ex-10.txt

                                      EXHIBIT 10.1

              SECOND AMENDED AND RESTATED CREDIT AGREEMENT
             ==============================================



                        SECOND AMENDED AND RESTATED
                             CREDIT AGREEMENT

                               by and among

                         CONSOLTEX HOLDINGS, INC.,
                              CONSOLTEX INC.,
                      CONSOLTEX MEXICO, S.A. de C.V.,
                           CONSOLTEX (USA) INC.,
                      THE BALSON-HERCULES GROUP LTD.,
                    LINQ INDUSTRIAL FABRICS, INC., and
                          RAFYTEK, S.A. de C.V.,
                               as Borrowers,


                          NATIONAL BANK OF CANADA
                                    and
                           BANK OF AMERICA, N.A.
                         as Agents and as Lenders,

                                    and

                      BANC OF AMERICA SECURITIES LLC
                  as Lead Arranger and Lead Book Manager

                                    and

                THE LENDERS PARTY HERETO FROM TIME TO TIME

                             November 7, 2000







<PAGE>


                             TABLE OF CONTENTS

1.1	Assignment and Allocations........................3
1.2  Definitions........................................9
1.3  Rules of Interpretation...........................55

                                ARTICLE II

                           The Credit Facilities

2.1  Term Loan.........................................57
2.2  Revolving Loans...................................60
2.3  Use of Proceeds...................................65
2.4  Notes.............................................65
2.5  Canadian Swing Line...............................65

                                ARTICLE III

                             Letters of Credit

3.1  Letters of Credit.................................67
3.2  Reimbursement and Participations..................67

                                ARTICLE IV

Bankers' Acceptances, Eurodollar Funding, Fees, and Payment
Conventions

4.1. Bankers' Acceptances..............................72
4.2  Interest Rate Options.............................74
4.3  Conversions and Elections of
	Subsequent Interest Periods......................75
4.4  Payment of Interest...............................76
4.5  Prepayments of Eurodollar Rate
	Loans and Bankers' Acceptances...................77
4.6  Manner of Payment.................................77
4.7  Fees..............................................77
4.8  Pro Rata Payments.................................79
4.9  Computation of Rates and Fees.....................79
4.10 Deficiency Advances; Failure
	to Purchase Participations.......................80
4.11 Intraday Funding..................................81
4.12 Risk Participation among Lenders..................82
4.13 Utilization of Canadian Dollars...................83

                                 ARTICLE V

                                 Security

5.1  Security..........................................86
5.2  Further Assurances................................87
5.3  Information Regarding Collateral..................87
5.4. Lock Boxes and Lock Box Accounts..................88
5.5  Deposit Accounts..................................88
5.6  Power of Attorney of Canadian Agent
	and Canadian Collateral Trustee..................89

                                ARTICLE VI

                          Change in Circumstances

6.1  Increased Cost and Reduced Return.................91
6.2  Limitation on Types of Loans......................93
6.3  Illegality........................................93
6.4  Treatment of Affected Loans.......................93
6.5  Compensation......................................94
6.6  Taxes.............................................95

                                ARTICLE VII

Conditions to Making Loans and Issuing Letters of Credit

7.1  Conditions of Closing and the Additional
	Advance of the US Term Loan......................97
7.2  Conditions of Revolving Loans
	and Letter of Credit............................102
7.3  Post-Closing Items...............................103

                               ARTICLE VIII

                      Representations and Warranties

8.1  Organization and Authority.......................106
8.2  Loan Documents...................................106
8.3  Solvency.........................................107
8.4  Subsidiaries and Stockholders....................107
8.5  Ownership Interests..............................107
8.6  Financial Condition..............................107
8.7  Title to Properties..............................108
8.8  Taxes............................................108
8.9  Other Agreements.................................109
8.10 Litigation.......................................109
8.11 Margin Stock.....................................109
8.12 Regulated Company................................109
8.13 Patents, Etc.....................................109
8.14 No Untrue Statement..............................110
8.15 No Consents, Etc.................................110
8.16 Employee Benefit Plans...........................110
8.17 No Default.......................................112
8.18 Environmental Laws...............................112
8.19 Employment Matters...............................112
8.20 RICO.............................................113
8.21 Assets of Consoltex Holdings.....................113
8.22 Lock Box Accounts................................113
8.23 Perfected Security Interests.....................113

                                ARTICLE IX

                           Affirmative Covenants

9.1  Financial Reports, Etc...........................114
9.2  Maintain Properties..............................118
9.3  Existence, Qualification, Etc....................118
9.4  Regulations and Taxes............................118
9.5  Insurance........................................118
9.6  True Books.......................................120
9.7  Right of Inspection..............................120
9.8  Observe all Laws.................................120
9.9  Governmental Licenses............................121
9.10 Covenants Extending to Other Persons.............121
9.11 Officer's Knowledge of Default...................121
9.12 Suits or Other Proceedings.......................121
9.13 Notice of Environmental Complaint or Condition...121
9.14 Environmental Compliance.........................121
9.15 Indemnification..................................122
9.16 Further Assurances...............................122
9.17 Employee Benefit Plans...........................122
9.18 Continued Operations.............................124
9.19. Lease Purchase Agreement........................124
9.20 Lock Boxes and Lock Box Accounts.................124

                                 ARTICLE X

                            Negative Covenants

10.1 Financial Covenants..............................126
10.2 Acquisitions.....................................128
10.3 Capital Expenditures.............................128
10.4 Liens............................................128
10.5 Indebtedness.....................................130
10.6 Transfer of Assets...............................132
10.7 Investments......................................133
10.8 Merger or Consolidation..........................133
10.9 Restricted Payments..............................134
10.10 Transactions with Affiliates....................134
10.11 Compliance with ERISA, the Code, Foreign
	Benefit Laws, Mexican Benefit Law
	and Canadian Benefit Law........................134
10.12 Fiscal Year.....................................136
10.13 Dissolution, etc................................136
10.14 Limitations on Sales and Leasebacks.............136
10.15 Change in Control...............................136
10.16 Rate Hedging Obligations........................136
10.17 Negative Pledge Clauses.........................136
10.18 Compensation; Reimbursement of Expenses.........136
10.19 Change in Accountants...........................137
10.20 Prepayments, Etc. of Indebtedness...............137
10.21 Subordinated Debt...............................137
10.22 PIK Notes.......................................137
10.23 Fee Limitation Agreement........................137
10.24. Consoltex Holdings.............................137
10.25 Limitations on Upstreaming......................138
10.26 Limitations on Deposit Accounts.................138
10.27 Limitations on Subsidiaries.....................138

                                ARTICLE XI

                    Events of Default and Acceleration

11.1 Events of Default................................139
11.2 Agents to Act....................................142
11.3 Cumulative Rights................................142
11.4 No Waiver........................................142
11.5 Allocation of Proceeds...........................143

                                ARTICLE XII

                                 The Agent

12.1 Appointment, Powers, and Immunities..............145
12.2 Reliance by Agents...............................145
12.3 Defaults.........................................146
12.4 Rights as Lender.................................146
12.5 Indemnification..................................147
12.6 Non-Reliance on Agent and Other Lenders..........147
12.7 Resignation of Agent.............................147

                               ARTICLE XIII

                               Miscellaneous

13.1 Assignments and Participations...................149
13.2 Notices..........................................151
13.3 Right of Set-off; Adjustments....................154
13.4 Survival.........................................154
13.5 Expenses.........................................154
13.6 Amendments and Waivers...........................155
13.7 Counterparts; Facsimile Signatures...............156
13.8 Termination......................................156
13.9 Indemnification; Limitation of Liability.........157
13.10 Severability....................................157
13.11 Entire Agreement................................157
13.12 Agreement Controls..............................157
13.13 Usury Savings Clause............................158
13.14 Governing Law; Waiver of Jury Trial.............158
13.15 Confidentiality.................................159


EXHIBIT A: Applicable Commitment Percentages..........A-1
EXHIBIT B: Form of Assignment and Acceptance..........B-1
EXHIBIT C: Notice of Appointment (or Revocation)
		of Authorized Representative..............C-1
EXHIBIT D: Form of Borrowing Base Certificate.........D-1
EXHIBIT E-1: Form of Borrowing Notice...............E-1-1
EXHIBIT E-2: Form of Borrowing Notice-Swing Line Loans.....E-2-1
EXHIBIT F: Form of Interest Rate Selection Notice.....F-1
EXHIBIT G-1: Form of Revolving Note.................G-1-1
EXHIBIT G-2: Form of Term Note......................G-2-1
EXHIBIT H: Form of Third Amendment to Mortgag ........H-1
EXHIBIT I-1: Form of Opinion of Kirkland & Ellis....I-1-1
EXHIBIT I-2: Form of Opinion of Young, Clement,
		Rivers & Tisdale LLP....................I-2-1
EXHIBIT I-3: Form of Opinion of Ogilvy
		Renault S.E.N.C.........................I-3-1
EXHIBIT I-4: Form of Opinion of Brown Rudnick
		Freed & Gesmer...........................I-4-1
EXHIBIT I-5: Form of Opinion of Rich, Heather
		 and Mueller.............................I-5-1
EXHIBIT I-6: Form of Opinion of Stewart McKelvey
		Stirling Scales..........................I-6-1										 I-6-1
EXHIBIT I-7: Form of Opinion of Osler
		Hoskins & Harcourt.......................I-7-1
EXHIBIT J: Form of Compliance Certificate............. J-1
EXHIBIT K: Form of Waiver of Lien Rights...............K-1

Schedule 5.3: Information Regarding Collateral........ S-1
Schedule 5.4: Lock Box and Cash Collateral
		Accounts...................................S-2
Schedule 5.5: Deposit Accounts ........................S-3
Schedule 8.4: Subsidiaries and Investments in
		Other Persons .............................S-4
Schedule 8.6: Indebtedness ........................... S-5
Schedule 8.7: Liens ...................................S-6
Schedule 8.8: Tax Matters .............................S-7
Schedule 8.10: Litigation .............................S-8
Schedule 8.13: Intellectual Property ..................S-9
Schedule 8.16: Pension Plans ..........................S-10
Schedule 8.16(e): Unfunded Employment
		Benefit Plans..............................S-11
Schedule 8.19: Employment Matters .....................S-12





373603                               1


<PAGE>


       SECOND AMENDED & RESTATED CREDIT AGREEMENT


     THIS  SECOND  AMENDED  AND  RESTATED  CREDIT
AGREEMENT, dated as of November  7,  2000 (as amended,
restated or supplemented and in effect from time to time,
the  "Agreement"),  is  made by and among each of
CONSOLTEX HOLDINGS,  INC.,  a  Delaware corporation
having its principal  place of business on the date
hereof in New York, New York, U.S.A., ("Consoltex Holdings"),
CONSOLTEX INC., a corporation incorporated under the  laws
of New Brunswick,  Canada,  having its principal place of
business on the date hereof in Ville Saint-Laurent,Quebec,
Canada ("Consoltex"), CONSOLTEX (USA) INC., a New York
corporation having its  principal place of business on the
date hereof in New York, New York, U.S.A. ("Consoltex  USA"),
THE BALSON-HERCULES GROUP LTD., a Rhode Island
corporation having its principal place of business on the date
hereof  in  New  York,  New  York, U.S.A.("Balson-Hercules"),
LINQ INDUSTRIAL FABRICS, INC., a Delaware corporation
having its principal place  of  business on the date
hereof in Summerville, South Carolina, U.S.A. ("LINQ"),
CONSOLTEX MEXICO, S.A. DE C.V., a Mexican corporation having
its principal place  of  business on the date hereof in Col.
Polanco C.P., 11560, Mexico, D.F. ("Consoltex Mexico"),  and
RAFYTEK,S.A.  DE C.V., a Mexican corporation having its
principal place of business on the  date hereof in Col. Polanco
C.P., 11560, Mexico, D.F. ("Rafytek")(Consoltex Holdings,
Consoltex,  Consoltex  USA,  Balson-Hercules,
LINQ, Consoltex Mexico and Rafytek are collectively referred to
herein as the "Borrowers" and individually referred to as a
"Borrower");

RAFYTICA,  S.A.,  a Costa Rican corporation having its principal
place  of business on the date hereof in San Jose, Costa Rica
("Rafytica"), VERA PAK, S.A. DE C.V., a Mexican  corporation
having its principal place of business on the date hereof in
Col.  Polanco C.P., 11560, Mexico, D.F. ("Vera Pak"),ROYALTON
MEXICANA S.A. DE C.V., a Mexican corporation having its
principal place of business on the date  hereof in Mexico City,
Mexico  ("Royalton"),VEST COMPANY  VESTCO  S.A.  DE C.V.,  a
Mexican  corporation  having its principal place of business on
the  date  hereof  in  Mexico City, Mexico("Vestco")  and
MARINO  TECHNOLOGIES  DE  MEXICO,  S.A. DE C.V., a Mexican
corporation having its principal place of business on  the
date  hereof in San Luis Potosi, Mexico ("Marino Mexico");

NATIONAL  BANK  OF  CANADA,  a  bank governed by the BANK ACT
(Canada) (the "Bank Act"), having its head office  in  Montreal,
Quebec, Canada, in its capacity as a Lender ("NBC"), BANK OF
AMERICA,  N.A.,  successor  in interest  to  NationsBank,
National Association,   a  national  banking association
organized  and existing under the laws of the  United
States, having its principal office  in  Charlotte,  North
Carolina, U.S.A., in its capacity  as a  Lender  ("Bank  of
America"), and  EACH  OTHER  FINANCIAL INSTITUTION EXECUTING
AND DELIVERING A SIGNATURE PAGE HERETO and each other financial
institution which may hereafter execute and deliver an
instrument of  assignment  with respect to this Agreement
pursuant  to  SECTION  13.1(hereinafter  NBC, Bank of America
and  each  other  such  financial institutions may be referred to
individually  as a "Lender" or collectively as  the  "Lenders"),
NATIONAL  BANK  OF  CANADA,  in   its   capacity   as
administrative agent  for  the  Canadian  Facilities  Lenders
(as defined herein (in such capacity, or any successor
administrative agent  appointed in accordance  with the terms
of SECTION 12.7, the "Canadian Agent"), and BANK OF AMERICA,
N.A.,  successor  in  interest  to  NationsBank, National
Association,  in  its  capacity  as  administrative  agent
for the U.S. Facilities Lenders (as defined herein) (in such
capacity, or any successor administrative agent appointed in
accordance with the terms of SECTION 12.7, the "US Agent" and
together with the Canadian Agent, the "Agents");

                           W I T N E S S E T H:

 WHEREAS,  the Borrowers, the Agents and certain  of  the
Lenders are party to that certain  Amended  and  Restated
Credit Agreement dated as of October 25, 1999, as amended by
Amendment No. 1  to Amended and  Restated Credit  Agreement
and Other Loan Documents dated as of January 3, 2000,  as
further amended by Amendment No. 2 to Amended and Restated
Credit Agreement and Consent  dated  as  of May  12,  2000,
as  further  amended by Letter Agreement and Amendment No. 3
to Amended & Restated Credit  Agreement dated as of August 31,
2000, as further amended by Amendment No. 4 to
Amended and Restated  Credit  Agreement and Other Loan
Documents dated as of  September 28, 2000, and as further
amended  by Consolidated  Amendment  and Consent Agreement
dated  as  of September  29, 2000 (as so amended, the
"Existing Credit Agreement"), pursuant to which  the  Lenders
have  agreed  to  make available to certain Borrowers each of
the following:  (a) a U.S. term loan facility in  the
aggregate  principal amount outstanding as of October 1, 2000
of $3,375,000, the proceeds  of  which  were  used
when advanced to refinance and cancel certain existing term
indebtedness and working capital facilities  of  the  US
Borrowers(as hereinafter defined), (b) a Canadian term loan
facility in the aggregate principal Dollar Equivalent
Amount (as hereinafter defined)outstanding  as  of October
1, 2000 of $3,375,000, the proceeds of which were used when
advanced  to  refinance and cancel certain
existing term indebtedness and working capital facilities of
Consoltex, (c)a  third  term loan facility in the principal
amount of  $43,000,000  (the "Existing Term  B  Loan
Facility  "), the proceeds of which were used when advanced
to the US Borrowers principally  to  acquire  Marino
Technologies,Inc. and to finance the acquisition of the
assets of Atlas  Bag,  Inc.  and Atlas  Bag Texas, Inc.,
for working capital and for other lawful purposes,
and (d) two revolving  credit  facilities of up to
$57,500,000 in aggregate maximum principal Dollar Equivalent
Amount (as hereinafter defined) at any time outstanding
(the "Existing Revolvers"),  the proceeds  of  which were used
when advanced and are to be used (i) in part to refinance and
cancel certain  existing  term indebtedness and working
capital facilities of the Borrowers, (ii) to pay certain  fees
and  expenses in connection with such facilities  and  such
refinancing and (iii) for  other  general corporate purposes
including  but  not   limited   to   permitted
investments in subsidiaries,  Capital  Expenditures,  capital
investment and debt repayment and including letter of credit
availability  of up to $15,000,000 in  aggregate  stated
Dollar  Equivalent  Amount (as hereinafter  defined)
outstanding at any time for the issuance of  commercial and
standby letters of credit; and

     WHEREAS,  the  Borrowers have requested that  the
Lenders amend  and restate the Existing Credit Agreement,
among  other things, to increase the total Dollar Equivalent
Amount  (as hereinafter  defined) of the term loans by
$9,500,000, which increase shall  be  used  for  working
capital and for other lawful purposes, to adjust
the term loans between the US Borrowers, the US Facilities
Lenders, Consoltex and the Canadian Facilities Lenders,
and to simplify the existing term loan structure
(the "Restatement"); and

     WHEREAS,  the  Lenders and the Agents are willing to
amend and restate the Existing Credit Agreement  and  to
continue  to  make certain  credit facilities  available  to
the  Borrowers upon the terms and conditions set forth
herein;

     NOW, THEREFORE, the Borrower,  the  Lenders and the
Agent hereby agree as follows:


                                 ARTICLE I

                    Assignments, Definitions and Terms

1.1  ASSIGNMENTS  AND  ALLOCATIONS.  In   order   to
facilitate the Restatement  and otherwise to effectuate the
desires of the Borrowers,  the Agents and the Lenders:

     (a)  as of  the  close  of  business  on  October 30,
2000, the Dollar Equivalent Amount allocations of commitments
of  the Lenders  under  the Existing Credit Agreement  for
each of the respective subfacilities were as follows:

<TABLE>
<CAPTION>
U.S. Term Loan Facility
<S>                                      <C>
LENDER                                      COMMITMENT
Bank of America, N.A.                   $ 1,389,705.87
Fleet Business Credit Corporation       $ 1,985,294.13
Canadian Term Loan Facility
LENDER                                      COMMITMENT
National Bank of Canada                $  2,580,882.35
The Bank of Nova Scotia                $    794,117.65
Term B Loan Facility
LENDER                                      COMMITMENT
Bank of America, N.A.                  $  12,676,470.60
Fleet Business Credit Corporation      $  12,647,058.80
National Bank of Canada (U.S. Division)$  12,676,470.60
The Bank of Nova Scotia (U.S. Division $   5,000,000.00
U.S. Revolving Loan Facility
LENDER                                      COMMITMENT
Bank of America, N.A.                 $ 17,352,941.48
Fleet Business Credit Corporation     $ 16,911,764.70
National Bank of Canada (U.S. Division) $   2,647,058.82
Canadian Revolving Loan Facility
LENDER                                      COMMITMENT
National Bank of Canada               $ 14,705,882.06
The Bank of Nova Scotia               $   5,882,352.94
TOTAL FACILITIES                      $107,250,000.00
</TABLE>

     (b)  simultaneously  with  the  Closing Date, but
immediately prior to giving  effect  to  SECTION 1.1(C) and
any  additional commitments  to  be provided  as  part  of
this  Agreement,  the Facilities  and  the  Dollar Equivalent
Amounts outstanding thereunder will be deemed to be
reallocated by (i) reducing the commitments under  the
Canadian Revolving Loan Facility by $1,595,907.88, of which
$521,739.08 reduces  the  commitment of National Bank of
Canada and $1,074,168.80 reduces the commitment
of The Bank of Nova Scotia, and (ii) increasing the commitments
under the  US  Revolving  Loan Facility by  $1,595,907.88,  of
which $521,739.08 will be allocated to National Bank of Canada,
U.S. Division, and $1,074,168.80 will be allocated to The Bank of
Nova Scotia, U.S. Division, with the resulting allocation of
commitments immediately  after such reallocation, but prior
to the application of Section 1.1(c), as follows:

<TABLE>
<CAPTION>
U.S. Term Loan Facility
<S>                                      <C>
LENDER                                      COMMITMENT
Bank of America, N.A.                  $ 1,389,705.87
Fleet Business Credit Corporation      $ 1,985,294.13
Canadian Term Loan Facility
LENDER                                      COMMITMENT
National Bank of Canada                $ 2,580,882.35
The Bank of Nova Scotia               $    794,117.65
Term B Loan Facility
LENDER                                      COMMITMENT
Bank of America, N.A.                 $ 12,676,470.60
Fleet Business Credit Corporation     $ 12,647,058.80
National Bank of Canada (U.S. Division) $ 12,676,470.60
The Bank of Nova Scotia (U.S. Division) $   5,000,000.00
U.S. Revolving Loan Facility
LENDER                                      COMMITMENT
Bank of America, N.A.                 $ 17,352,941.48
Fleet Business Credit Corporation     $ 16,911,764.70
National Bank of Canada (U.S. Division) $   3,168,797.90
The Bank of Nova Scotia (U.S. Division) $   1,074,168.80
Canadian Revolving Loan Facility
LENDER                                      COMMITMENT
National Bank of Canada               $ 14,184,142.98
The Bank of Nova Scotia              $   4,808,184.14
TOTAL FACILITIES                      $107,250,000.00
</TABLE>


(c)  simultaneously  with  the  Closing Date, but immediately
prior to giving  effect  to  SECTION 1.1(D) and any  additional
commitments  to  be provided as part of this  Agreement,  the
following  assignments in Dollar Equivalent Amounts are made
by and between the identified Lenders, with the same force
and effect as if such assignments were evidenced  by
applicable Assignments and Acceptances  under  the  Existing
Credit  Agreement  or hereunder:

          (i) National  Bank  of  Canada (U.S. Division) assigns
its entire$12,676,470.60 commitment to the Existing Term B
Loan to National Bank of Canada;

          (ii) The Bank of Nova Scotia  (U.S.  Division)
assigns its entire $5,000,000.00 commitment to the Existing
Term  B  Loan to The Bank of Nova Scotia;

          (iii) National Bank of Canada (U.S. Division) assigns
$521,739.08 of  its commitment to the Existing Revolvers to GMAC
Business  Credit,LLC ("GMAC"),  and  GMAC purchases such amount
of such commitment from National Bank of Canada (U.S. Division)
and tenders thereto payment in full of such amount in
immediately available funds;

          (iv)  The Bank of  Nova  Scotia  (U.S.   Division)
 assigns $1,074,168.80 of its commitment to the Existing
Revolvers to GMAC, and GMAC  purchases  such  amount of such
commitment from The Bank of Nova Scotia (U.S. Division) and
tenders  thereto  payment  in full of such amount in immediately
available funds;

    (v)  Bank of America assigns $3,168,798.01 of its commitment
to the Existing Revolvers to GMAC, and GMAC purchases such
amount of such commitment from Bank of America and tenders
thereto payment in full of such amount in immediately available
funds;

          (vi) Fleet Business Credit Corporation assigns
$3,088,235.24 of its commitment to the Existing Revolvers
to GMAC, and GMAC purchases such amount of such commitment
from Fleet Business  Credit Corporation and  tenders  thereto
payment in full of such amount in immediately available funds;
and

      (vii) National Bank of Canada (U.S. Division)assigns its
entire $2,647,058.82 commitment to the Existing  Revolvers  to
GMAC, and GMAC purchases such amount of such commitment from
National Bank of Canada(U.S. Division) and tenders thereto
payment in full of such amount in immediately available funds;
with  the  resulting commitment  allocations  immediately
following such assignments in Dollar Equivalent Amounts as
follows:

<TABLE>
<CAPTION>
U.S. Term Loan Facility
<S>                                <C>
LENDER                                COMMITMENT
Bank of America, N.A.            $ 1,389,705.87
Fleet Business Credit Corporation $ 1,985,294.13
Canadian Term Loan Facility
LENDER                                COMMITMENT
National Bank of Canada          $ 2,580,882.35
The Bank of Nova Scotia         $    794,117.65
Term B Loan Facility
LENDER                                COMMITMENT
Bank of America, N.A.           $ 12,676,470.60
Fleet Business Credit Corporation $ 12,647,058.80
National Bank of Canada         $ 12,676,470.60
The Bank of Nova Scotia        $   5,000,000.00
U.S. Revolving Loan Facility
LENDER                                COMMITMENT
Bank of America, N.A.           $ 14,184,143.47
Fleet Business Credit Corporation $ 13,823,529.41
GMAC Business Credit, LLC       $ 10,500,000.00
Canadian Revolving Loan Facility
LENDER                                COMMITMENT
National Bank of Canada         $ 14,184,142.98
The Bank of Nova Scotia        $   4,808,184.14
TOTAL FACILITIES                $107,250,000.00
</TABLE>

Notwithstanding anything to the contrary in SECTION 14.1 of the
Existing Credit Agreement or 13.1 of this Agreement, no
new Notes or other documents will be executed in connection
with these assignments (all  of  which requirements are
hereby waived), which  shall be immediately succeeded by
the actions in SECTION 1.1(D) hereof; and

     (d)  immediately  following  the reallocations
contained in SECTION 1.1(B) hereof and the assignments
contained  in  SECTION 1.1(C) hereof, and simultaneously
with  the  Closing  Date,  the Facilities and  the  Dollar
Equivalent Amounts outstanding thereunder will  be deemed to
be reallocated (including  any  additional  commitments to
be provided  as  part  of  this Agreement and, with respect
to  the "Outstandings"  identified  below, any Advance to
be made on the Closing Date under the US Term Loan Facility,
but not  including any  Advance  to  be  made  on  the
Closing Date under any Revolving Credit  Facility)  such  that
the resulting allocations  on  the Closing
Date are as follows, with Outstandings as registered by the
Agents pursuant to the administration of the Facilities:

<TABLE>
<CAPTION>
U.S. Term Loan Facility
<S>                               <C>
LENDER                               COMMITMENT
Bank of America, N.A.          $ 14,066,176.48
Fleet Business Credit Corporation $ 14,632,352.92
GMAC Business Credit, LLC     $   9,500,000.00
Canadian Term Loan Facility
LENDER                               COMMITMENT
National Bank of Canada        $ 15,257,352.94
The Bank of Nova Scotia       $   5,794,117.66
U.S. Revolving Loan Facility
LENDER                               COMMITMENT
Bank of America, N.A.          $ 14,184,143.47
Fleet Business Credit Corporation $ 13,823,529.41
GMAC Business Credit, LLC      $ 10,500,000.00
Canadian Revolving Loan Facility
LENDER                               COMMITMENT
National Bank of Canada        $ 14,184,142.98
The Bank of Nova Scotia       $   4,808,184.14
TOTAL FACILITIES               $116,750,000.00
</TABLE>

(e)  The  parties  hereby consent to all increases in
Commitments  and Total Commitments and to all  reallocations
and  assignments of Commitments and Outstandings effected
pursuant to SECTIONS 1.1(B), 1.1(C)  AND  1.1(D)  and subject
to ARTICLE VII hereof, waive any requirement for any other
document or  instrument,  including any Assignment and
Acceptance, necessary to give effect to any
reallocation or assignment, which shall be deemed effective as
if such reallocation  or  assignment  were  evidenced  by
applicable Assignments and Acceptances.  On  the  Closing
Date the Lenders shall make full  cash  settlement  with
each  other either directly or through the Relevant Agent,
as the Relevant Agent  may  direct or approve, with respect
to  all  assignments,  reallocations and other changes  in
Commitments  as reflected in this SECTION  1.1
such  that  after  giving  effect  to  such settlements  each
Lender's  Applicable  Commitment Percentage of the Total
Commitment for  each  Facility  equals  (with   customary
rounding)  its Applicable Commitment Percentage of the
Outstandings of such Facility.

