Exhibit 10.7

                             NOTE PURCHASE AGREEMENT

     THIS LOAN AGREEMENT (the "Agreement") is made as of this 2 day of May, 2000
by and between CHAMPION TRAILER  COMPANY,  L.P., an Indiana limited  partnership
("Borrower")  and  MARKPOINT  EQUITY  GROWTH FUND,  J.V., a Texas joint  venture
("MEGF").  In  connection  with the mutual  covenants and  agreements  contained
herein, the parties hereto agrees as follows:

1.   Definitions.  All terms and phrases  used  herein  which are defined in the
     Uniform Commercial Code in the State of Texas, as amended from time to time
     (the  "Code"),  shall  have  the  meanings  given  them in the  UCC  unless
     otherwise defined herein. The following  definitions shall apply throughout
     this Agreement:

     "Affiliate" means with respect to any Person in question,  any other Person
     owned or  controlled  by,  or which  owns or  controls  or is under  common
     control or is otherwise  affiliated with such Person in question.  A Person
     shall be  deemed  to  control  another  Person  if such  Person  possesses,
     directly or  indirectly,  the power to direct or cause the direction of the
     management and policies of such other Person, whether through the ownership
     of voting securities, by contract or otherwise.

     "Collateral" has the meaning given it in Section 4.

     "Debit  Account'  means  Account No.  1588262467,  ABA No.  111000614  that
     Borrower has with Bank One, Texas, N.A. over which MEGF has express written
     authority to debit pursuant to this Agreement.

     "Environmental  Laws"  means any and all  federal,  state  and local  laws,
     regulations,  rules,  orders,  licenses,  agreements or other  governmental
     restrictions  relating to the protection of human health or the environment
     or to emissions,  discharges or releases of pollutants or industrial, toxic
     or hazardous substances into the environment,  or otherwise relating to the
     manufacture,  processing, treatment, transport or handling of pollutants or
     industrial, toxic or hazardous substances.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
     amended  from  time to  time,  together  with  all  rules  and  regulations
     promulgated with respect thereto.

     "ERISA Affiliate" means with respect to any Person in question,  any Person
     that would be treated as a single employer with Borrower.

     "ERISA  Plan" means any pension  benefit  plan subject to Title IV of ERISA
     maintained  by Borrower or any ERISA  Affiliate of Borrower with respect to
     which Borrower or any ERISA Affiliate of Borrower has a fixed or contingent
     liability.

     "GAAP" means those generally accepted  accounting  principles and practices
     which are recognized as such by the Financial  Accounting  Standards  Board
     (or any generally  recognized  successor),  consistently applied throughout
     the period involved.

     "General  Partner" means Durham Whitesell & Associates,  an Indiana limited
     liability company.

     "Indemnified Claims" means any and all claims, demands,  actions, causes of
     action,  judgments,  suits, liabilities,  obligations,  losses, damages and
     consequential  damages,   penalties,   fines,  costs,  fees,  expenses  and
     disbursements (including without limitation, fees and expenses of attorneys
     and other  professional  consultants  and  experts in  connection  with any
     investigation  or  defense)  of every  kind or  nature,  known or  unknown,
     existing or hereafter arising,  foreseeable or unforeseeable,  which may be
     imposed  upon,  threatened  or asserted  against or incurred or paid by any
     Indemnified  Person  at any  time  and from  time to  time,  because  of or
     resulting from, in connection with or in any way relating to or arising out
     of the Loan, the Collateral or any other transaction,  act, omission, event
     or circumstance in any way connected with or contemplated by this Agreement
     or the other  Loan  Documents  or any  action  taken or omitted by any such
     Indemnified  Person  under  or in  connection  with  any of  the  foregoing
     (including but not limited to any  investigation,  litigation,  proceeding,
     enforcement  of MEGF's  rights or defense of MEGF's  actions  related to or
     arising out of this Agreement or the other Loan Documents),  whether or not
     any Indemnified Person is a party hereto.

     "Indemnified  Person" shall collectively mean MEGF and its joint venturers,
     officers, directors, shareholders,  employees, attorneys,  representatives,
     agents, Affiliates, successors and assigns.

     "Lien" means any mortgage, lien, pledge, assignment, adverse claim, charge,
     security interest or other encumbrance.

     "Life Insurance" has the meaning given it in Section 8(f).

     "Loan" has the meaning given it in Section 2.

     "Loan Documents" means this Agreement,  the Note, the Warrant and all other
     documents,  agreements and instruments  required by MEGF to be executed and
     delivered  in  connection  herewith  (including,  without  limitation,  all
     documents,  agreements and  instruments  evidencing,  securing,  governing,
     guaranteeing and/or pertaining to the Note and the Loan).

     "Note" has the meaning given it in Section 3.

     "Obligors" means Borrower and the Guarantors.

     "Person" means a corporation,  association,  partnership, limited liability
     company,  organization,  business,  individual,  governmental  or political
     subdivision thereof or governmental agency.

     "Purchase  Agreement" means (a) that certain asset purchase agreement dated
     as of April 20,  2000  between  Borrower  and Target  Companies,  as may be
     amended from time to time.

     "Senior Lender" means Bank One, Indiana, N.A.

     "Senior  Lender  Loan  Documents"  means  all  documents,   agreements  and
     instruments  previously executed and delivered by Borrower to Senior Lender
     to  evidence,  secure,  govern or  guarantee  any loans or other  financial
     accommodations provided by Senior Lender to Borrower.

     "Target  Companies" means,  collectively,  Champion  Trailer,  LLC, a Texas
     limited  liability  company,  Champion  Collision,  LLC,  a  Texas  limited
     liability  company and  Brandonson,  Inc.,  a Texas  corporation  and their
     successors or assignors.

     "Termination Event" means (a) the occurrence with respect to any ERISA Plan
     of (i) a reportable event described in Sections 4043(b)(5) of ERISA or (ii)
     any other  reportable event described in Section 4043 of ERISA other than a
     reportable  event not  subject to the  provision  for 30-day  notice to the
     Pension  Benefit  Guaranty   Corporation  pursuant  to  a  waiver  by  such
     corporation  under Section 4043(a) of ERISA, (b) the withdrawal of Borrower
     or any  Affiliate  of  Borrower  from any ERISA Plan  during a plan year in
     which it was a "substantial  employer" as defined in Section  4001(a)(2) of
     ERISA, or (c) any event or condition which might  constitute  grounds under
     Section  4042 of ERISA  for the  termination  of, or the  appointment  of a
     trustee to administer, any ERISA Plan.

     " Warrant' `means the Warrant of even date herewith from Borrower to MEGF.

2.   Loan.  Subject to the terms and  conditions set forth in this Agreement and
     the other Loan  Documents,  MEGF  hereby  agrees to lend to  Borrower,  and
     Borrower agrees to borrow from MEGF, the amount of $1,250,000 (the "Loan").
     The amount advanced under the Loan shall be for $1,250,000.  The purpose of
     this Loan shall be to finance the  acquisition of a substantial  portion of
     the assets of the Target Companies.

3.   Promissory Note. Borrower agrees to execute,  contemporaneously herewith, a
     promissory  note  payable  to the  order  of MEGF,  in form  and  substance
     acceptable to MEGF in MEGF's sole and absolute discretion,  to evidence the
     indebtedness  owing by Borrower to MEGF under the Loan  (together  with any
     renewals,  extensions and increases thereof,  the "Note").  Interest on the
     Note  shall  accrue at the rate set forth  therein.  The  principal  of and
     interest  on the  Note  shall  be due and  payable  and may be  prepaid  in
     accordance  with the terms and conditions set forth in the Note and in this
     Agreement.

4.   Collateral.  As security for the indebtedness evidenced by the Note and any
     and all  other  indebtedness  or  obligations  from  time to time  owing by
     Borrower to MEGF, MEGF shall receive a Lien in to the collateral  described
     in the other Loan Documents (the "Collateral").

5.   Commitment Fee. Borrower shall pay to The Markpoint  Company,  concurrently
     with the  execution  hereof,  a  commitment  fee in the amount of  $25,000.
     Borrower  hereby   authorizes  The  Markpoint   Company,   in  MEGF's  sole
     discretion,  to collect any such commitment fee by deducting such fees from
     the first  advance  under  the Loan.  This  authorization  does not  affect
     Borrower's  obligation to pay the Loan.  Borrower and The Markpoint Company
     acknowledge and agree that the commitment fee is reasonable compensation to
     The  Markpoint  Company for providing the Loan to Borrower and for no other
     purpose.

6.   Representations and Warranties.  Borrower hereby represents and warrants to
     MEGF as follows:

     (a)  Existence.  Borrower is a corporation duly organized, validly existing
          and in good standing under the laws of the state of its  incorporation
          and is duly licensed, qualified to do business and is in good standing
          in all other states in which such  licensing,  qualification  and good
          standing are necessary. Borrower has all requisite power and authority
          (i) to own and operate its  properties,  (ii) to carry on its business
          as now conducted and as proposed to be conducted, and (iii) to execute
          and  deliver  this  Agreement  and the other Loan  Documents  to which
          Borrower is a party.

     (b)  Binding Obligations. The execution,  delivery, and performance of this
          Agreement  and all of the other Loan  Documents by Borrower  have been
          duly  authorized by all necessary  action by Borrower,  have been duly
          executed and  delivered by Borrower and  constitute  legal,  valid and
          binding obligations of Borrower,  enforceable in accordance with their
          respective  terms,  except as limited  by  bankruptcy,  insolvency  or
          similar laws of general  application  relating to the  enforcement  of
          creditors'  rights  and  except to the extent  specific  remedies  may
          generally be limited by equitable principles.

     (c)  No Consent. The execution,  delivery and performance of this Agreement
          and the other Loan Documents, and the consummation of the transactions
          contemplated hereby and thereby, do not (i) conflict with, result in a
          violation  of, or  constitute  a default  under (A) any  provision  of
          Borrower's articles or certificate of incorporation or bylaws, (B) any
          law,  governmental  regulation,  court decree or order  applicable  to
          Borrower,  or (C) any other document or agreement to which Borrower is
          a party, or (ii) require the consent, approval or authorization of any
          Person  and  will  not  result  in  the  creation  of (or  impose  any
          obligation on Borrower to create) any Lien upon any of the  properties
          of Borrower (other than Liens in favor of MEGF).

     (d)  Subsidiaries.  Borrower  neither  owns nor has any other  interest in,
          directly or  indirectly,  any other  corporation,  partnership,  joint
          venture or other business organization except as set forth on Schedule
          6(d) attached hereto.

     (e)  Financial Condition. Borrower has delivered to MEGF true, complete and
          correct  copies of (i) the  Borrower-prepared  balance sheet of Target
          Companies  as of  December  31,  1999 and the  related  statements  of
          income,  cash flows and shareholders'  equity for the fiscal year then
          ended,  together with any footnotes  thereto and the report thereon by
          Birk Gross Bell & Coulter,  L.P. and (ii) the unaudited  balance sheet
          of  Borrower as of December  31,  1999 and the related  statements  of
          income,  cash flows and shareholders equity for the twelve (12) months
          then ended (collectively,  the "Financial  Statement").  The Financial
          Statements  have been  prepared  in  accordance  with GAAP and  fairly
          present  Borrower's  financial  condition  as of the date of each such
          Financial Statement.  There has been no material adverse change in the
          financial condition or results of operations of Borrower subsequent to
          the date of the most recent Financial Statements.

     (f)  Litigation.  Except as described  on Schedule  6(f)  attached  hereto,
          there  are no  actions,  suits  or  proceedings,  pending  or,  to the
          knowledge  of Borrower,  threatened  (or any basis  therefor  known to
          Borrower) against or affecting Borrower or the properties of Borrower,
          before  any court or  governmental  department,  commission  or board,
          which,  if  determined  adversely to  Borrower,  would have a material
          adverse  effect  on the  business,  financial  condition,  properties,
          operations or prospects of Borrower.

     (g)  Taxes; Governmental Charges. Borrower has filed all federal, state and
          local tax reports and returns  required by any law or regulation to be
          filed by it and has  either  duly paid all taxes,  duties and  charges
          indicated  due on the  basis  of such  returns  and  reports,  or made
          adequate provision for the payment thereof,  and the assessment of any
          material  amount  of  additional  taxes in  excess  of those  paid and
          reported  is not  reasonably  expected.  There is no tax  Lien  notice
          against Borrower or its properties presently on file.

     (h)  ERISA Compliance.  Borrower and its ERISA  Affiliates,  if any, are in
          compliance with ERISA concerning  Borrower's and any ERISA Affiliates'
          ERISA Plans.  Except as described on Schedule --------- 6(h ), neither
          Borrower  nor  any  ERISA  Affiliate  maintains,  contributes  to,  is
          required to ----- contribute to, or has been required to contribute to
          at any time within the last six years, any pension plan, as defined in
          Section 3(2) of ERISA. No unfunded liability exists for benefits under
          any plan  maintained  by or  contributed  to by  Borrower or any ERISA
          Affiliate. Neither Borrower nor any ERISA Affiliate maintains any plan
          which provides  benefits to an employee or the  employee's  dependents
          after the employee terminates employment other than as required by law
          and no written or oral  representations  have been made by Borrower or
          any ERISA  Affiliate to any employee or former  employee  promising or
          guaranteeing  any employer  payment or funding for the continuation of
          medical, dental, or disability coverage beyond that legally required.

     (i)  Compliance   with  Laws.   Borrower  is  conducting  its  business  in
          compliance with all statutes,  rules,  regulations  and/or  ordinances
          imposed by any governmental unit upon Borrower or upon its businesses,
          operations   and  property   (including,   without   limitation,   all
          Environmental  Laws).  Borrower has all permits and licenses necessary
          for the  operation  of its  business  as  presently  conducted  and as
          proposed to be conducted.

     (j)  Trademarks,  Patents, Etc. There are no licenses, patents, trademarks,
          service marks, copyrights,  or applications therefor owned by Borrower
          or used or required by Borrower in the operation of its business as it
          is  presently  conducted,  except  for the  trademark(s)  set forth on
          Schedule 6(j) attached hereto. To the knowledge of Borrower,  there is
          no  infringement  action,  lawsuit,  claim  or  complaint  pending  or
          contemplated  which  asserts  that  Borrower's  operations  violate or
          infringe  the  rights  or  the  trade  names,  trademarks,   trademark
          registration,  service name, service mark, or copyright of others, nor
          is Borrower in any way making use of any  confidential  information or
          trade  secrets of any Person  except with the consent of such  Person.
          Borrower conducts business under no trade or assumed name.

     (k)  Debt.  Schedule 6(k) attached hereto is a complete and correct list of
          all credit agreements,  indentures,  purchase  agreements,  promissory
          notes and other evidences of indebtedness,  guaranties, capital leases
          and other instruments, agreements and arrangements presently in effect
          providing  for  or  relating  to   extensions  of  credit   (including
          agreements and  arrangements  for the issuance of letters of credit or
          for acceptance  financing) in respect of which Borrower, or any of the
          properties  thereof is in any manner  directly or, to the knowledge of
          Borrower,  contingently  obligated;  and the maximum principal or face
          amounts of the credit in question that are outstanding and that can be
          outstanding are correctly stated, and all Liens of any nature given or
          agreed to be given as security  therefor  are  correctly  described or
          indicated in such Schedule.

     (l)  Certain  Transactions.  Except as set forth on Schedule  6(l) attached
          hereto,  Borrower is not indebted,  directly or indirectly,  to any of
          its  shareholders,  officers,  or  directors  or to  their  respective
          spouses  or  children,   in  any  amount  whatsoever;   none  of  said
          shareholders,  officers or directors or to the  knowledge of Borrower,
          any members of their immediate  families,  are indebted to Borrower or
          have any direct or  indirect  ownership  interest  in any Person  with
          which  Borrower  has a  business  relationship,  or any  Person  which
          competes  with  Borrower.  Borrower  is not a  party  to  any  written
          agreement  or to the  knowledge of Borrower,  any oral  agreement,  in
          which it is guarantor or indemnitor of any  indebtedness  of any other
          Person.

     (m)  Margin  Regulations.  Borrower  is  not  engaged  in the  business  of
          extending  credit for the purpose of  purchasing  or  carrying  margin
          stock. No proceeds  received pursuant to this Agreement or the Warrant
          will be used to purchase or carry any equity security of a class which
          is registered pursuant to Section 12 of the Securities Exchange Act of
          1934, as amended.

     (n)  Significant Contracts. Schedule 6(n) attached hereto is a complete and
          correct list of all contracts, agreements and other documents, whether
          verbal or written  in  nature,  pursuant  to which  Borrower  receives
          revenues in the  aggregate of at least  $10,000 per fiscal year.  Each
          such contract agreement and other document is in full force and effect
          as of the  date  hereof  and  Borrower  knows  of no  reason  why such
          contracts,  agreements  and other  documents  would not remain in full
          force and effect pursuant to the terms thereof.

     (o)  Title to Properties  Borrower has valid leasehold  interests in all of
          the real  properties it leases and has good title to its other assets,
          free and clear of all Liens  other than  permitted  liens set forth in
          Subsection 10(e).

     (p)  Capitalization.  The authorized equity interest  ownership of Borrower
          consists of (i) Timothy S. Durham owning forty-four and fifty-five one
          hundredths of one percent  (44.55%) of the equity limited  partnership
          interest; (ii) Terry A. Whitesell owning forty-four and fifty-five one
          hundredths of one percent  (44.55%) of the equity limited  partnership
          interest;  (iii) Marcus  Kennedy  owning nine and  nine-tenths  of one
          percent  (9.9%) of the equity  limited  partnership;  and (iv) General
          Partner owning one percent (1%) of the equity general partnership. All
          such  interests of capital  stock have been duly  authorized,  validly
          issued,  fully paid and are nonassessable.  Except for the Warrant and
          as  set  forth  on  Schedule  6(p)  attached  hereto,   there  are  no
          subscriptions,  options,  warrants, rights, convertible securities, or
          other  agreements or  commitments  of any character  pursuant to which
          Borrower is required to issue any shares of its equity interests.

     (q)  Registration Rights.  Except as described in the Warrant,  Borrower is
          not under any contractual  obligation to register under the Securities
          Act of 1933,  as  amended,  or the  Trust  Indenture  Act of 1939,  as
          amended,  any of its  presently  outstanding  securities or any of its
          securities that may subsequently be issued.

     (r)  Employees.  Borrower has no current labor  problems or disputes  which
          have  resulted or Borrower  reasonably  believes  could be expected to
          have a material adverse effect on Borrower's business.

     (s)  List of Deposit Institutions. Schedule 6(s) attached hereto sets forth
          a true and complete list of all deposit  institution at which Borrower
          has or maintains an account or deposits of any kind.

     (t)  Disclosure.  Neither this Agreement,  the Financial Statements nor any
          other document,  certificate or instrument  delivered to MEGF by or on
          behalf of Borrower in connection  with the  transactions  contemplated
          hereby,  when all such  documents,  certificates  and  instruments are
          taken as a whole,  contains any untrue statement of a material fact or
          omits  to  state a  material  fact  necessary  in  order  to make  the
          statements  contained  herein or therein not  misleading.  There is no
          fact actually known to Borrower that materially  adversely  affects or
          in  the  future  may   materially   adversely   affect  the  business,
          operations,  affairs, condition or properties of Borrower that has not
          been set  forth  herein or in the other  documents,  certificates  and
          instruments delivered to MEGF by or on behalf of Borrower specifically
          for use in connection with the transactions contemplated hereby.

     (u)  Solvency of  Borrower.  The fair  saleable  value of the  business and
          assets  of   Borrower,   upon  giving   effect  to  the   transactions
          contemplated  hereby,  will be in  excess of the  amount  that will be
          required  to  pay  its  probable  liabilities  (including  contingent,
          subordinated,  unmatured  and  unliquidated  liabilities)  on existing
          debts as they may become absolute and matured.  Borrower,  upon giving
          effect to the transactions contemplated hereby, will not be engaged in
          any  business or  transaction,  or about to engage in any  business or
          transaction,  for which it has an unreasonably  limited  capital,  and
          Borrower  has no intent (i) to hinder,  delay or defraud any entity to
          which it is, or will become, on or after the date hereof, indebted, or
          (ii) to incur  debts that  would be beyond its  ability to pay as they
          mature.

7.   Conditions Precedent MEGF's obligation to make the Loan shall be subject to
     the conditions  precedent that, as of the date of the Loan and after giving
     effect thereto (i) all  representations and warranties made to MEGF in this
     Agreement and the other Loan Documents  shall be true and correct as of and
     as if made on such date,  (ii) no material  adverse change in the financial
     condition of Borrower or its business  since the effective date of the most
     recent Financial Statements shall have occurred,  (iii) no Event of Default
     shall have occurred and no event has occurred and is  continuing,  or would
     result from the Loan,  which with notice or lapse of time,  or both,  would
     constitute an Event of Default (as  hereinafter  defined),  (iv) MEGF shall
     have received all Loan Documents appropriately executed by Borrower and all
     other proper  parties,  (v) MEEGF shall have  received a legal opinion from
     Borrower's  counsel in form and substance and covering such matters as MEGF
     and its counsel may require in MEGF's sole and  absolute  discretion,  (vi)
     MEGF's  receipt of all fees and expenses owing to MEGF under this Agreement
     and  the  other  Loan  Documents  (vii)  MEGF's  receipt  of a  secretary's
     certificate  of  Borrower,   with  the  Borrower's  certified  articles  or
     certificate of limited partnership, good standing certificates,  bylaws and
     corporate  resolutions  authorizing the  transactions  contemplated  hereby
     attached thereto as given by the General Partner,  (viii) MEGF's receipt of
     the final and executed (A) Senior  Lender Loan  documents  and (B) Purchase
     Agreement,  and (ix) evidence satisfactory to MEGF, in its sole discretion,
     of the Borrower's acquisition of the Life Insurance.

8.   Affirmative  Covenants.  Until (i) the Note and all other  obligations  and
     liabilities  of Borrower  under this Agreement and the other Loan Documents
     are fully paid and satisfied, and (ii) the Warrant expires or terminates or
     has been  exercised by the holder  thereof,  Borrower  agrees and covenants
     that it will, unless MEGF shall otherwise consent in writing:

     (a)  Accounts  and Records.  Maintain  its books and records in  accordance
          with  GAAP.

     (b)  Right  of  Inspection.   Permit  MEGF  to  visit  its  properties  and
          installations  and to examine,  audit and make and take away copies or
          reproductions  of  Borrower's  books and  records,  at all  reasonable
          times.  For one audit trip per fiscal  quarter of the Borrower and for
          no more than five (5) days per audit trip,  Borrower agrees to pay all
          costs  associated with any such audits,  at a rate equal to $ 1,000.00
          per day, per person, plus out-of-pocket expenses.

     (c)  Right to  Additional  Information.  Furnish MEGF with such  additional
          information  and  statements,  lists of assets  and  liabilities,  tax
          returns,  and other  reports  with  respect  to  Borrower's  financial
          condition  and  business  operations  as MEGF may request from time to
          time.

     (d)  Compliance with Laws. Conduct its business in an orderly and efficient
          manner consistent with good business practices, and perform and comply
          with all statutes, rules, regulations and/or ordinances imposed by any
          governmental  unit  upon  Borrower,  its  businesses,  operations  and
          properties (including without limitation, all Environmental Laws).

     (e)  Taxes. Pay and discharge when due all assessments, taxes, governmental
          charges and levies, of every kind and nature, imposed upon Borrower or
          its  properties,  income  or  profits,  prior  to the  date  on  which
          penalties would attach,.  and all lawful claims that if unpaid,  might
          become a Lien upon any of  Borrower's  property,  income  or  profits;
          provided,  however, Borrower will not be required to pay and discharge
          any such assessment,  tax,  charge,  levy or claim so long as (i) same
          shall  be   contested   in  good   faith  by   appropriate   judicial,
          administrative or other legal proceedings timely instituted,  and (ii)
          Borrower shall have established adequate reserves with respect to such
          contested  assessment,  tax, charge,  levy or claim in accordance with
          GAAP.

     (f)  Insurance.  Maintain,  with financially sound and reputable  insurers,
          insurance covering the life of Timothy S. Durham in an amount not less
          than $1,250,000 which is assigned to MEGIF (the "Life  Insurance") and
          such other  insurance as deemed  necessary  or  otherwise  required by
          MEGF,  including  but not limited to,  fire  insurance,  comprehensive
          property damage, public liability,  worker's compensation and business
          interruption insurance. Borrower shall provide to MEGF evidence of (i)
          the Life  Insurance  within  sixty  (60)  days  after the date of this
          Agreement  and (ii)  evidence of the payment of all premiums and other
          fees and expenses as related to the Life Insurance annually. MEGF will
          apply the proceeds of the Life Insurance,  first to the unpaid balance
          of  principal  of the  Note,  together  with all  accrued  but  unpaid
          interest thereon, and all other indebtedness owing to MEGF by Borrower
          until such  indebtedness  is paid in full, and second the remainder of
          the proceeds of the Life Insurance to the other  beneficiaries  of the
          Life Insurance.

     (g)  Notice of Material  Change/Litigation.  Borrower shall promptly notify
          MEGF in  writing  (i) of any  material  adverse  change in  Borrower's
          financial  condition  or its  businesses,  (ii) of any  litigation  or
          claims against Borrower which could materially  affect Borrower or its
          business,  operations,  financial condition,  properties or prospects,
          and (iii) the  occurrence  of any event of  default  under the  Senior
          Lender Loan  Documents or any event which with notice or lapse of time
          or both would be an event of  default  under the  Senior  Lender  Loan
          Documents.

     (h)  Corporate  Existence.   Maintain  its  corporate  existence  and  good
          standing in the state of its  incorporation  and its qualification and
          good standing in all other states where required by applicable law.

     (i)  ERISA.  Borrower shall promptly notify MEGF in writing of the adoption
          or  amendment  of any plan  that  results  in the  representations  in
          Subsection 7(h) no longer being true.

     (j)  Additional Documentation. Execute and deliver, or cause to be executed
          and delivered, any and all other agreements,  instruments or documents
          which  MEGF may  reasonably  request  in order to give  effect  to the
          transactions  contemplated  under  this  Agreement  and the other Loan
          Documents.

     (k)  Board  Observation  and  Membership.  The  board of  directors  of the
          General  Partner  shall  consist of no less than four (4) or more than
          five (5)  members.  MGEF shall be entitled to  designate  at least one
          member of the board of members of the General  Partner,  the Borrower,
          and each  subsidiary  thereof  but  shall not be  obligated  to do so.
          Borrower  will  deliver  to  MEGF a copy  of the  minutes  of and  all
          materials  distributed  at or prior to all  meetings  of the  board of
          members of the General Partner,  certified as true and accurate by the
          Secretary  of  the  General  Partner,  promptly  following  each  such
          meeting. The Borrower will (w) permit MEGF, to designate one person to
          attend all  meetings of the General  Partner's  board of members,  (x)
          provide such designee not less than seven calendar days' actual notice
          of all regular or special  meetings of the General  Partner's board of
          members,  (y) permit  such  designee  to attend  such  meetings  as an
          observer,  and (z)  provide to such  designee a copy of all  materials
          distributed  at such  meetings  or  otherwise  to the  members  of the
          General Partner. Such meetings shall be held in person or by telephone
          or video conference at least  quarterly,  and the General Partner will
          cause its  board of  members  to call a  meeting  at any time upon the
          request  of any  such  designated  observer  upon the  occurrence  and
          continuation  of any  Event  of  Default  for 14  calendar  days.  The
          Borrower  shall  reimburse  each  such  observer  for  all  reasonable
          expenses incurred in traveling to and from such meetings and attending
          such meetings.

     (l)  Licensing Agreement.  Borrower will provide true, correct and complete
          copies of all licensing agreements,  whether verbal or written, with a
          value in excess of $ 10,000.

9.   Negative  Covenants.  Until  (i) the Note  and all  other  obligations  and
     liabilities  of Borrower  under this Agreement and the other Loan Documents
     are fully paid and satisfied, and (ii) the Warrant expires or terminates or
     has been exercised by the holder  thereof,  Borrower will not,  without the
     prior written consent of MEGF:

     (a)  Nature of  Business.  Make any  material  change in the  nature of its
          business as carried on as of the date hereof

     (b)  Liquidations; Mergers; Consolidations;  Acquisitions. Liquidate, merge
          or consolidate with or into any other Person, convert from any type of
          legal  entity to another  type of legal  entity or form or acquire any
          new   subsidiary   or  acquire  by  purchase  or   otherwise   all  or
          substantially all of the assets of any other Person.

     (c)  Transactions with Affiliates. Enter. into any transaction,  including,
          without limitation,  the purchase, sale or exchange of property or the
          rendering of any service,  with any  Affiliate of Borrower,  except in
          the ordinary course of and pursuant to the reasonable  requirements of
          Borrower's  business  and  upon  fair  and  reasonable  terms  no less
          favorable  to  Borrower   than  would  be  obtained  in  a  comparable
          arm's-length  transaction  with a person or entity not an Affiliate of
          Borrower.

     (d)  Sale of Assets.  Sell, lease,  transfer or otherwise dispose of all or
          substantially  all of its assets or  properties,  other than inventory
          sold in the  ordinary  course of business  and as necessary to replace
          obsolete equipment.

     (e)  Liens. Create or incur any Lien on any of its assets that the Borrower
          is not  contesting  in good  faith,  other  than  (i)  Liens  securing
          indebtedness  owing to MEGF,  (ii)  pledges or  deposits to secure the
          payment of obligations under any worker's compensation laws or similar
          laws,  (iii)  deposits  to secure the  payment of public or  statutory
          obligations,  (iv) mechanic's,  carriers',  workman's,  repairman's or
          other Liens  arising by  operation  of law in the  ordinary  course of
          business  which secure  obligations  that are not overdue or are being
          contested  in  good  faith  and for  which  Borrower  has  established
          adequate  reserves in accordance  with generally  accepted  accounting
          principles,  and (v) the Liens  described  in Schedule  9(e)  attached
          hereto.

     (f)  Indebtedness.  Create,  incur or assume any  indebtedness for borrowed
          money or issue or assume  any  other  note,  debenture,  bond or other
          evidences of indebtedness,  or guarantee any such indebtedness or such
          evidences of  indebtedness  of others,  other than (i) borrowings from
          MEGF,  (ii) current  accounts  payable and other  current  obligations
          (other than for borrowed  money),  (iii) borrowings from Senior Lender
          which  does  not  exceed   $2,000,000  at  any  time,   and  (iv)  the
          indebtedness described on Schedule 9(f) attached hereto.

     (g)  Transfer of Ownership.  Permit the sale,  pledge or other  transfer of
          any of the ownership interest in Borrower by Timothy S. Durham,  Terry
          G. Whitesell,  Marcus Kennedy or any current or future limited partner
          of the Borrower.

