Exhibit 10.3

                                CREDIT AGREEMENT

                                      among


                               MOVIE GALLERY, INC.
                                       and
                            THE LENDERS NAMED HEREIN,

                                       and

                                SOUTHTRUST BANK,
              as Agent, as Issuing Lender and as Swing Line Lender

                            Revolving Credit Facility


                            Dated as of June 27, 2001


<PAGE>

                                TABLE OF CONTENTS

ARTICLE                                                                     PAGE
-------                                                                     ----

ARTICLE I......................................................................1
    1.   DEFINITIONS...........................................................1
         1.1      Defined Terms................................................1
         1.2      Accounting Terms............................................26
         1.3      Construction of Terms.......................................26
         1.4      Computation of Time Periods.................................27
         1.5      Computation of Applicable Margin and Financial Covenant.....27

ARTICLE II....................................................................27
    2.   THE REVOLVING LOAN...................................................27
         2.1      General Terms...............................................27
         2.2      Disbursement of the Revolving Loan..........................28
         2.3      The Revolving Notes.........................................28
         2.4      Interest Rate...............................................28
         2.5      Payments of Principal and Interest..........................29
         2.6      Use of Proceeds of Revolving Loan...........................29

ARTICLE III...................................................................29
    3.   THE SWING LINE LOAN..................................................29
         3.1      General Terms...............................................29
         3.2      Disbursement of the Swing Line Loan.........................30
         3.3      The Swing Line Note.........................................30
         3.4      Interest Rate...............................................31
         3.5      Payments of Principal and Interest..........................31
         3.6      Use of Proceeds of Swing Line Loan..........................31

ARTICLE IV....................................................................31
    4.   LETTERS OF CREDIT....................................................31
         4.1   General Terms..................................................31
         4.2   Issuance of a Letter of Credit.................................31
         4.3   Reimbursement and Other Payments...............................31
         4.4   Upon an Event of Default.......................................32
         4.5   No Liability of the Issuing Lender.............................33
         4.6   Indemnification................................................33
         4.7   Pro Rata Participation, Drawing and Reimbursemen...............33
         4.8   Failure to Purchase Pro Rata Share of Letter
               of Credit Advances.............................................34
         4.9   Letter of Credit Reports.......................................34

ARTICLE V.....................................................................35
    5.   PAYMENTS, ADDITIONAL COSTS, ETC....................... ..............35
                                       i
<PAGE>

         5.1      Payment to Agent............................................35
         5.2      Late Payments...............................................35
         5.3      Voluntary and Mandatory Prepayments.........................35
         5.4      Default Rate................................................36
         5.5      No Setoff or Deduction......................................36
         5.6      Payment on Non-Business Day; Payment Computations...........37
         5.7      LIBOR Rate Borrowing Indemnification........................37
         5.8      360-Day Year................................................37
         5.9      No Requirement to Actually Obtain Funds.....................37
         5.10     Usury Limitation............................................37
         5.11     Increased Costs; Change in Circumstances; Illegality; etc...38
         5.12     Taxes.......................................................40

ARTICLE VI....................................................................41
    6.   CONDITIONS OF BORROWING..............................................41
         6.1      Documents Required for the Closing..........................41
         6.2      Certain Events Required for Closing and for all Advances....43
         6.3      Legal Matters...............................................44
         6.4      Election to Make Advances Prior to
                  Satisfaction of Conditions Precedent........................44

 ARTICLE VII..................................................................44
    7.   REPRESENTATIONS AND WARRANTIES.......................................44
         7.1      Corporate Organization and Power............................44
         7.2      Authorization; Enforceability...............................44
         7.3      No Violation................................................44
         7.4      Governmental Authorization; Permits.........................45
         7.5      Litigation..................................................45
         7.6      Taxes.......................................................45
         7.7      Subsidiaries................................................46
         7.8      Full Disclosure.............................................46
         7.9      Margin Regulations..........................................46
         7.10     No Material Adverse Change..................................46
         7.11     Financial Matters...........................................46
         7.12     Ownership of Properties.....................................47
         7.13     ERISA.......................................................47
         7.14     Environmental Matters.......................................47
         7.15     Compliance with Laws........................................48
         7.16     Regulated Industries........................................48
         7.17     Insurance...................................................48
         7.18     Material Contracts..........................................49
         7.19     Security Documents..........................................49
         7.20     Continuing Effectiveness....................................49
                                       ii
<PAGE>

ARTICLE VIII..................................................................49
    8.   AFFIRMATIVE COVENANTS................................................49
         8.1      Financial Statements........................................49
         8.2      Other Business and Financial Information....................50
         8.3      Corporate Existence; Franchises; Maintenance of Properties..52
         8.4      Compliance with Laws........................................52
         8.5      Payment of Obligations......................................52
         8.6      Insurance...................................................53
         8.7      Maintenance of Books and Records; Inspection................53
         8.8      Interest Rate Protection....................................53
         8.9      Permitted Acquisitions......................................53
         8.10     Creation or Acquisition of Subsidiaries.....................54
         8.11     Further Assurances..........................................56

ARTICLE IX....................................................................56
    9.   FINANCIAL COVENANTS..................................................56
         9.1      Leverage Ratio..............................................56
         9.2      Interest Coverage Ratio.....................................56
         9.3      Fixed Charge Coverage.......................................56
         9.4      Net Worth...................................................57

ARTICLE X.....................................................................57
    10.  NEGATIVE COVENANTS...................................................57
         10.1     Merger; Consolidation.  ....................................57
         10.2     Indebtedness................................................57
         10.3     Liens.......................................................58
         10.4     Disposition of Assets.......................................59
         10.5     Investments.................................................59
         10.6     Restricted Payments.........................................60
         10.7     Transactions with Affiliates................................61
         10.8     Lines of Business...........................................61
         10.9     Limitation on Certain Restrictions..........................61
         10.10    Fiscal Periods..............................................62
         10.11    Accounting Changes..........................................62

ARTICLE XI....................................................................62
    11.  EVENTS OF DEFAULT....................................................62
         11.1     Events of Default...........................................62
         11.2     Remedies: Termination of Commitments, Acceleration, Etc.....65
         11.3     Remedies: Set-Off...........................................65

ARTICLE XII...................................................................66
    12.  THE AGENT............................................................66
         12.1     Appointment.................................................66
         12.2     Nature of Duties............................................66
                                      iii
<PAGE>


         12.3     Exculpatory Provisions......................................66
         12.4     Reliance by Agent...........................................67
         12.5     Non-Reliance on Agent and Other Lenders.....................67
         12.6     Notice of Default...........................................68
         12.7     Indemnification.............................................68
         12.8     The Agent in its Individual Capacity........................68
         12.9     Successor Agent.............................................69
         12.10    Collateral Matters..........................................69

ARTICLE XIII..................................................................70
    13.  MISCELLANEOUS........................................................70
         13.1     Fees and Expenses...........................................70
         13.2     Indemnification.............................................70
         13.3     Governing Law; Consent to Jurisdictions.....................71
         13.4     Arbitration; Preservation and Limitation of Remedies........72
         13.5     Notices.....................................................73
         13.6     Amendments, Waivers, etc....................................74
         13.7     Assignments, Participations.................................74
         13.8     No Waiver...................................................77
         13.9     Successors and Assigns......................................77
         13.10    Survival....................................................77
         13.11    Severability................................................77
         13.12    Construction................................................78
         13.13    Confidentiality.............................................78
         13.14    Counterparts................................................78
         13.15    Entire Agreement............................................78

EXHIBIT A       ASSIGNMENT AND ACCEPTANCE

EXHIBIT B       COMPLIANCE CERTIFICATE

EXHIBIT C       LENDERS' COMMITMENTS

SCHEDULE 7.6    TAX AUDITS AND EXAMINATIONS

SCHEDULE 7.7    BORROWER'S SUBSIDIARIES AND OWNERSHIP

SCHEDULE 7.14   ENVIRONMENTAL MATTERS

SCHEDULE 7.17   INSURANCE POLICIES

SCHEDULE 10.2   PERMITTED INDEBTEDNESS

SCHEDULE 10.3   PERMITTED LIENS

                                       iv

<PAGE>

SCHEDULE 10.5   PERMITTED INVESTMENTS

SCHEDULE 10.7   PERMITTED TRANSACTIONS WITH AFFILIATES

SCHEDULE 10.10  FISCAL PERIODS

                                       v
<PAGE>


                                CREDIT AGREEMENT
                                ----------------

     THIS CREDIT AGREEMENT (this "Agreement"), dated as of the 27th day of June,
2001,  is  made  among  MOVIE  GALLERY,   INC.,  a  Delaware   corporation  (the
"Borrower"),  the banks and financial institutions listed on the signature pages
hereof or that become  parties hereto after the date hereof  (collectively,  the
"Lenders"), and SOUTHTRUST BANK, an Alabama banking corporation  ("SouthTrust"),
as agent for the  Lenders  (in such  capacity,  the  "Agent"),  as issuer of the
Letters of Credit (in such capacity,  the "Issuing Lender"), and as maker of the
Swing Line Loan (in such capacity, the "Swing Line Lender").

                              W I T N E S S E T H:
                               - - - - - - - - - -

     WHEREAS,  Borrower has requested  that Lenders make available to Borrower a
revolving  credit  facility  in  the  initial  aggregate   principal  amount  of
$65,000,000.  Borrower  will use the  proceeds  of this  facility  to  refinance
certain existing indebtedness,  to pay or reimburse certain fees and expenses in
connection herewith and therewith,  to finance certain acquisitions and treasury
stock repurchases,  and for working capital and general corporate purposes,  all
as more fully described herein; and

     WHEREAS,  Lenders are willing to make  available to Borrower the  revolving
credit  facility  described above subject to and on the terms and conditions set
forth in this Agreement.

     NOW,  THEREFORE,  in consideration of the mutual provisions,  covenants and
agreements herein contained, the parties hereto hereby agree as follows:


                                   ARTICLE I.

1.   DEFINITIONS.

     1.1 Defined Terms. For purposes of this Agreement, in addition to the terms
         -------------
defined elsewhere herein,  the following terms shall have the meanings set forth
below (such  meanings to be equally  applicable to the singular and plural forms
thereof):

          "Account  Designation  Letter"  means a letter from  Borrower to Agent
duly  completed and signed by an Authorized  Officer of Borrower and in form and
substance  satisfactory  to the  Agent,  listing  any  one or more  accounts  at
SouthTrust to which  Borrower may from time to time request the Agent to deposit
the proceeds of any Advances made hereunder.

          "Acquisition"  means any acquisition  (whether in a single transaction
or  series  of  related  transactions)  of (i)  any  going  business,  or all or
substantially all of the assets of any Person, whether through purchase,  merger
or otherwise;  or (ii) Equity  Interests of any Person of at least a majority of
the Voting Power of such Person.
<PAGE>

          "Acquisition  Amount" means, with respect to any Acquisition,  the sum
(without  duplication)  of (i) the  amount  of cash  paid  by  Borrower  and its
Subsidiaries in connection with such Acquisition,  (ii) the Fair Market Value of
all  Equity  Interests  of  Borrower  and its  Subsidiaries  issued  or given in
connection with such Acquisition, (iii) the amount (determined by using the face
amount  or  the  amount  payable  at  maturity,  whichever  is  greater)  of all
Indebtedness  incurred,  assumed or acquired by Borrower and its Subsidiaries in
connection with such Acquisition,  (iv) all additional purchase price amounts in
connection  with such  Acquisition in the form of earnouts and other  contingent
obligations  that  should be recorded  as a  liability  on the balance  sheet of
Borrower and its  Subsidiaries  or expensed,  in either event in accordance with
Generally Accepted  Accounting  Principles,  Regulation S-X under the Securities
Act of 1933, as amended,  or any other rule or regulation of the  Securities and
Exchange  Commission,  (v) all  amounts  paid in  respect  of  covenants  not to
compete, consulting agreements and other affiliated contracts in connection with
such  Acquisition,  (vi)  the  amount  of  all  transaction  fees  and  expenses
(including without limitation legal,  accounting and finders' fees and expenses)
incurred by Borrower and its  Subsidiaries in connection with such  Acquisition,
and (vii) the aggregate  fair market value of all other  consideration  given by
Borrower and its Subsidiaries in connection with such Acquisition.

          "Adjusted  Base Rate" means an  interest  rate equal to the sum of (i)
the Base Rate, plus (ii) the Applicable Margin.

          "Advance"  means each loan of money or credit  made or  extended to or
for the benefit of Borrower by Lenders pursuant to this Agreement, including the
Revolving  Loan  Advances,  the Swing Line Loan  Advances,  and Letter of Credit
Advances.

          "Agent" means  SouthTrust,  in its capacity as Agent  appointed  under
Article X of this  Agreement,  and its successors and permitted  assigns in such
capacity.

          "Agent's  Fee"  means an annual  fee  payable to Agent in an amount as
agreed to between Agent and Borrower pursuant to the Fee Letter, such annual fee
to be paid in  advance  at the  Closing  and on or  before  July 1 of each  year
beginning calendar year 2002.

          "Agent's Lien" means any Lien granted to the Agent in the Collateral.

          "Affiliate" means, as to any Person,  each other Person that directly,
or  indirectly  through  one  or  more  intermediaries,  owns  or  controls,  is
controlled  by or under  common  control  with,  such Person or is a director or
officer of such  Person.  For purposes of this  definition,  with respect to any
Person "control" means (i) the possession,  direct or indirect,  of the power to
direct or cause the  direction  of the  management  and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise, or
(ii) the beneficial ownership of securities or other ownership interests of such
Person having 10% or more of the combined  voting power of the then  outstanding
securities or other  ownership  interests of such Person  ordinarily  (and apart
from rights  accruing under special  circumstances)  having the right to vote in
the election of directors or other governing body of such Person.



                                       2
<PAGE>

          "Agreement"  means this  Credit  Agreement,  as  amended,  modified or
supplemented from time to time.

          "Amortization   Expense"  means  the   amortization   expense  for  an
applicable  period (to the extent  included in the  computation  of Net Income),
according to Generally Accepted Accounting Principles.

          "Annualized  Rolling  Period"  means the period from the date one year
prior to the applicable date through the applicable date.

          "Applicable Margin" means a percentage based on the Leverage Ratio, as
follows:

<TABLE>
<CAPTION>
                                         Applicable Margin       Applicable Margin
         Leverage Ratio                Base Rate Borrowings    LIBOR Rate Borrowings
         --------------                --------------------    ---------------------

<S>                                            <C>                      <C>
Greater than or equal to 2.5 to 1.0            1.25%                    3.0%

Greater than or equal to 2.0 to 1.0            1.0%                     2.75%
           but less than 2.5 to 1.0

Greater than or equal to 1.5 to 1.0            0.75%                    2.5%
           but less than 2.0 to 1.0

Greater than or equal to 1.0 to 1.0            0.5%                     2.25%
           but less than 1.5 to 1.0

Less than 1.0 to 1.0                           0.0%                     2.0%
</TABLE>

          "Assets"  means all property  that should be classified as assets on a
balance sheet according to Generally Accepted Accounting Principles.

          "Asset  Disposition"  means any sale,  assignment,  transfer  or other
disposition  of any assets,  business units or other  properties  (including any
interests  in  property  or  securities),   excluding  (i)  sales  of  inventory
(including rental tapes) in the Ordinary Course of Business and (ii) the sale or
exchange of used or obsolete  equipment  to the extent (x) the  proceeds of such
sale  are  applied  towards,   or  such  equipment  is  exchanged  for,  similar
replacement  equipment  or (y)  such  equipment  is no  longer  useful  for  the
operations in the Ordinary Course of Business.

          "Assignee"  means a Person who is assigned  an interest in  accordance
with the provisions of Section 13.7(A) of this Agreement.

          "Assignment and Acceptance" means an Assignment and Acceptance entered
into between a Lender and an Assignee and accepted by the Agent and Borrower, in
substantially the form of Exhibit "A".

                                       3
<PAGE>

          "Authorized  Officer"  means,   collectively,   the  president,  chief
executive officer, chief financial officer, and general counsel of Borrower, any
vice  president-finance or controller of Borrower or any Subsidiary of Borrower,
and any other person designated by Borrower as an Authorized  Officer under this
Agreement.

          "Available  Amount" of any Letter of Credit  means,  at any time,  the
maximum  amount  available  to be drawn at such time  under any Letter of Credit
issued under this Agreement.

          "Bankruptcy Law" means Title 11, U.S. Code, or any similar Laws of any
Jurisdiction for the relief of debtors,  and "Bankruptcy" means the commencement
of any case or other action for relief under Bankruptcy Law.

          "Base  Rate"  means  the  higher of (i) the per  annum  interest  rate
publicly announced from time to time by SouthTrust, to be its prime or base rate
(which may not  necessarily be its best lending rate), as adjusted to conform to
changes as of the  opening of  business  on the date of any such  change in such
prime or base  rate,  or (ii) 0.5% per annum plus the  Federal  Funds  Rate,  as
adjusted  to conform to changes as of the opening of business on the date of any
such change in the Federal Funds Rate.

          "Base Rate  Borrowing"  means,  at any time,  any Borrowing that bears
interest at such time at the Adjusted Base Rate.

          "Borrower" means Movie Gallery, Inc., a Delaware corporation.

          "Borrower  Margin  Stock" means Equity  Interests of Borrower that are
held by Borrower or any of its Subsidiaries and that constitute Margin Stock.

          "Borrower  Parties" means Borrower,  Guarantors,  and any other Person
that  hereafter  becomes  a party to this  Agreement  and/or  any  other  Credit
Document,  and which  Person is  responsible  in whole or in part for any of the
Obligations.

          "Borrower's   Closing  Affidavit"  means  an  affidavit  in  form  and
substance acceptable to Agent, and signed by a duly authorized representative of
Borrower.

          "Borrowing" means a borrowing hereunder consisting of (i) with respect
to Revolving Loan Advances,  the aggregate amount of the several  Revolving Loan
Advances made on the same date by the Lenders to Borrower; and (ii) with respect
to Swing Line Loan Advances, the Swing Line Loan Advance made at any time by the
Swing Line Lender to Borrower.

          "Business  Day"  means any day of the year,  other  than  Saturday  or
Sunday,  on which dealings in United States Dollars are carried on in the London
interbank  market and banks open for  business  in  Birmingham,  Alabama are not
required or authorized to close.


                                       4
<PAGE>

          "Capital  Expenditures"  means,  for any period,  the aggregate amount
(whether paid in cash or accrued as a liability)  that would, in accordance with
Generally  Accepted  Accounting  Principles,  be  included  on the  consolidated
statement  of cash flows of  Borrower  and its  Subsidiaries  for such period as
additions to equipment,  fixed assets,  real property or  improvements  or other
capital  assets  (including,  without  limitation,  capital lease  obligations);
provided,  however,  that  Capital  Expenditures  shall  not  include  any  such
expenditures (i) for replacements and  substitutions  for capital assets, to the
extent  made  with the  proceeds  of  insurance,  (ii) made in  connection  with
Permitted  Acquisitions,  or (iii) for the purchase of Rental  Inventory  (other
than New Retail Store Rental Inventory).

          "Cash  Collateral  Account" means the special cash collateral  account
established pursuant to Section 4.4.

          "Cash  Equivalents"  means (i)  securities  issued or  unconditionally
guaranteed  by the United  States of  America  or any agency or  instrumentality
thereof, backed by the full faith and credit of the United States of America and
maturing  within 90 days from the date of  acquisition,  (ii)  commercial  paper
issued by any Person  organized  under the Laws of the United States of America,
maturing  within  90 days  from  the  date of  acquisition  and,  at the time of
acquisition,  having a rating of at least  "A-1" or the  equivalent  thereof  by
Standard & Poor's Ratings  Services or at least "P-1" or the equivalent  thereof
by Moody's Investors Service, Inc., (iii) time deposits (which shall not include
demand deposit  accounts) and  certificates  of deposit  maturing within 90 days
from the date of issuance and issued by a bank or trust company  organized under
the Laws of the United  States of America or any state thereof that has combined
capital and surplus of at lest  $500,000,000 and that has (or is a subsidiary of
a bank holding  company that has) a long-term  unsecured debt rating of at least
"A" or the equivalent  thereof by Standard & Poor's Ratings Services or at least
"A2"  or the  equivalent  thereof  by  Moody's  Investors  Service,  Inc.,  (iv)
repurchase  obligations with a term not exceeding seven (7) days with respect to
underlying  securities  of the types  described in clause (i) above entered into
with any bank or trust company  meeting the  qualifications  specified in clause
(iii) above,  and (v) money market funds  substantially  all of whose assets are
comprised  of  securities  of the types  described  in clauses (i) through  (iv)
above.

          "Casualty  Event" means,  with respect to any property  (including any
interest  in  property)  of Borrower  or any of its  Subsidiaries,  any loss of,
damage to, or  condemnation or other taking of, such property for which Borrower
or such Subsidiary receives insurance proceeds, proceeds of a condemnation award
or other compensation.

          "Closing" means the time and place of actual execution and delivery of
this Agreement,  the Notes,  and except as waived by Agent, the other documents,
instruments, and things required by Section 6.1 hereof.

          "Closing Date" means the date of Closing.

          "Collateral" means all the assets,  property and interests in property
that shall from time to time be pledged or be  purported to be pledged as direct
or  indirect  security  for the  Obligations  pursuant to any one or more of the
Security Documents.

                                       5
<PAGE>

          "Commitments" means the Revolving Loan Commitment, the Swing Line Loan
Commitment, and the Letter of Credit Commitment.

          "Commitment  Fee" means  commitment  fees payable to  SouthTrust in an
amount  as set forth in the Fee  Letter,  and  commitment  fees  payable  to the
Lenders other than  SouthTrust in an amount as indicated by letter dated of even
date herewith from SouthTrust to each Lender other than SouthTrust.

          "Compliance  Certificate"  means a fully  completed  and duly executed
certificate  (including the Covenant  Compliance  Worksheet attached thereto) in
the form of Exhibit "B".

          "Consolidated   Basis"   means  the   consolidation   of  the  assets,
liabilities,  income and  losses,  as  applicable,  of the  applicable  Persons,
together  with a separate  statement  of each of the  foregoing  for each Person
whose   assets,   liabilities,   income  and  losses  are  the  subject  of  the
consolidation.

          "Credit Documents" means this Agreement,  the Notes, the Guaranty, the
Security  Documents,  the Fee  Letter,  and all other  agreements,  instruments,
documents and certificates now or hereafter  executed and delivered to the Agent
or any  Lender by or on  behalf  of  Borrower  or any of its  Subsidiaries  with
respect  to  this  Agreement  and  the  transactions  contemplated  hereby  (but
specifically excluding any Hedge Agreements), in each case as amended, modified,
supplemented or restated from time to time.

          "Credit  Percentage"  means:

          (A) Until  such time as all  Revolving  Loan  Commitments  shall  have
expired or  terminated,  with  respect to each Lender,  a percentage  based on a
fraction,  the numerator of which shall be the amount of such Lender's Revolving
Loan Commitments as set forth on Exhibit "C", and the denominator of which shall
be the Revolving Loan Commitments of all Lenders at such time; and

          (B) At such time as all Revolving Loan Commitments  shall have expired
or terminated,  such percentage  shall be based on a fraction,  the numerator of
which shall be the sum of (a) the  aggregate  principal  amount of the  Advances
outstanding  at such time and owing to such  Lender at such time,  plus (b) such
Lender's  Pro Rata Share of the  aggregate  Available  Amount of all  Letters of
Credit  outstanding at such time, and the  denominator of which shall be the sum
of (a) the aggregate  principal amount of all Advances  outstanding at such time
and owing to the Lenders at such time, and (b) the aggregate Available Amount of
all Letters of Credit  outstanding at such time;  provided,  that in calculating
such  percentage and each Lender's Pro Rata Share,  each Lender's Pro Rata Share
of the aggregate  Available  Amount of Letters of Credit shall, at such time, be
determined under  subparagraph (A) above, and the aggregate  principal amount of
Swing Line Loan Advances  owing to the Swing Line Lender and of Letter of Credit
Advances  owing to the Issuing  Lender shall,  at such time, be considered to be
owed to the Lenders that purchase  Swing Line Loan Advances and Letter of Credit


                                       6
<PAGE>

Advances from the Swing Line Lender and the Issuing  Lender as and when required
under the terms of this Agreement.

          "Debt  Issuance"  means the issuance or sale by Borrower or any of its
Subsidiaries  of any  debt  securities,  whether  in a public  offering  of such
securities or otherwise.

          "Default"  means the occurrence of an event or condition  described in
Section 11.1 hereof  regardless of whether there shall have occurred any passage
of time or giving of notice that would be necessary in order to constitute  such
event as an Event of Default.

          "Default  Costs"  means  all  Indemnified  Losses  incurred  by Lender
Parties by reason of a Default.

          "Default  Rate" means a variable  per annum rate of interest  equal to
the  lesser  of (1) two  percent  (2%) in excess of the  highest  Interest  Rate
otherwise payable hereunder, or (2) the maximum rate allowed by applicable Laws.

          "Depreciation   Expense"  means  the   depreciation   expense  for  an
applicable  period (to the extent  included in the  computation  of Net Income),
according to Generally Accepted Accounting Principles.

          "Dollars" or "$" means dollars of the United States of America.

          "Eligible  Assignee"  means (i) a commercial  bank organized under the
Laws of the United States or any state thereof and having total assets in excess
of $1,000,000,000,  (ii) a commercial bank organized under the Laws of any other
country  that is a member  of the  Organization  for  Economic  Cooperation  and
Development or any successor thereto (the "OECD") or a political  subdivision of
any such country and having total assets in excess of  $1,000,000,000,  provided
that  such bank or other  financial  institution  is acting  through a branch or
agency located in the United  States,  in the country under the Laws of which it
is organized or in another country that is also a member of the OECD,  (iii) the
central  bank of any  country  that is a  member  of the  OECD,  (iv) a  finance
company,  insurance  company  or other  financial  institution  or fund  that is
engaged in making,  purchasing  or otherwise  investing in loans in the Ordinary
Course of Business and having total  assets in excess of  $500,000,000,  (v) any
Affiliate  of an  existing  Lender  or (vi) any  other  Person  approved  by the
Required Lenders, which approval shall not be unreasonably withheld.

          "Environmental Claims" means any and all administrative, regulatory or
judicial actions,  suits,  demands,  demand letters,  claims,  liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by any Person in the  Ordinary  Course of  Business  and not in  response to any
third party action or request of any kind) or proceedings relating in any way to
any  Environmental  Law or any permit issued,  or any approval given,  under any
such Environmental Law (collectively,  "Claims"), including, without limitation,
(i) any and all Claims by  Governmental  Authorities for  enforcement,  cleanup,
removal,  response,  remedial  or  other  actions  or  damages  pursuant  to any
applicable  Environmental  Law and (ii) any and all  Claims by any  third  party
seeking damages, contribution,  indemnification,  cost recovery, compensation or


                                       7
<PAGE>

injunctive  relief  resulting from Hazardous  Substances or arising from alleged
injury or threat of injury to human health or the environment.

          "Environmental Laws" means any and all federal,  state and local Laws,
statutes,   ordinances,   rules,  regulations,   permits,  licenses,  approvals,
interpretations,  rules of common  law and  orders  of  courts  or  Governmental
Authorities,  relating to the protection of human health or occupational  safety
or the environment,  now or hereafter in effect and in each case as amended form
time to time,  including,  without  limitation,  requirements  pertaining to the
manufacture,   processing,  distribution,  use,  treatment,  storage,  disposal,
transportation,  handling, reporting,  licensing,  permitting,  investigation or
remediation  of  Hazardous   Substances,   including  without  limitation,   the
Comprehensive  Environmental  Response  Compensation  and  Liability Act of 1980
("CERCLA"),  as amended  (42  U.S.C.  Sections  9601,  et seq.),  the  Hazardous
Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), the
Resource  Conservation and Recovery Act ("RCRA"), as amended (42 U.S.C. Sections
6901,  et seq.),  the Clean Water Act, as amended (42 U.S.C.  Sections  7401, et
seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Sections 2601, et
seq.).

          "Equity  Interests"  means any and all  ownership  or other  equitable
interests in the applicable  Person,  including any interest  represented by any
capital stock,  membership interest,  partnership interest, or similar interest,
but  specifically  excluding  any interest of any Person solely as a creditor of
the applicable Person.

          "Equity Issuance" means (i) the issuance, sale or other disposition by
Borrower  or any of  its  Subsidiaries  of its  Equity  Interests,  any  rights,
warrants or options to purchase  or acquire any Equity  Interests,  or any other
security or instrument  representing,  convertible  into or exchangeable for any
Equity Interest in Borrower or any of its Subsidiaries,  and (ii) the receipt by
Borrower or any of its Subsidiaries of any capital contribution  (whether or not
evidenced  by any  security or  instrument);  provided,  however,  that the term
"Equity  Issuance" shall not include (x) any rights,  warrants or options issued
to  directors,  officers or  employees  of  Borrower or any of its  Subsidiaries
pursuant to bona fide employee benefit plans  established in the Ordinary Course
of Business  and any capital  stock issued upon the  exercise  thereof,  (y) any
capital  contribution  to  any  Subsidiary,  to  the  extent  made  directly  or
indirectly by Borrower,  or (z) any Equity Interest issued or sold in connection
with  any  Permitted  Acquisition  and  constituting  all  or a  portion  of the
applicable purchase price.

          "ERISA" means the Employee  Retirement Income Security Act of 1974, as
amended  from  time to  time,  and any  successor  statute,  and all  rules  and
regulations from time to time promulgated thereunder.

          "ERISA  Affiliate" means any Person  (including any trade or business,
whether or not  incorporated)  that would be deemed to be under "common control"
with,  or a member of the same  "controlled  group" as,  Borrower  or any of its
Subsidiaries,  within the meaning of  Sections  414(b),  (c),  (m) or (0) of the
Internal Revenue Code or Section 4001 of ERISA.


                                       8
<PAGE>

          "ERISA  Event"  means any of the  following  with respect to a Plan or
Multiemployer Plan, as applicable: (i) a Reportable Event with respect to a Plan
or a Multiemployer  Plan,  (ii) a complete or partial  withdrawal by Borrower or
any ERISA  Affiliate from a  Multiemployer  Plan that results in liability under
Section 4201 or 4202 of ERISA, or the receipt by Borrower or any ERISA Affiliate
of notice from a Multiemployer  Plan that it is in  reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated  under Section 4041A of ERISA,  (iii) the distribution by Borrower or
any ERISA  Affiliate  under Section 4041 or 4041A of ERISA of a notice of intent
to terminate  any Plan or the taking of any action to terminate  any Plan,  (iv)
the  commencement of proceedings by the PBGC under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,  any Plan, or the
receipt by Borrower or any ERISA  Affiliate  of a notice from any  Multiemployer
Plan  that  such  action  has  been  taken  by the  PBGC  with  respect  to such
Multiemployer  Plan, (v) the institution of a proceeding by any fiduciary of any
Multiemployer  Plan against  Borrower or any ERISA  Affiliate to enforce Section
515 of  ERISA,  which  is not  dismissed  within  thirty  (30)  days,  (vi)  the
imposition  upon Borrower or any ERISA Affiliate of any liability under Title IV
of ERISA, other than for PBGC premiums due but not delinquent under Section 4007
of ERISA, or the imposition or threatened imposition of any Lien upon any assets
of Borrower or any ERISA  Affiliate as a result of any alleged failure to comply
with the  Internal  Revenue  Code or ERISA in  respect  of any  Plan,  (vii) the
engaging in or otherwise becoming liable for a nonexempt Prohibited  Transaction
by  Borrower  or any  ERISA  Affiliate,  (viii) a  violation  of the  applicable
requirements of Section 404 or 405 of ERISA or the exclusive  benefit rule under
Section  401(a) of the Internal  Revenue  Code by any  fiduciary of any Plan for
which  Borrower or any of its ERISA  Affiliates  may be  directly or  indirectly
liable,  or (ix) the  adoption  of an  amendment  to any Plan that,  pursuant to
Section  401(a)(29) of the Internal Revenue Code or Section 307 of ERISA,  would
result in the loss of a  tax-exempt  status of the trust of which such Plan is a
part of Borrower or an ERISA Affiliate fails to timely provide  security to such
Plan in accordance with the provisions of such sections.

          "Event of  Default"  means  the  occurrence  of an event or  condition
described in Section  11.1 hereof  provided  that there shall have  occurred any
passage  of time or  giving  of  notice  that  would  be  necessary  in order to
constitute such event or condition as an Event of Default under Section 11.1.

          "Exchange Act" means the  Securities  Exchange Act of 1934, as amended
from time to time, and any successor statute, and all rules and regulations from
time to time promulgated thereunder.

          "Extraordinary  Receipt"  means any cash received by or paid to or for
the account of any Person not in the  Ordinary  Course of  Business,  including,
without limitation, tax refunds, pension plan reversions,  proceeds of insurance
(other  than  proceeds  of business  interruption  insurance  to the extent such
proceeds  constitute  compensation for lost earnings),  condemnation awards (and
payments in lieu thereof) and indemnity payments.

          "Fair Market  Value"  means,  with  respect to any Equity  Interest of
Borrower given in connection with an Acquisition, the value given to such Equity
Interest for purposes of such Acquisition by the parties thereto,  as determined
in good faith  pursuant to the  relevant  acquisition  agreement or otherwise in
connection with such Acquisition.