     (f)  The Borrowers, the Guarantors, the Agents, the US
Collateral Agent, the Canadian Collateral Trustee and the Lenders
hereby agree that upon the effectiveness of this Agreement, the
terms and provisions of the Existing Credit Agreement which in
any manner govern or evidence the Obligations, the rights and
interests of the Agents and the Lenders and any terms, conditions
or matters related to any thereof, shall be and hereby are
amended and restated in their entirety by the terms and
provisions of this Agreement and the terms and conditions of the
Existing CreditAgreement shall be superseded
by this Agreement, except as expressly provided herein.

     Notwithstanding this amendment and restatement of the Existing
Credit Agreement,  including  anything  in  this  SECTION  1.1, and
certain of the related "Loan Documents" as defined in the Existing
Credit  Agreement  (the "Prior  Loan  Documents") by this Agreement
and the other Loan Documents as herein defined,  (i)  all  of the
indebtedness, liabilities and obligations owing by each Borrower
under  the  Existing Credit Agreement shall continue
as Obligations hereunder and shall be  and  remain  secured by the
Security Instruments for the benefit of the Agents, the US
Collateral Agent,  the Canadian Collateral  Trustee  and
the Lenders, (ii) this Agreement is given as  a  substitution
of,  and  not  as  a  payment of,  the  indebtedness,liabilities
and obligations of the Borrowers and  the Guarantors under
the Existing Credit Agreement or any Prior
Loan Document and is not intended to constitute  a  novation
thereof or of any of other Prior  Loan  Documents. Upon the
effectiveness of  this  Agreement, all Loans owing by the
Borrower and outstanding under the Existing  Credit  Agreement
shall,  after giving effect to  the  assignments  and
reallocations  as  set forth in SECTIONS 1.1(A), (B), (C) and
(D), continue as Loans hereunder and  shall
constitute Advances under the respective Facility hereunder.

     1.2  DEFINITIONS.  For the purposes of this Agreement,  in
addition to the  definitions  set  forth  above,  the  following
terms shall have  the respective meanings set forth below:

          "Acceleration Event" means that (i) an Event of Default
has occurred and is continuing and (ii) all of the Obligations
have become due and payable in accordance with the terms of
SECTION 11.1(A).

          "Accounts  Receivable"  means  all  accounts  receivable
 	of the Borrowers (excluding Consoltex Holdings, Consoltex
Mexico and Rafytek)created  or acquired by such Borrower in
the ordinary course of its business arising  from  the  sale
of inventory and/or the provision of services in its ordinary
course of business.

          "Acquisition" means the acquisition  of  (i) a
controlling equity interest  in  another  Person (including
the purchase of  an  option,warrant or convertible or  similar
type  security to acquire such a controlling interest at the
time it becomes  exercisable by  the holder thereof), whether
by purchase of such equity interest or upon exercise of  an
option or warrant for, or conversion of securities into,
such equity interest, or (ii) assets of another Person
which constitute all or substantially  all  of  the  assets
of such Person or of a line or lines of business conducted
by such Person.

          "Additional  Equity  Investment"  means   any
additional	equity securities issued by Consoltex Holdings to,
or equity  investment made in or contributed surplus
contributed to Consoltex Holdings by, AIP or one of its
affiliated investment funds or by Les Gantiers Holding B.V.
or one of its Affiliates, after the Closing Date, in each
case either in  exchange  for  cash received  by  Consoltex
Holdings  or for the extinguishment	of debt originally owing
to third parties by Consoltex Holdings.

          "Adjusted  Consolidated   EBITDA"   means,   for  any
	period  of computation  thereof,  the  SUM of (i) Annualized
 	Consolidated  EBITDA applicable to such period, (ii) the fees
 	paid in cash by the Borrowers to consultants, appraisers and
	field examiners engaged by the Agents and the Lenders during
	the Four-Quarter Period ending on the last date of the period
 	of computation, but not including  any  such  fees  paid prior
  	to January 1, 2001, (iii) to the extent the Four-Quarter Period
	ending on  the  last  date  of  the period of computation includes
 	the fiscal quarter ended September 30, 2000, the AIP Investment
	net of all distributions and other Restricted  Payments  to  AIP
 	or any of their respective Affiliates during such period, and
	(iv) to the  extent  the Four-Quarter  Period  ending  on  the
	last  date  of  the  period  of computation  includes  a  fiscal
  	quarter in which such investment is made,  the  cash  amount
	received by, or the extinguishment  of  debt originally owing to
	third parties by, Consoltex Holdings in connection with any
	Management Investment or Additional Equity Investment.

          "Adjusted Consolidated  Fixed  Charges"  means, for any
	period of computation thereof (without duplication), the  SUM
 	of (i) Annualized Fixed  Charges applicable to such period,
	(ii) scheduled  payments  of interest  on  Subordinated  Debt
 	for the immediately succeeding twelve month period, (iii)
	scheduled  maturities of Subordinated Debt for the immediately
	succeeding twelve month  period,  and  (iv) the balance of
    	scheduled   purchase   price   payments  due  during  the
	immediately succeeding twelve-month period relating  to  the
 	acquisitions of Atlas and Marino.

          "Advance" means any borrowing under any Facility.

          "Advance Date Exchange Rate" means, with  respect  to a
	specified Advance  or  Loan  in  Canadian  Dollars, a Canadian
	Letter of  Credit issued  in  Canadian  Dollars  or a Bankers'
	Acceptance  accepted  in Canadian Dollars, the Spot Rate  of
	Exchange determined for the date such  Advance is originally
	made, such Canadian Letter  of  Credit  is issued or such
	Bankers' Acceptance is accepted, PROVIDED that, if such Advance,
 	Loan  or  Bankers' Acceptance is Continued, or such Canadian
     	Letter of Credit is renewed,  for  a  subsequent  Interest
	Period in Canadian  Dollars,  or  if  an  Advance  originally made
 	in Dollars is Converted into an Advance or Loan in Canadian
 	Dollars,in each case pursuant to SECTION 4.3, the Advance Date
 	Exchange Rate with respect to such Advance  or  Loan  shall  be
	the  Spot  Rate  of Exchange two Business Days preceding the
	effective date of the latest  Continuation or  the  Conversion
  	of such Advance, Loan or Bankers' Acceptance,  or renewal of such
 	Canadian  Letter  of Credit, and the Dollar Equivalent Amount of
 	such Advance, Loan, Bankers'  Acceptance  or Canadian Letter
     	of  Credit  shall  be adjusted as set forth in SECTION 4.13;
 	PROVIDED FURTHER that, if such  Canadian  Letter of Credit is
	issued for a term exceeding  three  (3)  months, the Advance
	Date Exchange Rate with respect to such Canadian  Letter  of
	Credit shall be the Spot Rate of Exchange on the last Business
 	Day of each  fiscal quarter of Consoltex Holdings and the Dollar
	Equivalent Amount of  such  Canadian Letter of Credit shall be
	adjusted as set forth in SECTION 4.13;  and  PROVIDED FURTHER
	that,if such Canadian  Letter of Credit is drawn upon, the
	Advance Date Exchange Rate shall be  the Spot Rate of Exchange
 	for the date of such drawing only for the purposes of repayment
 	of Reimbursement Obligations and determining the Dollar
	Equivalent Amount of such Canadian Letter of Credit Outstandings;
 	and PROVIDED  FURTHER that,  with  respect  to  each  Base Rate
 	Loan outstanding on the last business day of each fiscal quarter
 	of Consoltex Holdings, the Advance Date Exchange Rate with
	respect to  such  Base  Rate Loan shall be the Spot Rate of
	Exchange on the last Business Day of such fiscal quarter and
 	the Dollar Equivalent Amount of such Base Rate Loan shall be
 	adjusted as set forth in SECTION 4.13.

          "Affiliate" means any Person  (i)  which  directly  or
	indirectly through one or more intermediaries controls, or is
 	controlled  by,  or is  under common control with any Borrower;
 	or (ii) which beneficially owns or holds 10% or more of any class
 	of the outstanding voting stock (or in the case of a Person
	which is not a corporation, 10% or more of the equity  interest)
  	of any Borrower; or 10% or more of any class of the outstanding
 	voting stock (or in the case of a Person which is not a
	corporation,  10%  or more of the  equity  interest)  of
	which isbeneficially owned or held  by any Borrower.  The term
 	"control" meansthe possession, directly or indirectly,  of  the
  	power to direct or cause the  direction  of  the  management
  	and policies of a Person, whether through ownership of
	voting stock, by contract or otherwise.

          "Agents" has the meaning given such term in the preamble
	hereto.

          "Agreement"  has  the  meaning  given such term in  the
	preamble hereto.

          "AIP"  means AIP Capital Fund II and  its  Affiliates,
	including without limitation  American  Industrial  Partners,
	a Delaware general partnership.

          "AIP Capital Fund II" means American Industrial Partners
 	Capital Fund II, L.P., a Delaware limited partnership.

          "AIP Investment" means the cash equity investment made
  	on September 29, 2000, by AIP Capital Fund II  in  Consoltex
  	Holdings in the amount of $7,377,000.

          "Alternate  Code"  has  the  meaning  given  such term
	in SECTION 1.3(B).

          "Annualized  Capital  Expenditures"  means,  for  the
	applicable period, the LESSER of (a) $10,000,000, or (b) (i)
 	for the  one  fiscal quarter of Consoltex Holdings ended March
 	31,2001, Capital Expenditures paid in cash during  such fiscal
 	quarter times four, (ii) for the two fiscal quarters of Consoltex
 	Holdings ended June 30, 2001, Capital  Expenditures paid in cash
 	during such two fiscal quarters times two, and (iii) for the three
 	fiscal quarters of Consoltex Holdings ended September 30, 2001,
	Capital Expenditures paid in cash during such three fiscal
	quarters times four-thirds ({4}/{3}).

          "Annualized  Consolidated  EBITDA"  means  (i) for the one
 	fiscal quarter  of  Consoltex  Holdings  ended  March 31, 2001,
 	Consolidated EBITDA for such fiscal quarter times four,  (ii)
	for the two fiscal quarters  of  Consoltex  Holdings  ended
	June 30, 2001, Consolidated EBITDA for such two fiscal quarters
 	times two, and (iii) for the three fiscal  quarters  of
	Consoltex  Holdings  ended September  30,  2001, Consolidated
	EBITDA for such three fiscal quarters  times  four-thirds
     	({4}/{3}).

          "Annualized  Fixed Charges" means (i) for the one fiscal
  	quarter of Consoltex Holdings ended March 31, 2001, Consolidated
 	Fixed Charges for such fiscal quarter  times  four, (ii) for the
 	two fiscal quarters of Consoltex Holdings ended June  30, 2001,
	Consolidated Fixed Charges for such two fiscal quarters times two,
 	and (iii) for the three fiscal quarters of Consoltex Holdings ended
  	September 30, 2001, Consolidated Fixed Charges for such three fiscal
      quarters  times  four-thirds
     	({4}/{3}).

          "Applicable Commitment Fee" means, at any time and from time
 	to time, 0.50% per annum.

          "Applicable Commitment Percentage" means, for  each Lender
 	at any time, a fraction, (i) with respect to the US Revolving
	Credit Facility and the US Letter of Credit Facility, the
	numerator of  which shall be such Lender's Commitment to the
	US Revolving Credit Facility  and  the denominator of which
 	shall be the Total Commitment with respect to the US Revolving
	Credit  Facility, (ii) with respect to the Canadian Revolving
 	Credit Facility and the Canadian Letter of Credit  Facility,
     	the numerator  of  which  shall  be  such  Lender's Commitment
	to the Canadian Revolving Credit Facility and the denominator
 	of which shall be the Total Commitment with respect to the
	Canadian Revolving  Credit Facility,  (iii)  with  respect
  	to the US Term Loan Facility, the numerator of which shall be
 	such Lender's Commitment  to  the  US Term Loan  Facility  and
  	the denominator of which shall be the Total Commitment with respect
 	to the US Term Loan Facility, and (iv) with respect to the
	Canadian Term Loan Facility, the numerator of which shall be
	such Lender's Commitment to the Canadian  Term  Loan Facility
     	and the denominator shall be the Total Commitment with respect
 	to the Canadian Term Loan Facility, which Applicable Commitment
 	Percentage for each Lender with respect to each applicable
	Facility as of the Closing Date immediately upon giving effect
 	to SECTIONS 1.1(B), 1.1(C) and 1.1(D) is as set forth in
 	EXHIBIT A; provided that the Applicable Commitment Percentage
	of each Lender shall be increased or  decreased to reflect any
 	assignments to or by such Lender effected in accordance
     	with SECTION 13.1.

          "Applicable  Lending  Office" means, for each Lender and for
 	each Type of Loan, the "Lending Office"  of such Lender (or of
 	an affiliate of such Lender) designated for such Type  of
	Loan on the signature pages hereof or such other office of such
 	Lender(or an affiliate of such Lender)as such Lender may from
	time to time specify to the Agent and the Borrower by written
 	notice in accordance with the terms hereof as the office by
  	which its Loans of such Type are to be made and maintained.

          "Applicable Margin" means that percent  per  annum based
 	upon the Consolidated Leverage Ratio for the period of computation
  	most recently ended, set forth as the Applicable Margin in the
 	Pricing Grid and subject to further adjustment as therein
	provided.

          "Applicable Outstanding Percentage" means, with respect to
 	any Lender at any date of determination, a fraction, the numerator
 	of which shall be the sum of all Outstandings owing to such Lender
 	under all the Facilities at such date and the denominator of
	which shall be the total of all the Outstandings under all the
 	Facilities at such date.

          "Applicable Total  Commitment  Percentage" means, with
	respect to any Lender on any date, a fraction, the  numerator
	of which shall be such Lender's aggregate Commitments under
	all the Facilities  on  such date and the denominator of which
	shall be the sum of all the Lenders'Commitments under all the
 	Facilities on such date; PROVIDED that the Applicable Total
	Commitment  Percentage of each Lender shall beincreased or
	decreased to reflect any assignments to or by such Lender
     	effected in accordance with SECTION 13.1.

          "Applications  and  Agreements  for  Letters  of  Credit"
  	means, collectively, the Applications  and  Agreements for
	Letters of Credit,or similar documentation, executed by any
 	applicable Borrower under a Revolving Credit Facility from time
 	to time and delivered to the applicable Issuing Bank to support
 	the issuance of Letters of Credit.

          "Asset Disposition"  means  any voluntary disposition, whether
 	by sale, lease or transfer, of (a) any  of  the assets of any
	Borrower or any of its Subsidiaries, other than disposition of
	cash and cash equivalents  in  the  ordinary  course  of  business
 	and dispositions permitted under SECTION 10.6(A), (B), (D), (E)
	AND (G), and (b) any of the capital stock, or securities or
	investments  exchangeable, exercisable or convertible for or into,
  	or otherwise entitling the holder to receive any of the capital
	stock, of any Subsidiary of Consoltex Holdings (other than a
	disposition to a Borrower or a Guarantor).

          "Assignment and Acceptance" shall mean an Assignment and
	Acceptance substantially in the form of EXHIBIT B (with blanks
     	appropriately filled in) delivered to the Agents in connection
 	with an assignment of all or a portion of a Lender's interest
	under this Agreement pursuant to SECTION 13.1.

          "Atlas" means, collectively, Atlas Bag, Inc. and Atlas Bag
 	Texas,Inc., the assets of which were previously acquired by a
	Subsidiary of Consoltex Holdings.

          "Authorized Representative" means any  of  the  President or
  	any Vice President of Consoltex Holdings or, with respect  to
	financial matters, the chief financial officer of Consoltex
 	Holdings, or any other Person expressly designated by the Board
  	of Directors of Consoltex Holdings (or the appropriate committee
  	thereof) as an Authorized Representative, as set  forth  from
	time to time in a certificate delivered  to the Agents in
	substantially the form of EXHIBIT C.

          "Available  Liquidity"  means,  as  at  any date of
	determination thereof, an amount equal to the result of (a)
	total availability under the Revolving  Credit  Facilities
	(without regard to Outstandings thereunder) after giving effect
  	to the Borrowing  Base,  PLUS  (b)(without duplication)
	collected cash  balances in the deposit accounts of the
	Borrowers and the Guarantors (for  periods  after  such date
 	as the  Lock  Box  arrangement  provided for in SECTION 7.3
	is in  place,limited to $500,000 of cash not subject to a Cash
 	Collateral Agreement and the provisions of this Agreement
	relating  to Lock Boxes and Lock Box Accounts), MINUS (c)
	all Outstandings under the  Revolving  Credit Facilities,
 	including Outstandings under the Letter of Credit Facilities,
	all Bankers' Acceptances, all Canadian Letters of Credit,
     	MINUS (d) any accounts payable of any Borrowers and any
	Guarantor that are unpaid more than 30 days past the due
 	date set forth on the invoices for such accounts  payable,
 	MINUS (e) any payroll, taxes or other amounts owed by any of
 	the Borrowers and any of the Guarantors that are due but not
	paid, MINUS (f) any other amounts that any of the Borrowers and
 	any of the Guarantors has accrued or failed to pay to the extent
  	that such accrual or failure to pay is inconsistent with
     	such Borrower's past  practice  in  paying  or  accruing similar
 	items prior to the Closing Date.

          "Balson-Hercules" has the meaning given such term in the
	preamble hereto.

          "Bank Act" has the meaning given such term in the preamble
     	hereto.

          "Bank of America" has the meaning given such term in the
	preamble hereto.

          "Bankers' Acceptances" means (i) with respect to any
	Canadian Facilities Lender (other than a Non-BA Lender), a
	non-interest bearing bill of exchange drawn by Consoltex, on
 	the standard form used by the Canadian Facility Lender accepting
 	it, at its Lending Office, or (ii)with respect to a Non-BA
	Lender, a Discount Note payable to the order of such Non-BA
	Lender, both the bill of exchange and the Discount Note to be
	denominated in Canadian Dollars and issued under a Canadian
     	Facility.  Subject to the Canadian Facility Lenders electing to
	use a clearing house as contemplated by the Depository Bills and
 	Notes Act(S.C. 1998 c. 13) (the "Act"), "Bankers' Acceptance"
 	shall mean a depository bill (as defined in the Act) in
	Canadian Dollars signed by a Borrower and accepted by a
 	Canadian Facility Lender.

          "Bankers' Acceptance Segment" means a Segment under a
	Canadian Facility utilized by way of Bankers' Acceptances.

          "BAS" means Banc of America Securities LLC and its successors.

          "Base Rate" means, as applicable:

               (i) with regard to Advances made in Canadian Dollars
		under either of the Canadian Facilities, the Applicable
		Margin PLUS the greater, for each day, of:

                    (a) the Reference Rate then in force; or

                    (b) the annual rate of interest which is the rate
               determined as being the arithmetic average (rounded
		upwards,if necessary, to the nearest 0.01%) of the discount
 		rates for Canadian Dollar bankers' acceptances having a
		maturit date of thirty (30) days appearing on the CDOR Page
 		of the "Reuters Screen" (as defined in the 1991
		International Swap and Derivatives Association Inc.
		definitions, as amended or modified from time to time)
		at 10:00 a.m. (Montreal time)on such day or, if such
		day is not a Business Day, on the preceding Business Day
		or if such rates do not appear on the CDOR Page of the
		Reuters Screen as contemplated on any such day, then the
		rate shall be calculated as the arithmetic average of the
		discount rate for Canadian Dollar bankers'acceptances having
 		a maturity date of 30 days quoted for such day by three
		brokers of good standing selected by the Canadian Agent,
		in each case plus 1.25%;

               (ii) with regard to Advances made in Dollars under either
 		of the Canadian Facilities, the Applicable Margin PLUS the
		greater, for each day, of (a) the Reference Rate then in
		effect or (b) the Federal Funds Rate on such day plus 1.25%;
 		and

               (iii) with regard to Advances made under either of the
 		US Facilities, the Applicable Margin PLUS the per annum rate
 		of interest equal to the greater, for each day, of (a) the
		Prime Rate then in effect or (b) the Federal Funds Rate on
 		such day plus 0.50%.

          Any change in the Base Rate resulting from a change in the
	Prime Rate, the Reference Rate or the Federal Funds Rate shall
 	become effective as of 12:01 A.M. on the Business Day on which
 	each such change occurs.  Each of the Base Rate, the Reference
 	Rate and the Prime Rate is a reference rate used by the Agents
 	in determining interest rates on certain loans and is not
	intended to be the best orlowest rate of interest charged on
	any extension of credit to any debtor.

          "Base Rate Loan" means a Loan (including a Segment) for which
	the rate of interest is determined by reference to the Base Rate.

          "Base Rate Refunding Loan" means a Base Rate  Loan  made
 	under a Revolving Credit Facility either to (i) satisfy
	Reimbursement Obligations arising from a drawing undera Letter
	of Credit or (ii)pay NBC in respect of Canadian Swing Line
 	Loan Outstandings.

          "Base Rate Segment" means a Segment  bearing  interest or
 	to bear interest at the Base Rate.

          "Board"  means  the  Board  of  Governors of the Federal
 	Reserve System (or any successor body).

          "Borrower" and "Borrowers" have the  meanings given such
 	terms in the preamble hereto.

          "Borrowers' Canadian Account" means , as the context may
	require,(i) demand deposit account number 01-488-25 with the
 	Canadian Agent with respect to Consoltex for Canadian Dollars,
 	and (ii) demand deposit account number 01-003-69 with the
	Canadian Agent with respect to Consoltex for Dollars, as
	applicable, and in each instance includes any successor account
 	with the Canadian Agent, which may be maintained at one or more
	offices of the Canadian Agent or an agent of the Canadian Agent,
 	for the Borrowers under the Canadian Facilities, as is agreed
 	in writing from time to time between the Canadian Agent and
     	such Borrowers.

          "Borrowers' US Account" means, as the  context  may  require,
 	(i)demand deposit account number 3751-443-984 with respect to
	LINQ, (ii)demand  deposit  account  number  3750-636-802 with
	respect to Balson-Hercules, (iii) demand deposit account number
	3750-636-792 with respect to Consoltex USA, and (iv) demand
	deposit account number 3751-444-815 with respect to Rafytek,
	as  applicable,  and in each instance including  any  successor
  	account with the US Agent,  which  may  be maintained at one or
 	more offices of  the  US Agent or an agent of the US Agent, for
 	such Borrowers under the US Facilities,  as is agreed in writing
 	from time to time between the US Agent and such Borrowers.

          "Borrowing Base" means, as of any date of determination
	thereof, an  amount  equal  to  (a) the sum of (i) the product
	of the aggregate amount as of such date of  all  Eligible
	Receivables, as set forth in the  most  recent  Borrowing Base
 	Certificate  delivered  pursuant  to SECTION 9.1(H), multiplied
  	by  80%, (ii) the product of the aggregate amount as of such date
 	of all Eligible  Factor  Receivables,  as  set forth in the most
 	recent Borrowing Base Certificate delivered pursuant to SECTION
  	9.1(H),  multiplied  by  80%,  (iii)  the  lesser  of  (A)
     	$2,500,000  or  (B)  the  product of the aggregate stated amount
 	as of such date of all Eligible Letters  of Credit, as set forth
 	in the most recent  Borrowing  Base  Certificate  delivered
	pursuant to SECTION 9.1(H), multiplied by 50%, and (iv) the
	lesser of (x) $25,000,000 or (y)  the  product  of  the
	aggregate amount as of such  date  of  all Eligible Inventory,
	as set forth  in  the  most  recent Borrowing Base Certificate
 	delivered pursuant to SECTION 9.1(H),  multiplied  by 50%,
     	MINUS  (b)  reserves  instituted  by any Agent at the direction
 	of the Required Lenders.


          "Borrowing Base Certificate" means a certificate
	substantially in the form of EXHIBIT D prepared and delivered
 	by an Authorized Representative to the Agents from time to time
 	in accordance with SECTION 9.1(H).

          "Borrowing Notice" means the notice  delivered  by  an
	Authorized Representative  in  connection with an Advance under
 	either Revolving Credit Facility or an issuance  of Bankers'
	Acceptances  under  the Canadian  Revolving  Credit  Facility,
	substantially  in  the form of EXHIBIT E.

          "Business Day" means, (i) except as expressly provided in
	clause(ii), any day which is not a Saturday, Sunday or a day on
 	which  banks in  the  Province of Quebec and in the States of
 	New York and North Carolina are  authorized  or  obligated  by
	law, executive order or governmental  decree  to  be  closed  and,
  	(ii) with  respect to the selection, funding, interest rate, payment,
       and Interest Period of any
     	Eurodollar Rate Loan, any day which is a Business Day under clause
	(i)above, and on which the relevant international financial
	markets are open for the transaction of business contemplated by
 	this Agreement in London, England, Montreal, Canada and
	Charlotte, North Carolina.

          "Canadian Agent" has the meaning given such term in the
	preamble hereto.

          "Canadian Benefit Law" means any applicable Canadian
	federal or provincial statute, law, regulation, order or decree
 	having the force of law regulating, relating to or imposing
	liability or standards oF conduct concerning any Canadian
	Employee Pension Plan.

          "Canadian Borrower" means any Borrower that is formed under
	the laws of Canada or any political subdivision thereof.

          "Canadian Collateral Trustee" means Desjardins Trust Inc.,
	a trust company, or any successor thereto, as collateral trustee
     	pursuant to certain Security Instruments with respect to
	Collateral located in Canada or the Canadian Agent acting in
 	such capacity.

          "Canadian Dollar Equivalent Amount" means with respect to
     	Canadian Dollars and a specified Dollar amount, the amount of
 	Canadian Dollars into which such Dollar amount would be converted,
 	based on the applicable Advance Date Exchange Rate.

          "Canadian Dollar Loan" has the meaning given to such term
 	in SECTION 4.13(B).

          "Canadian Dollars" and the symbol "CDN $" means dollars
     	constituting legal tender for the payment of public and private
 	debts in Canada.

          "Canadian Employee Pension Plan" means any employee benefit
 	plan registered as a pension plan in Canada under Canadian Benefit
 	Law and that is maintained by any Borrower or with respect to
	which any Borrower could incur a liability.

          "Canadian Facility" means any of the Canadian Term Loan
	Facility, the  Canadian  Revolving  Credit  Facility  or the
	Canadian Swing Line Facility.

          "Canadian Facilities Lenders" means, collectively,  the
	Canadian Term  Loan  Facility  Lenders,  the Canadian Revolving
	Credit Facility Lenders and the Canadian Swing Line Facility
	Lender.

          "Canadian Issuing Bank" means  initially  NBC  and thereafter
 	any Canadian Revolving Credit Facility Lender which is the
	successor to NBC as issuer of Canadian Letters of Credit under
 	ARTICLE III.

          "Canadian Letter of Credit" means a standby or commercial
	letter of credit issued under the Canadian Revolving Credit Facility
 	by the Canadian Issuing Bank for the account of an applicable
	Facility Borrower in favor of a Person advancing credit to or
	securing an obligation on behalf of such Facility Borrower.

          "Canadian Letter of Credit Facility" means the facility
	described in ARTICLE  III  hereof  providing  for  the  issuance
	by the Canadian Issuing Bank for the account of the applicable
	Facility Borrowers of Canadian Letters of Credit in an aggregate
	stated amount at any time outstanding not exceeding $7,500,000.

          "Canadian Letter of Credit Outstandings" means, as of any
	date of determination,  the  aggregate  amount available to be
 	drawn under all Canadian  Letters  of  Credit  plus
	Reimbursement Obligations then outstanding.

          "Canadian  Revolving  Credit Commitment" means, with
	respect to each  Lender under the Canadian   Revolving Credit
  	Facility, the obligation of such Lender to make Canadian Revolving
  	Credit Loans to Consoltex or any  other  Borrower  thereunder up
  	to an aggregate principal amount at any one time outstanding equal
 	to such Lender's Applicable Commitment Percentage of the Total
 	Commitment applicable to the Canadian Revolving Credit Facility.

          "Canadian Revolving Credit Facility" means the facility
	described in ARTICLE II hereof providing  for  Advances  in
	Dollars or Canadian Dollars and for Bankers' Acceptances, in
	favor or at the request of an applicable Facility Borrower by
	the Canadian Revolving Credit Facility Lenders in the aggregate
	principal amount at any time  outstanding not exceeding  the
  	Total Commitment applicable to such Facility at such time.

          "Canadian Revolving Credit Facility Lenders" means,
	collectively, each Lender identified  on EXHIBIT A hereto as
	being a Lender having a Commitment under the Canadian Revolving
	Credit Facility and each other financial institution that  executes
  	and delivers an Assignment and Acceptance pursuant to SECTION 13.1
	in which such institution acquires a Commitment under such
	Facility.