     (h)  Change in  Management  Permit a change  in the  senior  management  of
          Borrower.  Permit a change in the  following  personnel  or a material
          change in such personnel's current duties:

          Name                           Title

          Terry G. Whitesell             Chairman
          Timothy S. Durham              Vice-Chairman
          Marcus Kennedy                 President & Chief Executive Officer

     (i)  Loans.  Make any loans to any Person  other than  travel  advances  to
          employees  in the  ordinary  course of  business  except  for loans to
          employees of the Borrower which in no event,  in the aggregate,  shall
          exceed $5,000.

     (j)  Dividends.  Make any  distributions  or declare or pay any dividends (
          whether  in cash or in  units)  on any  shares  of  Borrower's  equity
          interests,  or  purchase,  redeem,  acquire  or  retire  any  units of
          Borrower's equity interests.

     (k)  Capital Expenditures. Incur capital expenditures and capital leases or
          commitments  therefor  in excess of  $50,000 in the  aggregate  in any
          calendar year.

     (l)  Senior Lender Loan Documents. Modify or amend any of the Senior Lender
          Loan Documents without the prior written consent of MEGF.

10.  Reporting  Requirements.  Until (i) the Note and all other  obligations and
     liabilities  of Borrower  under this Agreement and the other Loan Documents
     are  fully  paid and  satisfied,  and  (ii)  the  Warrant  has  expired  or
     terminates  or has been  exercised by the holder  thereof,  Borrower  will,
     unless MEGF shall otherwise consent in writing, furnish to MEGF:

     (a)  Financial Statements.  The following financial statements:  (i) within
          90  days  after  the  last  day of each  fiscal  year  of  Borrower  a
          consolidated  statement of income and a consolidated statement of cash
          flows of Borrower for such fiscal  year,  and a  consolidated  balance
          sheet of Borrower as of the last day of such fiscal year, in each case
          audited by an independent  certified public accounting firm acceptable
          to MEGF, together with a copy of any report to management delivered to
          Borrower by such accountants in connection  therewith;  (ii) within 45
          days after the last day of each  fiscal  quarter of  Borrower,  (1) an
          unaudited consolidated statement of income and statement of cash flows
          of Borrower for such fiscal  quarter,  (2) an  unaudited  consolidated
          balance  sheet of Borrower as of the last day of such fiscal  quarter,
          and (3) a year-to-date unaudited statement of income of Borrower as of
          the end of such fiscal  quarter;  and (iii)  within 30 days after each
          month (1) an unaudited  consolidated statement of income and statement
          of  cash  flows  of  Borrower   for  such  month,   (2)  an  unaudited
          consolidated  balance  sheet  of  Borrower  as of the last day of such
          month,  and  (3) a  year-to-date  unaudited  statement  of  income  of
          Borrower as of the end of such month. Borrower represents and warrants
          that each such  statement  of income and  statement of cash flows will
          fairly present,  in all material  respects,  the results of operations
          and cash flows of Borrower for the period set forth therein,  and that
          each such balance sheet will fairly present, in all material respects,
          the financial  condition of Borrower as of the date set forth therein.
          Each statement  provided in accordance with subclauses (i) and (ii) of
          this  Subsection  10(a),  shall be in  accordance  with GAAP (or, with
          respect to unaudited  financial  statements,  in the notes thereto and
          subject to year-end review adjustments) and the statements provided in
          subclause (iii) of this Subsection 10(a) will be in the form generally
          kept by the Borrower that is reasonably acceptable by MEGF.

     (b)  Annual Pro Forma Financial Statements.  A copy of Borrower's statement
          of income, statement of cash flows and balance sheet on a one (1) year
          pro forma basis with respect to each fiscal year of Borrower within 30
          days after the commencement of each such fiscal year.

     (c)  Senior  Lender  Reports and  Notices.  A copy of all written  reports,
          certificates,  lists and  notices  required to be given by Borrower to
          Senior  Lender  under the Senior  Lender  Loan  Documents  as and when
          required to be delivered to Senior  Lender,  and a copy of all written
          notices  received  by  Borrower  from  Senior  Lender  concerning  the
          occurrence of an event of default by Borrower  under the Senior Lender
          Loan  Documents or  concerning  an event which with notice or lapse of
          time,  or both,  would be an event of default  under the Senior Lender
          Loan Documents.

     (d)  Compliance Certificate. A certificate signed by an officer of Borrower
          which  states  that  Borrower  is in  full  compliance  and all of its
          obligators;  under this  Agreement and all other Loan Documents and is
          not in  default  of any  term or  provision  hereof  or  thereof,  and
          demonstrating  compliance with all financial  covenants and ratios set
          forth in this Agreement.  Such  certificate  will be delivered to MEGF
          contemporaneously   with  the  delivery  to  MEGF  of  each  financial
          statement required hereunder.

11.  Financial  Covenants.  Until  (i) the Note and all  other  obligations  and
     liabilities  of Borrower  under this Agreement and the other Loan Documents
     are fully paid and satisfied, and (ii) the Warrant expires or terminates or
     has been  exercised  by the holder  thereof,  Borrower  will  maintain  the
     following financial covenants:

     (a)  Debt Service  Coverage  Ratio.  At the end of each fiscal  quarter,  a
          ratio  of  (i)  earnings  before  interest  taxes,   depreciation  and
          amortization for the immediately  preceding twelve (12) months to (ii)
          all principal and interest due in such twelve (12) month period on all
          amortizing  loans,  and all  interest  due in such  twelve  (12) month
          period on all non-amortizing loans and of not less than 1.25 to 1.0.

     (b)  Debt/EBITDA  Ratio. At the end of each fiscal quarter,  a ratio of (i)
          total  interest-bearing  liabilities  as of  the  end of  such  fiscal
          quarter,  to (ii) earnings before  interest,  taxes,  depreciation and
          amortization at the end of such 12 month period,  not greater than 4.0
          to 1.0.

     (c)  Net Worth.  At the end of each fiscal year,  its Net Worth of not less
          than $500,000.

          Unless  otherwise  specified,  all accounting and financial  terms and
          covenants set forth above are to be determined according to GAAP.

12.  Events of Default.  Each of the  following  shall  constitute  an "Event of
     Default"' under this Agreement:

     (a)  Failure to Pay  Indebtedness.  Borrower  shall fail to pay within five
          (5) calendar days after receiving written notice from MEGF as and when
          due any part of the  principal  of, or  interest  on,  the Note or any
          other  indebtedness  or obligations  now or hereafter owing to MEGF by
          Borrower,

     (b)  Non-Performance  of  Covenants.  Any of the Obligors  shall breach any
          covenant or agreement made herein, in any of the other Loan Documents,
          in the Purchase  Agreement or in any other  agreement now or hereafter
          entered  into  between  any of the  Obligors  and MEGF  except for the
          covenant contained in Section 8(0 hereof, where breach of said section
          shall  occur  at the  expiration  of  five  (5)  calendar  days  after
          Borrower's  receipt  of  notice  from  MEGF  of  such  breach  of this
          Agreement solely due to Section 8(f) hereof.

     (c)  False  Representation.  Any warranty or representation made herein, in
          any of the other Loan Documents or in the Purchase  Agreement shall be
          false or misleading in any material respect when made.

     (d)  Default  Under Other Loan  Documents.  The  occurrence  of an event of
          default under any of the other Loan Documents,  the Purchase Agreement
          or any other  agreement  now or hereafter  entered into between any of
          the Obligors and MEGF.

     (e)  Untrue Financial Report. Any report, certificate,  schedule, financial
          statement,  profit and loss statement or other statement  furnished by
          any Obligor,  or by any other person on behalf of any Obligor, to MEGF
          is not true and correct in any material respect.

     (f)  Default to Third Party. The occurrence of any event which permits,  or
          with notice or lapse of time, or both, permits the acceleration of the
          maturity of any indebtedness owing by any of the Obligors to any third
          party  under  any  agreement  or   undertaking   (including,   without
          limitation, any indebtedness owing by Borrower to Senior Lender).

     (g)  Bankruptcy.  The  filing  of a  voluntary  or  involuntary  case by or
          against any of the Obligors under the United States Bankruptcy Code or
          other  present or future  federal or state  insolvency,  bankruptcy or
          similar laws, or the appointment of a receiver,  trustee,  conservator
          or  custodian  for a  substantial  portion of the assets of any of the
          Obligors.

     (h)  Insolvency.  Any  of  the  Obligors  shall  become  insolvent,  make a
          transfer in fraud of creditors or make an  assignment  for the benefit
          of creditors.

     (i)  Involuntary  Lien. The filing or commencement of any involuntary Lien,
          garnishment  attachment  or the like  shall be issued  against or with
          respect to the Collateral which the Borrower is not contesting in good
          faith.

     (j)  Material Adverse Change. A material adverse change shall have occurred
          in the financial condition, business prospects or operations of any of
          the Obligors.

     (k)  Tax Lien.  Any of the Obligors  shall have a federal or state tax Lien
          filed  against  any of its  properties  which  such  Obligors  are not
          contesting in good faith.

     (l)  Execution on  Collateral.  The  Collateral  or any portion  thereof is
          taken on execution or other process of law.

     (m)  ERISA  Plan.  Either  (i) any  "accumulated  funding  deficiency"  (as
          defined in Section  412(a) of the Internal  Revenue  Code of 1986,  as
          amended) in excess of $25,000 exists with respect to any ERISA Plan of
          Borrower or its ERISA Affiliate, if any, or (ii) any Termination Event
          occurs  with  respect  to any  ERISA  Plan of  Borrower  or its  ERISA
          Affiliate,  if any,  and the then  current  value of such ERISA Plan's
          benefit  liabilities  exceeds  the then  current  value of such  ERISA
          Plan's assets available for the payment of such benefit liabilities by
          more than $25,000.

     (n)  Judgment.  The  entry  against  any of the  Obligors  of a  final  and
          nonappealable  judgment  for the payment of money in excess of $50,000
          (not  covered  by  insurance  satisfactory  to  MEGF  in  MEGF's  sole
          discretion).

     (o)  Termination  of Purchase  Agreement.  The expiration or termination of
          the Purchase Agreement by either party, for whatever reason.

     (q)  Death or  Incapacity.  The death or legal  incapacity  of  Timothy  S.
          Durham.

Nothing  contained in this Loan Agreement shall be construed to limit the events
of default  enumerated in any of the other Loan Documents and all such events of
default shall be cumulative.

13.  Remedies. Upon the occurrence of any one or more of the foregoing Events of
     Default,  (a) the entire unpaid balance of principal of the Note,  together
     with all accrued but unpaid interest  thereon,  and all other  indebtedness
     owing to MEGF by Borrower at such time shall, at the option of MEGF, become
     immediately due and payable without farther notice,  demand,  presentation,
     notice of dishonor, notice of intent to accelerate, notice of acceleration,
     protest or notice of protest of any kind, all of which are expressly waived
     by Borrower.  All rights and  remedies of MEGF set forth in this  Agreement
     and in any of the  other  Loan  Documents  are  cumulative  and may also be
     exercised  by MEGF,  at its  option  and in its sole  discretion,  upon the
     occurrence of an Event of Default.

14.  Indemnification.  Borrower  hereby  indemnifies and agrees to hold harmless
     and defend all Indemnified Persons from and against any and all Indemnified
     Claims.  THE  FOREGOING  INDEMNIFICATION  SHALL  APPLY  WHETHER OR NOT SUCH
     INDEMNIFIED  CLAIMS  ARE IN ANY WAY OR TO ANY EXTENT  OWED,  IN WHOLE OR IN
     PART,  UNDER ANY CLAIM OR THEORY OF STRICT  LIABILITY,  OR ARE  CAUSED,  IN
     WHOLE OR IN PART,  BY ANY  NEGLIGENT  ACT OR  OMISSION  OF ANY  INDEMNIFIED
     PERSON,  but  shall  exclude  any  of the  foregoing  resulting  from  such
     Indemnified Person's gross negligence or willful misconduct. If Borrower or
     any third party ever alleges any gross negligence or willful  misconduct by
     any Indemnified  Person, the  indemnification  provided for in this Section
     shall  nonetheless  be paid upon  demand,  subject to later  adjustment  or
     reimbursement,  until such time as a court of competent jurisdiction enters
     a  final  judgment  as to  the  extent  and  effect  of the  alleged  gross
     negligence or willful  misconduct.  Upon notification and demand,  Borrower
     agrees to provide defense of any Indemnified Claim and to pay all costs and
     expenses of counsel selected by any Indemnified  Person in respect thereof.
     Any Indemnified  Person against whom any Indemnified  Claim may be asserted
     reserves the right to settle or compromise  any such  Indemnified  Claim as
     such  Indemnified  Person may  determine  in its sole  discretion,  and the
     obligations  of such  Indemnified  Person,  if any,  pursuant  to any  such
     settlement or compromise  shall be deemed  included  within the Indemnified
     Claims.  Except as specifically  provided in this Section,  Borrower waives
     all notices from any  Indemnified  Person.  The  provisions of this Section
     shall survive the termination of this Agreement.

15.  Rights  Cumulative.  All rights of MEGF  under the terms of this  Agreement
     shall be  cumulative  of, and in addition  to, the rights of MEGF under any
     and all other  agreements  between  Borrower and MEGF  (including,  but not
     limited  to,  the  other  Loan  Documents),  and  not  in  substitution  or
     diminution  of any rights now or hereafter  held by MEGF under the terms of
     any other agreement.

16.  Compliance with Usury Laws. Borrower and MEGF intend to conform strictly to
     the  usury  laws in force  that  apply  to the  transactions  evidenced  or
     contemplated hereby. Accordingly, all agreements between Borrower and MEGF,
     whether now existing or hereafter  arising and whether written or oral, are
     hereby limited so that in no contingency, whether by reason of acceleration
     of the maturity of the Note,  or  otherwise,  shall the  interest  (and all
     other  sums  that are  deemed  to be  interest)  contracted  for,  charged,
     received,  paid or agreed to be paid  exceed the  Maximum  Rate (as defined
     below).  Borrower and MEGF  stipulate  and  represent  that, as of the date
     hereof (the same being the date of the granting of the Warrant to MEGF) the
     value of the Wan-ant is both  contingent  and (in the sense that the future
     realization of any value from the exercise of the Warrant is dependent upon
     the occurrence of events beyond the control of the parties) and speculative
     (in the sense that the amount, if any, which will be realized upon exercise
     of the Warrant is  uncertain).  Borrower and MEGF  stipulate and agree that
     the terms and  provisions  contained in this  Agreement  and the other Loan
     Documents  are not  intended  to and shall never be  construed  to create a
     contract to pay for the use, forbearance or detention of money an amount in
     excess of the maximum amount  permitted to be charged by applicable law, if
     any.

Anything  in  this  Agreement  or the  other  Loan  Documents  to  the  contrary
notwithstanding,  neither Borrower nor any other party now or hereafter becoming
liable for payment of the Note shall ever be required to pay interest on or with
respect to the Note or any other obligation hereunder at a rate of interest that
would  otherwise  be payable  under this  Agreement or on or with respect to the
Note would exceed the Maximum Rate,  or if MEGF shall receive  anything of value
that is deemed or  determined to  constitute  interest  that would  increase the
effective rate of interest payable under this Agreement or on or with respect to
the Note or the other Loan  Documents  to a rate in excess of the Maximum  Rate,
then (a) the amount of  interest  that  would  otherwise  be payable  under this
Agreement,  the Note or the other Loan Documents  shall be reduced to the amount
allowed at the Maximum Rate under applicable law, and (b) any unearned  interest
paid by Borrower or any interest  paid by Borrower in excess of the Maximum Rate
shall,  at the option of MEGF, be either refunded to Borrower or credited on the
principal of the Note.  It is further  agreed that,  without  limitation  of the
foregoing,  all calculations of the rate of interest  contracted for, charged or
received  by MEGF,  or under this  Agreement,  that are made for the  purpose of
determining  whether such rate exceeds the Maximum  Rate,  shall be made, to the
extent  permitted  by  applicable  law (now or, to the extent  permitted by law,
hereafter  enacted)  governing  the  Maximum  Rate,  by (i)  characterizing  any
nonprincipal payment as an expense, fee or premium rather than as interest,  and
(ii) amortizing,  prorating,  allocating and spreading in equal parts during the
period of the full term of the Note  (including  the  period of any  renewal  or
extension thereof), all interest at any time contracted for, charged or received
by such registered holder in connection therewith.  As used in this Section, the
term "Maximum  Rate" means the maximum  nonusurious  rate of interest  permitted
from time to time to be contracted for, taken,  charged or received with respect
to the Note by the registered holder thereof,  under applicable law as in effect
with respect to this Agreement or the Note.

17.  Waiver and Agreement. Neither the failure nor any delay on the part of MEGF
     to exercise any right,  power or privilege herein or under any of the other
     Loan  Documents  shall operate as a waiver  thereof nor shall any single or
     partial  exercise of such right,  power or privilege  preclude any other or
     further  exercise  thereof or the  exercise  of any other  right,  power or
     privilege.  No waiver of any provision in this Loan  Agreement or in any of
     the other Loan  Documents and no departure by Borrower  therefrom  shall be
     effective  unless the same shall be in writing and signed by MEGF, and then
     shall be effective  only in the  specific  instance and for the purpose for
     which given and to the extent specified in such writing. No modification or
     amendment  to this Loan  Agreement  or to any of the other  Loan  Documents
     shall be valid or effective  unless the same is signed by the party against
     whom it is sought to be enforced.

18.  Benefits.  This Agreement shall be binding upon and inure to the benefit of
     MEGF and Borrower,  and their respective successors and assigns;  provided,
     however,  that Borrower may not, without the prior written consent of MEGF,
     assign any rights,  powers,  duties or obligations  under this Agreement or
     any of the other Loan Documents.

19.  Notices. All notices, requests, demands or other communications required or
     permitted to be given  pursuant to this  Agreement  shall be in writing and
     given by (i) personal delivery,  (ii) expedited delivery service with proof
     of delivery,  (iii) United  States mail,  postage  prepaid,  registered  or
     certified mail,  return receipt  requested,  or (iv) telecopy (with receipt
     thereof  confirmed by  telecopier)  sent to the  intended  addressee at the
     address set forth on the signature  page hereof and shall be deemed to have
     been received either, in the case of personal  delivery,  as of the time of
     personal  delivery,  in the case of expedited  delivery service,  as of the
     date of first attempted  delivery at the address and in the manner provided
     herein, in the case of mail, upon deposit in a depository  receptacle under
     the care and custody of the United States Postal Service, or in the case of
     telecopy,  upon  receipt.  Either  party shall have the right to change its
     address for notice  hereunder to any other location  within the continental
     United  States by notice to the other  party of such new  address  at least
     thirty (30) days prior to the effective date of such new address.

20.  GOVERNING LAW; VENUE;  SUBMISSION TO  JURISDICTION.  THIS AGREEMENT AND THE
     OTHER LOAN DOCUMENTS  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
     THE LAWS OF THE STATE OF TEXAS WITHOUT  GIVING EFFECT TO THE  PRINCIPLES OF
     CONFLICTS OF LAWS THEREOF,  EXCEPT TO THE EXTENT  PERFECTION AND THE EFFECT
     OF PERFECTION OR  NON-PERFECTION OF THE SECURITY INTEREST GRANTED HEREUNDER
     OR THEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE
     LAWS OF A  JURISDICTION  OTHER THAN THE STATE OF TEXAS.  THIS AGREEMENT AND
     THE OTHER LOAN  DOCUMENTS ARE  PERFORMABLE BY THE PARTIES IN DALLAS COUNTY,
     TEXAS.  BORROWER AND MEGF EACH AGREE THAT DALLAS COUNTY, TEXAS SHALL BE THE
     EXCLUSIVE  VENUE FOR  LITIGATION  OF ANY DISPUTE OR CLAIM  ARISING UNDER OR
     RELATING  TO THIS  AGREEMENT  AND THE OTHER LOAN  DOCUMENTS,  AND THAT SUCH
     COUNTY IS A CONVENIENT  FORUM IN WHICH TO DECIDE ANY SUCH DISPUTE OR CLAIM.
     BORROWER AND MEGF EACH CONSENT TO THE  PERSONAL  JURISDICTION  OF THE STATE
     AND FEDERAL COURTS  LOCATED IN DALLAS  COUNTY,  TEXAS FOR THE LITIGATION OF
     ANY SUCH  DISPUTE OR CLAIM.  BORROWER  IRREVOCABLY  WAIVES,  TO THE FULLEST
     EXTENT  PERMITTED BY LAW, ANY OBJECTION  WHICH IT MAY NOW OR HEREAFTER HAVE
     TO THE LAYING OF THE VENUE OF ANY SUCH  PROCEEDING  BROUGHT IN SUCH A COURT
     AND ANY CLAIM  THAT ANY SUCH  PROCEEDING  BROUGHT  IN SUCH A COURT HAS BEEN
     BROUGHT IN AN INCONVENIENT FORUM.

21.  WAIVER OF JURY TRIAL.  BORROWER AND MEGF EACH HEREBY IRREVOCABLY WAIVES, TO
     THE MAXIMUM  EXTENT  PERMITTED  BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
     JURY IN  RESPECT  OF ANY  LITIGATION  DIRECTLY  OR  INDIRECTLY  AT ANY TIME
     ARISING  OUT  OF,  UNDER  OR IN  CONNECTION  WITH  THIS  AGREEMENT  OR  ANY
     TRANSACTION CONTEMPLATED HEREBY OR ASSOCIATED HEREWITH.

22.  Invalid Provisions.  If any provision of this Agreement or any of the other
     Loan  Documents  is held to be  illegal,  invalid  or  unenforceable  under
     present or future laws,  such  provision  shall be fully  severable and the
     remaining  provisions of this  Agreement or any of the other Loan Documents
     shall  remain in full  force and effect  and shall not be  affected  by the
     illegal, invalid or unenforceable provision or by its severance.

23.  Expenses.  Borrower  shall pay all costs and expenses  (including,  without
     limitation,  reasonable attorneysfees) in connection with (i) the making of
     the Loan (including without limitation,  the preparation and negotiation of
     this  Agreement,  the Note and the other Loan Documents and all filing fees
     and  recording   taxes),   (ii)  any  action  required  in  the  course  of
     administration  of the indebtedness  and obligations  evidenced by the Loan
     Documents,  and (iii) any action in the  enforcement  of MEGF's rights upon
     the occurrence of Event of Default.

24.  Participation  of the Loan.  Borrower  agrees that MEGF may, at its option,
     sell  interests  in the Loan and its rights  under this  Agreement  and the
     other Loan  Documents  and,  in  connection  with each such sale,  MEGF may
     disclose any financial and other  information  available to MEGF concerning
     Borrower to each prospective purchaser and assignee.

25.  Conflicts.  In the event any term or provision hereof is inconsistent  with
     or conflicts with any provision of the other Loan Documents,  the terms and
     provisions contained in this Agreement shall be controlling.

26.  Counterparts.  This  Agreement may be separately  executed in any number of
     counterparts,  each of which shall be an original,  but all of which, taken
     together,  shall be  deemed  to  constitute  one and the  same  instrument.
     Delivery of an executed  counterpart of this Agreement by telecopy shall be
     equally as effective as delivery of a manually executed counterpart of this
     Agreement.  Any party delivering an executed  counterpart of this Agreement
     by telecopy  also shall  deliver a manually  executed  counterpart  of this
     Agreement but the failure to deliver a manually executed  counterpart shall
     not  affect  the  validity,  enforceability,  and  binding  effect  of this
     Agreement.

27.  ENTIRE  AGREEMENT.  THIS  AGREEMENT,  THE NOTE AND THE OTHER LOAN DOCUMENTS
     REPRESENT THE FINAL  AGREEMENT  BETWEEN THE PARTIES  HERETO WITH RESPECT TO
     THE  TRANSACTIONS  CONTEMPLATED  HEREIN  AND  MAY  NOT BE  CONTRADICTED  BY
     EVIDENCE OF PRIOR,  CONTEMPORANEOUS,  OR SUBSEQUENT  ORAL AGREEMENTS OF THE
     PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.  THIS
     AGREEMENT  ALSO AMENDS AND SUPERSEDES ANY OF THE TERMS OF ANY PRIOR WRITTEN
     AGREEMENTS WITH RESPECT TO THE MATTERS SET FORTH IN THIS AGREEMENT.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


<PAGE>


Note Purchase Agreement
129682
EXECUTED as of the date first above written.

CHAMPION TRAILER COMPANY, L.P.:              MARKPOINT EQUITY GROWTH FUND, J.V.:

 By: Durham Whitesell & Associates, LLC,     By:  The Markpoint Company,
     its general partner Venturer                 its Managing


By:  _____________________                   By: ____________________________
Name: ____________________                   Name: __________________________
Title: ___________________                   Title: _________________________

Borrower's Address:                          MEGF's Address:

111 Monument Circle, Suite 3680              15770 Dallas Parkway, Suite 800
Indianapolis, Indiana 46204                  Dallas, Texas  75248
Attn: Timothy S. Durham                      Attn:  Tex Sekhon
Telecopy No.                                 Telecopy No. 972-490-1980

With copy to:                                With a copy to:

Riley Bennett & Egloff, LLP .                Patton Boggs LLP
One American Square, 18th Floor              2001 Ross Avenue, Suite 3000
Indianapolis, Indiana 46282-0003             Dallas, Texas  75201
Attn: John Egloff, Esq.                      Attn:  Larry A. Makel, Esq.
Telecopy No. 317-636-8027                    Telecopy No. 214-758-1550



<PAGE>


                               Index of Schedules

Schedule 6(d)            Subsidiaries
Schedule 6(f)            Litigation
Schedule 6(j)            Trademarks, Patents, Etc.
Schedule 6(k)            Debt and Liens
Schedule 6(l)            Shareholder Loans
Schedule 6(n)            Significant Contracts
Schedule 6 (p)           Outstanding Subscriptions, Warrants, Options, Etc.
Schedule 6(s)            Deposit Institutions
Schedule 9(e)            Liens
Schedule 9(f)            Indebtedness


<PAGE>


THE RIGHTS AND REMEDIES OF MARKPOINT  EQUITY  GROWTH FUND,  J.V.  HEREUNDER  ARE
SUBJECT TO A SUBORDINATION  AGREEMENT  AMONG MARKPOINT  EQUITY GROWTH FUND, J.V.
AND BANK ONE INDIANA, N.A. DATED AS OF EVEN DATE HEREWITH.


                             PARENT PLEDGE AGREEMENT


THIS PLEDGE  AGREEMENT  ("Agreement") is made as of the 2nd day of May, 2000, by
DURHAM WHITESELL & ASSOCIATES,  LLC (hereinafter called "Pledgor"),  in favor of
MARKPOINT EQUITY GROWTH FUND, J.V. ("Secured Party"). Pledgor hereby agrees with
Secured Party as follows:

1.   Definitions.  As used in this Agreement, the following terms shall have the
     meanings indicated below:


     (a)  "Additional  Property" shall mean the following property which Pledgor
          becomes  entitled to receive or shall receive in  connection  with any
          other Collateral:  (i) any equity ownership unit or stock certificate,
          including  without  limitation,  any certificate  representing a stock
          dividend or any certificate in connection  with any  recapitalization,
          reclassification,  merger, consolidation,  conversion, sale of assets,
          combination  of shares,  stock  split or  spin-off,  (ii) any  option,
          warrant~  subscription  or  right,  whether  as an  addition  to or in
          substitution  of  any  other   Collateral;   (iii)  any  dividends  or
          distributions of any kind whatsoever,  whether  distributable in cash,
          stock or  other  property;  (iv) any  interest  premium  or  principal
          payments; and (v) any conversion or redemption proceeds

     (b)  "Borrower" shall mean CHAMPION TRAILER COWANY, L.P.

     (c)  "Code"  shall  mean the  Uniform  Commercial  Code as in effect in the
          State of Texas on the date of this Agreement or as it may hereafter be
          amended from time to time.

     (d)  "Collateral"  shall  mean  all  property  specifically   described  on
          Schedule  "A"  attached  hereto  and  made  a  part  hereof  The  term
          Collateral,  as used herein,  shall also include (i) all certificates,
          instruments and/or other documents evidencing the foregoing,  (ii) all
          renewals,  replacements  and  substitutions  of all of the  foregoing,
          (iii) all Additional  Property,  and (iv) all PRODUCTS and PROCEEDS of
          all of the foregoing.  The  designation of proceeds does not authorize
          Pledgor to sell,  transfer or  otherwise  convey any of the  foregoing
          property.  The delivery at any time by Pledgor to Secured Party of any
          property  as  a  pledge  to  secure  payment  or  performance  of  any
          indebtedness or obligation  whatsoever  shall also constitute a pledge
          of such property as Collateral hereunder.

     (e)  "Financing   Documents"  shall  mean  all  instruments  and  documents
          evidencing, securing, governing, guaranteeing and/or pertaining to the
          Indebtedness, including, without limitation, the Security Agreement of
          even date herewith among Borrower and Secured Party, the Note Purchase
          Agreement of even date herewith among Borrower and Secured Party,  the
          Note and the Holder  Pledge  Agreement  of even date  herewith  by and
          between  Secured Party and Timothy S. Durham,  Terry G.  Whitesell and
          Marcus Kennedy.

     (f)  "Indebtedness"   shall   mean  (i)   indebtedness,   obligations   and
          liabilities owing by Borrower to Secured Party under the Note and Note
          Purchase  Agreement  and  all  other  indebtedness,   obligations  and
          liabilities  of Pledgor  and  Borrower  (or either of them) to Secured
          Party of any kind or  character,  now existing or  hereafter  arising,
          whether  direct  indirect,   related,  unrelated,  fixed,  contingent~
          liquidated,  unliquidated,  joint,  several or joint and several,  and
          regardless of whether such  indebtedness,  obligations and liabilities
          may,  prior to their  acquisition  by Secured  Party,  be or have been
          payable to or in favor of a third party and  subsequently  acquired by
          Secured Party (it being  contemplated that Secured Party may make such
          acquisitions  from third parties),  including  without  limitation all
          indebtedness,  obligations and liabilities of Pledgor and Borrower (or
          either of them) to Secured Party now existing or hereafter  arising by
          note,  draft,  acceptance,  guaranty,  endorsement,  letter  of credit
          assignment,  purchase,  overdraft,  discount,  indemnity  agreement or
          otherwise,  (ii) all obligations of Pledgor and Borrower (or either of
          them) to  Secured  Party  under any  documents  evidencing,  securing,
          governing  and/or  pertaining to all or any part of the  indebtedness,
          obligations  and liabilities  described in (i) above,  (iii) all costs
          and  expenses  incurred  by  Secured  Party  in  connection  with  the
          collection and  administration of all or any part of the indebtedness,
          obligations  and  liabilities  described  in (i) and (ii) above or the
          protection or  preservation  of, or  realization  upon, the collateral
          securing  all  or  any  pan  of  such  indebtedness,  obligations  and
          liabilities,  including without  limitation all reasonable  attorneys'
          fees,   and  (iv)  all   renewals,   extensions,   modifications   and
          rearrangements  of  the  indebtedness,   obligations  and  liabilities
          described in (i), (ii) and (iii) above.