                                       9
<PAGE>

          "Federal Funds Rate" means,  for any period,  a fluctuating  per annum
interest  rate  (rounded  upwards,  if  necessary,  to the nearest  1/100 of one
percentage  point) equal for each day during such period to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next  preceding  Business Day) by the
Federal  Reserve Bank of New York,  or if such rate is not so published  for any
day that is a Business Day, the average of the  quotations  for such day on such
transactions  received  by  the  Agent  from  three  federal  funds  brokers  of
recognized standing selected by the Agent.

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

          "Fee Letter" means the letter from SouthTrust to Borrower,  dated June
27,  2001,  relating  to  certain  fees  payable by  Borrower  in respect of the
transactions   contemplated   by  this  Agreement,   as  amended,   modified  or
supplemented from time to time.

          "Fees" means the Agent's Fee, the Commitment Fee, the Syndication Fee,
the Letter of Credit  Facility  Fee,  the Letter of Credit  Facing Fee,  and the
Unused Fee.

          "Financing Statements" means the UCC-1 financing statements (including
any  amendments  and  continuations)  and UCC-3  financing  statements  required
hereunder or under any other Security Document.

          "Fixed Charge  Coverage"  means the ratio of (i)  Operating  Cash Flow
plus Lease Expense,  to (ii) Interest Expense,  plus Lease Expense,  plus Income
Tax Expense (but only to the extent paid), plus principal payments in respect of
Funded Debt scheduled or otherwise required to have been made.

          "Funded Debt" means the difference between (a) all Indebtedness, other
than Indebtedness  that is accounts  payable,  accrued expenses or other current
liabilities not incurred through the borrowing of money, and Indebtedness  under
Hedge  Agreements,  and (b) the amount by which the aggregate  cash balances and
Cash Equivalents of Borrower and its Subsidiaries exceed $1,500,000.

          "Generally  Accepted  Accounting  Principles" means generally accepted
accounting   principles,   as  set  forth  in  the   statements,   opinions  and
pronouncements  of the Accounting  Principles  Board, the American  Institute of
Certified Public Accountants and the Financial  Accounting  Standards Board (or,
to the extent not so set forth in such statements,  opinions and pronouncements,
as  generally  followed by entities  similar in size to Borrower  and engaged in
generally similar lines of business), consistently applied and maintained and in
conformity  with  those used in the  preparation  of the Most  Recent  Financial
Statements.

                                       10
<PAGE>

          "Governing  Body"  means the board of  directors  of a Person  (or any
Person or group of Persons exercising similar authority).

          "Governmental   Approvals"   means   all   authorizations,   consents,
approvals,  licenses and  exemptions  of,  registrations  and filings with,  and
reports to, any Governmental Authority.

          "Governmental Authority" means any nation or government,  any state or
other political subdivision thereof and any central bank thereof, any municipal,
local,  city  or  county  government,   and  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.

          "Guaranty"  means that certain  Guaranty  dated of even date  herewith
from  Guarantors in favor of Agent,  and any other Guaranty at any time executed
and delivered in connection with this  Agreement,  as the same may be amended or
supplemented from time to time.

          "Guarantors"  means M.G.A.,  MovieGallery.com,  Movie Gallery Finance,
and each other Person who becomes a Guarantor under this Agreement.

          "Guarantor's   Closing   Affidavits"  means  affidavits  in  form  and
substance acceptable to Agent, and signed by each Guarantor.

          "Hazardous  Substances" means any substances or materials (i) that are
or  become  defined  as  hazardous  wastes,  hazardous  substance,   pollutants,
contaminants  or toxic  substances  under any  Environmental  Law, (ii) that are
defined by any  Environmental  Law as toxic,  explosive,  corrosive,  ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) the presence of
which require  investigation or response under any Environmental  Law, (iv) that
constitute  a  nuisance,  trespass  or  health or safety  hazard to  Persons  or
neighboring  properties,  (v) that consist of underground or aboveground storage
tanks,  whether empty,  filled or partially  filled with any substance,  or (vi)
that contain,  without limitation,  asbestos,  polychlorinated  biphenyls,  urea
formaldehyde  foam  insulation,   petroleum   hydrocarbons,   petroleum  derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.

          "Hedge  Agreement"  means any interest or foreign  currency rate swap,
cap,  collar,  option,  hedge,  forward  rate  or  other  similar  agreement  or
arrangement  designed  to protect  against  fluctuations  in  interest  rates or
currency exchange rates.

          "Immaterial Subsidiary" means any Subsidiary that (i) does not conduct
an active trade or  business,  and (ii) either (a) has assets with a fair market
value of less than  $100,000 and gross  revenues  (for the most  recently  ended
period of twelve  consecutive  fiscal  months) of less than  $100,000 or (b) has
been organized by Borrower as an  acquisition  vehicle solely for the purpose of
merging with another person in connection with a Permitted Acquisition.

                                       11
<PAGE>

          "Income Tax  Expense"  means the income tax expense for an  applicable
period (to the extent included in the  computation of Net Income),  according to
Generally Accepted Accounting Principles.

          "Indebtedness"   means  all  items  of  indebtedness,   obligation  or
liability, whether matured or unmatured,  liquidated or unliquidated,  direct or
contingent,   joint  or  several,  and  including,  but  without  limitation  or
duplication:  (A) all Liabilities;  (B) all  indebtedness  under leases that, in
accordance  with  Generally  Accepted  Accounting  Principles,   should  not  be
reflected on a balance sheet; and (C) all indebtedness  secured by (or which the
holder of such indebtedness has a right,  contingent or otherwise, to be secured
by) any lien upon property owned or acquired subject thereto, whether or not the
liabilities secured thereby have been assumed.

          "Indemnified  Lender Persons" means each and all of the Lender Parties
and their  respective  directors,  officers,  employees,  agents,  attorneys and
Affiliates.

          "Indemnified Losses" means all damages, dues, penalties, fines, costs,
amounts paid in settlement,  taxes, losses,  expenses, and fees, including court
costs and attorneys' fees and expenses.

          "Interest  Coverage  Ratio" means the ratio of (i) Operating Cash Flow
to (ii) Interest Expense.

          "Interest  Expense" means the sum (without  duplication)  of (i) total
interest expense in respect of Funded Debt (including,  without limitation,  all
interest expense accrued or capitalized, whether or not actually paid), (ii) all
net amounts paid or accrued under or in respect of Hedge  Agreements,  and (iii)
all commitment  fees and other ongoing fees in respect of Funded Debt (including
the Unused Fee and the fees paid to the Agent) amortized or paid or accrued.

          "Interest   Rate"  means  the  actual   interest  rate  at  which  the
outstanding  principal  amount of a Note bears interest from time to time during
the term of such Note.

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

          "Issuing  Lender"  means  SouthTrust  in its capacity as issuer of the
Letters of Credit, and its successors in such capacity.

          "Jurisdiction"   means  each  and  every   nation  or  any   political
subdivision thereof.

          "Laws" means each and all laws, treaties, ordinances, statutes, rules,
regulations,   orders,  injunctions,   writs  or  decrees  of  any  Governmental
Authority,  or any court or similar entity  established by any thereof,  whether
now in effect or hereafter enacted.

                                       12
<PAGE>

          "Lease  Expense" means the aggregate  (without  duplication)  of total
lease and rental expense (including,  without  limitation,  all lease and rental
expense accrued or  capitalized,  whether or not paid,  including  capital lease
obligations),  but  excluding  amounts  paid in  respect  of  taxes,  utilities,
insurance,  common area maintenance,  and other like charges associated with the
lease and rental of property.

          "Lender" means each financial  institution  signatory  hereto and each
other  financial  institution  that  becomes a "Lender"  hereunder  pursuant  to
Section 13.7, and their respective successors and assigns.

          "Lender Parties" means, collectively, Lenders and Agent.

          "Lending Office" means, with respect to any Lender, the office of such
Lender  designated as its "Lending Office" on its signature page hereto or in an
Assignment and Acceptance,  or such other office as may be otherwise  designated
in writing from time to time by such Lender to Borrower and the Agent.  A Lender
may designate separate Lending Offices as provided in the foregoing sentence for
the  purposes  of making or  maintaining  different  types of Loans,  and,  with
respect  to LIBOR Rate  Borrowings,  such  office  may be a domestic  or foreign
branch or Affiliate of such Lender.

          "Letter of Credit"  means any  Letter of Credit  that is issued  under
this Agreement.

          "Letter of Credit  Advances"  means all  amounts  owing to the Issuing
Lender under any Letter of Credit Agreement,  including, without limitation, all
drafts paid by the Issuing Lender under any Letter of Credit and with respect to
which the  Issuing  Lender has not been  reimbursed,  and all  amounts  owing to
Revolving  Loan  Lenders who  purchase  their Pro Rata Share of Letter of Credit
Advances in accordance with Section 4.7.

          "Letter  of  Credit  Agreement"  means  this  Agreement  and any other
agreement  providing  for the issuance of the Letters of Credit as  contemplated
hereunder,  together with any and all extensions,  revisions,  modifications  or
amendments at any time made thereto.

          "Letter of Credit  Commitment"  means the  commitment  of the  Issuing
Lender,  subject  to the terms of this  Agreement,  to issue for the  account of
Borrower  Letters  of Credit up to the  lesser of (i) Five  Million  and  00/100
Dollars ($5,000,000.00), or (ii) the Unused Revolving Loan Commitment.

          "Letter of Credit  Facility  Fee" means the fee payable by Borrower to
the Agent,  for the  account of the  Lenders  (based on each  Lender's  Pro Rata
Share), on each Quarter-End as determined by Agent as of such Quarter-End, in an
amount equal to the product of the daily average of the Available  Amount of the
Letters of Credit  for the  applicable  quarter,  multiplied  by the  Applicable
Margin for LIBOR Rate Borrowings.

          "Letter of Credit  Facing  Fee" means the fee  payable by  Borrower to
Issuing Lender for its own account,  on each  Quarter-End as determined by Agent
as of such  Quarter-End,  in an amount equal to the product of the daily average
of the  Available  Amount of the Letters of Credit for the  applicable  quarter,
multiplied by 0.125%.

                                       13
<PAGE>

          "Leverage  Ratio" means the ratio of (i) Funded Debt to (ii) Operating
Cash Flow.

          "Liabilities"  means all  Indebtedness  that should be  classified  as
liabilities  on a balance  sheet  according  to  Generally  Accepted  Accounting
Principles.

          "LIBOR Rate  Borrowing"  means any Borrowing  bearing  interest at the
30-Day  Adjusted  LIBOR Rate,  the 60-Day  Adjusted  LIBOR  Rate,  or the 90-Day
Adjusted LIBOR Rate.

          "LIBOR Rate  Interest  Period"  means any 30-Day  LIBOR Rate  Interest
Period, 60-Day LIBOR Rate Interest Period, or 90-Day LIBOR Rate Interest Period.

          "LIBOR Rate Notice"  means any 30-Day LIBOR Rate Notice,  60-Day LIBOR
Rate Notice, or 90-Day LIBOR Rate Notice.

          "Lien" means any mortgage, pledge, hypothecation, assignment, security
interest, lien (statutory or otherwise),  preference,  priority, charge or other
encumbrance of any nature, whether voluntary or involuntary,  including, without
limitation,  the  interest of any vendor or lessor  under any  conditional  sale
agreement,  title  retention  agreement,  capital  lease or any  other  lease or
arrangement having substantially the same effect as any of the foregoing.

          "Loans" means the Revolving Loan and the Swing Line Loan.

          "M.G.A." means M.G.A., Inc., a Delaware corporation and a Wholly Owned
Subsidiary of Borrower.

          "Margin Stock" shall have the meaning given to such term in Regulation
G, T, U or X.

          "Material  Adverse  Change"  means the  occurrence  of an event or the
existence of a condition giving rise to a Material Adverse Effect.

          "Material Adverse Effect" means a material adverse effect upon (i) the
condition (financial or otherwise),  operations,  business, or properties of the
Borrower  Parties,  taken as a whole,  (ii) the ability of any Borrower Party to
perform  its  obligations  under  this  Agreement  or any of  the  other  Credit
Documents,  or (iii) the legality,  validity or enforceability of this Agreement
or any of the other Credit Documents or the rights and remedies of the Agent and
the Lenders hereunder and thereunder.

          "Material  Contract"  means any  contract  or  agreement  to which any
Borrower Party is a party, by which any of them or their  respective  properties
is bound or to which any of them is subject  and that is required to be filed as
an exhibit to Borrower's  registration statements or periodic reports (including
on Forms 10-Q and 10-K ) submitted to the  Securities  and  Exchange  Commission
under the Securities Act of 1933, as amended, and the rules and regulations from
time to time promulgated thereunder, or under the Exchange Act.

                                       14
<PAGE>

          "Material  Subsidiary"  means any Subsidiary  other than an Immaterial
Subsidiary.

          "Most  Recent  Financial  Statements"  means the audited  consolidated
balance  sheets of Borrower  and its  Subsidiaries  as of December  31, 2000 and
related statements of operations,  stockholders'  equity and cash flows, and the
unaudited  consolidated  balance sheets of Borrower and its  Subsidiaries  as of
April  1,  2001  and  the  related   consolidated   statements  of   operations,
stockholders' equity and cash flows for the three-month period then ended.

          "MovieGallery.com"   means   MovieGallery.com,    Inc.,   a   Delaware
corporation and a Wholly Owned Subsidiary of Borrower.


          "Movie Gallery Finance" means Movie Gallery Finance,  Inc., a Delaware
corporation and a Wholly Owned Subsidiary of


          "Multiemployer Plan" means any "multiemployer plan" within the meaning
of Section  4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate  makes,
is making or is obligated to make contributions or has made or been obligated to
make contributions.

          "Net Cash  Proceeds"  means (i) in the case of any Equity  Issuance or
Debt  Issuance,  the  aggregate  cash  payments  received  by  Borrower  and its
Subsidiaries  less  reasonable  fees and  expenses  incurred by Borrower and its
Subsidiaries  in connection  therewith,  (ii) in the case of any Casualty Event,
the  aggregate  cash  proceeds  of  insurance,  condemnation  awards  and  other
compensation  received  by  Borrower  and its  Subsidiaries  in  respect of such
Casualty  Event less (y) reasonable  fees and expenses  incurred by Borrower and
its  Subsidiaries  in  connection  therewith  and  (z)  contractually   required
repayments  of  Indebtedness  to the  extent  secured  by Liens on the  property
subject  to such  Casualty  Event  and any  income  or  transfer  taxes  paid or
reasonably  estimated by Borrower to be payable by Borrower and its Subsidiaries
as a  result  of such  Casualty  Event,  and  (iii)  in the  case  of any  Asset
Disposition,   the  aggregate  cash  payments   received  by  Borrower  and  its
Subsidiaries  in connection  therewith,  less (x)  reasonable  fees and expenses
incurred  by  Borrower  and  its  Subsidiaries  in  connection  therewith,   (y)
Indebtedness  to the  extent  the  amount  thereof  is  secured by a Lien on the
property that is the subject of such Asset Disposition and the transferee of (or
holder of the Lien on) such Property  requires that such  Indebtedness be repaid
as a condition to such Asset  Disposition,  and (z) any income or transfer taxes
paid or  reasonably  estimated  by Borrower  to be payable by  Borrower  and its
Subsidiaries as a result of such Asset Disposition.

          "Net Worth" means the excess of total  Assets over total  Liabilities,
plus Subordinated Indebtedness to the extent included in Liabilities.

          "New Retail Store Rental  Inventory"  means Rental  Inventory which is
purchased for use in a new retail store of Borrower or its Subsidiaries.

          "Notes" means the Revolving Notes and the Swing Line Note.

                                       15
<PAGE>

          "Notice  of  Borrowing"  means a  notice  from  Borrower  in form  and
substance  satisfactory to Agent (and, in the case of a Swing Line Loan Advance,
in  form  and  substance  satisfactory  to  Swing  Line  Lender),  to be made by
telephone and confirmed in writing, specifying therein the information as may be
reasonably  required by Agent (and, in the case of a Swing Line Loan Advance, as
may be  reasonably  required by Swing Line Lender) with respect to any Borrowing
under this Agreement.

          "Notice of Funding" means a notice from Agent to Lenders to be made by
telephone and confirmed in writing, specifying therein the information as may be
reasonably  required by Lenders with respect to any funding of any amounts under
this Agreement.

          "Notice of Issuance" means a notice from Borrower to Agent and Issuing
Lender to be made by telephone and confirmed in writing,  specifying therein the
information  as may be  reasonably  required  by Agent and  Issuing  Lender with
respect to the issuance of any Letter of Credit under this Agreement.

          "Obligations"   means  the  obligations   (including   obligations  of
performance)  and liabilities of any Borrower Party to any Lender Party of every
kind and description whatsoever, direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter incurred,  contracted or arising, or
acquired by a Lender  Party from any source,  joint or  several,  liquidated  or
unliquidated,  whether incurred as maker, endorser,  surety, guarantor,  general
partner, drawer, tort-feasor, indemnitor, account party with respect to a Letter
of Credit,  a Hedge  Agreement,  or otherwise,  and arising under,  pursuant to,
and/or in connection with this Agreement,  any Note, and any of the other Credit
Documents, and any and all extensions and renewals of any of the same, including
but not limited to the obligation:

          (A) To pay the  principal of and  interest on the Notes in  accordance
with  the  terms  hereof  and  thereof,   including  any  and  all   extensions,
modifications, and renewals thereof and substitutions therefor;

          (B) To pay the Reimbursement  Obligation and Letter of Credit Advances
in accordance with the terms hereof;

          (C) To pay or reimburse the Lender Parties all amounts advanced by the
Lender  Parties  hereunder,  under any of the Credit  Documents  or otherwise in
accordance with the terms hereof; and

          (D) To pay or  reimburse  the  Lender  Parties  for all of the  Lender
Parties' Default Costs and other Indemnified Losses in accordance with the terms
hereof.

          "Operating  Cash Flow" means the aggregate of (i) Net Income plus (ii)
the  sum  of  Interest  Expense,  Income  Tax  Expense,   Depreciation  Expense,
Amortization  Expense,  and extraordinary  losses and other non-cash expenses or
charges reducing income, all to the extent taken into account in the calculation
of Net Income, less (iii) Extraordinary  Receipts, less (iv) extraordinary gains
and other  non-cash  credits  increasing  income,  less (v) all amounts  paid to


                                       16
<PAGE>

purchase Rental Inventory (other than New Retail Store Rental Inventory), all to
the  extent  taken into  account in the  calculation  of Net  Income;  provided,
however, that there shall be (x) excluded therefrom the results of operations of
any Person sold or otherwise  disposed of at any time after the first day of the
applicable  Trailing  Reference  Period,  and (y) with the  consent of Agent and
subject  to  such  conditions  as may be  imposed  by  Agent,  included  for the
applicable  Pro-Forma  Reference  Period,  on a pro-forma  basis, the results of
operations of any Person acquired in a Permitted Acquisition.

          "Ordinary  Course of Business"  means an action taken by a Person only
if:

          (A) Such action is consistent  with the past  practices of such Person
and is taken in the ordinary course of the normal day-to-day  operations of such
Person;

          (B) Such action is not required to be authorized by the Governing Body
of such Person; and

          (C) Such  action  is  similar  in  nature  and  magnitude  to  actions
customarily  taken,  without any  authorization  by any  Governing  Body, in the
ordinary course of the normal day-to-day operations of other Persons that are in
the same or similar line of business as such Person.

          "Organizational Documents" means (i) the articles of incorporation and
the bylaws of a corporation, (ii) the partnership agreement and any statement of
partnership of a general  partnership,  (iii) the limited partnership  agreement
and the certificate of limited  partnership of a limited  partnership,  (iv) the
articles of  organization  and the  operating  agreement of a limited  liability
company, (v) any charter or similar document adopted or filed in connection with
the creation,  formation, or organization of a Person, and (vi) any amendment to
any of the foregoing.

          "Participant"  means a Person  purchasing a participation  interest in
accordance with the provisions of Section 13.7(D) of this Agreement.

          "Payment Due Date" means,  except as otherwise  expressly  provided to
the  contrary,  (A) with  respect to any  payment of  interest on any LIBOR Rate
Borrowing,  the first  Business Day following the  expiration of any  applicable
LIBOR Rate Interest  Period;  and (B) with respect to any payment of interest on
any Base Rate Borrowing, the first Business Day following each Quarter-End.

          "Payment  Obligation"  means any  Obligation to any Lender Party which
may be satisfied with the payment of money.

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

          "Permitted  Acquisition"  means any  Acquisition  if (i) the  business
acquired  is a  Permitted  Line  of  Business;  (ii)  any  securities  given  as
consideration therewith are securities of Borrower;  (iii) immediately after the
Acquisition,  the  business  so  acquired  (and  the  assets  constituting  such
business)  shall be owned and operated by Borrower or a wholly-owned  Subsidiary
of  Borrower  (provided  that,  with  respect to the Video  Update  Acquisition,


                                       17
<PAGE>

Borrower  shall be allowed a period of up to 30 days (or such  longer  period of
time of up to 90 days if approved  by Agent) for the  business so acquired to be
wholly-owned by Borrower or a wholly-owned Subsidiary of Borrower, provided that
immediately after the Acquisition, Borrower shall own or control at least 90% of
the Voting  Power of the entity owing the assets the subject of the Video Update
Acquisition);  (iv) no Default shall have occurred and be continuing at the time
of the  consummation of such Acquisition or would exist  immediately  after such
Acquisition; (v) other than the Video Update Acquisition, the Acquisition Amount
paid or payable in connection  therewith,  together with the consideration  paid
for all other  Acquisitions  during the applicable  Trailing  Reference  Period,
shall not exceed $35,000,000 (excluding therefrom the Video Update Acquisition);
and (vi) other than the Video Update Acquisition,  to the extent paid or payable
in cash, the  Acquisition  Amount paid with respect  thereto,  together with the
consideration  paid for all other  Acquisitions  during the applicable  Trailing
Reference Period,  shall not exceed $15,000,000  (excluding  therefrom the Video
Update Acquisition).

          "Permitted Liens" means:

               (1) Liens created under the Security Documents;

               (2)  Liens in  existence  on the  Closing  Date and set  forth on
Schedule 10.3;

               (3)  Liens   imposed   by  Law,   such  as  Liens  of   carriers,
warehousemen,  mechanics,  materialmen  and  landlords,  and other similar Liens
incurred in the Ordinary Course of Business for sums not  constituting  borrowed
money that are not  overdue  for a period of more than  thirty (30) days or that
are being  contested  in good  faith by  appropriate  proceedings  and for which
adequate  reserves have been  established in accordance with Generally  Accepted
Accounting Principles;

               (4) Liens (other than any Lien imposed by ERISA), the creation or
incurrence  of which  would not  result  in an Event of  Default  under  Section
11.1(J),  and incurred in the  Ordinary  Course of Business in  connection  with
worker's  compensation,  unemployment  insurance or other forms of  governmental
insurance or benefits,  or to secure the performance of letters of credit, bids,
tenders,  statutory  obligations,  surety and appeal bonds,  leases,  government
contracts and other similar  obligations  (other than  obligations  for borrowed
money) entered into in the Ordinary Course of Business;

               (5) Liens for taxes, assessments or other governmental charges or
statutory  obligations  that are not  delinquent or remain  payable  without any
penalty or that are being contested in good faith by appropriate proceedings and
for which adequate  reserves have been  established in accordance with Generally
Accepted Accounting Principles;

               (6) Purchase money Liens upon property used by Borrower or any of
its  Subsidiaries  in the  Ordinary  Course of Business,  securing  Indebtedness
incurred solely to pay all or a portion of the purchase price thereof (including
in connection with capital leases), provided that the aggregate principal amount
at any time  outstanding of all Indebtedness  secured by such Liens,  when taken
together with all other  Indebtedness of Borrower and its Subsidiaries  incurred


                                       18
<PAGE>

subject  to the  limitation  set forth in Section  10.2(7),  does not exceed the
dollar amount set forth in such clause,  and provided further that any such Lien
(i) shall  attach to such  property  concurrently  with or within  ten (10) days
after the  acquisition  thereof by Borrower or such  Subsidiary,  (ii) shall not
exceed the lesser of (y) the fair market value of such property, or (z) the cost
thereof to Borrower or such  Subsidiary,  and (iii) shall not encumber any other
property of Borrower or any of its Subsidiaries;

               (7) Liens on Borrower Margin Stock, to the extent the fair market
value thereof exceeds 25% of the fair market value of the assets of Borrower and
its Subsidiaries (including Borrower Margin Stock);

               (8) With respect to any real property occupied by Borrower or any
of its  Subsidiaries,  all  easements,  rights  of  way,  licenses  and  similar
encumbrances on title that do not materially impair the use of such property for
its intended purposes; and

               (9) Liens in favor of the trustee or agent under any agreement or
indenture relating to Subordinated Indebtedness of Borrower permitted under this
Agreement,  covering  sums  required to be deposited  with such trustee or agent
thereunder.

          "Permitted  Line of  Business"  means the  business  of movie and game
rental and sales,  and the rental or sale of products  and  services  reasonably
ancillary thereto, including,  without limitation,  rental by patrons of the use
of tanning beds and ancillary equipment.

          "Person" means any individual, corporation, limited liability company,
partnership,    association,    joint-stock   company,   trust,   unincorporated
organization, joint venture, court or Governmental Authority.

          "Place  for  Payment"  means a place for  payment as from time to time
designated  by Agent,  which  place for payment  currently  is at the address of
Agent as hereinafter provided for with respect to notices.

          "Plan" means any "employee pension benefit plan" within the meaning of
Section  3(2) of ERISA that is subject  to the  provisions  of Title IV of ERISA
(other than a  Multiemployer  Plan) and to which Borrower or any ERISA Affiliate
may have any liability.

          "Pledge  Agreement"  means that certain Pledge  Agreement of even date
herewith,  made by  Borrower  in favor of the Agent,  as  amended,  modified  or
supplemented from time to time.

          "Pro-Forma  Reference  Period"  means  a  period  of one  fiscal  year
comprised of four quarters, the first quarter being the quarter during which the
applicable  event occurs or with respect to which a  calculation  is to be made,
and the next three quarters being the three quarters immediately  following such
last quarter.

          "Prohibited  Transaction"  means  any  transaction  described  in  (i)
Section  406 of ERISA that is not exempt by reason of Section 408 of ERISA or by
reason of a  Department  of Labor  prohibited  transaction  individual  or class
exemption  or (ii)  Section  4975(c) of the  Internal  Revenue  Code that is not
exempt by reason of Section 4975(c)(2) or 4975(d) of the Internal Revenue Code.

                                       19
<PAGE>

          "Pro Rata" or "Pro Rata Share" of any amount  means,  with  respect to
any Lender at any time,  the product of such amount times such  Lender's  Credit
Percentage.

          "Quarter-End" means the last day of each fiscal quarter of Borrower.

          "Register"  means the  register  maintained  by the Agent  pursuant to
Section 13.7(B).

          "Regulation  D" means  Regulation  D of the Board of  Governors of the
Federal  Reserve  System  from time to time in  effect  and  shall  include  any
successor  or other  regulation  or  official  interpretation  of said  Board of
Governors  relating to reserve  requirements  applicable  to member banks of the
Federal Reserve System.

          "Regulation "G",  Regulation "T",  Regulation "U", and Regulation "X""
means Regulation G, Regulation T, Regulation U, and Regulation X,  respectively,
of the Board of Governors of the Federal  Reserve  System as now or from time to
time hereafter in effect and shall include any successor or other  regulation or
official  interpretation of said Board of Governors relating to the extension of
credit  by banks  for the  purpose  of  purchasing  or  carrying  margin  stocks
applicable to member banks of the Federal Reserve System.

          "Reimbursement Obligation" means the obligation of Borrower to pay the
amounts required under Section 4.3.

          "Rental  Inventory"  means video  tapes or  cassettes,  digital  video
discs,  games and game cartridges,  CD ROMs, and any other format or media which
is rental  inventory  of  Borrower or its  Subsidiaries  and is  capitalized  by
Borrower or its Subsidiaries as rental inventory.

          "Reportable Event" means (i) any "reportable event" within the meaning
of Section 4043(c) of ERISA for which the 30-day notice under Section 4043(a) of
ERISA has not been waived by the PBGC (including any failure to meet the minimum
funding standard of, or timely make any required  installment under, Section 412
of the Internal Revenue Code or Section 302 of ERISA, regardless of the issuance
of any waivers in accordance with Section 412(d) of the Internal  Revenue Code),
(ii) any such  "reportable  event"  subject to advance  notice to the PBGC under
Section  4043(b)(3) of ERISA,  (iii) any  application for a funding waiver or an
extension  of any  amortization  period  pursuant to Section 412 of the Internal
Revenue Code, and (iv) a cessation of operations described in Section 4062(e) of
ERISA.

          "Required   Lenders"   means  at  any  time  Lenders   holding  Credit
Percentages of at least fifty percent (50%).

          "Requirement of Law" means,  with respect to any Person,  the charter,
articles or certificate of  organization  or  incorporation  and bylaws or other
organizational  or governing  documents of such  Person,  and any statute,  Law,


                                       20
<PAGE>

treaty, rule,  regulation,  order, decree, writ,  injunction or determination of
any arbitrator or court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its  property  is subject or  otherwise  pertaining  to any or all of the
transactions contemplated by this Agreement and the other Credit Documents.

          "Reserve  Requirement"  with respect to a LIBOR Rate  Interest  Period
means the weighted  average during the LIBOR Rate Interest Period of the maximum
aggregate reserve requirement (including all basic,  supplemental,  marginal and
other  reserves and taking into account any  transitional  adjustments  or other
scheduled changes in reserve requirements during the LIBOR Rate Interest Period)
which is imposed under Regulation D.

          "Responsible  Officer"  means,  collectively,   the  president,  chief
executive officer, chief financial officer, and general counsel of Borrower.

          "Revolving  Loan" means the loan which  Lenders have agreed to advance
to Borrower in accordance with the terms of Article II of this Agreement.

          "Revolving Loan Advancement Termination Date" means the earlier of (i)
the Revolving Loan Maturity Date, or (ii) the date of the occurrence of an Event
of Default.

          "Revolving Loan Advances" means Advances of the Revolving Loan.

          "Revolving  Loan  Amount"  means (i) until  July 7,  2002,  Sixty-Five
Million and No/100  Dollars  ($65,000,000.00),  (ii)  thereafter,  until July 6,
2003,  Fifty-Five  Million  and  No/100  Dollars  ($55,000,000.00);   and  (iii)
thereafter,  Forty-Five Million and No/100 Dollars  ($45,000,000.00);  provided,
however,  that upon  five (5)  Business  Days'  prior  written  notice to Agent,
Borrower  may reduce the amount of the  Revolving  Loan Amount at any time in an
aggregate  amount  of not  less  than  $5,000,000  (or if  greater  in  integral
multiples of $1,000,000 in excess  thereof) and the Revolving  Loan Amount shall
be automatically and permanently reduced by prepayments  required under Sections
5.3(B), (C) and (D).

          "Revolving   Loan   Borrowing"   means  a  Borrowing   consisting   of
simultaneous Revolving Loan Advances made by the Lenders.

          "Revolving Loan Commitment" means (A) with reference to the Lenders in
the  aggregate,  the  commitment  of the  Lenders,  subject to the terms of this
Agreement,  to lend  Borrower  up to the  Revolving  Loan  Amount less the total
Available Amount of all Letters of Credit; and (B) with reference to each Lender
separately,  the  commitment  of  such  Lender,  subject  to the  terms  of this
Agreement,  to lend Borrower such Lender's Pro Rata Share of the Revolving  Loan
Commitment.

          "Revolving  Loan Lenders"  means the banks and financial  institutions
listed on the signature  pages hereof or that become parties hereto as Revolving
Loan Lenders after the date hereof, and their respective successors and assigns.

          "Revolving Loan Maturity Date" means July 4, 2004, or if earlier,  the
occurrence of an Event of Default.

                                       21
<PAGE>

          "Revolving Notes" means those certain Revolving Notes from Borrower to
the  Revolving  Loan  Lenders,  dated of even date  herewith,  in the  aggregate
principal  amount of $65,000,000,  and includes any amendment to or modification
of any such note and any promissory note given in extension or renewal of, or in
substitution for, such note.

          "Security  Documents"  means the Pledge Agreement and all other pledge
or security agreements or instruments  executed and delivered by Borrower or any
of its Subsidiaries pursuant to Section 8.10 or otherwise in connection with the
transactions   contemplated  hereby,  in  each  case  as  amended,  modified  or
supplemented from time to time.

          "Solvent"  and  "Solvency"  mean,  with  respect  to any  Person  on a
particular  date,  that on such date (a) the fair value of the  property of such
Person is  greater  than the total  amount of  liabilities,  including,  without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the  assets of such  Person is not less  than the  amount  that will be
required  to pay the  probable  liability  of such  Person  on its debts as they
become  absolute and  matured,  (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in  business  or a  transaction,  and is not about to engage  in  business  or a
transaction,  for which such Person's  property would constitute an unreasonably
small  capital.  The  amount  of  contingent  liabilities  at any time  shall be
computed  as the amount  that,  in the 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.