          "Canadian  Revolving  Credit  Loan"  means  any  Loan,
	including without  limitation any Base Rate Refunding Loan, under
  	the Canadian Revolving Credit Facility made in accordance with
	ARTICLE II to any Facility Borrower thereunder.

          "Canadian Revolving Credit Outstandings" means, as of any
	date of determination, the aggregate principal amount of all
 	Canadian Revolving Credit Loans then outstanding.

          "Canadian Swing Line Facility" means the revolving line of
 	credit established by the Canadian Swing Line Facility Lender
 	in favor of the Facility Borrowers pursuant to SECTION 2.5.

          "Canadian Swing Line Facility Lender" means NBC.

          "Canadian  Swing  Line  Loans"  means Loans made by the
	Canadian Swing  Line  Facility  Lender to the Facility Borrowers
  	pursuant to SECTION 2.5.

          "Canadian Swing Line  Loan Outstandings" means, as of any
 	date of determination, the aggregate principal amount of all
	Canadian Swing Line Loans then outstanding.

          "Canadian Term Loan" means the Loan made by the Canadian
 	Term Loan Facility Lenders under the Canadian Term Loan
	Facility in accordance with ARTICLE II.

          "Canadian Term Loan Commitment" means, with respect to
	each Canadian Term Loan Facility Lender, the obligation of such
 	Lender to make or, to have made by, the Closing Date under the
	Canadian Term Loan loans to Consoltex in a principal amount equal
 	to such Lender's Applicable Commitment Percentage of the Total
	Commitment applicable to the Canadian Term Loan Facility, as set
 	forth on EXHIBIT A.

          "Canadian Term Loan Facility" means the facility described
 	in ARTICLE II providing for Advances, including loans previously
 	made under the Existing Credit Agreement and restructured by the
 	Canadian Term Loan hereby in Dollars or Canadian Dollars and for
 	Bankers'Acceptances in favor of the applicable Facility Borrowers
 	by the Canadian Term Loan Facility Lenders in the aggregate
	principal amount of the Total Commitment applicable to such
	Facility on the Closing Date.

          "Canadian Term Loan Facility Lenders" means, collectively,
 	each Lender identified on EXHIBIT A hereto as being a Lender
 	having a Commitment  under  the  Canadian  Term Loan Facility and
 	each other financial institution that executes  and  delivers
	an Assignment and Acceptance pursuant to SECTION 13.1 in which
	such Lender acquires a Commitment under such Facility.

          "Canadian  Term  Loan  Outstandings"  means,  as  of  any
	date of determination, the aggregate principal amount of all
	Canadian Term Loans then outstanding.

          "Canadian  Termination Event"  means  (i) a notice given
 	with respect to a Canadian  Employee  Pension  Plan that
	registration under Canadian Benefit Law may be revoked; or (ii)
  	the termination of a Canadian Employee  Pension  Plan or
 	the filing of a notice of intent under Canadian Benefit Law to
 	terminate any such plan or the treatment of any amendment to any
 	such plan as a termination;  or  (iii) the appointment of a
	provisional administrator, including any Governmental
     	Authority, to administer any Canadian Employee Pension Plan.

          "Capital  Expenditures"  means, with respect to the Borrowers
 	and their Subsidiaries on a consolidated basis, for any period the
 	SUM (without duplication) of (a) all expenditures (whether paid
	in cash or accrued as liabilities) by any Borrower or any
	Subsidiary  during such period  for  items  that  would  be
	classified as "property, plant or equipment" or comparable items
	on the consolidated  balance sheet of the Borrower and its
	Subsidiaries and, to the extent not included therein, all
	transactional  costs  incurred  in  connection  with such
     	expenditures  provided  the  same  have  been  capitalized,
	excluding, however, the amount of any Capital Expenditures paid
	for or to be paid for with proceeds of (i) casualty insurance,
	condemnation  awards  (or payments  in  place thereof) or
	indemnity payments received from third parties; (ii) any  sale
  	or trade in of worn-out, obsolete, surplus or damaged fixed
	assets; or (iii)  any  government grants received by any
     	Borrower or any Subsidiary which are for  the  restricted
 	purpose of funding Capital Expenditures and which, if to be
	repaid, are repayable in not less than three (3) years and on
	which no interest accrues or is payable, in each case as
	evidenced in writing and submitted to the Agents together with
 	the compliance certificate delivered pursuant to SECTION 9.1(A)
	(V) OR 9.1(B)(II) for such period, and (b) with respect to any
	Capital Lease  entered  into  by any Borrower or any Subsidiary
     	during such period, the present value  of the lease payments due
 	under such  Capital Lease over the term of such Capital Lease
	applying a discount rate equal to the interest rate provided in
	such lease (or in the absence of a stated interest  rate,
	that rate used in the preparation of the  financial statements
 	described in SECTION 9.1(A)(I)), all the foregoing in accordance
 	with GAAP applied on a Consistent Basis.

          "Capital Leases" means all leases which have been  or  should
  	be capitalized  in  accordance  with  GAAP as in effect from time
 	to time including Statement No. 13 of the Financial Accounting
 	Standards Board and any successor thereof.

          "Cash Collateral Agreement" means,  collectively (or
	individually as the context may indicate) each Cash Collateral
  	Agreement in form and substance satisfactory to the Agents and
 	the Lenders delivered to the  Agents  in  connection  with  the
  	establishment of the Lock Box Account pursuant to SECTION 7.3,
	and any additional Cash  Collateral Agreement delivered to the
	Relevant Agent pursuant to SECTION 9.20 or otherwise under the
	Agreement, as the same may be amended, modified, supplemented or
	restated from time to time.

          "Change of Control" means, at any time:

               (i) the sale, lease or transfer,  in  one  or  a  series
  		of related  transactions,  of all or substantially all of
 		the assets of Consoltex Holdings to any "person" or "group"
 		(each as used in Sections 13(d)(3) and 14(d)(2) of the
		Exchange Act);

               (ii) the adoption of  a  plan relating to the
		liquidation or dissolution of Consoltex Holdings;

               (iii) any "person" or "group"  (each  as  used  in
		Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other
		than AIP  either(A)  becomes the "beneficial owner" (as
		defined in Rule 13d-3 of the Exchange  Act ), directly or
		indirectly, of Voting Securities of  Consoltex  Holdings
   		(or securities convertible into or exchangeable for such
 		Voting Securities) representing  more than 50% of the
		combined voting power of all Voting Securities  of
          	Consoltex Holdings (on a  fully  diluted  basis) or (B)
		otherwise has the ability, directly or indirectly, to
		elect a majority of the board of directors of Consoltex
 		Holdings;

               (iv)  during  any  period  of  up  to 24 consecutive
 		months, commencing on the Closing Date, individuals who at
 		the beginning of such 24-month period were directors of
		Consoltex Holdings shall cease for any reason (other than
		the death, disability or retirement of an officer of
		Consoltex Holdings that is serving as a director at such
		time so long as another  officer  of Consoltex Holdings
 		replaces such Person as a director)to constitute  a
          	majority  of  the  board  of  directors  of  Consoltex
 		Holdings, PROVIDED that any new directors  that are
		nominated by a majority of the then existing board of
		directors shall be counted in determining such majority
 		of the board of directors of Consoltex Holdings;

(a)  	any Person or two or  more  Persons (other than AIP) acting in
 	concert shall have acquired by contract  or  otherwise, or
	shall have entered into a contract or arrangement that, upon
 	consummation thereof, will result  in its or their acquisition
 	of the power to exercise, directly or indirectly, a controlling
 	influence on the management or policies of Consoltex Holdings; or

(b)  	Consoltex Holdings shall  at any time cease to own, either
	directly or through Subsidiaries, beneficially and of record
 	100% of the Voting Securities and all other capital stock of each
  	other Borrower or Guarantor, except for directors' qualifying
	shares and except as the disposition of such shares is
	permitted as part of the Mexican Operational Restructuring.

          "Closing  Date" means the date as  of  which  this
	Agreement is executed by the  Borrowers, the Lenders and the
	Agent and on which the conditions set forth in SECTION 7.1 have
 	been satisfied.

          "Code" means  the  Internal Revenue Code of 1986, as amended,
 	and any regulations promulgated thereunder.

          "Collateral" means,  collectively,  all property of any
	Borrower, any Subsidiary or any other Person in which  the  US
	Collateral Agent, the Canadian Agent, the Canadian Collateral
	Trustee or any Lender is granted a Lien under any Security
	Instrument as security for all or any portion of the Obligations
 	or any other obligation arising under any Loan Document.

          "Commitment"  means, for each Lender under any certain
	Facility, the obligation  of  such  Lender   to   make  Advances
  	(or  Bankers' Acceptances under any Canadian Facility) available
 	under such Facility to the Facility Borrowers (including the
	acquisition and funding of Participations  as  herein  provided
 	other than as provided in SECTION 4.12) in an aggregate principal
  	amount from time to time up to such Lender's Applicable Commitment
 	Percentage of the Total Commitment for such Facility at such time;
 	PROVIDED, that as used  in  the definition of "Applicable Total
 	Commitment Percentage", for purposes of the application of SECTION
 	4.12 hereof, "Commitments"  shall be calculateD immediately prior
 	to the occurrence of any Event of  Default,  subject to adjustment
  	for later assignments, and such calculation shall be made without
 	giving effect to any then existing or thereafter imposed interim
 	limit on or adjustment to the funding of any Facility that does
	not expressly state that it is a permanent increase,  decrease
	or termination of the Commitments of the Lenders.

          "Consistent Basis" in reference to the application of GAAP
  	means the  accounting  principles  observed  in  the  period
	referred to are comparable  in  all  material  respects  to
	those applied in the preparation  of  the  audited  financial
  	statements of the Borrower delivered on the Closing Date pursuant
 	to SECTION 8.6(A).

          "Consolidated  Amendments"  means, collectively (or
	individually, as the context may indicate), (i)  that certain
 	Consolidated Amendment to Guaranty Agreements dated as of the
	Closing Date by Consoltex Holdings, Consoltex,  Consoltex  USA,
	Balson-Hercules, LINQ, Consoltex Mexico and each of the Mexican
 	Companies to each of the Agents, the US Collateral Agent and the
 	Canadian Collateral Trustee, (ii)that certain Consolidated
	Amendment to Pledge Agreements dated as of the Closing Date by
 	Consoltex Holdings, Consoltex, Consoltex USA, Balson-Hercules,
 	LINQ and Consoltex Mexico to each of the  Agents  and the US
     	Collateral Agent, and (iii) that certain Consolidated Amendment
  	to Security Agreement and Assignment of Patents, Trademarks,
	Service Marks and Copyrights  dated  as of the Closing Date by
	Consoltex, Consoltex USA, Balson-Hercules and LINQ to each of
	the Agents and the US Collateral Agent, in each case as modified,
 	amended or supplemented from time to time.

          "Consolidated  EBITDA"  means, with respect to the Borrowers
  	and their Subsidiaries for any period ending on the date of
	computation thereof, the sum of (i) Consolidated Net Income, (ii)
 	Consolidated Interest Expense,(iii)income tax expense,(iv)
	amortization expense,(v) depreciation expense, (vi) any
	non-recurring or extraordinary non-cash losses for such period
	(net of any non-recurring or extraordinary gains), (vii) all
	management  or  other  fees  payable  by  Consoltex Holdings to
 	AIP accrued, but not paid in cash, during such period, and
     	(viii) with respect to any foreign currency exchange gains and
  	losses that are set forth as a specific gain or loss in the
	financial statements most recently delivered pursuant to
 	SECTION  9.1(A)(I)or 9.1(B)(I), (a) to the extent of any such
	foreign currency exchange gain included in Net Income, less such
 	gain and (b) to the extent of any such foreign currency exchange
 	loss included in Net Income, plus such loss, all determined on a
	consolidated basis and in accordance with GAAP applied on a
	Consistent Basis;  PROVIDED, HOWEVER, that notwithstanding the
	foregoing, there shall be excluded from such computation any
	non-cash expense related to  post-retirement  employee
     	benefits.

          "Consolidated Fixed Charge Coverage Ratio" means, with
	respect to Consoltex Holdings and its Subsidiaries for any
	applicable period ending on the date of computation thereof, the
	ratio  of (i) Adjusted Consolidated EBITDA applicable to such
	period less (without duplication)  Annualized  Capital
	Expenditures applicable to such period, to (ii) Adjusted
	Consolidated Fixed Charges applicable to such period.

          "Consolidated Fixed Charges" means, with respect  to the
 	Borrower and its Subsidiaries for any period ending on the date
	of  computation thereof,  the  SUM  of, without duplication, (i)
 	Consolidated Interest Expense paid in cash  for  such period,
	LESS any interest paid in cash with  respect to any Subordinated
 	Debt, (ii) all expense incurred during such period with respect
	to the sale of Accounts Receivable to one or more  factors,  (iii)
  	current maturities of Consolidated Total Debt for such period
	(other than amounts of Revolving Credit Loans and Term  Loans
	due on the Stated Termination  Date), (iv) income  tax expense
 	accrued during  such period (but excluding any deferred income
     	tax expense), and (v) all  management  fees  paid  to  AIP during
 	such period, all determined on a consolidated basis in accordance
 	with GAAP applied on a Consistent Basis.

          "Consolidated Interest Expense" means, with respect to any
 	period of computation thereof, the interest expense of Consoltex
 	Holdings and its Subsidiaries during such period, including without
 	limitation (i) the current amortized portion of debt discounts to
	the extent included in interest  expense,  (ii) the current
	amortized portion of all fees(including fees payable in  respect
 	of any Rate Hedging Obligations) payable  in  connection with the
 	incurrence  of  Indebtedness  to  the extent included  in  interest
  	expense,  and  (iii) the portion of any payments made in connection
 	with Capital Leases  allocable to interest expense,  all
	determined on a consolidated basis in  accordance  with GAAP
	applied on a Consistent Basis.

          "Consolidated   Leverage   Ratio"   means,  as  of  the  date
  	of computation thereof, the ratio of (i) Consolidated  Total Debt
     	(determined as at such date) to (ii) Adjusted Consolidated EBITDA
 	(for the applicable period ending on (or most recently ended prior
 	to) such date).

          "Consolidated  Net  Income"  means, for any period of
	computation thereof, the gross revenues from operations of the
	Borrower and its Subsidiaries (including  payments  received by
	the Borrower and its Subsidiaries  of  (i)  interest  income,
	and (ii) dividends and distributions  made  in  the  ordinary
 	course of their businesses  by Persons in which investment is
	permitted  pursuant  to  this Agreement and  not  related  to an
	extraordinary event), less all operating and non-operating
	expenses of the Borrower and its Subsidiaries including taxes on
 	income, all determined  on a consolidated basis in accordance
     	with GAAP applied on a Consistent  Basis; but excluding as
	income: (i) net gains on the sale, conversion or other disposition
  	of capital assets, (ii) net gains on the acquisition, retirement,
	sale or other disposition of capital stock and other securities
	of the Borrower or its Subsidiaries, (iii) net gains  on  the
	collection  of proceeds of life insurance policies, (iv) any
	write-up of any asset,  and  (v) net gains attributable to any
	Person that is not a wholly owned Subsidiary of  such  Person,
 	except to the extent of the amount of dividends  or other
	distributions referred to in clause (ii) above, (vi) net gains
     	attributable to any Person that  accrued prior to the date such
	Person became a Subsidiary of any Borrower or was merged into or
 	consolidated with any Borrower or any of its Subsidiaries,  and
 	(vii) any other net gain or credit of an extraordinary nature, in
 	each case as determined on  a  consolidated  basis  in  accordance
  	with GAAP applied on a Consistent Basis.

          "Consolidated  Total  Debt " means, as of any date on
	which the amount thereof is to be determined,  the  SUM (without
 	duplication) of(i) all Indebtedness for Money Borrowed of
	Consoltex Holdings and its Subsidiaries, including without
	limitation all Subordinated Debt, (ii) the aggregate Rate Hedge
 	Value owing by Consoltex  Holdings  and  its Subsidiaries with
 	respect to all applicable Rate Hedging obligations incurred
	thereby,  (iii)  all  Contingent  Obligations  of  Consoltex
     	Holdings and its Subsidiaries,  and  (iv) all obligations of
	Consoltex Holding and its Subsidiaries arising out  of  the
	acquisition of Atlas or  Marino  owing  to  the  former
 	shareholders of Atlas  or  Marino, including in each case all
	such items  incurred  by any partnership or joint  venture  as
 	to which Consoltex Holdings or any of its Subsidiaries  is
 	liable as a general partner or joint venturer, all determined
 	on a consolidated basis.

          "Consoltex" has the meaning given such term in the preamble
     hereto.

          "Consoltex Holdings" has the meaning given such term in the
     preamble hereto.

          "Consoltex Mexico" has the meaning given such term in the
     preamble hereto.

          "Consoltex USA" has the meaning given such term in the
	preamble hereto.

          "Contingent Obligation" means,  as  to  any Person, any
	direct or indirect liability of that Person with respect  to
 	any Indebtedness, lease, dividend, guaranty, letter of credit
	or other obligation  (each a  "primary  obligation")  of
	another Person (the "primary obligor"),whether or not contingent,
 	(a) to  purchase,  repurchase  or otherwise acquire  any  such
	primary  obligation  or  any property constituting direct or
	indirect security therefor, or (b) to  advance  or  provide
     	funds (i) for the payment or discharge of any such primary
	obligation, or (ii) to  maintain  working capital or equity
	capital of the primary obligor in respect of any  such  primary
  	obligation  or  otherwise to maintain the net worth or solvency
 	or any balance sheet item,level of income or financial condition
  	of such primary obligor, or (c) to purchase property, securities
 	or services primarily for the purpose of assuring the owner of
	any such primary obligation of the ability of the primary obligor
  	thereof to make payment of such primary obligation, or (d)
	otherwise to assure or hold harmless the owner of any such
	primary obligation against loss or failure or inability to
     	perform  in respect thereof.  The amount of any Contingent
 	Obligation shall be deemed to be an amount equal to the stated
 	or determinable amount of the primary obligation in respect of
	which such Contingent Obligation is made or, if not stated or
	determinable, the maximum reasonably anticipated liability in
 	respect thereof.

          "Continue," "Continuation," and "Continued"  shall  refer,
  	as applicable and in each case pursuant to SECTION 4.3 hereof, to
 	(i) the continuation in the same currency of a Eurodollar Rate
 	Loan of one Type as a Eurodollar Rate Loan  of  the  same  Type
  	from one Interest Period to the next Interest Period, or (ii) the
 	election of a subsequent period for a Bankers' Acceptance or a
  	Bankers' Acceptance Segment to begin on the last day of the then
 	current period for such Bankers' Acceptance or Bankers'
	Acceptance Segment.

          "Control  Agreement" means a control agreement from the
	Registrar of any Subsidiary,  in  form  and substance acceptable
 	to the Relevant Agent and in which the Registrar  (1)
	acknowledges that the pledgor is at the  date of such
	acknowledgment the sole record, and to its knowledge, beneficial
  	owner  of  such  Subsidiary  Securities, (2) acknowledges the
	Lien in favor of the US Collateral Agent or Canadian Collateral
 	Trustee, as applicable, conferred under the Pledge Agreement and
	that such Lien  will  be  reflected  on the registry for such
	Subsidiary Securities, (3) agrees that it will  not  register
	any transfer of such Subsidiary Securities nor acknowledge any
 	Lien in favor of any other Person on such Subsidiary Securities,
	without the prior written consent of the US Collateral Agent or
 	Canadian Collateral Trustee, as applicable, in each instance,
	until it receives notice from the US Collateral Agent or Canadian
 	Collateral Trustee, as applicable, that  all  Liens  on  such
 	Collateral in favor of US Collateral Agent or Canadian Collateral
  	Trustee,  as applicable, for the  benefit  of  the  Agents and
	the Lenders have been release or terminated, and (4) agrees that
	upon  receipt  of  notice  from the US Collateral  Agent or
	Canadian Collateral Trustee, as applicable,  that an Event of
	Default has occurred and is continuing and that the Subsidiary
  	Securities identified in such notice have been transferred to a
	transferee identified in such notice, it will duly record such
    	transfer of Subsidiary Securities  on the appropriate registry
	without requiring further consent from the pledgor and shall
	thereafter treat the transferee as the sole record and beneficial
	owner of such Subsidiary Securities pending further  transfer,
	notwithstanding any contrary instruction received from the pledgor.

          "Convert,"  "Conversion,"  and  "Converted"  shall refer to
	(i) a conversion pursuant to SECTION 4.3 of one Type of Loan into
  	another Type of Loan, including with respect to Bankers'
	Acceptances or (ii) a conversion of a Loan from one currency to
	another currency as herein permitted, as applicable.

          "Credit Parties"  means,  collectively,  the Borrower, each
     	Guarantor and each other Person providing Collateral  pursuant
	to any Security Instrument.

          "Default" means any event or condition which, with the
	giving or receipt of notice or lapse of time or both, would
	constitute an Event of Default hereunder.

          "Default  Rate"  means  (i)  with respect to each Eurodollar
 	Rate Loan, until the end of the Interest  Period applicable
	thereto, a rate of two percent (2%) above the Eurodollar Rate
	applicable to such Loan, and thereafter at a rate of interest
      per annum which shall be two percent (2%)  above the  Base
	Rate,  (ii) with respect to Base Rate Loans, Swing Line Loans,
	Reimbursement Obligations,  fees,  and  other amounts payable
	in respect of (x) Obligations (other than with respect to
	Bankers'  Acceptances) or (y) (except as otherwise expressly
     	provided therein) the obligations of any other Credit Party
	under any of the other Loan Documents, a rate of interest per
	annum which shall be two percent (2%) above the Base Rate and
	(iii) in any case, the maximum rate permitted by applicable law,
 	if lower.

          "Deposit Account Agreement"  means,  with  respect to any
 	deposit account  of  any Borrower except the Mexican Companies
	and Consoltex Mexico (other  than  with  respect  to  accounts
  	held  by any Mexican Company or Consoltex Mexico at a United
	States or Canadian  finanical institution or a branch, division
  	or Affiliate thereof), with any financial institution, an
	agreement executed and delivered by the applicable depository
  	institution to the Relevant Agent, the US Collateral  Agent  or
 	the Canadian Collateral Trustee, as applicable, acknowledging and
 	agreeing to the Lien attaching to such deposit account in favor of
 	the Relevant Agent, the US Collateral Agent or the Canadian
	Collateral Trustee, as applicable, for the benefit of the Agents
	and the Lenders, in form and substance reasonably acceptable to
     	the Agents and the Lenders.

          "Direct Foreign Subsidiary"  means  each  Subsidiary of
	Consoltex Holdings that is not a Domestic Subsidiary and a
	majority of whose Voting Securities,  or  a majority of whose
 	Subsidiary Securities, are owned by Consoltex Holdings or a
 	Domestic Subsidiary of Consoltex Holdings; PROVIDED, HOWEVER,
 	that this definition of "Direct  Foreign Subsidiary" shall not
 	include Consoltex.

          "Discount" means (i) with respect to a Bankers' Acceptance
     	accepted by a Canadian Facility Lender which is a bank governed
 	by the Bank Act, the amount which is the difference between the
	face amount of such Bankers' Acceptance and the Discounted
	Proceeds and (ii) with respect to a Bankers' Acceptance which is
 	a Discount Note, the amount determined by the Canadian Agent as
 	being the arithmetic average (rounded upward to the nearest
	1/100th of 1%), of the discounts applicable to the Bankers'
	Acceptances accepted by (or that would be accepted by) the
	Canadian Facility Lenders which are banks governed by the Bank
	Act and issued under the same Facility on the day the Discount
 	Note is issued and having the same maturity as such Discount
     	Note.

          "Discount Note" means a non-interest bearing note in form
	and substance reasonably satisfactory to a Non-BA Lender, issued
 	by Consoltex under a Canadian Facility in favor of a Non-BA
	Lender and discounted by such Non-BA Lender, the Loan evidenced
	by such note being made in lieu of accepting Bankers' Acceptances.

          "Discounted Proceeds" means in respect of any Bankers'
	Acceptance to be accepted by a Canadian Facility Lender which is
	a bank governed by the Bank Act on any day, an amount (rounded to
	the nearest whole cent, and with one-half of one cent being rounded
 	up) calculated on such day by multiplying:

          (a) the face amount of such Bankers' Acceptance, by

          (b)  the price, where the price is determined by dividing
		   one by the sum of one plus the product of:

               (i) the Discount Rate (expressed as a decimal); and

               (ii) a fraction, the numerator of which is the number
			  of days in the term of such Bankers' Acceptance
			  and the denominator of which is 365;

               with the price as so determined being rounded up or
		   down to the fifth decimal place and .000005 being
		   rounded up.

          "Discount Rate" with respect to an issue of Bankers'
	Acceptances with the same maturity date, means the rate
	determined by the Canadian Agent as being the discount rate,
 	calculated on the basis of a year of 365 days, of each of the
 	Canadian Facility Lenders which are banks governed by the Bank Act,
 	established in accordance with their normal practices at or about
 	9:30 a.m. (Montreal time) on the date of issue and acceptance
 	of such Bankers' Acceptances, for bankers' acceptances having a
	face value comparable, and a maturity date identical, to the face
 	value and maturity date of the Bankers'Acceptances forming part
 	of such issue to be accepted by each such Canadian Facility
	Lender.

          "Dollar Equivalent Amount" means, (a) the amount denominated
 	in Dollars, and (b) with respect to any Canadian Dollar amount,
	the amount of Dollars into which the Canadian Dollar amount would
	be converted, based on the applicable Advance Date Exchange Rate.

          "Dollars" and the symbol " $" means dollars constituting
	legal tender for the payment of public and private debts in the
 	United States of America.

          "Domestic  Subsidiary"  means  (i)  any  Subsidiary  of
    	Consoltex Holdings organized under the laws of the United States
 	of America, any state or territory thereof or the District of
	Columbia and  (ii) notwithstanding (i) above, Consoltex and any
	Subsidiary of Consoltex.

          "Eligible Assignee" means (i) a Lender,  (ii)  an  affiliate
 	of a Lender, and (iii) any other Person approved by the Agent
	and,  unless an  Event  of  Default  has occurred and is
	continuing at the time any assignment is effected in accordance
  	with SECTION 13.1, Consoltex Holdings, such approval not to be
	unreasonably withheld or delayed  by Consoltex Holdings and such
 	approval to be deemed given by Consoltex Holdings (in the absence
  	of notice to the contrary, effective upon receipt) within five
	(5) Business Days after  notice  of such proposed assignment has
  	been provided by the assigning Lender to Consoltex Holdings;
 	provided, however, that  neither  Consoltex Holdings nor any
     	Subsidiary  or Affiliate of Consoltex Holdings  shall  qualify
 	as an Eligible Assignee.

          "Eligible  Factor  Receivables" means the aggregate amount
	of all payment rights to amounts  due to any US Borrower or
	Canadian Borrower from factors of Accounts Receivable of any US
 	Borrower or Canadian Borrower,  net of the aggregate amount of
	such payment rights as to which any such factor may have a right
	of offset or recoupment, so long as (a) such payment rights arise
  	from transactions and pursuant to agreements not in violation of
	SECTION 10.5(I)  hereof, and (b) the US Collateral Agent, the
	Canadian Collateral Trustee  or  the Canadian Agent, as applicable,
 	shall have a first priority perfected  security interest in such
 	payment rights pursuant to the Security Instruments, free of any
  	Lien other  than  such  security  interest and Statutory
	Borrowing Base Permitted Liens.