     (g)  "Note"  means  that  certain  promissory  note of even  date  herewith
          payable  by  Borrower  to the  order of  Secured  Party in the  stated
          principal  amount  of  $1,250,000.00,  as  may be  renewed,  extended,
          amended and modified.

          All words and  phrases  used  herein  which are  expressly  defined in
          Section  1.201,  Chapter  8 or  Chapter 9 of the Code  shall  have the
          meaning  provided  for  therein.   Other  words  and  phrases  defined
          elsewhere in the Code shall have the meaning  specified therein except
          to the  extent  such  meaning is  inconsistent  with a  definition  in
          Section 1.20 1, Chapter 8 or Chapter 9 of the Code.

2.   Security  Interest.  As security for the Indebtedness,  Pledgor,  for value
     received,  hereby grants to Secured Party a continuing security interest in
     the Collateral.

3.   Additional property. Collateral shall also include the Additional Property;
     provided,  however,  that until the  occurrence  of an Event of Default (as
     hereinafter  defined),  Pledgor shall be entitled to all cash dividends and
     all  interest  paid  on  the  Collateral   (except  interest  paid  on  any
     certificate of deposit  pledged  hereunder)  free of the security  interest
     created under this Agreement.  All Additional  Property received by Pledgor
     shall be received in trust for the benefit of Secured Party. All Additional
     Property and all  certificates  or other written  instruments  or documents
     evidencing and/or  representing the Additional Property that is received by
     Pledgor,  together with such  instruments  of transfer as Secured Party may
     request~ shall  immediately be delivered to or deposited with Secured Party
     and held by Secured Party as Collateral  under the terms of this Agreement.
     If the Additional  Property received by Pledgor shall be shares of stock or
     other  securities,  such shares of stock or other  securities shall be duly
     endorsed in blank or  accompanied  by proper  instruments  of transfer  and
     assignment  duly  executed in blank with,  if requested  by Secured  Party,
     signatures  guaranteed by a member or member  organization in good standing
     of an authorized  Securities Transfer Agents Medallion Program, all in form
     and substance  satisfactory to Secured Party. Secured Party shall be deemed
     to have  possession  of any  Collateral  in transit to Secured Party or its
     agent.

4.   Voting  Rights.  As  long  as no  Event  of  Default  shall  have  occurred
     hereunder,  any voting rights incident to any stock or other  securities or
     interests  pledged as  Collateral  may be exercised  by Pledgor;  provided,
     however, that Pledgor will not exercise, or cause to be exercised, any such
     voting rights,  without the prior written  consent of Secured Party, if the
     direct or  indirect  effect of such vote will result in an Event of Default
     hereunder.

5.   Maintenance  of Collateral.  Other than the exercise of reasonable  care to
     assure the safe custody of any  Collateral  in Secured  Party's  possession
     from time to time,  Secured  Party  does not have any  obligation,  duty or
     responsibility  with  respect  to  the  Collateral.  Without  limiting  the
     generality of the foregoing,  Secured Party shall not have any  obligation,
     duty  or  responsibility  to do any of the  following:  (a)  ascertain  any
     maturities,  calls,  conversions,  exchanges,  offers,  tenders  or similar
     matters relating to the Collateral or informing Pledgor with respect to any
     such matters; (b) fix, preserve or exercise any right,  privilege or option
     (whether   conversion,   redemption  or  otherwise)  with  respect  to  the
     Collateral  unless (i) Pledgor makes written  demand to Secured Party to do
     so, (ii) such  written  demand is received by Secured  Party in  sufficient
     time to permit  Secured  Party to take the action  demanded in the ordinary
     course of its business,  and (iii) Pledgor provides additional  collateral,
     acceptable to Secured Party in its sole discretion; (c) collect any amounts
     payable in respect of the Collateral (Secured Party being liable to account
     to Pledgor  only for what  Secured  Party may  actually  receive or collect
     thereon);  (d) sell all or any portion of the  Collateral  to avoid  market
     loss;  (e) sell all or any portion of the  Collateral  unless and until (i)
     Pledgor makes written demand upon Secured Party to sell the Collateral, and
     (ii) Pledgor provides additional collateral, acceptable to Secured Parry in
     its sole  discretion;  or (f) hold the  Collateral  for or on behalf of any
     party other than Pledgor.

6.   Representations and Warranties.  Pledgor hereby represents and wan-ants die
     following to Secured Party:

     (a)  Due  Authorization.  The execution,  delivery and  performance of this
          Agreement  and all of the other  Financing  Documents  by Pledgor have
          been duly authorized by all necessary  corporate action of Pledgor, to
          the extent Pledgor is a corporation,  or by all necessary  partnership
          action, to the extent Pledgor is a partnership.

     (b)  Enforceability.  This  Agreement  and the  other  Financing  Documents
          constitute   legal,   valid  and  binding   obligations   of  Pledgor,
          enforceable  in  accordance  with their  respective  terms,  except as
          limited  by   bankruptcy,   insolvency  or  similar  laws  of  general
          application  relating  to the  enforcement  of  creditors'  rights and
          except to the extent  specific  remedies  may  generally be limited by
          equitable principles.

     (c)  Ownership  and Liens.  The equity  interests  issued by Borrower  that
          constitutes a portion of the Collateral represents one percent (1%) of
          the issued and outstanding  equity interests of Borrower.  Pledgor has
          good and  marketable  title to the  Collateral  free and  clear of all
          liens, security interests,  encumbrances or adverse claims, except for
          the security interest created by this Agreement.  No dispute, right of
          setoff, counterclaim or defense exists with respect to all or any part
          of the  Collateral.  Pledgor  has  not  executed  any  other  security
          agreement   currently   affecting  the  Collateral  and  no  financing
          statement or other  instrument  similar in effect  covering all or any
          part of the  Collateral is on file in any  recording  office except as
          may have been executed or filed in favor of Secured Party.

     (d)  No Conflicts or Consents.  Neither the ownership,  the intended use of
          the  Collateral  by  Pledgor,  the grant of the  security  interest by
          Pledgor to Secured  Party herein nor the exercise by Secured  Party of
          its rights or remedies hereunder, will (i) conflict with any provision
          of (A) any domestic or foreign law, statute,  rule or regulation,  (B)
          the articles or certificate of incorporation or organization, charter,
          operating agreement,  bylaws or partnership agreement, as the case may
          be, of Pledgor,  or (C) any  agreement,  judgment,  license,  order or
          permit  applicable  to or binding upon Pledgor or otherwise  affecting
          the Collateral, or (ii) result in or require the creation of any lien,
          charge or  encumbrance  upon any assets or properties of Pledgor or of
          any person  except as may be expressly  contemplated  in the Financing
          Documents.   Except  as  expressly   contemplated   in  the  Financing
          Documents,  no consent,  approval,  authorization  or order of, and no
          notice to or filing with, any court,  governmental  authority or third
          party is  required  in  connection  with the grant by  Pledgor  of the
          security  interest  herein or the  exercise  by  Secured  Party of its
          rights and remedies hereunder.

     (e)  Security Interest.  Pledgor has and will have at all times full right,
          power and authority to grant a security  interest in the Collateral to
          Secured  Party in the manner  provided  herein,  free and clear of any
          lien, security interest or other charge or encumbrance. This Agreement
          creates  a legal,  valid and  binding  security  interest  in favor of
          Secured Party in the Collateral.

     (f)  Location.  Pledgor's  residence or chief executive office, as the case
          may be, and the office where the records concerning the Collateral are
          kept is located at its address set forth on the signature page hereof

     (g)  Solvency of Pledgor. As of the date hereof, and after giving effect to
          this   Agreement  and  the   completion  of  all  other   transactions
          contemplated by Pledgor at the time of the execution of this Agreement
          (i) Pledgor is and will be solvent,  (ii) the fair  saleable  value of
          Pledgor's  assets  exceeds  and  will  continue  to  exceed  Pledgor's
          liabilities  (both fixed and contingent),  (iii) Pledgor is paying and
          will continue to be able to pay its debts as they mature,  and (iv) if
          Pledgor is not an  individual,  Pledgor  has and will have  sufficient
          capital to carry on Pledgor's  businesses  and all businesses in which
          Pledgor is about to engage.

     (h)  Securities.   Any  certificates   evidencing   securities  pledged  as
          Collateral  are  valid  and  genuine  and have not been  altered.  All
          securities pledged as Collateral have been duly authorized and validly
          issued,  are fully  paid and  non-assessable,  and were not  issued in
          violation of the preemptive rights of any party or of any agreement by
          which  Pledgor or the  issuer  thereof is bound.  No  restrictions  or
          conditions  exist  with  respect  to the  transfer  or  voting  of any
          securities  pledged as  Collateral,  except as has been  disclosed  to
          Secured  Party in  writing.  To the best of  Pledgor's  knowledge,  no
          issuer of such securities  (other than securities of a class which are
          publicly  traded)  has  any  outstanding   stock  rights,   rights  to
          subscribe,  options, wan-ants or convertible securities outstanding or
          any other  rights  outstanding  entitling  any party to have issued to
          such party capital stock of such issuer,  except as has been disclosed
          to Secured Party in writing.

7.   Affirmative Covenants.  Pledgor will comply with the covenants contained in
     this  Section  at all times  during the  period of time this  Agreement  is
     effective unless Secured Party shall otherwise consent in writing.

     (a)  Ownership and Liens.  Pledgor will maintain good and marketable  title
          to all  Collateral  free and clear of all liens,  security  interests,
          encumbrances  or  adverse  claims,  except for the  security  interest
          created  by  this  Agreement  and the  security  interests  and  other
          encumbrances  expressly  permitted by the other  Financing  Documents.
          Pledgor will not permit any dispute, right of setoff,  counterclaim or
          defense  to exist with  respect to all or any part of the  Collateral.
          Pledgor  will  cause  any  financing   statement  or  other   security
          instrument with respect to the Collateral to be terminated,  except as
          may exist or as may have been filed in favor of Secured Party. Pledgor
          will defend at its expense Secured  Party's right,  title and security
          interest  in and to the  Collateral  against  the  claims of any third
          party.

     (b)  Inspection of Books and Records.  Pledgor will keep  adequate  records
          concerning  the  Collateral  and will  permit  Secured  Party  and all
          representatives  and  agents  appointed  by  Secured  Party to inspect
          Pledgor's  books and records of or relating to the  Collateral  at any
          time during normal business hours, to make and take away  photocopies,
          photographs  and  printouts  thereof  and to write down and record any
          such information.

     (c)  Adverse Claim. Pledgor covenants and agrees to promptly notify Secured
          Party  of any  claim,  action  or  proceeding  affecting  title to the
          Collateral,  or any part  thereof,  or the security  interest  created
          hereunder and, at Pledgor's  expense,  defend Secured Party's security
          interest  in the  Collateral  against  the claims of any third  party.
          Pledgor also covenants and agrees to promptly deliver to Secured Party
          a copy of all written notices  received by Pledgor with respect to the
          Collateral,  including without  limitation,  notices received from the
          issuer of any securities pledged hereunder as Collateral.

     (d)  Delivery  of  Instruments   and/or   Certificates.   Contemporaneously
          herewith, Pledgor covenants and agrees to deliver to Secured Party any
          certificates,  documents or instruments representing or evidencing the
          Collateral,  with Pledgor's  endorsement thereon and/or accompanied by
          proper  instruments of transfer and assignment  duly executed in blank
          with, if requested by Secured Party, signatures guaranteed by a member
          or member  organization  in good standing of an authorized  Securities
          Transfer  Agents  Medallion   Program,   all  in  form  and  substance
          satisfactory to Secured Party.

     (e)  Further Assurances.  Pledgor will contemporaneously with the execution
          hereof  and  from  time to time  thereafter  at its  expense  promptly
          execute and deliver all further instruments and documents and take all
          further  action  necessary or  appropriate  or that Secured  Party may
          request in order (i) to perfect  and  protect  the  security  interest
          created or  purported to be created  hereby and the first  priority of
          such security  interest,  (ii) to enable Secured Party to exercise and
          enforce  its  rights  and   remedies   hereunder  in  respect  of  the
          Collateral,  and  (iii)  to  otherwise  effect  the  purposes  of this
          Agreement,  including without limitation: (A) executing and filing any
          financing or continuation  statements,  or any amendments thereto; (B)
          obtaining  written  confirmation  from the  issuer  of any  securities
          pledged as  Collateral of the pledge of such  securities,  in form and
          substance  satisfactory to Secured Party; (C) cooperating with Secured
          Party  in  registering  the  pledge  of  any  securities   pledged  as
          Collateral with the issuer of such securities;  (D) delivering  notice
          of Secured  Party's  security  interest in any  securities  pledged as
          Collateral  to any  securities  or  financial  intermediary,  clearing
          corporation  or other  party  required by Secured  Party,  in form and
          substance  satisfactory  to Secured Party;  and (E) obtaining  written
          confirmation of the pledge of any securities  constituting  Collateral
          from any securities or financial intermediary, clearing corporation or
          other  party  required  by  Secured  Party,   in  form  and  substance
          satisfactory to Secured Party. If all or any part of the Collateral is
          securities  issued by an agency or  department  of the United  States,
          Pledgor covenants and agrees, at Secured Party's request, to cooperate
          in registering such securities in Secured Party's name or with Secured
          Party's   account   maintained  with  a  Federal  Reserve  Bank,  When
          applicable  law provides more than one method of perfection of Secured
          Party's security interest in the Collateral,  Secured Party may choose
          the method(s) to be used.

8.   Negative  Covenants.  Pledgor will comply with the  covenants  contained in
     this  Section  at all times  during the  period of time this  Agreement  is
     effective, unless Secured Party shall otherwise consent in writing.

     (a)  Transfer  or  Encumbrance.  Pledgor  will  not (i)  sell,  assign  (by
          operation of law or otherwise) or transfer  Pledgor's rights in any of
          the Collateral,  (ii) grant a lien or security interest in or execute,
          file or record any financing  statement or other  security  instrument
          with respect to the  Collateral to any party other than Secured Party,
          or (iii) deliver actual or constructive possession of any certificate,
          instrument  or  document  evidencing  and/or  representing  any of the
          Collateral to any party other than Secured Party.

     (b)  Impairment of Security Interest. Pledgor will not take or fail to take
          any  action   which   would  in  any   manner   impair  the  value  or
          enforceability of Secured Party's security interest in any Collateral.

     (c)  Dilution of  Ownership.  As to any  securities  pledged as  Collateral
          (other than securities of a class which are publicly traded),  Pledgor
          will not consent to or approve of the  issuance of (i) any  additional
          shares of any class of securities of such issuer  (unless  immediately
          upon  issuance  additional  securities  are pledged and  delivered  to
          Secured Party pursuant to the terms hereof to the extent  necessary to
          give Secured Party a security interest after such issuance in at least
          the same percentage of such issuer's outstanding securities as Secured
          Party had  before  such  issuance),  (ii) any  instrument  convertible
          voluntarily by the holder thereof or automatically upon the occurrence
          or nonoccurrence of any event or condition into, or exchangeable  for,
          any such  securities,  or (iii) any  warrants,  options,  contracts or
          other  commitments  entitling any third party to purchase or otherwise
          acquire any such securities.

     (d)  Restrictions on Securities.  Pledgor will not enter into any agreement
          creating,  or otherwise  permit to exist any  restriction or condition
          upon the  transfer,  voting or  control of any  securities  pledged as
          Collateral, except as consented to in writing by Secured Party.

9.   Rights of Secured Party.  Secured Party shall have the rights  contained in
     this  Section  at all times  during the  period of time this  Agreement  is
     effective. ,

     (a)  Power of Attorney.  Pledgor hereby irrevocably  appoints Secured Party
          as Pledgor's  attorney-in-fact,  such power of attorney  being coupled
          with an  interest,  with  full  authority  in the  place  and stead of
          Pledgor  and in the name of Pledgor or  otherwise,  to take any action
          and to execute any  instrument  which  Secured  Party may from time to
          time in Secured  Party's  discretion  deem necessary or appropriate to
          accomplish  the  purposes  of  this   Agreement,   including   without
          limitation,   the  following  action:  (i)  transfer  any  securities,
          instruments,  documents or  certificates  pledged as Collateral in the
          name of Secured Party or its nominee; (ii) use any interest premium or
          principal  payments,  conversion or redemption  proceeds or other cash
          proceeds  received in connection  with any Collateral to reduce any of
          the  Indebtedness;  (iii)  exchange any of the  securities  pledged as
          Collateral  for any other  property  upon any  merger,  consolidation,
          reorganization,  recapitalization  or other readjustment of the issuer
          thereof, and, in connection therewith,  to deposit and deliver any and
          all of such securities with any committee, depository, transfer agent,
          registrar or other  designated agent upon such terms and conditions as
          Secured  Party may deem  necessary or  appropriate;  (iv)  exercise or
          comply with any conversion, exchange, redemption,  subscription or any
          other right,  privilege or option pertaining to any securities pledged
          as Collateral;  provided,  however, except as provided herein, Secured
          Party shall not have a duty to exercise or comply with any such right,
          privilege or option (whether conversion,  redemption or otherwise) and
          shall not be  responsible  for any delay or  failure to do so; and (v)
          file any claims or take any action or institute any proceedings  which
          Secured Party may deem  necessary or  appropriate  for the  collection
          and/or  preservation  of the  Collateral  or  otherwise to enforce the
          rights of Secured  Party with  respect  to the  Collateral;  provide ,
          however,  nothing  herein  shall  allow  Secured  Party to confess any
          judgment  with  respect to any action which the Company is a plaintiff
          or defendant.

     (b)  Performance  by Secured . If Pledgor fails to perform any agreement or
          obligation provided herein, Secured Party may itself perform, or cause
          performance  of such  agreement  or  obligation,  and the  expenses of
          Secured Party incurred in connection  therewith shall be a part of the
          Indebtedness,  secured  by the  Collateral  and  payable by Pledgor on
          demand.

          Notwithstanding  any other provision  herein to the contrary,  Secured
          Party does not have any duty to exercise  or continue to exercise  any
          of the foregoing  rights and shall not be responsible  for any failure
          to do so or for any delay in doing so.

10.  Events of Default.  Each of the following constitutes an "Event of Default"
     under this Agreement:

     (a)  Failure to Pay  Indebtedness.  Borrower  or Pledgor  shall fail to pay
          after the  expiration  of five (5)  calendar  days after  Borrower has
          received  notice (as  dictated by the Note  Purchase  Agreement)  from
          Secured Party of a failure by Borrower to pay any  Indebtedness as and
          when due.

     (b)  Non-Performance  of  Covenants.  Borrower or Pledgor  shall breach any
          covenant or agreement made herein or the Note Purchase  Agreement,  in
          any of  the  Financing  Documents  or in any  other  agreement  now or
          hereafter entered into between Borrower or Pledgor and Secured Party.

     (c)  False  Representation.  Any warranty or representation  made herein or
          the Note Purchase Agreement or in any of the Financing Documents shall
          be false or misleading in any material respect when made.

     (d)  Default Under Other Financing Documents. The occurrence of an event of
          default  under  the  Note  Purchase  Agreement,  any of the  Financing
          Documents or any other agreement now or hereafter entered into between
          Borrower or Pledgor and Secured Party.

     (e)  Untrue Financial Report. Any report, certificate,  schedule, financial
          statement,  profit and loss statement or other statement  furnished by
          Borrower or Pledgor,  or by any other  person on behalf of Borrower or
          Pledgor,  to Secured  Party is not true and  correct  in any  material
          respect.

     (f)  Default to Third Party.  The occurrence of any event which permits the
          acceleration of the maturity of any indebtedness  owing by Borrower or
          Pledgor to any third party under any agreement or undertaking.

     (g)  Bankruptcy The filing of a voluntary or involuntary case by or against
          Borrower or Pledgor under the United States  Bankruptcy  Code or other
          present or future federal or state  insolvency,  bankruptcy or similar
          laws (collectively,  "Applicable  Bankruptcy Law"), or the appointment
          of a receiver,  trustee,  conservator  or custodian  for a substantial
          portion of the assets of Borrower or Pledgor.

     (h)  Insolvency.  Borrower  or  Pledgor  shall  become  insolvent,  make  a
          transfer in fraud of creditors or make an  assignment  for the benefit
          of creditors.

     (i)  Involuntary  Lien. The filing or commencement of any involuntary lien,
          garnishment,  attachment  or the like shall be issued  against or with
          respect to the  Collateral  which the Borrower  and/or  Pledgor is not
          contesting in good faith.

     (j)  Material Adverse Change. A material adverse change shall have occurred
          in the  financial  condition,  business  prospects  or  operations  of
          Borrower or Pledgor or any of its subsidiaries.

     (k)  Tax Lien.  Borrower or Pledgor  shall have a federal or state tax lien
          filed against any of its properties.

     (1)  Execution on  Collateral.  The  Collateral  or any portion  thereof is
          taken on execution or other  process of law which the Borrower  and/or
          Pledgor is not contesting in good faith.

     (m)  Guarantor's  Obligations.  If any of the  obligations of any guarantor
          under the Financing Documents is limited or terminated by operation of
          law or by the guarantor,  or any such guarantor becomes the subject of
          an insolvency proceeding.

     (n)  Judgment.  The  entry  against  Borrower  or  Pledgor  of a final  and
          nonappealable  judgment  for the payment of money in excess of $50,000
          (not covered by insurance  satisfactory  to Secured  Party in its sole
          discretion).

     (o)  Dilution  of  Ownership.  The  issuer of any  securities  (other  than
          securities  of  a  class  which  are  publicly  traded)   constituting
          Collateral  hereafter  issues any shares of any class of capital stock
          (unless immediately upon issuance,  additional  securities are pledged
          and  delivered  to Secured  Party  pursuant to the terms hereof to the
          extent necessary to give Secured Party a security  interest after such
          issuance in at least the same percentage of such issuer's  outstanding
          securities as Secured Party had before such  issuance) or any options,
          warrants or other rights to purchase any such capital stock.

     (p)  Bankruptcy  of Issue . (i) The issuer of any  securities  constituting
          Collateral files a petition for relief under any Applicable Bankruptcy
          Law, (ii) an involuntary petition for relief is filed against any such
          issuer  under any  Applicable  Bankruptcy  Law,  or (iii) an order for
          relief  naming  any  such  issuer  is  entered  under  any  Applicable
          Bankruptcy Law.

     (q)  Termination of Note Purchase Agreement.  The expiration or termination
          of the Note Purchase Agreement.

11.  Remedies and Related  Rights.  If an Event of Default shall have  occurred,
     and without limiting any other rights and remedies  provided herein,  under
     any of the other  Financing  Documents  or  otherwise  available to Secured
     Party,  Secured  Party may  exercise one or more of the rights and remedies
     provided in this Section.

     (a)  Remedies.  Secured  Party  may  from  time to time at its  discretion,
          without  limitation and without notice except as expressly provided in
          any of the Financing Documents:

          (i)  exercise in respect of the Collateral all the rights and remedies
               of a  secured  party  under  the  Code  (whether  or not the Code
               applies to the affected Collateral);

          (ii) reduce its claim to judgment or foreclose  or otherwise  enforce,
               in whole or in part, the security  interest granted  hereunder by
               any available judicial procedure;

          (iii)sell or otherwise  dispose of, at its office,  on the premises of
               Pledgor or elsewhere, the Collateral, as a unit or in parcels, by
               public  or  private  proceedings,  and by  way  of  one  or  more
               contracts (it being agreed that the sale or other  disposition of
               any part of the  Collateral  shall not  exhaust  Secured  Party's
               power of sale, but sales or other  dispositions  may be made from
               time  to  time  until  all of the  Collateral  has  been  sold or
               disposed of or until the Indebtedness has been paid and performed
               in full), and at any such sale or other  disposition it shall not
               be necessary to exhibit any of the Collateral;

          (iv) buy the Collateral, or any portion thereof, at any public sale;

          (v)  buy the Collateral,  or any portion thereof,  at any private sale
               if the Collateral is of a type  customarily  sold in a recognized
               market or is of a type which is the subject of widely distributed
               standard price quotations;

          (vi) apply for the appointment of a receiver for the  Collateral,  and
               Pledgor hereby consents to any such appointment; and

          (vii)at its  option,  retain the  Collateral  in  satisfaction  of the
               Indebtedness  whenever  the  circumstances  are such that Secured
               Party is entitled to do so under the Code or otherwise.

Pledgor agrees that in the event Pledgor is entitled to receive any notice under
the  Uniform  Commercial  Code,  as it exists in the  state  governing  any such
notice,  of the sale or other  disposition of any Collateral,  reasonable notice
shall be deemed given when such notice is  deposited in a depository  receptacle
under the care and custody of the United States Postal Service, postage prepaid,
at Pledgor's address set forth on the signature page hereof, five (5) days prior
to the date of any public sale,  or after which a private  sale,  of any of such
Collateral is to be held.  Secured Party shall not be obligated to make any sale
of Collateral  regardless of notice of sale having been given. Secured Party 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 was so adjourned.  Pledgor  further  acknowledges
and agrees that the  redemption by Secured Party of any  certificate  of deposit
pledged  as  Collateral  shall  be  deemed  to  be  a  commercially   reasonable
disposition under Section 9.504(c) of the Code.

     (b)  Private Sale of Securities.  Pledgor recognizes that Secured Party may
          be unable to effect a public sale of all or any part of the securities
          pledged as Collateral  because of restrictions  in applicable  federal
          and state  securities  laws and that  Secured  Party  may,  therefore,
          determine to make one or more private sales of any such  securities to
          a restricted group of purchasers who will be obligated to agree, among
          other  things,  to acquire such  securities  for their own account for
          investment and not with a view to the  distribution  or resale thereof
          Pledgor  acknowledges that each any such private sale may be at prices
          and other terms less favorable then what might have been obtained at a
          public sale and, notwithstanding the foregoing,  agrees that each such
          private  sale  shall be deemed  to have  been  made in a  commercially
          reasonable  manner and that Secured  Party shall have no obligation to
          delay the sale of any such securities for the period of time necessary
          to permit the issuer to register such securities for public sale under
          any federal or state securities laws. Pledgor further acknowledges and
          agrees  that any  offer to sell  such  securities  which has been made
          privately in the manner described above to not less than five (5) bona
          fide  offerees  shall be  deemed to  involve  a "public  sale" for the
          purposes of Section  9.504(c) of the Code,  notwithstanding  that such
          sale may not constitute a "public offering" under any federal or state
          securities laws and that Secured Party may, in such event, bid for the
          purchase of such securities.

     (c)  Application of Proceeds.  If any Event of Default shall have occurred,
          Secured  Party  may at its  discretion  apply or use any cash  held by
          Secured Parry as Collateral, and any cash proceeds received by Secured
          Party in respect of any sale or other disposition of, collection from,
          or  other  realization  upon,  all or any  part of the  Collateral  as
          follows in such order and manner as Secured Party may elect:

          (i)  to the repayment or  reimbursement  of the  reasonable  costs and
               expenses (including,  without limitation,.  reasonable attorneys'
               fees and expenses)  incurred by Secured Party in connection  with
               (A)  the  administration  of the  Financing  Documents,  (B)  the
               custody,  preservation,  use or  operation  of,  or the  sale of,
               collection from, or other realization  upon, the Collateral,  and
               (C) the exercise or enforcement of any of the rights and remedies
               of Secured Party hereunder;

          (ii) to the  payment  or other  satisfaction  of any  liens  and other
               encumbrances upon the Collateral;

          (iii) to the satisfaction of the Indebtedness;

          (iv) by holding such cash and proceeds as Collateral;

          (v)  to the payment of any other amounts  required by  applicable  law
               (including without limitation, Section 9.504(a)(3) of the Code or
               any other applicable statutory provision); and

          (vi) by delivery to Pledgor or any other  party  lawfully  entitled to
               receive such cash or proceeds  whether by direction of a court of
               competent jurisdiction or otherwise.

     (d)  Deficiency.  In the event that the proceeds of any sale of, collection
          from, or other  realization upon, all or any part of the Collateral by
          Secured  Party are  insufficient  to pay all amounts to which  Secured
          Party is legally entitled, Borrower and any party who guaranteed or is
          otherwise  obligated  to pay all or any  portion  of the  Indebtedness
          shall be liable for the deficiency,  together with interest thereon as
          provided in the Financing Documents.

     (e)  Non-Judicial  Remedies.  In  granting  to  Secured  Party the power to
          enforce  its  rights  hereunder  without  prior  judicial  process  or
          judicial hearing,  Pledgor  expressly waives,  renounces and knowingly
          relinquishes  any legal right which might  otherwise  require  Secured
          Party to enforce its rights by judicial  process.  Pledgor  recognizes
          and concedes that non-judicial  remedies are consistent with the usage
          of trade, are responsive to commercial necessity and are the result of
          a bargain  at arm's  length.  Nothing  herein is  intended  to prevent
          Secured Party or Pledgor from resorting to judicial  process at either
          party's option.

     (f)  Other  Recourse.  Pledgor waives any right to require Secured Party to
          proceed  against  any third  party,  exhaust any  Collateral  or other
          security for the Indebtedness,  or to have any third party joined with
          Pledgor  in any suit  arising  out of the  Indebtedness  or any of the
          Financing  Documents,  or pursue any other remedy available to Secured
          Party. Pledgor further waives any and all notice of acceptance of this
          Agreement and of the creation, modification,  rearrangement renewal or
          extension  of the  Indebtedness.  Pledgor  further  waives any defense
          arising  by reason of any  disability  or other  defense  of any third
          party or by reason of the cessation  from any cause  whatsoever of the
          liability of any third party. Until all of the Indebtedness shall have
          been paid in full,  Pledgor  shall  have no right of  subrogation  and
          Pledgor waives the right to enforce any remedy which Secured Party has
          or may hereafter have against any third party,  and waives any benefit
          of and any right to participate  in any other security  whatsoever now
          or hereafter held by Secured Party.  Pledgor authorizes Secured Party,
          and without  notice or demand and without  any  reservation  of rights
          against Pledgor and without affecting Pledgor's liability hereunder or
          on the  Indebtedness,  to (i) take or bold any other  property  of any
          type  from any  third  party as  security  for the  Indebtedness,  and
          exchange,  enforce,  waive  and  release  any  or all  of  such  other
          property,  (ii)  apply  such  other  property  and direct the order or
          manner  of  sale  thereof  as  Secured  Party  may in  its  discretion
          determine, (iii) renew, extend, accelerate, modify, compromise, settle
          or  release  any  of  the  Indebtedness  or  other  security  for  the
          Indebtedness,  (iv) waive,  enforce or modify any of the provisions of
          any of the Financing  Documents  executed by any third party,  and (v)
          release or substitute any third party.

     (g)  Voting  Rights.  Upon the  occurrence of an Event of Default,  Pledgor
          will not  exercise  any voting  rights  with  respect  to  securities.
          pledged as Collateral.  Pledgor hereby  irrevocably  appoints  Secured
          Party as  Pledgor's  attorney-in-fact  (such power of  attorney  being
          coupled with an interest) and proxy to exercise any voting rights with
          respect  to  Pledgor's  securities  pledged  as  Collateral  upon  the
          occurrence of an Event of Default.