          "SouthTrust" means SouthTrust Bank, an Alabama banking corporation.

          "Stated  Amount"  means,  with  respect to any Letter of Credit at any
time,  the  aggregate  amount  available  to be drawn  thereunder  at such  time
(regardless of whether any conditions for drawing could then be met).

          "Subordinated  Indebtedness"  means  Indebtedness  of Borrower that is
expressly  subordinated  and made  junior  in right and time of  payment  to the
obligations of Borrower with respect to the Loans,  and that is evidenced by one
or more written agreements having terms,  conditions and provisions  (including,
without  limitation,  provisions  relating to the  principal  amount,  maturity,
covenants,  defaults,  interest,  subordination,  and repayment) satisfactory in
form and  substance  to Agent  (and  approved  by all the  Lenders)  in its sole
discretion,  which shall provide, at a minimum and without limitation, that such
Indebtedness  (a) shall  mature no earlier  than the second  anniversary  of the
Revolving  Loan Maturity  Date,  (b) shall not require any scheduled  payment of
principal  prior to the first  anniversary  of the Revolving Loan Maturity Date,
and (c) shall  have  covenants  and  undertakings  that,  taken as a whole,  are
materially less restrictive than those contained in the Credit Documents.

          "Subsidiary"  means,  with respect to any Person,  any Person of which
more than fifty  percent (50%) of the  outstanding  Voting Power is at the time,
directly or indirectly, owned or controlled by such Person.

                                       22
<PAGE>

          "Swing Line Lender" means SouthTrust in its capacity as the Swing Line
Lender and its successors in such capacity.

          "Swing Line Loan" means the aggregate  unpaid  principal  balance from
time to time of all Advances made under Article III of this Agreement.

          "Swing Line Loan  Advances"  means the Advances made by the Swing Line
Lender pursuant to Article III hereof.

          "Swing Line Loan  Borrowing"  a Borrowing  consisting  of a Swing Line
Loan Advance made by the Swing Line Lender.

          "Swing Line Loan  Commitment"  means the  commitment of the Swing Line
Lender,  subject  to the  terms  of this  Agreement  until  the  Revolving  Loan
Advancement  Termination Date, to lend Borrower in principal amount  outstanding
from  time to time up to the  lesser  of (i) Five  Million  and  No/100  Dollars
($5,000,000.00),  or (ii) the aggregate of the Unused  Revolving  Commitments of
the Lenders.

          "Swing Line Loan Maturity Date" means the earlier of (a) the date five
(5) Business Days prior to the Revolving  Loan Maturity Date, (b) the occurrence
of an Event of Default,  or (c) the date of demand for payment of the Swing Line
Loan by the Swing Line Lender.

          "Swing Line Note" means that certain  Swing Line Note from Borrower to
the Swing Line Lender  dated of even date  herewith in the  principal  amount of
$5,000,000.00,  and includes any amendment to or  modification  of such note and
any promissory  note given in extension or renewal of, or in  substitution  for,
such note.

          "Syndication  Fee" means a fee payable to Agent in an amount as agreed
to between Agent and Borrower pursuant to the Fee Letter, such fee to be paid in
advance on or before the Closing Date.

          "Third Party" means a Person not a party to this Agreement.

          "Trailing  Reference  Period"  means  a  period  of  one  fiscal  year
comprised of four quarters,  the last quarter being the quarter during which the
applicable  event occurs or with respect to which a  calculation  is to be made,
and the first three quarters being the three quarters immediately preceding such
last quarter.

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

          "Unsecured Indebtedness" means Indebtedness not secured by any Lien.


                                       23
<PAGE>

          "Unused  Fee" means the fee  payable by  Borrower to the Agent for the
account of each Lender on each  Quarter-End,  as  determined by Agent as of such
Quarter-End  in an amount equal to the product of (A) the daily  average of such
Lender's Unused  Revolving Loan  Commitment  outstanding on each day during such
quarter, multiplied by (B) a percentage based on the Leverage Ratio as follows:

         Leverage Ratio                                   Unused Fee
         --------------                                   ----------

         Equal to or greater than 2.0 to 1.0                0.5%

         Less than 2.0 to 1.0                               0.375%

          "Unused  Revolving  Loan  Commitment"  means,  with respect to (i) any
Lender at any time,  (a) such Lender's  Revolving  Loan  Commitment at such time
minus (b) the sum of (x) the aggregate  principal  amount of all Revolving  Loan
Advances and Letter of Credit  Advances made by such Lender and  outstanding  at
such time,  plus (y) such  Lender's  Pro Rata Share of the  aggregate  Available
Amount of all Letters of Credit  outstanding  at such time; and (ii) the Lenders
at any time (in the aggregate),  (a) the Lenders'  Revolving Loan Commitments at
such  time  minus  (b) the  sum of (x) the  aggregate  principal  amount  of all
Revolving  Loan  Advances and Letter of Credit  Advances made by the Lenders and
outstanding at such time, plus (y) the aggregate Available Amount of all Letters
of Credit outstanding at such time.

          "Video Update Acquisition" means the Acquisition of Video Update, Inc.
contemplated to be made by Borrower  pursuant to a Plan of  Reorganization to be
filed in  connection  with Chapter 11  Bankruptcy  proceedings  of Video Update,
Inc., and the transactions relating thereto,  including the purchase by Borrower
and Movie Gallery No. 1, LLC of senior  secured bank debt of Video Update,  Inc.
and the extension of credit under the Debtor In Possession  Financing  Agreement
between Borrower and Video Update, Inc., as debtor in possession.

          "Voting  Power" means,  with respect to any Person,  the right to vote
for  the  election  of  the  Governing   Body  of  such  Person  under  ordinary
circumstances.

          "Wholly  Owned" means,  with respect to any  Subsidiary of any Person,
that 100% of the  outstanding  Equity  Interests  of such  Subsidiary  is owned,
directly or indirectly, by such Person.

          "30-Day  Adjusted  LIBOR Rate" means an interest rate equal to the sum
of (i) the applicable 30-Day LIBOR Rate, plus (ii) the Applicable Margin.

          "30-Day LIBOR Rate" means,  as applicable  to each  respective  30-Day
LIBOR Rate Interest  Period,  a per annum rate of interest equal to the quotient
obtained (stated as an annual  percentage rate rounded upward to the next higher
100th of 1%) by dividing (A) the London  Interbank  Offered Rate ("LIBOR") for a
period of thirty (30) days as  determined  by Agent from Telerate (or such other
source as Agent may select if such a rate index is not available from Telerate),


                                       24
<PAGE>

by (B) 1.00 minus any Reserve  Requirement  for the 30-Day  LIBOR Rate  Interest
Period (expressed as a decimal).

          "30-Day LIBOR Rate  Interest  Period" means a period of one month from
the first day of the  applicable  30-Day LIBOR Rate Interest  Period to the date
one month  thereafter,  and with respect to which a 30-Day LIBOR Rate Notice has
been given.

          "30-Day LIBOR Rate Notice" means a written notice given to Agent by an
Authorized  Officer  providing  for  Borrower's  election  for  the  outstanding
principal balance of the Note to bear interest at the applicable 30-Day Adjusted
LIBOR Rate for a 30-Day LIBOR Rate Interest  Period,  such notice to be given no
later than 11:00 a.m.  (Birmingham,  Alabama time) three (3) Business Days prior
to and specifying the date of the  commencement  of the applicable  30-Day LIBOR
Rate Interest Period; provided,  however, that, except as may be waived by Agent
in Agent's  discretion,  in no event may any 30-Day LIBOR Rate  Interest  Period
begin until the  expiration of any current LIBOR Rate Interest  Period and in no
event  may a  30-Day  Adjusted  LIBOR  Rate be  elected  at any  time  when  the
corresponding  30-Day  LIBOR  Rate  Interest  Period  would  extend  beyond  the
Revolving  Loan Maturity  Date,  and if any such 30-Day LIBOR Rate Notice is not
timely  received or is  otherwise  not  properly  made,  such 30-Day  LIBOR Rate
Notice, at Agent's election, shall not be effective.

          "60-Day  Adjusted  LIBOR Rate" means an interest rate equal to the sum
of (i) the applicable 60-Day LIBOR Rate, plus (ii) the Applicable Margin.

          "60-Day LIBOR Rate" means,  as applicable  to each  respective  60-Day
LIBOR Rate Interest  Period,  a per annum rate of interest equal to the quotient
obtained (stated as an annual  percentage rate rounded upward to the next higher
100th of 1%) by dividing (A) the London  Interbank  Offered Rate ("LIBOR") for a
period of sixty (60) days as  determined  by Agent from  Telerate (or such other
source as Agent may select if such a rate index is not available from Telerate),
by (B) 1.00 minus any Reserve  Requirement  for the 60-Day  LIBOR Rate  Interest
Period (expressed as a decimal).

          "60-Day LIBOR Rate Interest  Period" means a period of two months from
the first day of the  applicable  60-Day LIBOR Rate Interest  Period to the date
two months thereafter,  and with respect to which a 60-Day LIBOR Rate Notice has
been given.

          "60-Day LIBOR Rate Notice" means a written notice given to Agent by an
Authorized  Officer  providing  for  Borrower's  election  for  the  outstanding
principal balance of the Note to bear interest at the applicable 60-Day Adjusted
LIBOR Rate for a 60-Day LIBOR Rate Interest  Period,  such notice to be given no
later than 11:00 a.m.  (Birmingham,  Alabama time) three (3) Business Days prior
to and specifying the date of the  commencement  of the applicable  60-Day LIBOR
Rate Interest Period; provided,  however, that, except as may be waived by Agent
in Agent's  discretion,  in no event may any 60-Day LIBOR Rate  Interest  Period
begin until the  expiration of any current LIBOR Rate Interest  Period and in no
event  may a  60-Day  Adjusted  LIBOR  Rate be  elected  at any  time  when  the
corresponding  60-Day  LIBOR  Rate  Interest  Period  would  extend  beyond  the
Revolving  Loan Maturity  Date,  and if any such 60-Day LIBOR Rate Notice is not
timely  received or is  otherwise  not  properly  made,  such 60-Day  LIBOR Rate
Notice, at Agent's election, shall not be effective.

                                       25
<PAGE>

          "90-Day  Adjusted  LIBOR Rate" means an interest rate equal to the sum
of (i) the applicable 90-Day LIBOR Rate, plus (ii) the Applicable Margin.

          "90-Day LIBOR Rate" means,  as applicable  to each  respective  90-Day
LIBOR rate Interest  Period,  a per annum rate of interest equal to the quotient
obtained (stated as an annual  percentage rate rounded upward to the next higher
100th of 1%) by dividing (A) the London  Interbank  Offered Rate ("LIBOR") for a
period of ninety (90) days as  determined  by Agent from Telerate (or such other
source as Agent may select if such a rate index is not available from Telerate),
by (B) 1.00 minus any Reserve  Requirement  for the 90-Day  LIBOR Rate  Interest
Period (expressed as a decimal).

          "90-Day  LIBOR Rate  Interest  Period"  means a period of three months
from the irst day of the  applicable  90-Day LIBOR Rate  Interest  Period to the
date three  months  thereafter,  and with  respect to which a 90-Day  LIBOR Rate
Notice has been given.

          "90-Day LIBOR Rate Notice" means a written notice given to Agent by an
Authorized  Officer  providing  for  Borrower's  election  for  the  outstanding
principal balance of the Note to bear interest at the applicable 90-Day Adjusted
LIBOR Rate for a 90-Day LIBOR Rate Interest  Period,  such notice to be given no
later than 11:00 a.m.  (Birmingham,  Alabama time) three (3) Business Days prior
to and specifying the date of the  commencement  of the applicable  90-Day LIBOR
Rate Interest Period; provided,  however, that, except as may be waived by Agent
in Agent's  discretion,  in no event may any 90-Day LIBOR Rate  Interest  Period
begin until the  expiration of any current LIBOR Rate Interest  Period and in no
event  may a  90-Day  Adjusted  LIBOR  Rate be  elected  at any  time  when  the
corresponding  90-Day  LIBOR  Rate  Interest  Period  would  extend  beyond  the
Revolving  Loan Maturity  Date,  and if any such 90-Day LIBOR Rate Notice is not
timely  received or is  otherwise  not  properly  made,  such 90-Day  LIBOR Rate
Notice, at Agent's election, shall not be effective.

     1.2 Accounting  Terms.  Except as specifically  provided  otherwise in this
Agreement,  all accounting terms used herein that are not  specifically  defined
shall have the meanings  customarily given them, and all financial  computations
hereunder  shall be made,  in  accordance  with  Generally  Accepted  Accounting
Principles.  Notwithstanding  the  foregoing,  in the event that any  changes in
Generally Accepted  Accounting  Principles after the date hereof are required to
be applied to the transactions described herein and would affect the computation
of the financial covenants contained in Sections 9.1 through 9.4, as applicable,
such changes shall be followed only from and after the date this Agreement shall
have been amended to taken into account any such changes.

     1.3  Construction of Terms.  Whenever used in this Agreement,  the singular
number  shall  include the plural and the plural the  singular,  pronouns of one
gender shall include all genders, and use of the terms "herein",  "hereof",  and
"hereunder"  shall be deemed to be references to this  Agreement in its entirety
unless otherwise specifically provided.

                                       26
<PAGE>

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


     1.5 Computation of Applicable Margin and Financial Covenants. Except as may
otherwise  be provided in this  Agreement to the  contrary,  (i) for purposes of
computation  of the Applicable  Margin and the financial  covenants set forth in
this  Agreement,  such  computation  (x) shall be determined by Agent as of each
Quarter-End,  based on the  Compliance  Certificate  most recently  delivered by
Borrower  in  accordance  with the  terms of this  Agreement,  and (y)  shall be
determined on a Consolidated Basis and based on an Annualized Rolling Period, if
applicable;   and  (ii)  any  adjustment  in  the  Applicable  Margin  shall  be
prospective  and shall  commence as of the tenth Business Day after the delivery
of the Compliance  Certificate most recently delivered by Borrower in accordance
with the terms of this  Agreement  until such time as the  Applicable  Margin is
subsequently  adjusted pursuant to this Agreement (provided that should Borrower
fail to so timely deliver a required Compliance Certificate, Agent at its option
may adjust the Applicable Margin to the highest applicable  percentage as of the
date the  Compliance  Certificate  was due to be  delivered).  Until  the  first
Quarter-End   following  the  Closing  Date,  the  Applicable  Margin  shall  be
determined by reference to the Leverage Ratio determined as of April 1, 2001 and
as reflected in the certificate of Borrower described in Section 6.1(M).

                                   ARTICLE II.

2.   THE REVOLVING LOAN

     2.1 General Terms.  Subject to the terms hereof, the Revolving Loan Lenders
will lend  Borrower,  from time to time  until the  Revolving  Loan  Advancement
Termination  Date,  such  amounts  which  shall  not  exceed,  in the  aggregate
principal amount at any one time  outstanding,  the Revolving Loan Commitment as
follows:

          (A) Each  Revolving  Loan Lender  severally  agrees,  on the terms and
conditions  hereinafter  set forth,  to make Revolving Loan Advances to Borrower
from time to time on any  Business  Day during the period  from the date  hereof
until the Revolving Loan Advancement Termination Date in an amount for each such
Revolving  Loan  Advance  not to exceed  such  Revolving  Loan  Lender's  Unused
Revolving Loan  Commitment at such time.  Each Revolving Loan Borrowing shall be
in an aggregate amount of (i) with respect to Base Rate  Borrowings,  $1,000,000
or, if greater, an integral multiple of $500,000 in excess thereof; or (ii) with
respect  to LIBOR  Rate  Borrowings,  $1,000,000  or, if  greater,  an  integral
multiple of $500,000 in excess  thereof  (other than a Revolving  Loan Borrowing
the  proceeds  of  which  shall  be used  solely  to  repay  or  prepay  in full
outstanding  Swing Line Loan Advances or outstanding  Letter of Credit  Advances
and a Revolving Loan Borrowing in an amount equal to the entire Unused Revolving
Loan   Commitment)   and  shall   consist  of  Revolving   Loan   Advances  made
simultaneously  by  the  Revolving  Loan  Lenders  ratably  according  to  their
respective Revolving Loan Commitments.

          (B) Subject to the terms  hereof,  Borrower may borrow,  repay without
penalty or premium, and reborrow hereunder,  the Revolving Loan from the date of
this Agreement until the Revolving Loan Advancement  Termination Date. If at any


                                       27
<PAGE>

time the unpaid  principal  balance of the  Revolving  Loan  exceeds  the amount
Borrower  could  borrow  at  such  time  as set  forth  herein,  Borrower  shall
immediately  upon demand of Agent pay or cause to be paid such  amounts to Agent
for the account of the Revolving Loan Lenders (based on each such Revolving Loan
Lender's Pro Rata Share of the Revolving Loan  Commitment at such time),  to the
extent  necessary to reduce the Revolving Loan to an amount which Borrower could
borrow at that time.

     2.2 Disbursement of the Revolving Loan.

          (A) In order to obtain a Revolving Loan Advance, an Authorized Officer
shall  deliver a Notice of Borrowing to Agent not later than (i) with respect to
Revolving Loan Advances to be made at Closing,  the time of  commencement of the
Closing, and (ii) with respect to any other Revolving Loan Advances,  11:00 a.m.
(Birmingham, Alabama time) on a date not less than three (3) Business Days prior
to the date such Revolving Loan Advance is sought.

          (B) Upon Agent's receipt of a Notice of Borrowing, Agent shall deliver
a Notice of Funding to each  Revolving Loan Lender at least one (1) Business Day
prior to the date the Revolving Loan Advance is to be made to Borrower, and each
Revolving Loan Lender shall, before 11:00 a.m. (Birmingham, Alabama time) on the
date of such Revolving Loan Advance,  make available to the Agent at the Agent's
Account,  in same day funds, such Revolving Loan Lender's Pro Rata Share of such
Revolving Loan Advance.

          (C) After Agent's  receipt of such funds and upon  fulfillment  of any
applicable  conditions set forth in this  Agreement,  Agent will make such funds
available  to Borrower  by  crediting  Borrower's  deposit  account  with Agent;
provided,  however,  that upon (i)  written  notice to Agent from the Swing Line
Lender given prior to the funding of the  Revolving  Loan  Advance,  Agent shall
first make a portion of such funds equal to the  aggregate  principal  amount of
any Swing  Line  Loan  Advances  (plus  interest  accrued  and  unpaid  thereon)
available  to the Swing  Line  Lender  for  repayment  of such  Swing  Line Loan
Advances;  and (ii) written  notice to Agent from the Issuing Lender given prior
to the funding of the Revolving  Loan Advance,  Agent shall first make a portion
of such funds equal to the  aggregate  principal  amount of any Letter of Credit
Advances (plus  interest  accrued and unpaid  thereon)  available to the Issuing
Lender (and, if  applicable,  each other Lender that has made a Letter of Credit
Advance  that  remains  outstanding)  for  repayment  of such  Letter  of Credit
Advances.

     2.3 The Revolving Notes.  Borrower's obligation to repay the Revolving Loan
shall be evidenced by the Revolving Notes.

     2.4  Interest  Rate.  During the entire term of the  Revolving  Notes,  the
outstanding  principal balance of the Revolving Notes shall bear interest at the
Adjusted Base Rate;  subject,  however, to the right of an Authorized Officer to
deliver to Agent a LIBOR Rate Notice, in each which case all or a portion of the
outstanding  principal balance of the Revolving Notes shall bear interest at the
Interest Rate as provided for in the applicable LIBOR Rate Notice. Following the
expiration  of any  applicable  LIBOR Rate  Interest  Period,  if an  Authorized
Officer  shall not have timely and properly  delivered a LIBOR Rate Notice for a
LIBOR Rate Interest  Period to commence as of the  expiration of the  applicable
expiring LIBOR Rate Interest Period,  then the outstanding  principal balance of


                                       28
<PAGE>

the Revolving Notes shall  automatically bear interest at the Adjusted Base Rate
until the commencement of the next LIBOR Rate Interest Period, if any.

     2.5  Payment of  Principal  and  Interest.  Principal  and  interest on the
Revolving Loan shall be payable as follows:

          (A) On the first Payment Due Date  following the date of the Revolving
Notes,  and on each  successive  Payment  Due Date  thereafter  until the entire
indebtedness  evidenced by the Revolving  Notes is paid in full,  Borrower shall
pay to Agent for the account of the Revolving  Loan Lenders  (based on each such
Revolving Loan Lender's Pro Rata Share of the Revolving Loan  Commitment at such
time) all accrued and unpaid  interest on the outstanding  principal  balance of
the Revolving Notes.

          (B) If not earlier  demanded  pursuant  to Section  11.2  hereof,  the
outstanding  principal balance of the Revolving Loan,  together with all accrued
and unpaid interest  thereon,  shall be due and payable to Agent for the account
of the Revolving  Loan Lenders  (based on each such  Revolving Loan Lender's Pro
Rata Share of the Revolving Loan  Commitment at such time) on the Revolving Loan
Maturity Date.

     2.6 Use of Proceeds of Revolving  Loan.  The proceeds of the Revolving Loan
shall be used to refinance  certain existing  indebtedness,  to pay or reimburse
certain  fees and expenses in  connection  herewith  and  therewith,  to finance
certain  acquisitions  and stock  repurchases,  for working  capital and general
corporate  purposes  and to repay Swing Line Loan  Advances and Letter of Credit
Advances.

                                  ARTICLE III.

3.   THE SWING LINE LOAN.

     3.1 General Terms.

          (A)  Subject  to the terms  hereof,  the Swing Line  Lender  will lend
Borrower,  from time to time  until the Swing  Line  Loan  Maturity  Date,  such
amounts  which shall not exceed,  in the aggregate  principal  amount at any one
time outstanding, the Swing Line Loan Commitment.

          (B) Subject to the terms  hereof,  Borrower may borrow,  repay without
penalty or premium, and reborrow hereunder, the Swing Line Loan from the date of
this  Agreement  until the Swing  Line Loan  Maturity  Date.  If at any time the
unpaid  principal  balance of the Swing Line Loan  exceeds  the amount  Borrower
could borrow at such time as set forth herein,  Borrower shall  immediately upon
demand of Agent pay or cause to be paid such  amounts to the Swing Line  Lender,
to the  extent  necessary  to  reduce  the Swing  Line  Loan to an amount  which
Borrower could borrow at that time.

                                       29
<PAGE>

     3.2 Disbursement of the Swing Line Loan.

          (A) Swing Line Lender  will  credit or pay the  proceeds of each Swing
Line Loan  Advance to  Borrower's  deposit  account with Swing Line Lender or in
such other manner as Borrower and Swing Line Lender may agree.

          (B) (i) Subject to the terms of any other  agreement  among Swing Line
Lender and Borrower to the contrary  (including any cash management  agreement),
in order to obtain a Swing  Line  Loan  Advance,  an  Authorized  Officer  shall
deliver a Notice of  Borrowing  to Agent and Swing  Line  Lender  not later than
11:00 a.m.  (Birmingham,  Alabama time) on the Business Day such Swing Line Loan
Advance is sought.  Upon Swing Line Lender's receipt of such Notice of Borrowing
and upon satisfaction of the terms and conditions of this Agreement,  Swing Line
Lender  will make such  funds  available  to  Borrower  as  provided  for above.
Notwithstanding anything contained herein to the contrary, Borrower shall not be
entitled to receive  nor shall  Swing Line  Lender be  required to disburse  any
Swing Line Loan Advance after the Swing Line Loan Maturity Date.

          (ii) Upon  written  demand by Swing Line  Lender,  with a copy of such
demand to the Agent,  each other Lender shall  purchase  from Swing Line Lender,
and Swing Line  Lender  shall sell and  assign to each such other  Lender,  such
other Lender's Pro Rata Share of such outstanding  Swing Line Loan Advance as of
the date of such demand,  by making  available for the account of the Swing Line
Lender, by deposit to the Agent's Account, in same day funds, an amount equal to
the portion of the outstanding  principal amount of such Swing Line Loan Advance
to be  purchased by such Lender.  Borrower  hereby  agrees to each such sale and
assignment.  Each Lender agrees to purchase its Pro Rata Share of an outstanding
Swing Line Loan Advance on (i) the Business Day on which demand therefor is made
by Swing Line  Lender,  provided  that  notice of such demand is given not later
than 11:00 a.m.  (Birmingham,  Alabama  time) on such  Business  Day or (ii) the
first Business Day next succeeding such demand if notice of such demand is given
after  such time.  Upon any such  assignment  by Swing Line  Lender to any other
Lender of a portion of a Swing Line Loan Advance,  Swing Line Lender  represents
and  warrants  to such other  Lender  that  Swing  Line  Lender is the legal and
beneficial  owner of such  interest  being  assigned  by it,  but makes no other
representation  or warranty and assumes no  responsibility  with respect to such
Swing Line Loan  Advance,  the Credit  Documents  or any  Lender.  If and to the
extent that any Lender shall not have so made the amount of such Swing Line Loan
Advance available to the Agent, such Lender agrees to pay to the Agent forthwith
on demand of the Agent or Swing Line Lender such amount  together  with interest
thereon,  for each day from the date of demand by Swing  Line  Lender  until the
date such amount is paid to the Agent, at the Federal Funds Rate. If such Lender
shall pay to the Agent such  amount for the  account of Swing Line Lender on any
Business  Day,  such amount so paid in respect of principal  shall  constitute a
Swing Line Loan Advance made by such Lender on such Business Day for purposes of
this  Agreement,  and the  outstanding  principal  amount of the Swing Line Loan
Advance  made by Swing  Line  Lender  shall be  reduced  by such  amount on such
Business Day.

     3.3 The Swing Line Note. Borrower's obligation to repay the Swing Line Loan
shall be evidenced by the Swing Line Note.

                                       30
<PAGE>

     3.4  Interest  Rate.  During  the entire  term of the Swing Line Note,  the
outstanding  principal balance of the Swing Line Note shall bear interest at the
Adjusted Base Rate.

     3.5 Payments of Principal  and Interest.  If not earlier  demanded by Swing
Line  Lender or pursuant  to Section  11.2  hereof,  the  outstanding  principal
balance of the Swing Line Loan,  together  with all accrued and unpaid  interest
thereon,  shall be due and  payable  to the Agent for the  account of Swing Line
Lender  and each other  Lender  that has made a Swing  Line Loan  Advance  which
remains  outstanding  on the Swing Line Loan Maturity  Date,  and Borrower shall
repay to Agent for the  account of the Swing Line  Lender and each other  Lender
that  has  made  a  Swing  Line  Loan  Advance  which  remains  outstanding  the
outstanding  principal  amount of each Swing Line Loan  Advance  made by each of
them upon demand of the Agent.

     3.6 Use of Proceeds of Swing Line Loan. The proceeds of the Swing Line Loan
shall be used to refinance  certain existing  indebtedness,  to pay or reimburse
certain  fees and expenses in  connection  herewith  and  therewith,  to finance
certain  acquisitions  and stock  repurchases,  for working  capital and general
corporate purposes and to repay Letter of Credit Advances.

                                   ARTICLE IV.

4.   LETTERS OF CREDIT.

     4.1 General  Terms.  Subject to the terms hereof,  Borrower may request the
Issuing Lender, on the terms and conditions hereinafter set forth, to issue, and
the Issuing  Lender shall  issue,  Letters of Credit for the account of Borrower
from time to time on any Business Day in an aggregate  Available  Amount for all
Letters  of Credit  not to exceed at any time the lesser of (i) Letter of Credit
Commitment,  or (ii) the Unused  Revolving Loan Commitment on such Business Day.
No Letter of Credit  shall  have an  expiration  date  (including  all rights of
Borrower or the beneficiary to require renewal) later than the earlier of (i) 30
days before the Revolving Loan Maturity Date, or (ii) one year after the date of
issuance thereof. Unless the Issuing Lender agrees otherwise, there shall be not
more than six (6) Letters of Credit outstanding at any time.

     4.2  Issuance of a Letter of Credit.  In order for a Letter of Credit to be
issued,  an  Authorized  Officer shall deliver a Notice of Issuance to Agent and
Issuing  Lender not later than 11:00 a.m.  (Birmingham,  Alabama time) on a date
not less than three (3)  Business  Days prior to the date the  issuance  of such
Letter of Credit is sought,  such Notice of Issuance  to be  accompanied  by the
form of the Letter of Credit to be  issued.  If (i) the  requested  form of such
Letter of Credit is acceptable  to the Issuing  Lender in its  discretion,  and,
(ii) if required by Agent and Issuing  Lender,  upon execution and delivery of a
Letter of  Credit  Agreement  in form and  substance  satisfactory  to Agent and
Issuing  Lender,  the  Issuing  Lender  will,  subject  to the  other  terms and
conditions  hereof,  issue such Letter of Credit. In the event and to the extent
that the provisions of any Letter of Credit  Agreement  shall conflict with this
Agreement, the provisions of this Agreement shall govern.

     4.3 Reimbursement  and Other Payments.  Borrower agrees to pay to the Agent
immediately upon demand of the Agent or the Issuing Lender for  reimbursement to
the Issuing  Lender (i) at the time when the Issuing  Lender shall pay any draft
presented  under any Letter of  Credit,  a sum equal to the amount so paid under
such Letter of Credit,  plus (ii)  interest  at the  Default  Rate on any amount
remaining  unpaid by Borrower to the Issuing  Lender under clause (i) above from
such time until payment in full.

                                       31
<PAGE>

     4.4 Upon an Event of Default.  In addition to any rights and  remedies  the
Lender Parties may otherwise have under this Agreement,  if any Event of Default
shall have occurred, the Agent or the Issuing Lender may in their discretion (i)
by notice to Borrower, declare the obligation of the Issuing Lender to issue any
Letter of Credit to be  terminated,  whereupon  the  obligation  of the  Issuing
Lender to issue any Letter of Credit shall  forthwith  terminate,  and (ii) make
demand upon Borrower to, and forthwith upon such demand Borrower will pay to the
Agent in same day funds at the Agent's  office  designated  in such demand,  for
deposit in a special Cash Collateral  Account to be maintained at such office of
the Agent,  an amount  equal to the maximum  amount then  available  to be drawn
under any Letter of Credit.  The Cash Collateral Account shall be in the name of
Borrower,  but under the sole  dominion  and control of the Agent,  and shall be
held and disbursed as follows:

          (A) The Agent may from time to time  invest  funds on  deposit  in the
Cash Collateral  Account,  reinvest  proceeds of any such investments  which may
mature or be sold,  and invest  interest or other income  received from any such
investments,  and all such investments and reinvestments  shall, for purposes of
this  Agreement,  constitute  part  of the  funds  held in the  Cash  Collateral
Account.

          (B) If at any time the Agent  determines  that any  funds  held in the
Cash  Collateral  Account are subject to any right or claim of any Person  other
than claims  arising under this  Agreement  and/or that the total amount of such
funds is less than the maximum  amount at such time  available to be drawn under
the Letters of Credit, Borrower will, forthwith upon demand by the Agent, pay to
the Agent,  as additional  funds to be deposited and held in the Cash Collateral
Account,  an amount equal to the excess of (i) such maximum  amount at such time
available  to be drawn under the Letters of Credit over (ii) the total amount of
funds,  if any,  then  held in the  Cash  Collateral  Account  which  the  Agent
determines  to be free and clear of any such  right and  claim.  Nothing in this
Agreement  shall either  obligate the Agent to require any funds to be deposited
in the Cash  Collateral  Account or limit the right of the  Agent,  which it may
exercise  at any time and from time to time,  to release to  Borrower  any funds
held in the Cash Collateral Account.

          (C) Borrower  hereby  assigns,  transfers and sets over, and grants to
Agent a Lien on and upon, the Cash Collateral Account,  including all funds held
in the Cash Collateral  Account from time to time and all proceeds  thereof,  as
security for the Obligations. Borrower agrees that, to the extent notice of sale
of any securities  shall be required by Law, at least five Business Days' Notice
to Borrower of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable  notification.  The Agent
may adjourn any public or private sale from time to time by  announcement at the
time and place fixed therefor,  and such sale may,  without  further notice,  be
made at the time and place to which it will so adjourned.

          (D) The Agent may, at any time or from time to time,  apply funds from
time to time  held in the Cash  Collateral  Account  to the  payment  of (i) any
Reimbursement  Obligation and (ii) upon termination of all Letters of Credit and
payment in full of all the Reimbursement  Obligation, in such order as the Agent
may elect,  as shall have become or shall  become due and payable by Borrower to
the Agent under this Agreement.

                                       32
<PAGE>

          (E) Neither  Borrower nor any Person  claiming on behalf of or through
Borrower  shall  have any right to  withdraw  any of the funds  held in the Cash
Collateral Account after and during the continuance of any Event of Default.

          4.5 No Liability of the Issuing Lender. Neither the Issuing Lender nor
any of its officers or directors shall be liable or responsible for: (a) the use
that  may be made of any  Letter  of  Credit  or any  acts or  omissions  of any
beneficiary or transferee in connection therewith; (b) the validity, sufficiency
or  genuineness  of  documents,  or of any  endorsement  thereon,  even  if such
documents  should  prove  to be in any or all  respects  invalid,  insufficient,
fraudulent or forged; (c) payment by the Issuing Lender against  presentation of
documents  that do not comply  with the terms of a Letter of  Credit,  including
failure of any  documents  to bear any  reference  or adequate  reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit. In furtherance and not in limitation
of the foregoing,  the Issuing Lender may accept  documents that appear on their
face  to  be  in  order,  without   responsibility  for  further  investigation,
regardless of any notice or information to the contrary.