          "Eligible Inventory" means all of the Inventory  located
	in the United  States  or Canada, without duplication (valued at
	the lower of cost, determined using the first-in-first-out method
  	or rolling average method, replacement cost and net realizable
	value, but in no event valued at greater  than  fair market value),
 	consisting of uncut and undyed greige goods inventory, raw
	materials, polypropylene products, and finished goods inventory,
 	and in which the US Collateral Agent, the Canadian Collateral
	Trustee or the holders of any Bank Act security  shall  have  a
	first priority perfected  security  interest pursuant to the
	Security Instruments, free of any Lien other than such security
	interest and Statutory  Borrowing  Base  Permitted Liens, and
     	which  (a)  conforms  in  all  material  respects  to  the
	warranties contained in the Security Agreement, (b) is not damaged
  	or  defective in any way, (c) is not sold or segregated for sale or
 	otherwise reflected as an account receivable of  any  Borrower or
	any Guarantor, (d) is not consigned inventory unless a waiver of
	the consignee's Lien in form and substance reasonably acceptable to
	the Agents  and  the Lenders  has  been  executed  by  such
	consignee and delivered to the Relevant Agent, (e) is not
	inventory-in-transit  (except inventory-in-transit  between
	locations of any Borrowers) or located  in  a  place
     	other than at the locations  listed  on  SCHEDULE  5.3  or  such
	other locations  acceptable  to  the Agents as to which the
	Borrowers  shall have complied with the provisions of SECTION 5.3
 	hereof hereto, (f) is not work-in-process, (g) is  not
	constituting packaging materials and supplies (other than
	packaging materials  which are inventory held for sale to third
 	parties), (h) is not inventory  evidenced  by negotiable
     	warehouse receipts or by non-negotiable warehouse receipts or
	bills of lading or documents of title which have not been issued
 	in the name of the Relevant Agent or the Canadian Collateral
	Trustee, and  (i) is not inventory  deemed  ineligible  by  the
 	Relevant Agent or the Canadian Collateral Trustee in its reasonable
 	judgment and discretion; PROVIDED that, to the extent otherwise
	included in Eligible Inventory, Eligible Inventory  will  be
	reduced by (i) any supplies,  spare  parts,  goods returned or
	rejected  by  customers  of  any  Borrower  which  are not
     	saleable or are subject to a Lien of any factor of accounts
	receivable of  any  Borrower,  goods to be returned to suppliers
	of any Borrower, goods in transit to third  parties  (other than
	the agents, leaseholds or warehouses of any Borrower to the
	extent such locations  are  in compliance  with  the  provisions
  	hereof), (ii) any reserves required under GAAP for bill and hold
 	(deferred  shipment)  sales as and to the extent  such  reserves
  	relate to such Eligible Inventory,  (iii)  any Inventory of
	Balson-Hercules  other than Inventory located on property owned
	or leased by Balson-Hercules  or  held at a bonded warehouse for
     	the benefit of Balson-Hercules, and (iv)  any  Inventory  located
	on a property leased by any Borrower with respect to which the
	landlord  of such  property  has not delivered a Waiver of Lien
 	Rights with respect to such property.

          "Eligible Letters of Credit" means at any date commercial
	letters of credit issued  for  the  account  of  any  of  the
	US Borrowers or Consoltex  in  connection  with  the  purchase
	of  raw materials  and finished goods, which raw materials and
	finished goods  have  not been received  as  Inventory  as of
	such date, and each of which commercial letters of credit has an
 	expiration date not later than the EARLIER of (i) the date that
	is 120 days  after  its  issuance,  or (ii) the date that is
	ninety (90) days beyond the Stated Termination Date.

          "Eligible  Receivables" means all of (i) the Accounts
	Receivable evidenced by an invoice (valued at the face amount of
 	such invoice) in which the US Collateral  Agent,  the  Canadian
	Lenders or the Canadian Collateral  Trustee  shall  have a first
 	priority  perfected  security interest pursuant to the Security
 	Instruments, free of any Lien other than  such security interest
	and Statutory  Borrowing  Base  Permitted Liens, and (ii) the
	accounts receivable of Rafytek which are supported by a bill of
 	sale to LINQ that has been delivered, and is reasonably acceptable,
 	to the US Collateral Agent ("Rafytek Accounts"); PROVIDED that
 	both clauses (i)  and  (ii) shall exclude (a) Accounts Receivable
     	and Rafytek Accounts outstanding for longer than ninety (90) days
 	(120 days in the case of agrotextile  and  cotton  bale  wrap
	customers of LINQ) from the date of original invoice (unless they
 	are supported  by a  letter  of  credit  that  has  been  assigned
  	or  pledged,  and is reasonably  acceptable,  to  the  Relevant
 	Agent);  (b)  all Accounts Receivable  and  Rafytek  Accounts
	owed  by an account debtor to  the extent more than fifty percent
 	(50%) of the  Accounts  Receivable  and Rafytek  Accounts  owed
  	by  such  account  debtor  to  any applicable Borrower are deemed
 	ineligible hereunder; (c) Accounts Receivable and Rafytek Accounts
 	owing  from  any  Affiliate  of any Borrower or any Subsidiary;
  	(d) Accounts Receivable and Rafytek Accounts  owed  by  a
     	creditor of any Borrower or any of their Subsidiaries to the
	extent of the amount of  the obligation of such Borrower or
	Subsidiaries to such creditor; (e) Accounts  Receivable  and
	Rafytek Accounts which are in dispute  or  subject  to  any
	post-dated  payment  items,  retainage, counterclaim,
	contra-account or offset, but  only to the extent of the amount
 	disputed and the specific amount subject  to post-dated payment
     	items, retainage, counterclaim, contra-account or offset; (f)
	Accounts Receivable and Rafytek Accounts owing by any account
  	debtor which has entered  into  insolvency  proceedings;  (g)
  	Accounts Receivable  and Rafytek  Accounts  arising from a sale
 	on a bill-and-hold,  guaranteed sale, sale-or-return,
	sale-on-approval,  consignment or similar basis or which is
	subject to repurchase, return,  rejection,  repossession, loss
  	or  damage;  (h)  Accounts  Receivable owed by an account debtor
     	domiciled  outside of the continental  United  States  of  America
  	or Canada, unless (1) the applicable Account Receivable is
	supported by a letter of credit that has been remitted, and is
	reasonably acceptable, to the US Collateral  Agent or the
	Canadian Agent, as the case may be, or (2) the applicable Account
  	Receivable  is  insured  by  an insure reasonably acceptable to
 	the US Collateral Agent, the US Agent  or the Canadian  Agent,
	as  the  case  may  be;  (i) Accounts Receivable and Rafytek
	Accounts owed by the United States of  America, Canada, Mexico
     	or any other federal, state, provincial or other governmental or
	quasi governmental unit, agency or subdivision; (j) Accounts
	Receivable and Rafytek  Accounts  that  are  denominated  in any
	currency other than Dollars  or  Canadian  Dollars;  (k) Accounts
 	Receivable  and  Rafytek Accounts as to which the goods giving
	rise to the Account Receivable or Rafytek Account have not been
	delivered to  and  accepted  by  the account debtor or the service
 	giving rise to the Account Receivable or Rafytek  Account  has  not
  	been completely performed or which do not represent a final sale;
	(l) Accounts  Receivable  and Rafytek Accounts for which the total
 	of all Accounts Receivable and  Rafytek  Accounts from any three
	account  debtors (together with the Affiliates of the account
	debtors) would, when  combined,  exceed  thirty-five  percent
     	(35%) of the  total  Accounts  Receivable  and Rafytek Accounts
	of the Borrowers and their Subsidiaries (to the extent  of  such
	excess); (m) Accounts   Receivable   and   Rafytek  Accounts
	which,  by  contract, subrogation, mechanics' lien laws  or
	otherwise, are subject to claims by  any Borrower's or any of
	their Subsidiaries'  creditors  or  other third  parties  or
	which  are  owed by account debtors as to whom any creditor of
	any Borrower or any of  their  Subsidiaries (including any
	bonding company) has a lien or retainage rights; (n) any and all
	other Accounts Receivable and Rafytek Accounts the validity,
	collectibility, or amount of which is determined in good faith
	in accordance with GAAP by  any  Borrower or any of their
	Subsidiaries  to  be  doubtful;  (o) Accounts Receivable  and
	Rafytek  Accounts  owed by an account debtor which  is located
	in a jurisdiction where the applicable  Borrower  or Subsidiary
	are  required  to  qualify to transact business or to file
     	reports, unless such Borrower or  such  Subsidiary has so
	qualified or filed and provided written evidence satisfactory
	to the Agents of such compliance; (p) any Accounts Receivable and
  	Rafytek  Accounts  as  to which  any  representation,  warranty  or
  	covenant  contained  in the Security  Agreement  shall  be  untrue
	or  misleading,  (q)  Accounts Receivable  and  Rafytek Accounts
	subject to a Lien of, or which  have been sold, assigned  or
	otherwise  disposed  of,  to  any  factor  of Accounts  Receivable
  	or  Rafytek  Accounts  of  any  Borrower  or any Subsidiary, and
	(r) any other Accounts Receivable and Rafytek Accounts which the
	Agents otherwise in their reasonable discretion deems to  be
     	ineligible.

          "Employee  Benefit  Plan"  means  (i)  any employee benefit
 	plan, including  any Pension Plan, within the meaning  of  Section
  	3(3)  of ERISA which  (A) is maintained for employees of any
	Borrower or any of their ERISA Affiliates,  or  any  Subsidiary
	or  is  assumed  by  any Borrower  or  any  of  their  ERISA
	Affiliates,  or any Subsidiary in connection with any Acquisition
 	or (B) at any time within the last six (6)  Fiscal  Years  has
	been  maintained  for  the employees  of  any Borrower,  any
	current or former ERISA Affiliate,  or  any  Subsidiary and (ii)
	any plan, arrangement, understanding or scheme maintained  by
     	any  Borrower  or  any  Subsidiary  that provides retirement,
	deferred compensation, employee or retiree medical or life
	insurance, severance benefits or any other benefit covering any
	employee or former employee and which is administered under any
	Foreign  Benefit  Law or regulated by any Governmental Authority
	other than the United States of America.

          "Environmental  Laws" means, collectively, as applicable  to
  	and governing any certain  Borrower  or  its  properties, (i)
	each binding Canadian, Mexican and Costa Rican applicable
	federal,  provincial  or local  Act,  Statute,  Regulation,
	By-Law, policy, code, instruction, guideline,  indicator, order,
	infraction  notice,  correction  notice, decision, declaration,
	injunction, decree, order-in-council, judgment and  summons,
	and, as applicable in Quebec, the "Politique de rehabilitation
	des terrains contamines" and the "Lignes directrices en
     	matiere d'enlevement de reservoirs souterrains ayant contenu
  	des produits  petroliers"  and  pertains  in  whole  or  in
	part to the environment or to its protection, adopted,
	published, sent or rendered by   any   Governmental   Authority;
   	and (ii)the Comprehensive Environmental Response, Compensation
	and Liability Act of 1980, as amended, the Superfund Amendments
 	and Reauthorization Act of 1986, the Resource Conservation and
 	Recovery Act, the Toxic Substances Control Act, as amended, the
 	Clean Air  Act,  as amended, the Clean Water Act, as  amended,
	any other "Superfund" or "Superlien"  law  or  any  other
     	federal,   state   or  local  statute,  law,  ordinance,  code,
	rule, regulation, order, decree,  permit or license regulating,
	relating to, or  imposing  liability  or  standards   of  conduct
  	concerning,  any environmental  matters  or  conditions,
	environmental protection or conservation, or any Hazardous
	Material.

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

          "ERISA Affiliate,"  as  applied to any Borrower, means any
	Person or trade or business which is  a  member  of  a  group
	which is under common control with any Borrower, who together
	with such  Borrower, is treated as a single employer within the
	meaning of Section  414(b) and (c) of the Code.

          "Eurodollar  Rate"  means  the interest rate per annum
	calculate according to the following formula:

        Eurodollar = INTERBANK OFFERED RATE  + Applicable
         Rate       1- Reserve Requirement     Margin


          "Eurodollar Rate Loan" means  a  Loan  (including  a
	Segment) for which  the  rate  of  interest  is  determined
	by  reference  to  the Eurodollar Rate.

          "Eurodollar Rate Segment" means a Segment bearing interest
	or to bear interest at the Eurodollar Rate.

          "Event of Default" means any of the occurrences set forth
	as such in SECTION 11.1.

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

          "Existing Credit Agreement" has the meaning  given  such
	term in the preamble hereto.

          "Existing Credit Agreement Closing Date" means October 25,
	1999, the date on which certain of the Borrowers, the Agents
	and certain  of the Lenders entered into the Existing Credit
	Agreement.

          "Existing  Term  B Loan Facility" has the meaning given such
 	term in the preamble hereto.

          "Existing Revolver"  has  the  meaning  given  such  term
	in the preamble hereto.

          "Facility"  means  any  of  the  Revolving Credit Facilities,
	the Letter of Credit Facilities, the Term Loan Facilities and the
	Canadian Swing Line Facility.

          "Facility Borrower" means, when in  relation  to (i) the
	Canadian Revolving  Credit Facility, the Canadian Swing Line
	Facility  and  the Canadian Letter  of Credit Facility: Consoltex;
	(ii) the Canadian Term Loan Facility:  Consoltex;  (iii)  the
	U.S. Revolving Credit Facility and the U.S. Letter of Credit
	Facility: each  of  Consoltex  Holdings, Consoltex USA,
	Balson-Hercules, LINQ, Consoltex Mexico (subject to the Mexican
	Borrowing Limit) and Rafytek (subject to the Mexican Borrowing
     	Limit); and (iv) the US Term Loan Facility: each of LINQ and
	Consoltex Mexico (subject to the Mexican Borrowing Limit).

"Facility Guaranty" means, collectively (or individually  as
the context may indicate), (i) that certain Guaranty Agreement
dated as of the  Original  Closing  Date  by  Consoltex,
Consoltex  USA,  Balson-Hercules, LINQ, Consoltex Mexico, Rafytek,
Rafytica and certain  other entities that have been merged or
amalgamated out of existence to  the Agents and the Canadian
Collateral Trustee, (ii) that certain Guaranty Agreement dated as
of May 31, 1996 by Vera Pak to the Agents and the Canadian
Collateral  Trustee,  (iii)  that  certain Guaranty Agreement
dated as of October 22, 1999 by Marino, Royalton,  Vestco  and
Marino Mexico  to  the  Agents and the Canadian Collateral
Trustee, (iv) that certain Guaranty Agreement dated as of
September 29, 2000 by Consoltex Holdings to the Agents and the
Canadian Collateral Trustee, (v) that certain Guarantee dated as
of  the  date  hereof  by  Consoltex to the Agents  and  the
Canadian Collateral Trustee, and (vi) any  additional direct or
indirect guaranty  of any of the obligations or liabilities of
any of the Borrowers or Guarantors under any of the Loan
documents(as defined herein or in the OriginalCredit Agreement
or in the Existing Credit Agreement) delivered on or before the
Closing Date or at any other time pursuant to the Original Credit
Agreement(or any of the "Loan  Documents" as defined therein),
the Existing Credit Agreement (or any of the "Loan  Documents"
as defined therein), or otherwise  pursuant  to  the  terms
hereof or any of the other Loan Documents, in each case as
amended effective as of the Closing Date by the applicable
Consolidated Amendment and as otherwise  heretofore  or
hereafter modified, amended or supplemented from time to time.

          "Facility  Termination  Date"  means  such  date  as  all
	of the following  shall  have  occurred:   (a) each applicable
	Borrower shall have permanently terminated each of the  Revolving
	Credit  Facilitie and  the  Canadian  Swing  Line  Facility  by
  	payment  in full of all Revolving  Credit  Outstandings,  Letter
  	of  Credit Outstandings  and Canadian Swing Line Loan Outstandings,
	together  with  all accrued and unpaid interest thereon, except
	for the undrawn portion  of Letters of Credit as have been fully
	cash collateralized in a manner consistent with the terms of
	SECTION 11.1(B), (b) each applicable Borrower shall have paid all
	Term  Loan  Outstandings  in  full,  together  with all accrued
	and  unpaid  interest  thereon, (c) all Swap Agreements shall
     	have  been  terminated, expired or cash collateralized to the
     	satisfaction of the Relevant Agent and the applicable Lenders,
	(d) all Term Loan Commitments, Revolving Credit  Commitments
	and Letter of Credit Commitments shall have terminated or
	expired and (e) each Borrower shall have fully, finally and
	irrevocably paid and satisfied in full all Obligations (other
	than Obligations consisting of continuing indemnities and other
	Contingent Obligations of such Borrower or any Guarantor that
	may be owing to the Lenders pursuant to the Loan Documents and
	expressly survive termination of this Agreement).

          "FASB 133"  means Statement of Financial Accounting Standards
	No. 133.

          "Federal Funds  Rate"  means,  for  any  day,  the rate per
	annum(rounded upwards, if necessary, to the nearest 1/100 of 1%)
	equal to the weighted average of the rates on overnight Federal
	funds transactions  with  members  of the Federal Reserve System
	arranged by Federal funds brokers on such day, as published by the
	Federal Reserve Bank  of  New  York on the Business  Day  next
	succeeding  such  day; provided that (a) if such day is not a
	Business Day, the Federal Funds Rate for such day shall be such
	rate on such transactions on the next preceding Business Day as so
	published on the next succeeding Business Day, and (b)if no such
	rate  is so published on such next succeeding Business Day, the
	Federal Funds Rate for such day shall be the average rate quoted
	to the Relevant Agent on such day on such transaction from three
	Federal funds brokers of recognized standing selected by the
     	Relevant Agent.

          "Fee  Limitation  Agreement" means the agreement of AIP
	addressed to the Borrowers, the Agents  and the Lenders, limiting
	the payment of management fees by the Borrower  to  AIP  to:
	(a) $342,500 paid after the Closing Date as remittance of a
	portion  of the accrued and unpaid management fees as of the
	Closing Date; (b) $57,083 to be paid monthly in each of October,
	November and December, 2000; and(c)an amount each month thereafter
	consisting of all or part of the monthly fee due AIP of up to
	$114,166 and such accrued and unpaid management fees from prior
	periods;  PROVIDED,  however, that such agreement shall provide
     	that all fees under (c) shall  be limited in amount, or
	restricted, to the extent necessary such that,  after  giving
	pro forma effect to the payment  of such fee, there would not
	then  exist  a  default  in  the Consolidated Fixed Charge
	Coverage Ratio.

          "Fiscal  Year"  means the twelve month fiscal period of
	Consoltex Holdings and its Subsidiaries commencing on January 1
	of each calendar year and ending on December 31 of such calendar
	year.

          "Foreign  Benefit   Law"   means  any  applicable  statute,
	law, ordinance, code, rule, regulation,  order  or  decree  of
	any foreign nation  or  any  province,  state,  territory,
	protectorate  or other political  subdivision  thereof  regulating,
	relating to, or imposing liability  or  standards of conduct
	concerning, any  Employee  Benefit Plan.

          "Four-Quarter  Period"  means  a  period of four full
	consecutive fiscal quarters of Consoltex Holdings and its
	Subsidiaries, taken together as one accounting period.

          "GAAP"  or  "Generally   Accepted  Accounting  Principles"
	means generally accepted accounting principles  at  such  time
	applicable in the United States of America, being those principles
 	of accounting set forth in pronouncements of the Financial
	Accounting Standards Board, the American Institute of Certified
	Public Accountants, or which have other substantial authoritative
  	support and are applicable in the circumstances as of the date
	of a report.

          "GMAC" has the meaning given such term in SECTION 1.1(C)
	hereof.

          "Governmental Authority" shall mean as applicable to and
     	governing  any  certain  Borrower,  any  United States of America,
	any Canadian, any Mexican and any Costa Rican  federal, state,
	provincial, municipal, national or other governmental department,
	ministry, commission, board, bureau, court, agency or
	instrumentality or political subdivision thereof or any entity
	exercising executive, legislative, judicial, regulatory or
	administrative  functions  of  or pertaining  to  any
	government or  any  court,  in each case whether associated
	with the United States of America or any  of  its  states, Canada
 	or any of its provinces,  Mexico or any of its states, Costa
	Rica or a foreign	entity or government.

          "Grantor" has the meaning given such term in SECTION 5.3.

          "Guarantors"  means, at any date,  each  of  Consoltex
	Holdings, Consoltex, Consoltex USA, Balson-Hercules, LINQ,
	Consoltex Mexico, the Mexican Companies, and any other
	Subsidiaries or other Persons who are or are required to be
	parties  to  a  Facility Guaranty at such date, each of which
	shall guarantee all Obligations of all Borrowers and all
    	other Guarantors, PROVIDED that Consoltex Mexico and each
	of the Mexican Companies shall only guarantee the Obligations
	of Consoltex Mexico, Consoltex and the Mexican Companies.

          "Hazardous Material" means and includes any pollutant,
     	contaminant, or hazardous,  toxic  or  dangerous  waste,
	substance or material (including without limitation petroleum
	products, asbestos-containing  materials  and  lead),  the
	generation, handling, storage, transportation, disposal,
	treatment, release, discharge or emission of which is subject
	to any Environmental Law.

          "Holding Companies" means Consoltex  Holdings,  Consoltex
	USA and Consoltex Mexico.

          "Income  Tax  Act"  means  the INCOME TAX ACT, R.S.C.  1985,
	5th Supplement, as amended, and any regulations promulgated
	thereunder.

          "Indebtedness" means as to any  Person,  without duplication,
	(a) all  Indebtedness  for  Money Borrowed of such Person, (b)
	all  Rate Hedging  Obligations  of  such   Person,  (c)  all
	Synthetic  Lease Obligations of such Person, (d) all indebtedness
	secured  by  any Lien on any property or asset owned or held by
	such Person regardless  or whether the  indebtedness  secured
	thereby shall have been assumed by such Person or is non-recourse
	to the  credit  of such Person, and (e) all Contingent Obligations
	of such Person, including  all  such  items incurred  by  any
	partnership or joint venture as to which such Person is liable
	as a general partner or joint venturer.

          "Indebtedness  for  Money  Borrowed"  means  with  respect
 	to any Person,  without  duplication,  all indebtedness in respect
  	of  money borrowed, including without limitation  all  obligations
	under Capital Leases, the deferred purchase price of any property
	or  services, the aggregate   face  amount  of  all  surety  bonds,
	letters  of  credit(including without limitation Letters of Credit
	issued hereunder), and Bankers'  Acceptances,  and  (without
	duplication)  all  payment  and reimbursement  obligations  in
	respect thereof whether or not matured, evidenced by a promissory
	note,  bond,  debenture  or  similar written obligation   for
	the   payment  of  money  (including  reimbursement agreements
	and  conditional   sales   or   similar   title  retention
	agreements),  including all such items incurred by any partnership
	or joint venture as  to  which such Person is liable as a general
	partner or joint venturer, other  than  trade  payables  and
	accrued expenses incurred in the ordinary course of business.

          "Indemnified Party" means each Agent and each Lender and
	each of their affiliates and their respective officers, directors,
	employees, agents, and advisors.

          "Initial Mortgaged Properties" has the meaning given such
	term in Section 8.1(xv) of the Original Credit Agreement.

          "Indirect  Foreign  Subsidiary"  means a Subsidiary of
	Consoltex Holdings that is neither a Domestic Subsidiary  nor
	a  Direct Foreign Subsidiary.

          "Interbank  Offered  Rate" means, with respect to any
	Eurodollar Rate Loan for the Interest Period applicable thereto:

               (a) the rate per  annum equal to the rate determined
		by the Agent to be the offered  rate  that  appears  on
		the page of the Telerate   screen   that  displays  an
		average  British  Bankers Association Interest Settlement
		Rate for deposits in Dollars (for delivery on the first
		day  of  such Interest Period) with a term equivalent to
		such Interest Period,  determined as of approximately
		11:00 a.m. (London time) two Business Days prior to
          	the first day of such Interest Period, or

               (b)  in  the event the  rate  referenced  in  the
		preceding subsection (a)  does  not  appear on such page
		or service or such page or service shall cease  to  be
		available, the rate per annum equal to the rate determined
		by the  Agent to be the offered rate on  such  other page or
		other service that  displays  an  average British Bankers
		Association Interest Settlement Rate for deposits in Dollars
		(for  delivery  on  the  first  day  of such Interest Period)
		with a term equivalent to such Interest Period, determined
		as of approximately  11:00  a.m.  (London  time)  two
          	Business Days prior to the first day of such Interest
		Period, or

               (c) in the  event  the  rates  referenced  in  the
		preceding subsections (a) and (b) are not available, the
		rate per annum determined by the Agent  as  the rate of
		interest (rounded upward to the next 1/100{th} of 1%) at
		which  deposits  in  Dollars for delivery  on  the  first
		day of such Interest Period in same  day funds in the
		approximate amount of the Eurodollar Rate Loan being
          	made, continued or converted  by  Bank of America and
		with a term equivalent to such Interest Rate would  be
		offered by Bank of America's  London  Branch  to  major
		banks in the offshore Dollar market at their request at
		approximately 11:00 a.m. (London time) two Business Days
		prior to the first day of such Interest Period.

          "Interest Period" means, for each  Eurodollar Rate Loan, a
	period commencing on the date such Eurodollar Rate  Loan is made
	or Converted or Continued and ending, at the Borrower's option,
	on  the  date one, two  or  three  months  thereafter  as
	notified  to  the Agent by the Authorized  Representative in
	accordance  with  the  terms   hereof; provided that,

               (i)  if  an  Authorized  Representative  fails to notify
		the Relevant Agent of the length of an Interest Period at
		least three(3) Business Days prior to the first day of
		such Interest Period, the  Loan  for  which such Interest
		Period was to  be  determined shall be deemed to  be  a
		Base  Rate  Loan  as  of the first day thereof;

               (ii) if an Interest Period for a Eurodollar Rate  Loan
		would end  on  a day which is not a Business Day, such
		Interest  Period shall be extended to the next Business
		Day (unless such extension would  cause  the  applicable
		Interest  Period  to  end  in  the succeeding  calendar
		month,  in  which case such Interest Period shall end on
		the next preceding Business Day);

               (iii) any Interest Period which  begins on the last
		Business Day  of  a  calendar month (or on a day for which
		there is no numerically corresponding day in the calendar
		month at the end of such Interest  Period)  shall  end  on
		the last Business Day of a calendar month; and

               (iv)  no  Interest  Period  shall  extend  past  the
		Stated Termination  Date then in effect for Revolving
		Credit  Loans  or past the Term Loan Maturity Date for
		any Term Loans.

          "Interest Rate  Selection  Notice"  means  a  written  notice
	in substantially the form of EXHIBIT F delivered to the Relevant
	Agent by an  Authorized Representative in connection with (i) the
	election of a subsequent  Interest  Period  for  any  Eurodollar
	Rate  Loan  or the Conversion  of  any  Eurodollar  Rate Loan
	under a particular Facility into a Base Rate Loan under such
	Facility  or  the  Conversion  of any Base Rate Loan under a
	particular Facility into a Eurodollar Rate Loan under such
	Facility,  (ii) the conversion of any Segment in Canadian
     	Dollars under a particular Canadian Facility into a Segment
	in Dollars under such Facility or of any Segment in Dollars
	under a particular Canadian  Facility  into  a Segment in
	Canadian  Dollars  under  such Facility, (iii) the Continuation
	of any Bankers Acceptances or the Conversion of any Bankers'
	Acceptances under a Canadian Facility into Base Rate Loans or
	Eurodollar Rate Loans under such Canadian Facility and (iv)
	the Conversion of a Base Rate Loan or a Eurodollar Rate Loan
     	under a Canadian Facility into Bankers' Acceptances under
	such Canadian Facility.

          "Issuing  Bank"  means one or the other of the  Canadian
	Issuing Bank and the US Issuing Bank, as applicable.

          "Inventory" means  all  inventory  of the Borrowers
	(exclusive of Consoltex Holdings, Consoltex Mexico and  Rafytek)
	as  defined in th Security Agreement.

          "LC Account Agreement" means the LC Account Agreement dated
	as of the date hereof between the Facility Borrowers and the
	Agents, as amended, modified or supplemented from time to time.

          "Lender" and "Lenders" have  the meanings given such terms in
	the preamble hereto and in each event,  where  applicable,
	"Lenders" shall include without limitation the Canadian Swing
	Line Facility Lender.

          "Les Gantiers Debenture" means that certain Convertible
	Debenture by and between Consoltex Holdings and Les Gantiers
	Holding B.V. dated as of September 29, 2000 in the aggregate
	initial principal  amount of $2,123,000.

          "Letter of Credit" means any of a Canadian Letter of Credit
	or a US Letter of Credit.

          "Letter of Credit Commitment" means, with respect to each
	Lender, the obligation of such Lender to acquire Participations
	in respect  of Letters  of  Credit  and  Reimbursement Obligations
	up to an aggregate amount at any one time outstanding  equal
	to such Lender's Applicable Commitment Percentage of the Total
	US Letter  of  Credit Commitment or the Total Canadian Letter of
	Credit Commitment, as  applicable, as the same may be increased
	or decreased from time to time  pursuant to this Agreement.

          "Letter of Credit Facility" means, collectively, the
	Canadian Letter of Credit Facility and the US Letter of Credit
	Facility.

          "Letter   of   Credit   Outstandings"   means,  collectively
	or individually as the context may require, each  of  the
	Canadian Letter of Credit Outstandings and the US Letter of
	Credit Outstandings.