     (h)  Dividend Rights and interest Payments. Upon the occurrence of an Event
          of Default:

          (i)  all rights of Pledgor to  receive  and retain the  dividends  and
               interest  payments  which it would  otherwise  be  authorized  to
               receive  and retain  pursuant  to  Section 3 shall  automatically
               cease,  and all such rights shall  thereupon  become  vested with
               Secured  Party  which  shall  thereafter  have the sole  right to
               receive, hold and apply as Collateral such dividends and interest
               payments; and

          (ii) all dividend and interest  payments which are received by Pledgor
               contrary to the provisions of clause (i) of this Subsection shall
               be received in trust for the benefit of Secured  Party,  shall be
               segregated  from other funds of Pledgor,  and shall be  forthwith
               paid over to Secured Party in the exact form  received  (properly
               endorsed or assigned if requested by Secured  Party),  to be held
               by Secured Party as Collateral.

12.  Indemnity.  Pledgor hereby  indemnifies and agrees to hold harmless Secured
     Party, and its officers,  directors,  shareholders,  employees,  attorneys,
     representatives,  agents and affiliates (each an "Indemnified Person") from
     and against any and all liabilities,  obligations, claims, demands, losses,
     damages,   penalties,   actions,   judgments,  suits,  costs,  expenses  or
     disbursements of any kind or nature  (collectively,  the "Claims" which may
     be imposed on, incurred by, or asserted  against,  any  Indemnified  Person
     arising in connection with the Financing  Documents the Indebtedness or the
     Collateral (including without limitation,  the enforcement of the Financing
     Documents  and the  defense  of any  Indemnified  Person's  actions  and/or
     inactions in  connection  with the Financing  Documents);  provide that the
     payment  of such  Claims  shall be  limited  to the  proceeds  or  products
     realized from the Collateral. WITHOUT LIMITATION, THE FOREGOING INDEMNITIES
     SHALL APPLY TO EACH INDEMNIFIED  PERSON WITH RESPECT TO ANY CLAIMS WHICH IN
     WHOLE  OR IN PART ARE  CAUSED  BY OR ARISE  OUT OF THE  NEGLIGENCE  OF SUCH
     ANDIOR  ANY OTHER  INDEMNIFIED  PERSON,  except to the  limited  extent the
     Claims  against  an  Indemnified  Person  are  proximately  caused  by such
     Indemnified Person's gross negligence or willful misconduct.  If Pledgor or
     any third parry ever alleges such gross negligence or willful misconduct by
     any Indemnified  Person, the  indemnification  provided for in this Section
     shall  nonetheless  be paid upon  demand,  subject to later  adjustment  or
     reimbursement until such time as a court of competent jurisdiction enters a
     final judgment as to die extent and effect of the alleged gross  negligence
     or willful  misconduct.  The  indemnification  provided for in this Section
     shall  survive  the  termination  of this  Agreement  and shall  extend and
     continue  to benefit  each  individual  or entity who is or has at any time
     been an Indemnified Person hereunder.

13.  Miscellaneous.

     (a)  Entire  Agreement.  This  Agreement  contains the entire  agreement of
          Secured  Party and  Pledgor  with  respect to the  Collateral.  If the
          parties hereto are parties to any prior  agreement,  either written or
          oral,  relating to the  Collateral,  the terms of this Agreement shall
          amend  and  supersede  the  terms  of  such  prior  agreements  as  to
          transactions on or after the effective date of this Agreement, but all
          security agreements, financing statements, guaranties, other contracts
          and notices for the  benefit of Secured  Party shall  continue in fill
          force and  effect to secure  the  Indebtedness  unless  Secured  Party
          specifically releases its rights thereunder by separate release.

     (b)  Amendment.  No modification,  consent or amendment of any provision of
          this Agreement or any of the other Financing  Documents shall be valid
          or  effective  unless the same is in  writing  and signed by the party
          against whom it is sought to be enforced.

     (c)  Actions  by  Secured  Party.  The lien,  security  interest  and other
          security  rights of Secured Party  hereunder  shall not be impaired by
          (i) any renewal,  extension,  increase or modification with respect to
          the Indebtedness,  (ii) any surrender,  compromise,  release, renewal,
          extension, exchange or substitution which Secured Party may grant with
          respect to the Collateral,  or (iii) any release or indulgence granted
          to any endorser,  guarantor or surety of the Indebtedness.  The taking
          of  additional  security by Secured  Party shall not release or impair
          the lien,  security interest or other security rights of Secured Party
          hereunder or affect the obligations of Pledgor hereunder.

     (d)  Waiver by Secured Party.  Secured Party may waive any Event of Default
          without  waiving  any  other  prior or  subsequent  Event of  Default.
          Secured  Party may remedy any  default  without  waiving  the Event of
          Default  remedied.  Neither the failure by Secured  Party to exercise,
          nor the delay by Secured Party in exercising, any right or remedy upon
          any Event of Default  shall be  construed as a waiver of such Event of
          Default  or as a waiver of the  right to  exercise  any such  right or
          remedy at a later date. No single or partial exercise by Secured Party
          of any  right or  remedy  hereunder  shall  exhaust  the same or shall
          preclude any other or further exercise  thereof,  and every such right
          or remedy  hereunder  may be exercised  at any time.  No waiver of any
          provision  hereof or consent  to any  departure  by Pledgor  therefrom
          shall be  effective  unless the same shall be in writing and signed by
          Secured Party and then such waiver or consent shall be effective  only
          in the specific instances,  for the purpose for which given and to the
          extent  therein  specified.  No notice to or demand on  Pledgor in any
          case shall of itself entitle Pledgor to any other or further notice or
          demand in similar or other circumstances.

     (e)  Costs and Expenses.  After an event of default  hereunder and a demand
          by Secured Party to the Pledgor for the Collateral,  Pledgor will upon
          demand  pay to  Secured  Party  the  amount  of any and all  costs and
          expenses (including without limitation, attorneys' fees and expenses),
          which Secured  Party may incur in connection  with (i) the exercise or
          enforcement  of any of the rights of Secured Party under the Financing
          Documents  with  respect  to the  Collateral,  or (ii) the  failure by
          Pledgor to perform or observe any of the provisions hereof.

     (f)  Governing Law; Venue; Submission to Jurisdiction. THIS AGREEMENT SHALL
          HE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE LAWS OF THE STATE
          OF TEXAS WITHOUT  GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS
          THEREOF,  EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT OF PERFECTION
          OR  NON-PERFECTION  OF THE SECURITY  INTEREST  GRANTED  HEREUNDER,  IN
          RESPECT OF ANY  PARTICULAR  COLLATERAL,  ARE GOVERNED BY THE LAWS OF A
          JURISDICTION  OTHER  THAN  THE  STATE  OF  TEXAS.  THIS  AGREEMENT  IS
          PERFORMABLE  BY THE  PARTIES  IN DALLAS  COUNTY,  TEXAS.  PLEDGOR  AND
          SECURED  PARTY (BY ITS  ACCEPTANCE  HEREOF)  EACH  AGREE  THAT  DALLAS
          COUNTY,  TEXAS  SHALL BE THE  EXCLUSIVE  VENUE FOR  LITIGATION  OF ANY
          DISPUTE OR CLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT, AND THAT
          SUCH COUNTY IS A CONVENIENT  FORUM IN WHICH TO DECIDE ANY SUCH DISPUTE
          OR CLAIM.  PLEDGOR AND SECURED PARTY (BY ITS  ACCEPTANCE  HEREOF) EACH
          CONSENT TO THE PERSONAL  JURISDICTION  OF THE STATE AND FEDERAL COURTS
          LOCATED IN DALLAS COUNTY, TEXAS FOR THE LITIGATION OF ANY SUCH DISPUTE
          OR CLAIM.  PLEDGOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
          BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
          OF THE VENUE OF ANY SUCH  PROCEEDING  BROUGHT  IN SUCH A COURT AND ANY
          CLAIM  THAT  ANY  SUCH  PROCEEDING  BROUGHT  IN SUCH A COURT  HAS BEEN
          BROUGHT IN AN INCONVENIENT FORUM.

     (g)  Waiver of Jury Trial.  PLEDGOR AND  SECURED  PARTY (BY ITS  ACCEPTANCE
          HEREOF)  EACH  HEREBY  IRREVOCABLY   WAIVES,  TO  THE  MAXIMUM  EXTENT
          PERMITTED  BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
          OF ANY  LITIGATION  DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF,
          UNDER  OR  IN  CONNECTION   WITH  THIS  AGREEMENT  OR   ANYTRANSACTION
          CONTEMPLATED HEREBY OR ASSOCIATED HEREWITH.

     (h)  Severability. If any provision of this Agreement is held by a court of
          competent  jurisdiction to be illegal,  invalid or unenforceable under
          present or future laws, such provision shall be fully severable, shall
          not impair or  invalidate  the  remainder  of this  Agreement  and the
          effect  thereof shall be confined to the provision held to be illegal,
          invalid or unenforceable.

     i)   No  Obligation.  Nothing  contained  herein  shall be  construed as an
          obligation  on the part of  Secured  Party to  extend or  continue  to
          extend credit to Borrower or Pledgor.

     j.)  Notices.  All  notices,  requests,  demands  or  other  communications
          required or permitted to be given pursuant to this Agreement  shall be
          in writing and given by (i) personal delivery, (ii) expedited delivery
          service with proof of  delivery,  (iii)  United  States mail,  postage
          prepaid,  registered or certified mail, return receipt  requested,  or
          (iv) telecopy (with receipt thereof  confirmed by telecopier)  sent to
          the intended  addressee at the address set forth on the signature page
          hereof  or to such  different  address  as the  addressee  shall  have
          designated  by written  notice sent  pursuant to the terms  hereof and
          shall be deemed to have been received either,  in the case of personal
          delivery,  at the time of personal delivery,  in the case of expedited
          delivery  service,  as of the date of first attempted  delivery at the
          address and in the manner provided  herein,  in the case of mail, upon
          deposit in a depository  receptacle  under the care and custody of the
          United  States  Postal  Service,  or in the  case  of  telecopy,  upon
          receipt.  Either  party shall have the right to change its address for
          notice  hereunder to any other location within the continental  United
          States  by  notice to the  other  party of such new  address  at least
          thirty (30) days prior to the effective date of such new address.

     (k)  Binding Effect and Assignment. This Agreement (i) creates a continuing
          security interest in the Collateral,  (ii) shall be binding on Pledgor
          and the heirs, executors,  administrators,  personal  representatives,
          successors  and  assigns  of  Pledgor,  and (iii)  shall  inure to the
          benefit of  Secured  Party and its  successors  and  assigns.  Without
          limiting the  generality of the  foregoing,  Secured Party may pledge,
          assign or  otherwise  transfer the  Indebtedness  and its rights under
          this Agreement and any of the other  Financing  Documents to any other
          party.  Pledgor's rights and obligations hereunder may not be assigned
          or otherwise  transferred without the prior written consent of Secured
          Party.

     (l)  Termination.  It is  contemplated by the parties hereto that from time
          to time there may be no outstanding Indebtedness,  but notwithstanding
          such  occurrences,  this Agreement  shall remain valid and shall be in
          full force and effect as to subsequent outstanding Indebtedness.  Upon
          (i) the satisfaction in full of the Indebtedness, (ii) the termination
          or expiration  of any  commitment of Secured Party to extend credit to
          Pledgor and/or  Borrower,  (iii) written  request for the  termination
          hereof delivered by Pledgor to Secured Party, and (iv) written release
          delivered by Secured Parry to Pledgor, this Agreement and the security
          interests  created hereby shall  terminate.  Upon  termination of this
          Agreement  and  Pledgor's  written  request  Secured  Party  will,  at
          Pledgor's  sole  cost  and  expense,  return  to  Pledgor  such of the
          Collateral  as shall not have been sold or  otherwise  disposed  of or
          applied  pursuant  to the terms  hereof  and  execute  and  deliver to
          Pledgor such documents as Pledgor shall reasonably request to evidence
          such termination.

     (m)  Cumulative  Rights. All rights and remedies of Secured Party hereunder
          are  cumulative of each other and of every other right or remedy which
          Secured Party may  otherwise  have at law or in equity or under any of
          the other Financing Documents, and the exercise of one or more of such
          rights or remedies  shall not  prejudice or impair the  concurrent  or
          subsequent exercise of any other rights or remedies.

     (n)  Gender and Number.  Within this Agreement words of any gender shall be
          held and  construed  to  include  the other  gender,  and words in the
          singular  number shall be held and construed to include the plural and
          words in the plural  number shall be held and construed to include the
          singular, unless in each instance the context requires otherwise.

     (o)  Descriptive   Headings.   The  headings  in  this  Agreement  are  for
          convenience  only and shall in no way  enlarge,  limit or  define  the
          scope or meaning of the various and several provisions hereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



<PAGE>



EXECUTED as of the date first written above.

PLEDGOR:

DURHAM WHITESELL & ASSOCIATES, LLC

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

Pledgor's Address:


Telecopy No.
             ----------------------------------------


SECURED PARTY:

MARKPOINT EQUITY GROWTH FUND, J.V.

By: The Markpoint Company, its Managing Venturer

By:
   ------------------------------------
Name: Tex Sekhon
Title: President

Secured Party's Address:

Markpoint Equity Growth Fund, J.V.
15770 Dallas Parkway, Suite 800
Dallas, Texas 75248
ATTN: Tex Sekhon
Telecopy No. 972-490-1980












<PAGE>


                             SUBORDINATION AGREEMENT

     This Subordination Agreement, made effective as of the 2nd day of May, 2000
by and between  MARKPOINT  EQUITY GROWTH FUND,  J.V., a Texas joint venture (the
"Junior Creditor") and BANK ONE, INDIANA,  N.A., a national banking  association
(the "Bank");

                                   WITNESSETH:

     WHEREAS,  the Junior Creditor is the holder of that certain Promissory Note
dated the date hereof from Champion  Trailer  Company,  L.P. (the "Borrower") in
the aggregate principal amount of One Million Two Hundred Fifty Thousand Dollars
($1,250,000)  (the  "Subordinated  Note") pursuant to that certain Note Purchase
Agreement of even date  herewith  among Junior  Creditor and Borrower (the "Note
Agreement"); and

     WHEREAS,  the Bank,  pursuant  to a certain  Credit  Agreement  between the
Borrower  and the Bank dated of even date  herewith (as the same may be amended,
modified or replaced from time to time, the "Credit  Agreement"),  has agreed to
extend credit facilities and financial  accommodations to the Borrower,  subject
to the subordinations and other agreements herein; and

     NOW, THEREFORE,  for value received,  and in consideration of the premises,
the parties agree as follows:

     1.   Certain Definitions. As used herein:

     "Default  Notice" means a notice which states that a default or an event of
default  under any  provision  of the Junior Debt has  occurred  and that Junior
Creditor desires to take such action available to Junior Creditor under the Note
Agreement and the Loan Documents.

     "Junior Debt" means the indebtedness  evidenced by the  Subordinated  Note,
all loans,  advances,  liabilities or debit balances owed by the Borrower to the
Junior  Creditor,  due or to become due,  secured or unsecured,  now existing or
hereafter  arising,  together with all  interest,  fees,  charges,  expenses and
attorneys' fees which the Borrower is now or hereafter  becomes liable to pay to
the Junior  Creditor in  connection  with the  foregoing  and together  with all
extensions, renewals, and modifications thereof or of any part thereof.

     "Proceeding" has the meaning assigned to it in Section 5 hereof.

     "Senior  Debt"  means all loans,  advances,  liabilities,  debit  balances,
covenants  and  duties at any time  owed by the  Borrower  to the Bank,  whether
direct or indirect,  absolute or  contingent,  secured or  unsecured,  due or to
become due, now existing or hereafter arising, together with all interest, fees,
charges, expenses and attorneys' fees for which the Borrower is now or hereafter
becomes  liable  to pay to the  Bank  and with  any  extensions,  renewals,  and
modifications  thereof or of any part thereof,  provided that the maximum amount
of the  Senior  Debt  (exclusive  of  interest  thereon,  collection  costs  and
attorneys'  fees)  that the Junior  Creditor  is  subordinated  to, and which is
entitled to the benefit of this Agreement,  shall not exceed Two Million Dollars
($2,000,000). "Default" and "Unmatured Default" shall have the meanings ascribed
thereto in the Credit Agreement.

     All other  capitalized  terms used herein but not defined herein shall have
the meaning ascribed to them in the Note Agreement.

     2. Subordination. The Junior Creditor hereby agrees that the Junior Debt is
subordinated to the payment of all Senior Debt. The  Subordinated  Note and each
instrument hereafter evidencing Junior Debt shall bear a conspicuous legend that
it is subordinated to the Senior Debt.  Notwithstanding  the order of recording,
filing,  attachment or perfection of any security  interest or lien,  the Junior
Creditor also hereby subordinates any lien it may have to secure the Junior Debt
on any  property  of  the  Borrower,  whether  real  or  personal,  tangible  or
intangible,  to any lien on such property given to the Bank to secure any Senior
Debt.  Except as  provided  for in this  Section 2, the Junior  Creditor  hereby
agrees that any proceeds from the sale or  foreclosure  of  Borrower's  property
shall  first be applied to the Senior Debt until the Senior Debt has been fully,
finally  and  irrevocably  paid  before  any  application  to the  Junior  Debt.
Notwithstanding  anything to the contrary within this Agreement, the Bank hereby
agrees that Junior  Creditor has and shall have priority over Bank regardless of
the  order of  recording,  filing,  attachment  or  perfection  of any  security
interest  or lien  over the  capital  stock or  equivalent  equity  units of the
Borrower.

     3. No Payment  or  Acceleration.  Except as  provided  in  Sections 2 and 4
hereof:

     (a)  If (i) any  default in the payment on account of any  principal  of or
          interest on, or any other  amounts owing in respect of any Senior Debt
          (whether  at  maturity  or  at a  date  fixed  for  prepayment  or  by
          declaration,  acceleration or otherwise) occurs or exists, or (ii) any
          event of default under  Sections  7(c),  (e), (f) or (g) of the Credit
          Agreement  occurs or  exists,  then the rights of Junior  Creditor  to
          receive any payments or other distributions with respect to the Junior
          Debt shall be suspended  from and after the date that Junior  Creditor
          receives a notice to suspend  payments  under the Junior Debt (a "Stop
          Payment  Notice"),  unless  and  until  the  earliest  to occur of the
          following: (1) written notice from the Bank that each event of default
          which is the  subject of such Stop  Payment  Notice has been waived or
          cured or ceases to exist,  (2) 90 days  shall have  elapsed  since the
          date upon which Junior Creditor received such Stop Payment Notice, and
          (3) the Senior Debt has been paid in full and all  commitments  of the
          Bank to Borrower under the Credit Agreement shall have expired or been
          terminated; provided, however, that Bank shall not be permitted to (i)
          issue a Stop Payment Notice more than twice within any 365 consecutive
          days or (ii) use any event or circumstance which constitutes a default
          that the Bank  knows  exists as of the date  that such a Stop  Payment
          Notice is issued as a basis for the issuance of any other Stop Payment
          Notice  unless such event or  circumstance  had been waived,  cured or
          ceased to exist.

     (b)  Notwithstanding  anything to the contrary  contained in this Section 3
          or  elsewhere  in this  Agreement  (i)  Borrower  may  pay and  Junior
          Creditor may take and retain any scheduled  payment on the Junior Debt
          as set forth in the  current  terms of the  Subordinated  Note  before
          receipt by Junior  Creditor of a Stop Payment  Notice,  (ii)  Borrower
          shall be  entitled  to resume  the  making of any  payments  otherwise
          prohibited  under this Section 3,  including  any payments  previously
          suspended,  at the  earlier of (A) such time as the Senior  Debt shall
          have been  paid in fall and all  commitments  of the Bank to  Borrower
          under the Credit Agreement shall have expired or been  terminated,  or
          (B) such time as the  default  giving rise to such  prohibition  shall
          have been cured or waived or the applicable  period following the date
          upon which Junior  Creditor  received the relevant Stop Payment Notice
          shall have elapsed.

     4.  Standstill.  Junior  Creditor agrees to promptly send to Bank a copy of
any notice of default under the Junior Debt sent to Borrower and farther  agrees
that  Junior  Creditor  shall not  exercise  any rights or  remedies or take any
enforcement  action  available  upon the  occurrence of a default or an event of
default or otherwise under the Loan Documents evidencing,  governing or securing
the Junior  Debt or take any action  toward the  collection  of any Junior  Debt
until the  earliest of (a  "Standstill  Period") (a) the  expiration  of 90 days
following the Banks receipt of a Default Notice unless the event of default that
is the  subject  of the  Default  Notice  has  been  waived  or  cured,  (b) the
expiration  of 90 days  following  Junior  Creditor's  receipt of a Stop Payment
Notice, (c) the exercise by Bank of any acceleration or foreclosure available to
it upon a default or event of default with  respect to the Senior Debt,  (d) the
occurrence of a  Proceeding,  or (e) all of the Senior Debt shall have been paid
in full and all  commitments of the Bank to Borrower under the Credit  Agreement
shall have expired or been terminated;  provided,  however, that with respect to
clause (a) and (b) above, no subsequent  Standstill  Period shall prevent Junior
Creditor from  continuing the  prosecution of any remedial action or foreclosure
commenced within a reasonable time after the expiration of a previous Standstill
Period  with  respect  to an Event of Default  under the Junior  Debt that began
before or during such previous  Standstill  Period and has continued  since that
time. The failure to make a payment of principal of, interest on, or fees, costs
or expenses  relative  to, any of the Junior Debt by reason of any  provision of
this Agreement  shall not be construed as preventing the occurrence of a default
or event of default  with  respect to such Junior  Debt.  Not  withstanding  the
foregoing,  Junior  Creditor  shall not be entitled  to  exercise  any rights or
remedies or take any  enforcement  action upon the  expiration  of a  Standstill
Period if no default or event of default  under the Junior Debt has occurred and
is continuing at the time of such expiration.

     5.  Liquidation.  Upon any liquidation,  dissolution or other winding up of
the   Borrower  or  its   business  or  any  sale,   receivership,   insolvency,
reorganization  or  bankruptcy   proceeding,   assignment  for  the  benefit  of
creditors,  arrangement for the commencement of any proceeding by or against the
Borrower for any relief under any bankruptcy,  reorganization  or insolvency law
or laws,  federal or state, or any other law, federal or state,  relating to the
relief of debtors, readjustment of debt reorganization, composition or extension
(a  "Proceeding"),  then and in any such event, any such payment or distribution
of any kind or  character,  whether  in cash,  property  or  securities  (except
securities  which are  subordinate and junior in right of payment to the payment
of Senior Debt at least to the extent provided in this Agreement) which, but for
the subordination  provisions  contained  herein,  would otherwise be payable or
deliverable to the Junior Creditor upon or in respect of any Junior Debt, shall,
instead be paid over or  delivered to the Bank for  application  as a payment or
prepayment  on account of the Senior  Debt until the final  satisfaction  of the
Senior Debt after giving effect to any concurrent payment or distribution to the
holders of the Senior Debt.  Junior  Creditor shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which proceedings
are pending,  or a certificate of the liquidating trustee or other person making
any distribution to Junior Creditor, for the purpose of ascertaining the persons
entitled to participate in such distribution,  the Bank and the holders of other
debt of Borrower,  the amount thereof or payable thereon,  the amount or amounts
paid or  distributed  thereon and all other facts  pertinent  thereto or to this
Agreement.

     6.  Turnover of  Payments.  Should any payment,  distribution,  security or
instruments or any proceeds thereof,  other than regularly scheduled payments of
interest and principal in accordance with current terms of the Subordinated Note
outside of a Standstill  Period, be received by the Junior Creditor upon or with
respect to the Junior Debt prior to the full,  final and irrevocable  payment of
the Senior  Debt and  termination  of all  financing  arrangements  between  the
Borrower and the Bank,  the Junior  Creditor  shall receive and hold the same in
trust, as trustee, in precisely the form received (except for the endorsement or
assignment by such Junior  Creditor  where  necessary),  for  application to the
Senior Debt, whether or not due.

     7. Enforcement of Junior Debt. The Junior Creditor  irrevocably  authorizes
and empowers the Bank, under the circumstances set forth in Section 5 hereof, to
file claims and proofs of claim in any statutory or non-statutory proceeding, in
the name of the Bank or in the name of the  Junior  Creditor  or  otherwise,  if
Junior  Creditor fails to do so within ten (10) days of the bar date  pertaining
thereto; provided, however, that Bank shall not be permitted to vote such claim,
all rights with respect thereto being hereby retained by Junior Creditor. Junior
Creditor  covenants to the Bank that it will not vote any such claim in a manner
materially  detrimental to the priority of the Bank's claims as senior lender or
in contravention of U.S.C.A.  ss. 1129 (b)(2). In any event, the Junior Creditor
shall not contest the validity, perfection, recording, effectiveness or priority
of any liens securing the Senior Debt. The Junior Creditor hereby agrees,  under
the circumstances set forth in Section 5 hereof,  duly and promptly to take such
action as may be  reasonably  requested at any time and from time to time by the
Bank to  collect  the  Junior  Debt  for the  account  of the  Bank  and to file
appropriate proofs of claim in respect thereof. Except as set forth in Section 3
hereof,  any and all  monies  so  collected  or  received  by the Bank  shall be
retained  indefeasibly  by the Bank for application to the Senior Debt until the
Senior  Debt  is  fully,   finally  and  irrevocably   paid  and  all  financing
arrangements between the Borrower and the Bank are terminated. In no event shall
the Bank be liable to the Junior  Creditor  for any  failure to prove any Junior
Debt, to exercise any right with respect  thereto or to collect any sums payable
thereon.

     8.  Waivers.  Without  the  consent of Junior  Creditor  and subject to the
maximum  amount of Senior Debt  entitled  to the  benefit of this  Subordination
Agreement,  any  demand  by the  Bank  for  payment  of the  Senior  Debt may be
rescinded  by the Bank in whole  or in part  and any of the  Senior  Debt may be
continued,  and the Senior Debt or the  liability  of the  Borrower or any other
party  upon or for any part  thereof  or any  collateral  security  or  guaranty
therefor  or any right of offset  with  respect  thereto  or any  obligation  or
liability  of the  Borrower or any other party under any of the Senior Debt may,
from  time to  time,  in  whole  or in part,  be  renewed,  extended,  modified,
accelerated,  compromised,  waived,  surrendered  or released by the Bank or the
amount thereof  increased or decreased.  The  instruments  evidencing the Senior
Debt or any loan agreements, collateral, security documents, guaranties or other
documents  in  connection  therewith  may be  amended,  modified,  supplemented,
terminated or replaced,  in whole or in part as the Bank may deem advisable from
time to time; provided,  however, that notwithstanding the foregoing, Bank shall
not  without  the prior  written  consent of Junior  Creditor  amend,  modify or
supplement  the  following   terms  of  and  provisions  of  such  documents  or
instruments  if the effect is to: (a) increase  the interest  rate on the Senior
Debt  above  the  rates in  effect  on the date of this  Agreement  (except  for
increases  due to changes in the Bank's prime rate),  (b)  accelerate  the dates
upon which  payments of  principal or interest are due on the Senior Debt (other
than an  acceleration on account of an event of default under the Loan Documents
evidencing,  governing or securing the Senior Debt) or (c) change,  amend or add
any financial covenant in a manner to be more restrictive to Borrower.

     9.  Representations  and  Warranties  of the  Junior  Creditor.  The Junior
Creditor hereby  represents,  warrants and covenants to the Bank that (a) he has
not  heretofore  assigned,  transferred  or created a security  interest  in, or
otherwise  encumbered the Junior Debt (b) the Junior Debt is not  represented by
any  instrument or document  other than the  Subordinated  Note and the security
agreement  from the  Borrower  in  favor of the  Junior  Creditor  of even  date
herewith,  as approved by the Bank, (c) the Junior  Creditor is not insolvent as
of the date hereof,  (d) the documents  evidencing and governing the Junior Debt
may be  amended  or  modified  without  the prior  written  consent of the Bank;
provider, however, that notwithstanding the foregoing, Junior Creditor shall not
without the prior written  consent of the Bank amend,  modify or supplement  the
following terms of and provisions of such documents or instruments if the effect
is to: (i) increase the interest  rate on the Junior Debt above the  non-default
rate in effect on the date of this  Agreement,  (ii)  accelerate  the dates upon
which  payments of  principal or interest are due on the Junior Debt (other than
an  acceleration  on  account of an event of  default  under the Loan  Documents
evidencing, governing or securing the Junior Debt) or (iii) change, amend or add
any financial  covenant in a manner to be more restrictive to Borrower;  (e) any
Junior Debt now or hereafter  existing will not be represented by any instrument
or document  other than those that have been  delivered to the Bank or marked to
indicate that they are subject to this Subordination  Agreement,  (f) the Junior
Creditor  has been made aware the Senior  Debt may be, in part,  of a  revolving
nature and that the amount  thereof which may be outstanding at any time or from
time to time may be increased or reduced and subsequently reborrowed, subject to
the maximum amount of Senior Debt entitled to the benefit of this  Subordination
Agreement,  and (g) the Junior Creditor will not further  subordinate any of the
Junior Debt without the prior written consent of the Bank.

     10.  Termination.  Upon (a) the full, final and irrevocable  payment of all
Senior Debt and (b) the  termination of all  agreements  under which the Bank is
obligated  to  extend   credit,   make  advances,   loans  or  other   financial
accommodations  to the Borrower,  the Junior Creditor,  by written notice to the
Bank,  may  terminate  this  Subordination   Agreement.  In  the  event  of  any
termination  of  this   Subordination   Agreement  by  operation  of  law,  this
Subordination Agreement shall continue in full force and effect as to all Junior
Debt and all Senior Debt outstanding at the date of such termination, until such
Senior Debt has been fully, finally and irrevocably paid and discharged.

     11. Payments Notwithstanding.  No payment or distribution of any character,
whether  in cash,  securities  or other  property  (except  securities  that are
subordinate  and  junior in right of payment  to the  payment of Senior  Debt at
least to the extent  provided in Us Agreement),  to which Junior  Creditor would
have been entitled  except for the  provisions of this  Agreement and that shall
have been made to or for the account of Bank shall, as between  Borrower and its
creditors  (other  than  Bank),  be deemed to be a payment  or  distribution  by
Borrower to or for the  account of Bank,  and from and after the payment in full
in cash of all Senior Debt and  termination  of all  commitments of the Borrower
under the Credit Agreement, Junior Creditor shall be subrogated to all rights of
Bank to receive any further  payments or  distribution  applicable to the Senior
Debt until the  principal  of and  interest  on the Junior Debt shall be paid in
full and no such  payment  or  distribution  made  pursuant  to such  rights  of
subrogation to Junior Creditor that otherwise would be payable or  distributable
to or for the  account of Bank  shall,  as between  Borrower  and its  creditors
(other  than  Junior  Creditor),  be deemed to be a payment or  distribution  by
Borrower to Junior Creditor or on account of the Junior Debt.