          4.6  Indemnification.   In  addition  to  any  other   indemnification
obligation  of  Borrower  under this  Agreement  or any other  Credit  Document,
Borrower  hereby agrees to indemnify and hold the Lender  Parties  harmless from
and against any and all Indemnified Losses which the Lender Parties may incur or
which may be claimed against the Lender Parties by any Person by reason of or in
connection with the execution and delivery or transfer of, or payment or failure
to make lawful payment under, any Letter of Credit, except Borrower shall not be
required to indemnify  the Issuing  Lender for any action taken or omitted to be
taken by the Issuing Lender if the same  constitutes  gross negligence or wilful
misconduct on the part of the Issuing Lender.

          4.7 Pro Rata Participation, Drawing and Reimbursement.

          (A)  Without  any  further  action  on the part of any  Lender  Party,
effective  immediately  upon the  issuance of any Letter of Credit  issued under
this Agreement, the Issuing Lender will be deemed to have sold, transferred, and
assigned to the Revolving  Loan Lenders at such time,  and such  Revolving  Loan
Lenders will have been deemed to have  purchased  and accepted  from the Issuing
Lender, an undivided interest in the Issuing Lender's interest in the applicable
Letter of Credit equal to such  Revolving  Loan  Lender's Pro Rata Share,  which
purchase  shall obligate each Revolving Loan Lender to purchase from the Issuing
Lender  such  Revolving  Loan  Lender's  Pro Rata  Share of any Letter of Credit
Advance in accordance with the provisions of Section 4.7(C) below, and upon such
purchase,  shall entitle each  Revolving  Loan Lender,  in  accordance  with and
subject to the  provisions of this  Agreement,  to receive such  Revolving  Loan
Lender's Pro Rata Share of any and all payments made by Borrower with respect to
the  applicable  Letter of Credit and whether  required  hereunder  or under any
Letter of Credit Agreement.

          (B) The  payment  by the  Issuing  Lender of a draft  drawn  under any
Letter of Credit shall  constitute for all purposes of this Agreement the making
by the Issuing  Lender of a Letter of Credit Advance in the amount of such draft
and shall bear  interest at the Default Rate from the date of payment  until the
date of reimbursement by Borrower as provided hereunder.

                                       33
<PAGE>

          (C) Upon  written  demand by the Issuing  Lender,  with a copy of such
demand to the Agent,  each Revolving Loan Lender shall purchase from the Issuing
Lender, and the Issuing Lender shall sell and assign to each such Revolving Loan
Lender, such Revolving Loan Lender's Pro Rata Share of any outstanding Letter of
Credit Advance as of the date of such purchase, by making available to the Agent
for the account of the Issuing  Lender,  by deposit to the Agent's  Account,  in
same day funds,  an amount  equal to the  portion of the  outstanding  principal
amount of such Letter of Credit  Advance to be purchased by such  Revolving Loan
Lender.  Promptly after receipt thereof,  the Agent shall transfer such funds to
the Issuing  Lender.  Borrower  hereby agrees to each such sale and  assignment.
Each  Revolving  Loan  Lender  agrees  to  purchase  its Pro  Rata  Share  of an
outstanding  Letter of Credit  Advance on (i) the  Business  Day on which demand
therefor is made by the Issuing Lender which made such Advance,  provided notice
of such demand is given not later than 11:00 a.m. (Birmingham,  Alabama time) on
such Business Day or (ii) the first Business Day next  succeeding such demand if
notice of such demand is given after such time.  Upon any such assignment by the
Issuing  Lender to any Revolving  Loan Lender of a portion of a Letter of Credit
Advance,  the Issuing  Lender  represents  and warrants to such  Revolving  Loan
Lender  that the  Issuing  Lender  is the  legal  and  beneficial  owner of such
interest being  assigned by it, free and clear of any Liens,  but makes no other
representation  or warranty and assumes no  responsibility  with respect to such
Letter of Credit  Advance,  the Credit  Documents or any Lender Party. If and to
the extent that any  Revolving  Loan Lender shall not have so made the amount of
such Letter of Credit Advance available to the Agent, such Revolving Loan Lender
agrees to pay to the Agent  forthwith  on demand of Agent such  amount  together
with  interest  thereon,  for each day from the date of  demand  by the  Issuing
Lender  until the date such amount is paid to the Agent,  at the  Federal  Funds
Rate for its account or the account of the Issuing  Lender,  as  applicable.  If
such Revolving Loan Lender shall pay to the Agent such amount for the account of
the  Issuing  Lender on any  Business  Day,  such  amount so paid in  respect of
principal  shall  constitute a Letter of Credit  Advance made by such  Revolving
Loan  Lender  on such  Business  Day for  purposes  of this  Agreement,  and the
outstanding principal amount of the Letter of Credit Advance made by the Issuing
Lender shall be reduced by such amount on such Business Day.

     4.8 Failure to Purchase  Pro Rata Share of Letter of Credit  Advances.  The
failure  of any  Revolving  Loan  Lender to  purchase  its Pro Rata Share of any
Letter of Credit  Advance as required in Section 4.7 shall not relieve any other
Revolving Loan Lender of its obligation hereunder to purchase its Pro Rata Share
of such  Letter  of  Credit  Advance,  but no  Revolving  Loan  Lender  shall be
responsible  for the failure of any other  Revolving Loan Lender to purchase its
Pro Rata Share of any Letter of Credit Advance.

     4.9 Letter of Credit Reports. The Issuing Lender shall furnish to the Agent
and each  Revolving  Loan  Lender on request  (such  request to be made not more
frequently  than monthly) a written report  summarizing  issuance and expiration
dates of the Letters of Credit issued by the Issuing  Lender and drawings  under
all Letters of Credit issued by the Issuing Lender.

                                       34
<PAGE>

                                   ARTICLE V.

5.   PAYMENTS, ADDITIONAL COSTS, ETC.

     5.1 Payment to Agent.

          (A) All monies  payable to Agent  under  this  Agreement  or under the
Notes shall be paid  directly  to Agent in  immediately  available  funds at the
Place for  Payment.  If Agent  shall send  Borrower  statements  of amounts  due
hereunder,  absent manifest error,  such statements shall be considered  correct
and  conclusively  binding on Borrower  unless  Borrower  notifies  Agent to the
contrary  within sixty (60) days of its receipt of any statement  which it deems
to be incorrect.

          (B) All  payments  to be made by  Borrower  hereunder  will be made to
Agent not later than 1:00 p.m. at the Place for Payment. Payments received after
1:00 p.m. at the Place for Payment  shall be deemed to be payments made prior to
1:00 p.m. at the Place for Payment on the next succeeding Business Day. Borrower
hereby  authorizes  Agent to charge  its  accounts  with Agent in order to cause
timely payment of amounts due hereunder to be made.

          (C) At the time of making each such payment,  Borrower shall,  subject
to the other terms and conditions of this  Agreement,  specify to Agent the Loan
or other  obligation  of  Borrower  hereunder  to which  such  payment  is to be
applied.  In the event that Borrower fails to so specify the relevant Loan or if
an Event of Default shall have occurred and be continuing,  Agent may apply such
payments as it may determine in its discretion.

     5.2 Late Payments. If any scheduled payment, whether principal, interest or
principal and interest,  is late fifteen (15) days or more,  Borrower  agrees to
pay a late charge equal to four percent (4%) of the amount of the payment  which
is late, but not more than the maximum  amount  allowed by applicable  Laws. The
foregoing  provision shall not be deemed to excuse a late payment or be deemed a
waiver of any  other  rights  Lender  Parties  may have  under  this  Agreement,
including,  subject to the terms hereof,  the right to declare the entire unpaid
principal and interest immediately due and payable.

     5.3 Voluntary and Mandatory Prepayments.

          (A) Subject to any  contrary  provision  herein or in any other Credit
Document,  Borrower may prepay or cause to be prepaid the  principal of any Loan
in whole or,  from  time to time,  in part.  All  partial  prepayments,  whether
voluntary  or  mandatory,  shall  (except as may be  directed  by an  Authorized
Officer  to the  contrary)  be  applied  against  the  Obligations  as Agent may
determine in its discretion,  provided that no prepayment shall entitle Borrower
to  cease  making  any  payment  as  otherwise  scheduled  hereunder,   and  any
application  against the Revolving  Loan shall be applied for the account of the
Lenders based on each Lender's Pro Rata Share thereof.

          (B)  Promptly  upon (and in any event not later than two (2)  Business
Days after) its receipt thereof,  Borrower will prepay the outstanding principal
amount of the Loans in an amount equal to (i) 25% of the Net Cash  Proceeds from
any  Equity  Issuance,  or (ii)  100% of the Net  Cash  Proceeds  from  any Debt


                                       35
<PAGE>

Issuance;  provided,  however, that Borrower shall not be required to prepay the
Loans  with any of the Net Cash  Proceeds  from any Debt  Issuance  if such Debt
Issuance  is  Subordinated  Indebtedness  used  solely  for the  purpose  of the
repurchase of the Equity  Interests of Borrower,  and such  repurchase  does not
otherwise give rise to a Default hereunder.

          (C) Not later  than 180 days  after its  receipt  of any  proceeds  of
insurance,  condemnation  award or other compensation in respect of any Casualty
Event (and in any event  upon its  determination  not to repair or  replace  any
property subject to such Casualty  Event),  Borrower will prepay the outstanding
principal  amount  of the  Loans  in an  amount  equal  to 100% of the Net  Cash
Proceeds from such Casualty Event (less any amounts  theretofore  applied to the
repair or  replacement  of  property  subject to such  Casualty  Event) and will
deliver to the Agent, concurrently with such prepayment, a certificate signed by
its chief financial officer in form and substance  satisfactory to the Agent and
setting for the calculation of such Net Cash Proceeds;  provided,  however, that
no such  prepayment  shall be required  until the  aggregate  amount of Net Cash
Proceeds from any Casualty  Event (less any amounts  theretofore  applied to the
repair or replacement of affected  property) exceeds $500,000,  but at such time
the  cumulative  aggregate  amount  of such Net Cash  Proceeds  not  theretofore
subject  to  prepayment  under  this  subsection  (C) shall  become  subject  to
prepayment.

          (D) Not later than 180 days after its receipt  thereof,  Borrower will
prepay the outstanding  principal amount of the Loans in an amount equal to 100%
of  the  Net  Cash  Proceeds  from  any  Asset  Disposition  (less  any  amounts
theretofore  expended to acquire assets or properties or otherwise reinvested in
its  businesses)  and  will  deliver  to  the  Agent,   concurrently  with  such
prepayment,  a  certificate  signed by its chief  financial  officer in form and
substance  satisfactory  to the Agent and setting forth the  calculation of such
Net Cash  Proceeds;  provided,  however,  that  such  prepayment  shall  only be
required to the extent the  aggregate  amount of Net Cash Proceeds from all such
Asset  Dispositions  made from and  after the  Closing  Date  (less any  amounts
theretofore  expended to acquire  assets or properties or otherwise  reinvested)
exceeds $1,000,000.  Notwithstanding  the foregoing,  nothing in this subsection
(D) shall be deemed to permit  any Asset  Disposition  not  expressly  permitted
under Section 10.4.

     5.4 Default  Rate.  Notwithstanding  any  provision  herein or in any other
Credit Document to the contrary,  upon the occurrence and during the continuance
of an Event of  Default,  the  Interest  Rate  payable on the Loans shall be the
Default Rate.

     5.5 No Setoff or  Deduction.  All  payments of principal of and interest on
the Loans and other  amounts  payable  by  Borrower  hereunder  shall be made by
Borrower  without setoff or  counterclaim,  and,  subject to the next succeeding
sentence,  free and clear of, and without  deduction or  withholding  for, or on
account  of,  any  present  or future  taxes,  levies,  imposts,  duties,  fees,
assessments,  or other charges of whatever  nature,  imposed by any Governmental
Authority, or by any department, agency or other political subdivision or taxing
authority.  If any such taxes, levies,  imposts,  duties,  fees,  assessments or
other charges are imposed,  Borrower will pay such additional  amounts as may be
necessary  so that  payment of  principal of and interest on the Loans and other
amounts  payable  hereunder,  after  withholding  or deduction for or on account
thereof,  will not be less than any amount provided to be paid hereunder and, in


                                       36
<PAGE>

any such  case,  Borrower  will  furnish  to Agent  certified  copies of all tax
receipts  evidencing  the payment of such amounts  within 30 days after the date
any such payment is due pursuant to applicable Laws.

     5.6 Payment on Non-Business Day; Payment Computations.  Except as otherwise
provided  in  this  Agreement  to the  contrary,  whenever  any  installment  of
principal  of, or interest on, the Loans or other amount due  hereunder  becomes
due and payable on a day which is not a Business Day, the maturity thereof shall
be  extended  to the  next  succeeding  Business  Day  and,  in the  case of any
installment  of  principal,  interest  shall be payable  thereon at the rate per
annum determined in accordance with this Agreement during such extension.

     5.7 LIBOR Rate Borrowing Indemnification.  If Borrower makes any payment of
principal  with  respect to any LIBOR Rate  Borrowing on any other date than the
last day of an interest  period  applicable  thereto,  or if  Borrower  fails to
borrow  any LIBOR  Rate  Borrowing  after  notice has been given to the Agent in
accordance  with this  Agreement,  or if  Borrower  fails to make any payment of
principal or interest in respect of any LIBOR Rate Borrowing when due,  Borrower
shall  reimburse  each Lender  Party on demand of Agent or such Lender Party for
any resulting loss or expense incurred by such Lender Party,  including  without
limitation  any loss incurred in obtaining,  liquidating  or employing  deposits
from  third  parties,  whether or not the Lender  Parties  shall have  funded or
committed  to fund  such  loan.  A  statement  as to the  amount of such loss or
expense,  prepared in good faith and in reasonable  detail by a Lender Party and
submitted  by a  Lender  Party  to  Borrower  (with a copy to  Agent),  shall be
conclusive and binding for all purposes  absent  manifest error in  computation.
Calculation of all amounts payable to a Lender Party under this Section shall be
made as though the Lender Party shall have actually  funded or committed to fund
such LIBOR Rate  Borrowing  through the purchase of an underlying  deposit in an
amount equal to the amount of such LIBOR Rate  Borrowing in the relevant  market
and having a maturity  comparable to the related interest period and through the
transfer of such deposit to a domestic  office of the Lender Party in the United
States; provided,  however, that Agent may fund such LIBOR Rate Borrowing in any
manner it sees fit and the foregoing  assumption  shall be utilized only for the
purpose of calculation of amounts payable under this Section.

     5.8 360-Day Year. All interest  payable under the Notes shall be calculated
on the basis of a 360-day year by multiplying the outstanding  principal  amount
by the applicable per annum rate,  multiplying the product thereof by the actual
number of days elapsed, and dividing the product so obtained by 360.

     5.9 No Requirement to Actually Obtain Funds.  Notwithstanding the fact that
the Interest Rate  pursuant to the Loans may be  calculated  based upon Lenders'
cost of funds,  Borrower agrees that no Lender Party shall be required  actually
to obtain funds from such source at any time.

     5.10 Usury  Limitation.  If, at any time,  the Interest Rate payable on any
Loan shall be deemed by any competent court of law or any Governmental Authority
to exceed the maximum rate of interest  permitted by any applicable  Laws, then,
for such time as the Interest Rate would be deemed  excessive,  its  application
shall be  suspended  and there  shall be charged  instead  the  maximum  rate of
interest permissible under such Laws, and any excess interest actually collected
by Lender shall be credited as a partial prepayment of principal.

                                       37
<PAGE>

     5.11 Increased Costs; Change in Circumstances; Illegality; etc.

          (A) If, at any time after the date  hereof and from time to time,  the
introduction  of or any change in any  applicable  Law, rule or regulation or in
the  interpretation  or  administration  thereof by any  Governmental  Authority
charged with the interpretation or administration  thereof, or compliance by any
Lender  with any  guideline  or  request  from any such  Governmental  Authority
(whether or not having the force of law),  shall (i) subject  such Lender to any
tax or other charge, or change the basis of taxation of payments to such Lender,
in respect  of any of its LIBOR Rate  Borrowings  or any other  amounts  payable
hereunder or its obligation to make, fund, or maintain any LIBOR Rate Borrowings
(other  than any change in the rate or basis of tax on the overall net income of
such Lender or its  applicable  Lending  Office),  (ii)  impose,  modify or deem
applicable any reserve,  special deposit or similar requirement (other than as a
result of any change in the Reserve  Requirement)  against  assets of,  deposits
with or for the account of, or credit extended by, such Lender or its applicable
Lending Office, or (iii) impose on such Lender or its applicable  Lending Office
any other condition  affecting its LIBOR Rate Borrowings,  and the result of any
of the  foregoing  shall be to  increase  the cost to such  Lender  of making or
maintaining  any  LIBOR  Rate  Borrowings  or to  reduce  the  amount of any sum
received or  receivable  by such Lender  hereunder  (including  with  respect to
Letters of Credit),  Borrower will, promptly upon demand therefor by such Lender
(which  demand  shall be  accompanied  by a written  explanation  in  reasonable
detail,  showing the basis for such demand),  pay to such Lender such additional
amounts as shall  compensate such Lender for such increase in costs or reduction
in return.

          (B) If, at any time after the date  hereof and from time to time,  any
Lender shall have reasonably  determined that the  introduction of or any change
in any applicable Law, rule or regulation  regarding  capital adequacy or in the
interpretation or administration  thereof by any Governmental  Authority charged
with the interpretation or administration  thereof, or compliance by such Lender
with any guideline or request from any such Governmental  Authority  (whether or
not having the force of law), has or would have the effect,  as a consequence of
such  Lender's  Commitment,   Loans  or  participations  in  Letters  of  Credit
hereunder,  of reducing  the rate of return on the capital of such Lender or any
Person  controlling  such  Lender to a level  below that  which  such  Lender or
controlling  Person  could have  achieved but for such  introduction,  change or
compliance  (taking into account such Lender's or controlling  Person's policies
with respect to capital adequacy),  Borrower will, promptly upon demand therefor
by such  Lender  therefor  (which  demand  shall  be  accompanied  by a  written
explanation  in reasonable  detail,  showing the basis for such demand),  pay to
such  Lender  such  additional   amounts  as  will  compensate  such  Lender  or
controlling Person for such reduction in return.

          (C) If, on or prior to the first day of any Interest  Period,  (y) the
Agent shall have determined that adequate and reasonable  means do not exist for
ascertaining the applicable LIBOR Rate for such Interest Period or (z) the Agent
shall  have  received   written  notice  from  the  Required  Lenders  of  their
determination that the rate of interest referred to in the definition of "30-Day
LIBOR Rate",  "60-Day LIBOR Rate" or "90-Day LIBOR Rate" upon the basis of which
the 30-Day  Adjusted LIBOR Rate,  the 60-Day  Adjusted LIBOR Rate and the 90-Day
Adjusted  LIBOR Rate for LIBOR  Rate  Borrowings  for such  LIBOR Rate  Interest
Period is to be determined  will not  adequately  and fairly reflect the cost to


                                       38
<PAGE>

such Lenders of making or maintaining  LIBOR Rate  Borrowings  during such LIBOR
Rate  Interest  Period,  the Agent will  forthwith  so notify  Borrower  and the
Lenders.  Upon such notice, (i) all then outstanding LIBOR Rate Borrowings shall
automatically,  on the  expiration  date of the  respective  LIBOR Rate Interest
Periods  applicable thereto (unless then repaid in full), be converted into Base
Rate  Borrowings,  (ii) the  obligation  of the Lenders to make, to convert Base
Rate Borrowings  into, or to continue,  LIBOR Rate Borrowings shall be suspended
(including  pursuant to the Borrowing to which such LIBOR Rate  Interest  Period
applies),  and (iii) any LIBOR Rate Notice given at any time thereafter will not
be effective,  in each case until the Agent or the Required Lenders, as the case
may be,  shall  have  determined  that  the  circumstances  giving  rise to such
suspension  no  longer  exist  (and  the  Required   Lenders,   if  making  such
determination,  shall have so notified  the Agent),  and the Agent shall have so
notified Borrower and the Lenders.

          (D) Notwithstanding any other provision in this Agreement,  if, at any
time  after  the date  hereof  and from  time to time,  any  Lender  shall  have
determined  in  good  faith  that  the  introduction  of or  any  change  in any
applicable Law, rule or regulation or in the  interpretation  or  administration
thereof  by and  Governmental  Authority  charged  with  the  interpretation  or
administration  thereof,  or  compliance  with any guideline or request from any
such  Governmental  Authority  (whether or not having the force of law),  has or
would  have the  effect  of  making it  unlawful  for such  Lender to make or to
continue to make or maintain LIBOR Rate  Borrowings,  such Lender will forthwith
so notify the Agent and  Borrower.  Upon such notice,  (i) each of such Lender's
then outstanding  LIBOR Rate Borrowings shall  automatically,  on the expiration
date of the respective Interest Period applicable thereto (or, to the extent any
such  LIBOR  Rate  Borrowing  may not  lawfully  be  maintained  as a LIBOR Rate
Borrowing  until such expiration  date,  upon such notice),  be converted into a
Base Rate Borrowing, (ii) the obligation of such Lender to make, to convert Base
Rate Borrowings  into, or to continue,  LIBOR Rate Borrowings shall be suspended
(including  pursuant to any  Borrowing for which the Agent has received a Notice
of Revolving  Borrowing but for which the Borrowing  Date has not arrived),  and
(iii) any Notice of  Revolving  Borrowing  or Notice of  Conversion/Continuation
given at any time thereafter with respect to LIBOR Rate Borrowings  shall, as to
such Lender,  be deemed to be a request for a Base Rate Borrowing,  in each case
until such Lender shall have  determined that the  circumstances  giving rise to
such  suspension  no longer exist and shall have so notified the Agent,  and the
Agent shall have so notified Borrower.

          (E)  Determinations  by the Agent or any Lender for  purposes  of this
Section 5.11 of any increased costs,  reduction in return, market contingencies,
illegality or any other matter shall,  absent  manifest  error,  be  conclusive,
provided  that such  determinations  are made in good  faith.  No failure by the
Agent or any Lender at any time to demand  payment of any amounts  payable under
this  Section 5.11 shall  constitute a waiver of its right to demand  payment of
any additional  amounts arising at any subsequent time.  Nothing in this Section
5.11 shall  require or be  construed  to require  Borrower to pay any  interest,
fees, costs or other amounts in excess of that permitted by applicable Laws.

                                       39
<PAGE>

     5.12 Taxes.

          (A) Any and all payments by Borrower hereunder or under any Note shall
be made, in accordance with the terms hereof and thereof,  free and clear of and
without  deduction  for any and all present or future  taxes,  levies,  imposts,
deductions,  charges or withholdings,  and all liabilities with respect thereto,
other than net income and franchise  taxes imposed on the Agent or any Lender by
the United  States or by the  Jurisdiction  under the Laws of which the Agent or
such Lender,  as the case may be, is organized or in which its principal  office
or (in the case of a Lender) its applicable  Lending  Office is located,  or any
political  subdivision or taxing authority thereof (all such nonexcluded  taxes,
levies,  imposts,  deductions,   charges,  withholdings  and  liabilities  being
hereinafter  referred to as  "Taxes").  If Borrower  shall be required by Law to
deduct any Taxes from or in respect of any sum  payable  hereunder  or under any
Note to the Agent or any Lender,  (i) the sum payable  shall be increased as may
be necessary so that after making all required deductions  (including deductions
applicable to additional  sums payable  under this Section  5.12),  the Agent or
such  Lender,  as the case may be,  receives an amount equal to the sum it would
have  received had no such  deductions  been made,  (ii) the  relevant  taxation
authority or other authority in accordance with applicable Law and (iv) Borrower
will deliver to the Agent or such Lender,  as the case may be,  evidence of such
payment.

          (B)  Borrower  will  indemnify  the Agent and each Lender for the full
amount  of Taxes  (including,  without  limitation,  any  Taxes  imposed  by any
Jurisdiction  on amounts  payable  under this Section 5.12) paid by the Agent or
such  Lender,  as the  case  may be,  and any  liability  (including  penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally  asserted.  This  indemnification  shall be
made within 30 days from the date the Agent or such Lender,  as the case may be,
makes written demand therefor.

          (C) Each of the Agent and the Lenders  agrees that if it  subsequently
recovers, or receives a permanent net tax benefit with respect to, any amount of
Taxes (i) previously paid by it and as to which it has been indemnified by or on
behalf of Borrower or (ii) previously deducted by Borrower  (including,  without
limitation, any Taxes deducted from any additional sums payable under clause (i)
of subsection  (A) above),  the Agent or such Lender,  as the case may be, shall
reimburse Borrower to the extent of the amount of any such recovery or permanent
net  tax  benefit  (but  only to the  extent  of  indemnity  payments  made,  or
additional  amounts  paid,  by or on behalf of Borrower  under this Section 5.12
with  respect  to the  Taxes  giving  rise to  such  recovery  or tax  benefit);
provided,  however, that Borrower, upon the request of the Agent or such Lender,
agrees to repay to the Agent or such Lender, as the case may be, the amount paid
over to Borrower  (together with any penalties,  interest or other charges),  in
the event  the Agent or such  Lender is  required  to repay  such  amount to the
relevant taxing authority or other Governmental Authority.  The determination by
the Agent or any Lender of the amount of any such  recovery or permanent net tax
benefit shall, in the absence of manifest error, be conclusive and binding.

          (D) If any Lender is a  "foreign  corporation,  partnership  or trust"
within  the  meaning  of the  Internal  Revenue  Code,  and such  Lender  claims
exemption from United States  withholding  tax under Section 1441 or 1442 of the
Internal  Revenue  Code,  such  Lender  will  deliver  to each of the  Agent and
Borrower,  on or prior to the date of any  payment by  Borrower  to such  Lender


                                       40
<PAGE>

under this Agreement or the Notes, a properly completed Internal Revenue Service
Form 4224 or 1001, as  applicable  (or successor  forms),  certifying  that such
Lender is  entitled  to an  exemption  from or a  reduction  of  withholding  or
deduction for or on account of United States  federal income taxes in connection
with payments under this Agreement or any of the Notes, together with a properly
completed  Internal Revenue Service Form W-8 or W-9, as applicable (or successor
forms).  Each such  Lender  further  agrees to  deliver to each of the Agent and
Borrower an  additional  copy of each such  relevant  form on or before the date
that such form expires (currently, three successive calendar years for Form 1001
and one calendar year for Form 4224) or becomes obsolete or after the occurrence
of any event  requiring a change in the most recent forms so delivered by it, in
each case  certifying  that such Lender is entitled  to an  exemption  from or a
reduction of withholding or deduction for or on account of United States federal
income taxes in  connection  with  payments  under this  Agreement or any of the
Notes, unless an event (including, without limitation, any change in treaty, Law
or regulation ) has occurred  prior to the date on which any such delivery would
otherwise be required,  which event renders all such forms  inapplicable  or the
exemption to which such forms relate  unavailable  and such Lender  notifies the
Agent and Borrower that it is not entitled to receive payments without deduction
or  withholding  of United States  federal  income taxes.  Each such Lender will
promptly  notify the Agent and  Borrower  of any changes in  circumstances  that
would modify or render invalid any claimed exemption or reduction.

          (E) If any Lender is entitled  to a  reduction  in (and not a complete
exemption  from) the  applicable  withholding  tax,  Borrower  and 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 any of
the forms or other  documentation  required  under  subsection (D) above are not
delivered  to the Agent as therein  required,  then  Borrower  and 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.

                                   ARTICLE VI.

6.   CONDITIONS OF BORROWING

     The  obligation  of Lenders to make the Loans and any Advance  hereunder is
subject to the following conditions precedent:

     6.1 Documents  Required for the Closing.  Prior to or concurrently with the
Closing,  the following  instruments and documents,  duly executed by all proper
Persons shall have been delivered to Agent:

          (A) This Agreement;

          (B) The Notes;

          (C) The Guaranty;

                                       41
<PAGE>

          (D) The Pledge Agreement,  together with all documents and instruments
required to be executed and delivered by Borrower thereunder;

          (E) The Borrower's Closing Affidavit;

          (F) The Guarantor's Closing Affidavits;

          (G)  The  Financing  Statements,   together  with  evidence  that  the
Financing  Statements have been duly recorded in all filing or recording offices
that Agent may deem  necessary  or  desirable in order to create a valid Lien on
the Collateral  described  therein,  and that all filing and recording taxes and
fees have been paid;

          (H) With respect to each Borrower  Party (other than a Borrower  Party
that is an  individual),  a  certificate  of an officer or other  representative
acceptable to Agent dated as of the date of this Agreement, certifying as to the
incumbency  and  signatures  of the  representative(s)  of such  Borrower  Party
signing,  as applicable,  this Agreement and each of the other Credit Documents,
and each other  document to be  delivered  pursuant  hereto,  together  with the
following documents attached thereto:

               (1) A  copy  of  the  resolutions  of  such  applicable  Person's
Governing  Body  authorizing  the  execution,  delivery and  performance of this
Agreement, each of the Credit Documents, and each other document to be delivered
pursuant hereto, as applicable;

               (2) A copy,  certified as of the most recent date  practicable by
the  secretary  of state  (or  similar  Governmental  Authority)  of the  state,
province, or other Jurisdiction where such Person is organized, of such Person's
Organizational  Documents  filed  with  such  secretary  of  state  (or  similar
Governmental Authority);

               (3) A copy of such Person's other Organizational Documents;

          (I) A  certificate,  as of the most  recent date  practicable,  of the
secretary  of  state  (or  similar  appropriate   Governmental   Authority)  and
department  of  revenue  or  taxation  (or  similar   appropriate   Governmental
Authority) of the State of Alabama and each  Jurisdiction in which each Borrower
Party is organized  as to the  existence  and good  standing of each such Person
within  such  Jurisdiction,  and a  certificate,  as of  the  most  recent  date
practicable,  of the  secretary  of state (or similar  appropriate  Governmental
Authority)  of  each  state  where  the  Laws  of  such   Jurisdiction   require
qualification  and/or  registration as to the qualification and good standing of
each Borrower Party as a foreign entity doing business in each such state;

          (J) A written opinion of counsel to Borrower Parties,  dated as of the
Closing Date and addressed to Lender Parties,  in form and substance  acceptable
to Agent;

          (K) An Account Designation Letter;

          (L) UCC-11 reports showing no Liens superior to the Agent's Lien;

                                       42
<PAGE>

          (M) A Compliance  Certificate  as required  under this  Agreement  and
reflecting  compliance  with the terms of this Agreement  after giving effect to
the Advances to be made at Closing; and

          (N)  Receipt  and  approval  by Agent of any  other  items  reasonably
required to be provided to Agent, and not otherwise set forth above.

     6.2 Certain Events  Required for Closing and for all Advances.  At the time
of the Closing and at the time of each Advance, Agent shall be satisfied that:

          (A) No Default shall have occurred and be continuing;

          (B) No Material Adverse Change shall have occurred;

          (C) All of the Credit  Documents shall have remained in full force and
effect;

          (D)  Borrower  shall have paid all fees,  expenses,  costs,  and other
amounts then owing to Lender Parties, including, but not limited to the Fees;

          (E) All  Indebtedness  to be prepaid,  redeemed  or defeased  with the
proceeds of any Advance shall have been satisfied and extinguished;

          (F) There shall exist no action,  suit,  investigation,  litigation or
proceeding  affecting any Borrower Party pending or threatened before any court,
governmental  agency or arbitrator that (i) could reasonably be expected to have
a Material Adverse Effect, or (ii) could be reasonably be expected to affect the
legality,  validity or  enforceability  of this  Agreement  or any other  Credit
Document or the consummation of the transactions contemplated hereby;

          (G) All Governmental Approvals necessary in connection with the Credit
Documents and the transactions  contemplated  hereby and thereby shall have been
obtained  (without the imposition of any  conditions  that are not acceptable to
Agent) and shall remain in effect  other than such  Governmental  Approvals  the
failure to obtain which shall not affect the enforceability, validity or binding
effect of any of the Credit Documents; all applicable waiting periods shall have
expired  without any action being taken by any competent  authority;  and no Law
shall be applicable in the reasonable judgment of Agent that restrains, prevents
or imposes  materially  adverse  conditions  upon the Credit  Documents  and the
transactions contemplated hereby and thereby;

          (H) All Collateral  shall be owned free and clear of any Lien,  except
for the Agent's Lien;

          (I)  Borrower  will be able to meet its  obligations  under all Plans,
that the Plans are, in all  material  respects,  funded in  accordance  with the
minimum statutory requirements,  that no material "reportable event" (as defined
in ERISA, but excluding events for which reporting has been waived) has occurred


                                       43
<PAGE>

as to any such Plan and that no  termination  of, or withdrawal  from,  any such
Plan has occurred or is contemplated that could result in a material  liability;
and

          (J) There shall have been delivered to Agent a Compliance  Certificate
as and when required  under this Agreement and  reflecting  compliance  with the
terms of this Agreement.