          "Lien" means any interest in or right with respect to
	property of any certain Borrower or its Subsidiaries, securing
	any obligation owed to,  or  a  claim by, a Person other than the
	owner of  the  property,whether such interest is based on the
	Civil Code of Quebec, the Ley General de Titulos  y
	Operaciones  de  Credito  of  Mexico (the Mexican General Law
	of   Negotiable   Instruments   and   Credit Transactions), the
	applicable Uniform Commercial Code, the common law, statute or
	contract, and including but not limited to the right of  an
     	unpaid  vendor or supplier to dissolve the sale or to repossess
	goods, any lien, security interest or priority arising by operation
	of law or from a mortgage,  hypothec,  encumbrance, pledge,
	security agreement, conditional sale, trust receipt or any other
	title retention device or a lease, trust, deemed trust, consignment
	for  security  purposes  or bailment  for  security  purposes  and
	including also a margin payment made in connection with a Rate
	Hedging  Obligation.   For the purposes of this Agreement, any
	Borrower and any Subsidiary shall  be deemed to be the owner of
	any property which it has acquired or holds subject to a
	conditional  sale  agreement, financing lease, or other
	arrangement pursuant to which title to the property has been
	retained by or vested in some other Person until full payment
	of its purchase price or for security purposes.

          "LINQ" has the meaning given such term in the preamble
	hereto.

          "Loan"  or "Loans" means any of  the  Canadian  Revolving
	Credit Loans, US Revolving  Credit Loans, the Canadian Term Loan,
	the US Term Loan or the Canadian Swing  Line Loans, including any
	Segment, and any Bankers' Acceptances issued thereunder  to the
	full extent of its face amount.

          "Loan Documents" means this Agreement,  the  Notes,  the
	Security Instruments, the Facility Guaranties, the Consolidated
	Amendments, the Lock  Box  Agreements, the Deposit Account
	Agreements, the LC  Account Agreement, the  Applications and
	Agreements for Letter of Credit, each Mortgage, the Third
	Amendment  to  Mortgage and all other agreements,instruments and
	documents  heretofore   or  hereafter  executed  and delivered to
	or in favor of any Lender (including the Canadian Issuing Bank or
	the US Issuing Bank) or either Agent  in  connection  with the
     	Loans made and transactions contemplated under this Agreement,
	as the same may be amended, supplemented or replaced from the
	time to time.

          "Lock  Box " means one or more post office boxes or other
	similar places for the  receipt  of  mail  established  by  any
	US Borrower or Canadian Borrower reasonably acceptable to the
	Relevant Agent and over which the US Agent, the US Collateral
	Agent, the Canadian Agent or the Canadian Collateral Trustee,
	as applicable, shall have received a Lock Box Agreement in
	accordance with SECTION 7.3 or 9.20   giving  such US Agent,
	US  Collateral  Agent,  Canadian  Agent or Canadian Collateral
     	Trustee  rights  with respect to the receiving  and  opening  of
	mail received therein,  the  depositing  of proceeds of Accounts
	Receivable received therein in the appropriate Lock Box Account,
	and such other rights and remedies as are otherwise provided for
	in the applicable Lock Box Agreement and Cash Collateral Agreement.

          "Lock Box Account" means one or more accounts established
	by any US  Borrower  or  Canadian  Borrower with the US Agent or
	the Canadian Agent, including any of the Borrowers'  US  Accounts
	or the Borrowers'Canadian  Accounts  if  so  designated  by  the
	Borrower  owning  such account,  over  which  the  US  Agent,
	the US Collateral  Agent,  the Canadian  Agent  or the Canadian
	Collateral  Trustee,  as  applicable, shall have complete  dominion
	and control for the receipt of payments in respect of all Accounts
	Receivable  in accordance with the terms of a Cash Collateral
	Agreement executed with respect to each such account
     	in accordance with SECTION 7.3 or 9.20 and  into which the
	proceeds of any Accounts Receivable received in any Lock Box
	are deposited as provided herein or in an applicable Lock Box
	Agreement.

          "Lock  Box Agreements" means, collectively, each certain
	Lock Box Agreement of  even  date  herewith  by  and  among
	certain  of the US Borrowers  or  Canadian  Borrowers and the
	US Agent, the US Collateral Agent, the Canadian Agent  or  the
	Canadian  Collateral  Trustee,  as applicable, providing for the
	establishment and operations of the Lock Boxes, as amended,
	restated, modified or replaced from time to time in accordance
	with   its   terms,  in  form  and  substance  reasonably
     	satisfactory to the Agents and the Lenders.

          "Management Investment"  means  any  equity  contribution
	made to Consoltex Holdings in exchange for additional equity
	interests in, or right to acquire additional equity interests in,
	Consoltex Holdings in connection with its management stock option
	plan and the  exercise  of options issued thereunder after the
	Closing Date.

          "Marino"  means Marino Technologies, Inc., all of whose
	stock was previously acquired by Consoltex USA and which was
	subsequently merged into LINQ.

          "Marino Mexico" has the meaning given thereto in the preamble
     hereof.

          "Material Adverse  Effect" means a material adverse effect
	on (i) the  business,  properties,   operations,   prospects
	or  condition, financial  or  otherwise,  of Consoltex Holdings
	and its Subsidiaries, taken as a whole, (ii) the ability of the
	Borrower and the Guarantors, taken as a whole, to observe  the
	covenants  and agreements contained herein or in any other Loan
	Document, or (iii)  the rights, powers and remedies of the
	Relevant Agent, the US Collateral  Agent, the Canadian
     	Collateral  Trustee  or  any  Lender  under any Loan Document
	or  the validity, legality or enforceability thereof.

          "Mexican Benefit Law" means any applicable Mexican federal
	or state statute, law, regulation, order or decree having the
	force of law regulating, relating to or imposing liability or
	standards of conduct concerning any Mexican Employee Pension
	Plan.

          "Mexican Borrowing Limit" means, with respect to Consoltex
	Mexico as to the US Term Loan Facility, and with respect to
	Consoltex Mexico and Rafytek collectively as to the US Revolving
	Credit Facility , the respective maximum principal amounts set
	forth below:

          (a)  US Term Loan Facility (Consoltex Mexico) $2,250,000
          (b)  US Revolving Credit Facility (Consoltex Mexico
               and Rafytek) $15,000,000

          "Mexican Companies" means collectively,  each  of  Marino
	Mexico, Rafytek, Vera Pak, Royalton, Vestco and Rafytica.

          "Mexican  Employee Pension Plan" means any employee benefit
	plan registered as a  pension  plan in Mexico under Mexican Benefit
	Law and that is maintained by any Subsidiary  of  Consoltex Holdings
  	organized under the laws of Mexico or any political subdivision
	thereof, or with respect to which any of them could incur a
	liability.

          "Mexican Operational Restructuring" means  that  portion  of
	the Reorganization  pertaining  to  the  restructuring of the
	ownership or organization of the existing and previous Subsidiaries
	of  Consoltex Holdings  formed  under the law of Mexico or any
	political subdivision thereof, in form and substance previously
	disclosed to and otherwise acceptable to the Agents and the
	Lenders.

          "Mexican Stock Pledge Agreements"  means,  collectively
	or individually  as  the  context  may indicate, each of (i) that
	certain Stock Pledge Agreement dated as of  the  Closing  Date  by
	and between Consoltex  Mexico and the US Collateral Agent for the
	benefit  of  the Agents and the Lenders, (ii) that certain Stock
	Pledge Agreement dated as of the Closing  Date  by  and between
	Rafytek and the US Collateral Agent  for  the benefit of the
	Agents and  the  Lenders,  (iii)  that certain Stock  Pledge
	Agreement dated as of the Closing Date by and between Consoltex
 	and the US Collateral Agent  for  the benefit of the Agents and
	the Lenders, (iv) that certain Stock Pledge Agreement dated as of
	the  Closing  Date  by  and between Consoltex USA and  the  US
     	Collateral Agent for the benefit  of  the  Agents and the Lenders,
	(v) that certain Stock Pledge Agreement dated as  of  the
	Closing Date by and between LINQ and the US Collateral Agent for
	the benefit  of  the Agents and the Lenders.

          "Mexican Termination Event" means (i) a notice given with
	respect to a Mexican  Employee  Pension  Plan  that registration
	under Mexican Benefit  Law  may be revoked; or (ii) the
	termination  of  a  Mexican Employee Pension  Plan  or  the
	filing  of  a  notice of intent under Mexican Benefit Law to
	terminate any such plan or the treatment of any amendment to any
	such plan as a termination; or (iii)  the appointment of a
	provisional administrator, including any Governmental  Authority,
     	to administer any Mexican Employee Pension Plan.

          "Mortgage" means, collectively, all hypothecs, mortgages,
	deeds of trust and deeds granting a Lien to the Canadian
	Collateral Trustee, the US Collateral Agent or a trustee for the
	benefit of either Agent for the benefit of the Lenders in
	Collateral constituting real property and fixtures to secure
	Obligations existing as of the Closing Date or at any time
	thereafter, as such documents are amended effective as of the
	Closing Date by the Third Amendment to Mortgage and by any
	Consolidated Amendment and as otherwise heretofore or
     	hereafter amended, modified or supplemented from time to time.

          "Mortgaged  Property" means, collectively, the real property
	and fixtures of the Borrowers as described in the Mortgages.

          "Multiemployer  Plan"  means a "multiemployer plan" as
	defined in Section  4001(a)(3)  of ERISA to  which  the  Borrower
	or  any  ERISA Affiliate  is  making, or  is  accruing  an
	obligation to  make, contributions  or has made, or been obligated
 	to  make, contributions within the preceding  six (6) Fiscal
	Years, other than the District 65 Pension Plan from which
	Balson-Hercules withdrew effective January 31,1995.

          "NBC" has the meaning given such term in the preamble
	hereto.

          "Net Proceeds"  (a)  from  any  public or private offering
	of any security  means  cash  payments  received   by  any
	Borrower  or  any Subsidiary  therefrom  as  and  when  received,
	net of  all  legal, accounting,  banking and underwriting fees
	and expenses,  commissions, discounts and other issuance expenses
	incurred in connection therewith and all taxes  required to be
	paid or accrued as a consequence of such issuance; and (b)  from
	any Asset  Disposition  means  cash payments received  by  any
	Borrower or any Subsidiary therefrom (including  any cash payments
	received pursuant  to  any  note or other debt security received
	in connection  with  any  Asset Disposition)  as  and  when
	received, net of (i) all legal fees and  expenses  and  other
	fees and expenses  paid to third parties and incurred in
	connection therewith, (ii) all taxes required to be paid or
	accrued as a consequence of such disposition, and (iii)all amounts
	applied to repayment of Indebtedness (other than the Obligations)
	secured by a Lien on the asset or property disposed.

          "Non-BA Lender" means a Canadian Facility Lender which is
	not a bank governed by the Bank Act and in favor of which are
	issued Discount Notes.

          "Non-Funding Lender" means any Lender that shall at any time
	fail to advance funds as herein provided, including without
	limitation as a result of being in any insolvency or receivership
	proceeding, for so long as such Lender's failure to advance funds
	shall continue.

          "Notes"  means,  collectively,  the  Term Notes and the
	Revolving Notes.

          "Notice  Officers" has the meaning given  such  term  in
	SECTION 9.11.

          "Obligations" means the obligations, liabilities and
	Indebtedness of each Borrower  and each Guarantor with respect
	to (i) the principal and interest on the  Loans,  whether or not
	evidenced by Notes, and on Bankers' Acceptances issued under
	the  Canadian  Facilities, (ii) the Reimbursement Obligations
	and otherwise in respect  of  the Letters of Credit,  (iii) all
	liabilities of any Borrower to any Lender  (or  any affiliate
	of any Lender) which arise under a Swap Agreement, and (iv)
     	the payment  and performance of all other obligations, liabilities
	and Indebtedness of  the  Borrowers  and  the  Guarantors  to
	the Lenders(including  the  Canadian  Issuing Bank and the US
	Issuing Bank),  the Agents, the US Collateral Agent,  the
	Canadian  Collateral Trustee or BAS hereunder, under any one or
	more of the other  Loan  Documents or with respect to the Loans.

          "Operating  Documents"  means  with  respect  to any
	corporation, limited  liability company, partnership, limited
	partnership,  limited liability  partnership  or  other  legally
	authorized incorporated or unincorporated  entity, the bylaws,
	operating  agreement,  partnership agreement, limited partnership
	agreement or other applicable documents relating to the operation,
	governance or management of such entity.

          "Organizational  Action"  means  with respect to any
	corporation,limited liability company, partnership,  limited
	partnership, limited liability  partnership  or  other  legally
	authorized incorporated or unincorporated entity, any corporate,
	organizational or partnership action (including any required
	shareholder, member or partner action),or other similar official
	action, as applicable, taken by such entity.

          "Organizational Documents" means with respect to any
	corporation,limited  liability company, partnership, limited
	partnership,  limited liability  partnership  or  other  legally
	authorized incorporated or unincorporated entity, the articles of
	incorporation,  certificate  of incorporation,   articles  of
	organization,  certificate  of  limited partnership  or  other
	applicable organizational or charter documents relating to the
	creation of such entity.

          "Original Credit Agreement"  means  that certain Credit
	Agreement by and among the Agents, certain of the Borrowers  and
	Guarantors, and certain  of  the  Lenders  dated as of March 19,
	1996, as  amended  by Amendment No. 1 to Credit Agreement  dated
	as of February 14, 1997, by Amendment No. 2 to Credit Agreement
	dated  as of December 12, 1997, by that certain letter agreement
	dated as of March 16, 1998, by Amendment No. 4 to Credit Agreement
	dated as of June 8, 1998, by Amendment No. 5 to Credit Agreement
	dated as of September 29, 1998, by Amendment No. 6 to Credit
	Agreement dated as of December 31,  1998, by Amendment No. 7
     	to Credit Agreement dated as of May 17, 1999 and by Amendment
	No. 8 to Credit Agreement dated as of August 2, 1999.

          "Original Closing Date" means March 19, 1996,  the  date on
	which certain of the Borrowers, the Agents and certain of the
	Lenders first entered into the Original Credit Agreement.

          "Outstandings"  means,  as  the context may require, at any
	date,(i)  with  respect to any certain Facility,  the  aggregate
	principal amount of the  Loans  then  outstanding under such
	Facility, including the aggregate face amount of  Bankers'
	Acceptances  then  outstanding thereunder, and the then aggregate
	amount remaining undrawn  under the Letters  of  Credit  issued
	thereunder plus Reimbursement Obligations relating thereto then
	outstanding  and  (ii)  with  respect to all the Facilities,
	the  aggregate  principal  amount  of  the  Loans  then
	outstanding under  all  the  Facilities,  including the aggregate
	face amount of Bankers' Acceptances then outstanding  thereunder,
	and  the then  aggregate  amount  remaining undrawn under the
	Letters of Credit issued thereunder plus Reimbursement Obligations
	relating thereto then outstanding on such date.

          "Participating Lenders" has the meaning given such term in
     SECTION 4.12.

          "Participation" means,  as  the  context  may  require,
	(i) with respect to any Lender (other than the applicable Issuing
	Bank)  and  a Letter   of  Credit,  the  extension  of  credit
	represented  by  the participation  of  such  Lender  hereunder
	in  the  liability of such Issuing Bank in respect of a Letter of
	Credit issued by  such  Issuing Bank  in  accordance  with  the
	terms hereof, (ii) with respect to any Lender, the extension of
	credit  represented  by  the participation of such  Lender in the
	liability of another Lender under  a  Facility  to which the
	participating  Lender  is  not  a  party in accordance with
    	SECTION 4.12 hereof and (iii) with respect to any  Canadian
	Revolving Credit Facility Lender (other than the Canadian Swing
	Line Facility Lender), the extension of credit represented by the
	participation of such  Lender  in  the  liability of the Canadian
	Swing  Line  Facility Lender in respect of a Canadian Swing Line
 	Loan made in accordance with the terms hereof.

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

          "Pension Plan" means any employee pension benefit plan within
	the meaning of Section 3(2)  of  ERISA,  other  than a
	Multiemployer Plan, which is subject to the provisions of Title
	IV of ERISA or Section 412 of the Code and which (i) is maintained
	for employees  of any Borrower or any of their ERISA Affiliates or
	is assumed by any Borrower  or any of their  ERISA Affiliates in
	connection with any Acquisition or (ii)has been maintained within
	the past six (6) preceding Fiscal Years for the  employees  of
	any  Borrower  or  any  current  or  former  ERISA
     	Affiliate.

          "Permitted Liens" means those Liens permitted under SECTION
	10.4.

          "Person"  means  an individual, partnership, corporation,
	limited liability company, limited liability  partnership,  trust,
     	unincorporated   organization,   association,   joint   venture
	or a government or agency or political subdivision thereof.

          "PIK  Notes" means, collectively, the Les Gantiers Debenture
	and any  additional  PIK  Debentures  (as  defined  in  the  Les
	Gantiers Debenture)  issued  pursuant  to  Section  1(b)  of  the
	Les Gantiers Debenture.

          "Pledge  Agreement" means, collectively (or individually  as
	the context may indicate),  (i)  that  certain  Amended and
	Restated Stock Pledge Agreement dated as of January 3, 2000  by
	and among Consoltex, Consoltex USA and Consoltex Mexico and the
	US Collateral Agent for the benefit of the Agents and the Lenders,
	(ii) that certain  Stock Pledge Agreement (Mexican Subsidiaries)
	dated as of the Original Closing Date by and among Consoltex,
	Consoltex USA, Consoltex Mexico and the Agents and  the  US
	Collateral  Agent for the benefit of the Agents and  the
	Lenders, (iii) any deed of  hypothec  by  Consoltex  in  favor
	of the Canadian  Collateral Trustee, (iv) that certain Stock
	Pledge Agreement(Vera Pak) dated as of May 31, 1996 by and
	among Consoltex Mexico, the Agents and  the  US Collateral Agent
	for the benefit of the Agents and the Lenders, (v) that certain
	Stock Pledge Agreement (1999 - Mexican Subsidiaries) dated as of
	October  22,  1999 by and between Marino and the US Collateral
	Agent for the benefit of the Agents and the Lenders,(vi) that
	certain Stock Pledge Agreement  (Consoltex  Holdings,  Inc.)
     	dated  as  of  October  2,  2000  by and among Consoltex Holdings,
 	the Agents and the US Collateral Agent  for  the benefit of the
	Agents and the Lenders, (vii) each of the Mexican Stock Pledge
	Agreements, (viii) that certain Movable Hypothec With Delivery
	(Pledge) dated as of the Closing Date by and among Consoltex
	Holdings in favor of  the Canadian Collateral Trustee for the
	benefit of the Agents and the Lenders, and (ix) any additional
	hypothec, stock pledge agreement delivered on or
     	before the Closing  Date or at any other time pursuant to the
	Original Credit Agreement (or  any of the "Loan Documents" as
	defined therein), the Existing Credit Agreement  (or  any  of
	the  "Loan  Documents" as defined therein), or otherwise pursuant
	to the terms hereof  or any of the other Loan Documents, in each
	case as amended effective as  of the Closing Date by the applicable
	Consolidated Amendment and as otherwise heretofore or hereafter
	amended, modified or supplemented from time to time, including
	without limitation  one or more supplements or amendments to any
	Pledge  Agreement to be entered into by Consoltex Mexico in
	connection with the Mexican Operational Restructuring.

          "Pledge Agreement Supplement"  means, with respect to each
	Pledge Agreement, the Pledge Agreement Supplement  in  the form
	affixed as an Exhibit to such Pledge Agreement.

          "Pledged Interests" means the Subsidiary Securities  required
	to be  pledged  as  Collateral  pursuant to ARTICLE V or the terms
	of any Pledge Agreement.

          "Polypropylene Companies"  means  LINQ,  Marino  Mexico,
	Rafytek, Rafytica and Vera Pak.

          "Pricing Grid" means:

<TABLE>
<CAPTION>
                               APPLICABLE MARGIN
                                  REVOLVING   		Term
                                  CREDIT  Loans       LOANS
                                 Eurodollar        Eurodollar
                                 Rate and          Rate and
Consolidated Leverage Ratio      Bankers'          Bankers'
TIER                             Acceptances Base  Acceptances Base
                                 Rate              Rate
<S><C>                                   <C>      <C>    <C>     <C>
  I
     Less than 3.00 to 1.00             2.00%   1.00%   2.25%   1.25%
 II  Greater than or equal to 3.00 to   2.25%   1.25%   2.50%   1.50%
     1.00, but less than 3.50 to 1.00
 III Greater than or equal to 3.50 to   2.75%   1.75%   3.00%   2.00%
     1.00, but less than 4.00 to 1.00
 IV  Greater than or equal to 4.00 to   3.00%   2.00%   3.25%   2.25%
     1.00, but less than 4.50 to 1.00
  V  Greater than or equal to 4.50 to   3.25%   2.25%   3.50%   2.50%
     1.00
</TABLE>

     	The Applicable Margin shall be established at the end of  each
	fiscalquarter of the Borrower (each, a "Determination Date").
	Any change in the  Applicable  Margin  following  each
	Determination Date shall be determined  based  upon  the
	computations set forth in the certificate furnished  to  the
	Agents pursuant to SECTION  9.1(A)(V) and SECTION  9.1(B)(II),
  	subject to review and approval of  such computations by the Agents,
	and shall be effective commencing  on the fifth Business Day
	following  the date such certificate is received until  the
	fifth Business Day following the date on which a new certificate
	is  delivered  or  is  required to be delivered, whichever shall
	first occur.  From the Closing  Date to  the  date that is five
	Business Days following the date on which a certificate referred
	to in the  immediately  preceding sentence is received following
	the  first Determination Date  to  occur  after January 31, 2001,
	the Applicable Margin shall be Tier V.  Notwithstanding the
	provisions  of  the two preceding  sentences,  if  the Borrower
	shall fail to deliver any such certificate within the time  period
	required by SECTION 9.1, then the Applicable Margin shall be Tier V
	from  the  date such certificate was due until the fifth Business
	Day following the  date  the  appropriate certificate is so
	delivered.

          "Prime  Rate"  means  the  per annum rate of interest
	established from time to time by the US Agentas  its  prime rate,
	which rate may not be the lowest rate of interest charged by  the
	US  Agent  to  its customers.

          "Principal  Office"  means,  when  used  in  relation  to (i)
	the Canadian Agent: the office of the Canadian Agent at National
	Bank of Canada, 600, rue de La Gauchetiere Ouest, Syndication
	Canada, 9th Floor, Montreal,  Quebec, H3B 4L2, Attention:
	Senior Manager, or such other office and  address  as the Canadian
	Agent may from time to time designate to the applicable  Facility
	Borrowers and the Canadian Facility Lenders for such purpose and
	to (ii) the US Agent: the office of the US Agent at Bank of America,
	N.A.,Independence Center, 15th Floor, NC1-001-15-04,Charlotte,
	North  Carolina  28255, Attention: Agency Services, or such other
	office and address as the  US Agent may from  time to time
	designate to the applicable Facility Borrowers and the US Facility
	Lenders for such purpose.

          "Rafytek" has the meaning given such term in the preamble
	hereto.

          "Rafytek Accounts" has the meaning given such term in the
     	definition of Eligible Receivables.

          "Rafytica" has the meaning given such term in the preamble
     hereto.

          "Rate  Hedging  Obligations"  means, without duplication,
	any and all obligations of any Borrower or any Subsidiary, whether
	absolute or contingent and howsoever and whensoever created,
	arising, evidenced or acquired (including all renewals, extensions
	and modifications thereof and substitutions therefor), under (i)
	any and all agreements, devices or arrangements designed to protect
	at  least  one  of  the  parties thereto  from  the  fluctuations
	of interest rates, exchange rates or forward  rates  applicable  to
	such party's assets, liabilities or exchange transactions,
	including, but not limited to, Canadian Dollar-denominated,
	Dollar-denominated,  Mexican Peso cross-currency interest
     	rate  exchange  agreements,  forward  currency   exchange
	agreements,interest  rate  cap  or  collar  protection agreements,
	forward  rate currency or interest rate options,  puts,  warrants
	and those commonly known as interest rate "swap" agreements; (ii)
	all  other "derivative instruments"  as  defined  in  FASB 133 and
	which are subject  to  the reporting  requirements  of  FASB  133;
	and (iii) any and all cancellations, buybacks, reversals,
	terminations or assignments of any of  the  foregoing.   For
	purposes of any computation hereunder, each Rate Hedging
	Obligation shall be valued at the Rate Hedge Value thereof.

          "Rate   Hedge  Value"  means,  with  respect  to  each
	contract, instrument or  other  arrangement  creating a Rate
	Hedging Obligation, the net obligations of any Borrower or any
	Subsidiary thereunder equal to the termination value thereof as
	determined in accordance with its provisions (if such Rate Hedging
	Obligation  has  been  terminated) or the  mark  to  market  value
	thereof  as  determined on the basis  of available quotations from
	any recognized dealer  in, or from Bloomberg or  other  similar
	service providing  market quotations for, the applicable Rate
	Hedging Obligation (if such Rate Hedging Obligation has not been
	terminated).

          "Reference Rate" means  the  interest rate expressed as an
	annual rate  announced  publicly  from time to  time  by  NBC  as
	being  its reference rate then in effect  for  determining  the
	interest rate on commercial  loans made by NBC in Canada in Canadian
	Dollars  or,  when used in relation  to  Advances  in  Dollars, in
	Dollars (regardless of whether or not any such loans are actually
	made).

          "Registrar" means, with respect to any Subsidiary Securities,
	any Person authorized or obligated to maintain records of the
	registration of ownership or transfer of ownership  of interests
	in such Subsidiary Securities, and in the event no such Person
	shall have been expressly designated  by  the  related  Subsidiary,
	shall mean (i) as to any corporation or limited liability company,
	its Secretary (or comparable official), and (ii) as to any
	partnership, its general partner (or managing general partner if
	one shall have been appointed).

          "Regulation D" means Regulation D of the Board as the same
	may be amended or supplemented from time to time.

          "Reimbursement Obligation" shall mean at any time, the
	obligation of any Borrower with respect to any Letter of Credit to
	reimburse the applicable Issuing Bank and the Canadian Revolving
	Credit Lenders or the US Revolving Credit  Lenders, as the case may
	be, to the extent of their respective Participations  (including
	by  the  receipt  by  the Canadian  Issuing  Bank  or  the  US
	Issuing Bank of proceeds of Loans pursuant to SECTION 2.2(C)(III))
	for  amounts  theretofore paid by the applicable  Issuing  Bank
	pursuant to a drawing under  any  Letter  of Credit to the extent
	such obligations have not been satisfied by or on behalf of such
	Borrower  prior to such time, whether from the proceeds of a Base
	Rate Refunding Loan or otherwise.

          "Related LC Documents"  has  the meaning given thereto in
	SECTION 3.2(I)(I).

          "Relevant Agent" means the Canadian  Agent  or  the  US Agent,
	as applicable.

          "Reorganization"   means   the   recent   reorganization  of
	the Borrowers, including (i) the consolidation of Consoltex  with
	AIP/CGI NB  Acquisition  Corp.  with the surviving corporation
	being, or being named, Consoltex Inc., (ii)  the  transfer of all
	of the capital stock of  Consoltex  USA by Consoltex to Consoltex
	Holdings, resulting in Consoltex USA becoming a wholly-owned
	subsidiary  of  Consoltex Holdings, and (iii) the remaining  steps
	of the reorganization of the Borrowers as previously disclosed to
	the Agents and the Lenders.