     12. No Prejudice or Impairment. The provisions of this Agreement are solely
for the purposes of defining the  relative  rights of Bank,  on the one hand and
Junior Creditor, on the other hand. Bank shall not be prejudiced in the right to
enforce  subordination  of the  Junior  Debt  by any  act or  failure  to act by
Borrower or anyone in custody of its assets or  property.  Nothing  herein shall
impair,  as between  Borrower and Junior  Creditor,  the obligation of Borrower,
which is unconditional and absolute,  to pay to Junior Creditor the principal of
and  interest  on the  Junior  Debt as and  when the same  shall  become  due in
accordance  with their terms,  nor shall anything herein prevent Junior Creditor
from exercising all remedies otherwise  permitted by applicable law upon default
under the Loan  Documents  evidencing,  governing  or securing  the Junior Debt,
subject,  however, to the provisions of this Agreement and the rights of Bank to
the extent  provided  herein.  Junior  Creditor shall not at any time be charged
with  knowledge of the existence of any facts which would prohibit the making of
any  payment to Junior  Creditor  or the taking of any other  action  under this
Agreement  unless and until Junior  Creditor shall have received  written notice
from Bank and, prior to the receipt of any such notice, Junior Creditor shall be
entitled to assume conclusively that no such facts exist.

     13. Default. In the event of a breach by the Borrower of this Subordination
Agreement,  each of the Bank and Junior  Creditor may declare the Senior Debt or
Junior Debt,  respectively,  to be  immediately  due and payable,  however,  all
provisions of this  Subordination  Agreement with respect to rights and remedies
shall continue to apply,

     14.  Notices.  All  notices,  requests,  demands  or  other  communications
required or permitted under this  Subordination  Agreement or by law shall be in
writing and shall be deemed to have been duly given, made and received only when
delivered against receipt or when deposited in a receptacle of the United States
mail,  certified or  registered,  postage  prepaid,  return  receipt  requested,
addressed, appropriately, as follows:

         If to the Bank:                   Bank One, Indiana, N.A.
                                           Bank One Center Tower, 4th Floor
                                           111 Monument Circle, IN1-0046
                                           Indianapolis, Indiana 46277
                                           Attention: David R. Owen
                                           Facsimile: (317) 592-5269

          If to the Junior                  Markpoint Equity Growth Fund, J.V.
          Creditor:                         15770 Dallas Parkway, Suite 800
                                            Dallas, Texas 75248
                                            Attn: Tex Sekhon
                                            Facsimile: (972) 490-1980

          With a copy (which shall
          not constitute notice)            Patton Boggs LLP
                                            2001 Ross Avenue, Suite 3000
                                            Dallas, Texas 75201
                                            Attn: Larry A. Makel, Esq.
                                            Facsimile: (214) 758-1550

Any party may change its address for notice by giving notice in conformity  with
the requirements of this Section.

     15. Non-Waiver.  No delay on the part of the Bank or the Junior Creditor in
exercising any right  hereunder or in failing to exercise the same shall operate
as a waiver of such  right,  and no notice to or demand on the  Borrower  or the
Junior  Creditor,  to the  extent  applicable,  shall be  deemed a waiver of any
obligation  or duty of the Borrower or such Junior  Creditor of the right of the
Bank or Junior  Creditor to take further  action  without  notice or demand.  No
modification,   alteration   or  waiver  of  any  of  the   provisions  of  this
Subordination  Agreement  shall be affected  unless in writing and signed by the
Bank and Junior Creditor

     16.  Subrogation.  Once  the  Senior  Debt  has  been  fully,  finally  and
irrevocably paid and discharged,  the Junior Creditor shall be subrogated to all
rights of the Bank to receive  payments or  distributions  of cash,  property or
securities  payable or  distributable  on account of the Senior Debt and no such
payment or distribution  made pursuant to such rights of subordination to Junior
Creditor that otherwise would be payable or  distributable to or for the account
of the Bank shall,  as between  Borrower  and its  creditors  (other than Junior
Creditor)  be deemed to be a  payment  or  distribution  by  Borrower  to Junior
Creditor or on account of Junior Debt.

     17.  Assignment.  If the Junior Creditor  desires to assign or transfer any
document  or  instrument  evidencing  or securing  Junior  Debt or any  benefits
thereof to any other person,  the Junior  Creditor shall notify the Bank thereof
and shall advise such person of this Subordination Agreement. On or prior to the
date of such assignment,  and as a condition thereof,  the Junior Creditor shall
obtain an undertaking  from such person to be bound hereby in form and substance
satisfactory to the Bank. If Borrower is in the process of refinancing a portion
of the Senior Debt or Junior Debt with a new lender (such  refinancing  to be in
accordance  with the provisions of the Loan Documents  evidencing,  governing or
securing the Senior Debt),  and if the party who wishes to be refinanced makes a
request of the other parties  hereto,  Junior  Creditor or Bank, as the case may
be, may agree to enter into a new,  substitute  agreement  with the new  lender;
provided,  however,  that any such new, substitute agreement shall be in a form,
and contain such terms and  conditions,  as may be acceptable to the party whose
financial  accommodations  to Borrower  are not being  refinanced;  and provided
further,  however,  that  in no  circumstances  shall  the  party  hereto  whose
financial  accommodations  to Borrower are not being  refinanced be obligated to
enter into such an  agreement  if the  substitute  agreement  deprives it of any
material right, privilege or benefit accorded to it hereunder.

     18. Application of Proceeds.  Except as set forth in Section 2 hereof, Bank
and  Junior  Creditor  agree to apply  the  proceeds  of the  Collateral  in the
following order irrespective of the application of any rule of law or the defect
or impairment of any Loan Document evidencing,  governing or securing the Senior
Debt,  any Loan  Document  evidencing,  governing or securing the Junior Debt or
security interest, lien or assignment thereunder:

     first, to the payment of all costs and expenses of Bank (including, without
          limitation,  the  reasonable  fees and  expenses of legal  counsel and
          other  agents)  incurred in  connection  with the  collection  of such
          Proceeds  or the  protection  of the  rights  and  interests  of  Bank
          therein;

     second, to the  payment  in full of all Senior  Debt,  in such order as the
          Bank shall determine in it sole discretion;

     third, to  the  payment  of all  costs  and  expenses  of  Junior  Creditor
          (including,  without  limitation,  the reasonable fees and expenses of
          legal  counsel  and other  agents)  incurred  in  connection  with the
          collection  of such  Proceeds  or the  protection  of the  rights  and
          interests of Junior Creditor therein;

     fourth, to the  payment in full of all Junior  Debt in such order as Junior
          Creditor shall determine
                      in its sole discretion; and

     finally, to pay any surplus then remaining to the owner of such  Collateral
          or its  successors or assigns or as a court of competent  jurisdiction
          may direct.

     19.  Governing  Law. The validity,  construction  and  enforcement  of this
Subordination  Agreement  shall be governed by the internal laws of the State of
Indiana,  notwithstanding  the fact that  Indiana  conflict  of law rules  might
otherwise require the substantive rules of law of another jurisdiction to apply.
The Junior Creditor  consents to the  jurisdiction of any state or federal court
located  within Marion  County,  Indiana.  All service of process may be made by
messenger,  certified  mail,  return  receipt  requested or by  registered  mail
directed to the Junior  Creditor at the address  indicated in Section 14 hereof,
and the Junior Creditor otherwise waives personal service of any and all process
made upon the Junior  Creditor.  The Junior  Creditor waives any objection which
the Junior  Creditor may have to any proceeding  commenced in a federal or state
court located within Marion County,  Indiana, based upon improper venue or forum
non conveniens.  Nothing contained in this Section shall affect the right of the
Bank to serve legal process in any other manner permitted by law or to bring any
action or proceeding  against the Junior  Creditor or its property in the courts
of any other jurisdiction.

     20. Successors and Assigns. This Subordination Agreement shall inure to the
benefit of the Bank, its  successors and assigns,  and shall be binding upon the
Junior  Creditor and its successors  and assigns.  Any reference to the Borrower
herein  shall  be  deemed  to refer  to  Champion  Trailer  Company,  L.P.,  its
successors and assigns,  including any receiver, trustee or debtor-in-possession
of or for the Borrower.

     21.  Severability.  The  provisions  of this  Subordination  Agreement  are
independent  and separable from one another.  If any provision  hereof shall for
any reason be held  invalid or  unenforceable,  it is the intent of the  parties
that such  invalidity  or  unenforceability  shall not  affect the  validity  or
enforceability of other provisions hereof and that this Subordination  Agreement
shall be construed as if such invalid or unenforceable  provision had never been
contained herein.

     22.  Additional  Documentation.  The Junior  Creditor agrees to execute and
deliver to the Bank such further instruments and take such further action as the
Bank may at any time,  and from  time to time,  reasonably  request  in order to
carry out the provisions and intent of this Subordination Agreement.

     23.  Limited  Duty.  The  rights  granted  to each of the Bank  and  Junior
Creditor  in this  Subordination  Agreement  are solely for its  protection  and
nothing  herein  contained  imposes on each of the Bank or Junior  Creditor  any
duties  with  respect to any  property  either of the  Borrower or of the Junior
Creditor,  as  applicable,  received  by the Bank  beyond  the duty to  exercise
reasonable  care in the custody and  preservation  of such property while in the
its  possession.  Neither  the  Bank  nor the  Junior  Creditor  has any duty to
preserve  rights  against  prior  parties on any  instrument  or  chattel  paper
received from the Borrower or the Junior Creditor, as applicable,  as collateral
security for the Senior Debt, the Junior Debt or any portion thereof.

     24.  Counterparts.  This  Subordination  Agreement  may be  executed in any
number  of  counterparts  and  by  the  different  parties  hereto  on  separate
counterparts  each of which,  when so executed  and  delivered  by the  parties,
constituting an original but all such counterparts together constituting but one
and the same instrument.

     25. Entire Agreement.  This Subordination  Agreement constitutes the entire
understanding  between the parties  hereto  with  respect to the subject  matter
hereof   and   supersedes   all  prior  and   contemporaneous   agreements   and
understandings,  inducements or conditions,  whether express or implied, oral or
written.

     26.  Reinstatement  of  Obligations  and  Security.  To the extent that the
Borrower or any  obligor  makes a payment to the Bank or the Bank  receives  any
payment(s)  or  proceeds  of the  collateral  securing  the Senior  Debt for the
Borrower's  benefit,  which  payment(s)  or  proceeds  or any part  thereof  are
subsequently invalidated,  declared to be fraudulent or preferential,  set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable doctrine, then, to
the extent of such payment(s) or proceeds received and not retained by the Bank,
the Junior  Creditor's  obligations  intended to be  satisfied  thereby and this
Subordination  Agreement  shall be  reinstated  and  continue  in full force and
effect until full and final payment shall have been made to the Bank. The Junior
Creditor agrees to hold in trust for the Bank and promptly remit to the Bank any
payments  received by the Junior Creditor after such  invalidated,  rescinded or
returned  payment(s)  were originally made until the Senior Debt is satisfied in
full.

     27. No Marshalling. The Junior Creditor, on its own behalf and on behalf of
its  successors  and assigns  hereby  expressly  waives all  rights,  if any, to
require a  marshalling  of the assets of the Borrower or any obligor by the Bank
or to  require  that  the  Bank  first  resort  to  some or any  portion  of the
collateral before foreclosing upon, selling or otherwise  realizing on any other
portion thereof.

     28.  Waiver  of Jury  Trial.  THE  BANK  AND  THE  JUNIOR  CREDITOR,  AFTER
CONSULTING OR HAVING HAD THE  OPPORTUNITY  TO CONSULT WITH  COUNSEL,  KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS SUBORDINATION AGREEMENT
OR ANY OF THE TRANSACTIONS  CONTEMPLATED BY THIS SUBORDINATION  AGREEMENT OR ANY
COURSE OF CONDUCT, DEALING,  STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF
ANY OF TEEM. NEITHER THE BANK NOR THE JUNIOR CREDITOR SHALL SEEK TO CONSOLIDATE,
BY COUNTERCLAIM  OR OTHERWISE,  ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED
WITH ANY OTHER  ACTION IN WHICH A JURY TRIAL  CANNOT BE OR HAS NOT BEEN  WAIVED.
THIS  WAIVER  SHALL  NOT BE  DEEMED  TO HAVE BEEN  MODIFIED  IN ANY  RESPECT  OR
RELINQUISHED  BY OF THE  BANK  NOR  THE  JUNIOR  CREDITOR  EXCEPT  BY A  WRITTEN
INSTRUMENT EXECUTED BY BOTH OF THEM.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]


<PAGE>


     IN WITNESS WHEREOF,  the undersigned have executed or caused to be executed
this Subordination Agreement as of the date first above written.

                                 "JUNIOR CREDITOR"

                                 MARKPOINT EQUITY GROWTH FUND, J.V.

                                 By:      The Markpoint Company,
                                          its Managing Venturer


                                 By:_________________________________
                                        Tex Sekhon
                                        President

ACCEPTED:
                                 "BANK"

                                 BANK ONE, INDIANA, N.A.


                                 By:_______________________________________
                                        David R. Owen
                                        Vice-President























<PAGE>


THE RIGHTS AND REMEDIES OF MARKPOINT  EQUITY  GROWTH FUND,  J.V.  HEREUNDER  ARE
SUBJECT TO A SUBORDINATION AGREEMENT AMONG MARKPOINT EQUITY GROWTH FUND, J.V.AND
BANK ONE INDIANA, N.A. DATED AS OF EVEN DATE HEREWITH.

                               SECURITY AGREEMENT

THIS SECURITY  AGREEMENT  ("Agreement") is made as of the 2 day of May, 2000, by
CHAMPION  TRAILER COMPANY,  L.P.  (hereinafter  called "Debtor",  whether one or
more),  in favor of MARKPOINT  EQUITY  GROWTH FUND,  J.V., a Texas joint venture
authorized to do business in Texas ("Secured Party").  Debtor hereby agrees with
Secured Party as follows:

1.   Definitions.  As used in this Agreement, the following terms shall have the
     meanings indicated below:

     (a)  "Code"  shall  mean the  Uniform  Commercial  Code as in effect in the
          State of Texas, as it may hereafter be amended from time to time.

     (b)  "Collateral" shall mean all of the property set forth below:

          Accounts.  All present and future accounts,  contract rights,  chattel
          paper,   documents,   instruments,   deposit   accounts   and  general
          intangibles  now or  hereafter  owned by  Debtor,  all money and other
          funds of Debtor which may now or hereafter  come into the  possession,
          custody or control of Secured Party, all books of account and customer
          lists, and in any case where an account arises from the sale of goods,
          the interest of Debtor in such goods.

          Inventory.  All present and hereafter  acquired  inventory  (including
          without  limitation,  all raw materials,  work in process and finished
          goods) owned by Debtor wherever located.

          Equipment.  All  equipment of  whatsoever  kind and  character  now or
          hereafter  owned  by  Borrower  (including,  without  limitation,  the
          equipment described on Exhibit "A" attached hereto), together with all
          replacements,  accessories, additions, substitutions and accessions to
          all of the foregoing.

          Other.  All goods and  investment  property now or hereafter  owned by
          Borrower, including all proceeds therefrom.

          The term  Collateral,  as used  herein,  shall  also  include  (i) all
          records  relating  in any  way to the  foregoing  (including,  without
          limitation, any computer software, whether on tape, disk, card, strip,
          cartridge  or any other  form),  and (ii) all PRODUCTS and PROCEEDS of
          all of the foregoing (including without limitation,  insurance payable
          by  reason  of  loss  or  damage  to  the  foregoing  property).   The
          designation of proceeds does not authorize Debtor to sell, transfer or
          otherwise  convey any of the foregoing  property except finished goods
          intended  for sale in the ordinary  course of Debtor's  business or as
          otherwise provided herein.

     (c)  "Financing   Documents"  shall  mean  all  instruments  and  documents
          evidencing, securing, governing, guaranteeing and/or pertaining to the
          Indebtedness,   including,   without  limitation,  the  Parent  Pledge
          Agreement  of even  date  herewith  among  Secured  Party  and  Durham
          Whitesell & Associates,  the Note, the Note Purchase Agreement of even
          date herewith  among  Borrower and Secured Party and the Holder Pledge
          Agreement of even date herewith  among the Secured  Party,  Timothy S.
          Durham, Marcus Kennedy and Terry G. Whitesell.

     (d)  "Indebtedness"   shall   mean  (i)   indebtedness,   obligations   and
          liabilities  owing by Debtor to Secured  Party  under the Note and all
          other  indebtedness,  obligations and liabilities of Debtor to Secured
          Party of any kind or  character,  now existing or  hereafter  arising,
          whether  direct,  indirect,  related,  unrelated,  fixed,  contingent,
          liquidated,  unliquidated,  joint,  several or joint and several,  and
          regardless of whether such  indebtedness,  obligations and liabilities
          may,  prior to their  acquisition  by Secured  Party,  be or have been
          payable to or in favor of a third party and  subsequently  acquired by
          Secured Party (it being  contemplated that Secured Party may make such
          acquisitions  from third parties),  including  without  limitation all
          indebtedness,  obligations  and liabilities of Debtor to Secured Party
          now  existing  or  hereafter  arising  by  note,  draft,   acceptance,
          guaranty,  endorsement,   letter  of  credit,  assignment,   purchase,
          overdraft,  discount,  indemnity  agreement  or  otherwise,  (ii)  all
          obligations of Debtor to Secured Party under any documents evidencing.
          securing,  governing  and/or  pertaining  to all or  any  part  of the
          indebtedness,  obligations  and  liabilities  described  in (i) above,
          (iii) all costs and expenses  incurred by Secured  Party in connection
          with  the  collection  and  administration  of all or any  part of the
          indebtedness,  obligations and  liabilities  described in (i) and (ii)
          above or the protection or preservation  of. or realization  upon, the
          collateral securing all or any part of such indebtedness,  obligations
          and   liabilities,   including   without   limitation  all  reasonable
          attorneys' fees, and (iv) all renewals, extensions,  modifications and
          rearrangements  of  the  indebtedness,   obligations  and  liabilities
          described in (i), (ii) and (iii) above.

     (e)  "Note"  means  that  certain  promissory  note of even  date  herewith
          payable  by  Debtor  to the  order  of  Secured  Party  in the  stated
          principal amount of $1,250,000, as may be renewed,  extended,  amended
          and modified.

All words and phrases used herein which are  expressly  defined in Section 1.201
or Chapter 9 of the Code shall have the  meaning  provided  for  therein.  Other
words and phrases defined elsewhere in the Code shall have the meaning specified
therein except to the extent such meaning is  inconsistent  with a definition in
Section 1.201 or Chapter 9 of the Code.

2.   Security  Interest.  As security for the  Indebtedness,  Debtor,  for value
     received,  hereby grants to Secured Party a continuing security interest in
     the Collateral.

3.   Representations  and Warranties.  Debtor hereby represents and warrants the
     following to Secured Party:

     (a)  Due  Authorization  . The execution,  delivery and performance of this
          Agreement and all of the other Financing  Documents executed by Debtor
          have been duly authorized by all necessary partnership action.

     (b)  Enforceability  . This  Agreement  and the other  Financing  Documents
          executed by Debtor constitute legal, valid and binding  obligations of
          Debtor,  enforceable in accordance with their respective terms, except
          as  limited  by  bankruptcy,  insolvency  or  similar  laws of general
          application  relating  to the  enforcement  of  creditors'  rights and
          except to the extent  specific  remedies  may  generally be limited by
          equitable principles.

     (c)  Ownership  and  Liens.  Debtor  has good and  marketable  title to the
          Collateral   free  and  clear  of  all  liens,   security   interests,
          encumbrances or adverse claims,  (other than those in favor of Secured
          Party  or  otherwise   expressly  permitted  in  the  other  Financing
          Documents or the Senior Subordination Agreement). No dispute, right of
          setoff, counterclaim or defense exists with respect to all or any part
          of  the  Collateral.  Debtor  has  not  executed  any  other  security
          agreement   currently   affecting  the  Collateral  and  no  effective
          financing statement or other instrument similar in effect covering all
          or any  part of the  Collateral  is on file  in any  recording  office
          except as may have been executed or filed in favor of Secured Party or
          as expressly permitted in the other Financing Documents.

     (d)  No Conflicts or Consents.  Neither the ownership,  the intended use of
          the Collateral by Debtor, the grant of the security interest by Debtor
          to Secured  Party  herein  nor the  exercise  by Secured  Party of its
          rights or remedies hereunder,  will (i) conflict with any provision of
          (A) any domestic or foreign law, statute, rule or regulation,  (B) the
          articles  or  certificate  of   incorporation,   charter,   bylaws  or
          partnership  agreement,  as the case  may be,  of  Debtor,  or (C) any
          agreement, judgment, license, order or permit applicable to or binding
          upon  Debtor,  or (ii) result in or require the  creation of any lien,
          charge or  encumbrance  upon any assets or  properties of Debtor or of
          any person  except as may be expressly  contemplated  in the Financing
          Documents.   Except  as  expressly   contemplated   in  the  Financing
          Documents,  no consent,  approval,  authorization  or order of, and no
          notice to or filing with,  any court  governmental  authority or third
          party is  required  in  connection  with the  grant by  Debtor  of the
          security  interest  herein or the  exercise  by  Secured  Party of its
          rights and remedies hereunder.

     (e)  Security  Interest.  Debtor has and will have at all times full right,
          power and authority to grant a security  interest in the Collateral to
          Secured  Party in the manner  provided  herein,  free and clear of any
          lien,  security  interest or other charge or  encumbrance  (other than
          those  in  favor  of  Secured  Party  or  otherwise  disclosed  to and
          consented  by Secured  Party in  writing).  This  Agreement  creates a
          legal,  valid and binding security  interest in favor of Secured Party
          in the  Collateral  securing the  Indebtedness.  Possession by Secured
          Party  of  all  instruments,   chattel  paper  and  cash  constituting
          Collateral  from  time to time  and/or  the  filing  of the  financing
          statements  delivered  prior hereto  and/or  concurrently  herewith by
          Debtor to Secured Party will perfect and establish the first  priority
          of Secured Party's security interest hereunder in the Collateral.

     (f)  Location.  Debtor's  residence or chief executive  office, as the case
          may be, and the office where the records concerning the Collateral are
          kept is located at its address set forth on the signature page hereof.
          Except as specified  elsewhere herein, all Collateral shall be kept at
          such address and such other addresses as may be listed in Schedule "A"
          attached hereto and made a part hereof

     (g)  Solvency of Debtor. As of the date hereof.  and after giving effect to
          this   Agreement  and  the   completion  of  all  other   transactions
          contemplated by Debtor at the time of the execution of this Agreement,
          (i) Debtor is and will be  solvent,  (ii) the fair  saleable  value of
          Debtor's   assets  exceeds  and  will  continue  to  exceed   Debtor's
          liabilities  (both fixed and  contingent),  (iii) Debtor is paying and
          will continue to be able to pay its debts as they mature.  and (iv) if
          Debtor  is not an  individual,  Debtor  has and will  have  sufficient
          capital to carry on Debtor's  businesses  and all  businesses in which
          Debtor is about to engage.

     (h)  Compliance with Environmental  Laws. Except as disclosed in writing to
          Secured Party,  Debtor is conducting  Debtor's  businesses in material
          compliance  with  all  applicable  federal,   state  and  local  laws,
          statutes,  ordinances, rules, regulations,  orders, determinations and
          court decisions,  including  without  limitation,  those pertaining to
          health or environmental matters.

     (i)  Inventory.  The security  interest in the inventory  granted hereunder
          shall continue  through all stages of manufacture  and shall,  without
          further  action,  attach to the accounts or other  proceeds  resulting
          from the  sales  lease or other  disposition  thereof  and to all such
          inventory as may be returned to Debtor by its account debtors.

     (h)  Accounts.  Each account  pledged  hereunder  represents  the valid and
          legally  binding  indebtedness  of a bona fide account  debtor arising
          from the sale or lease by Debtor of goods or the  rendition  by Debtor
          of services and is not subject to contra accounts,  setoffs,  defenses
          or counterclaims  by or available to account debtors  obligated on the
          accounts  except as disclosed by Debtor to Secured  Party from time to
          time in writing. The amount shown as to each account on Debtor's books
          is the true and undisputed  amount owing and unpaid  thereon,  subject
          only to discounts,  allowances,  rebates,  credits and  adjustments to
          which the account  debtor has a right and which have been disclosed to
          Secured Party in writing.

     (k)  Chattel Paper, Documents and Instruments. The chattel paper, documents
          and  instruments  of Debtor  pledged  hereunder have only one original
          counterpart  and no party  other than  Debtor or  Secured  Party is in
          actual or constructive possession of any such chattel paper, documents
          or instruments.

4.   Affirmative  Covenants.  Debtor will comply with the covenants contained in
     this  Section  at all times  during the  period of time this  Agreement  is
     effective unless Secured Party shall otherwise consent in writing.

     (a)  Ownership and Liens. Debtor will maintain good and marketable title to
          all  Collateral  free and  clear  of all  liens,  security  interests,
          encumbrances or adverse claims, except those in favor of Secured Party
          and the security interests and other encumbrances  expressly permitted
          by the other Financing Documents or the Senior Subordination Agreement
          of even date herewith  between  Secured  Party and Bank One,  Indiana.
          N.A. Debtor will not permit any dispute, right of setoff, counterclaim
          or defense to exist with respect to all or any part of the Collateral.
          Debtor will cause any financing statement or other security instrument
          with respect to the  Collateral to be  terminated,  except those liens
          expressly  permitted in the other  Financing  Documents or as may have
          been  filed in favor of  Secured  Party.  Debtor  will  defend  at its
          expense Secured Party's right,  title and security  interest in and to
          the Collateral against the claims of any third party.

     (b)  Further  Assurances.  Debtor  will  from  time to time at its  expense
          promptly execute and deliver all further instruments and documents and
          take all further action necessary or appropriate or that Secured Party
          may request in order (i) to perfect and protect the security  interest
          created or  purported to be created  hereby and the first  priority of
          such security  interest,  (ii) to enable Secured Party to exercise and
          enforce  its  rights  and   remedies   hereunder  in  respect  of  the
          Collateral,  and  (iii)  to  otherwise  effect  the  purposes  of this
          Agreement, including without limitation: (A) executing and filing such
          financing or continuation  statements,  or amendments thereto; and (B)
          furnishing to Secured Party from time to time statements and schedules
          further  identifying  and  describing  the  Collateral  and such other
          reports in connection  with the Collateral,  all in reasonable  detail
          satisfactory to Secured Party.

     (c)  Inspection of Collateral. Debtor will keep adequate records concerning
          the Collateral  and will permit Secured Party and all  representatives
          and agents appointed by Secured Party to inspect any of the Collateral
          and the books and records of or relating to the Collateral at any time
          during  normal  business  hours,  to make and take  away  photocopies,
          photographs  and  printouts  thereof  and to write down and record any
          such information.

     (d)  Payment of Taxes.  Debtor (i) will timely pay all  property  and other
          taxes, assessments and governmental charges or levies imposed upon the
          Collateral or any part thereof, (ii) will timely pay all lawful claims
          which, if unpaid, might become a lien or charge upon the Collateral or
          any part  thereof,  and (iii) will maintain  appropriate  accruals and
          reserves for all such  liabilities  in a timely  fashion in accordance
          with generally accepted  accounting  principles.  Debtor may, however,
          delay  paying or  discharging  any such taxes,  assessments,  charges,
          claims or liabilities so long as the validity  thereof is contested in
          good faith by proper  proceedings and provided Debtor has set aside on
          Debtor's books adequate reserves therefor;  provided,  however, Debtor
          understands  and agrees that in the event of any such delay in payment
          or discharge and upon Secured  Party's  written  request,  Debtor will
          establish  with Secured  Party an escrow  acceptable  to Secured Party
          adequate  to  cover  the  payment  of  such  taxes,   assessments  and
          governmental  charges  with  interest,   costs  and  penalties  and  a
          reasonable  additional  sum to  cover  possible  costs,  interest  and
          penalties  (which  escrow  shall be returned to Debtor upon payment of
          such taxes, assessments,  governmental charges,  interests,  costs and
          penalties  or  disbursed  in  accordance  with the  resolution  of the
          contest to the  claimant) or furnish  Secured  Party with an indemnity
          bond  secured by a deposit  in cash or other  security  acceptable  to
          Secured Party.  Notwithstanding  any other provision contained in this
          Subsection,  Secured Party may at its  discretion  exercise its rights
          under  Subsection  6(c) at any  time to pay such  taxes,  assessments,
          governmental charges, interest, costs and penalties.

     (e)  Mortgagee's and Landlord's Waivers.  Debtor shall cause each mortgagee
          of real  property  owned by Debtor and each  landlord of real property
          leased by Debtor to execute and  deliver  agreements  satisfactory  in
          form  and  substance  to  Secured  Party by which  such  mortgagee  or
          landlord  waives  or  subordinates  any  rights  it  may  have  in the
          Collateral.

     (f)  Accounts and General Intangible. Debtor will duly perform and cause to
          be  performed  all of its  obligations  with  respect  to the goods or
          services,  the sale or lease or  rendition  of which gave rise or will
          give rise to each account pledged hereunder and all of its obligations
          to be  performed  under or with  respect  to the  general  intangibles
          pledged hereunder. Debtor also covenants and agrees to take any action
          and/or  execute any documents  that Secured Party may request in order
          to comply with the Federal Assignment of Claims Act, as amended.

     (g)  Chattel Paper. Documents and Instruments .Debtor will take such action
          as may be requested by Secured Party in order to cause any  Collateral
          which constitute  chattel paper,  documents or instruments to be valid
          and  enforceable  and will  cause all  chattel  paper to have only one
          original  counterpart.  Upon  request by Secured  Party,  Debtor  will
          deliver to Secured Party all originals of chattel paper,  documents or
          instruments  or will mark all originals of chattel paper with a legend
          indicating that such chattel paper is subject to the security interest
          granted hereunder.

     (h)  Condition of Goods. Debtor will maintain,  preserve,  protect and keep
          all Collateral which constitutes  goods in good condition,  repair and
          working  order and will cause such  Collateral to be used and operated
          in good and workmanlike manner, in accordance with applicable laws and
          in a manner which will not make void or cancelable  any insurance with
          respect to such  Collateral.  Debtor will promptly make or cause to be
          made  all  repairs,  replacements  and  other  improvements  to  or in
          connection  with the  Collateral  which Secured Party may request from
          time to time.