     6.3 Legal Matters.  At the time of Closing,  and the  disbursement  of each
Advance,  all legal matters  incidental thereto shall be satisfactory to Gordon,
Silberman, Wiggins & Childs, P.C., counsel to Agent.

     6.4  Election  to  Make  Advances  Prior  to   Satisfaction  of  Conditions
Precedent.  In the event Lender Party, at its option, elects to make one or more
Advances  prior to receipt and approval of all items  required by this  Article,
such election  shall not  constitute any commitment or agreement of Lender Party
to make any  subsequent  Advance  until all items  required by this Article have
been delivered.

                                  ARTICLE VII.

7.   REPRESENTATIONS AND WARRANTIES

     To induce the Agent and the  Lenders to enter  into this  Agreement  and to
induce the Lenders to extend the credit contemplated hereby, Borrower represents
and warrants to the Agent and the Lenders as follows:

     7.1 Corporate  Organization and Power. Each Borrower Party (i) is an entity
duly  organized,  validly  existing and in good  standing  under the Laws of the
Jurisdiction  of its  organization,  (ii) has the full  power and  authority  to
execute,  deliver and perform the Credit  Documents  to which it is or will be a
party,  to own and hold its  property and to engage in its business as presently
conducted, and (iii) is duly qualified to do business as a foreign entity and is
in good  standing in each  Jurisdiction  where the nature of its business or the
ownership of its  properties  requires it to be so  qualified,  except where the
failure to be so  qualified  would not,  individually  or in the  aggregate,  be
reasonably likely to have a Material Adverse Effect.

     7.2 Authorization; Enforceability. Each Borrower Party has taken, or on the
Closing Date will have taken, all necessary corporate action to execute, deliver
and perform each of the Credit  Documents to which it is or will be a party, and
has, or on the Closing Date (or any later date of execution and  delivery)  will
have, validly executed and delivered each of the Credit Documents to which it is
or will be a party.  This  Agreement  constitutes,  and each of the other Credit
Documents  upon  execution and delivery will  constitute,  the legal,  valid and
binding  obligation  of each of Borrower  and its  Subsidiaries  that is a party
hereto or thereto,  enforceable  against it in accordance with its terms, except
as  enforceability  may be limited by  Bankruptcy  Laws or by general  equitable
principles.

     7.3 No Violation.  The execution,  delivery and  performance by each of the
Borrower  Parties of this  Agreement  and each of the other Credit  Documents to
which it is or will be a party,  and  compliance by it with the terms hereof and


                                       44
<PAGE>

thereof,  do not (i) violate any  provision of its  Organizational  Documents or
contravene any  Requirement of Law applicable to it, (ii) conflict with,  result
in a breach  of or  constitute  (with  notice,  lapse of time or both) a default
under any  Material  Contract to which it is a party,  by which it or any of its
properties is bound or to which it is subject, or (iii) result in or require the
creation or  imposition  of any Lien upon any of its  properties  or assets.  No
Borrower  Party is subject to any  restriction  or encumbrance on its ability to
make dividend payments or other distributions in respect of its Equity Interests
to make loans or advances to any other Borrower Party, or to transfer any of its
assets or properties to any other Borrower  Party,  in each case other than such
restrictions or encumbrances existing under or by reason of the Credit Documents
or applicable Requirements of Law.

     7.4 Governmental Authorization; Permits.

          (A) No consent, approval, authorization or other action by, notice to,
or registration or filing with, any Governmental Authority or other Person is or
will be required as a  condition  to or  otherwise  in  connection  with the due
execution,  delivery and performance by each Borrower Party of this Agreement or
any of the  other  Credit  Documents  to  which  it is or will be a party or the
legality, validity or enforceability hereof or thereof.

          (B) Each of the Borrower  Parties has,  and is in good  standing  with
respect to, all  Governmental  Approvals  necessary  to conduct its  business as
presently  conducted and to own or lease and operate its properties,  except for
those the failure to obtain which would not be reasonably  likely,  individually
or in the aggregate, to have a Material Adverse Effect.

     7.5 Litigation. There are no actions, investigations,  suits or proceedings
pending or, to the  knowledge of Borrower,  threatened,  at law, in equity or in
arbitration, before any court, other Governmental Authority or other Person, (i)
against  or  affecting  Borrower,  any of  its  Subsidiaries  or  any  of  their
respective  properties  as  to  which  there  is a  reasonable  likelihood  of a
determination and that would, if adversely  determined,  be reasonably likely to
have a Material Adverse Effect, or (ii) with respect to this Agreement or any of
the other Credit Documents;

     7.6 Taxes. Each of the Borrower Parties has timely filed all federal, state
and local tax returns  and  reports  required to be filed by it (other than such
local tax returns and reports the failure to file which would not be  reasonably
likely, individually or in the aggregate, to have a Material Adverse Effect) and
has paid all taxes,  assessments,  fees and other charges levied upon it or upon
its properties that are shown thereon as due and payable,  other than those that
are  being  contested  in good  faith and by  proper  proceedings  and for which
adequate  reserves have been  established in accordance with Generally  Accepted
Accounting Principles.  Such returns accurately reflect in all material respects
all liability for taxes of the Borrower Parties for the periods covered thereby.
Except as described in Schedule 7.6,  there is no ongoing  audit or  examination
or, to the  knowledge  of Borrower or any of its  Subsidiaries,  and there is no
unresolved claim by any Governmental  Authority  concerning the tax liability of
the  Borrower  Parties  for any period for which tax  returns  have been or were
required to have been filed,  other than claims for which adequate reserves have
been established in accordance with Generally Accepted Accounting Principles. No
Borrower  Party has waived or extended or has been  requested to waive or extend
the statute of limitations relating to the payment of any taxes.

                                       45
<PAGE>

     7.7  Subsidiaries.  Schedule 7.7 sets forth a list, as of the Closing Date,
of all of the  Subsidiaries  of Borrower  and, as to each such  Subsidiary,  the
percentage  ownership  (direct  and  indirect)  of Borrower in each class of its
capital  stock and each direct  owner  thereof  (and such list  indicates  which
Subsidiaries  are  Immaterial  Subsidiaries).  Except for the  Equity  Interests
expressly  indicated on Schedule 7.7, there are no Equity Interests or warrants,
rights,  options  or  other  Equity  Interests  of any  Subsidiary  of  Borrower
outstanding or reserved for any purpose.  All  outstanding  Equity  Interests of
each  Subsidiary  of  Borrower  are  duly and  validly  issued,  fully  paid and
nonassessable.  Borrower is the sole legal,  record and beneficial owner of, and
has good and valid  title to, all such Equity  Interests,  free and clear of all
Liens, other than the Liens created pursuant to the Pledge Agreement.

     7.8   Full   Disclosure.    All   factual    information    heretofore   or
contemporaneously  furnished  to the  Agent or any  Lender in  writing  by or on
behalf  of any  Borrower  Party  for  purposes  of or in  connection  with  this
Agreement  and the  transactions  contemplated  hereby  is,  and all other  such
factual information hereafter furnished to the Agent or any Lender in writing by
or on behalf of any  Borrower  Party will be, true and  accurate in all material
respects on the date as of which such  information is dated or certified (or, if
such information has been amended or  supplemented,  on the date as of which any
such  amendment or supplement is date or certified)  and not made  incomplete by
omitting to state a material  fact  necessary to make the  statements  contained
therein,  in  light  of the  circumstances  under  which  such  information  was
provided, not misleading.

     7.9 Margin Regulations. No Borrower Party is engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying  Margin Stock.  No proceeds of the Loans will be used,
directly  or  indirectly,  to  purchase  or carry any Margin  Stock  (except for
purchases by Borrower of  outstanding  shares of its capital stock  permitted by
Section  10.6  and  made  in  compliance  with  the  applicable   provisions  of
Regulations  G, T, U and X), to extend  credit for such purpose or for any other
purpose that would violate or be inconsistent  with  Regulations G, T, U or X or
any provision of the Exchange Act.

     7.10 No Material Adverse Change.  There has been no Material Adverse Change
since December 31, 2000, and there exists no event,  condition or state of facts
that could reasonably be expected to result in a Material Adverse Change.

     7.11 Financial Matters.

          (A) Borrower has  heretofore  furnished to the Agent copies of (i) the
audited  consolidated  balance  sheets of Borrower  and its  Subsidiaries  as of
December 31, 2000 and January 2, 2000, and the related  consolidated  statements
of operations,  stockholders'  equity and cash flows for the  three-year  period
ended December 31, 2000, together with the opinion of Ernst & Young thereon, and
(ii) the unaudited  consolidated  balance sheet of Borrower and its Subsidiaries
as of April 1, 2001,  and the related  consolidated  statements  of  operations,
stockholders'  equity and cash flows for the three-month period then ended. Such
financial  statements have been prepared in accordance  with Generally  Accepted


                                       46
<PAGE>

Accounting  Principles  (subject,   with  respect  to  the  unaudited  financial
statements,  to the absence of notes required by Generally  Accepted  Accounting
Principles  and to normal  year-end  audit  adjustments)  and present fairly the
financial  condition of Borrower and its Subsidiaries on a consolidated basis as
of the respective  dates thereof and the  consolidated  results of operations of
Borrower and its Subsidiaries for the respective periods then ended.  Except for
the Video Update  Acquisition or as fully reflected in the most recent financial
statements  referred  to above and the  notes  thereto,  there  are no  material
liabilities or obligations  with respect to Borrower or any of its  Subsidiaries
of any nature whatsoever (whether absolute,  contingent or otherwise and whether
or not due).

          (B) Each of Borrower and its Subsidiaries,  after giving effect to the
consummation of the transactions contemplated hereby, will be Solvent.

     7.12 Ownership of Properties. Each of Borrower and its Subsidiaries (i) has
good and marketable title to all real property owned by it, (ii) holds interests
as lessee  under  valid  leases in full  force and  effect  with  respect to all
material leased real and personal property used in connection with its business,
(iii) possesses or has rights to use licenses, patents, copyrights,  trademarks,
service marks,  trade names and other assets sufficient to enable it to continue
to conduct its business  substantially  as heretofore  conducted and without any
material  conflict with the rights of others,  and (iv) has good title to all of
its  other  properties  and  assets  reflected  in  the  Most  Recent  Financial
Statements  (except as sold or  otherwise  disposed of since the date thereof in
the Ordinary Course of Business),  in each case under (i), (ii),  (iii) and (iv)
above free and clear of all Liens other than Permitted Liens.

     7.13 ERISA.  Each Plan is and has been  administered  in  compliance in all
material  respects with all applicable  Requirements of Law,  including  without
limitation, the applicable provisions of ERISA and the Internal Revenue Code. No
ERISA Event has occurred and is continuing or, to the knowledge of Borrower,  is
reasonably expected to occur with respect to any Plan, in either case that would
be  reasonably  likely,  individually  or in the  aggregate,  to have a Material
Adverse Effect. No Plan has any Unfunded Pension Liability, and neither Borrower
nor any ERISA  Affiliate has engaged in a  transaction  that could be subject to
Section  4069 or 4212(c) of ERISA,  in either  instance  where the same would be
reasonably likely,  individually or in the aggregate, to have a Material Adverse
Effect. Neither Borrower nor any ERISA Affiliate is required to contribute to or
has, or has at any time had, any liability to a Multiemployer Plan.

     7.14 Environmental Matters.

          (A) Except as described in Schedule 7.14, no Hazardous  Substances are
or have been generated, used, located, released,  treated, disposed of or stored
by Borrower or any of its Subsidiaries or, to the knowledge of Borrower,  by any
other  Person or  otherwise,  in, on or under any portion of any real  property,
leased or owned,  of  Borrower  or any of its  Subsidiaries,  except in material
compliance  with all applicable  Environmental  Laws, and no portion of any such
real property or, to the  knowledge of Borrower,  any other real property at any
time leased, owned or operated by Borrower or any of its Subsidiaries,  has been
contaminated  by any Hazardous  Substance;  and no portion of any real property,
leased or owned,  of  Borrower  or any of its  Subsidiaries  has been or, to the


                                       47
<PAGE>

knowledge  of  Borrower,  is presently  the subject of an  environmental  audit,
assessment or remedial action.

          (B) To the  knowledge  of  Borrower,  except as  described in Schedule
7.14, (i) no portion of any real property,  leased or owned,  of Borrower or any
of its Subsidiaries has been used as or for a mine, a landfill,  a dump or other
disposal  facility,  a gasoline  service  station,  or (other than for petroleum
substances  stored in the  Ordinary  Course of  Business) a  petroleum  products
storage facility, (ii) no portion of such real property or any other property at
any time leased,  owned or operated by Borrower or any of its Subsidiaries  has,
pursuant to any Environmental Law, been placed on the "National Priorities List"
or "CERCLIS List" (or any similar federal, state or local list) of sites subject
to possible environmental  problems, and (iii) there are not and have never been
any underground storage tanks situated on any real property, leased or owned, of
Borrower or any of its Subsidiaries.

          (C) All activities and operations of Borrower and its Subsidiaries are
in compliance with the requirements of all applicable Environmental Laws, except
to the extent the failure so to comply,  individually or in the aggregate, would
not be reasonably likely to have a Material Adverse Effect. Neither Borrower nor
any of its  Subsidiaries is involved in any suit,  action or proceeding,  or has
received  any  notice,  complaint  or other  request  for  information  from any
Governmental  Authority or other  Person,  with respect to any actual or alleged
Environmental Claims that, if adversely determined,  would be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect; and, to the
knowledge of Borrower,  there are no threatened actions,  suits,  proceedings or
investigations  with  respect to any such  Environmental  Claims,  nor any basis
therefor.

     7.15 Compliance with Laws. Each of Borrower and its Subsidiaries has timely
filed all material reports,  documents and other materials  required to be filed
by it under all applicable  Requirements of Law with any Governmental Authority,
has retained all material  records and  documents  required to be retained by it
under all applicable  Requirements  of Law, and is otherwise in compliance  with
all applicable Requirements of Law in respect of the conduct of its business and
the ownership and operation of its properties,  except for such  Requirements of
Law the failure to comply with which,  individually  or in the aggregate,  would
not be reasonably likely to have a Material Adverse Effect.

     7.16 Regulated Industries.  Neither Borrower nor any of its Subsidiaries is
(i) an "investment  company," a company "controlled" by an "investment company,"
or an "investment  advisor," within the meaning of the Investment Company Act of
1940,  as  amended,  or (ii) a "holding  company," a  "subsidiary  company" of a
"holding  company," or an "affiliate" of a "holding  company," or an "affiliate"
of a "holding  company" or of a  "subsidiary  company"  of a "holding  company,"
within  the  meaning of the  public  Utility  Holding  Company  Act of 1935,  as
amended.

     7.17 Insurance. Schedule 7.17 sets forth a true and complete summary of all
insurance  policies or  arrangements  carried or  maintained by Borrower and its
Subsidiaries.   The  assets,   properties  and  business  of  Borrower  and  its
Subsidiaries  are  insured  against  such  hazards and  liabilities,  under such
coverages  and  in  such  amounts,  as are  customarily  maintained  by  prudent
companies similarly situated and under policies issued by insurers of recognized
responsibility.

                                       48
<PAGE>

     7.18 Material Contracts.  Each Material Contract existing as of the Closing
Date is (and each Material  Contract  entered into after the Closing Date,  upon
execution and delivery,  will be) in full force and effect, and neither Borrower
nor any of its  Subsidiaries  or, to the knowledge of Borrower,  any other party
thereto, is in material default under any such Material Contract.

     7.19 Security  Documents.  The provisions of each of the Security Documents
(whether  executed and delivered  prior to or on the Closing Date or thereafter)
are and will be  effective  to create in favor of the Agent,  for the benefit of
the Lenders,  upon the initial  extension of credit hereunder and the possession
by the Agent of certificates  evidencing the securities pledged thereby, a valid
and enforceable first priority  perfected security interest in and Lien upon all
right,  title and interest of Borrower and its Subsidiaries,  as applicable,  in
the Collateral described therein.

     7.20 Continuing Effectiveness. All representations and warranties contained
herein  shall be deemed  continuing  and in effect at all times  while  Borrower
remains  indebted  to the  Lender  Parties  hereunder  and shall be deemed to be
incorporated  by reference  in each Notice of Borrowing  and Notice for Issuance
unless Borrower specifically notifies Agent of any change therein.

                                  ARTICLE VIII.

8.   AFFIRMATIVE COVENANTS.

     Borrower   covenants  and  agrees  that,   until  the  termination  of  the
Commitments and all Letters of Credit,  and the payment in full of all principal
and interest  with respect to the Loans,  all Letter of Credit  Advances and all
Reimbursement Obligations, and with all other amounts due and owing hereunder:

     8.1   Financial   Statements.   Borrower   will  deliver  to  each  Lender:

          (A) As soon as available and in any event within  forty-five (45) days
after  each  Quarter-End  of the  first  three  quarters  of each  fiscal  year,
beginning  with the  Quarter-End  of July 1,  2001,  an  unaudited  consolidated
balance  sheet of  Borrower  and its  Subsidiaries  as of such  Quarter-End,  an
unaudited consolidated statement of income for Borrower and its Subsidiaries for
the quarter then ended and unaudited  consolidated  statements of cash flows for
that  portion  of the  fiscal  year  then  ended,  in each  case  setting  forth
comparative  consolidated  figures  as of the end of and  for the  corresponding
period in the preceding  fiscal year, all prepared in accordance  with Generally
Accepted  Accounting  Principles  (subject to the  absence of notes  required by
Generally  Accepted  Accounting  Principles and subject to normal year-end audit
adjustments) applied on a basis consistent with that of the preceding quarter or
containing  disclosure  of the effect on the  financial  condition or results of
operations  of any  change  in the  application  of  accounting  principles  and
practices during such quarter; and

          (B) As soon as  available  and in any event  within  ninety  (90) days
after the end of each fiscal year, beginning with the fiscal year ending January
6,  2002,  (i) an  audited  consolidated  balance  sheet  of  Borrower  and  its
Subsidiaries  as of  the  end of  such  fiscal  year  and  audited  consolidated
statements  of income and cash flows for Borrower and its  Subsidiaries  for the


                                       49
<PAGE>

fiscal year then ended,  including the  applicable  notes,  in each case setting
forth  comparative  figures as of the end of and for the preceding  fiscal year,
certified by the independent certified public accounting firm regularly retained
by  Borrower  or  another  independent   certified  public  accounting  firm  of
recognized  national  standing  reasonably  acceptable to the Required  Lenders,
together with (y) a report thereon by such  accountants that is not qualified as
to going  concern  or  scope of audit  and to the  effect  that  such  financial
statements  present fairly the consolidated  financial  condition and results of
operations of Borrower and its  Subsidiaries as of the dates and for the periods
indicated in accordance with Generally Accepted Accounting Principles applied on
a basis  consistent with that of the preceding year or containing  disclosure of
the effect on the  financial  position or results of operations of any change in
the application of accounting  principles and practices during such year and (z)
a report by such accountants to the effect that, based on and in connection with
their examination of the financial  statements of Borrower and its Subsidiaries,
they  obtained no  knowledge  of the  occurrence  or existence of any Default or
Event of Default  relating to accounting or financial  reporting  matters,  or a
statement  specifying  the nature and period of existence of any such Default or
Event of  Default  disclosed  by  their  audit;  provided,  however,  that  such
accountants  shall not be liable by reason of the failure to obtain knowledge of
any Default or Event of Default  that would not be  disclosed or revealed in the
course of their audit examination,  and (ii) an unaudited  consolidating balance
sheet of  Borrower  and its  Subsidiaries  as of the end of such fiscal year and
unaudited consolidating statements of income and cash flows for Borrower and its
Subsidiaries for the fiscal year then ended, all in reasonable detail.

     8.2 Other Business and Financial Information. Borrower will deliver to each
Lender:

          (A)  Concurrently  with  each  delivery  of the  financial  statements
described in Section 8.1, a  Compliance  Certificate  with respect to the period
covered by the financial statements then being delivered,  executed by the chief
financial officer of Borrower;

          (B) As soon as  available  and in any event  within  thirty  (30) days
prior to the end of each  fiscal  year,  beginning  with the fiscal  year ending
January  6,  2002,  a  consolidated   operating  budget  for  Borrower  and  its
Subsidiaries  for the succeeding  fiscal year  (prepared on a quarterly  basis),
consisting of a consolidated balance sheet and consolidated statements of income
and cash flows,  together with a certificate of the chief  financial  officer of
Borrower to the effect that such  budgets  have been  prepared in good faith and
are reasonable  estimates of the financial position and results of operations of
Borrower and its Subsidiaries for the period covered thereby;

          (C) Promptly upon receipt thereof,  copies of any "management  letter"
submitted  to  Borrower  or any  of its  Subsidiaries  by its  certified  public
accountants  in  connection  with each  annual,  interim or special  audit,  and
promptly upon completion thereof, any response reports from Borrower or any such
Subsidiary in respect thereof;

          (D) Promptly upon the sending,  filing or receipt  thereof,  copies of
(i) all  financial  statements,  reports,  notices  and  proxy  statements  that
Borrower or any of its  Subsidiaries  shall send or make available  generally to
its  shareholders,   and  (ii)  all  regular,   periodic  and  special  reports,
registration  statements and prospectuses (other than on Form S-8) that Borrower


                                       50
<PAGE>

or any of it  Subsidiaries  shall  render  to or file  with the  Securities  and
Exchange Commission, the National Association of Securities Dealers, Inc. or any
national securities exchange;

          (E)  Promptly  upon (and in any event  within ten (10)  Business  Days
after) any Responsible Officer of Borrower obtaining knowledge thereof,  written
notice of any of the following:

               (1) the  occurrence of any Default or Event of Default,  together
with a written statement of the chief financial  officer of Borrower  specifying
the nature of such Default or Event of Default,  the period of existence thereof
and the  action  that  Borrower  has taken  and  proposes  to take with  respect
thereto;

               (2) the  institution  or  threatened  institution  of any action,
suit,  investigation or proceeding  against or affecting  Borrower of any of its
Subsidiaries, including any such investigation or proceeding by any Governmental
Authority (other than routine periodic inquiries, investigations or reviews), as
to which there is a reasonable  likelihood of an adverse  determination and that
would, if adversely  determined,  be reasonably  likely,  individually or in the
aggregate,  to have a Material Adverse Effect,  and any material  development in
any litigation or other proceeding  previously  reported pursuant to Section 7.5
or this Section 8.3(E)(2);

               (3) the receipt by Borrower or any of its  Subsidiaries  from any
Governmental  Authority of (i) any notice  asserting  any failure by Borrower or
any of its Subsidiaries to be in compliance with applicable  Requirements of Law
or that threatens the taking of any action against  Borrower or such  Subsidiary
or sets forth  circumstances  that, if taken or adversely  determined,  would be
reasonably  likely to have a Material Adverse Effect,  or (ii) any notice of any
actual or threatened suspension,  limitation or revocation of, failure to renew,
or  imposition  of any  restraining  order,  escrow or  impoundment  of funds in
connection with, any license, permit, accreditation or authorization of Borrower
or any of its Subsidiaries, where such action would be reasonably likely to have
a Material Adverse Effect;

               (4) the  occurrence  of any  ERISA  Event,  together  with  (i) a
written  statement of the chief executive  officer or chief financial officer of
Borrower specifying the details of such ERISA Event and the action that Borrower
has taken and proposes to take with respect  thereto,  (ii) a copy of any notice
with respect to such ERISA Event that may be required to be filed with the PBGC,
and (iii) a copy of any notice  delivered  by the PBGC to Borrower or such ERISA
Affiliate with respect to such ERISA Event;

               (5) the occurrence of any material default under, or any proposed
or threatened  termination or  cancellation  of, any Material  Contract to which
Borrower or any of its  Subsidiaries is a party, the termination or cancellation
of which would be reasonably likely to have a Material Adverse Effect;

                                       51
<PAGE>

               (6) the occurrence of any of the following:  (i) the assertion of
any Environmental Claim against or affecting  Borrower,  any of its Subsidiaries
or any of their respective real property,  leased or owned;  (ii) the receipt by
Borrower or any of its  Subsidiaries  of notice of any alleged  violation  of or
noncompliance  with any Environmental  Laws; or (iii) the taking of any remedial
action by Borrower,  any of its  Subsidiaries or any other Person in response to
the actual or alleged generation, storage, release, disposal or discharge of any
Hazardous  Substances on, to, upon or from any real property  leased or owned by
Borrower or any of its  Subsidiaries;  but in each case under  clauses (i), (ii)
and (iii) above,  only to the extent the same would be reasonably likely to have
a Material Adverse Effect; and

               (7) any other  matter or event that has,  or would be  reasonably
likely to have, a Material Adverse Effect,  together with a written statement of
the chief executive officer or chief financial officer of Borrower setting forth
the nature and period of  existence  thereof and the actions  that  Borrower has
taken and proposes to take with respect thereto; and

          (F) As promptly as reasonably  possible,  such other information about
the business,  condition  (financial or otherwise),  operations or properties of
Borrower  or any of its  Subsidiaries  (including  any Plan and any  information
required to be filed under ERISA, and including any statements,  audits or other
reports  submitted by or on behalf of Borrower or any of its Subsidiaries to any
state  Governmental  Authority) as the Agent or any Lender may from time to time
reasonably request.

     8.3 Corporate Existence;  Franchises;  Maintenance of Properties.  Borrower
will,  and  will  cause  each  of  its   Subsidiaries   (other  than  Immaterial
Subsidiaries)  to,  (i)  maintain  and  preserve  in full  force and  effect its
corporate  existence,  except as expressly  permitted otherwise by Section 10.1,
(ii) obtain,  maintain  and preserve in full force and effect all other  rights,
franchises,  licenses,  permits,  certifications,  approvals and  authorizations
required by Governmental Authorities and necessary to the ownership,  occupation
or use of its  properties or the conduct of its  business,  except to the extent
the failure to do so would not be reasonably  likely to have a Material  Adverse
Effect,  and  (iii)  keep all  material  properties  in good  working  order and
condition  (normal  wear  and tear  excepted)  and  from  time to time  make all
necessary repairs to and renewals and replacements of such properties, except to
the extent that any of such properties are obsolete or are being replaced.

     8.4  Compliance  with  Laws.  Borrower  will,  and will  cause  each of its
Subsidiaries  to, comply in all respects with all Requirements of Law applicable
in respect of the conduct of their  respective  businesses and the ownership and
operation of their respective properties, except to the extent the failure so to
comply would not be reasonably expected to have a Material Adverse Effect.

     8.5  Payment  of  Obligations.  Borrower  will,  and will cause each of its
Subsidiaries  to,  (i) pay all  liabilities  and  obligations  as and  when  due
(subject  to any  applicable  subordination  provisions),  except to the  extent
failure  to do so would  not be  reasonably  likely to have a  Material  Adverse
Effect,  and (ii) pay and  discharge  all taxes,  assessments  and  governmental
charges or levies imposed upon it, upon its income or profits or upon any of its
properties,  prior to the date on which penalties would attach thereto,  and all
lawful claims that, if unpaid, might become a Lien upon any of the properties of


                                       52
<PAGE>

Borrower or any of its Subsidiaries;  provided,  however,  that neither Borrower
nor any of its Subsidiaries  shall be required to pay any such tax,  assessment,
charge,  levy or claim  that is being  contested  in good  faith  and by  proper
proceedings and as to which Borrower or such Subsidiary is maintaining  adequate
reserves with respect thereto in accordance with Generally  Accepted  Accounting
Principles.

     8.6 Insurance.  Borrower will, and will cause each of its  Subsidiaries to,
maintain with financially sound and reputable insurance companies insurance with
respect to its assets,  properties  and  businesses,  against  such  hazards and
liabilities,  of such types and in such amounts, as is customarily maintained by
companies in the same or similar businesses similarly situated.

     8.7 Maintenance of Books and Records;  Inspection.  Borrower will, and will
cause each of its  Subsidiaries  to, (i) maintain  adequate books,  accounts and
records,  in which full, true and correct entries shall be made of all financial
transactions  in  relation  to its  business  and  properties,  and  prepare all
financial  statements required under this Agreement,  in each case in accordance
with  Generally  Accepted  Accounting  Principles  and in  compliance  with  the
requirements of any Governmental Authority having jurisdiction over it, and (ii)
permit  employees or agents of the Agent or any Lender to inspect its properties
and examine or audit its books,  records,  working  papers and accounts and make
copies and memoranda of them, and to discuss its affairs,  finances and accounts
with its officers and employees  and, upon notice to Borrower,  the  independent
public  accountants  of Borrower  and its  Subsidiaries  (and by this  provision
Borrower  authorizes  such  accountants  to discuss the  finances and affairs of
Borrower and its  Subsidiaries),  all at such times and from time to time,  upon
reasonable notice and during business hours, as may be reasonably requested.

     8.8 Interest Rate  Protection.  At September 1, 2001,  Borrower  shall have
entered into or obtained,  and Borrower will  thereafter  maintain in full force
and effect,  Hedge Agreements in form and substance  reasonably  satisfactory to
the Agent the effect of which shall be to fix or limit interest rates payable by
Borrower  as to at least  thirty-three  and  one-third  percent  (331/3%) of all
principal amounts outstanding at such date under all Funded Debt of Borrower and
its  Subsidiaries  for a period of not less than two (2) years  after such date.
Borrower  will deliver to the Agent,  promptly upon receipt  thereof,  copies of
such Hedge Agreements (and any supplements or amendments thereto),  and promptly
upon request therefor,  any other information  reasonably requested by the Agent
to evidence its compliance with the provision of this Section.

     8.9 Permitted Acquisitions.

          (A) Borrower may from time to time on or after the Closing Date effect
Permitted Acquisitions.

          (B)  Borrower  may from time to time  after the  Closing  Date  effect
Acquisitions that are not Permitted Acquisitions, but in each instance only with
the prior written consent of the Agent and the Required Lenders.

          (C)  (i)  As  soon  as  reasonably  practicable  before  the  plan  of
reorganization is submitted in connection with the Video Update Acquisition, and
(ii)  not less  than  five (5)  Business  Days  after  the  consummation  of any


                                       53
<PAGE>

Permitted  Acquisition  with  respect to which the  Acquisition  Amount  exceeds
$5,000,000  (other  than the Video  Update  Acquisition),  Borrower  shall  have
delivered  to the Agent (i) with respect to the Video  Update  Acquisition,  the
plan of reorganization,  and (ii) with respect to any Acquisition other than the
Video Update  Acquisition,  a summary  description of the material terms of such
Permitted  Acquisition  (including,  without limitation,  the purchase price and
method and  structure  of payment)  and of each  Person or business  that is the
subject  of  such  Permitted   Acquisition,   together  with  summary  financial
information  (including  statements  of revenues and cash flows) with respect to
each such acquired Person or business.

          (D) Not less than five (5) Business Days after the consummation of any
Permitted  Acquisition  with  respect to which the  Acquisition  Amount  exceeds
$5,000,000,  Borrower shall have  delivered to the Agent a certificate,  in form
and  substance  reasonably  satisfactory  to the  Agent,  executed  by the chief
financial  officer  of  Borrower,  to the  effect  that,  to the  best  of  such
individual's knowledge,  the consummation of such Permitted Acquisition will not
result in a violation of any provision of this Section,  and after giving effect
to such Permitted  Acquisition and any Borrowings made in connection  therewith,
Borrower  will be in  compliance  with  the  financial  covenants  contained  in
Sections 9.1 through 9.4, such compliance determined with regard to calculations
made on a pro forma  basis in  accordance  with  Generally  Accepted  Accounting
Principles as if each Person or business  that is the subject of such  Permitted
Acquisition had been consolidated with Borrower for those periods  applicable to
such covenants and following the Permitted  Acquisition (such calculations to be
attached to the certificate).

          (E) The consummation of each Permitted  Acquisition shall be deemed to
be a  representation  and  warranty by Borrower  that (except as shall have been
approved in writing by the Required Lenders) all conditions thereto set forth in
this Section 8.9 and in the  description  furnished  under  subsection (C) above
have been satisfied,  that the same is permitted in accordance with the terms of
this Agreement, and that the matters certified to by the chief financial officer
of Borrower in the  certificate  referred to in subsection (D) above are, to the
best of such individual's  knowledge,  true and correct in all material respects
as of the date such  certificate  is given,  which  representation  and warranty
shall be deemed to be a  representation  and warranty as of the date thereof for
all purposes hereunder.

          (F)  Borrower  will  furnish to the Agent and the  Lenders  such other
information  regarding any  Permitted  Acquisition  and the assets,  business or
Persons that are the subject thereof as the Agent or any Lender may from time to
time  reasonably  request  (it  being  understood  that the  provisions  of this
subsection  (F) shall not be deemed to limit or restrict the ability of Borrower
to consummate  Permitted  Acquisitions  subject to the other  provisions of this
Section 8.9 and subject to the other terms and conditions of this Agreement).