          "Required Lenders" means, as of any date,  Lenders  on  such
	date having  Credit  Exposures (as defined below) aggregating at
	least  66-2/3% of the aggregate  Credit  Exposures  of  all  the
	Lenders on such date.   For  purposes  of  the preceding sentence,
	the amount  of  the "CREDIT  EXPOSURE"  of each Lender  (i)  at
	any  time  prior  to  the occurrence of an Acceleration  Event,
	shall be equal to the sum of the aggregate  principal  amount of
	such  Lender's  Commitment  under  the Revolving Credit Facilities
	(unless  such  Lender  is  a  Non-Funding Lender,  in  which  event
	such amount shall be the aggregate principal amount of Loans owing
	to  such  Lender  under  the  Revolving  Credit Facilities
	(including the face amount of Bankers' Acceptances accepted by
	such  Lender)),  plus  the  amount  of  such  Lender's  Applicable
     	Commitment  Percentage,  if  any, of Outstandings under the Letter
	of Credit Facilities (unless such Lender has not funded its
	Participation in a Reimbursement Obligation,  in  which  event
	such amount shall be such Lender's Applicable Commitment
	Percentage of undrawn and outstanding  Letters of Credit plus the
	amount of Participations in outstanding Reimbursement Obligations
	it has funded) plus, if the Term Loan Facilities have not been
	repaid or prepaid in full prior to such time, the amount of such
	Lender's Commitment  under  the  Term  Loan Facilities; and (ii)
	at  any  time  after  the  occurrence  of  an Acceleration Event,
	shall  be equal to the aggregate principal amount of all
	Outstandings owing to such Lender after taking into account all
   	payments actually received or  made by such Lender pursuant to
	SECTION 4.12 hereof; PROVIDED THAT, if any  Lender shall have
	failed to pay to the Canadian Issuing Bank or the US Issuing
	Bank, as the case may be, its  entire  Applicable  Commitment
	Percentage of  any  Reimbursement Obligation, the Credit Exposure
	of such  Lender  attributable  to such unfunded  amount of such
	Reimbursement Obligations shall be deemed  to be held by  the
	Lender that is also the applicable Issuing Bank for purposes of
	this definition.  For  purposes  of  SECTION  12.7, Credit
     	Exposures  shall  be  determined  only  with  respect  to the
	Canadian Facilities or the US Facilities, as applicable.

          "Reserve  Requirement"  means,  with  respect to any US
	Facility Lender for any day during any Interest Period, the
	reserve percentage(expressed as a decimal, rounded upward to the
	next 1/100{th} of 1%)in effect on such day, whether or not
	applicable to any Lender, under regulations issued from time to
	time by the Board for determining the maximum reserve requirement
	(including any emergency, special, supplemental or other marginal
	reserve  requirement)  with  respect to Eurocurrency  funding
	(currently   referred   to  as  "Eurocurrency liabilities"). The
	Eurodollar Rate for each outstanding  Eurodollar Rate Loan shall be
	adjusted automatically as of the effective date of any change in
	the Reserve Requirement.

          "Restatement" has the meaning  given  such  term  in the
	preamble hereto.

          "Restricted   Payment"   means   (a)   any   dividend   or
	other distribution,  direct  or  indirect,  on account of any
	shares of  any class  of stock of any Borrower or any Subsidiary
	Securities  of  any Subsidiary  (other than  those payable  or
	distributable solely to a Borrower or any Guarantor) now or
	hereafter outstanding, except a dividend payable  solely  in
	shares of a class of stock to the holders of that class; (b) any
	redemption, conversion, exchange, retirement or similar payment,
	purchase or  other  acquisition  for value, direct or indirect, of
	the principal of any Subordinated Debt  or  any  PIK Note (other
	than  the  conversion  of  any PIK Note into shares of capital
     	stock  of  Consoltex  Holdings  and the  issuance  of  additional
	PIK Debentures in lieu of cash interest, each in accordance with
	the terms of the Les Gantiers Debenture) or  any shares of any
	class of stock of any Borrower or any Subsidiary Securities  of
	any  Subsidiary  (other than  those  payable  or  distributable
	solely to a Borrower or any Guarantor) now  or  hereafter
	outstanding; (c) any payment  made  to retire,  or  to obtain the
	surrender  of,  any  outstanding  warrants, options or other rights
	to acquire shares of any class of stock of any Borrower  or any
	Subsidiary  Securities  of  any  Subsidiary  now  or hereafter
	outstanding;  (d)  any  issuance  and  sale  of  Subsidiary
     	Securities of  any  Subsidiary of any Borrower (or any option,
	warrant or  right to acquire such  stock)  other  than  to  a
	Borrower  or  a Guarantor;  and  (e)  any  payment  to AIP of
	management or other fees other than in accordance with the Fee
	Limitation Agreement.

          "Revolving Credit Commitment" means, collectively or
	individually as  the  context may require, each of the  Canadian
	Revolving  Credit Commitments and the US Revolving Credit
	Commitments.

          "Revolving  Credit Facility Lender" means one or the other of
	the Canadian Revolving Credit Facility Lenders and the US Revolving
	Credit Facility Lenders, as the context may require.

          "Revolving Credit  Facility"  means, collectively or
	individually as the context may require, each of the Canadian
	Revolving Credit Facility and the US Revolving Credit Facility.

          "Revolving  Credit  Loan"  means, individually or collectively
	as the context may require, the Canadian  Revolving  Credit Loans
	and the US Revolving Credit Loans.

          "Revolving   Credit   Outstandings"   means,   individually
	or collectively as the context may require, the Canadian Revolving
	Credit Outstandings and the US Revolving Credit Outstandings.

          "Revolving Credit Termination Date" means the earliest of (i)
	the Stated  Termination  Date  or  (ii)  such  date  of termination
	of the Lenders' obligations pursuant to SECTION 11.1 upon  the
	occurrence of an  Event  of  Default,  or  (iii)  such  date  as
	the  Borrowers may voluntarily and permanently terminate the
	Revolving Credit  Facilities by  payment  in  full  of  all
	Outstandings under the Revolving Credit Facilities, under the
	Canadian  Swing  Line  Facility,  and  under the Letter of Credit
	Facilities and cancellation or cash collateralization pursuant to
	the Cash Collateral Agreement of all Letters of Credit and
     	Bankers'  Acceptances,  together  with all accrued and unpaid
	interest thereon, and by termination of the Total Commitments
	under the Revolving Credit Facilities in accordance with SECTION
 	2.2(E).

          "Revolving Notes" means, collectively,  the  promissory
	notes of the  applicable  Facility  Borrowers  evidencing  US
	Revolving  Loans executed and delivered to the US Revolving Credit
	Facility Lenders  as provided in SECTION 2.4 substantially in the
	form of EXHIBIT G-1, with appropriate   insertions  as  to
	amounts,  dates  and  names  of  the applicable Lenders amending
	and restating the corresponding promissory notes most recently
	issued  by  the  Facility  Borrowers under the US Revolving Credit
	Facility to such US Revolving Credit Facility Lender pursuant to
	the  Existing  Credit  Agreement or the Original  Credit
     	Agreement, as applicable.

          "Royalton" has the meaning given thereto in the preamble
	hereof.

          "Security Agreement" means, collectively  (or individually as
	the context may indicate), (i) that certain Security Agreement
	dated as of the Original Closing Date by the Borrowers and the
	Guarantors (other than Consoltex Holdings, Consoltex Mexico,
	Rafytek,  Vera  Pak, Royalton, Vestco, Marino  Mexico  and
	Rafytica)  to the US Collateral Agent and the Canadian Collateral
	Trustee, (ii) that  certain Security Agreement dated as of
	October 22, 1999 by Marino and Walpole to the US Collateral Agent
	and the Canadian Collateral Trustee, and  (iii)  any additional
	security  agreement,  hypothec,  bond,  pledge agreement or
     	other agreement relating to the granting of collateral by any of
	the Borrowers or any of the Guarantors delivered on or before the
	Closing Date  or  at  any other time pursuant to the Original Credit
	Agreement(or any of the  "Loan  Documents"  as  defined  therein),
	the Existing Credit Agreement (or any of the "Loan Documents" as
	defined therein), or  otherwise pursuant to the terms hereof or
	any of the other Loan Documents, in each case as amended effective
	as of the Closing Date by the applicable  Consolidated  Amendment
	and as otherwise heretofore or hereafter modified, amended or
	supplemented from time to time.

          "Security   Instruments"   means,    collectively,   the
	Pledge Agreements,  the Security Agreements, the Mortgages,  the
	Cash Collateral  Agreement,  the   Lock   Box   Agreements,  the
	Facility Guaranties, the Consolidated Amendments, the  Deposit
	Account Agreements, the LC Account  Agreement, the Third Amendment
	to Mortgage and all other agreements (including control
	agreements), instruments and  other  documents,  whether now
	existing or hereafter  in  effect, pursuant to which any Borrower
	or any Guarantor shall grant or convey to the US Agent, the Lenders,
	the  Canadian  Agent,  the US Collateral Agent  or  the  Canadian
	Collateral Trustee a Lien in, or  any  other Person shall
	acknowledge any  such  Lien  in, property as security for all or
	any portion of the Obligations or any  other  obligation  under
   	any  Loan  Document,  including without limitation each of the
	deed of hypothec and issue of bonds  granted  by  Consoltex in
	favor  of the Canadian  Collateral Trustee, each of the bonds
	issued or to be issued from time to  time by Consoltex in favor
	of each of the Lenders or the Canadian Collateral  Trustee,  each
	of  the  pledge of bond agreement granted or to be granted from
	time to time by Consoltex  in  favor  of each  of the Lenders or
	the Canadian Collateral Trustee, each security under Section 427
	of the Bank Act granted by Consoltex in favor of the Lenders under
	the Canadian Facilities which are banks governed by the Bank Act,
	the conditional trademark license agreements by Consoltex in
     	favor of the  Canadian  Collateral  Trustee  and  the special
	power of attorney with respect to intellectual property by
	Consoltex  in  favor of  the  Canadian  Collateral  Trustee, as
	any of them may be amended, modified or supplemented from time
	to time.

          "Segment" means, as the context may require, (i) a portion of
	the principal amount outstanding under any Term Loan  Facility
	(or all thereof) in  the  same  currency  with  respect to which
	a particular interest rate is (or is proposed to be) applicable
	or (ii) a portion of the principal amount outstanding under any
	Canadian Facility which is utilized by way of Bankers' Acceptances.

          "Selling Lender" has the meaning given such term in SECTION
	4.12.

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

               (a) the fair value of its assets (both at fair valuation
		and at present fair saleable value  on an orderly basis)is
		in excess of the total amount of its liabilities,
		including  Contingent Obligations; and

               (b) it is then  able and expects to be able to pay its
		debts as they mature; and

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

          "Spot  Rate  of  Exchange"  means (i) in determining  the
	Dollar Equivalent Amount of a Canadian Dollar amount as of any
	date, the spot exchange rate determined by the Canadian  Agent in
	accordance with its usual  procedures for the purchase by the
	Canadian Agent of Dollars with Canadian Dollars at approximately
	10:00 A.M. on the Business Day that is two (2)  Business  Days
	prior  to  such  date,  and  (ii)  in determining  the  Canadian
	Dollar  Equivalent  Amount  of a specified Dollar  amount on any
	date, the spot exchange rate determined  by  the Canadian  Agent
	in  accordance  with  its  usual  procedures  for the purchase
	by  the  Canadian Agent of Canadian Dollars with Dollars  at
     	approximately 10:00 A.M. on the Business Day that is two Business
	Days prior to such date.

          "Stated Termination Date" means December 31, 2001.

          "Statutory Borrowing  Base Permitted Liens" means those
	Liens set forth in SECTIONS 10.4(B), (C), (D) AND (L).

          "Statutory  Permitted Liens"  means  those  Liens  set
	forth in SECTIONS 10.4 (E),  (F),  (H),  (J),  (O)  AND  (Q),
	together with all Statutory Borrowing Base Permitted Liens.

          "Subordinated Debt" means (i) all Obligations  (as  defined
	as of the  Closing Date in the Subordinated Indenture) with respect
	to  the Subordinated  Notes  and  (ii)  all obligations of any
	Borrower or any Subsidiary  with respect to the Les  Gantiers
	Debenture  or  the  PIK Notes.

          "Subordinated Indenture" means that certain Indenture dated
	as of September 30, 1993 among Consoltex USA, Consoltex,
	Balson-Hercules, LINQ and First Trust National Association, as
	Trustee, as amended from time to time in accordance with its
	terms.

          "Subordinated Notes" has the meaning given the term "Notes"
	as of the Closing Date in the Subordinated Indenture.

          "Subsidiary"   means  (i)  any  subsidiary  (within  the
	meaning ascribed  to  it  as  of  the  date  hereof  in  the
	CANADA  BUSINESS CORPORATIONS ACT) of any Borrower or any one or
	more of any Borrower's Subsidiaries, (ii) any  corporation or other
	entity in which more than 50% of its outstanding voting stock or
	more  than 50% of all equity interests is owned directly or
	indirectly by any Borrower or by one or more of any Borrower's
	Subsidiaries and (iii) any partnership or limited partnership of
	which more than 50% of the outstanding units or interests are owned
	directly or indirectly by any Borrower or by one or more of any
	Borrower's Subsidiaries.

          "Subsidiary Securities" means  the shares of capital stock
	or the other  equity  interests  issued by or equity
	participations  in  any Subsidiary, whether or not  constituting
	a "security" under Article 8 of the Uniform Commercial Code as
	in effect in any jurisdiction.

          "Swap  Agreement"  means  one  or  more  agreements  between
	any Borrower and any Person with respect to Indebtedness evidenced
	by any or all of the Notes, on terms mutually acceptable to such
	Borrower and such Person  and  approved by the Required Lenders,
	which  agreements create Rate Hedging  Obligations;  provided,
	however,  that  no  such approval  of the Required Lenders shall
	be required to the extent such agreements are entered into
	between any Borrower and any Lender or any affiliate of any
	Lender.

          "Synthetic Lease Obligations" means all monetary obligations
	of a lessee under any tax retention or other synthetic leases
	which is treated as an operating lease under GAAP  but  the
	liabilities  under which are or would be characterized as
	indebtedness of such Person for tax  purposes  or  upon  the
	insolvency of such Person.  The amount of Synthetic Lease
	Obligations  in  respect of any synthetic lease at any date of
	determination thereof shall be equal to the aggregate purchase
     	price of any  property subject to such lease less the aggregate
	amount of  payments  of  rent  theretofore made  which  reduce
	the  lessee's obligations under such synthetic lease and which
	are not the financial equivalent of interest.

          "Term Loan" means, collectively or individually as the
	context may require, the Canadian Term Loan and the US Term Loan.

          "Term Loan Commitment" means, collectively or individually
	as the context may require, each  of  the  Canadian Term Loan
	Commitments and the US Term Loan Commitments.

          "Term Loan Facility" means, collectively or individually as
	the context may require, each of the Canadian Term Loan Facility
	and the US Term Loan Facility.

          "Term Loan Facility Lender" means any one or more of the
	Canadian Term Loan Facility Lenders and the US Term Loan Facility
	Lenders.

          "Term Loan Maturity Date" means December 31, 2001.

          "Term Loan Outstandings" means,  individually  or collectively
	as the context may require, the Canadian Term Loan Outstandings
	and the US Term Loan Outstandings.

          "Term  Loan  Termination Date" means the earliest of (i) the
	Term Loan Maturity Date  or  (ii)  such  date  of  termination
	of Lenders' obligations pursuant to SECTION 11.1 upon the occurrence
 	of  an  Event of  Default,  or  (iii)  such date as the Borrower
	may voluntarily and permanently terminate both  (but  not  only
	one)  of  the  Term  Loan Facilities by payment in full of all
 	Obligations incurred  in connection with the Term Loan.

          "Term Notes"  means,  collectively,  the  promissory notes of
	the applicable Facility Borrowers evidencing the US Term Loan
	executed and delivered to the US Term Loan Facility Lenders as
	provided in SECTION 2.4  substantially  in  the  form  of
	EXHIBIT  G-2  with  appropriate insertions  as  to  amounts,
	dates  and  names of applicable Lenders, amending and restating
	the promissory notes  most  recently  issued by the Facility
	Borrowers under the US Term Loan Facility pursuant to the Existing
	Credit  Agreement  or  the  Original  Credit  Agreement,  as
     	applicable.

          "Termination  Event" means: (i) a "Reportable Event" described
	in Section 4043 of ERISA  and  the  regulations issued thereunder
	(unless the notice requirement has been waived  by  applicable
	regulation); or(ii)  the  withdrawal of the Borrower or any ERISA
	Affiliate from a Pension Plan during a plan year in  which
	it  was a "substantial employer" as defined in Section 4001(a)(2)
	of ERISA or was deemed such under Section 4062(e) of ERISA; or
	(iii) the termination of a Pension Plan, the filing of a notice
	of intent to terminate a Pension Plan or the treatment of a
	Pension Plan amendment as a termination under Section  4041 of
	ERISA; or (iv)the institution  of proceedings  to terminate a
	Pension  Plan  by the  PBGC;  or  (v)  any other event or
     	condition  which  would  constitute grounds under Section 4042(a)
 	of ERISA for the termination  of,  or the appointment of  a
	trustee to administer, any Pension Plan; or (vi) the  partial
	or  complete withdrawal of the Borrower or any ERISA Affiliate
	from a Multiemployer Plan; or (vii) the imposition of a Lien
	pursuant to Section 412 of the Code  or Section 302 of ERISA; or
	(viii) any event or condition  which results  in  the
	reorganization or insolvency of a Multiemployer Plan
     	under Section 4241 or Section 4245 of ERISA, respectively; or
	(ix) any event or condition which results in the termination of
	a Multiemployer Plan under Section  4041A  of  ERISA or the
	institution by the PBGC of proceedings to terminate a Multiemployer
	Plan under  Section 4042 of ERISA; or (x) any event or condition
	with respect to any  Employee Benefit  Plan which is regulated
	by  any  Foreign  Benefit  Law  that results in  the  termination
	of  such  Employee  Benefit  Plan or the revocation of such
	Employee Benefit Plan's authority to operate  under the applicable
	Foreign Benefit Law.

          "Textile  Companies"  means  Consoltex, Balson-Hercules,
	Royalton and Vestco.

          "Third Amendment to Mortgage"  means that certain Third
	Amendment to Mortgage with respect to the Mortgage and the
	Mortgaged Property in the form attached hereto as EXHIBIT H.

          "Third Party Mexican Accounts Payable"  means,  as of any
	date of measurement  thereof, those accounts payable of Consoltex
	Mexico and each of the Mexican Companies (other than Rafytica)
	arising in the ordinary course of business and owing to trade
	creditors other than any Person that is a Borrower or a Guarantor.

          "Total Commitment" means (i) with respect to the Canadian
     	Revolving Credit Facility, an aggregate principal amount equal to
     	$18,992,327.12 as reduced from time to time in accordance with
	SECTION 2.2(E),(ii)with respect to the Canadian Term Loan Facility,
	an aggregate principal amount equal to $ 21,051,470.60, (iii) with
     	respect to the US Revolving Credit Facility an aggregate principal
     	amount equal to $38,507,672.88, as reduced from time to time in
     	accordance with SECTION 2.2(E), and (iv) with respect to the US
	Term Loan Facility an aggregate principal amount equal to
	$38,198,529.40.

          "Total  Canadian Letter of Credit Commitment" means an amount
	not to exceed $7,500,000.

          "Total US  Letter  of  Credit  Commitment" means an amount
	not to exceed $7,500,000.

      "Type" shall mean any type of Loan (i.e., a Bankers' Acceptance
     	(including  a  Bankers' Acceptance Segment), a Base Rate Loan
	or a Eurodollar Rate Loan).

          "US Agent" has the meaning given such term in the preamble
     	hereto.

          "US Borrower" means any Borrower that is formed under the
	laws of the United States or any political subdivision thereof.

          "US Collateral Agent" means Bank of America, N.A., successor
	in interest to  NationsBank, National Association, or any successor
     	thereto, as collateral agent pursuant to the Security Instruments
	and the US Agent acting in such capacity.

          "US Facilities Lenders" means, collectively, each of the US
     	Revolving Credit Facility Lenders and the US Term Loan Facility
     	Lenders.

          "US Facility" means, one or the other of the US Term Loan
     	Facility and the US Revolving Credit Facility.

          "US Guarantor" means any Guarantor that is formed under the
	laws of the United States or any political subdivision thereof.

          "US Issuing  Bank" means initially Bank of America and
	thereafter any US Revolving Credit Facility Lender which is the
	successor to Bank of America as issuer of US Letters of Credit
	under ARTICLE III.

          "US Letter of Credit" means a standby or commercial letter
	of credit issued under the US Revolving Credit Facility by the
	US Issuing Bank for the account of an applicable Facility Borrower
	in favor of a Person advancing credit to or securing an obligation
	on behalf of such Facility Borrower.

          "US Letter of  Credit  Facility"  means the facility
	described in ARTICLE III hereof providing for the issuance by the
	US Issuing Bank for the account of the applicable Facility
	Borrowers of US Letters of Credit in an aggregate stated amount
	at any time outstanding not exceeding $7,500,000.

          "US Letter of Credit Outstandings"  means, as of any date
	of determination, the aggregate amount available to be drawn
	under all US Letters of Credit plus Reimbursement Obligations
	then outstanding.

          "US Revolving Credit Commitment" means, with respect to
	each Lender under the US Revolving Credit Facility, the obligation
	of such Lender to make US Revolving Credit Loans to the applicable
	Borrowers up to an  aggregate principal amount at any one time
	outstanding equal to such Lender's Applicable Commitment
	Percentage of the Total Commitment applicable to the US Revolving
	Credit Facility.

          "US Revolving  Credit  Facility"  means the facility
	described in ARTICLE II hereof providing for Advances in Dollars
	in favor or at the request of an applicable Facility Borrower
	(subject to the Mexican Borrowing Limit) in an aggregate principal
	amount at any time outstanding not exceeding the Total Commitment
	applicable to such Facility at such time.

          "US Revolving Credit Facility Lenders"  means, collectively,
	each Lender identified as such on EXHIBIT A hereto as being a
	Lender having a Commitment under the US Revolving Credit Facility
	and each other financial institution that is an assignee thereof
	and executes and delivers an Assignment and Acceptance pursuant
	to SECTION 13.1 in which such institution acquires a Commitment
	under such Facility.

          "US  Revolving  Credit  Loan"  means  any Loan, including
	without limitation any Base Rate Refunding Loan, under the US
	Revolving Credit Facility made in accordance with ARTICLE II
	to  any Facility Borrower thereunder (subject to the Mexican
	Borrowing Limit).

          "US  Revolving  Credit Outstandings" means, as  of  any
	date  of determination, the aggregate  principal  amount  of
	all  US Revolving Credit Loans then outstanding.

          "US Term Loan" means, collectively, (i) the Advances
	previously made pursuant to the US Term Loan Facility under
	the Existing Credit Agreement, as restructured hereby, to the
	applicable Facility Borrowers (subject to the Mexican Borrowing
	Limit) in Dollars, and (ii) the Advance to be made on the Closing
	Date pursuant to the US Term Loan Facility in accordance with
	ARTICLE II to the applicable Facility Borrower in Dollars.

          "US  Term  Loan Commitment" means, with respect to each
	US  Term Loan Facility Lender,  the obligation of such Lender to
	make on, or to have made by, the Advance  under  the  US  Term
	Loan  Facility to the applicable  Borrowers  in  a  principal
	amount equal to such  Lender's Applicable Commitment Percentage
	of the Total Commitment applicable to the US Term Loan, as set
	forth on EXHIBIT A.

          "US Term Loan Facility" means the facility described in
	ARTICLE II providing for Advances (including previous advances
	under the Existing Credit Agreement, as restructured hereby)
	in Dollars in favor of the Facility Borrowers (subject to the
	Mexican Borrowing Limit) in the aggregate principal amount of
	the Total Commitment applicable to such Facility on the Closing
	Date.

          "US Term Loan Facility Lenders"  means, collectively, each
	Lender identified as such on EXHIBIT A hereto  as  being  a
	Lender having a Commitment  under  the  US Term Loan Facility
 	and each other financial institution that is an assignee thereof
	and executes and delivers an Assignment  and  Acceptance pursuant
	to SECTION  13.1  in  which  such institution acquires a Commitment
	under such Facility.

          "US Term Loan Outstandings"  means,  as  of  any  date  of
     	determination,  the  aggregate principal amount of all US  Term
 	Loans then outstanding.

          "Vera Pak" has the meaning given thereto in the preamble
	thereof.

          "Vestco" has the meaning given thereto in the preamble
	hereof.

          "Voting Securities"  means  shares  of  capital stock issued
	by a corporation, or equivalent interests in any other  Person,
	the holders of which are ordinarily, in the absence of
	contingencies,  entitled to vote  for  the  election  of
	directors (or persons performing similar functions) of such
	Person, even  if  the  right  so  to  vote has been suspended
	by the happening of such a contingency.

          "Waiver   of  Lien  Rights"  means  any  Waiver  of  Lien
	Rights substantially in  the form of EXHIBIT K hereto delivered by
	a landlord to the Agents with  respect  to any property leased by
	any Borrower or any Subsidiary.

          "Walpole" means Walpole Inc.,   a  New  Jersey corporation,
	which has previously been merged into LINQ.

     	1.3  RULES OF INTERPRETATION.

          (a) All accounting terms not specifically  defined  herein
	shall have the meanings assigned to such terms and shall be
	interpreted in accordance with GAAP applied on a Consistent Basis.

          (b)  Each  term  defined  in  Article  1,  8 or 9 of the
	New York Uniform  Commercial Code shall have the meaning given
	therein unless otherwise defined herein, except to the extent that
	the Uniform Commercial Code or the equivalent thereto of another
	jurisdiction  or the Civil Code of Quebec (the "Alternate Code")
	is expressly stated as controlling  in  respect  of  attachment,
	perfection,  priority or enforcement, in which case such terms
	shall have the meaning given in the Alternate Code.

          (c)  The  headings, subheadings and table of contents used
	herein or in any other  Loan Document are solely for convenience
	of reference and shall not constitute  a  part  of  any such
	document or affect the meaning, construction or effect of any
	provision thereof.

          (d)  Except as otherwise expressly provided, references in
	any Loan Document  to  articles,  sections,  paragraphs, clauses,
	annexes, appendices, exhibits and schedules are references to
	articles, sections, paragraphs, clauses, annexes, appendices,
	exhibits and schedules in or to such Loan Document.

          (e)  All  definitions  set  forth  herein  or  in any other
	Loan Document  shall  apply to the singular as well as the plural
	form of such defined term,  and  all  references to the masculine
	gender shall include reference to the feminine or neuter gender,
	and vice versa, as the context may require.

          (f) When used herein or in any other Loan Document, words
	such as "hereunder," "hereto," "hereof"  and  "herein" and other
	words of like import shall, unless the context clearly indicates
	to  the contrary, refer  to  the  whole  of  the  applicable
	document  and  not  to any particular article, section,
	subsection, paragraph or clause thereof.

          (g)  References  to  "including" means including without
	limiting the generality of any description  preceding  such term,
	and such term shall not limit a general statement to matters
	similar to those specifically mentioned.

          (h) Except as otherwise  expressly  provided, all dates and
	times of day specified herein shall refer to such  dates  and
	times at Montreal, Canada and Charlotte, North Carolina, as
	applicable.

          (i) Whenever interest rates  or  fees are established in whole
	or in part by reference to a numerical percentage  expressed  as
	"___%," such arithmetic expression shall be interpreted in
	accordance with the convention that 1% = 100 basis points.

          (j)  Each  of the parties to the Loan Documents and their
	counsel have reviewed and  revised,  or  requested  (or had the
	opportunity to request) revisions to, the Loan Documents, and any
	rule of construction  that ambiguities are to be resolved against
	the drafting party shall be  inapplicable  in  the construing and
	interpretation of the Loan Documents and all exhibits, schedules
	and appendices thereto.

          (k) Any reference to an officer  of  the  Borrower  or  any
	other Person  by  reference to the title of such officer shall be
	deemed  to refer to each other officer of such Person, however
	titled, exercising the same or substantially similar functions.

          (l) All  references  to  any  agreement  or  document as
	amended, modified or supplemented, or words of similar effect,
	shall mean such document or agreement, as the case may be, as
	amended, modified or supplemented from time to time  only  as
	and to the extent permitted therein and in the Loan Documents.

          (m) For all purposes of this Agreement (but  not  for purposes
	of the preparation  of  any  financial  statements  delivered
	pursuant hereto), the equivalent in Canadian Dollars of an amount
	in Dollars, and the equivalent in Dollars of an amount in Canadian
	Dollars, shall be determined as set forth in the definitions of
	Dollar Equivalent Amount and Canadian Dollar Equivalent Amount,
	as applicable.