     (i)  Insurance.  Debtor will, at its own expense,  maintain  insurance with
          respect to all  Collateral  which  constitutes  goods in such amounts,
          against such risks,  in such form and with such insurers,  as shall be
          satisfactory  to Secured  Party  from time to time.  If  requested  by
          Secured Party, each policy for property damage insurance shall provide
          for all losses to be paid directly to Secured  Party.  If requested by
          Secured Party, each policy of insurance maintained by Debtor shall (i)
          name Debtor and Secured Party as insured parties  thereunder  (without
          any representation or warranty by or obligation upon Secured Party) as
          their interests may appear,  (ii) contain the agreement by the insurer
          that  any  loss   thereunder   shall  be  payable  to  Secured   Party
          notwithstanding  any action,  inaction or breach of  representation or
          warranty  by Debtor,  (iii)  provide  that there  shall be no recourse
          against  Secured  Party for payment of premiums or other  amounts with
          respect  thereto,  and (iv)  provide that at least ten (10) days prior
          written notice of  cancellation  or of lapse shall be given to Secured
          Party by the  insurer.  Debtor will,  if  requested by Secured  Party,
          deliver  to Secured  Party  original  or  duplicate  policies  of such
          insurance  and,  as often as Secured  Party may  reasonably  request a
          report of a reputable insurance broker with respect to such insurance.
          Debtor will also,  at the request of Secured  Party,  duly execute and
          deliver instruments of assignment of such insurance policies and cause
          the respective insurers to acknowledge notice of such assignment.  All
          insurance  payments in respect of loss of or damage to any  Collateral
          shall be paid to Secured  Party and  applied  as Secured  Party in its
          sole discretion deems appropriate.

5.   Negative Covenants. Debtor will comply with the covenants contained in this
     Section at all times during the period of time this Agreement is effective,
     unless Secured Party shall otherwise consent in writing.

     (a)  Transfer  or  Encumbrance.  Debtor  will  not  (i)  sell,  assign  (by
          operation of law or otherwise), transfer, exchange, lease or otherwise
          dispose  of any of the  Collateral,  (ii)  grant  a lien  or  security
          interest  in or execute,  file or record any  financing  statement  or
          other security  instrument with respect to the Collateral to any party
          other than Secured  Party  except as permitted in the other  Financing
          Documents,  or (iii) deliver actual or constructive  possession of any
          of the  Collateral to any party other than Secured  Party,  except for
          (A) sales and leases of inventory in the ordinary  course of business,
          and (B) the sale or other  disposal of any item of equipment  which is
          worn out or obsolete  and which has been  replaced by an item of equal
          suitability  and  value,  owned  by  Debtor  and made  subject  to the
          security  interest under this  Agreement,  but which is otherwise free
          and clear of any  lien,  security  interest,  encumbrance  or  adverse
          claim; provided,  however, the exceptions permitted in clauses (A) and
          (B) above shall  automatically  terminate  upon the  occurrence  of an
          Event of Default.

     (b)  Impairment of Security Interest.  Debtor will not take or fail to take
          any  action   which   would  in  any   manner   impair  the  value  or
          enforceability of Secured Party's security interest in any Collateral.

     (c)  Possession of Collateral.  Debtor will not cause or permit the removal
          of any Collateral from its  possession,  control and risk of loss, nor
          will  Debtor  cause or permit the removal of any  Collateral  from the
          address on the signature  page hereof and the  addresses  specified on
          Schedule  "A"  to  this  Agreement  other  than  (i) as  permitted  by
          Subsection  5(a),  or (ii) in  connection  with the  possession of any
          Collateral by Secured Party or by its bailee.

     (d)  Goods.  Debtor will not permit any Collateral which  constitutes goods
          to at any time (i) be covered by any document except  documents in the
          possession of the Secured Party,  (ii) become so related to,  attached
          to or used in connection  with any  particular  real property so as to
          become a fixture upon such real property,  or (iii) be installed in or
          affixed  to other  goods so as to become an  accession  to such  other
          goods  unless  such  other  goods are  subject  to a  perfected  first
          priority security interest under this Agreement.

     (e)  Compromise of Collateral.  Debtor will not adjust, settle, compromise,
          amend or modify  any  Collateral,  except an  adjustment,  settlement,
          compromise,  amendment  or  modification  in  good  faith  and  in the
          ordinary course of business:  provided.  however, this exception shall
          automatically  terminate upon the occurrence of an Event of Default or
          upon Secured Party's written request.  Debtor shall provide to Secured
          Party such  information  concerning  (i) any  adjustment,  settlement,
          compromise,  amendment or modification of any Collateral, and (ii) any
          claim   asserted  by  any  account   debtor  for  credit,   allowance,
          adjustment.  dispute,  setoff or  counterclaim,  as Secured  Party may
          request from time to time.

     (f)  Financing   Statement   Filings.   Debtor  recognizes  that  financing
          statements  pertaining  to the  Collateral  have  been or may be filed
          where Debtor maintains any Collateral,  has its records concerning any
          Collateral or has its residence or chief executive office, as the case
          may be. Without  limitation of any other covenant herein,  Debtor will
          not cause or permit any change in the location of (i) any  Collateral,
          (ii) any records concerning any Collateral or (iii) Debtor's residence
          or chief executive office, as the case may be, to a jurisdiction other
          than as  represented  in  Subsection  3(f)  unless  Debtor  shall have
          notified  Secured Party in writing of such change at least thirty (30)
          days prior to the effective date of such change,  and shall have first
          taken all action  required by Secured Party for the purpose of further
          perfecting  or  protecting  the security  interest in favor of Secured
          Party in the Collateral.  In any written notice furnished  pursuant to
          this  Subsection,  Debtor  will  expressly  state  that the  notice is
          required  by this  Agreement  and  contains  facts  that  may  require
          additional  filings of financing  statements  or other notices for the
          purpose of continuing  perfection of Secured Party's security interest
          in the Collateral.

     (g)  Liquidations,  Mergers . Debtor shall not merge or consolidate with or
          into any other  entity  or  liquidate,  dissolve  or  otherwise  cease
          conducting business.

6.   Rights of Secured Party.  Secured Party shall have the rights  contained in
     this  Section  at all times  during the  period of time this  Agreement  is
     effective.

     (a)  Additional  Financing  Statements  Filing.  Debtor  hereby  authorizes
          Secured Party to file,  without the  signature of Debtor,  one or more
          financing or continuation statements, and amendments thereto, relating
          to the Collateral.  Debtor further agrees that a carbon,  photographic
          or other  reproduction  of this  Security  Agreement or any  financing
          statement  describing  any  Collateral  is  sufficient  as a financing
          statement and may be filed in any jurisdiction  Secured Party may deem
          appropriate.

     (b)  Power of Attorney. Debtor hereby irrevocably appoints Secured Party as
          Debtor's  attorney-in-fact,  such power of attorney being coupled with
          an interest,  with full authority in the place and stead of Debtor and
          in the name of  Debtor  or  otherwise,  from  time to time in  Secured
          Party's  discretion,  to take any action and to execute any instrument
          which Secured Party may deem  necessary or  appropriate  to accomplish
          the purposes of this Agreement,  including without limitation,  (i) to
          obtain and adjust any insurance  required by Secured Party  hereunder;
          (ii) to demand, collect, sue for, recover,  compound, receive and give
          acquittance  and receipts for moneys due and to become due under or in
          respect of the Collateral:  (iii) to receive,  endorse and collect any
          drafts or other instruments, documents and chattel paper in connection
          with clause (i) or (ii) above: and (iv) to file any claims or take any
          action or  institute  any  proceedings  which  Secured  Party may deem
          necessary or appropriate for the collection and/or preservation of the
          Collateral  or otherwise  to enforce the rights of Secured  Party with
          respect to the  Collateral;  provided,  however,  that nothing  herein
          shall permit Secured Party to confess any judgment with respect to any
          action which the Company is a plaintiff or defendant.

     (c)  Performance by Secured Party. If Debtor fails to perform any agreement
          or obligation  provided herein,  Secured Party may itself perform,  or
          cause  performance of, such agreement or obligation,  and the expenses
          of Secured Party incurred in connection  therewith  shall be a part of
          the  Indebtedness,  secured by the Collateral and payable by Debtor on
          demand.

     (d)  Debtor's  Receipt of  Proceeds.  All amounts and  proceeds  (including
          instruments  and writings)  received by Debtor in respect of accounts,
          general  intangibles  or chattel  paper shall be received in trust for
          the benefit of Secured  Party  hereunder  and, upon request of Secured
          Party,  shall be segregated from other property of Debtor and shall be
          forthwith  delivered to Secured  Party in the same form as so received
          (with any necessary  endorsement)  and applied to the  Indebtedness in
          such manner as Secured Party deems appropriate in its sole discretion.

     (c)  Notification of Account  Debtors.  Secured Party may at its discretion
          from time to time  notify  any or all  obligors  under  any  accounts,
          general  intangibles or chattel paper (i) of Secured Party's  security
          interest  in such  accounts  or general  intangibles  and direct  such
          obligors to make payment of all amounts due or to become due to Debtor
          thereunder directly to Secured Party, and (ii) to verify the accounts,
          general intangibles or chattel paper with such obligors. Secured Party
          shall have the right, at the expense of Debtor. to enforce  collection
          of any such  accounts,  general  intangibles  or chattel  paper and to
          adjust,  settle or compromise  the amount or payment  thereof,  in the
          same manner and to the same extent as Debtor.

7.   Events of Default.  Each of the following constitutes an "Event of Default"
     under this Agreement:

     (a)  Failure  to Pay  Indebtedness.  Debtor  shall  fail to pay  after  the
          expiration  of five (5)  calendar  days after  Borrower  has  received
          notice (as dictated by the Note Purchase Agreement) from Secured Party
          of a failure by Borrower to pay any Indebtedness as and when due.

     (b)  Non-Performance  of  Covenants.  Debtor  shall  breach any covenant or
          agreement  made herein,  in any of the  Financing  Documents or in any
          other  agreement  now or hereafter  entered  into  between  Debtor and
          Secured Party.

     (c)  False Representation. Any warranty or representation made herein or in
          any of the  Financing  Documents  shall be false or  misleading in any
          material respect when made.

     (d)  Default Under Other Financing Documents. The occurrence of an event of
          default  under any of the Financing  Documents or any other  agreement
          now or hereafter entered into between Debtor and Secured Party.

     (e)  Untrue Financial Report. Any report, certificate,  schedule, financial
          statement,  profit and loss statement or other statement  furnished by
          Debtor,  or by any other person on behalf of Debtor,  to Secured Party
          is not true and correct in any material respect.

     (f)  Default to Third Party.  The occurrence of any event which permits the
          acceleration  of the maturity of any  indebtedness  owing by Debtor to
          any third party under any agreement or undertaking.

     (g)  Bankruptcy.  The  filing  of a  voluntary  or  involuntary  case by or
          against  Debtor  under  the  United  States  Bankruptcy  Code or other
          present or future federal or state  insolvency,  bankruptcy or similar
          laws,  or the  appointment  of a  receiver,  trustee,  conservator  or
          custodian for a substantial portion of Debtor's assets.

     (h)  Insolvency. Debtor shall become insolvent, make a transfer in fraud of
          creditors or make an assignment for the benefit of creditors.

     (i)  Involuntary  Lien. The filing or commencement of any involuntary lien,
          garnishment,  attachment  or the like shall be issued  against or with
          respect to the  Collateral  which the Debtor is not contesting in good
          faith.

     (j)  Material Adverse Change. A material adverse change shall have occurred
          in the financial condition, business prospects or operations of Debtor
          or any of its subsidiaries.

     (k)  Tax Lien.  Debtor shall have a federal or state tax lien filed against
          any of its  properties  which  the  Debtor is not  contesting  in good
          faith.

     (l)  Execution on  Collateral.  The  Collateral  or any portion  thereof is
          taken on execution or other process of law.

     (m)  Guarantor's  Obligations.  If any of the  obligations of any guarantor
          under the Financing  Documents or other third-party  agreement related
          to the  transactions  contemplated  hereby is limited or terminated by
          operation of law or by the guarantor,  or any such  guarantor  becomes
          the subject of an insolvency proceeding.

     (n)  Judgment.  The  entry  against  Debtor  of a final  and  nonappealable
          judgment for the payment of money in excess of $50,000 (not covered by
          insurance satisfactory to Secured Party in its sole discretion).

8.   Remedies and Related  Rights.  If an Event of Default shall have  occurred,
     and without limiting any other rights and remedies  provided herein,  under
     any of the other  Financing  Documents  or  otherwise  available to Secured
     Party,  Secured  Party may  exercise one or more of the rights and remedies
     provided in this Section.

     (a)  Remedies.  Secured  Party  may  from  time to time at its  discretion,
          without  limitation and without notice except as expressly provided in
          any of the Financing Documents:

          (i)  exercise in respect of the Collateral all the rights and remedies
               of a  Secured  Party  under  the  Code  (whether  or not the Code
               applies to the affected Collateral);

          (ii) require  Debtor to, and Debtor  hereby agrees that it will at its
               expense  and upon  request of the  Secured  Party,  assemble  the
               Collateral  as directed by Secured Party and make it available to
               Secured  Party at a place to be designated by Secured Party which
               is reasonably convenient to both parties:

          (iii)reduce its claim to judgment or foreclose  or otherwise  enforce,
               in whole or in part, the security  interest granted  hereunder by
               any available judicial procedure;

          (iv) sell or otherwise  dispose of, at its office,  on the premises of
               Debtor or elsewhere, the Collateral,  as a unit or in parcels, by
               public  or  private  proceeding  , and  by  way  of  one or  more
               contracts (it being agreed that the sale or other  disposition of
               any part of the  Collateral  shall not  exhaust  Secured  Party's
               power of sale, but sales or other  dispositions  may be made from
               time  to  time  until  all of the  Collateral  has  been  sold or
               disposed of or until the Indebtedness has been paid and performed
               in full), and at any such sale or other  disposition it shall not
               be necessary to exhibit any of the Collateral:

          (v)  buy the Collateral, or any portion thereof, at any public sale;

          (vi) buy the Collateral, or any portion thereof at any private sale if
               the  Collateral  is of a type  customarily  sold in a  recognized
               market or is of a type which is the subject of widely distributed
               standard price quotations:

          (vii)apply for the appointment of a receiver for the  Collateral,  and
               Debtor hereby consents to any such appointment; and

          (viii) at its option,  retain the  Collateral in  satisfaction  of the
               Indebtedness  whenever  the  circumstances  are such that Secured
               Party is entitled to do so under the Code or otherwise.

Debtor  agrees that in the event  Debtor is entitled to receive any notice under
the  Uniform  Commercial  Code,  as it exists in the  state  governing  any such
notice,  of the sale or other  disposition of any Collateral,  reasonable notice
shall be deemed given when such notice is  deposited in a depository  receptacle
under the care and custody of the United States Postal Service, postage prepaid,
at Debtor's address set forth on the signature page hereof,  five (5) days prior
to the date of any public sale,  or after which a private  sale,  of any of such
Collateral is to be held.  Secured Party shall not be obligated to make any sale
of Collateral  regardless of notice of sale having been given. Secured Party 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 was so adjourned.

     (b)  Application of Proceeds.  If any Event of Default shall have occurred,
          Secured Party may at its  discretion and without notice to Debtor (any
          requirement  of notice being  expressly  waived) apply or use any cash
          held by Secured Party as Collateral. and any cash proceeds received by
          Secured  Party  in  respect  of any  sale  or  other  disposition  of,
          collection  from, or other  realization  upon,  all or any part of the
          Collateral  as follows  in such order and manner as Secured  Party may
          elect:

          (i)  to the repayment or  reimbursement  of the  reasonable  costs and
               expenses (including,  without limitation,  reasonable  attorneys'
               fees and expenses)  incurred by Secured Party in connection  with
               (A)  the  administration  of the  Financing  Documents,  (B)  the
               custody,  preservation,  use or  operation  of,  or the  sale  of
               collection from, or other realization  upon, the Collateral,  and
               (C) the exercise or enforcement or any of the rights and remedies
               of Secured Party hereunder;

          (ii) to the  payment  or other  satisfaction  of any  liens  and other
               encumbrances upon the Collateral;

          (iii)to the satisfaction of the Indebtedness  (without  constituting a
               retention of collateral in satisfaction  of an obligation  within
               the meaning of Section 9.505 of the Code);

          (iv) by holding such cash and proceeds as Collateral;


          (v)  to the payment of any other amounts  required by  applicable  law
               (including without limitation, Section 9.504(a)(3) of the Code or
               any other applicable statutory provision); and

          (vi) by  delivery to Debtor or any other  party  lawfully  entitled to
               receive such cash or proceeds  whether by direction of a Court of
               competent jurisdiction or otherwise.

     (c)  Deficiency.  In the event that the proceeds of any sale of, collection
          from, or other  realization upon, all or any part of the Collateral by
          Secured  Party are  insufficient  to pay all amounts to which  Secured
          Party is legally  entitled.  Debtor and any party who guaranteed or is
          otherwise  obligated  to pay all or any  portion  of the  Indebtedness
          shall be liable for the deficiency,  together with interest thereon as
          provided in the Financing Documents.

     (d)  Non-Judicial  Remedies.  In  granting  to  Secured  Party the power to
          enforce  its  rights  hereunder  without  prior  judicial  process  or
          judicial  hearing,  Debtor expressly  waives,  renounces and knowingly
          relinquishes  any legal right which might  otherwise  require  Secured
          Party to enforce its rights by judicial process. Debtor recognizes and
          concedes that  non-judicial  remedies are consistent with the usage of
          trade, are responsive to commercial  necessity and are the result of a
          bargain at arm's length. Nothing herein is intended to prevent Secured
          Party or Debtor from  resorting to judicial  process at either party's
          option.

     (e)  Other  Recourse.  Debtor waives any right to require  Secured Party to
          proceed  against  any third  party,  exhaust any  Collateral  or other
          security for the Indebtedness,  or to have any third party joined with
          Debtor  in any  suit  arising  out of the  Indebtedness  or any of the
          Financing  Documents,  or pursue any other remedy available to Secured
          Party.  Debtor further waives any and all notice of acceptance of this
          Agreement and of the creation, modification,  rearrangement renewal or
          extension  of the  Indebtedness.  Debtor  further  waives any  defense
          arising  by reason of any  disability  or other  defense  of any third
          party or by reason of the cessation  from any cause  whatsoever of the
          liability of any third party. Until all of the Indebtedness shall have
          been  paid in full,  Debtor  shall  have no right of  subrogation  and
          Debtor  waives the right to enforce any remedy which Secured Party has
          or may hereafter have against any third party,  and waives any benefit
          of and any right to participate  in any other security  whatsoever now
          or hereafter held by Secured Party.  Debtor authorizes  Secured Party,
          and without  notice or demand and without  any  reservation  of rights
          against Debtor and without affecting Debtor's  liability  hereunder or
          on the Indebtedness to (i) take or hold any other property of any type
          from any third party as security for the  Indebtedness,  and exchange,
          enforce,  waive and  release any or all of such other  property,  (ii)
          apply  such  other  property  and  direct  the order or manner of sale
          thereof as Secured Party may in its discretion determine, (iii) renew,
          extend, accelerate,  modify, compromise,  settle or release any of the
          Indebtedness  or other  security  for the  Indebtedness,  (iv)  waive,
          enforce  or  modify  any of  the  provisions  of any of the  Financing
          Documents  executed by any third party,  and (v) release or substitute
          any third party.

9.   Indemnity.  Debtor hereby  indemnifies and agrees to hold harmless  Secured
     Party, and its officers,  directors,  shareholders,  employees,  attorneys,
     representatives,  agents and affiliates (each an "Indemnified  Person" from
     and against any and all liabilities,  obligations, claims, demands, losses,
     damages,   penalties,   actions,   judgments,  suits,  costs,  expenses  or
     disbursements of any kind or nature (collectively,  the "Claims") which may
     be imposed on, incurred by, or asserted  against,  any  Indemnified  Person
     arising in connection with the Financing Documents, the Indebtedness or the
     Collateral (including without limitation,  the enforcement of the Financing
     Documents  and the  defense  of any  Indemnified  Person's  actions  and/or
     inactions in connection with the Financing Documents).  WITHOUT LIMITATION.
     THE  FOREGOING  INDEMNITIES  SHALL  APPLY TO EACH  INDEMNIFIED  PERSON WITH
     RESPECT TO ANY CLAIMS  WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT
     OF THE NEGLIGENCE OF SUCH AND/OR ANY OTHER  INDEMNIFIED  PERSON,  except to
     the limited extent the Claims against an Indemnified Person are proximately
     caused by such Indemnified Person's gross negligence or willful misconduct.
     If Debtor or any third party ever alleges such gross  negligence or willful
     misconduct by any Indemnified Person, the  indemnification  provided for in
     this  Section  shall  nonetheless  be paid upon  demand,  subject  to later
     adjustment  or  reimbursement,  until  such  time as a court  of  competent
     jurisdiction  enters a final  judgment  as to the  extent and effect of the
     alleged  gross  negligence  or  willful  misconduct.   The  indemnification
     provided  for in  this  Section  shall  survive  the  termination  of  this
     Agreement  and shall  extend and  continue to benefit  each  individual  or
     entity who is or has at any time been an Indemnified Person hereunder.

10.  Miscellaneous.

     (a)  Entire  Agreement.  This  Agreement  contains the entire  agreement of
          Secured  Party and  Debtor  with  respect  to the  Collateral.  If the
          parties hereto are parties to any prior  agreement,  either written or
          oral,  relating to the  Collateral,  the terms of this Agreement shall
          amend  and  supersede  the  terms  of  such  prior  agreements  as  to
          transactions on or after the effective date of this Agreement, but all
          security agreements, financing statements, guaranties, other contracts
          and notices for the  benefit of Secured  Party shall  continue in full
          force and  effect to secure  the  Indebtedness  unless  Secured  Party
          specifically releases its rights thereunder by separate release.

     (b)  Amendment.  No modification,  consent or amendment of any provision of
          this Agreement or any of the other Financing  Documents shall be valid
          or  effective  unless the same is in  writing  and signed by the party
          against whom it is sought to be enforced.

     (c)  Actions  by  Secured  Party.  The lien,  security  interest  and other
          security  rights of Secured Party  hereunder  shall not be impaired by
          (i) any renewal,  extension,  increase or modification with respect to
          the Indebtedness,  (ii) any surrender,  compromise,  release, renewal,
          extension, exchange or substitution which Secured Party may grant with
          respect to the Collateral,  or (iii) any release or indulgence granted
          to any endorser,  guarantor or surety of the Indebtedness.  The taking
          of  additional  security by Secured  Party shall not release or impair
          the lien,  security interest or other security rights of Secured Party
          hereunder or affect the obligations of Debtor hereunder.

     (d)  Waiver by Secured Party.  Secured Party may waive any Event of Default
          without  waiving  any  other  prior or  subsequent  Event of  Default.
          Secured  Party may remedy any  default  without  waiving  the Event of
          Default  remedied.  Neither the failure by Secured  Party to exercise,
          nor the delay by Secured Party in exercising, any right or remedy upon
          any Event of Default  shall be  construed as a waiver of such Event of
          Default  or as a waiver of the  right to  exercise  any such  right or
          remedy at a later date. No single or partial exercise by Secured Party
          of any  right or  remedy  hereunder  shall  exhaust  the same or shall
          preclude any other or further exercise  thereof,  and every such right
          or remedy  hereunder  may be exercised  at any time.  No waiver of any
          provision hereof or consent to any departure by Debtor therefrom shall
          be effective unless the same shall be in writing and signed by Secured
          Party and then such waiver or consent  shall be effective  only in the
          specific instances,  for the purpose for which given and to the extent
          therein specified.  No notice to or demand on Debtor in any case shall
          of itself  entitle  Debtor to any other or further notice or demand in
          similar or other circumstances.

     (e)  Costs and  Expense.  Debtor will upon demand pay to Secured  Party the
          amount  of  any  and  all  costs  and  expenses   (including   without
          limitation,  attorneys'  fees and  expenses),  which Secured Party may
          incur in connection with (i) the  transactions  which give rise to the
          Financing  Documents,  (ii) the  preparation of this Agreement and the
          perfection and  preservation of the security  interests  granted under
          the Financing  Documents,  (iii) the  administration  of the Financing
          Documents, (iv) the custody, preservation, use or operation of, or the
          sale of collection  from, or other  realization  upon, the Collateral,
          (v) the exercise or  enforcement of any of the rights of Secured Party
          under  the  Financing  Documents,  or (vi) the  failure  by  Debtor to
          perform or observe any of the provisions hereof

     (f)  Governing Law; Venue; Submission to Jurisdiction. THIS AGREEMENT SHALL
          BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE LAWS OF THE STATE
          OF TEXAS WITHOUT  GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS
          THEREOF,  EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT OF PERFECTION
          OR  NON-PERFECTION  OF THE SECURITY  INTEREST  GRANTED  HEREUNDER,  IN
          RESPECT OF ANY  PARTICULAR  COLLATERAL,  ARE GOVERNED BY THE LAWS OF A
          JURISDICTION  OTHER  THAN  THE  STATE  OF  TEXAS.  THIS  AGREEMENT  IS
          PERFORMABLE BY THE PARTIES IN DALLAS COUNTY, TEXAS. DEBTOR AND SECURED
          PARTY (BY ITS ACCEPTANCE HEREOF) EACH AGREE THAT DALLAS COUNTY,  TEXAS
          SHALL BE THE  EXCLUSIVE  VENUE FOR  LITIGATION OF ANY DISPUTE OR CLAIM
          ARISING UNDER OR RELATING TO THIS AGREEMENT, AND THAT SUCH COUNTY IS A
          CONVENIENT FORUM IN WHICH TO DECIDE ANY SUCH DISPUTE OR CLAIM.  DEBTOR
          AND  SECURED  PARTY (BY ITS  ACCEPTANCE  HEREOF)  EACH  CONSENT TO THE
          PERSONAL  JURISDICTION  OF THE STATE AND  FEDERAL  COURTS  LOCATED  IN
          DALLAS COUNTY,  TEXAS FOR THE LITIGATION OF ANY SUCH DISPUTE OR CLAIM.
          DEBTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
          OBJECTION  WHICH IT MAY NOW OR  HEREAFTER  HAVE TO THE  LAYING  OF THE
          VENUE OF ANY SUCH  PROCEEDING  BROUGHT  IN SUCH A COURT  AND ANY CLAIM
          THAT ANY SUCH  PROCEEDING  BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN
          AN INCONVENIENT FORUM.

     (g)  Waiver of Jury  Trial.  DEBTOR AND  SECURED  PARTY (BY ITS  ACCEPTANCE
          HEREOF)  EACH  HEREBY  IRREVOCABLY   WAIVES,  TO  THE  MAXIMUM  EXTENT
          PERMITTED  BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
          OF ANY  LITIGATION  DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF,
          UNDER  OR  IN  CONNECTION  WITH  THIS  AGREEMENT  OR  ANY  TRANSACTION
          CONTEMPLATED HEREBY OR ASSOCIATED HEREWITH.

     (h)  Severability. If any provision of this Agreement is held by a court of
          competent  jurisdiction to be illegal,  invalid or unenforceable under
          present or future laws, such provision shall be fully severable, shall
          not impair or  invalidate  the  remainder  of this  Agreement  and the
          effect  thereof shall be confined to the provision held to be illegal,
          invalid or unenforceable.

     (i)  No  Obligation.  Nothing  contained  herein  shall be  construed as an
          obligation  on the part of  Secured  Party to  extend or  continue  to
          extend credit to Debtor.

     (j)  Notices.  All  notices,  requests,  demands  or  other  communications
          required or permitted to be given pursuant to this Agreement  shall be
          in writing and give by (i) personal delivery,  (ii) expedited delivery
          service with proof of  delivery,  (iii)  United  States mail,  postage
          prepaid,  registered or certified mail, return receipt  requested,  or
          (iv) telecopy (with receipt thereof  confirmed by telecopier)  sent to
          the intended  addressee at the address set forth on the signature page
          hereof  or to such  different  address  as the  addressee  shall  have
          designated  by written  notice sent  pursuant to the terms  hereof and
          shall be deemed to have been received either,  in the case of personal
          delivery,  at the time of personal delivery,  in the case of expedited
          delivery  service,  as of the date of first attempted  delivery at the
          address and in the mariner provided herein,  in the case of mail, upon
          deposit in a depository  receptacle  under the care and custody of the
          United  States  Postal  Service,  or in the  case  of  telecopy,  upon
          receipt.  Either  parry shall have the right to change its address for
          notice  hereunder to any other location within the continental  United
          States  by  notice to the  other  party of such new  address  at least
          thirty (30) days prior to the effective date of such new address.

     (k)  Binding Effect and Assignment. This Agreement (i) creates a continuing
          security  interest in the Collateral,  (ii) shall be binding on Debtor
          and the heirs, executors,  administrators,  personal  representatives,
          successors and assigns of Debtor, and (iii) shall inure to the benefit
          of Secured Party and its successors and assigns.  Without limiting the
          generality  of the  foregoing,  Secured  Party may  pledge,  assign or
          otherwise   transfer  the  Indebtedness  and  its  rights  under  this
          Agreement and any of the other Financing Documents to any other party.
          Debtor's  rights and  obligations  hereunder  may not be  assigned  or
          otherwise  transferred  without the prior  written  consent of Secured
          Party.

     (l)  Termination.  It is  contemplated by the parties hereto that from time
          to time there may be no outstanding Indebtedness,  but notwithstanding
          such  occurrences,  this Agreement  shall remain valid and shall be in
          full force and effect as to subsequent outstanding Indebtedness.  Upon
          (i) the satisfaction in full of the Indebtedness, (ii) the termination
          or expiration  of any  commitment of Secured Party to extend credit to
          Debtor,  (iii) written request for the termination hereof delivered by
          Debtor to Secured  Party,  and (iv)  written  release  or  termination
          delivered by Secured Party to Debtor,  this Agreement and the security
          interests  created hereby shall  terminate.  Upon  termination of this
          Agreement  and  Debtor's  written  request,  Secured  Party  will,  at
          Debtor's  sole  cost  and  expense,  return  to  Debtor  such  of  the
          Collateral  as shall not have been sold or  otherwise  disposed  of or
          applied pursuant to the terms hereof and execute and deliver to Debtor
          such  documents as Debtor shall  reasonably  request to evidence  such
          termination.

     (m)  Cumulative  Rights. All rights and remedies of Secured Party hereunder
          are  cumulative of each other and of every other right or remedy which
          Secured Party may  otherwise  have at law or in equity or under any of
          the other Financing Documents, and the exercise of one or more of such
          rights or remedies  shall not  prejudice or impair the  concurrent  or
          subsequent exercise of any other rights or remedies.

     (n)  Gender and Number. Within this Agreement, words of any gender shall be
          held and  construed  to  include  the other  gender,  and words in the
          singular  number shall be held and construed to include the plural and
          words in the plural  number shall be held and construed to include the
          singular, unless in each instance the context requires otherwise.

     (o)  Descriptive   Heading  .  The  headings  in  this  Agreement  are  for
          convenience  only and shall in no way  enlarge,  limit or  define  the
          scope or meaning of the various and several provisions hereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




<PAGE>


EXECUTED as of the date first written above.

DEBTOR:

CHAMPION TRAILER COMPANY, L.P.