     8.10 Creation or Acquisition of Subsidiaries.  Subject to the provisions of
Section 10.5,  Borrower may from time to time create or acquire new Wholly Owned
Subsidiaries  in connection with Permitted  Acquisitions  or otherwise,  and the
Wholly  Owned  Subsidiaries  of Borrower  may create or acquire new Wholly Owned
Subsidiaries,  provided that neither the aggregate fair market value at any time
of the assets of all Subsidiaries that are Immaterial Subsidiaries at such time,
nor the aggregate gross revenues  (determined for the most recently ended period
of twelve  consecutive  fiscal months) of all  Subsidiaries  that are Immaterial
Subsidiaries at such time, shall exceed $1,000,000, and provided further that:

                                       54
<PAGE>

          (A) Promptly  (and in any event within  fifteen  (15)  Business  Days)
after the creation or direct or indirect acquisition by Borrower of a new Wholly
Owned Subsidiary,  if such new Subsidiary is a Material  Subsidiary (or, if such
new Subsidiary is an Immaterial Subsidiary when so created or acquired, promptly
(and in any event within  fifteen (15) Business  Days) after such new Subsidiary
ceases to be an Immaterial  Subsidiary),  such new  Subsidiary  will execute and
deliver to the Agent a supplement or joinder to the Guaranty,  pursuant to which
such new Subsidiary shall become a guarantor thereunder;

          (B) Promptly  (and in any event within  fifteen  (15)  Business  Days)
after the creation or  acquisition  of a new Wholly Owned  Subsidiary the Equity
Interests of which are directly  owned by Borrower,  if such new Subsidiary is a
Material Subsidiary (or, if such new Subsidiary is an Immaterial Subsidiary when
so created or acquired,  promptly (and in any event within fifteen (15) Business
Days) after such new Subsidiary ceases to be an Immaterial Subsidiary), Borrower
will execute and deliver to the Agent an amendment or  supplement  to the Pledge
Agreement  pursuant to which all of the Equity  Interests of such new Subsidiary
and any  promissory  notes from such new Subsidiary to Borrower shall be pledged
to the Agent,  together with the  certificates,  if any,  evidencing such Equity
Interests  of such  new  Subsidiary  and any  promissory  notes  from  such  new
Subsidiary  to  Borrower  shall  be  pledged  to the  Agent,  together  with the
certificates, if any, evidencing such capital stock or other ownership interests
and undated  stock powers duly executed in blank and any such  promissory  notes
duly endorsed in blank; and concurrently with the creation or acquisition of any
new Wholly Owned  Subsidiary the Equity Interests of which are directly owned by
another Wholly Owned Subsidiary (the "Parent  Subsidiary") of Borrower,  if such
new  Subsidiary  is a Material  Subsidiary  (or,  if such new  Subsidiary  is an
Immaterial  Subsidiary  when so created or acquired,  promptly (and in any event
within  fifteen (15) Business  Days) after such new  Subsidiary  ceases to be an
Immaterial  Subsidiary),  the Parent  Subsidiary will execute and deliver to the
Agent a pledge agreement,  in form and substance  substantially identical to the
Pledge Agreement,  pursuant to which all of the capital stock or other ownership
interests  of such  new  Subsidiary  and any  promissory  notes  from  such  new
Subsidiary to the parent Subsidiary shall be pledged to the Agent, together with
the  certificates,  if any,  evidencing such Equity  Interests and undated stock
powers duly  executed in blank and any such  promissory  notes duly  endorsed in
blank;

          (C) Promptly  (and in any event within  fifteen  (15)  Business  Days)
after any existing Wholly Owned Subsidiary that was an Immaterial  Subsidiary as
of the Closing Date ceases to be an Immaterial  Subsidiary,  (i) such Subsidiary
will execute and deliver to the Agent a supplement  or joinder to the  Guaranty,
pursuant to which such Subsidiary shall become a guarantor thereunder,  and (ii)
Borrower will execute and deliver to the Agent an amendment or supplement to the
Pledge  Agreement  pursuant  to  which  all  of the  Equity  Interests  of  such
Subsidiary  and any promissory  notes from such  Subsidiary to Borrower shall be
pledged to the Agent,  together with the certificates,  if any,  evidencing such
Equity  Interests  and undated  stock powers duly executed in blank and any such
promissory notes duly endorsed in blank; and

                                       55
<PAGE>

          (D) As promptly as reasonably possible,  Borrower and its Subsidiaries
will deliver any such other  documents,  certificates  and  opinions  (including
opinions  of local  counsel  in the  Jurisdiction  of  organization  of each new
Subsidiary),  in form and substance reasonably satisfactory to the Agent, as the
Agent may  reasonably  request in connection  with the actions taken pursuant to
this Section 8.10.

     8.11  Further  Assurances.  Borrower  will,  and  will  cause  each  of its
Subsidiaries to, make, execute, endorse, acknowledge and deliver any amendments,
modifications  or  supplements  hereto  and  restatements  hereof  and any other
agreements,  instruments or documents,  and take any and all such other actions,
as may from time to time be  reasonably  requested  by the Agent or the Required
Lenders to perfect and maintain  the validity and priority of the Liens  granted
pursuant to the Security  Documents and to effect,  confirm or further assure or
protect and  preserve  the  interests,  rights and remedies of the Agent and the
Lenders under this Agreement and the other Credit Documents.

                                   ARTICLE IX.

9.   FINANCIAL COVENANTS

     Borrower   covenants  and  agrees  that,   until  the  termination  of  the
Commitments and all Letters of Credit,  and the payment in full of all principal
and interest  with respect to the Loans,  all Letter of Credit  Advances and all
Reimbursement Obligations, and with all other amounts due and owing hereunder:

     9.1 Leverage  Ratio.  Borrower will not permit the Leverage Ratio as of any
Quarter-End  during the periods set forth below to be greater than the ratio set
forth below opposite such period:

         Date                                         Leverage Ratio
         ----                                         --------------

         Closing Date through January 6, 2002         2.5 to 1.0

         Thereafter                                   2.0 to 1.0

     9.2 Interest Coverage Ratio. Borrower will not permit the Interest Coverage
Ratio as of any  Quarter-End  during the periods set forth below to be less than
the ratio set forth below opposite such period:

         Date                                         Interest Coverage Ratio
         ----                                         -----------------------

         Closing Date through January 6, 2002         3.5 to 1.0

         Thereafter                                   4.0 to 1.0

     9.3 Fixed  Charge  Coverage.  Borrower  will not  permit  the Fixed  Charge
Coverage as of any Quarter-End,  beginning with the Quarter-End of July 1, 2001,
to be less than 1.05 to 1.0.

                                       56
<PAGE>

     9.4 Net Worth.  Borrower  will not permit Net Worth as of any  Quarter-End,
beginning  with the  Quarter-End of July 1, 2001, to be less than the sum of (i)
$125,000,000,  plus (ii) 75% of the  aggregate  of Net  Income  for each  fiscal
quarter  beginning  with the  Quarter-End  of April 1, 2001  (provided  that Net
Income for any fiscal  quarter  shall be taken into account for purposes of this
calculation  only if positive),  plus (iii) 100% of the aggregate  amount of all
increases  in the stated  capital and  additional  paid-in  capital  accounts of
Borrower and its  Subsidiaries,  resulting from the issuance of Equity Interests
(including  Equity Interests issued pursuant to the exercise of options,  rights
or warrants or pursuant to the  conversion of convertible  Equity  Interests) or
other capital investments after December 31, 2000 (provided that nothing in this
section shall be deemed to permit any stock repurchases not expressly  permitted
under  Section  10.6(A)(3)),  less (iv)  100% of the  aggregate  amount  paid or
payable  with  respect  to  any  purchase,   redemption,   retirement  or  other
acquisition of shares of its capital stock;

provided,  however, that in all events, Borrower will not permit Net Worth as of
any Quarter-End to be less than  $109,000,000  plus (ii) 75% of the aggregate of
Net Income for each fiscal quarter  beginning  with the  Quarter-End of April 1,
2001  (provided  that Net  Income  for any  fiscal  quarter  shall be taken into
account for purposes of this calculation only if positive).

                                   ARTICLE X.

10.  NEGATIVE COVENANTS

     Borrower   covenants  and  agrees  that,   until  the  termination  of  the
Commitments and all Letters of Credit,  and the payment in full of all principal
and interest  with respect to the Loans,  all Letter of Credit  Advances and all
Reimbursement Obligations, and with all other amounts due and owing hereunder:

     10.1 Merger; Consolidation. Borrower will not, and will not permit or cause
any of its Subsidiaries to,  liquidate,  wind up or dissolve,  or enter into any
consolidation, merger or other combination, or agree to do any of the foregoing;
provided, however, that:

               (1) Borrower may merge or consolidate with another Person so long
as  (x)  Borrower  is  the  surviving   corporation,   (y)  if  such  merger  or
consolidation  is in connection  with a Permitted  Acquisition,  the  applicable
conditions of Section 8.9 shall be satisfied,  and (z) immediately  after giving
effect thereto, no Default or Event of Default would exist; and

               (2) any Subsidiary  may merge or consolidate  with another Person
so  long  as (x)  the  surviving  corporation  is  Borrower  or a  Wholly  Owned
Subsidiary,  (y)  if  such  merger  or  consolidation  is in  connection  with a
Permitted Acquisition,  the applicable conditions of Sections 8.9 and 8.10 shall
be satisfied,  and (z) immediately  after giving effect  thereto,  no Default or
Event of Default would exist.

     10.2  Indebtedness.  Borrower will not, and will not permit or cause any of
its Subsidiaries to, create,  incur,  assume or suffer to exist any Indebtedness
other than:

               (1) Indebtedness incurred under this Agreement;

                                       57
<PAGE>

               (2)  Indebtedness  existing on the Closing Date and  described on
Schedule 10.2;

               (3)  Indebtedness  of Borrower  under Hedge  Agreements  required
pursuant to Section 8.8;

               (4) accrued expenses, current trade or other accounts payable and
other  current  liabilities  arising in the Ordinary  Course of Business and not
incurred  through the  borrowing of money,  provided that the same shall be paid
when due except to the extent being  contested in good faith and by  appropriate
proceedings;

               (5)  Indebtedness  under letters of credit (other than Letters of
Credit  issued  pursuant to Article  III) issued for the benefit of Borrower and
its  Subsidiaries  incurred in the Ordinary Course of Business,  in an aggregate
amount  (whether  drawn or  available  to be  drawn  thereunder)  not  exceeding
$2,000,000 at any time outstanding; and

               (6)  Unsecured  Indebtedness  of  Borrower  that is  Subordinated
Indebtedness;  provided  that,  as further  conditions  to the  issuance  of any
Subordinated  Indebtedness,  (1) immediately after giving effect to the issuance
of such Subordinated  Indebtedness,  no Default or Event of Default shall exist,
(2) all agreements  and  instruments  evidencing or governing such  Subordinated
Indebtedness  shall have been approved in writing by the Agent, and (3) prior to
or concurrently  with the issuance of such Subordinated  Indebtedness,  Borrower
shall have delivered to the Agent a certificate,  signed by the chief  financial
officer of Borrower,  satisfactory in form and substance to the Agent and to the
effect  that,  after  giving  effect  to the  incurrence  of  such  Subordinated
Indebtedness,  Borrower is in compliance with the financial  covenants set forth
in Sections 9.1 through 9.4, such  compliance  being  determined  with regard to
calculations  made on a pro forma basis in accordance  with  Generally  Accepted
Accounting  Principles  as of the  last  day of the  fiscal  quarter  then  most
recently ended and as if such Subordinated Indebtedness had been incurred on the
first day of the period  applicable to such covenants  (such  calculations to be
attached to such  certificate);  and provided further that the Net Cash Proceeds
from the issuance of such Subordinated  Indebtedness  shall be applied to prepay
the Loans in accordance  with, and to the extent required under,  the provisions
of Section 5.3(B);

               (7) Indebtedness  (other than  Indebtedness  specified in clauses
(2) through (4) and clause (6) above) that shall not at any time,  when combined
with the aggregate  amount of all  Indebtedness  incurred under clause (5) above
outstanding  at such time,  exceed  $5,000,000  in  aggregate  principal  amount
outstanding  at such  time  (which  Indebtedness  under  this  clause  (7) shall
include,  without limitation,  any Indebtedness of Borrower and its Subsidiaries
secured by Permitted Liens which are purchase money Liens).

     10.3  Liens.  Borrower  will not,  and will not  permit or cause any of its
Subsidiaries to, directly or indirectly,  make, create,  incur, assume or suffer
to exist,  or enter into or suffer to exist any  agreement or  restriction  that
prohibits or conditions the creation, incurrence or assumption of, any Lien upon


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or with  respect to any part of its  property  or assets,  whether  now owned or
hereafter  acquired,  or agree to do any of the foregoing,  other than Permitted
Liens.

     10.4 Disposition of Assets. Borrower will not, and will not permit or cause
any of its Subsidiaries to, sell, assign,  lease, convey,  transfer or otherwise
dispose of  (whether in one or a series of  transactions)  all or any portion of
its  assets,  business or  properties,  or enter into any  arrangement  with any
Person  providing  for the lease by Borrower or any  Subsidiary as lessee of any
asset that has been sold or transferred  by Borrower or such  Subsidiary to such
Person, or agree to do any of the foregoing, except for:

               (1) sales of Rental Inventory in the Ordinary Course of Business;

               (2) the sale or  exchange of used or  obsolete  equipment  to the
extent (y) the proceeds of such sale are applied  towards,  or such equipment is
exchanged for, similar replacement equipment, or (z) such equipment is no longer
necessary  for the  operations of Borrower or its  applicable  Subsidiary in the
Ordinary Course of Business;

               (3)  the  sale  or  other   disposition   by  Borrower   and  its
Subsidiaries  of any  Borrower  Margin Stock to the extent the fair market value
thereof  exceeds 25% of the fair market  value of the assets of Borrower and its
Subsidiaries  (including  Borrower  Margin  Stock),  provided that fair value is
received in exchange therefor;

               (4)  the  sale,  lease  or  other  disposition  of  assets  by  a
Subsidiary  of Borrower to Borrower or to another  Wholly Owned  Subsidiary  if,
immediately  after giving effect  thereto,  no Default or Event of Default would
exist; and

               (5) the sale or disposition of assets outside the Ordinary Course
of Business for cash, provided that (w) the Net Cash Proceeds from such sales or
dispositions  do not exceed  $5,000,000  in the  aggregate  for Borrower and its
Subsidiaries during any fiscal year, (x) to the extent not theretofore  expended
to acquire  assets or  properties  or  otherwise  reinvested  in the business of
Borrower,  such Net Cash  Proceeds are delivered to the Agent within one hundred
eighty (180) days after  receipt  thereof for  application  to prepayment of the
Loans in accordance with the provisions of Section 5.3(D), (y) in no event shall
Borrower  or any of its  Subsidiaries  sell or  otherwise  dispose of any of the
Equity Interests of any Subsidiary (other than Immaterial Subsidiaries), and (z)
immediately  after giving effect  thereto,  no Default or Event of Default would
exist.

     10.5  Investments.  Borrower  will not, and will not permit or cause any of
its  Subsidiaries  to,  directly  or  indirectly,  purchase,  own,  invest in or
otherwise  acquire  any  Equity  Interest,  evidence  of  indebtedness  or other
obligation or security or any interest  whatsoever in any other Person,  or make
or  permit to exist any  loans,  advances  or  extensions  of credit  to, or any
investment in cash or by delivery of property in, any other Person,  or purchase
or otherwise  acquire (whether in one or a series of related  transactions)  any
portion of the  assets,  business or  properties  of another  Person  (including
pursuant  to an  Acquisition),  or become a  partner  or joint  venturer  in any


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partnership or joint venture (collectively, "Investments"), or make a commitment
or otherwise agree to do any or the foregoing, other than:

          (A) Cash Equivalents;

          (B) Purchases and acquisitions of inventory,  supplies,  materials and
equipment in the Ordinary Course of Business;

          (C)  Investments  consisting  of loans and advances to  employees  for
reasonable  travel,  relocation and business  expenses in the Ordinary Course of
Business or prepaid expenses incurred in the Ordinary Course of Business;

          (D)  Without  duplication,   Investments  consisting  of  Indebtedness
permitted under Section 10.2;

          (E) Investments existing on the Closing Date and described in Schedule
10.5;

          (F) Investments in connection with Permitted Acquisitions with respect
to which the conditions and requirements of Section 8.9 have been satisfied;

          (G)  Investments  in  existing  Subsidiaries  and in newly  created or
acquired  Subsidiaries  with  respect  to which the  applicable  conditions  and
requirements of Sections 8.9 and 8.10 have been satisfied;

          (H)  Investments  (other  than  Investments  specified  in clauses (A)
through (G) above) in an aggregate  amount that shall not exceed  $5,000,000 for
all such Investments from and after the Closing Date; and

          (I) Any other  Investments  that may be  approved  in  writing  by the
Required Lenders from time to time.

     10.6 Restricted Payments.

          (A)  Borrower  will  not,  and will  not  permit  or cause  any of its
Subsidiaries to, directly or indirectly,  declare or make any dividend  payment,
or make any other distribution of cash, property or assets, in respect of any of
its Equity  Interests or any  warrants,  rights or options to acquire its Equity
Interests, or purchase, redeem, retire or otherwise acquire for value any Equity
Interests or any warrants, rights or options to acquire its Equity Interests, or
set aside funds for any of the foregoing, except that:

               (1)  Borrower  may  declare and make  dividend  payments or other
distributions payable solely in its common stock;

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<PAGE>

               (2) each Wholly Owned Subsidiary of Borrower may declare and make
dividend  payments or other  distributions  to Borrower or another  Wholly Owned
Subsidiary  of  Borrower,   to  the  extent  not  prohibited   under  applicable
Requirements of Law; and

               (3) so long  as no  Default  or  Event  of  Default  would  exist
immediately after giving effect thereto,  Borrower may purchase,  redeem, retire
or otherwise acquire shares of its capital stock.

          (B)  Borrower  will  not,  and will  not  permit  or cause  any of its
Subsidiaries  to,  make (or give any  notice in  respect  of) any  voluntary  or
optional payment or prepayment of principal on any Subordinated Indebtedness, or
directly or indirectly make any redemption  (including pursuant to any change of
control provision), retirement, defeasance or other acquisition for value of any
Subordinated Indebtedness,  or make any deposit or otherwise set aside funds for
any of the foregoing purposes.

     10.7 Transactions  with Affiliates.  Borrower will not, and will not permit
or  cause  any of its  Subsidiaries  to,  enter  into any  transaction  with any
officer, director, stockholder or other Affiliate of Borrower or any Subsidiary,
except in the  Ordinary  Course of Business and upon fair and  reasonable  terms
that are no less favorable to it than would obtain in a comparable  arm's length
transaction  with  a  Person  other  than  an  Affiliate  of  Borrower  or  such
Subsidiary;  provided,  however,  that nothing  contained in this Section  shall
prohibit:

               (1)   transactions   described  on  Schedule  10.7  or  otherwise
expressly  permitted  hereunder,  provided  that the terms of any  agreement  or
arrangement  relating to any of the transactions  described on Schedule 10.7 are
not, at any time from and after the Closing Date,  materially  less favorable to
Borrower and its Subsidiaries than the terms of such agreement or arrangement as
in effect during the period with regard to which such  agreement or  arrangement
is described on Schedule 10.7;

               (2) the payment by Borrower of reasonable  and customary  fees to
members of its board of directors; and

               (3) loans by Borrower to its officers or directors  not to exceed
$1,000,000 outstanding in the aggregate at any time, provided that any such loan
is made upon fair and  reasonable  terms that are no less  favorable to Borrower
than would obtain in a comparable arm's length transaction.

     10.8 Lines of Business. Borrower will not, and will not permit or cause any
of its Subsidiaries to, engage in any business other than the Permitted Lines of
Business.

     10.9  Limitation on Certain  Restrictions.  Borrower will not, and will not
permit or cause any of its  Subsidiaries  to, directly or indirectly,  create or
otherwise  cause or suffer  to exist or  become  effective  any  restriction  or
encumbrance on (i) the ability of Borrower and its  Subsidiaries  to perform and
comply with their respective obligations under the Credit Documents, or (ii) the
ability of any  Subsidiary  of Borrower to make any  dividend  payments or other


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<PAGE>

distributions in respect of its Equity  Interests,  to make loans or advances to
Borrower or any other Subsidiary, or to transfer any of its assets or properties
to Borrower or any other  Subsidiary,  in each case other than such restrictions
or  encumbrances  existing  under  or by  reason  of  the  Credit  Documents  or
applicable Requirements of Law.

     10.10 Fiscal  Periods.  Borrower will not, and will not permit or cause any
of its  Subsidiaries  to, change any of the ending dates of its fiscal  quarters
and fiscal years through and including  the fiscal  quarter  ending July 4, 2004
from those set forth on Schedule 10.10, unless (i) Borrower shall have given the
Lenders written notice of its intention to change any such ending dates at least
sixty  (60) days  prior to the  effective  date  thereof  and (ii) prior to such
ending date this  Agreement  shall have been  amended to make any changes in the
financial  covenants and other terms and conditions to the extent necessary,  in
the reasonable determination of the Required Lenders, solely to reflect such new
ending dates.

     10.11 Accounting  Changes.  Borrower will not, and will not permit or cause
any of  its  Subsidiaries  to,  make  or  permit  any  material  changes  in its
accounting  policies  or  reporting  practices,  except  as may be  required  by
Generally  Accepted  Accounting  Principles,  and except for changes  that would
shorten  amortization  periods  for  Rental  Inventory,  which  changes  are not
prohibited by Regulations  S-X under the Securities Act of 1933, as amended,  or
by any rulings or announcements by the Securities and Exchange Commission.

                                   ARTICLE XI.

11.  EVENTS OF DEFAULT

     11.1 Events of Default.  The occurrence of any one or more of the following
events shall constitute an "Event of Default":

          (A) Borrower shall fail to pay any principal of any Loan when due;

          (B)  Borrower  shall  fail  to  pay  any  interest  on any  Loan,  any
Reimbursement  Obligation,  any Letter of Credit  Advance,  any Fee or any other
Payment Obligation when due, and such failure shall continue unremedied for five
(5) Business Days after written notice from Agent to Borrower of such failure of
payment (provided,  however, that such written notice shall not be required more
than twice in any consecutive twelve-month period);

          (C)  Borrower  shall  fail to  observe,  perform  or  comply  with any
Obligation or condition  contained in any of Sections 2.6, 3.6, 8.2(E),  8.3(i),
8.9, 8.10 or Article IX or Article X;

          (D) Borrower or any of its Subsidiaries shall fail to observe, perform
or comply with any Obligation or condition contained in this Agreement or any of
the other Credit  Documents other than those  enumerated in subsections (A), (B)
and (C) above,  and such failure shall continue  unremedied for any grace period
specifically applicable thereto or, if no such grace period is applicable, for a
period of thirty (30) days after the earlier of the date on which a  Responsible
Officer of Borrower acquires knowledge thereof or the date of delivery of notice
thereof by the Agent;

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<PAGE>

          (E) Any representation or warranty made or deemed made by or on behalf
of  Borrower  or any of its  Subsidiaries  in this  Agreement,  any of the other
Credit  Documents or in any  certificate,  instrument,  report or other document
furnished  in  connection  herewith  or  therewith  or in  connection  with  the
transactions  contemplated  hereby or thereby  shall prove to have been false or
misleading  in any  material  respect  as of  the  time  made,  deemed  made  or
furnished;

          (F) Borrower or any of its Subsidiaries shall (i) fail to pay when due
(whether by  scheduled  maturity,  acceleration  or  otherwise  and after giving
effect to any  applicable  grace  period)  any  principal  of or interest on any
Indebtedness  (other than the Indebtedness  incurred pursuant to this Agreement)
having  an  aggregate  principal  amount of at least  $500,000;  or (ii) fail to
observe,  perform or comply with any condition,  covenant or agreement contained
in any agreement or instrument  evidencing or relating to any such Indebtedness,
or any other event shall occur or condition  exist in respect  thereof,  and the
effect of such failure,  event or condition is to cause, or permit the holder or
holders of such  Indebtedness  (or a trustee or agent on its or their behalf) to
cause  (with the  giving of notice,  lapse of time,  or both,  and after  giving
effect to any applicable grace period),  such  Indebtedness to become due, or to
be prepaid, redeemed, purchased or defeased, prior to its stated maturity;

          (G)  Borrower  or any of its  Subsidiaries  shall (i) file a voluntary
petition  or  commence  a  voluntary  case  seeking   liquidation,   winding-up,
reorganization,  dissolution,  arrangement,  readjustment  of debts or any other
relief under  Bankruptcy  Law,  (ii) consent to the  institution  of, or fail to
controvert in a timely and appropriate  manner, any petition or case of the type
described in subsection (H) below, (iii) apply for or consent to the appointment
of or taking  possession by a custodian,  trustee,  receiver or similar official
for or of itself or all or a substantial part of its properties or assets,  (iv)
fail generally, or admit in writing its inability, to pay its debts generally as
they become due, (v) make a general assignment for the benefit of creditors,  or
(vi) take any corporate action to authorize or approve any of the foregoing;

          (H) Any  involuntary  petition  or case  shall be  filed or  commenced
against Borrower or any of its  Subsidiaries  seeking  liquidation,  winding-up,
reorganization, dissolution, arrangement, readjustment of debts, the appointment
of a  custodian,  trustee,  receiver  or  similar  official  for  it or all or a
substantial part of its properties or any other relief under Bankruptcy Law, and
such petition or case shall  continue  undismissed  and unstayed for a period of
sixty (60) days;  or an order,  judgment or decree  approving or ordering any of
the foregoing shall be entered in any such proceeding;

          (I) Any one or more money judgments,  writs or warrants of attachment,
executions  or similar  processes  involving an aggregate  amount  (exclusive of
amounts  fully bonded or covered by insurance as to which the surety or insurer,
as the case may be, has  acknowledged  its  liability  in  writing) in excess of
$750,000 shall be entered or filed against  Borrower or any of its  Subsidiaries
or any of their  respective  properties  and the same  shall  not be  discussed,
stayed or discharged for a period of thirty (30) days;

          (J) Any ERISA Event  shall occur or exist with  respect to any Plan or
Multiemployer  Plan and,  as a result  thereof,  together  with all other  ERISA
Events then existing,  there shall exist a reasonable likelihood of liability to


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any  one  or  more  Plans  or  Multiemployer  Plans  or to the  PBGC  (or to any
combination thereof) in excess of $750,000 with respect to Borrower or any ERISA
Affiliate;

          (K)  Any   one  or   more   licenses,   permits,   accreditations   or
authorizations  of  Borrower  or any of its  Subsidiaries  shall  be  suspended,
limited or  terminated  or shall not be renewed,  or any other  action  shall be
taken,  by any  Governmental  Authority  in response  to any alleged  failure by
Borrower  or  any  of  its  Subsidiaries  to be in  compliance  with  applicable
Requirements of Law, and such action, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect;

          (L) Any Material Contract to which Borrower or any of its Subsidiaries
is a party shall be  terminated or shall,  for any other  reason,  fail to be in
full force and effect and  enforceable  in accordance  with its terms,  and such
event or condition,  together with all other events or conditions, if any, would
be reasonably likely to have a Material Adverse Effect;

          (M) There  shall  occur any  uninsured  damage  to, or loss,  theft or
destruction of, any assets or properties of Borrower and its  Subsidiaries  that
would be reasonably likely to have a Materiel Adverse Effect;

          (N) Any Security Document to which Borrower or any of its Subsidiaries
is now or  hereafter a party shall for any reason  cease to be in full force and
effect or cease to be effective to give the Agent a valid and perfected security
interest  in and Lien  upon the  Collateral  purported  to be  covered  thereby,
subject to no Liens  other than  Permitted  Liens,  in each case unless any such
cessation  occurs in  accordance  with the terms thereof or is due to any act or
failure to act on the part of the Agent or any  Lender;  or Borrower or any such
Subsidiary  shall assert any of the  foregoing;  or any Subsidiary or any Person
action on its behalf shall deny or disaffirm such Subsidiary's obligations under
the Guaranty; or

          (O) Any of the  following  shall  occur:  (i) any  Person  or group of
Persons acting in concert as a partnership or other group shall,  as a result of
a  tender  or  exchange  offer,  open  market  purchases,  privately  negotiated
purchases or  otherwise,  have become,  after the date hereof,  the  "beneficial
owner" (within the meaning of such term under Rule 13d-3 under the Exchange Act)
of securities of Borrower representing a percentage of the combined voting power
of the then outstanding securities of Borrower ordinarily (and apart from rights
accruing under special  circumstances)  having the right to vote in the election
of directors  equal to the lower of (y) 20% or (z) the  percentage of beneficial
ownership of Borrower's  common stock that would , upon the lapse of time or the
occurrence of certain events,  permit  Borrower's  stockholders  (other than the
acquiring  Person or group) to exercise  stock purchase  rights  pursuant to any
stockholder  rights  plan  then in  effect;  or (ii) the Board of  Directors  of
Borrower shall cease to consist of a majority of the individuals who constituted
the Board of  Directors  of  Borrower  as of the date  hereof or who shall  have
become  a member  thereof  subsequent  to the  date  hereof  after  having  been
nominated,  or  otherwise  approved  in  writing,  by at  least  a  majority  of
individuals  who  constituted  the Board of Directors of Borrower as of the date
hereof (or their replacements approved as herein required).

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<PAGE>

     11.2 Remedies: Termination of Commitments,  Acceleration,  Etc. Upon and at
any time  after  the  occurrence  and  during  the  continuance  of any Event of
Default,  the Agent  shall at the  direction,  or may with the  consent,  of the
Required  Lenders,  take  any or all of the  following  actions  at the  same or
different times:

          (A) Declare the  Commitments  and the Issuing  Lender's  obligation to
issue Letters of Credit to be terminated, whereupon the same shall be terminated
(provided that,  upon the occurrence of an Event of Default  pursuant to Section
11.1(G) or Section 11.1(H),  the Commitments and the Issuing Lender's obligation
to issue Letters of Credit shall automatically be terminated);

          (B) Declare all or any part of the outstanding principal amount of the
Loans to be  immediately  due and payable,  whereupon  the  principal  amount so
declared to be immediately due and payable,  together with all interest  accrued
thereon and all other amounts  payable under this  Agreement,  the Notes and the
other  Credit  Documents,  shall  become  immediately  due and  payable  without
presentment,  demand, protest, notice of intent to accelerate or other notice or
legal  process of any kind,  all of which are  hereby  knowingly  and  expressly
waived by Borrower  (provided  that, upon the occurrence of any Event of Default
pursuant to Section 11.1(G) or Section 11.1(H), all of the outstanding principal
amount of the Loans and all other amounts described in this subsection (B) shall
automatically  become immediately due and payable without  presentment,  demand,
protest,  notice of intent to accelerate or other notice or legal process of any
kind, all of which are hereby knowingly and expressly waived by Borrower);

          (C) Direct Borrower to deposit (and Borrower hereby agrees,  forthwith
upon receipt of notice of such  direction  from the Agent,  to deposit) with the
Agent  from  time to time  such  additional  amount  of cash as is  equal to the
aggregate Stated Amounts of all Letters of Credit then  outstanding  (whether or
not any  beneficiary  under any Letter of Credit shall have drawn or be entitled
at such  time to draw  thereunder),  such  amount to be held by the Agent in the
Cash Collateral  Account as security for the Obligations as described in Section
4.4; and

          (D)  Exercise  all  rights  and  remedies  available  to it under this
Agreement the other Credit Documents and applicable Laws.

     11.3  Remedies:  Set-Off.  In  addition  to all other  rights and  remedies
available under the Credit  Documents or applicable Laws or otherwise,  upon and
at any time after the  occurrence  and during  the  continuance  of any Event of
Default, each Lender may, and each is hereby authorized by Borrower, at any such
time and from time to time, to the fullest extent  permitted by applicable  Law,
without presentment,  demand,  protest or other notice of any kind, all of which
are hereby knowingly and expressly  waived by Borrower,  to set off and to apply
any and all deposits (general or special, time or demand,  provisional or final)
and any other property at any time held  (including at any branches or agencies,
wherever located),  and any other indebtedness at any time owing, by such Lender
to or for the  credit  or the  account  of  Borrower  against  any or all of the
Obligations  to such  Lender  now or  hereafter  existing,  whether  or not such
Obligations  may be contingent or unmatured,  Borrower  hereby  granting to each
Lender a  continuing  security  interest in and Lien upon all such  deposits and


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other  property as security for such  Obligations.  Each Lender agrees to notify
Borrower  promptly after any such set-off and  application;  provided,  however,
that the  failure to give such  notice  shall not affect  the  validity  of such
set-off and application.

                                  ARTICLE XII.

12.  THE AGENT

     12.1 Appointment.  Each Lender hereby  irrevocably  appoints and authorizes
SouthTrust to act as Agent hereunder and under the other Credit Documents and to
take such  actions as agent on its behalf  hereunder  and under the other Credit
Documents,  and to  exercise  such  powers and to perform  such  duties,  as are
specifically  delegated  to the Agent by the terms  hereof or thereof,  together
with such other powers and duties as are reasonably incidental thereto.