<PAGE>



                                ARTICLE II

                           The Credit Facilities

     	2.1  TERM LOAN.

          (a)  FUNDING.   Subject  to  the terms  and  conditions  of
	this Agreement, (i) GMAC agrees to make  an  Advance  of  its
	US Term Loan Commitment in Dollars to the US Agent on the Closing
	Date, (ii) to the extent outstanding as term loans under the
	Existing Credit  Facility, such outstandings  shall  be  deemed
	to  be converted to Outstandings under the US Term Loan (subject
	to the Mexican Borrowing  Limit) and the Canadian Term Loan, as
	applicable, such that after the application of clauses (i) and
	(ii) hereof, the Dollar Equivalent Amounts of the Outstandings
	under  the  US Term Loan and the Canadian Term Loan shall equal
	the US Term Loan Commitments  and Canadian Term Loan Commitments
     	of each Lender as set forth in SECTION  1.1(D). The principal
	amount of each Segment of each Term Loan outstanding hereunder
	from time to time shall bear interest and the Term Loans shall
	be repayable as herein provided.  No amount of the Term Loans
	repaid or prepaid by any Borrower may be reborrowed hereunder,
	and  no  subsequent Advances of Term  Loan  amounts  shall  be
	made by any Lender after  the  Advance provided for in this
	SECTION 2.1(A).

          (b) ACKNOWLEDGEMENT OF PRIOR  TERM  LOAN  ADVANCES  AND MAKING
	OF GMAC  US  TERM  LOAN ADVANCE.  (i) On the Original Closing Date,
	each Term Loan Facility  Lender party to the Original Credit
	Agreement made the Advance of the applicable  Term  Loan to be
	made by it on such day available by wire transfer to the Relevant
	Agent or, in the case of the Canadian Term Loan Facility, accepted
	Banker's  Acceptances requested  from  it to be accepted, in the
	amount not exceeding in the aggregate its Term  Loan  Commitment
	with respect to the Canadian Term Loan Facility or the US Term
	Loan Facility in effect at such time, as the case may be.  Such
	wire transfers  were  directed  to the Relevant Agent at the
	Principal  Office  and were in the form of immediately available,
	freely transferable Canadian  Dollars or Dollars, as requested by
	the  Facility Borrowers under the  Canadian  Term  Loan
     	Facility, or Dollars  with respect to the US Term Loan.  Each
	Facility Borrower with respect to  the  Canadian  Term Loan
	Facility and the US Term Loan Facility hereby acknowledges to
	and agrees with each Lender and the Relevant Agent that the
	amount so received  by the Relevant Agent was, subject to the
	terms  and  conditions set forth in the Original Credit Agreement,
	made available to the applicable Facility Borrowers under the
	applicable Term Loan Facility (subject to the Mexican Borrowing
	Limit  then  in  effect) by delivery of the proceeds thereof on
	the same date and in immediately  available  funds  to  the
     	applicable  Borrowers'  Canadian  Account  or applicable Borrowers'
	US Account, as the case may be, or otherwise as directed by an
	Authorized Representative and reasonably acceptable to the
	Relevant Agent.

          (ii) On the closing date of the Existing  Credit  Agreement,
	each Term Loan Facility Lender party to the Existing Credit
	Agreement made the Advance of the Existing Term B Loan Facility to
	be made by it on such day available by wire transfer to the
	Relevant Agent in the amount not exceeding in the aggregate its
	commitment with respect to the Existing Term B Loan Facility in
	effect at such time.  Such wire transfers  were directed to the
	Relevant Agent at the Principal Office and were in  the  form
	of  immediately available, freely transferable Dollars.  Each
	Facility Borrower  with  respect  to  the Canadian Term Loan
	Facility and the US Term Loan Facility hereby acknowledges to and
     	agrees  with  each  Lender and the Relevant Agent that the  amount
	so received by the Relevant Agent was, subject to the terms and
     	conditions set forth  in the Existing Credit Agreement, made
	available to the applicable Facility Borrowers under the Existing
	Term B Loan Facility by delivery of the proceeds thereof on the
	same date and in immediately available funds to the applicable
	Borrowers'  US  Account, or   otherwise   as  directed  by  an
	Authorized Representative and reasonably acceptable to the
	Relevant Agent.

          (iii) Not later  than 1:00 P.M., on the Closing Date, GMAC
	shall, pursuant to the terms and subject to the conditions of
	this Agreement, make the amount of the Advance of the US Term
	Loan to be made by it on such day available by wire  transfer
	to the US Agent in the amount of its US Term Loan Commitment.
	Such wire  transfer shall be directed to the US Agent at its
	Principal Office and shall  be  in  the  form  of immediately
	available,  freely  transferable  Dollars.  The amount so
     	received by the US Agent shall, subject to the terms and
	conditions of this Agreement, be made available to LINQ by
	delivery  of the proceeds thereof to the applicable Borrowers'
	US Account or otherwise  as shall be directed by the Authorized
	Representative and reasonably acceptable to the US Agent.

          (c) PAYMENT OF PRINCIPAL.  The principal amount of the Term
	Loans shall be repaid in five (5) consecutive quarterly installments  on the
     	dates and in the amounts set forth below for each Term Loan (as
	any of such  amounts  may have been reduced at or prior to such
	time pursuant to SECTIONS 2.1(D) AND 2.1(E)):

<TABLE>
<CAPTION>
 QUARTER      PRINCIPAL DUE                       BALANCE
  ENDED
<S>       <C>           <C>           <C>            <C>
 CANADIAN TERM LOAN  US TERM LOAN  CANADIAN TERM US TERM
                                       LOAN          LOAN
Closing                             $21,051,470.60 $38,198,529.40
Date
December  $621,773.40 $1,128,226.60 $20,429,697.20 $37,070,302.80
31, 2000
March 31, $621,773.40 $1,128,226.60 $19,807,923.80 $35,942,076.20
2001
June 30,  $621,773.40 $1,128,226.60 $19,186,150.40 $34,813,849.60
2001
September $621,773.40 $1,128,226.60 $18,564,377.00 $33,685,623.00
30, 2001
December  All remaining         All remaining  $0.00      $0.00
31, 2001  principal outstanding   principal
                                outstanding
</TABLE>

     	PROVIDED, HOWEVER,  that  the entire amount of Term Loan
	Outstandings shall be due and payable in full  on the Term
	Loan Termination Date together with interest accrued thereon
	to such date.

          (d) OPTIONAL PREPAYMENTS.   Prepayments  may be made on each
	Term Loan (including with respect to the face amount of  Bankers'
     	Acceptances),  PROVIDED  they be made for pro rata amounts and at
	the same time for each Term Loan, in whole or in part from time to
	time on any Business Day, without  penalty or premium, upon at
	least three (3)Business Days' telephonic notice  from  an
	Authorized  Representative (effective  upon  receipt) to each of
	the Agents prior to 10:30  A.M. (Charlotte,  NC  time),  which
	notice shall be irrevocable.  The Authorized   Representative
	shall   provide   each   Agent   written confirmation  of  each
	such telephonic notice but failure  to  provide such confirmation
	shall  not  affect  the  validity of such telephonic
     	notice.  Any prepayment, whether of a Base Rate Segment, a
	Bankers' Acceptance  Segment or a Eurodollar Rate Segment, shall
	be made at a prepayment price  equal  to (i) the amount of
	principal to be prepaid, plus (ii) all accrued and unpaid
	interest on the amount so prepaid, to the date of prepayment.
	All prepayments  under  this  SECTION 2.1(D) shall be made in
	the minimum principal amount of $500,000  (or,  as to segments
	in Canadian Dollars, the Canadian Dollar Equivalent Amount of
     	Canadian  Dollars)  or  any  integral  multiple of $100,000 (or,
	as to segments in Canadian Dollars, the Canadian Dollar Equivalent
	Amount of Canadian  Dollars)  in  excess thereof (or  in  the
	entire remaining principal balance of the  Term  Loan),  and
	all such prepayments of principal shall be made by the Facility
	Borrowers such that  they  may be  applied  pro  rata to the
 	Canadian Term Loan and the US Term Loan, and such prepayments
	in all cases shall be applied to installments of principal under
	each Term Loan in inverse order of their maturities.

          (e) MANDATORY PREPAYMENTS.   In addition to the required
	payments of principal of the Term Loan set forth  in  SECTION
	2.1(C)  and  any optional payments of principal of the Term Loan
	effected under SECTION 2.1(D), the  following required prepayments
	(to be applied in ratable amounts to reduce the Canadian Term Loan
	and the US Term Loan) of the Term Loans, each such payment to be
	made to the Relevant Agent for the benefit of the  applicable
	Term  Loan Facility Lenders, shall be made within the time period
	specified below:

               (i) a prepayment shall be  made  from  the  cash proceeds
		of each  private  and  public offering not prohibited by
		the terms hereof of equity securities  of  any  Borrower
		or any Subsidiary (other than cash proceeds from the AIP
		Investment, any Additional Equity Investment and any
		Management Investment)  in  an  amount equal to  one
		hundred percent (100%) of the Net Proceeds of each such
		issuance of equity securities of any Borrower or any
          	Subsidiary (including without limitation any security not
          	constituting Indebtedness exchangeable, exercisable or
          	convertible for or into equity securities);

               (ii) a prepayment  shall  be  made from the proceeds of
		each Asset Disposition in an amount equal to one hundred
		percent(100%)of the Net Proceeds of such Asset Disposition.

          Each prepayment will  be  made  within  ten (10) Business
	Days of receipt of such proceeds, and in each case upon not less
	than five (5) Business Days' irrevocable written notice to the
	Agents, which notice shall include a certificate of an Authorized
	Representative setting forth in reasonable detail the calculations
	utilized in computing the amount of such prepayment.  All mandatory
	prepayments made pursuant to SECTIONS 2.1(E)(I) shall be applied
	pro rata to the Canadian Term Loan and the US Term Loan, and shall
	be applied to remaining installments of principal under each Term
	Loan  in  inverse  order  of  their maturities, and in the event
	that all  Term  Loans  have  been paid in full,  shall  thereafter
	be  applied  to repay the Canadian Revolving Credit Facility and
	the US Revolving Credit  Facility pro rata, and to permanently
	reduce the Revolving Credit Commitments  pro  rata  in  an
     	amount equal to such repayment.  All  mandatory  prepayments
	made pursuant to SECTION 2.1(E)(II) shall be applied (x) first,
	to the extent the asset so disposed of constituted part of the
	Borrowing Base prior to its disposition, to the extent of its
	value in the Borrowing Base (after application of the applicable
	advance rate to such asset under the definition of "Borrowing
	Base"), to  repay  the  Canadian Revolving Credit Facility and
	the US Revolving Credit Facility pro rata, and to permanently
	reduce the Revolving  Credit  Commitments pro rata in an amount
	equal to such repayment, (y) second, pro rata to the Canadian
	Term  Loan  and  the  US  Term  Loan to reduce the remaining
     	installments of principal under each Term Loan  in  inverse
	order  of their maturities, and (z) third, in the event that
	the Term Loans have been  paid  in full, thereafter to repay
	the Canadian Revolving Credit Facility and  the  US  Revolving
	Credit  Facility  pro  rata,  and to permanently  reduce  the
	Revolving  Credit Commitments pro rata in an amount equal to
	such repayment.

     	2.2  REVOLVING LOANS.

          (a)  COMMITMENT.  Subject to the terms  and  conditions  of
	this Agreement,  (i)  each  US  Revolving  Credit Facility Lender
	severally agrees to make Advances in Dollars to any  one or more
	of the Facility Borrowers  under  the  US Revolving Credit Facility
	(subject  to  the Mexican Borrowing Limit)  on  a pro rata basis
	as to each US Revolving Credit Loan requested by such Facility
	Borrowers on any day determined by such Lender's Applicable
	Commitment  Percentage with respect to the US Revolving Credit
	Facility up to but not  exceeding the US Revolving Credit
	Commitment  of such Lender, and (ii) each  Canadian  Revolving
     	Credit Facility Lender  severally  agrees  to make Advances and
	accept Bankers' Acceptances in Dollars or in the Canadian Dollar
	Equivalent Amount  of  Canadian  Dollars  (as selected by the
	applicable Facility Borrower) to any one or more of the Facility
	Borrowers under the Canadian Revolving Credit Facility on a pro
	rata basis as to each Canadian Revolving Credit Loan requested
	by such Facility Borrowers on any day determined by such Lender's
	Applicable Commitment Percentage with respect to the Canadian
	Revolving Credit Facility up to  but  not exceeding the Dollar
	Equivalent Amount equal to the Canadian Revolving Credit
	Commitment of such Lender; PROVIDED, HOWEVER, that the Lenders
     	will not  be  required  and  shall have no obligation to make
	any such Advance (A) so long as a Default  or  an Event of
	Default has occurred and is continuing or (B) if the Agent has
	accelerated the maturity of any of the Notes as a result of an
	Event of Default; PROVIDED FURTHER, HOWEVER, that immediately
	after giving effect  to  each  such Advance, the provisions of
	SECTION 2.2(B)(I), (II) and (III) are not  violated. Within
	such  limits (and the Mexican Borrowing Limit) and subject  to
     	the  other terms  and  conditions  of  this  Agreement,  the
	Facility Borrowers under the Revolving Credit Facilities and
	under the Canadian Swing  Line  Facility  may  borrow  and
	(under the Canadian Revolving Credit Facility only) issue
	Bankers' Acceptances,  repay  and reborrow under  the  Revolving
	Credit Facilities and under the Canadian  Swing Line Facility on
	a Business  Day from the Original Closing Date until, but  (as
	to borrowings, reborrowings  or  the  issuance  of  Bankers'
     	Acceptances)  not  including,  the  Revolving Credit Termination
	Date.  Bankers' Acceptances are not available,  and  shall  not
	be issued or accepted under, the US Revolving Credit Facility.

          (b) AMOUNTS.  Except as otherwise permitted by all of the
	Lenders from  time to time, (i) the amount of US Revolving Credit
	Outstandings plus US Letter of Credit Outstandings shall not exceed
	at any time the Total Commitment  under the US Revolving Credit
	Facility at such time,(ii)  the  Dollar  Equivalent  Amount  of
	Canadian  Revolving  Credit Outstandings plus Canadian Letter of
	Credit Outstandings plus Canadian Swing Line Loan Outstandings at
	any time shall not exceed the Dollar Equivalent Amount of the Total
	Commitment under the Canadian Revolving Credit Facility at such
	time, and (iii)  the  Dollar Equivalent Amount of all Outstandings
	under the Revolving Credit  Facilities, the Letter of Credit
	Facilities and the Canadian Swing Line Facility shall not at
     	any time exceed the SUM of the Borrowing Base as calculated in
	Dollars at such time.  In the event any of clauses (i), (ii)
	or  (iii)  above are  violated  at  any time, such payments and
	prepayments as shall be necessary to comply  with  each such
	subsection  shall  be  made immediately, and in the case of  a
	violation of clause (iii) shall be made pro rata between the
	Canadian Revolving  Credit  Facility and the US Revolving Credit
	Facility.  Each Advance under the Revolving Credi Facilities,
	other  than  Base  Rate  Refunding  Loans  and  Bankers'
	Acceptances, shall  be  in  an  amount  of  at  least $100,000
	(or the Canadian Dollar Equivalent Amount thereof in Canadian
	Dollars),  and, if  greater  than  $100,000,  an integral
	multiple of $100,000 (or the Canadian Dollar Equivalent Amount
	thereof in Canadian Dollars).

          (c) ADVANCES.

               (i) An Authorized Representative shall give the Agent
		(1) at least three (3) Business Days' irrevocable telephonic
		notice of each Eurodollar Rate Loan (whether representing
		an  additional borrowing or the Continuation  of  a
		borrowing  hereunder or the Conversion of a borrowing
		hereunder from a Base Rate  Loan  to  a Eurodollar  Rate
		Loan)prior to 11:00 A.M.,(2)at least two (2) Business Days'
		irrevocable telephonic notice of each Bankers' Acceptance
		under the Canadian Revolving Credit Facility  (whether
          	representing  an  additional  borrowing or the Continuation
		of a borrowing hereunder or the Conversion  of  a  borrowing
		hereunder from a Base Rate Loan or a Eurodollar Rate Loan
		to  a  Bankers' Acceptance)  prior  to  11:00 A.M. and (3)
		irrevocable telephonic notice of each Base Rate  Loan  (other
		than  Base Rate Refunding Loans to the extent the same are
		effected without notice pursuant to  SECTION  2.2(C)(III)
		and whether representing  an  additiona borrowing hereunder
		or the Conversion of borrowing hereunder from Eurodollar
		Rate Loans or Bankers' Acceptances to Base Rate Loans)
          	prior to 11:00  A.M.  on the day of such proposed Revolving
		Loan.  Each such notice shall  be effective upon receipt by
		the Relevant Agent, shall specify the  Facility  Borrower,
		the  amount of the borrowing, the type of Revolving Loan
		(Dollars or, in the case of the Canadian Revolving Credit
		Facility only, Canadian  Dollars; Base Rate, Eurodollar
		Rate  or,  in  the  case  of  the Canadian Revolving Credit
		Facility only, Bankers' Acceptances),  the  date of
		borrowing and, if a Eurodollar Rate Loan or a Bankers'
          	Acceptance, the Interest Period to be used in the
		computation of interest.  The Authorized Representative
		shall provide the Agent written confirmation of each such
		telephonic notice in the form of a  Borrowing Notice or
		Interest  Rate  Selection  Notice (as applicable) with
		appropriate  insertions but failure to provide such
		confirmation shall not affect the  validity of such
          	telephonic notice.  Notice of receipt of such Borrowing
		Notice or Interest Rate Selection Notice, as the case may
		be, together with the amount of each Revolving Credit
		Facility Lender's  portion of an  Advance  requested
		thereunder,  shall  be  provided  by  the Relevant  Agent
		to each such Revolving Credit Facility Lender by
		telefacsimile transmission with reasonable promptness, but
          	(provided the Relevant Agent shall have  received  such
		notice by 11:00 A.M.) not later than 1:00 P.M. on the same
		day as the Agent's receipt of such notice.

               (ii) Not later than 2:00 P.M. on the date specified for
		each borrowing  under  this SECTION  2.2,  each  applicable
		Revolving Credit Facility Lender  shall,  pursuant to the
		terms and subject to  the conditions of this Agreement,
		make  the  amount  of  the Advance  or  Advances  to  be
		made by it on such day available by wire transfer to the
		Relevant Agent in the amount of its pro rata share,
		determined according  to  such  Revolving  Credit Facility
          	Lender's  Applicable Commitment Percentage of the Revolving
		Loan or Revolving  Loans  to  be made on such day.  Such
		wire transfer shall be directed to the Relevant Agent at
		its Principal Office and shall be in the form of Dollars or,
		solely with respect to the Canadian Revolving Credit Facility
		and as selected by the applicable Facility Borrower, the
		Canadian  Dollar  Equivalent Amount of Canadian Dollars, in
		each case constituting immediately available funds.  The
		amount so received  by  the  Relevant Agent shall, subject
		to the terms and conditions of this Agreement,  be made
		available to the appropriate Facility Borrower by delivery
          	of the proceeds thereof  to  the applicable Borrowers' US
		Account or Borrowers' Canadian Account,  as the case may be,
		or otherwise as shall be directed in the applicable
		Borrowing Notice by the Authorized Representative and
		reasonably acceptable to the Relevant Agent;  PROVIDED,
		that  if  any Lender accepts Bankers' Acceptances, SECTION
		4.1(C) shall apply.

               (iii) Notwithstanding the foregoing,  if  a  drawing is
		made under  any  Letter of Credit, such drawing is honored
		by  either Issuing Bank,  and  the applicable Borrower shall
		not immediately fully reimburse the applicable  Issuing
		Bank  in respect of such drawing from other funds available
		to such Borrower, (A) provided that the conditions to making
		a Revolving Credit  Loan  as herein provided  shall  then
		be satisfied, the Reimbursement Obligation arising from such
		drawing shall be paid to the applicable Issuing Bank by the
		Relevant Agent  without  the requirement of notice to or
		from, or any other action of, the applicable Facility Borrower
          	or  any other Borrower, from immediately  available  funds
		which shall  be  advanced as a Base Rate Refunding Loan to
		the Relevant Agent at its  Principal  Office by each Canadian
		Revolving Credit Facility Lender under the Canadian Revolving
		Credit Facility or by each US Revolving Credit Facility
		Lender under the US Revolving Credit Facility, as the case
		may be, in an amount equal to its Applicable Commitment
		Percentage of the Dollars Equivalent Amount of such
		Reimbursement Obligation, and (B) if the conditions  to
		making  a Revolving Loan as herein provided shall not then
		be satisfied, each  Canadian  Revolving  Credit Facility
          	Lender under the Canadian Revolving Credit Facility or each
		US Revolving  Credit  Facility  Lender under the US
		Revolving Credit Facility,  as the case may be,  shall  fund
		by payment to the Relevant Agent (for  the benefit of the
		applicable Issuing Bank) at  its  Principal Office  in
		immediately  available  funds  the purchase from  the
		applicable  Issuing  Bank of their respective Participations
		in the Dollar Equivalent Amount  of  the  related
    		Reimbursement Obligation  based  on  their  respective
		Applicable Commitment Percentages of the Total Letter of
		Credit Commitment. If  a  drawing  is  presented  under
		any  Letter  of  Credit  in accordance  with  the  terms
		thereof and the applicable Facility Borrower shall not
		immediately  reimburse  the  relevant  Issuing Bank  in
		respect thereof, then notice of such drawing or payment
          	shall be provided  promptly  by  the relevant Issuing Bank
		to the Relevant Agent and the Relevant Agent shall provide
		notice to each  Canadian  Revolving  Credit  Facility  Lender
		or  each  US Revolving  Credit  Facility  Lender,  as  the
		case may be, by telephone or telefacsimile transmission.  If
		notice  to such Lenders  of a drawing under any Letter of
		Credit is given by  the Relevant Agent  at or before 12:00
		noon on any Business Day, each Canadian Revolving  Credit
		Facility  Lender or each US Revolving Credit Facility Lender,
		as the case may  be,  shall either make a Base   Rate
		Refunding Loan or fund the purchase of its Participation as
		specified above in the amount of such Lender's Applicable
		Commitment Percentage of  such  drawing or payment and shall
		pay such amount to the Relevant Agent  for  the  account of
          	the applicable Issuing Bank at its Principal Office in
		Dollars and in immediately available funds before 2:30 P.M.
		on the same Business Day. If such notice to the Canadian
		Revolving Credit Facility Lender or US Revolving Credit
		Facility Lender, as the case may be, is given by the Relevant
		Agent after 12:00 noon on any Business Day, each such Lender
		shall either make such Base Rate Refunding Loan or fund
		such purchase before 12:00 noon on the next following
		Business Day.

(d) REPAYMENT OF REVOLVING  LOANS.   The principal amount of
each Revolving Credit Loan (including each Base  Rate Refunding
Loan) shall be due and payable to the Relevant Agentfor the benefit
of each Canadian Revolving Credit Facility Lender or US Revolving
Credit Facility Lender, as the case may be, in full on the Revolving
Credit Termination  Date,  or  earlier  as specifically provided herein.
The principal amount of any Revolving  Credit Loan may be prepaid in
whole or in part on any Business Day, upon  (A)  at least three
(3) Business Days' irrevocable telephonic notice in the case of each
Revolving Credit Loan that is a Eurodollar Rate Loan or, in the case of
the Canadian Revolving Credit Facility only, a Bankers' Acceptance
from an Authorized Representative (effective upon receipt) to the
Relevant Agent prior to 11:00 A.M. and (B) irrevocable telephonic
notice in the case of each Revolving Credit Loan that is a Base Rate
Loan (including a Base Rate Refunding Loan) from an Authorized
Representative(effective upon receipt) to the Relevant Agent prior
to 11:00 A.M. on the  day  of  such proposed repayment.  The
Authorized  Representative shall provide the Relevant Agent written
confirmation of each such telephonic notice but failure to provide
such confirmation shall not effect the validity of such telephonic
notice.  All prepayments of Revolving Credit Loans made  by the
applicable Facility Borrower shall be in the minimum amount of
$100,000  (or  the  Canadian  Dollar Equivalent Amount thereof in
Canadian  Dollars) or such greater amount which is an integral
multiple of $100,000  (or  the  Canadian  Dollar Equivalent Amount
thereof in Canadian Dollars), or the amount equal to all Revolving
Credit Outstandings, or such other amount as necessary to comply
with SECTION 2.2(B).   All  receipts  and  deposits received
from any Lock Box shall be deposited in the applicable Lock Box
Account on a daily basis in accordance with SECTION 9.20.  All
amounts deposited  in  the applicable Lock  Box Account and
constituting collected  funds (in accordance with the  applicable
Cash  Collateral Agreement) shall  be  applied  daily  to  repay
the Canadian Revolving Credit Outstandings and the US Revolving
Credit Outstandings,  as applicable, without regard to any minimum
or integral payment provided in the immediately preceding sentence,
at  all  times  after  (i) the Required  Lenders  shall  so
request (by notice to the Agents and the Borrowers), or (ii) any
one or more Lenders shall so request (by notice to the Agents and
the Borrowers) after the occurrence of an Event of Default that
has not been cured prior to the giving of such notice by such
Lender (but regardless of whether such Event of Default has been
waived).  Prepayments shall  also  be  made  as  set forth in
SECTION 2.1(E).

          (e)  REDUCTIONS.   The  Facility  Borrowers  under the
	applicable Revolving Credit Facility shall have the right from
	time  to time but not more frequently than once each calendar month,
	upon not  less than five (5) Business Days' written notice to the
	Relevant Agent from  the Chief Financial Officer of Consoltex
	Holdings, effective upon receipt, to  reduce  the  Total  Commitment
	of the Canadian Revolving Credit Facility and the US Revolving
	Credit Facility,  without  penalty  or premium, and any  such
	reduction  shall only be made pro rata between the Canadian
	Revolving Credit Facility  and  the  US  Revolving Credit
     	Facility.   The  Relevant  Agent  shall  give  each  Revolving
	Credit Facility  Lender,  within  one  (1)  Business Day of receipt
	of  such notice,  telefacsimile  notice,  or telephonic  notice
	(confirmed  in writing), of such reduction.  Each  such  reduction
	shall  be  in the aggregate  amount  of  $500,000  or such greater
	amount which is in an integral  multiple  of  $100,000, or  the
	entire  remaining  Total Commitment with respect to the Revolving
	Credit  Facilities, and shall permanently reduce each of the
	applicable Total Commitments pro rata.  Each reduction of the Total
	Commitment with respect to the Canadian Revolving Credit Facility
	and  the US Revolving Credit Facility shall be accompanied by
	payment of (i)  the  Canadian Revolving Credit Loans or Canadian
	Swing Line Loans to the extent  that,  after giving effect to such
	reduction, the principal amount of Canadian  Revolving  Credit
     	Outstandings plus Canadian Letter of Credit Outstandings plus
	Canadian Swing Line Loan Outstandings exceeds the Total Commitment
	with respect to  the  Canadian Revolving Credit Facility, and (ii)
	the US Revolving Credit Loans to the extent that, after giving
	effect to such reduction,  the principal amount of US Revolving
	Credit Outstandings plus US Letter of Credit Outstandings exceeds
	the Total Commitment with respect to the US Revolving Credit
	Facility,  in each case together with accrued  and  unpaid
	interest on the amounts prepaid.  Reductions shall also be made
	in accordance with SECTION 2.1(E).

     2.3  USE OF PROCEEDS.  The proceeds of  the  Term  Loans and
Revolving Credit Loans shall be used by the Borrower exclusively for
working capital, capital expenditures and other lawful corporate purposes.

     2.4  NOTES.

     (a)  REVOLVING NOTES. Revolving Loans made by each US Revolving
Credit Facility  Lender shall be evidenced by the Revolving Note  payable
to the order of such US Revolving Credit Facility Lender in the respective
amount of its US Revolving  Credit Commitment, which Revolving Note shall
be dated the Closing Date or a  later  date pursuant to an Assignment and
Acceptance and  shall  be  duly completed, executed  and  delivered  by
the  Facility Borrowers under the US Revolving Credit Facility.

     (b)  TERM NOTES.  The portion of the US Term Loan made by each US
Term Loan Facility Lender shall  be  evidenced  by  the Term Note payable
to the order of such US Term Loan Facility Lender in the  respective
amount of its US Term Loan Commitment, which Term Notes shall be dated
the Closing Date or a later date pursuant to an Assignment and Acceptance
and shall be duly completed,  executed  and delivered by the Facility
Borrowers under the US Term Loan.