By:      Durham Whitesell & Associates,
         its general partner

         By: __________________________
         Name: ________________________
         Title: _________________________

Debtor's Address:

Champion Trailer Company, L.P.
111 Monument Circle, Suite 3680
Indianapolis, Indiana 46204
ATTN:  Timothy S. Durham
Telecopy No. 317-237-0137

SECURED PARTY:

MARKPOINT EQUITY GROWTH FUND, J.V.

By:      The Markpoint Company, its Managing Venturer


         By: ____________________________________
         Name: Tex Sekhon
         Title:  President

Secured Party's Address:

Markpoint Equity Growth Fund, J.V.
15770 Dallas Parkway, Suite 800
Dallas, Texas  75248
ATTN:  Tex Sekhon
Telecopy No. 972-490-1980



<PAGE>


THE RIGHTS AND REMEDIES OF MARKPOINT  EQUITY  GROWTH FUND,  J.V.  HEREUNDER  ARE
SUBJECT TO A SUBORDINATION  AGREEMENT  AMONG MARKPOINT  EQUITY GROWTH FUND, J.V.
AND BANK ONE INDIANA, N.A. DATED AS OF EVEN DATE HEREWITH.


                             HOLDER PLEDGE AGREEMENT


THIS PLEDGE  AGREEMENT  ("Agreement") is made as of the 2nd day of May, 2000, by
TIMOTHY  S.  DURHAM,   TERRY  G.  WHITESELL  and  MARCUS  KENNEDY   (hereinafter
individually and collectively  referred to as "Pledgor"),  in favor of MARKPOINT
EQUITY GROWTH FUND, J.V. ("Secured  Party").  Pledgor hereby agrees with Secured
Party as follows:


1.   Definitions.  As used in this Agreement, the following terms shall have the
     meanings indicated below:

     (a)  "Additional  Property" shall mean the following property which Pledgor
          becomes  entitled to receive or shall receive in  connection  with any
          other  Collateral:  (i)  any  stock  certificate,   including  without
          limitation,  any  certificate  representing  a stock  dividend  or any
          certificate in connection with any recapitalization, reclassification,
          merger,  consolidation,  conversion,  sale of assets,  combination  of
          shares,   stock  split  or   spin-off;   (ii)  any  option,   warrant~
          subscription or right, whether as an addition to or in substitution of
          any other Collateral; (iii) any dividends or distributions of any kind
          whatsoever,  whether  distributable  in cash, stock or other property;
          (iv)  any  interest  premium  or  principal  payments;   and  (v)  any
          conversion or redemption proceeds.

     (b)  "Borrower" shall mean Champion Trailer Company, L.P.

     (c)  "Code'  shall  mean the  Uniform  Commercial  Code as in effect in the
          State of Texas on the date of this Agreement or as it may
                  hereafter be amended from time to time.

     (d)  "Collateral,   shall  mean  all  property  specifically  described  on
          Schedule  "A"  attached  hereto  and  made  a  part  hereof  The  term
          Collateral,  as used herein,  shall also include (i) all certificates,
          instruments and/or other documents evidencing the foregoing,  (ii) all
          renewals,  replacements  and  substitutions  of all of the  foregoing,
          (iii) all Additional  Property,  and (iv) all PRODUCTS and PROCEEDS of
          all of the foregoing.  The  designation of proceeds does not authorize
          Pledgor to sell,  transfer or  otherwise  convey any of the  foregoing
          property.

     (e)  "Financing   Documents"  shall  mean  all  instruments  and  documents
          evidencing, securing, governing, guaranteeing and/or pertaining to the
          Indebtedness,  including,  without limitation,  the Security Agreement
          dated as of the date hereof among the Secured  Party and the Borrower,
          the Note Purchase  Agreement of even date herewith  among Borrower and
          Secured Party,  the Note and the Parent Pledge  Agreement  dated as of
          even date herewith by and between Secured Party and Parent.

     (f)  "Indebtedness"   shall   mean  (i)   indebtedness,   obligations   and
          liabilities  owing by Borrower to Secured Party under the Note and all
          other  indebtedness,   obligations  and  liabilities  of  Pledgor  and
          Borrower  (or  either  of  them)  to  Secured  Party  of any  kind  or
          character, now existing or hereafter arising, whether direct~ indirec4
          related, unrelated, fixed, comingen4 liquidated,  unliquidated,  joint
          several  or  joint  and  several,   and  regardless  of  whether  such
          indebtedness,   obligations  and  liabilities   may,  prior  to  their
          acquisition by Secured  Party,  be or have been payable to or in favor
          of a third party and subsequently  acquired by Secured Party (it being
          contemplated  that Secured Party may make such acquisitions from third
          parties),  including without limitation all indebtedness,  obligations
          and liabilities of Pledgor and Borrower (or either of them) to Secured
          Party now existing or hereafter  arising by note,  draft,  acceptance,
          guaranty, endorsement letter of credit, assignment purchase, overdraft
          discount~  indemnity  agreement or otherwise,  (ii) all obligations of
          Pledgor and  Borrower  (or either of them) to Secured  Party under any
          documents evidencing,  securing, governing and/or pertaining to all or
          any part of the indebtedness, obligations and liabilities described in
          (i) above,  (iii) all costs and expenses  incurred by Secured Party in
          connection with the collection and  administration  of all or any part
          of the indebtedness,  obligations and liabilities described in (i) and
          (ii) above or the protection or preservation of, or realization  upon,
          the  collateral  securing  all  or  any  part  of  such  indebtedness,
          obligations  and  liabilities,   including   without   limitation  all
          reasonable  attorneys,  fees,  and  (iv)  all  renewals,   extensions,
          modifications and rearrangements of the indebtedness,  obligations and
          liabilities described in (i), (ii) and (iii) above.

     (g)  "Note"  means  that  certain  promissory  note of even  date  herewith
          payable  by  Borrower  to the  order of  Secured  Party In the  stated
          principal  amount of  $1.250,000.00.  as such  promissory  note may be
          renewed, extended, amended and modified.

     (h)  "Parent" means Durham Whitesell & Associates,  LLC. an Indiana limited
          liability company.

All words and phrases  used herein which are  expressly  defined in Section U01,
Chapter 8 or Chapter 9 of the Code shall have the meaning  provided for therein.
Other words and  phrases  defined  elsewhere  in the Code shall have the meaning
specified  therein  except to the extent  such  meaning is  inconsistent  with a
definition in Section 1.20 1, Chapter 8 or Chapter 9 of the Code.

2.   Security  Interest.  As security for the Indebtedness,  Pledgor,  for value
     received,  hereby grants to Secured Party a continuing security interest in
     the Collateral.

3.   Additional Property. Collateral shall also include the Additional Property;
     provided,  however,  that until the  occurrence  of an Event of Default (as
     hereinafter  defined),  Pledgor shall be entitled to all cash dividends and
     all  interest  paid  on  the  Collateral   (except  interest  paid  on  any
     certificate of deposit  pledged  hereunder)  free of the security  interest
     created under this Agreement.  All Additional  Property received by Pledgor
     shall be received in trust for the benefit of Secured Party. All Additional
     Property and all  certificates  or other written  instruments  or documents
     evidencing and/or  representing the Additional Property that is received by
     Pledgor,  together with such  instruments  of transfer as Secured Party may
     request,  shall immediately be delivered to or deposited with Secured Party
     and held by Secured Party as Collateral  under the terms of this Agreement.
     If the Additional  Property received by Pledgor shall be shares of stock or
     other  securities,  such shares of stock or other  securities shall be duly
     endorsed in blank or  accompanied  by proper  instruments  of transfer  and
     assignment  duly  executed in blank with,  if requested  by Secured  Party,
     signatures  guaranteed by a member or member  organization in good standing
     of an authorized  Securities Transfer Agents Medallion Program, all in form
     and substance  satisfactory to Secured Party. Secured Party shall be deemed
     to have  possession  of any  Collateral  in transit to Secured Party or its
     agent.

4.   Voting  Rights.  As  long  as no  Event  of  Default  shall  have  occurred
     hereunder,  any voting  rights  incident  to any stock or other  securities
     pledged as Collateral may be exercised by Pledgor; provided,  however, that
     Pledgor  will  not  exercise,  or cause to be  exercised,  any such  voting
     rights,  without the prior written  consent of Secured Party, if the direct
     or  indirect  effect  of such  vote  will  result  in an Event  of  Default
     hereunder.

5.   Maintenance  of Collateral.  Other than the exercise of reasonable  care to
     assure the safe custody of any  Collateral  in Secured  Party's  possession
     from time to time,  Secured  Party  does not have any  obligation,  duty or
     responsibility  with  respect  to  the  Collateral.  Without  limiting  the
     generality of the foregoing,  Secured Party shall not have any  obligation,
     duty  or  responsibility  to do any of the  following:  (a)  ascertain  any
     maturities,  calls,  conversions,  exchanges,  offers,  tenders  or similar
     matters relating to the Collateral or informing Pledgor with respect to any
     such matters; (b) fix, preserve or exercise any right,  privilege or option
     (whether   conversion,   redemption  or  otherwise)  with  respect  to  the
     Collateral  unless (i) Pledgor makes written  demand to Secured Party to do
     so, (ii) such  written  demand is received by Secured  Party in  sufficient
     time to permit  Secured  Party to take the action  demanded in the ordinary
     course of its business,  and (iii) Pledgor provides additional  collateral,
     acceptable to Secured Party in its sole discretion; (c) collect any amounts
     payable in respect of the Collateral (Secured Party being liable to account
     to Pledgor  only for what  Secured  Party may  actually  receive or collect
     thereon);  (d) sell all or any portion of the  Collateral  to avoid  market
     loss;  (e) sell all or any  portion  of the  Collateral  unless and until W
     Pledgor makes written demand upon Secured Party to sell the Collateral, and
     (ii) Pledgor provides additional collateral, acceptable to Secured Party in
     its sole  discretion;  or (f) hold the  Collateral  for or on behalf of any
     party other than Pledgor.

6.   Representations and Warranties.  Pledgor hereby represents and wan-ants the
     following to Secured Party:

     (a)  Due  Authorization.  The execution,  delivery and  performance of this
          Agreement  and all of the other  Financing  Documents  by Pledgor have
          been duly authorized by all necessary  corporate action of Pledgor, to
          the extent Pledgor is a corporation,  or by all necessary  partnership
          action, to the extent Pledgor is a partnership.

     (b)  Enforceability.  This Agreement and the other  Financing  Documents to
          which each of Pledgor is a party constitute  legal,  valid and binding
          obligations  of  Pledgor,   enforceable   in  accordance   with  their
          respective  terms,  except as limited  by  bankruptcy,  insolvency  or
          similar laws of general  application  relating to the  enforcement  of
          creditors'  rights  and  except to the extent  specific  remedies  may
          generally be limited by equitable principles.

     (c)  Ownership  and  Liens.  The  equity  interests  issued by Parent  that
          constitutes a portion of the Collateral represents one hundred percent
          (100%) of the  issued  and  outstanding  equity  interests  of Parent.
          Pledgor has good and marketable title to the Collateral free and clear
          of all liens,  security  interests,  encumbrances  or adverse  claims,
          except  for  the  security  interest  created  by this  Agreement.  No
          dispute, right of setoff,  counterclaim or defense exists with respect
          to all or any part of the  Collateral.  Pledgor has not  executed  any
          other  security  agreement  currently  affecting the Collateral and no
          financing statement or other instrument similar in effect covering all
          or any  part of the  Collateral  is on file  in any  recording  office
          except as may have been executed or filed in favor of Secured Party.

     (d)  No Conflicts or Consents.  Neither the ownership,  the intended use of
          the  Collateral  by  Pledgor,  the grant of the  security  interest by
          Pledgor to Secured  Party herein nor the exercise by Secured  Party of
          its rights or remedies hereunder, will (i) conflict with any provision
          of (A) any domestic or foreign law, statute,  rule or regulation,  and
          (B) any agreement, judgment, license. order or permit applicable to or
          binding upon Pledgor or otherwise  affecting the  Collateral,  or (ii)
          result in or require the creation of any lien,  charge or  encumbrance
          upon any assets or  properties  of Pledgor or of any person  except as
          may be expressly  contemplated in the Financing  Documents.  Except as
          expressly  contemplated  in  the  Financing  Documents,   no  consent,
          approval,  authorization  or order of and no notice to or filing with,
          any  court,  governmental  authority  or third  party is  required  in
          connection  with the grant by Pledgor of the security  interest herein
          or the exercise by Secured Parry of its rights and remedies hereunder.

     (e)  Security Interest. Pledgor has arid will have at all times full right~
          power and authority to grant a security  interest in the Collateral to
          Secured  Party in the manner  provided  herein,  free and clear of any
          lien, security interest or other charge or encumbrance. This Agreement
          creates  a legal,  valid and  binding  security  interest  in favor of
          Secured Party in the Collateral.

     (f)  Location.  Pledgor's  residence or chief executive office, as the case
          may be, and the office where the records concerning the Collateral are
          kept is located at its address set forth on the signature page hereof.

     (g)  Solvency of Pledgor. As of the date hereof, and after giving effect to
          this   Agreement  and  the   completion  of  all  other   transactions
          contemplated  by  Pledgor  at  the  time  of  the  execution  of  this
          Agreement,  (i) Pledgor is and will be solvent, (ii) the fair saleable
          value  of  Pledgor's  assets  exceeds  and  will  continue  to  exceed
          Pledgor's  liabilities  (both fixed and contingent),  (iii) Pledgor is
          paying and will  continue to be able to pay its debts as they  mature,
          and (iv) if Pledgor is not an  individual,  Pledgor  has and will have
          sufficient capital to carry on Pledgor's businesses and all businesses
          in which Pledgor is about to engage.

     (h)  Securities.   Any  certificates   evidencing   securities  pledged  as
          Collateral  are  valid  and  genuine  and have not been  altered.  All
          securities pledged as Collateral have been duly authorized and validly
          issued,  are fully  paid and  non-assessable,  and were not  issued in
          violation of the preemptive rights of any party or of any agreement by
          which  Pledgor or the  issuer  thereof is bound.  No  restrictions  or
          conditions  exist  with  respect  to the  transfer  or  voting  of any
          securities  pledged as  Collateral,  except as has been  disclosed  to
          Secured  Party in  writing.  To the best of  Pledgor's  knowledge,  no
          issuer of such securities  (other than securities of a class which are
          publicly  traded)  has  any  outstanding   stock  rights,   rights  to
          subscribe,  options, warrants or convertible securities outstanding or
          any other  rights  outstanding  entitling  any party to have issued to
          such party capital stock of such issuer,  except as has been disclosed
          to Secured Party in writing.

7.   Affirmative Covenants.  Pledgor will comply with the covenants contained in
     this  Section  at all times  during the  period of time this  Agreement  is
     effective unless Secured Party shall otherwise consent in writing.

     (a)  Ownership and Liens. Pledgor will maintain good and marketable tide to
          all  Collateral  free and  clear  of all  liens,  security  interests,
          encumbrances  or  adverse  claims,  except for the  security  interest
          created  by  this  Agreement  and the  security  interests  and  other
          encumbrances  expressly  permitted by the other  Financing  Documents.
          Pledgor will not permit any dispute, right of setoff,  counterclaim or
          defense  to exist with  respect to all or any part of the  Collateral.
          Pledgor  will  cause  any  financing   statement  or  other   security
          instrument with respect to the Collateral to be terminated,  except as
          may exist or as may have been filed in favor of Secured Party. Pledgor
          will defend at its expense Secured  Party's right,  title and security
          interest  in and to the  Collateral  against  the  claims of any third
          party.

     (b)  Inspection of Books and Records.  Pledgor will keep  adequate  records
          concerning  the  Collateral  and will  permit  Secured  Party  and all
          representatives  and  agents  appointed  by  Secured  Party to inspect
          Pledgor's  books and records of or relating to the  Collateral  at any
          time during normal business hours, to make and take away  photocopies,
          photographs  and  printouts  thereof  and to write down and record any
          such information.

     (c)  Adverse Claim. Pledgor covenants and agrees to promptly notify Secured
          Party  of any  claim,  action  or  proceeding  affecting  title to the
          Collateral,  or any part  thereof,  or the security  interest  created
          hereunder and, at Pledgor's  expense,  defend Secured Party's security
          interest  in the  Collateral  against  the claims of any third  party.
          Pledgor also covenants and agrees to promptly deliver to Secured Party
          a copy of all written notices  received by Pledgor with respect to the
          Collateral,  including without  limitation,  notices received from the
          issuer of any securities pledged hereunder as Collateral.

     (d)  Delivery  of  Instruments   and/or   Certificates.   Contemporaneously
          herewith, Pledgor covenants and agrees to deliver to Secured Party any
          certificates,  documents or instruments representing or evidencing the
          Collateral,  with Pledgor's  endorsement thereon and/or accompanied by
          proper  instruments of transfer and assignment  duly executed in blank
          with, if requested by Secured Party, signatures guaranteed by a member
          or member  organization  in good standing of an authorized  Securities
          Transfer  Agents  Medallion   Program,   all  in  form  and  substance
          satisfactory to Secured Party.

     (e)  Further Assurance . Pledgor will  contemporaneously with the execution
          hereof  and  from  time to time  thereafter  at its  expense  promptly
          execute and deliver all further instruments and documents and take all
          further  action  necessary or  appropriate  or that Secured  Party may
          request in order (i) to perfect  and  protect  the  security  interest
          created or  purported to be created  hereby and the first  priority of
          such  security  interest (h) to enable  Secured  Party to exercise and
          enforce  its  rights  and   remedies   hereunder  in  respect  of  the
          Collateral,  and  (iii)  to  otherwise  effect  the  purposes  of this
          Agreement,  including without limitation: (A) executing and filing any
          financing or continuation  statements,  or any amendments thereto; (B)
          obtaining  written  confirmation  from the  issuer  of any  securities
          pledged as  Collateral of the pledge of such  securities,  in form and
          substance  satisfactory to Secured Party; (C) cooperating with Secured
          Party  in  registering  the  pledge  of  any  securities   pledged  as
          Collateral with the issuer of such securities;  (D) delivering  notice
          of Secured  Party's  security  interest in any  securities  pledged as
          Collateral  to any  securities  or  financial  intermediary,  clearing
          corporation  or other  party  required by Secured  Party,  in form and
          substance  satisfactory  to Secured Party;  and (E) obtaining  written
          confirmation of the pledge of any securities  constituting  Collateral
          from any securities or financial intermediary, clearing corporation or
          other  party  required  by  Secured  Party.   in  form  and  substance
          satisfactory to Secured Party. If all or any part of the Collateral is
          securities  issued by an agency or  department  of the United  States,
          Pledgor covenants and agrees, at Secured Party's request, to cooperate
          in registering such securities in Secured Party's name or with Secured
          Party's   account   maintained  with  a  Federal  Reserve  Bank.  When
          applicable  law provides more than one method of perfection of Secured
          Party's security interest in the Collateral,  Secured Parry may choose
          the method(s) to be used.

8.   Negative  Covenants.  Pledgor will comply with the  covenants  contained in
     this  Section  at all times  during the  period of time this  Agreement  is
     effective, unless Secured Party shall otherwise consent in writing.

     (a)  Transfer  or  Encumbrance.  Pledgor  will  not (i)  sell,  assign  (by
          operation of law or otherwise) or transfer  Pledgor's rights in any of
          the Collateral,  (ii) grant a lien or security interest in or execute,
          file or record any financing  statement or other  security  instrument
          with respect to the  Collateral to any party other than Secured Party,
          or (iii) deliver actual or constructive possession of any certificate,
          instrument  or  document  evidencing  and/or  representing  any of the
          Collateral to any party other than Secured Party.

     (b)  Impairment of Security Interest. Pledgor will not take or fail to take
          any  action   which   would  in  any   manner   impair  the  value  or
          enforceability of Secured Party's security interest in any Collateral.

     (c)  Dilution of  Ownership.  As to any  securities  pledged as  Collateral
          (other than securities of a class which are publicly traded),  Pledgor
          will not consent to or approve of the  issuance of (i) any  additional
          shares of any class of securities of such issuer  (unless  immediately
          upon  issuance  additional  securities  are pledged and  delivered  to
          Secured Party pursuant to the terms hereof to the extent  necessary to
          give Secured Parry a security interest after such issuance in at least
          the same percentage of such issuer's outstanding securities as Secured
          Party had  before  such  issuance),  (ii) any  instrument  convertible
          voluntarily by the holder thereof or automatically upon the occurrence
          or non-occurrence of any event or condition into, or exchangeable for,
          any such  securities,  or (iii) any  warrants,  options,  contracts or
          other  commitments  entitling any third party to purchase or otherwise
          acquire any such securities.

     (d)  Restrictions on Securities.  Pledgor will not enter into any agreement
          creating,  or otherwise  permit to exist, any restriction or condition
          upon the  transfer,  voting or  control of any  securities  pledged as
          Collateral, except as consented to in writing by Secured Party.

9.   Rights of Secured Party.  Secured Party shall have the rights  contained in
     this  Section  at all times  during the  period of time this  Agreement  is
     effective.

     (a)  Power of Attorney.  Pledgor hereby irrevocably  appoints Secured Party
          as Pledgor's  attorney-in-fact,  such power of attorney  being coupled
          with an  interest,  with  full  authority  in the  place  and stead of
          Pledgor  and in the name of Pledgor or  otherwise,  to take any action
          and to execute any  instrument  which  Secured  Party may from time to
          time in Secured  Party's  discretion  deem necessary or appropriate to
          accomplish  the  purposes  of  this   Agreement,   including   without
          limitation,   the  following  action:  (i)  transfer  any  securities,
          instruments,  documents or  certificates  pledged as Collateral in the
          name of Secured Party or its nominee;  (ii) use any interest,  premium
          or principal payments, conversion or redemption proceeds or other cash
          proceeds  received in connection  with any Collateral to reduce any of
          the  Indebtedness;  (iii)  exchange any of the  securities  pledged as
          Collateral  for any other  property  upon any  merger,  consolidation,
          reorganization,  recapitalization  or other readjustment of the issuer
          thereof, and, in connection therewith,  to deposit and deliver any and
          all of such securities with any committee, depository, transfer agent,
          registrar or other  designated agent upon such terms and conditions as
          Secured  Party may deem  necessary or  appropriate;  (iv)  exercise or
          comply with any conversion, exchange, redemption,  subscription or any
          other right privilege or option  pertaining to any securities  pledged
          as Collateral;  provided,  however, except as provided herein, Secured
          Party shall not have a duty to exercise or comply with any such right,
          privilege or option (whether conversion,  redemption or otherwise) and
          shall not be  responsible  for any delay or  failure to do so; and (v)
          file any claims or take any action or institute any proceedings  which
          Secured Party may deem  necessary or  appropriate  for the  collection
          and/or  preservation  of the  Collateral  or  otherwise to enforce the
          rights of Secured  Party with  respect  to the  Collateral;  provided,
          however,  that nothing  herein shall permit Secured Pam to confess any
          judgment  with  respect to any action which the Company is a plaintiff
          or defendant.

     (b)  Performance  by Secured.  If Pledgor fails to perform any agreement or
          obligation provided herein, Secured Party may itself perform, or cause
          performance  of, such  agreement  or  obligation,  and the expenses of
          Secured Party incurred in connection  therewith shall be a part of the
          Indebtedness,  secured  by the  Collateral  and  payable by Pledgor on
          demand.

Notwithstanding  any other provision herein to the contrary,  Secured Party does
not have any duty to  exercise or  continue  to  exercise  any of the  foregoing
rights and shall not be responsible for any failure to do so or for any delay in
doing so.

10.  Events of Default.  Each of the following constitutes an "Event of Default"
     under this Agreement:

     (a)  Failure to Pay  Indebtedness.  Borrower  or Pledgor  shall fail to pay
          after the  expiration  of five (5)  calendar  days after  Borrower has
          received  notice (as  dictated by die Note  Purchase  Agreement)  from
          Secured Party of a failure by Borrower to pay any  Indebtedness as and
          when due.

     (b)  Non-Performance  of  Covenants.  Borrower or Pledgor  shall breach any
          covenant or agreement made herein,  in any of the Financing  Documents
          or in any  other  agreement  now or  hereafter  entered  into  between
          Borrower or Pledgor and Secured Party.

     (c)  False Representation. Any warranty or representation made herein or in
          any of the Financing Documents  shall be false or misleading in any
          material respect when made.

     (d)  Default Under Other Financing Documents. The occurrence of an event of
          default under any of the -- Financing Documents or any other agreement
          now or hereafter  entered into between Borrower or Pledgor and Secured
          Party.

     (e)  Untrue Financial Report. Any report, certificate,  schedule, financial
          statement,  profit and loss statement or other statement  furnished by
          Borrower or Pledgor,  or by any other  person on behalf of Borrower or
          Pledgor,  to Secured  Party is not true and  correct  in any  material
          respect.

     (f)  Default to Third Party.  The occurrence of any event which permits the
          acceleration of the maturity of any indebtedness  owing by Borrower or
          Pledgor to any third party under any agreement or undertaking.

     (g)  Bankruptcy.  The  filing  of a  voluntary  or  involuntary  case by or
          against Borrower or Pledgor under the United States Bankruptcy Code or
          other  present or future  federal or state  insolvency,  bankruptcy or
          similar  laws  (collectively,  "Applicable  Bankruptcy  Law")  or  the
          appointment  of a receiver,  trustee,  conservator  or custodian for a
          substantial portion of the assets of Borrower or Pledgor.

     (h)  Insolvency.  Borrower  or  Pledgor  shall  become  insolvent,  make  a
          transfer in fraud of creditors or make an  assignment  for the benefit
          of creditors.

     (i)  Involuntary  Lien. The filing or commencement of any involuntary lien,
          garnishment,  attachment  or the like shall be issued  against or with
          respect to the  Collateral  which the Borrower  and/or  Pledgor is not
          contesting in good faith.

     (j)  Material Adverse Change. A material adverse change shall have occurred
          in the  financial  condition,  business  prospects  or  operations  of
          Borrower or Pledgor or any of its subsidiaries.

     (k)  Tax Lien.  Borrower or Pledgor  shall have a federal or state tax lien
          filed against any of its properties  which the Borrower and/or Pledgor
          is not contesting in good faith

     (l)  Execution on  Collateral.  The  Collateral  or any portion  thereof is
          taken on execution or other process of law.

     (m)  Guarantor's  Obligations.  If any of the  obligations of any guarantor
          under the Financing Documents is limited or terminated by operation of
          law or by the guarantor,  or any such guarantor becomes the subject of
          an insolvency proceeding.

     (n)  Judgment.  The  entry  against  Borrower  or  Pledgor  of a final  and
          nonappealable  judgment  for the payment of money in excess of $50,000
          (not covered by insurance  satisfactory  to Secured  Party in its sole
          discretion).

     (o)  Dilution  of  Ownership.  The  issuer of any  securities  (other  than
          securities  of  a  class  which  are  publicly  traded)   constituting
          Collateral  hereafter  issues any shares of any class of capital stock
          (unless immediately upon issuance,  additional  securities are pledged
          and  delivered  to Secured  Party  pursuant to the terms hereof to the
          extent necessary to give Secured Party a security  interest after such
          issuance in at least the same percentage of such issuer's  outstanding
          securities as Secured Parry had before such  issuance) or any options,
          warrants or other rights to purchase any such capital stock.

     (p)  Bankruptcy of Issuer.  (i) The issuer of any  securities  constituting
          Collateral files a petition for relief under any Applicable Bankruptcy
          Law, (ii) an involuntary petition for relief is filed against any such
          issuer  under any  Applicable  Bankruptcy  Law,  or (iii) an order for
          relief  naming  any  such  issuer  is  entered  under  any  Applicable
          Bankruptcy Law.

11.  Remedies and Related  Rights.  If an Event of Default shall have  occurred,
     and without limiting any other rights and remedies  provided herein,  under
     any of the other  Financing  Documents  or  otherwise  available to Secured
     Party,  Secured  Party may  exercise one or more of the rights and remedies
     provided in this Section.

     (a)  Remedies.  Secured  Party  may  from  time to time at its  discretion,
          without  limitation and without notice except as expressly provided in
          any of the Financing Documents:

          (i)  exercise in respect of the Collateral all the rights and remedies
               of a  secured  party  under  the  Code  (whether  or not the Code
               applies to the affected Collateral);

          (ii) reduce its claim to judgment or foreclose  or otherwise  enforce,
               in whole or in part, the security  interest granted  hereunder by
               any available judicial procedure;

          (iii)sell or otherwise  dispose of, at its office,  on the premises of
               Pledgor or elsewhere, the Collateral, as a unit or in parcels, by
               public  or  private  proceedings,  and by  way  of  one  or  more
               contracts (it being agreed that the sale or other  disposition of
               any part of the  Collateral  shall not  exhaust  Secured  Party's
               power of sale, but sales or other  dispositions  may be made from
               time  to  time  until  all of the  Collateral  has  been  sold or
               disposed of or until the indebtedness has been paid and performed
               in full), and at any such sale or other  disposition it shall not
               be necessary to exhibit any of the Collateral;

          (iv) buy the Collateral, or any portion thereof, at any public sale;

          (v)  buy the Collateral,  or any portion thereof,  at any private sale
               if the Collateral is of a type  customarily  sold in a recognized
               market or is of a type which is the subject of widely distributed
               standard price quotations;

          (vi) apply for the appointment of a receiver for the  Collateral,  and
               Pledgor hereby consents to any such appointment; and

          (vii)at its  option,  retain the  Collateral  in  satisfaction  of the
               Indebtedness  whenever  the  circumstances  are such that Secured
               Party is entitled to do so under the Code or otherwise.

Pledgor agrees that in the event Pledgor is entitled to receive any notice under
the  Uniform  Commercial  Code,  as it exists in the  state  governing  any such
notice,  of the sale or other  disposition of any Collateral,  reasonable notice
shall be deemed given when such notice is  deposited in a depository  receptacle
under the care and custody of the United States Postal Service, postage prepaid,
at Pledgor's address set forth on the signature page hereof, five (5) days prior
to the date of any public sale,  or after which a private  sale,  of any of such
Collateral is to be held.  Secured Party shall not be obligated to make any sale
of Collateral  regardless of notice of sale having been given. Secured Party 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 was so adjourned.  Pledgor  further  acknowledges
and agrees that the  redemption by Secured Party of any  certificate  of deposit
pledged  as  Collateral  shall  be  deemed  to  be  a  commercially   reasonable
disposition under Section 9.504(c) of the Code.