     12.2 Nature of Duties.  The Agent shall have no duties or  responsibilities
other than those  expressly  set forth in this  Agreement  and the other  Credit
Documents.  The Agent shall not have,  by reason of this  Agreement or any other
Credit Document, a fiduciary  relationship in respect of any Lender; and nothing
in this Agreement or any other Credit Document,  express or implied, is intended
to or shall be so  construed  as to impose  upon the Agent  any  obligations  or
liabilities in respect of this Agreement or any other Credit  Document except as
expressly  set forth herein or therein.  The Agent may execute any of its duties
under this  Agreement  or any other  Credit  Document  by or  through  agents or
attorneys-in-fact  and shall not be responsible for the negligence or misconduct
of any agents or  attorneys-in-fact  that it selects with  reasonable  care. The
Agent  shall be  entitled  to consult  with legal  counsel,  independent  public
accountants  and  other  experts  selected  by it with  respect  to all  matters
pertaining  to this  Agreement  and the other  Credit  Documents  and its duties
hereunder and thereunder and shall not be liable for any action taken or omitted
to be taken in good faith by it in  accordance  with the advice of such counsel,
accountants or experts.  The Lenders hereby acknowledge that the Agent shall not
be under any duty to take any  discretionary  action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Credit Document unless
it shall be requested in writing to do so by the Required  Lenders (or,  where a
higher percentage of the Lenders is expressly required hereunder, such Lenders).

     12.3  Exculpatory  Provisions.  Neither the Agent nor any of its  officers,
directors,  employees,  agents,  attorneys-in-fact  or  Affiliates  shall be (i)
liable for any action taken or omitted to be taken by it or such Person under or
in  connection  with the Credit  Documents,  except for its or such Person's own
gross  negligence or willful  misconduct,  (ii) responsible in any manner to any
Lender for any recitals, statements, information,  representations or warranties
herein  or in  any  other  Credit  Document  or  in  any  document,  instrument,
certificate,  report  or other  writing  delivered  in  connection  herewith  or
therewith,   for   the   execution,   effectiveness,    genuineness,   validity,
enforceability or sufficiency of this Agreement or any other Credit Document, or
for the financial  condition of Borrower,  its Subsidiaries or any other Person,
or (iii) required to ascertain or make any inquiry concerning the performance or
observance of any of the terms,  provisions  or conditions of this  Agreement or
any other Credit Document or the existence or possible  existence of any Default
or Event of Default,  or to inspect the properties  books or records of Borrower
or any of its Subsidiaries.

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     12.4 Reliance by Agent.  The Agent shall be entitled to rely,  and shall be
fully  protected  in  relying,  upon any  notice,  statement,  consent  or other
communication  (including,   without  limitation,   any  thereof  by  telephone,
telecopy,  telex,  telegram or cable) believed by it in good faith to be genuine
and  correct  and to have  been  signed,  sent or made by the  proper  Person or
Persons.  The Agent may deem and treat each Lender as the owner of its  interest
hereunder  for all  purposes  hereof  unless  and until a written  notice of the
assignment,  negotiation or transfer  thereof shall have been given to the Agent
in accordance with the provisions of this Agreement. The Agent shall be entitled
to refrain  from taking or omitting to take any action in  connection  with this
Agreement or any other Credit  Document (i) if such action or omission would, in
the reasonable opinion of the Agent, violate any applicable Law or any provision
of this Agreement or any other Credit Document or (ii) unless and until it shall
have received such advice or  concurrence  of the Required  Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder,  such Lenders)
as it  deems  appropriate  or it  shall  first  have  been  indemnified  to  its
satisfaction  by the Lenders  against any and all liability  and expense  (other
than  liability  and expense  arising from its own gross  negligence  or willful
misconduct)  that may be incurred by it by reason of taking,  continuing to take
or omitting to take any such action.  Without limiting the foregoing,  no Lender
shall have the right of action  whatsoever  against the Agent as a result of the
Agent's  acting or  refraining  from acting  hereunder or under any other Credit
Document in accordance with the  instructions of the Required Lenders (or, where
a higher  percentage  of the  Lenders  is  expressly  required  hereunder,  such
Lenders),  and such instructions and any action taken or failure to act pursuant
thereto  shall be binding  upon all of the  Lenders  (including  all  subsequent
Lenders).

     12.5  Non-Reliance  on Agent  and  Other  Lenders.  Each  Lender  expressly
acknowledges  that  neither  the  Agent  nor  any  of its  officers,  directors,
employees,  agents,  attorneys-in-fact or Affiliates has made any representation
or  warranty  to it and that no act by the  Agent or any such  Person  hereafter
taken,  including  any review of the affairs of Borrower  and its  Subsidiaries,
shall be deemed to constitute any representation or warranty by the Agent to any
Lender.  Each Lender represents to the Agent that (i) it has,  independently and
without  reliance upon the Agent or any other Lender and based on such documents
and  information  as it has deemed  appropriate,  made its own  appraisal of and
investigation into the business, prospects,  operations,  properties,  financial
and other condition and  creditworthiness  of Borrower and its  Subsidiaries and
made its own decision to enter into this Agreement and extend credit to Borrower
hereunder,  and (ii) it will,  independently and without reliance upon 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  analysis,  appraisals
and  decisions  in taking or not  taking  action  hereunder  and under the other
Credit Documents and to make such  investigation as it deems necessary to inform
itself as to the  business,  prospects,  operations,  properties,  financial and
other financial condition and creditworthiness of Borrower and its Subsidiaries.
Except as expressly  provided in this Agreement and the other Credit  Documents,
the  Agent  shall  have no  duty or  responsibility,  either  initially  or on a
continuing  basis,  to provide any Lender  with any credit or other  information
concerning the business, prospects,  operations,  properties, financial or other
condition or creditworthiness of Borrower,  its Subsidiaries or any other Person
that  may at any  time  come  into  the  possession  of the  Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.

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     12.6 Notice of Default.  The Agent shall not be deemed to have knowledge or
notice of the  occurrence  of any  Default or Event of Default  unless the Agent
shall have received  written notice from Borrower or a Lender  referring to this
Agreement,  describing  such  Default or Event of Default and stating  that such
notice is a "notice  of  default."  In the event  that the Agent  receives  such
notice,  the Agent will give notice thereof to the Lenders as soon as reasonably
practicable;  provided, however, that if any such notice has also been furnished
to the Lenders,  the Agent shall have no  obligation  to notify the Lenders with
respect  thereto.  The Agent shall (subject to Sections 12.4 and 13.6) take such
action with respect to such Default or Event of Default as shall  reasonably  be
directed by the  Required  Lenders;  provided  that,  unless and until the Agent
shall have received such  directions,  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 in the best interests of
the Lenders.

     12.7  Indemnification.  To the extent the Agent is not  reimbursed by or on
behalf of Borrower,  and without  limiting the  obligation of Borrower to do so,
the  Lenders  agree (i) to  indemnify  the Agent  and its  officers,  directors,
employees,  agents,  attorneys-in-fact and Affiliates,  ratably in proportion to
their  respective  percentages as used in determining the Required Lenders as of
the  date  of   determination,   from  and  against  any  and  all  liabilities,
obligations,  loses,  damages,  penalties,  actions,  judgments,  suits,  costs,
expenses  (including,  without  limitation,  attorneys'  fees and  expenses)  or
disbursements  of any kind or nature  whatsoever that may at any time (including
at any time following the repayment in full of the Loans and the termination the
Commitments) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or any other Credit Document or any
documents contemplated by or referred to herein or the transactions contemplated
hereby or  thereby  or any  action  taken or  omitted  by the Agent  under or in
connection  with any of the  foregoing,  and (ii) to  reimburse  the Agent  upon
demand,  ratably  in  proportion  to  their  respective  percentages  as used in
determining  the  Required  Lenders  as of the  date of  determination,  for any
expenses incurred by the Agent in connection with the preparation,  negotiation,
execution,  delivery,   administration,   amendment,   modification,  waiver  or
enforcement (whether through  negotiations,  legal proceeding or otherwise) of ,
or legal advice in respect of rights or  responsibilities  under, this Agreement
or  any  other  Credit  Documents  (including,  without  limitation,  reasonable
attorneys'  fees and expenses and  compensation of agents and employees paid for
services rendered on behalf of the Lenders);  provided,  however, that no Lender
shall be  liable  for any  portion  of such  liabilities,  obligations,  losses,
damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the gross  negligence or willful  misconduct of the
party to be indemnified.

     12.8 The Agent in its Individual Capacity.  With respect to its Commitment,
the Loans made by it, the  Letters of Credit  issued by it and the Note or Notes
issued to it, the Agent in its  individual  capacity and not as Agent shall have
the same rights and powers  under the Credit  Documents  as any other Lender and
may  exercise  the same as  though  it were not  performing  the  agency  duties
specified  herein;  and the terms  "Lenders,"  "Required  Lenders,"  "holders of
Notes" and any  similar  terms  shall,  unless  the  context  clearly  otherwise
indicates,  include  the  Agent in its  individual  capacity.  The Agent and its
Affiliates may accept deposits from,  lend money to and generally  engage in any
kind of banking,  trust, financial advisory or other business with Borrower, any
of its Subsidiaries or any of their  respective  Affiliates as if the Agent were


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not performing the agency duties specified herein, and may accept fees and other
consideration  from any of them for services in connection  with this  Agreement
and otherwise without having to account for the same to the Lenders.

     12.9  Successor  Agent.  The Agent may resign at any time by giving  thirty
(30) days' prior  written  notice to  Borrower  and the  Lenders.  Upon any such
notice of resignation, the Required Lenders will, with the prior written consent
of Borrower  (which consent shall not be  unreasonably  withheld),  appoint from
among the Lenders a successor to the Agent  (provided  that  Borrower's  consent
shall not be  required  in the event a Default  or Event of  Default  shall have
occurred  or be  continuing).  If no  successor  to the Agent shall have been so
appointed  by the  Required  Lenders and shall have  accepted  such  appointment
within such  thirty-day  period,  then the retiring  Agent may, on behalf of the
Lenders and after consulting with the Lenders and Borrower,  appoint a successor
Agent from among the Lenders. Upon the acceptance of any appointment as Agent by
a successor  Agent,  such successor Agent shall thereupon  succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the  retiring  Agent  shall be  discharged  from its duties and  obligations
hereunder  and under the other  Credit  Documents.  After any  retiring  Agent's
resignation as Agent,  the provisions of this Article shall inure to its benefit
as to any actions  taken or omitted to be taken by it while it was Agent.  If no
successor to the Agent has accepted appointment as Agent by the thirtieth (30th)
day following a retiring  Agent's notice of  resignation,  the retiring  Agent's
resignation shall nevertheless thereupon become effective, and the Lenders shall
thereafter  perform all of the duties of the Agent hereunder and under the other
Credit  Documents  until such time,  if any, as the Required  Lenders  appoint a
successor Agent as provided for hereinabove.

     12.10 Collateral Matters.

          (A) The Agent is hereby  authorized on behalf of the Lenders,  without
the necessity of any notice to or further consent from the Lenders, from time to
time (but  without  any  obligation)  to take any  action  with  respect  to the
Collateral  and the  Security  Documents  that may be  necessary  to perfect and
maintain  perfected  the  Liens  upon the  Collateral  granted  pursuant  to the
Security Documents.

          (B) The Lenders hereby irrevocably  authorize the Agent, at its option
and in its discretion,  to release any Lien granted to or held by the Agent upon
any Collateral (i) upon  termination of the  Commitments  and payment in full of
all of the  Obligations,  (ii)  constituting  property  sold  or to be  sold  or
disposed  of as  part of or in  connection  with  any  disposition  that  may be
expressly  permitted  hereunder  or under any other  Credit  Document,  or (iii)
otherwise  pursuant to and in accordance  with the  provisions of any applicable
Credit Document. Upon request by the Agent at any time, the Lenders will confirm
in  writing  the  Agent's  authority  to  release  Collateral  pursuant  to this
subsection (B).

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                                  ARTICLE XIII.

13.  MISCELLANEOUS

     13.1 Fees and Expenses.  Borrower  agrees,  whether or not the transactions
contemplated by this Agreement shall be consummated,  to (i) pay upon demand all
out-of-pocket  costs and expenses of the Agent (including,  without  limitation,
the fees and  expenses of counsel to the Agent,  but subject in any event to the
provisions of the commitment  letter from SouthTrust to Borrower dated April 12,
2001) in connection with (x) the preparation,  negotiation,  execution, delivery
and  syndication of this Agreement and the other Credit  Documents,  and (y) any
amendment,  modification  or waiver  hereof or thereof or consent  with  respect
hereto or thereto;  (ii) pay upon demand all out-of-pocket costs and expenses of
the Agent and each Lender (including, without limitation, the out-of-pocket fees
and  expenses  of  counsel  to the Agent or any  Lender)  in  connection  with a
Default,  including  all such costs and  expenses  incurred  with respect to any
refinancing  or  restructuring  of the credit  arrangement  provided  under this
Agreement  (whether in the nature of a "work-out," in any Bankruptcy  proceeding
or otherwise and whether or not  consummated),  and the  enforcement,  attempted
enforcement  or  preservation  of any rights or remedies under this Agreement or
any of the other Credit  Documents,  whether in any action,  suit or  proceeding
(including  any  Bankruptcy  proceeding)  or  otherwise;  and (iii) pay and hold
harmless  the Agent and each  Lender  from and  against  all  liability  for any
intangibles,  documentary,  stamp or other similar taxes,  fees and excises,  if
any,  including any interest and penalties,  and any finder's or brokerage fees,
commissions  and  expenses  (other  than any fees,  commissions  or  expenses of
finders or brokers  engaged by the Agent or any Lender),  that may be payable in
connection  with the  transactions  contemplated by this Agreement and the other
Credit  Documents  (other than any transfer,  stamp or similar taxes that may be
payable in  connection  with the  transfer of any Loans or Notes  pursuant to an
Assignment and Acceptance).

     13.2  Indemnification.  Borrower  agrees,  whether or not the  transactions
contemplated  by this  Agreement  shall be  consummated,  to indemnify  and hold
harmless the Indemnified Lender Persons from and against any and all Indemnified
Losses (including all Default Costs) of any kind or nature  whatsoever,  whether
direct, indirect or consequential,  that may at any time be imposed on, incurred
by or  asserted  against  any such  Indemnified  Lender  Person as a result  of,
arising  from  or in any  way  relating  to  (i)  an  Event  of  Default  (which
indemnification  is in addition  to, and not in  derogation  of, any  statutory,
equitable,  or common law right or remedy the Lender Parties may have for breach
of representation,  warranty,  statement or covenant or otherwise may have under
any of the Credit Documents); and (ii) the preparation,  execution,  performance
or enforcement of this  Agreement or any of the other Credit  Documents,  any of
the transactions  contemplated herein or therein or any transaction  financed or
to be financed in whole or in part, directly or indirectly, with the proceeds of
any Loans or Letters of Credit, or any action, suit or proceeding (including any
inquiry or  investigation)  by any  Person,  whether  threatened  or  initiated,
related to any of the foregoing, and in any case whether or not such Indemnified
Person is a party to any such  action,  proceeding  or suit or a subject  of any
such inquiry or investigation;  provided,  however,  that no Indemnified  Person
shall  have  the  right  to be  indemnified  under  this  Section  13.2  for any
Indemnified  Losses to the extent resulting from the gross negligence or willful
misconduct of such Indemnified  Person. All of the foregoing  Indemnified Losses


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of any Indemnified Lender Person shall be paid or reimbursed by Borrower, as and
when  incurred  and upon  demand  and  shall  survive  the  termination  of this
Agreement.

     13.3 Governing Law; Consent to Jurisdictions.  THIS AGREEMENT AND THE OTHER
CREDIT  DOCUMENTS  HAVE BEEN  EXECUTED,  DELIVERED AND ACCEPTED IN, AND SHALL BE
DEEMED TO HAVE BEEN MADE IN,  ALABAMA AND SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ALABAMA  (WITHOUT REGARD TO
THE CONFLICTS OF LAW  PROVISIONS  THEREOF);  PROVIDED THAT EACH LETTER OF CREDIT
SHALL BE GOVERNED BY AND CONSTRUED  AND ENFORCED IN ACCORDANCE  WITH THE LAWS OR
RULES  DESIGNATED  IN SUCH  LETTER  OF  CREDIT  OR, IF NO SUCH LAWS OR RULES ARE
DESIGNATED,   THE  UNIFORM  CUSTOMS  AND  PRACTICES  FOR  DOCUMENTARY   CREDITS,
INTERNATIONAL  CHAMBER OF COMMERCE, AS IN EFFECT FROM TIME TO TIME (THE "UNIFORM
CUSTOMS"),  AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS,  THE LAWS OF
THE STATE OF ALABAMA  (WITHOUT  REGARD TO THE  CONFLICTS  OF THE LAW  PROVISIONS
THEREOF). BORROWER HEREBY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE
COURT WITHIN JEFFERSON  COUNTY,  ALABAMA OR ANY FEDERAL COURT LOCATED WITHIN THE
NORTHERN DISTRICT,  SOUTHERN DIVISION OF THE STATE OF ALABAMA FOR ANY PROCEEDING
INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS,  OR ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR
ANY  PROCEEDING  TO  WHICH  THE  AGENT OR ANY  LENDER  OR  BORROWER  IS A PARTY,
INCLUDING ANY ACTIONS BASED UPON,  ARISING OUT OF, OR IN  CONNECTION  WITH,  ANY
COURSE OF CONDUCT,  COURSE OF DEALING,  STATEMENT  (WHETHER  ORAL OR WRITTEN) OR
ACTIONS OF THE AGENT OR ANY LENDER OR BORROWER.  BORROWER  IRREVOCABLY AGREES TO
BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY JUDGMENT  RENDERED OR
RELIEF  GRANTED  THEREBY AND FURTHER WAIVES ANY OBJECTION THAT IT MAY HAVE BASED
ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT
OF ANY SUCH PROCEEDING. BORROWER CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY
REGISTERED  OR  CERTIFIED   MAIL  DIRECTED  TO  IT  AT  ITS  ADDRESS  SET  FORTH
HEREINBELOW,  AND  SERVICE  SO MADE  SHALL BE  DEEMED TO BE  COMPLETED  UPON THE
EARLIER OF ACTUAL RECEIPT  THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED
STATES MAILS,  PROPER POSTAGE  PREPAID AND PROPERLY  ADDRESSED.  NOTHING IN THIS
SECTION  SHALL  AFFECT  THE RIGHT TO SERVE  LEGAL  PROCESS  IN ANY OTHER  MANNER
PERMITTED  BY LAW OR  AFFECT  THE  RIGHT OF ANY  PARTY TO BRING  ANY  ACTION  OR
PROCEEDING AGAINST ANY OTHER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.

The parties hereto agree that this Agreement and the other Credit Documents have
been and will be made and entered  into within the State of Alabama and that the


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Loans and the other transactions  contemplated  hereby and thereby have been and
will be made and consummated in the State of Alabama.

     13.4 Arbitration; Preservation and Limitation of Remedies.

          (A) Upon  demand of any party  hereto,  whether  made  before or after
institution  of any  judicial  proceeding,  any  dispute,  claim or  controversy
arising out of, connected with or relating to this Agreement or any other Credit
Document ("Disputes") between or among Borrower, its Subsidiaries, the Agent and
the  Lenders,  or any of them,  shall be  resolved  by  binding  arbitration  as
provided herein.  Institution of a judicial proceeding by a party does not waive
the right of that party to demand arbitration  hereunder.  Disputes may include,
without limitation, tort claims, counterclaims, claims brought as class actions,
claims arising from documents  executed in the future,  disputes as to whether a
matter is subject to arbitration, or claims arising out of or connected with the
transactions  contemplated  by this  Agreement  and the other Credit  Documents.
Arbitration  shall be conducted  under and governed by the Commercial  Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association  (the  "AAA"),  as in  effect  from  time to time,  and the  Federal
Arbitration Act, Title 9 of the U.S. Code, as amended.  All arbitration hearings
shall be  conducted  in the city in which the  principal  office of the Agent is
located. A hearing shall begin within ninety (90) days of demand for arbitration
and all hearings shall be concluded  within 120 days of demand for  arbitration.
These  time  limitations  may not be  extended  unless a party  shows  cause for
extension  and then for no more than a total of sixty (60) days.  The  expedited
procedures  set  forth  in Rule 51 et seq.  of the  Arbitration  Rules  shall be
applicable  to  claims of less  than  $1,000,000.  All  applicable  statutes  of
limitation shall apply to any Dispute.  A judgment upon the award may be entered
in any court  having  jurisdiction.  The panel  from which all  arbitrators  are
selected shall be comprised of licensed  attorneys  selected from the Commercial
Financial Dispute  Arbitration Panel of the AAA. The single arbitrator  selected
for  expedited  procedure  shall be a retired  judge from the  highest  court of
general  jurisdiction,  state or federal, of the state where the hearing will be
conducted.  Notwithstanding the foregoing,  this arbitration  provision does not
apply to Disputes  under or related to any Hedge  Agreement.  The parties do not
waive applicable federal or state substantive Law except as provided herein.

          (B) Notwithstanding the preceding binding arbitration provisions,  the
parties hereto agree to preserve, without diminution,  certain remedies that any
party hereto may employ or exercise freely, either alone, in conjunction with or
during a Dispute.  Any party hereto shall have the right to proceed in any court
of proper  jurisdiction  or by self-help to exercise or prosecute  the following
remedies,  as applicable:  (i) all rights to foreclose against any Collateral by
exercising  a power of sale granted  pursuant to any of the Credit  Documents or
under applicable Law or by judicial foreclosure and sale, including a proceeding
to confirm the sale; (ii) all rights of self-help, including peaceful occupation
of real property and collection of rents,  set-off,  and peaceful  possession of
personal property; (iii) obtaining provisional or ancillary remedies,  including
injunctive  relief,  sequestration,  garnishment,  attachment,  appointment of a
receiver  and  filing  an  involuntary  Bankruptcy  proceeding;  and  (iv)  when
applicable,  a judgment by confession of judgment. Any claim or controversy with
regard to any party's entitlement to such remedies is a Dispute. Preservation of
these  remedies  does not  limit  the power of an  arbitrator  to grant  similar
remedies that may be requested by a party in a Dispute. The parties hereto agree


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that no party shall have a remedy of punitive or exemplary  damages  against any
other party in any Dispute,  and each party hereby  waives any right or claim to
punitive or exemplary damages that is has now or that may arise in the future in
connection with any Dispute,  whether such Dispute is resolved by arbitration or
judicially. The Parties acknowledge that by agreeing to binding arbitration they
have irrevocably waived any right they may have to a jury trial with regard to a
Dispute.

     13.5 Notices. All notices and other  communications  provided for hereunder
shall be in writing (including  telegraphic,  telex,  facsimile  transmission or
cable communication) and mailed,  telegraphed,  telexed,  telecopied,  cabled or
delivered to the party to be notified at the following addresses:

if to Borrower:         Movie Gallery, Inc.
                        900 West Main Street
                        Dothan, Alabama 36301
                        Attention: J. Steven Roy
                        Fax: (334) 677-2140

with a copy to:         Movie Gallery, Inc.
                        900 West Main Street
                        Dothan, Alabama 36301
                        Attention: S. Page Todd, Esq.
                        Fax No. (334) 702-0509

if to Agent:            SouthTrust Bank
                        P.O. Box 2554
                        Birmingham, Alabama 35290
                        Attention: Corporate Banking Department
                        Fax No. (205) 254-5911

and with a copy to:     Ray D. Gibbons, Esq.
                        Gordon, Silberman, Wiggins & Childs, P.C.
                        1400 SouthTrust Tower
                        Birmingham, Alabama 35203
                        Fax No. (205) 254-1500

if to any Lender,  to it at the  address for notices set forth on its  signature
page hereto (or if to any Lender not a party  hereto as of the date  hereof,  at
the address for notices set forth in its Assignment and Acceptance), with a copy
to the Agent;

or in each case,  to such other address as any party may designate for itself by
like notice to all other  parties  hereto.  All such notices and  communications
shall be deemed to have been given (i) if mailed as provided above by any method
other than overnight  delivery service,  on the third Business Day after deposit
in the mails, (ii) if mailed by overnight  delivery,  delivered to the telegraph
company,  confirmed by telex answerback,  transmitted by telecopier or delivered


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to the  cable  company,  respectively,  or (iii)  if  delivered  by  hand,  upon
delivery;  provided  that notices and  communications  to the Agent shall not be
effective until received by the Agent.

     13.6  Amendments,  Waivers,  etc.  No  amendment,  modification,  waiver or
discharge or  termination  of, or consent to any departure by Borrower from, any
provision of this  Agreement or any other  Credit  Document,  shall be effective
unless  in a  writing  signed by the  Required  Lenders  (or by the Agent at the
direction or with the consent of the Required Lenders),  and then the same shall
be  effective  only in the specific  instance  and for the specific  purpose for
which given; provided,  however, that no such amendment,  modification,  waiver,
discharge, termination or consent shall:

          (A)  unless  agreed  to by each  Lender  holding  or owed  Obligations
directly  affected  thereby,  (i) reduce or forgive the principal  amount of, or
rate of  interest  on,  any  Loan,  or  reduce  or  forgive  any  fees or  other
Obligations (other than fees payable to the Agent for its own account),  or (ii)
extend any date  (including  the  Revolving  Loan  Maturity  Date) fixed for the
payment of any  principal  of or interest  on any Loan  (other  than  additional
interest  payable  under  Section  5.4)  during the  continuance  of an Event of
Default), any fees (other than fees payable to the Agent for its own account) or
any other Obligations;

          (B) unless agreed to by all of the Lenders, (i) increase or extend the
Commitment  of any  Lender  (it being  understood  that a waiver of any Event of
Default,  if agreed to by the requisite Lenders hereunder,  shall not constitute
such an increase or extension),  (ii) change the percentage of the  Commitments,
or the percentage of the aggregate  unpaid principal amount of the Loans, or the
number or percentage  of Lenders,  that shall be required for the Lenders or any
of them to take or approve,  or direct the Agent to take or approve,  any action
hereunder  (including  as set forth in the  definition  of "Required  Lenders"),
(iii) except as may be otherwise  specifically  provided in this Agreement or in
any other Credit Document,  release all or substantially  all of the Collateral,
or (iv) change any provision of this Section 13.6; and

          (C) unless agreed to by the Issuing  Lender,  the Swing Line Lender or
the Agent in addition to the Lenders  required as provided  hereinabove  to take
such action,  affect the respective rights or obligations of the Issuing Lender,
the Swing Line Lender or the Agent, as applicable, hereunder or under any of the
other Credit Documents;

and provided  further  that the Fee Letter may be amended or  modified,  and any
rights thereunder waived, in a writing signed by the parties thereto.

     13.7 Assignments, Participations.

          (A) Each  Lender may assign to one or more  other  Eligible  Assignees
(each, an "Assignee") all or a portion of its rights and obligations  under this
Agreement  (including,  without limitation,  all or a portion of its Commitment,
the  outstanding  Loans  made  by it,  the  Note  or  Notes  held  by it and its
participations  in  Letters of  Credit);  provided,  however,  that (i) any such
assignment  (other than an  assignment to a Lender or any Affiliate of a Lender)
shall not be made without the prior  written  consent of the Agent,  the Issuing
Lender and Borrower (to be evidenced by their  counterexecution  of the relevant
Assignment and  Acceptance),  which consent shall not be unreasonably  withheld,


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(ii) each such  assignment  by a Lender shall be made in such manner so that the
same  portion of its  Commitment,  Loans,  Note or Notes and  participations  in
Letters of Credit is assigned to the relevant Assignee  (provided that the Swing
Line  Lender  may  assign  all (but not less than  all) of the  Swing  Line Loan
Commitment, the Swing Line Loan and the Swing Line Note without the necessity of
assigning  a  corresponding  portion  of its  Commitment,  Revolving  Loans  and
Revolving  Note),  (iii) except in the case of an  assignment  to a Lender or an
Affiliate  of a Lender,  the amount of the  Commitment  of the  assignment  to a
Lender being  assigned  pursuant to each such  assignment  (determined as of the
date of the  Assignment  and  Acceptance  with respect to each such  assignment)
shall in no event be less than the lesser of (y) the entire  Commitment  of such
Lender immediately prior to such assignment or (z) $5,000,000,  and, in the case
of the Swing  Line  Lender,  shall not be less than the  entire  Swing Line Loan
Commitment,  and (iv) the  parties  to each such  assignment  will  execute  and
deliver to the Agent,  for its  acceptance  and  recording in the  Register,  an
Assignment  and  Acceptance,  together  with any Note or Notes  subject  to such
assignment,  and will pay a nonrefundable  processing fee of $3,000 to the Agent
for its own account. Upon such execution,  delivery, acceptance and recording of
the  Assignment  and  Acceptance,  from and after the effective  date  specified
therein,  which  effective  date shall be at least five  Business Days after the
execution  thereof  (unless the Agent shall otherwise  agree),  (A) the Assignee
thereunder  shall  be a  party  hereto  and,  to  the  extent  that  rights  and
obligations  hereunder have been assigned to it pursuant to such  Assignment and
Acceptance,  shall have the  rights  and  obligations  of the  assigning  Lender
hereunder  with respect  thereto,  and (B) the assigning  Lender  shall,  to the
extent that rights and  obligations  hereunder have been assigned by it pursuant
to such  Assignment  and  Acceptance,  relinquish  its rights (other than rights
under the provisions of this Agreement and the other Credit  Documents  relating
to  indemnification  or payment of fees, costs and expenses,  to the extent such
rights relate to the time prior to the  effective  date of such  Assignment  and
Acceptance) 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 such assigning  Lender's  rights and obligations  under this Agreement,  such
Lender  shall  cease to be a party  hereto).  The terms and  provisions  of each
Assignment and Acceptance shall, upon the effectiveness thereof, be incorporated
into  and  made a part of this  Agreement,  and the  covenants,  agreements  and
obligations of each Lender set forth therein shall be deemed made to and for the
benefit  of the  Agent and the  other  parties  hereto as if set forth at length
herein.

          (B) The Agent will  maintain at its  address  for notices  referred to
herein a copy of each Assignment and Acceptance  delivered to and accepted by it
and a Register for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amount of the Loans owing to, each Lender from
time to time.  The entries in the Register  shall be conclusive  and binding for
all purposes, absent manifest error, and Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the  Register as a Lender  hereunder
for all  purposes  of this  Agreement.  The  Register  shall  be  available  for
inspection by Borrower and each Lender at any  reasonable  time and from time to
time upon reasonable prior notice.

          (C) Upon its receipt of a duly  completed  Assignment  and  Acceptance
executed by an assigning Lender and an Assignee or  counterexecuted  by Borrower
(if required) and the Issuing Lender, together with any Note or Notes subject to
such assignment and the processing fee referred to in subsection (A) above,  the
Agent will (i) accept such Assignment and Acceptance, (ii) on the effective date


                                       75
<PAGE>

thereof,  record the information  contained  therein in the Register,  and (iii)
give notice  thereof to Borrower and the Lenders.  Within five (5) Business Days
after its receipt of such notice, Borrower will execute and deliver to the Agent
in exchange for the  surrendered  Note or Notes a new Note or Notes to the order
of such Assignee in an aggregate  principal amount equal to the principal amount
of the Commitment (or, if the Commitments  have been  terminated,  the principal
amount of the Loans)  assumed by it pursuant to such  Assignment  and Acceptance
and, to the extent the assigning Lender has retained its Loans and/or Commitment
hereunder,  a new Note or  Notes to the  order  of the  assigning  Lender  in an
aggregate  principal amount equal to the principal amount of the Commitment (or,
if the  Commitments  have been  terminated,  the principal  amount of the Loans)
retained by it hereunder.  Such new Note or Notes shall be dated the date of the
replaced Note or Notes and shall otherwise be in  substantially  the form of the
Notes delivered at Closing, as applicable. The Agent will return cancelled Notes
to Borrower.

          (D) Each Lender may, without the consent of Borrower, the Agent or any
other  Lender,  sell  to one or  more  other  Persons  (each,  a  "Participant")
participations  in any  portion  comprising  less  than  all of its  rights  and
obligations under this Agreement  (including,  without limitation,  a portion of
its Commitment,  the outstanding  Loans made by it, the Note or Notes held by it
and its participations in Letters of Credit);  provided,  however, that (i) such
Lender's obligations under this Agreement shall remain unchanged and such Lender
shall remain solely responsible for the performance of such obligations, (ii) no
Lender shall sell any  participation  that,  when taken  together with all other
participations,  if any, sold by such Lender, covers all of such Lender's rights
and obligations  under this Agreement,  (iii) Borrower,  the Agent and the other
Lenders  shall  continue  to deal  solely  and  directly  with  such  Lender  in
connection with such Lender's rights and obligations  under this Agreement,  and
no Lender shall permit any Participant to have any voting rights or any right to
control  the vote of such Lender with  respect to any  amendment,  modification,
waiver,  consent or other action  hereunder  or under any other Credit  Document
(except as to actions that would (x) reduce or forgive the principal  amount of,
or rate of  interest  on,  any  Loan,  or reduce  or  forgive  any fees or other
Obligations,  (y) extend any date  (including  the Revolving Loan Maturity Date)
fixed for the payment of any  principal of or interest on any Loan,  any fees or
any other Obligations,  or (z) increase any Commitment of any Lender),  and (iv)
no  Participant  shall have any rights under this  Agreement or any of the other
Credit  Documents,  each  Participant's  rights  against the granting  Lender in
respect  of any  participation  to be  those  set  forth  in  the  participation
agreement,  and all amounts payable by Borrower hereunder shall be determined as
if  such  Lender  had  not  granted  such  participation.   Notwithstanding  the
foregoing,  each  Participant  shall have the rights of a Lender for purposes of
Sections  5.7,  5.11,  5.12 and 11.3,  and  shall be  entitled  to the  benefits
thereto,  to the extent that the Lender  granting  such  participation  would be
entitled to such benefits if the participation had not been made,  provided that
no Participant  shall be entitled to receive any greater amount  pursuant to any
of such Sections than the Lender  granting  such  participation  would have been
entitled to receive in respect of the amount of the  participation  made by such
Lender to such Participant had such participation not been made.

          (E) Nothing in this  Agreement  shall be  construed  to  prohibit  any
Lender from  pledging or assigning all or any portion of its rights and interest
hereunder  or  under  any  Note to any  Federal  Reserve  Bank as  security  for
borrowings therefrom; provided, however, that no such pledge or assignment shall
release a Lender from any of its obligations hereunder.

                                       76
<PAGE>

          (F) Any Lender may, in connection with any assignment or participation
or proposed  assignment or participation  pursuant to this Section,  disclose to
the Assignee or Participant or proposed  Assignee or Participant any information
relating to Borrower and its Subsidiaries furnished to it by or on behalf of any
other party  hereto,  provided  that such  Assignee or  Participant  or proposed
Assignee or Participant agrees in writing to keep such information  confidential
to the same extent required of the Lenders under Section 13.13.

          (G) As  used  in  this  Section  13.7,  the  terms  "Commitments"  and
"Commitment"  shall  include the Swing Line Loan  Commitment  in the case of the
Swing Line Lender.

     13.8 No  Waiver.  The  rights  and  remedies  of the Agent and the  Lenders
expressly  set  forth in this  Agreement  and the  other  Credit  Documents  are
cumulative  and in  addition  to, and not  exclusive  of,  all other  rights and
remedies  available at law, in equity or  otherwise.  No failure or delay on the
part of the Agent or any  Lender in  exercising  any right,  power or  privilege
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such  right,  power or  privilege  preclude  any other or  further  exercise
thereof or the exercise of any other  right,  power or privilege or be construed
to be a waiver of any Default or Event of Default.  No course of dealing between
any of Borrower and the Agent or the Lenders or their agents or employees  shall
be effective to amend,  modify or discharge any  provision of this  Agreement or
any other Credit  Document or to  constitute a waiver of any Default or Event of
Default. No notice to or demand upon Borrower in any case shall entitle Borrower
to any other or further  notice or demand in similar or other  circumstances  or
constitute  a waiver  of the right of the Agent or any  Lender to  exercise  any
right or remedy or take any other or further action in any circumstances without
notice or demand.

     13.9 Successors and Assigns. This Agreement shall be binding upon, inure to
the benefit of and be enforceable  by the  respective  successors and assigns of
the parties  hereto,  and all references  herein to any party shall be deemed to
include its successors and assigns;  provided,  however, that (i) Borrower shall
not sell, assign or transfer any of its rights, interests, duties or obligations
under this  Agreement or any other  Credit  Document  without the prior  written
consent of all of the Lenders, and (ii) any Assignees shall have such rights and
obligations with respect to this Agreement and the other Credit Documents as are
provided for under and pursuant to the provisions of Section 13.7.

     13.10 Survival.  All representations,  warranties and agreements made by or
on behalf of Borrower or any of its  Subsidiaries  in this  Agreement and in the
other Credit  Documents  shall  survive the  execution  and  delivery  hereof or
thereof, the making and repayment of the Loans and the issuance and repayment of
the Letters of Credit.  In addition,  notwithstanding  anything  herein or under
applicable  Law to the contrary,  the provisions of this Agreement and the other
Credit  Documents  relating  to  indemnification  or payment of fees,  costs and
expenses,  including,  without limitation, the provisions of Sections 5.7, 5.11,
5.12,  12.7,  13.1 and 13.2,  shall survive the payment in full of all Loans and
Letters of Credit, the termination of the Commitments and all Letters of Credit,
and any termination of this Agreement or any of the other Credit Documents.

     13.11  Severability.  To the  extent any  provision  of this  Agreement  is
prohibited  by or invalid under the  applicable  Law of any  Jurisdiction,  such


                                       77
<PAGE>

provision  shall  be  ineffective  only to the  extent  of such  prohibition  or
invalidity and only in such  Jurisdiction,  without  prohibiting or invalidating
such  provision in any other  Jurisdiction  or the remaining  provisions of this
Agreement in any Jurisdiction.

     13.12  Construction.  The  headings of the various  articles,  sections and
subsections of this Agreement have been inserted for convenience  only and shall
not in any way  affect  the  meaning or  construction  of any of the  provisions
hereof.  Except as otherwise  expressly  provided herein and in the other Credit
Documents,  in the event of any  inconsistency or conflict between any provision
of this  Agreement and any provision of any of the other Credit  Documents,  the
provision of this Agreement shall control.

     13.13 Confidentiality. Each Lender agrees to keep confidential, pursuant to
its customary  procedures  for handling  confidential  information  of a similar
nature and in accordance  with safe and sound banking  practices,  all nonpublic
information  provided  to  it  by or  on  behalf  of  Borrower  or  any  of  its
Subsidiaries  in connection  with this  Agreement or any other Credit  Document;
provided,  however,  that any Lender may disclose  such  information  (i) to its
directors,  employees  and  agents  and  to  its  auditors,  counsel  and  other
professional  advisors,  (ii) at the demand or  request  of any bank  regulatory
authority,   court  or  other   Governmental   Authority   having  or  asserting
jurisdiction  over such Lender, as may be required pursuant to subpoena or other
legal process,  or otherwise in order to comply with any applicable  Requirement
of Law, (iii) in connection with any proceeding to enforce its rights  hereunder
or under any other Credit Document or any other litigation or proceeding related
hereto or to which it is a party, (iv) to the Agent or any other Lender,  (v) to
the extent the same has become  publicly  available  other than as a result of a
breach  of this  Agreement,  and (vi)  pursuant  to and in  accordance  with the
provisions of Section 13.7(F).

     13.14  Counterparts.  This  Agreement  may be  executed  in any  number  of
counterparts and by different parties hereto on separate  counterparts,  each of
which when so executed  and  delivered  shall be an  original,  but all of which
shall together  constitute  one and the same  instrument.  This Agreement  shall
become  effective  upon the  execution  of a  counterpart  hereof by each of the
parties  hereto and receipt by the Agent and  Borrower of written or  telephonic
notification of such execution and authorization of delivery thereof.

     13.15  Entire  Agreement.  THIS  AGREEMENT  AND  THE  OTHER  DOCUMENTS  AND
INSTRUMENTS  EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND  UNDERSTANDING  BETWEEN THE PARTIES HERETO AND THERETO RELATING TO
THE  SUBJECT  MATTER  HEREOF  AND  THEREOF,  (B)  SUPERSEDE  ANY AND  ALL  PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN,  RELATING TO THE
SUBJECT  MATTER  HEREOF  AND  THEREOF,  INCLUDING  THE  COMMITMENT  LETTER  FROM
SOUTHTRUST TO BORROWER  DATED APRIL 12, 2001 (EXCEPT AS  SPECIFICALLY  OTHERWISE
PROVIDED  THEREIN AS TO CERTAIN  PROVISIONS  THAT SHALL SURVIVE THE EXECUTION OF
THIS AGREEMENT),  BUT SPECIFICALLY  EXCLUDING THE FEE LETTER, AND (C) MAY NOT BE
AMENDED, SUPPLEMENTED,  CONTRADICTED OR OTHERWISE MODIFIED BY EVIDENCE OF PRIOR,


                                       78
<PAGE>

CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.



              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       79
<PAGE>

          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
be executed by their respective duly authorized  officers as of the day and year
first above written.


                               MOVIE GALLERY, INC.


                               By:/s/ S. Page Todd
                                  -----------------------------------
                                  S. Page Todd, Senior Vice President



STATE OF ALABAMA
COUNTY OF JEFFERSON

          I, the  undersigned,  a Notary  Public in and for said  County in said
State,  hereby certify that S. Page Todd, whose name as Senior Vice President of
Movie  Gallery,  Inc.,  a  Delaware  corporation,  is  signed  to the  foregoing
instrument,  and who is known to me, acknowledged before me that, being informed
of the contents of such instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.

          Given  under my hand  and  official  seal,  this the 27th day of June,
2001.


                               /s/ Elizabeth A. Carnig
                               ------------------------------------------(SEAL)
                               Notary Public
                               My Commission Expires: 1/10/2005


                                       80
<PAGE>

          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
be executed by their respective duly authorized  officers as of the day and year
first above written.


Commitment: $25,000,000        SOUTHTRUST  BANK,  as Agent,  as Issuing  Lender,
                               as Swing Line Lender, and as a Revolving Loan
                               Lender


                               By:/s/ W. Spencer Ragland
                                  ----------------------
                               Its: Vice President


STATE OF ALABAMA
COUNTY OF JEFFERSON

          I, the  undersigned,  a Notary  Public in and for said  County in said
State,  hereby certify that W. Spencer Ragland,  whose name as Vice President of
SouthTrust  Bank,  an Alabama  banking  corporation,  is signed to the foregoing
instrument,  and who is known to me, acknowledged before me that, being informed
of the  contents  of such  instrument,  he/she,  as such  officer  and with full
authority,  executed  the same  voluntarily  for and as the act of said  banking
corporation.

          Given  under my hand  and  official  seal,  this the 27th day of June,
2001.

                               /s/ Elizabeth A. Carnig
                               ------------------------------------------(SEAL)
                               Notary Public
                               My Commission Expires: 1/10/2005


Address for Notices (as Issuing Lender,       Lending Office:
Swing Line Lender, and a Revolving Loan
Lender):

SouthTrust Bank                               SouthTrust Bank
P.O. Box 2554                                 P.O. Box 2554
Birmingham, Alabama 35290                     Birmingham, Alabama 35290
Attention: Corporate Banking Dept.            Attention: Corporate Banking Dept.
Telephone: (205) 254-4521                     Telephone: (205) 254-4521
Facsimile: (205) 254-5911                     Facsimile: (205) 254-5911


                                       81
<PAGE>

          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
be executed by their respective duly authorized  officers as of the day and year
first above written.


Commitment: $20,000,000        FIRSTAR BANK, N.A., as a Revolving Loan Lender


                               By:/s/ Gregory L. Dryden
                                  ----------------------
                               Its:  Vice President


STATE OF MISSOURI

CITY OF ST. LOUIS


          I, the  undersigned,  a Notary  Public in and for said  County in said
State,  hereby  certify that Gregory L. Dryden,  whose name as Vice President of
Firstar Bank, N.A., a national banking  association,  is signed to the foregoing
instrument,  and who is known to me, acknowledged before me that, being informed
of the  contents  of such  instrument,  he/she,  as such  officer  and with full
authority,  executed  the same  voluntarily  for and as the act of said  banking
association.

          Given  under my hand  and  official  seal,  this the 25th day of June,
2001.


                               /s/ Rebecca L. Matthews
                               ------------------------------------------(SEAL)
                               Notary Public
                               My Commission Expires:  March 10, 2003



Address for Notices:                           Lending Office:

Firstar Bank, N.A.                             Firstar Bank, N.A.
One Firstar Plaza                              One Firstar Plaza
Twelfth Floor                                  Twelfth Floor
St. Louis, Missouri 63101                      St. Louis, Missouri 63101
Attention: Mr. Greg Dryden                     Attention: Mr. Greg Dryden
Telephone: 314-418-3983                        Telephone: 314-418-3983
Facsimile: 314-418-3859                        Facsimile: 314-418-3859


                                       82
<PAGE>

          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
be executed by their respective duly authorized  officers as of the day and year
first above written.


Commitment: $10,000,000        REGIONS BANK, as a Revolving Loan Lender


                               By:/s/ Sam Prudhomme
                                  --------------------------
                               Its: Assistant Vice President

STATE OF ALABAMA

COUNTY OF JEFFERSON


          I, the  undersigned,  a Notary  Public in and for said  County in said
State, hereby certify that Sam Prudhomme,  whose name as Asst. Vice President of
Regions  Bank,  an  Alabama  banking  corporation,  is signed  to the  foregoing
instrument,  and who is known to me, acknowledged before me that, being informed
of the  contents  of such  instrument,  he/she,  as such  officer  and with full
authority,  executed  the same  voluntarily  for and as the act of said  banking
corporation.

          Given  under my hand  and  official  seal,  this the 26th day of June,
2001.


                               Janilla W. Mozley
                               ------------------------------------------(SEAL)
                               Notary Public
                               My Commission Expires:  March 27, 2004


Address for Notices:                      Lending Office:

Regions Bank                              Regions Bank
417 North 20th Street, 15th Floor         417 North 20th Street, 15th Floor
Birmingham, Alabama 35203                 Birmingham, Alabama 35203
Attention:  Sam Prudhomme                 Attention: Sam Prudhomme
Telephone: 205-326-7025                   Telephone: (205) 326-7025
Facsimile: 205-326-7788                   Facsimile: (205) 326-7788


                                       83
<PAGE>

          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
be executed by their respective duly authorized  officers as of the day and year
first above written.


Commitment: $10,000,000        COMPASS BANK, as a Revolving Loan Lender

                               By:/s/ Jason F. Baldwin
                                  -----------------------------
                                  Its: Assistant Vice President


STATE OF ALABAMA

COUNTY OF HOUSTON


          I, the  undersigned,  a Notary  Public in and for said  County in said
State,  hereby  certify  that Jason F.  Baldwin,  whose name as  Assistant  Vice
President of Compass  Bank,  an Alabama  banking  corporation,  is signed to the
foregoing instrument, and who is known to me, acknowledged before me that, being
informed of the contents of such  instrument,  he/she,  as such officer and with
full authority, executed the same voluntarily for and as the act of said banking
corporation.

          Given  under my hand  and  official  seal,  this the 25th day of June,
2001.


                               /s/ Joy Marci Kirkland
                               ------------------------------------------(SEAL)
                               Notary Public
                               My Commission Expires: 2/2/2002


Address for Notices:                           Lending Office:

Compass Bank                                   Compass Bank
1263 West Main                                 1263 West Main
Dothan, Alabama 36301                          Dothan, Alabama 36301
Attention: Jason Baldwin                       Attention: Jason Baldwin
Telephone: 334-712-7021                        Telephone: 334-712-7021
Facsimile: 334-712-7032                        Facsimile: 334-712-7032


                                       84
<PAGE>

                                    EXHIBIT A

                            ASSIGNMENT AND ACCEPTANCE

     Reference is made to that  certain  Credit  Agreement  dated as of June 27,
2001 (as amended,  supplemented  or otherwise  modified  from time to time,  the
"Credit  Agreement") among Movie Gallery,  Inc. (the "Borrower"),  the Agent and
the other  Lender  Parties  (both as  defined in the  Credit  Agreement).  Terms
defined in the Credit Agreement are used herein with the same meaning.

          The  "Assignor"  and the  "Assignee"  referred to on Schedule 1 hereto
agree as follows:

          1. The  Assignor  hereby  sells and assigns to the  Assignee,  and the
Assignee hereby  purchases and assumes from the Assignor,  an interest in and to
the Assignor's  rights and obligations under the Credit Agreement as of the date
hereof equal to the  percentage  interest  specified on Schedule 1 hereto of all
outstanding  rights and  obligations  under the Credit  Agreement.  After giving
effect to such sale and assignment, the Assignee's Commitments and the amount of
the Advances owing to the Assignee will be as set forth on Schedule 1 hereto.

          2. The Assignor (i)  represents  and warrants that 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 adverse claim; (ii) 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 Documents
or the execution, legality, validity, enforceability,  genuineness,  sufficiency
or value of, or the  perfection  or priority  of any lien or  security  interest
created or  purported  to be created  under or in  connection  with,  the Credit
Documents or any other instrument or document  furnished  pursuant thereto;  and
(iii) makes no  representation  or warranty and assumes no  responsibility  with
respect to the financial  condition of any Borrower Party or any Lender Party or
the  performance  or observance by any Borrower Party or any Lender Party of any
of its obligations under any Credit Document or any other instrument or document
furnished  pursuant  thereto;  and (iv)  attaches  the Note or Notes held by the
Assignor and requests that the Agent  exchange such Note or Notes for a new Note
or  Notes  payable  to the  order  of the  Assignee  in an  amount  equal to the
Commitments  assumed by the Assignee pursuant hereto or new Notes payable to the
order of the  Assignee  in an amount  equal to the  Commitments  assumed  by the
Assignee  pursuant hereto and the Assignor in an amount equal to the Commitments
retained by the Assignor under the Credit Agreement,  respectively, as specified
on Schedule 1 hereto.

          3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with such financial information and such other documents and
information  as it has deemed  appropriate  to make its own credit  analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently  and without  reliance  upon the Agent,  the Assignor or any other
Lender  Party 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 the Credit  Agreement;  (iii)  confirms  that it is an
Eligible Assignee; (iv) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion  under the Credit

                                   A-1
<PAGE>

Documents as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably  incidental thereto; and (v) agrees that
it will perform in accordance  with their terms all of the  obligations  that by
the terms of the Credit Agreement are required to be performed by it as a Lender
Party.

          4.  Following the execution of this  Assignment and  Acceptance,  this
document  will be delivered  to the Agent for  acceptance  and  recording by the
Agent.  The effective date for this  Assignment and Acceptance  (the  "Effective
Date") shall be the date of  acceptance  hereof by the Agent,  unless  otherwise
specified on Schedule 1 hereto.

          5.  Upon  such  acceptance  and  recording  by  the  Agent,  as of the
Effective  Date, (i) the Assignee shall be a party to the Credit  Agreement and,
to the extent provided in this  Assignment and  Acceptance,  have the rights and
obligations  of a Lender Party  thereunder and (ii) the Assignor  shall,  to the
extent provided in this Assignment and Acceptance,  relinquish its rights and be
released from its obligations under the Credit Agreement.

          6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the  Notes in  respect  of the  interest  assigned  hereby  (including,  without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee.  The Assignor and Assignee shall make all  appropriate
adjustments  in payments  under the Credit  Agreement  and the Notes for periods
prior to the Effective Date directly between themselves.

          7. This Assignment and Acceptance  shall be governed by, and construed
in accordance with, the Laws of the State of Alabama.

          8. This  Assignment  and  Acceptance  may be executed in any number of
counterparts and by different parties hereto in separate  counterparts,  each of
which when so executed  shall be deemed to be an original and all of which taken
together shall  constitute one and the same  agreement.  Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier  shall
be effective as delivery of a manually  executed  counterpart of this Assignment
and Acceptance.

     IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to
this  Assignment and Acceptance to be executed by their officers  thereunto duly
authorized as of the date specified thereon.

[NAME OF ASSIGNOR], as Assignor             [NAME OF ASSIGNEE], as Assignee

By:                                         By:
   ----------------------------             -------------------------------
Title:                                      Title:
Dated: ___________, 20__                    Dated: ___________, 20__

                                      A-2
<PAGE>

Accepted and Approved this ____
day of ___________, 20__

[NAME OF AGENT]

By:
   ----------------------------
Title:
      -------------------------
Dated: ___________, 20__


                                      A-3

<PAGE>

                                   SCHEDULE 1
                                       to
                           ASSIGNMENT AND ACCEPTANCE


A. Assignor's Credit Percentage before assignment                   __________%
B. Assignor's Credit Percentage being assigned                      __________%
C. Assignor's Credit Percentage remaining after assignment          __________%

Note: The sum of B and C must total A.


A. Aggregate outstanding Advances of Assignor before assignment     $__________
B. Aggregate outstanding Advances of Assignor after assignment      $__________
C. Aggregate outstanding Advances of Assignee after assignment      $__________


A. Maximum principal amount of Revolving Note
   payable to Assignor before assignment                            $__________
B. Maximum principal amount of Revolving Note
   payable to Assignor after assignment                             $__________
C. Maximum principal amount of Revolving Note
   payable to Assignee after assignment                             $__________



[NAME OF ASSIGNOR], as Assignor             [NAME OF ASSIGNEE], as Assignee

By:                                         By:
   ----------------------------             -------------------------------
Title:                                      Title:
Dated: ___________, 20__                    Dated: ___________, 20__

Accepted and Approved this ____
day of ___________, 20__

[NAME OF AGENT]

By:
   ----------------------------
Title:
      -------------------------
Dated: ___________, 20__


                                      A-4
<PAGE>


                                    EXHIBIT B

                             COMPLIANCE CERTIFICATE

To:  SouthTrust Bank
     P.O. Box 2554
     Birmingham, Alabama  35290
     Attention: Corporate Banking Department

     Reference is made to that  certain  Credit  Agreement  dated as of June 27,
2001 (as amended,  supplemented  or otherwise  modified  from time to time,  the
"Credit  Agreement") among Movie Gallery,  Inc. (the "Borrower"),  the Agent and
the other  Lender  Parties  (both as  defined in the  Credit  Agreement).  Terms
defined in the Credit Agreement are used herein with the same meaning.

A. Set forth below (and on the attached covenant  compliance  worksheets) is the
financial  data  and  computation  evidencing  Borrower's  compliance  with  the
financial covenants set forth in the Credit Agreement.


(1) Leverage Ratio                                 -------------------------- 1

(2) Interest Coverage Ratio                        -------------------------- 2

(3) Fixed Charge Coverage                          -------------------------- 3

(4) Net Worth                                      -------------------------- 4

(5) Permitted Acquisitions                         -------------------------- 5

B. Attached hereto are copies of the financial statements required under Section
8.1 of the Credit Agreement.
-------------
1  Requirement-Not  more  than  2.5  to  1.0  through  1/6/2002  and  2.0 to 1.0
   thereafter.
2  Requirement  - Not  less  than  3.5 to 1.0  through  1/6/2002  and 4.0 to 1.0
   thereafter.
3  Requirement - Not less thatn 1.05 to 1.0.
4  Requirement - $125,000,000  plus 75% of Net Income per quarter,  plus 100% of
   increases  in  capital,  less  100% of stock  repurchases,  but not less than
   $109,000,000.
5  Requirement-  Limited to $15,000,000  cash and $35,000,000  total during each
   trailing Reference Period.

                                      B-1
<PAGE>

C. The  undersigned is the chief financial  officer of the Borrower,  and hereby
certifies that the information  contained herein and attached hereto is true and
correct,  and that I have  individually  reviewed the  provisions  of the Credit
Agreement and the  activities of the Borrower and its  Subsidiaries  through the
period  covered by this report with a view to  determining  whether the Borrower
has kept,  observed,  performed and fulfilled all of its  obligations  under the
Credit Agreement, and to the best of my knowledge, the Borrower has observed and
performed each and every undertaking  contained in the Credit  Agreement,  there
has occurred no Material Adverse Change since the date of the Credit  Agreement,
and there does not exist on the date hereof a Default, except as follows:

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

     Executed this ______ day of __________________, 20__.



                                  ---------------------------------------------
                                  Print Name:
                                            -----------------------------------


                                      B-2
<PAGE>


                                  ATTACHMENT A

                          COVENANT COMPLIANCE WORKSHEET


1        Leverage Ratio 1(1)
         (Section 9.1 of the Credit Agreement)

(1)  Funded Debt

     (a) Aggregate amount of Funded Debt                           $__________

     (b) Less cash and Cash Equivalents in excess of
         $1,500,000                                               ($__________)

     (c) Funded Debt                                               $__________
         Subtract line 1(b) from line 1(a))

(2)  Operating Cash Flow (2)

     (a) Net Income                                                $__________

     (b) Interest Expense, Income Tax Expense,                     $__________
         Depreciation Expense, Amortization Expense
         and Extraordinary Losses and Other Non-Cash
         Expenses and Charges reducing income

     (c) Less Extraordinary Receipts                              ($__________)

     (d) Less Extraordinary Gains and other                       ($__________)
         Non-Cash Credits increasing income

     (e) Less Rental Inventory purchases                          ($__________)
         (other than New Retail Store Rental
         Inventory purchases)

     (f) Operating Cash Flow                                       $__________
         (Total of 2(a) through 2(e))

(3)  Ratio of Funded Debt to Operating Cash Flow:                   __________
     (Divide Line 1(c) by Line 2(f))

2    Interest Coverage Ratio 3                        Not less than ____ to 1.0

--------------

         1 Ratio of Funded Debt to Operating Cash Flow.

         2 Excluding  results  from  operations  sold after the first day of the
    applicable  Trailing Reference Period and including (with the consent of the
    Agent) the operations of a Permitted  Acquisition if the Acquisition  Amount
    exceeds $5,000,000.

         3 Ratio of Operating Cash Flow to Interest Expense.

                                       B-3

<PAGE>

(1)  Operating Cash Flow 4                                         $__________

(2)  Interest Expense                                              $__________

(3)  Interest Coverage Ratio                                        __________
     (Divide Line 1 by Line 2)

3    Fixed Charge Coverage 5
     (Section 9.3 of the Credit Agreement)

(1)  Operating Cash Flow plus Lease Expense

     (a) Operating Cash Flow 6                                     $__________

     (b) Lease Expense                                             $__________

     (c) Operating Cash Flow plus Lease Expense                    $__________
        (Total of 1(a) plus 1(b))

(2)  Interest Expense, Lease Expense, Income Tax
     Expense, and Principal Payments of Funded Debt

     (a) Interest Expense                                          $__________

     (b) Lease Expenses                                            $__________

     (c) Income Tax Expense                                        $__________

     (d) Principal Payments of Funded Debt                         $__________

     (e) Interest Expense, Lease Expense, Income Tax               $__________
         Expense, and Principal Payments of Funded Debt
         (Total of 2(a) through 2(d))

(3)  Fixed Charge Coverage                                          __________
     (Divide Line 1(c) by Line 2(e))

4    Net Worth 7
     (Section 9.4 of the Credit Agreement):

--------------

         4 Refer to Leverage  Ratio for Detail of  computation of Operating Cash
    Flow.
         5 Ratio  ofOperating Cash Flow plus Lease Expense to Interest  Expense,
    Lease Expense, Income Tax Expense and principal payments of Funded Debt.
         6 Refer to Leverage  Ratio for detail of  computation of Operating Cash
    Flow.
         7 Excess of total  Assets  over total  Liabilities,  plus  Subordinated
    Indebtedness.

                                      B-4

<PAGE>


(1)  Base Net Worth Requirement                                    $125,000,000

(2)  Net Income for each fiscal quarter (if positive)
     ending after April 1, 2001, multiplied by 75%                 $__________

(3)  Aggregate amount of all increases in the stated               $__________
     capital and additional paid-in capital accounts
     resulting from the issuance of Equity Interests
     after December 31, 2000

(4)  Less aggregate amount of stock repurchases effected          ($__________)
     by the Borrower after December 31, 2000

(5)  Required Net Worth:                                           $__________
     (Total of (1), (2) (3), less (4))

(6)  Actual Net Worth as of measurement date                       $__________

5    Permitted Acquisitions8                     Not greater than the following:

(1)  Cash Limitation:

     (a) Maximum permitted Acquisition Amounts (to
         the extent paid or payable in cash) for all
         Acquisitions consummated during the
         applicable Trailing Reference Period                      $__________

     (b) Actual Acquisition Amounts (to the extent
         paid or payable in cash) for all Acquisitions
         consummated during the applicable Trailing
         Reference Period                                          $__________

(2)  Aggregate Limitation:

     (a) Maximum permitted Acquisition Amounts
         (regardless of the form of consideration)
         for all Acquisitions consummated during the
         applicable Trailing Reference Period                      $__________

     (b) Actual Acquisition Amounts (regardless of
         the form of consideration) for all
         Acquisitions consummated during the
         applicable Trailing Reference Period                      $__________

--------------

         8 As defined in the Credit Agreement.

                                      B-5
<PAGE>



                                    EXHIBIT C

                              LENDERS' COMMITMENTS


            SouthTrust                                $25,000,000
            Firstar Bank, N.A.                         20,000,000
            Regions Bank                               10,000,000
            Compass Bank                               10,000,000



                                      C-1

<PAGE>


                                  SCHEDULE 7.6

                           TAX AUDITS AND EXAMINATIONS

M.G.A., Inc. is currently under audit by the Florida Department of Revenue.  The
focus of the audit  concerns  the  Florida  sales  and use taxes for the  period
12/01/95 through 12/31/2000. The use tax portion of the audit has been completed
successfully  with  zero  discrepancies.  The  sales  tax  portion  has not been
finalized as the company is still gathering  information for the state. The only
potential  exposure will be some  additional tax due as a result of an effective
tax rate higher than the flat tax rate.  We expect that any  additional  tax due
will be minimal compared to what the company remits on a monthly basis.

M.G.A.,  Inc. has been recently notified by the Georgia Department of Revenue of
an  impending  Sales and Use tax audit.  The audit is set to begin July 9, 2001.
The audit will cover a three (3) year period.

There are no other audits in progress or pending for Movie Gallery,  Inc. or any
of its subsidiaries.

<PAGE>

                                  SCHEDULE 7.7

                      BORROWER'S SUBSIDIARIES AND OWNERSHIP

                        State of Incorporation/  Percentage   Type of
Name of Entity              Organization         Ownership    Security
--------------          ----------------------   ----------   --------

M.G.A., Inc.                    Delaware              100%    Common Stock
MovieGallery.com, Inc.          Delaware              100%    Common Stock
Movie Gallery Finance, Inc.     Delaware              100%    Common Stock
*Movie Gallery No. 1, LLC       Delaware              100%    Ownership Interest
*Movie Gallery No. 2, LLC       Delaware              100%    Ownership Interest

*Immaterial Subsidiaries

<PAGE>

                                  SCHEDULE 7.14

                              ENVIRONMENTAL MATTERS


                                      NONE
<PAGE>


                                  SCHEDULE 7.17

                               INSURANCE POLICIES

General Liability,  Automobile Liability, Excess Liability, Workers Compensation
and Employers  Liability and Personal  Property  (See  Attached  Certificate  of
Insurance)

Directors, Officers and Corporate Liability (See Attached Coverage Summary)

Aircraft Liability and Aircraft Hull (See Attached Certificate of Insurance)

<PAGE>

                                  SCHEDULE 10.2

                             PERMITTED INDEBTEDNESS

                                      NONE

<PAGE>

                                  SCHEDULE 10.3

                                 PERMITTED LIENS

                                      NONE
<PAGE>

                                  SCHEDULE 10.5

                              PERMITTED INVESTMENTS

Video  Update,  Inc.
--------------------
In connection with the proposed  acquisition of Video Update, Inc., Borrower and
Movie  Gallery  No. 1, LLC have  acquired  approximately  92% of Video  Update's
senior secured bank debt. The bank debt, which has a face value of approximately
$111.3  million,  was purchased  for the sum of $8.5  million.  Borrower is also
providing  additional  financing to Video Update for its working  capital  needs
under a $5 million debtor-in-possession credit facility.

Echo, LLC, d/b/a Xpresss Source
-------------------------------
Echo, LLC is an Alabama limited liability  company in which M.G.A.,  Inc. owns a
33 1/3%  ownership  interest.  Echo is in the  wholesale  business  products and
janitorial  supply business,  and it provides Borrower and its subsidiaries with
various  products.  M.G.A.  provides  financing to Echo for its working  capital
needs under a $250,000 revolving credit facility.
<PAGE>

                                  SCHEDULE 10.7

                     PERMITTED TRANSACTIONS WITH AFFILIATES

                                      NONE
<PAGE>

                                 SCHEDULE 10.10

                                 FISCAL PERIODS
<TABLE>
<CAPTION>
             2001 Fiscal Year     2002 Fiscal Year    2003 Fiscal Year     2004 Fiscal Year
<S>          <C>                <C>                  <C>                  <C>
Period 1      1/1/01 - 2/4/01     1/7/02 - 2/10/02     1/6/03 - 2/9/03     1/5/04 - 2/8/04
Period 2      2/5/01 - 3/4/01    2/11/02 - 3/10/02    2/10/03 - 3/9/03     2/9/04 - 3/7/04
Period 3      3/5/01 - 4/1/01    3/11/02 - 4/7/02     3/10/03 - 4/6/03     3/8/04 - 4/4/04
Period 4      4/2/01 - 5/6/01     4/8/02 - 5/12/02     4/7/03 - 5/11/03    4/5/04 - 5/9/04
Period 5      5/7/01 - 6/3/01    5/13/02 - 6/9/02     5/12/03 - 6/8/03    5/10/04 - 6/6/04
Period 6      6/4/01 - 7/1/01    6/10/02 - 7/7/02      6/9/03 - 7/6/03     6/7/04 - 7/4/04
Period 7      7/2/01 - 8/5/01     7/8/02 - 8/11/02     7/7/03 - 8/10/03    7/5/04 - 8/8/04
Period 8      8/6/01 - 9/2/01    8/12/02 - 9/8/02     8/11/03 - 9/7/03     8/9/04 - 9/5/04
Period 9      9/3/01 - 9/30/01    9/9/02 - 10/6/02     9/8/03 - 10/5/03    9/6/04 - 10/3/04
Period 10    10/1/01 - 11/4/01   10/7/02 - 11/10/02   10/6/03 - 11/9/03   10/4/04 - 11/7/04
Period 11    11/5/01 - 12/2/01  11/11/02 - 12/8/02   11/10/03 - 12/7/03   11/8/04 - 12/5/04
Period 12    12/3/01 - 1/6/02    12/9/02 - 1/5/03     12/8/03 - 1/4/04    12/6/04 - 1/2/05

</TABLE>