     (b)  Private Sale of Securities.  Pledgor recognizes that Secured Party may
          be unable to effect a public sale of all or any part of the securities
          pledged as Collateral  because of restrictions  in applicable  federal
          and state  securities  laws and that  Secured  Party  may,  therefore,
          determine to make one or more private sales of any such  securities to
          a restricted group of purchasers who will be obligated to agree, among
          other things,  to acquire such  securities for their own account,  for
          investment and not with a view to the  distribution  or resale thereof
          Pled.-or acknowledges that each any such private sale may be at prices
          and other terms less favorable than what might have been obtained at a
          public sale and, notwithstanding the foregoing,  agrees that each such
          private  sale  shall be deemed  to have  been  made in a  commercially
          reasonable  manner and that Secured  Party shall have no obligation to
          delay the sale of any such securities for the period of time necessary
          to permit the issuer to register such securities for public sale under
          any federal or state securities laws. Pledgor further acknowledges and
          agrees  that any  offer to sell  such  securities  which has been made
          privately in the manner described above to not less than five (5) bona
          fide  offerees  shall be  deemed to  involve  a "public  sale" for the
          purposes of Section  9.504(c) of the Code,  notwithstanding  that such
          sale may not constitute a "public offering" under any federal or state
          securities laws and that Secured Party may, in such event, bid for the
          purchase of such securities.

     (c)  Application of Proceeds.  If any Event of Default shall have occurred,
          Secured  Party  may at its  discretion  apply or use any cash  held by
          Secured Party as Collateral, and any cash proceeds received by Secured
          Party in respect of any sale or other disposition of, collection from,
          or  other  realization  upon,  all or any  part of the  Collateral  as
          follows in such order and manner as Secured Party may elect:

          (i)  to the repayment or  reimbursement  of the  reasonable  costs and
               expenses (including,  without limitation,  reasonable  attorney's
               fees and expenses)  incurred by Secured Party in connection  with
               (A)  the  administration  of the  Financing  Documents,  (B)  the
               custody,  preservation,  use or  operation  of,  or the  sale of,
               collection from, or other realization  upon, the Collateral,  and
               (C) the exercise or enforcement of any of the rights and remedies
               of Secured Party hereunder;

          (ii) to the  payment  or other  satisfaction  of any  liens  and other
               encumbrances upon the Collateral;

          (iii) to the satisfaction of the Indebtedness;

          (iv) by holding such cash and proceeds as Collateral;

          (v)  to the payment of any other amounts  required by  applicable  law
               (including without limitation, Section 9.504(a)(3) of the Code or
               any other applicable statutory provision); and

          (vi) by delivery to Pledgor or any other  party  lawfully  entitled to
               receive such cash or proceeds  whether by direction of a court of
               competent jurisdiction or otherwise.

     (d)  Deficiency.  In the event that the proceeds of any sale of, collection
          from, or other  realization upon, all or any part of the Collateral by
          Secured  Party are  insufficient  to pay all amounts to which  Secured
          Party is legally entitled, Borrower and any party who guaranteed or is
          otherwise  obligated  to pay all or any  portion  of the  Indebtedness
          shall be liable for the deficiency,  together with interest thereon as
          provided in the Financing Documents.

     (e)  Non-Judicial  Remedies . In  granting  to  Secured  Party the power to
          enforce  its  rights  hereunder  without  prior  judicial  process  or
          judicial hearing,  Pledgor  expressly waives,  renounces and knowingly
          relinquishes  any legal right which might  otherwise  require  Secured
          Party to enforce its rights by judicial  process.  Pledgor  recognizes
          and concedes that non-judicial  remedies are consistent with the usage
          of trade, are responsive to commercial necessity and are the result of
          a bargain  at arm's  length.  Nothing  herein is  intended  to prevent
          Secured Party or Pledgor from resorting to judicial  process at either
          party's option.

     (f)  Other  Recourse.  Pledgor waives any right to require Secured Party to
          proceed  against  any third  party,  exhaust any  Collateral  or other
          security for the Indebtedness,  or to have any third party joined with
          Pledgor  in any suit  arising  out of the  Indebtedness  or any of the
          Financing  Documents,  or pursue any other remedy available to Secured
          Party. Pledgor further waives any and all notice of acceptance of this
          Agreement and of the creation, modification, rearrangement, renewal or
          extension  of the  Indebtedness.  Pledgor  further  waives any defense
          arising  by reason of any  disability  or other  defense  of any third
          party or by reason of the cessation  from any cause  whatsoever of the
          liability of any third party. Until all of the Indebtedness shall have
          been paid in full,  Pledgor  shall  have no right of  subrogation  and
          Pledgor waives the right to enforce any remedy which Secured Party has
          or may hereafter have against any third party,  and waives any benefit
          of and any right to participate  in any other security  whatsoever now
          or hereafter held by Secured Party.  Pledgor authorizes Secured Party,
          and without  notice or demand and without  any  reservation  of rights
          against Pledgor and without affecting Pledgor's liability hereunder or
          on the  Indebtedness,  to (I) take or hold any other  property  of any
          type  from any  third  party as  security  for the  Indebtedness,  and
          exchange,  enforce,  waive  and  release  any  or all  of  such  other
          property,  (ii)  apply  such  other  property  and direct the order or
          manner  of  sale  thereof  as  Secured  Party  may in  its  discretion
          determine, (iii) renew, extend, accelerate, modify, compromise, settle
          or  release  any  of  the  Indebtedness  or  other  security  for  the
          Indebtedness,  (iv) waive,  enforce or modify any of the provisions of
          any of the Financing  Documents  executed by any third party,  and (v)
          release or substitute any third party.

     (g)  Voting  Rights.  Upon the  occurrence of an Event of Default,  Pledgor
          will not exercise any voting rights with respect to securities pledged
          as Collateral.  Pledgor hereby  irrevocably  appoints Secured Party as
          Pledgor's  attorney-in-fact (such power of attorney being coupled with
          an interest)  and proxy to exercise any voting  rights with respect to
          Pledgor's  securities  pledged as Collateral upon the occurrence of an
          Event of Default.

     (h)  Dividend Rights and Interest Payments. Upon the occurrence of an Event
          of Default:

          (ii) all rights of Pledgor to  receive  and retain the  dividends  and
               interest  payments  which it would  otherwise  be  authorized  to
               receive  and retain  pursuant  to  Section 3 shall  automatically
               cease,  and all such rights shall  thereupon  become  vested with
               Secured  Party  which  shall  thereafter  have the sole  right to
               receive, hold and apply as Collateral such dividends and interest
               payments; and

                  (ii)     all dividend and interest payments which are received
                           by Pledgor contrary to the provisions of clause (i)
                           of this Subsection shall be received in trust for the
                           benefit of Secured Party, shall be segregated from
                           other funds of Pledgor, and shall be forthwith paid
                           over to Secured Party in the exact form received
                           (properly endorsed or assigned if requested by
                           Secured Party), to be held by Secured Party as
                           Collateral.

12.  Indemnity.  Pledgor hereby  indemnifies and agrees to hold harmless Secured
     Party, and its officers,  directors,  shareholders,  employees,  attorneys,
     representatives,  agents and affiliates (each an "Indemnified Person") from
     and against any and all liabilities,  obligations, claims, demands, losses,
     damages,   penalties,   actions,   judgments,  suits,  costs,  expenses  or
     disbursements of any kind or nature (collectively,  the "Claims") which way
     be imposed on,  incurred by, or asserted  against~ any  Indemnified  Person
     arising in connection with the Financing  Documents the Indebtedness or the
     Collateral (including without limitation,  the enforcement of the Financing
     Documents  and the  defense  of any  Indemnified  Person's  actions  and/or
     inactions in connection  with the Financing  Documents);  provided that the
     payment of such  Claims  shall be  restricted  to the  proceeds or products
     realized from the Collateral. WITHOUT LIMITATION, THE FOREGOING INDEMNITIES
     SHALL APPLY TO EACH INDEMNIFIED PERSON WIT14 RESPECT TO ANY CLAIMS WHICH IN
     WHOLE  OR IN PART ARE  CAUSED  BY OR ARISE  OUT OF THE  NEGLIGENCE  OF SUCH
     ANDIOR  ANY OTHER  INDEMNIFIED  PERSON,  except to the  limited  extent the
     Claims  against  an  Indemnified  Person  are  proximately  caused  by  any
     Indemnified Person's gross negligence or willful misconduct.  If Pledgor or
     any third party ever alleges such gross negligence or willful misconduct by
     any Indemnified  Person, the  indemnification  provided for in this Section
     shall  nonetheless  be paid upon  demand,  subject to later  adjustment  or
     reimbursement,  until such time as a court of competent jurisdiction enters
     a  final  judgment  as to  the  extent  and  effect  of the  alleged  gross
     negligence or willful misconduct.  The indemnification provided for in this
     Section shall survive the  termination  of this  Agreement and shall extend
     and continue to benefit each individual or entity who is or has at any time
     been an Indemnified Person hereunder.

13.  Miscellaneous.

     (a)  Entire  Agreement.  This  Agreement  contains the entire  agreement of
          Secured  Party and  Pledgor  with  respect to the  Collateral.  If the
          parties hereto are parties to any prior  agreement,  either written or
          oral,  relating to the  Collateral,  the terms of this Agreement shall
          amend  and  supersede  the  terms  of  such  prior  agreements  as  to
          transactions on or after the effective date of this Agreement, but all
          security agreements, financing statements, guaranties, other contracts
          and notices for the  benefit of Secured  Party shall  continue in full
          force and  effect to secure  the  Indebtedness  unless  Secured  Party
          specifically releases its rights thereunder by separate release.

     (b)  Amendment.  No modification,  consent or amendment of any provision of
          this Agreement or any of the other Financing  Documents shall be valid
          or  effective  unless the same is in  writing  and signed by the party
          against whom it is sought to be enforced.

     (c)  Actions  by  Secured  Party.  The lien,  security  interest  and other
          security  rights of Secured Party  hereunder  shall not be impaired by
          (i) any renewal.  extension,  increase or modification with respect to
          the Indebtedness,  (ii) any surrender,  compromise,  release, renewal,
          extension, exchange or substitution which Secured Party may grant with
          respect to the Collateral,  or (iii) any release or indulgence granted
          to any endorser,  guarantor or surety of the Indebtedness.  'Me taking
          of  additional  security by Secured  Party shall not release or impair
          the lien,  security interest or other security rights of Secured Party
          hereunder or affect the obligations of Pledgor hereunder.

     (d)  Waiver by Secured Party.  Secured Party may waive any Event of Default
          without  waiving  any  other  prior or  subsequent  Event of  Default.
          Secured  Party may remedy any  default  without  waiving  the Event of
          Default  remedied.  Neither the failure by Secured  Party to exercise,
          nor the delay by Secured Party in exercising, any right or remedy upon
          any Event of Default  shall be  construed as a waiver of such Event of
          Default  or as a waiver of the  right to  exercise  any such  right or
          remedy at a later date. No single or partial exercise by Secured Party
          of any  right or  remedy  hereunder  shall  exhaust  the same or shall
          preclude any other or further exercise  thereof,  and every such right
          or remedy  hereunder  may be exercised  at any time.  No waiver of any
          provision  hereof or consent  to any  departure  by Pledgor  therefrom
          shall be  effective  unless the same shall be in writing and signed by
          Secured Party and then such waiver or consent shall be effective  only
          in the specific instances,  for the purpose for which given and to the
          extent  therein  specified.  No notice to or demand on  Pledgor in any
          case shall of itself entitle Pledgor to any other or further notice or
          demand in similar or other circumstances.

     (e)  Costs and Expenses.  After an event of default  hereunder and a demand
          by the Secured Party to the Pledgor for the  Collateral,  Pledgor will
          upon  demand pay to Secured  Party the amount of any and all costs and
          expenses (including without limitation, attorneys' fees and expenses),
          which Secured  Party may incur in connection  with (i) the exercise or
          enforcement  of any of the rights of Secured Party under the Financing
          Documents  with  respect  to the  Collateral,  or (ii) the  failure by
          Pledgor to perform or observe any of the provisions hereof.

     (f)  Governing Law; Venue; Submission to Jurisdiction. THIS AGREEMENT SHALL
          BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE LAWS OF THE STATE
          OF TEXAS WITHOUT GIVING EFTECI` TO THE PRINCIPLES OF CONFLICTS OF LAWS
          THEREOF,  EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT OF PERFECTION
          OR  NON-PERFECTION  OF THE SECURITY  INTEREST  GRANTED  HEREUNDER,  IN
          RESPECT OF ANY  PARTICULAR  COLLATERAL,  ARE GOVERNED BY THE LAWS OF A
          JURISDICTION  OTHER  THAN  THE  STATE  OF  TEXAS.  THIS  AGREEMENT  IS
          PERFORMABLE  BY THE  PARTIES  IN DALLAS  COUNTY,  TEXAS,  PLEDGOR  AND
          SECURED  PARTY (BY ITS  ACCEPTANCE  HEREOF)  EACH  AGREE  THAT  DALLAS
          COUNTY,  TEXAS  SHALL BE THE  EXCLUSIVE  VENUE FOR  LITIGATION  OF ANY
          DISPUTE OR CLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT, AND THAT
          SUCH COUNTY IS A CONVENIENT  FORUM IN WHICH TO DECIDE ANY SUCH DISPUTE
          OR CLAINL  PLEDGOR AND SECURED PARTY (BY ITS  ACCEPTANCE  HEREOF) EACH
          CONSENT TO THE PERSONAL  JURISDICTION  OF THE STATE AND FEDERAL COURTS
          LOCATED IN DALLAS COUNTY, TEXAS FOR THE LITIGATION OF ANY SUCH DISPUTE
          OR CLAIM.  PLEDGOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
          BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFFER HAVE TO THE LAYING
          OF THE VENUE OF ANY SUCH  PROCEEDING  BROUGHT  IN SUCH A COURT AND ANY
          CLAIM  THAT  ANY  SUCH  PROCEEDING  BROUGHT  IN SUCH A COURT  HAS BEEN
          BROUGHT IN AN INCONVENIENT FORUM

     (g)  Waiver of Jury Trial.  PLEDGOR AND  SECURED  PARTY (BY ITS  ACCEPTANCE
          HEREOF)  EACH  HEREBY  IRREVOCABLY  WAIVES,  TO  THE  MAXIM[UM  EXTENT
          PERMITTED  BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
          OF ANY  LITIGATION  DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF,
          UNDER  OR  IN  CONNECTION  WITH  THIS  AGREEMENT  OR  ANY  TRANSACTION
          CONTEMPLATED HEREBY OR ASSOCIATED HEREWITH.

     (h)  Severability. If any provision of this Agreement is held by a court of
          competent  jurisdiction to be illegal,  invalid or unenforceable under
          present or future laws, such provision shall be fully severable, shall
          not impair or  invalidate  the  remainder  of this  Agreement  and the
          effect  thereof shall be confined to the provision held to be illegal,
          invalid or unenforceable.

     (i)  No  Obligation.  Nothing  contained  herein  shall be  construed as an
          obligation  on the part of  Secured  Party to  extend or  continue  to
          extend credit to Borrower or Pledgor.

     (j)  Notice.  All  notices,   requests,  demands  or  other  communications
          required or permitted to be given pursuant to this Agreement  shall be
          in writing and given by (i) personal delivery, (ii) expedited delivery
          service with proof of  delivery,  (iii)  United  States mail,  postage
          prepaid,  registered or certified mail, return receipt  requested,  or
          (iv) telecopy (with receipt thereof  confirmed by telecopier)  sent to
          the intended  addressee at the address set forth on die signature page
          hereof  or to such  different  address  as die  addressee  shall  have
          designated  by written  notice sent  pursuant to the terms  hereof and
          shall be deemed to have been received either,  in the case of personal
          delivery,  at the time of personal delivery,  in the case of expedited
          delivery  service,  as of the date of first attempted  delivery at the
          address and in the manner provided  herein,  in the case of mail, upon
          deposit in a depository  receptacle  under the care and custody of the
          United  States  Postal  Service,  or in the  case  of  telecopy,  upon
          receipt.  Either  party shall have the right to change its address for
          notice  hereunder to any other location within the continental  United
          States  by  notice to the  other  party of such new  address  at least
          thirty (30) days prior to the effective date of such new address.

     (k)  Binding Effect and Assignment. This Agreement (i) creates a continuing
          security interest in die Collateral,  (ii) shall be binding on Pledgor
          and the heirs, executors,  administrators,  personal  representatives,
          successors  and  assigns  of  Pledgor,  and (iii)  shall  inure to the
          benefit of  Secured  Party and its  successors  and  assigns.  Without
          limiting the  generality of the  foregoing,  Secured Party may pledge,
          assign or  otherwise  transfer the  Indebtedness  and its rights under
          this Agreement and any of the other  Financing  Documents to any other
          party.  Pledgor's rights and obligations hereunder may not be assigned
          or otherwise  transferred without the prior written consent of Secured
          Party.

     (1)  Termination.  It is  contemplated by the parties hereto that from time
          to time there may be no outstanding Indebtedness,  but notwithstanding
          such  occurrences,  this Agreement  shall remain valid and shall be in
          full force and effect as to subsequent outstanding Indebtedness.  Upon
          (i) the satisfaction in full of the Indebtedness, (ii) the termination
          or expiration  of any  commitment of Secured Party to extend credit to
          Pledgor and/or  Borrower,  (iii) written  request for the  termination
          hereof delivered by Pledgor to Secured Party, and (iv) written release
          delivered by Secured Party to Pledgor, this Agreement and the security
          interests  created hereby shall  terminate.  Upon  termination of this
          Agreement  and  Pledgor's  written  request,  Secured  Party will,  at
          Pledgor's  sole  cost  and  expense,  return  to  Pledgor  such of the
          Collateral  as shall not have been sold or  otherwise  disposed  of or
          applied  pursuant  to the terms.  hereof and  execute  and  deliver to
          Pledgor such documents as Pledgor shall reasonably request to evidence
          such termination.

     (m)  Cumulative  Rights. All rights and remedies of Secured Party hereunder
          are  cumulative of each other and of every other right or remedy which
          Secured Party may  otherwise  have at law or in equity or under any of
          the other Financing Documents, and the exercise of one or more of such
          rights or remedies  shall not  prejudice or impair the  concurrent  or
          subsequent exercise of any other rights or remedies.

     (n)  Gender and Number.  Within this Agreement words of any gender shall be
          held and  construed  to  include  the other  gender,  and words in the
          singular  number shall be held and construed to include the plural and
          words in the plural  number shall be held and construed to include the
          singular, unless in each instance the context requires otherwise.

     (o)  Descriptive   Heading  .  The  headings  in  this  Agreement  are  for
          convenience  only and shall in no way  enlarge,  limit or  define  the
          scope or meaning of the various and several provisions hereof

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


<PAGE>


EXECUTED as of the date first written above.

PLEDGOR:

Timothy S. Durham

Telecopy No.:

Terry G. Whitesell

Telecopy No.:

Marcus Kennedy

Telecopy No.:

SECURED PARTY:

MARKPOINT EQUITY GROWTH FUND, J.V.

         By: The Markpoint Company, its Managing Venturer

              By:
              Name: Tex Sekhon
              Title: President

Secured Party's Address:

Markpoint Equity Growth Fund, J.V.
15770 Dallas Parkway, Suite 800
Dallas, Texas 75248
ATTN: Tex Sekhon
Telecopy No. 972-490-1980


<PAGE>
THE RIGHTS AND REMEDIES OF MARKPOINT  EQUITY  GROWTH FUND,  J.V.  HEREUNDER  ARE
SUBJECT TO A SUBORDINATION  AGREEMENT  AMONG MARKPOINT  EQUITY GROWTH FUND, J.V.
AND BANK ONE INDIANA, NA. DATED AS OF EVEN DATE HEREWITH.

                           REPLACEMENT PROMISSORY NOTE

$1,250,000                                          May 2, 2000

     FOR  VALUE  RECEIVED,  on or  before  May 2,  2005  ("Maturity  Date")  the
undersigned  (hereinafter  referred  to as  "Borrower"),  promises to pay to the
order of MARKPOINT  EQUITY GROWTH FUND,  J.V.  ("MEGF") at its offices in Dallas
County,  Texas, at 15770 Dallas Parkway,  Suite 800,  Dallas,  Texas 75248,  the
principal  amount of ONE MILLION TWO HUNDRED FIFTY  THOUSAND AND NO/100  DOLLARS
($1,250,000)  ("Total  Principal  Amount"),  or such  amount less than the Total
Principal  Amount  which is  outstanding  from time to time if the total  amount
outstanding under this Promissory Note ("Note") is less than the Total Principal
Amount,  together  with  interest at the rate set forth below on such portion of
the Total  Principal  Amount which has been  advanced to Borrower  from the date
advanced  until paid. All defined terms used herein but not defined herein shall
have the  meanings  ascribed to them in that  certain  Note  Purchase  Agreement
between Borrower and MEGF dated as of the date hereof.

     Interest Rate. The unpaid principal amount of this Note shall bear interest
at a fixed  rate per  annum  equal to  thirteen  and one half  percent  (13.5%),
calculated  on the basis of actual  days  elapsed  but  computed as if each year
consisted of 360 days.

     Repayment  Terms.  The principal of and all accrued but unpaid  interest on
this Note shall be due and payable as follows:


     (a) interest shall be due and payable monthly as it accrues,  commencing on
     the 1st day of June,  2000 and continuing on the 1st day of each successive
     month thereafter during the term of this Note; and

     (b) the  outstanding  principal  balance  of this Note,  together  with all
     accrued but unpaid interest, shall be due and payable on the Maturity Date.

Borrower  authorizes  MEGF to effect  all  payments  due under  this Note and to
collect  all sums due  hereunder  (whether  by  acceleration  or  otherwise)  by
debiting  Borrower's account number  1588262467,  ABA No. 111000614 at Bank One,
Texas,  N.A. (the "Debit Account")  through the Automated  Clearing House system
("ACH"). Such authorization shall not affect the obligations of Borrower to make
all payments when due  hereunder.  Borrower  represents and agrees that the Debt
Account  shall only be used for the payment of this Note.  If on my payment date
there are insufficient funds in the Debit Account to make such payments in full,
Borrower  agrees to pay TMC on  demand a  $100.00  manual  processing  fee.  All
payments of  principal of or interest on this Note shall be made in lawful money
of the United States of America in  immediately  available  funds,  and, if such
payments are not made via ACH, shall be made at MEGF's address  indicated above,
or such other  place as the holder of this Note  shall  designate  in writing to
Borrower.  If any payment of principal or interest on this Note shall become due
on a day which is not a Business  Day (as  hereinafter  defined),  such  payment
shall be made on the next succeeding Business Day and any such extension of time
shall be included in computing interest in connection with such payment. As used
herein, the term "Business Day" shall mean my day other than a Saturday,  Sunday
or any other day on which MEGF's office in Dallas Texas is closed. All regularly
scheduled  payments of the indebtedness  evidenced by this Note shall be applied
first to any accrued but unpaid interest then due and payable hereunder and then
to the principal mount then due and payable. The books and records of MEGF shall
be prima facie evidence of all  outstanding  principal of and accrued and unpaid
interest on this Note.  To the extent that any interest is not paid on or before
the fifth day after it becomes due and  payable,  MEGF may,  at its option,  add
such accrued  interest to the principal of this Note.  Notwithstanding  anything
herein to the contrary,  upon an Event of Default (as hereinafter defined) or at
maturity,  whether by  acceleration  or  otherwise,  all  principal of this Note
shall,  at the option of MEGF, bear interest at the higher of 18% or the Maximum
Rate (as defined hereinbelow) any further action or notice to the Borrower.

Prepayment  without  Penalty.  Borrower  may from time to time prepay all or any
portion of the  outstanding  principal  balance of this Note without  premium or
penalty.  Any  partial  prepayment  shall be applied  toward the  payment of the
principal  last maturing on this Note in the inverse order of maturity,  without
reducing  the amount or  altering  the due date of the  remaining  payments  due
hereunder.

Loan  Documents.  This Note is subject to the terms and  conditions set forth in
that  certain  Note  Purchase  Agreement  of even date  herewith  by and between
Borrower and MEOF (the "Note Purchase Agreement").  This Note, the Note Purchase
Agreement and all other documents evidencing, securing, governing,  guaranteeing
and/or pertaining to this Note are hereinafter  collectively  referred to as the
"Loan  Document".  The  holder  of this Note is  entitled  to the  benefits  and
security provided in the Loan Documents.

Purpose.  Borrower  agrees  that no  proceeds  of this  Note  shall  be used for
personal,  family or household purposes,  and that all of such proceeds shall be
used  solely for the  investment  purpose of the  acquisition  of a  substantial
portion of the assets of the Target Companies.

Event of  Default.  Borrower  agrees  that upon the  occurrence  of any event of
default  specified  in the Note  Purchase  Agreement  or any of the  other  Loan
Documents,  the holder of this Note may, at its option, pursue any and all other
rights, remedies and recourses available to the holder hereof, including but not
limited  to any  such  rights,  remedies  or  recourses  under  the  other  Loan
Documents, at law or in equity. The failure to exercise the option to accelerate
the maturity of this Note or any other right remedy or recourse available to the
holder  hereof upon the  occurrence of an Event of Default  hereunder  shall not
constitute a waiver of the right of the holder of this Note to exercise the same
at that time or at any subsequent  time with respect to such Event of Default or
any other Event of Default.  The rights,  remedies  and  recourses of the holder
hereof,  as provided in this Note and in any of the other Loan Documents,  shall
be cumulative  and  concurrent and may be pursued  separately,  successively  or
together as often as occasion  therefore  shall arise, at the sole discretion of
the holder hereof. The acceptance by the holder hereof of any payment under this
Note which is less than the  payment in full of all  amounts  due and payable at
the time of such payment shall not (i) constitute a waiver of or impair, reduce,
release or extinguish  any right,  remedy or recourse of the holder  hereof,  or
nullify  any prior  exercise  of any such  right,  remedy or  recourse,  or (ii)
impair,  reduce, release or extinguish the obligations of any party liable under
any of the other Loan Documents as originally provided herein or therein.

Compliance  with Usury  Laws.  Notwithstanding  any  provision  to the  contrary
contained in this Note, the Borrower shall not be required to pay, and Purchaser
shall not be permitted to contract for, take,  reserve,  charge or receive,  any
compensation  which  constitutes  interest under applicable law in excess of the
maximum amount of interest permitted by law ("Excess  Interest").  If any Excess
Interest is provided for or determined by a court of competent  jurisdiction  to
have  been  provided  for in  this  Note or  otherwise  contracted  for,  taken,
reserved,  charged or received,  then in such event:  (a) the provisions of this
Note shall  govern and control;  (b) the Borrower  shall not be obligated to pay
any Excess Interest;  (c) any Excess Interest that MEGF may have contracted for,
taken,  reserved,  charged or received hereunder shall be, at MEGF's option, (i)
applied as a credit  against the  outstanding  principal  balance of the Loan or
accrued and unpaid interest (not to exceed the maximum amount permitted by law),
(ii) refunded to the payor thereof,  or (iii) any  combination of the foregoing;
(d) the  interest  provided  for shall be  automatically  reduced to the maximum
lawful rate allowed from time to time under applicable law (the "Maximum Rate"),
and this Note shall be deemed to have been, and shall be,  reformed and modified
to reflect such  reduction;  and (e) the Borrower  shall have no action  against
MEGF for any damages  arising due to any Excess  Interest.  Notwithstanding  the
foregoing,  if for  any  period  of time  interest  on any  part of the  Loan is
calculated at the Maximum Rate rather than the applicable  rate under this Note,
and thereafter such applicable rate becomes less than the Maximum Rate, the rate
of interest  payable on such part of the Loan shall  remain at the Maximum  Rate
until MEGF  shall have  received  the amount of  interest  which MEGF would have
received  during  such  period on such part of the Loan had the rate of interest
not been limited to the Maximum Rate during such period. All sums paid or agreed
to be paid  hereunder or under the Loan  Documents for the use,  forbearance  or
detention  of sums due shall,  to the extent  permitted  by  applicable  law, be
amortized,  pro-rated, allocated and spread throughout the full term of the Loan
until  payment in full so that the rate or amounts of interest on account of the
Loan does not exceed the Maximum Rate. The terms of this Section shall be deemed
incorporated  into  each  of the  Loan  Documents  and  any  other  document  or
instrument  between the  Borrower  and MEGF or directed to the Borrower by MEGF,
whether or not specific reference to this Section is made.

Costs of Collection; Waivers. If this Note is placed in the hands of an attorney
for collection,  or is collected in whole or in part by suit or through probate,
bankruptcy or other legal  proceedings of any kind,  Borrower  agrees to pay, in
addition  to all  other  sums  payable  hereunder,  all costs  and  expenses  of
collection,  including but not limited to reasonable  attorneys' fees.  Borrower
and  any  and  all  endorsers  and  guarantors  of  this  Note  severally  waive
presentment  for  payment,  notice of  nonpayment,  protest,  demand,  notice of
protest,  notice of intent to accelerate,  notice of acceleration  and dishonor,
diligence  in  enforcement  and  indulgences  of every kind and without  further
notice  hereby  agree  to  renewals,   extensions,   exchanges  or  releases  of
collateral,  taking of additional  collateral  indulgences or partial  payments,
either before or after maturity.

GOVERNING LAW; VENUE; SUBMISSION TO JURISDICTION. THIS NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE  WITH THE LAWS OF THE STATE OF TEXAS WITHOUT  GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.  THIS NOTE IS PERFORMABLE
IN DALLAS COUNTY,  TEXAS. BORROWER AGREES THAT DALLAS COUNTY, TEXAS SHALL BE THE
EXCLUSIVE VENUE FOR LITIGATION OF ANY DISPUTE OR CLAIM ARISING UNDER OR RELATING
TO THIS NOTE, AND THAT SUCH COUNTY IS A CONVENIENT  FORUM IN WHICH TO DECIDE ANY
SUCH DISPUTE OR CLAIM.  BORROWER  CONSENTS TO THE PERSONAL  JURISDICTION  OF THE
STATE AND FEDERAL COURTS  LOCATED IN DALLAS COUNTY,  TEXAS FOR THE LITIGATION OF
ANY SUCH DISPUTE OR CLAIM.  BORROWER  IRREVOCABLY  WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH  PROCEEDING  BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING  BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

WAIVER OF JURY TRIAL.  BORROWER HEREBY IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT
PERMITTED  BY LAW,  ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN  RESPECT  OF ANY
LITIGATION  DIRECTLY  OR  INDIRECTLY  AT ANY TIME  ARISING  OUT OF,  UNDER OR IN
CONNECTION WITH THIS NOTE OR ANY TRANSACTION  CONTEMPLATED  HEREBY OR ASSOCIATED
HEREWITH.

FINAL  AGREEMENT.  THIS NOTE AND THE OTHER LOAN  DOCUMENTS  REPRESENT  THE FINAL
AGREEMENT   BETWEEN  MEGF  AND  BORROWER   WITH  RESPECT  TO  THE   TRANSACTIONS
CONTEMPLATED   HEREIN  AND  MAY  NOT  BE  CONTRADICTED  BY  EVIDENCE  OF  PRIOR,
CONTEMPORANEOUS,  OR SUBSEQUENT  ORAL  AGREEMENTS  OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

                                    BORROWER:

                                    CHAMPION TRAILER COMPANY, L.P.
                                    By: Durham Whitesell & Associates, LLC,
                                        its general partner


                                    By:  ______________________
                                    Name:  Timothy S. Durham
                                    Title:  Managing Member