     	2.5  CANADIAN SWING LINE.

          (a) Notwithstanding  any other provision of this Agreement to
	the contrary,  in  order  to  administer  the  Canadian  Revolving
	Credit Facility in an efficient manner,  to  facilitate the payment
	of checks in  circulation  issued by Facility Borrowers,  and  to
	minimize the transfer  of  funds  between  the  Canadian  Agent
	and  the  Canadian Revolving Credit  Facility  Lenders,  the
	Canadian Swing Line Facility Lender shall make available Canadian
	Swing  Line Loans to the Facility Borrowers under the Canadian
	Revolving Credit  Facility  prior  to the Revolving  Credit
	Termination Date.  The Canadian Swing Line Facility Lender shall
	not be obligated to make any Canadian Swing Line Loan pursuant
	hereto (i) if the Canadian Swing Line  Facility  Lender  has
     	actual knowledge that the applicable Facility Borrower is not in
     	compliance with all the conditions to the making of Canadian
	Revolving Credit Loans set forth in this Agreement, (ii) if after
	giving  effect to such Canadian Swing  Line  Loan, the Canadian
	Swing Line Loan Outstandings  exceed  $4,000,000  (or  the  Dollar
	Equivalent  Amount thereof  in  Canadian Dollars), (iii) if after
	giving effect  to  such Canadian Swing  Line  Loan, the SUM of the
	Dollar Equivalent Amount of Canadian  Swing  Line Loan
	Outstandings,  Canadian  Revolving  Credit Outstandings and
	Canadian  Letter  of  Credit Outstandings exceeds the Total
	Commitment  with  respect  to  the  Canadian  Revolving  Credit
     	Facility, or (iv) if after giving effect to  such  Canadian Swing
	Line Loan, the Dollar Equivalent Amount of all Outstandings under
	the Revolving Credit Facilities, the  Letter  of Credit Facilities
	and the Canadian Swing Line Facility shall exceed the  SUM  of
	the Borrowing Base in effect at such time.  The applicable Facility
	Borrowers may, subject to the conditions set forth in the preceding
	sentence, borrow, repay and reborrow under this SECTION 2.5.

          (b)  The  interest payable on Canadian Swing Line Loans is
	solely for the account  of the Canadian Swing Line Facility
	Lender. Canadian Swing Line Loans shall bear interest  solely at
	the Base Rate.  Canadian Swing Line Loans shall accrue interest
	at the Default Rate if any Event of Default shall occur and be
	continuing, and all accrued and unpaid interest on Swing Line
	Loans shall be payable on the dates and in the manner provided
	in SECTION 4.4 with respect to interest on Base Rate Loans.

          (c) Upon the making of a Canadian Swing  Line Loan, each
	Canadian Revolving Credit Facility Lender shall be deemed to have
	purchased from the Canadian  Swing  Line Facility Lender a
	Participation therein in an amount equal to such Canadian
	Revolving Credit Facility Lender's Applicable Commitment Percentage
	of such Canadian Swing Line Loan.  Upon demand made by the Canadian
	Swing Line Facility Lender,  each Canadian Revolving Credit
	Facility  Lender  shall,  according  to its Applicable Commitment
	Percentage of such Canadian Swing Line Loan, promptly provide to
	the  Canadian Swing Line  Facility  Lender  its purchase  price
	therefor in an  amount  equal  to  its  Participation therein in
	Dollars or, as to Participation in Canadian Swing Line Loan
     	Outstandings denominated  in Canadian Dollars, in the Canadian
	Dollars Equivalent Amount of Canadian  Dollars.   Any  provision
	by a Canadian Revolving Credit Facility Lender pursuant to demand
	of the Canadian Swing Line Facility Lender of the purchase price of
	its Participation shall when  made  be  deemed to be (i) provided
	that the conditions to making Canadian Revolving Credit Loans shall
	be satisfied, a Base Rate Refunding Loan under SECTION  2.2,  and
	(ii)  in all other cases, the funding  by  each  Canadian Revolving
	Credit Facility  Lender  of  the purchase price of its
	Participation in such Canadian Swing Line Loan.  The obligation of
	each Canadian Revolving Credit Facility Lender to so provide its
	purchase price  to the Canadian Swing Line Facility Lender shall
	be absolute and unconditional  and  shall not be affected by the
     	occurrence of an Event of Default or any other occurrence or
	event.

     	The applicable Facility Borrowers, at their  option and subject
	to the terms hereof, may request an Advance pursuant to SECTION
	2.2  in an amount sufficient to repay Canadian Swing Line Loan
	Outstandings on any date and the Canadian  Agent  shall  provide
	from the proceeds of such Advance to the Canadian Swing Line
	Facility Lender  the  amount necessary to repay  such  Canadian
	Swing Line Loan Outstandings (which the Canadian Swing Line
	Facility Lender shall then apply  to  such repayment) and credit
	any  balance of the Advance in immediately available funds in
	the manner directed by the applicable Facility Borrower pursuant
	to  SECTION  2.2(C)(II).  The proceeds of such Advances shall be
	paid to the Canadian Swing Line Facility Lender for application to
	the Canadian  Swing  Line  Loan  Outstandings  and  the Canadian
	Revolving  Credit  Facility  Lenders shall then be deemed to
     	have  made  Canadian Revolving Credit Loans  in  the  amount  of
	such Advances.  The  Canadian  Swing Line Facility shall continue
	in effect until  the  Revolving Credit  Termination  Date,  at
	which  time  all Canadian Swing  Line  Loan  Outstandings  and
	accrued interest thereon shall be due and payable in full.

<PAGE>




                                ARTICLE III

                             Letters of Credit

     3.1  LETTERS OF CREDIT.  Each of the Issuing  Banks agrees, subject
to the  terms  and conditions of this Agreement, upon request  of  a
Facility Borrower under  the  applicable  Letter  of  Credit  Facility
and  for its account,  to issue from time to time Letters of Credit
under the applicable Letter of Credit  Facility  upon delivery to the
applicable Issuing Bank of an Application and Agreement  for Letter of
Credit relating thereto in form and content acceptable to such Issuing
Bank;  provided,  that (i) neither Issuing Bank shall be obligated to
issue (or renew) any Letter of Credit if it has been notified by either
Agent or has actual knowledge that a Default or Event of Default has
occurred and is continuing, (ii) no  US  Letter  of Credit shall be
issued (or renewed) if, after giving effect thereto, the US Letter
of  Credit  Outstandings would exceed $7,500,000, (iii) no Canadian
Letter of Credit shall  be  issued  (or  renewed)  if,  after giving
effect thereto,  the  Dollar  Equivalent  Amount  of  Canadian  Letter
of  Credit Outstandings would exceed $7,500,000, (iv) no US Letter of
Credit shall be issued (or renewed) if, after giving effect thereto,
the US Letter of Credit Outstandings plus the US Revolving Credit
Outstandings shall exceed the Total Commitment with respect to the US
Revolving Credit Facility, (v) no Canadian Letter of Credit shall be
issued (or  renewed) if, after giving effect thereto, the Dollar
Equivalent Amount of Canadian  Letter  of Credit Outstandings  plus
the Canadian  Revolving  Credit  Outstandings plus the Canadian  Swing
Line Loan Outstandings shall exceed the  Total  Commitment with respect
to the  Canadian Revolving Credit Facility, and (vi) no Letter of
Credit shall be issued  (or  renewed)  if,  after giving effect thereto,
Dollar Equivalent Amount of all Outstandings under the Revolving Credit
Facilities,  the  Letter  of  Credit Facilities and the Canadian Swing
Line Facility  shall exceed the SUM of  the  Borrowing  Base  as
calculated in Dollars at  such  time.   No  Letter  of  Credit shall
have an expiry date (including  all  rights  of  the  applicable
Facility  Borrower   or   any beneficiary  named  in such Letter of
Credit to require renewal) or payment date occurring later  than  the
earlier to occur of one year after the date of its issuance or the
ninetieth  (90th)  day  after the Stated Termination Date; PROVIDED,
HOWEVER, in the event such expiry  date is after the Stated
Termination Date, there shall be deposited with the  Relevant  Agent
on or before the Business Day prior to the Stated Termination Date an
amount of cash equal  to the stated amount of such Letter of Credit
remaining undrawn at the date of  such  deposit  to  be  held  pursuant
to  the terms of the applicable  LC  Account Agreement.  Letters of
Credit issued under  the  US Letter of Credit  Facility shall be issued
in Dollars and Letters of Credit issued under the Canadian  Letter
of  Credit  Facility  may  be  issued in Dollars or in the Canadian
Dollar Equivalent Amount of Canadian Dollars.

     3.2  REIMBURSEMENT AND PARTICIPATIONS.

          (a) Each Facility Borrower under the applicable Letter of
	Credit Facility  hereby  unconditionally  agrees  to  pay  to
	the applicable Issuing Bank immediately on demand at its Principal
	Office all amounts required to pay all drafts drawn or purporting
	to be drawn under the Letters of Credit issued for the account of
	such Facility Borrower and all  reasonable  expenses  incurred  by
	the applicable Issuing Bank in connection  with each such Letter
	of Credit,  and  in  any  event  and without demand  to  place in
	possession of the applicable Issuing Bank (which shall include
	Advances  under  the applicable Revolving Credit Facility if
	permitted by SECTION 2.2 and  Canadian  Swing  Line  Loans with
	respect  to  Canadian  Letters of Credit if permitted by SECTION
     	2.5) sufficient funds to pay all  debts  and liabilities arising
	under any Letter of Credit.  Each of the Issuing  Banks  agrees
	to give the applicable Facility Borrower prompt notice of any
	request for a draw under any Letter of Credit.  The applicable
	Issuing Bank may charge any account the applicable Facility
	Borrower may have with it for any and all amounts such Issuing
	Bank  pays  under  any Letter of Credit, plus charges and
	reasonable expenses as from time to time agreed to by such
	Issuing Bank and such Facility Borrower; provided that to the
     	extent permitted by SECTION 2.2(C)(III) and SECTION 2.5, amounts
	shall be paid  pursuant  to  Advances  under the applicable
	Revolving Credit Facility or, if the Borrower shall elect, by
	Canadian Swing Line Loans in the case of Canadian Letters of
	Credit.   Each Facility Borrower under either Letter of Credit
	Facility agrees to pay the applicable Issuing Bank interest on
	any Reimbursement Obligations not paid when due hereunder at
	the Default Rate.

          (b) In accordance with the  provisions  of  SECTION  2.2(C),
	each Issuing Bank shall notify the Relevant Agent of any drawing
	under any Letter of Credit promptly following the receipt by such
	Issuing Bank of such drawing.

          (c)  Each applicable Revolving Credit Facility Lender (other
	than the applicable Issuing  Bank) shall automatically acquire on
	the date of issuance thereof, a Participation in  the liability of
	the applicable Issuing Bank in respect of each Letter of Credit in
	an amount equal to such Revolving Credit Facility Lender's
	Applicable Commitment Percentage of such liability,  and  to  the
	extent that the applicable  Facility  Borrower  is  obligated  to
	pay the  applicable Issuing Bank under SECTION 3.2(A), each such
	Revolving Credit Facility Lender (other  than  the  Issuing  Bank)
	thereby  shall  absolutely, unconditionally  and  irrevocably
	assume, and shall be unconditionally obligated to pay to the
	applicable Issuing Bank, its Applicable Commitment Percentage of
	the liability of such Issuing Bank under such Letter of Credit in
	the manner and with the effect provided in SECTION 2.2(C)(III).

          (d) Simultaneously with the making of each payment by a
	Revolving Credit Facility  Lender  to  an  Issuing  Bank  pursuant
	to  SECTION 2.2(C)(III)(B),  such  Revolving  Credit  Facility
	Lender  shall, automatically  and  without any further action on
	the  part  of  such Issuing Bank or such  Revolving  Credit
	Facility  Lender,  acquire  a Participation  in  an  amount  equal
	to  such  payment (excluding the portion thereof constituting
	interest accrued prior  to  the  date the Revolving  Credit
	Facility  Lender  made  its payment) in the related Reimbursement
	Obligation of the applicable Facility  Borrower.   Each Revolving
	Credit Facility Lender's obligation to make payment to the
     	Relevant Agent for the account of the applicable Issuing Bank
	pursuant to SECTION 2.2(C)(III) and SECTION  3.2(C),  and  the
	right  of  such Issuing Bank to receive the same, shall be absolute
	and unconditional, shall not be affected by any circumstance
	whatsoever and shall be made without any offset, abatement,
	withholding or reduction whatsoever.  In  the event the applicable
	Revolving  Credit  Facility  Lender has purchased  Participations
	in any Reimbursement Obligation as set forth above, then  at  any
	time payment (in fully collected, immediately available funds) of
	such Reimbursement Obligation, in whole or in part, is received
	by  the applicable Issuing Bank from the applicable Facility
	Borrower, such  Issuing  Bank shall promptly pay to each such
	Revolving Credit Facility Lender an amount (in Dollars or in
	the Canadian Dollar Equivalent Amount of Canadian Dollars, as
	applicable) equal to its Applicable Commitment Percentage of
	such payment from such Facility Borrower.

          (e) Promptly following the end of each calendar  quarter,
	the US Issuing Bank and the Canadian Issuing Bank shall each
	deliver to  the Relevant Agent  and  the Borrowers (pursuant to
	SECTION 13.2) a notice describing the aggregate  undrawn  amount
	of all US Letters of Credit and  Canadian Letters of Credit,
	respectively,  at  the  end  of  such quarter.   Upon  the
	request  of any Revolving Credit Facility Lender from time to
	time, the applicable  Issuing  Bank  shall deliver to the
     	Relevant Agent, and the Relevant Agent shall deliver to such
	Revolving Credit Facility Lender, any other information reasonably
	requested by such Revolving Credit Facility Lender with respect
	to each applicable Letter of Credit outstanding.

          (f)  The  issuance  by  the US Issuing Bank of each US Letter
	of Credit and by the Canadian Issuing Bank of each Canadian Letter
	of Credit shall, in addition to the conditions precedent  set
	forth  in ARTICLE VII,  be  subject  to  the conditions that each
	such Letter of Credit be in such form and contain  such  terms as
	shall be reasonably satisfactory to the applicable Issuing Bank
	consistent with the then current practices and procedures of such
	Issuing Bank with  respect to similar  letters  of  credit,  and
	the  Facility  Borrowers under the applicable Letter of Credit
	Facility shall have executed and delivered such other instruments
	and agreements relating to such Letters of Credit as the applicable
	Issuing Bank shall have reasonably requested consistent with such
	practices and procedures.  All Letters of Credit shall be issued
	pursuant to and subject to the Uniform Customs and Practice for
	Documentary Credits, 1993 revision, International Chamber of
	Commerce Publication No. 500 or, if the Issuing Bank shall elect
	by express reference in an affected Letter of Credit, the
	International Chamber of Commerce International Standby Practices
	commonly referred to as "ISP98," or any subsequent amendment or
	revision of either thereof.

          (g)  The Facility Borrowers under the applicable Letter of
	Credit Facility agree  that  the  applicable  Issuing  Bank  may,
	in its sole discretion, accept or pay, as complying with the terms
	of  any Letter of Credit, any drafts or other documents otherwise
	in order which may be signed or issued  by  an  administrator,
	executor, trustee in bankruptcy,  debtor in possession, assignee
	for the benefit of creditors, liquidator,  receiver,  attorney
	in  fact  or  other legal representative  of  a  party  who  is
	authorized under such Letter of Credit to draw or issue any
	drafts or other documents.

          (h) Without limiting the generality  of the provisions of
	SECTION 13.9,  each  Facility Borrower hereby agrees  to
	indemnify  and  hold harmless each  Issuing  Bank, each other
	Lender and each of the Agents from and against any and  all claims
	and damages, losses, liabilities, reasonable costs and expenses
	which  either  Issuing Bank, such other Lender  or  either Agent
	may incur (or which may  be  claimed  against either Issuing
	Bank, such other Lender or either Agent) by any Person by reason
	of or in  connection  with  the  issuance  or transfer of or
     	payment or failure to pay under any Letter of Credit; provided
	that no Facility Borrower shall be required to indemnify either
	Issuing Bank, any  other  Lender  or  either Agent for any claims,
	damages,  losses, liabilities, costs or expenses  to the extent,
	but only to the extent, (i) caused by the willful misconduct
	or gross negligence of the party to be indemnified or (ii) caused
	by the  failure  of such Issuing Bank to pay under any Letter
	of Credit after the presentation  to  it  of a request  for
	payment strictly complying with the terms and conditions of such
	Letter  of  Credit,  unless  such payment is prohibited by any
     	law, regulation, court order or decree.   The indemnification and
	hold harmless provisions of this SECTION 3.2(H)  shall survive
	repayment of the Obligations, occurrence of the Revolving Credit
	Termination Date, the Facility Termination Date and expiration or
	termination of this Agreement.

          (i)  Without  limiting  the  rights  of  the  applicable
	Facility Borrowers  as  set  forth  in  SECTION 3.2(H), the
	obligation  of  the Facility Borrowers under the applicable
	Letter of Credit Facility to immediately reimburse the applicable
	Issuing Bank  for  drawings  made under Letters of Credit and
	such Issuing Bank's right to receive such payment  shall  be
	absolute,  unconditional and irrevocable, and such obligations
	of the applicable Facility  Borrowers  shall  be performed strictly
	in accordance with the terms of this Agreement and such Letters
	of Credit and the related Application  and  Agreement  for any
     	Letter of Credit, under all circumstances whatsoever, including
	the following circumstances:

                    (i)  any  lack  of  validity  or  enforceability
		of the Letter  of  Credit,  the obligation supported by
		the Letter ofCredit or any other agreement or instrument
		relating thereto(collectively, the "Related LC Documents");

                    (ii)  any  amendment  or waiver of or any consent
		to or departure from all or any of the Related LC Documents;

                    (iii)  the  existence of  any  claim,  setoff,
		defense(other than the defense  of  payment in accordance
		with the terms of this Agreement) or other rights  which
		any  Facility Borrower may have at any time against any
		beneficiary or any transferee of a Letter of Credit (or
		any persons or entities for  whom any such beneficiary or
		any such transferee may be acting), the  Agents, the Lenders
		or any  other  Person, whether in connection with the
          	Loan  Documents,  the  Related  LC  Documents  or  any
		unrelated transaction;

                    (iv) any breach  of  contract  or other dispute
		between any Facility Borrower and any beneficiary  or any
		transferee of a Letter  of  Credit  (or  any persons or
		entities  for  whom  such beneficiary or any such transferee
		may  be  acting), the Agents, the Lenders or any other Person;

                    (v)   any  draft,  statement  or  any  other
		document presented under any  Letter  of  Credit  proving
		to  be  forged, fraudulent,  invalid  or  insufficient  in
		any  respect  or  any statement  therein  being  untrue  or
		inaccurate  in any respect whatsoever so long as any such
		document appeared to  comply  with the terms of such Letter
		of Credit;

                    (vi)   the  existence,  character,  quality,
		quantity, condition, value,  or delivery (including the time,
		place, manner or order thereof) of  property described or
		purportedly described in documents presented in connection
		with any Letter of Credit or the  existence,  nature  or
		extent  of  any  insurance  relating thereto;

                    (vii) any delay, extension of time, renewal,
		compromise or other indulgence or modification granted or
		agreed to by the Relevant  Agent,  with  or without notice
		to or approval  by  the applicable Facility Borrower in
		respect of any Obligations of the Facility Borrowers; or

                    (viii) any other circumstance or happening
		whatsoever, whether or not similar to any of the foregoing.

<PAGE>




                                ARTICLE IV

  	Bankers' Acceptances, Eurodollar Funding, Fees, and Payment
	Conventions

     4.1  BANKERS' ACCEPTANCES.

          (a) PERIOD AND OTHER DETAILS.  Bankers' Acceptances shall be
	for a period of 1, 2, 3 or 6 months; shall not allow for any day
	of grace; shall be signed as drawer by the applicable Facility
	Borrower under the Canadian Term Loan Facility or the Canadian
	Revolving Credit Facility or on its behalf by any one of the
	Canadian Facility Lenders requested to accept such Bankers'
	Acceptances to whom such Facility Borrower hereby gives an
	irrevocable power of attorney for such purpose; shall be issued
	on a Business Day; and shall mature on a Business Day which
	falls on or before the Term Loan Maturity Date or the Stated
	Termination Date, as the case may be.

          (b) AMOUNTS.  Each Bankers' Acceptance shall be of a
	minimum amount for each Canadian Facility Lender of the Dollar
	Equivalent Amount of CDN$500,000 and integral multiples of the
	Dollar Equivalent Amount of CDN $100,000 in excess thereof.

          (c) DEPOSIT IN THE ACCOUNT.  An amount equal to Discounted
     	Proceeds relating to Bankers' Acceptances issued on any Business
	Day or, in the case of a Discount Note, an amount equal to the face
	amount of the Discount Note less the Discount, shall be deposited
	by the relevant Canadian Facilities Lenders before 2:00 P.M. on
	such day in the Borrower's Canadian Account unless Bankers'
	Acceptances are traded by the applicable Facility Borrower on
	the money market in which even the Discounted Proceeds shall be
	deposited by the applicable Facility Borrower before 2:00 P.M.
	on such day in the Borrower's Canadian Account.  The applicable
	Facility Borrower shall cause an amount equal to the acceptance
	fee (to be distributed to the relevant Canadian Facilities Lenders
	by the Canadian Agent as contemplated in SECTION 4.1(F) below)
	to be deposited before 2:00 P.M. on such day in the
     	Borrower's Canadian Account.

          (d) TRADING.  The applicable Facility Borrower under the
	Canadian Term Loan Facility or the Canadian Revolving Credit
	Facility may trade the Bankers' Acceptances (but not a Discount
	Note) on the money market or directly with the Canadian Facilities
	Lenders.  The Canadian Agent shall have no duties or liabilities
	with respect to such trading.

          (e) PAYMENT.  On the maturity date of any Bankers' Acceptance
     	outstanding, the applicable Facility Borrower shall, subject to
	any Conversion or election in accordance with SECTION 4.3, pay to
	the Canadian Agent an amount equal to the face amount of such
	Bankers' Acceptance; if such amount is not so paid or otherwise
	shall be the subject of a Conversion or election in accordance
	with SECTION 4.3, it shall automatically be debited by the
	Canadian Agent from the Borrower's Canadian Account as a Base
	Rate Loan under the Canadian Revolving Credit Facility made to
	the applicable Facility Borrower.

          (f) ACCEPTANCE FEE.  Upon acceptance of a Bankers' Acceptance
	or the issuance of a Discount Note, an acceptance fee equal to
	the Applicable Margin, multiplied by the face amount of such
	Bankers' Acceptance or Discount Note, as the case may be, and
	multiplying the product so obtained by a fraction having a
	numerator equal to the number of days of the period of such
	Bankers' Acceptance and a denominator of 365, shall be paid by
	the relevant Facility Borrower to the Canadian Agent, for the
	account of the applicable Canadian Facilities Lenders.

          From the date and as long as Outstandings under any Facility bear
     interest at the Default Rate, as provided for herein, the acceptance
     fee payable pursuant to this SECTION 4.1(F) shall be equal to the
     Applicable Margin increased by two percent (2%), such increase to be
     calculated on the face amount of any outstanding Bankers' Acceptances
     for the number of days to elapse between and including such date and
     the last day of the period of such Bankers' Acceptances.  The
     applicable Facility Borrower shall pay such increase upon demand from
     the Canadian Agent for the account of the relevant Canadian Facilities
     Lenders; should the Default Rate cease to be applicable on a date
     which is prior to the last day of the period of the Bankers'
     Acceptances, the Canadian Agent shall then make an appropriate
     adjustment and upon receipt from the relevant Canadian Facilities
     Lenders of the amount representing such adjustment, remit same to the
     applicable Facility Borrower.

          Should an increase or a decrease occur in the Applicable Margin
     during the period of any outstanding Bankers' Acceptances, the
     acceptance fee payable with respect to such Bankers' Acceptances
     pursuant to this SECTION 4.1(F) shall be equal, as from the date of
     such change, to the Applicable Margin so increased or decreased,such
     increase or decrease to be calculated on the face amount of such
     Bankers' Acceptances for the number of days to elapse between and
     including such date and the last day of the period of such Bankers'
     Acceptances.  The relevant Facility Borrower shall pay such increase
     upon demand from the Canadian Agent for the account of the relevant
     Canadian Facilities Lenders; in the case of a decrease, the Canadian
     Agent shall make an appropriate adjustment and upon receipt from the
     relevant Canadian Facilities Lenders of the amount representing such
     adjustment, remit same to the relevant Facility Borrower.

(g) BANKERS' ACCEPTANCES BY NON-BA  LENDERS.  Whenever a Facility
Borrower  under  the  Canadian  Term  Loan Facility  or  the  Canadian
Revolving  Credit  Facility  obtains an Advance  by  way  of  Bankers'
Acceptances, each Non-BA Lender shall, in lieu of accepting a Bankers'
Acceptance, make a Loan under  such  Canadian  Facility evidenced by a
Discount Note.

(h) DEPOSITORY BILLS AND NOTES ACT.  Bankers'  Acceptances may be
issued in the form of a depository bill and deposited  with a clearing
house,  both terms as defined in the Depository Bills and  Notes  Act.
The Canadian  Facility  Lenders  and  the Borrowers shall agree on the
procedures to be followed, acting reasonably.   The  Canadian Facility
Lenders are also authorized to issue depository bills  as replacements
for previously issued Bankers' Acceptances, on the same terms as those
replaced, and deposit them with a clearing house against  cancellation
of the previously issued Bankers' Acceptances.

(i)  Notwithstanding the provisions of SECTION 4.1(A) hereof,  if
any Bankers'  Acceptance  issued hereunder has a maturity date falling
after the Term Loan Maturity  Date or the Stated Termination Date, not
less than one Business Day prior to the Term Loan Maturity Date or the
Stated Termination Date, as the  case  may  be,  the relevent Borrower
under  the  Canadian Revolving Credit Facility shall  provide  to  the
Canadian Agent an amount equal to the face amount of all such Bankers'
Acceptances in  Canadian Dollars to serve as cash collateral security,
which amount may  be  entirely  set-off  against  the  amount  of  the
Bankers'  Acceptances  in  circulation  which  the  Canadian  Facility
Lenders  have  accepted  and  will  be  imputed to the payment of such
Bankers'  Acceptances  at their maturity.   Such  Borrower  under  the
Canadian Revolving Credit  Facility  shall  sign and remit as security
with regard thereto all appropriate documents which the Canadian Agent
might judge necessary or desirable, specifically including a pledge or
an  assignment of the credit balance of any deposit  account  held  as
security.

4.2  INTEREST  RATE  OPTIONS.   Eurodollar Rate Loans, Base Rate Loans
and, in the case of the Canadian Facilities  only, Bankers' Acceptances
may be outstanding at the same time and, so long as  no  Default  or
Event  of Default  shall  have  occurred  and  be continuing, the
applicable Facility Borrower shall have the option to elect  the
Type of Loan and the duration of the initial and any subsequent
Interest Periods and to Convert Revolving Credit Loans and Segments
of the Term Loans (including,  in the case of the Canadian Term
Loan only, Bankers' Acceptance Segments) in  accordance  with
SECTIONS 2.2(C)(I) and 4.3, as applicable; provided, however,
(a) (a) there shall  not  be  outstanding at any one time
 Eurodollar Rate Segments having more than five (5)  different
Interest  Periods  under  the  US  Term Loan Facility  or
Eurodollar Rate Segments having more than three (3) different
Interest Periods under the Canadian Term Loan Facility, (b)
there shall not be outstanding  at  any one time Eurodollar
Rate Loans having more than ten (10) different Interest
Periods  under  the  US Revolving Credit Facility, Eurodollar
Rate Loans having more than four (4)  different Interest Periods
under the Canadian Revolving Credit Facility, or Bankers'
Acceptances under the Canadian Revolving Credit Facility
having more  than  two (2) different periods, (c) each
Eurodollar Rate Loan (including each Conversion  into and
each  Continuation  as  a  Eurodollar  Rate  Loan)  shall
be in the Dollar Equivalent  Amount  of  $100,000 or, if
greater than the Dollar  Equivalent Amount of $100,000,
an integral multiple of the Dollar Equivalent Amount of
$100,000, and (d) no Eurodollar  Rate Segment shall have
an Interest Period that extends beyond the Term Loan
Termination Date and no other Eurodollar Rate Loan shall
have an Interest Period  that  extends  beyond  the  Stated
Termination  Date.   If  the  Relevant  Agent  does not receive
a Borrowing Notice or an Interest Rate Selection Notice giving
notice  of  election of the  duration  of  an  Interest  Period or
of Conversion of any Loan to  or Continuation of a Loan as a
Eurodollar  Rate Loan by the time prescribed by SECTIONS 2.2(C)
(I) and 4.3, as applicable, the applicable Facility Borrower
shall be deemed to have elected to obtain  or  Convert  such  Loan
to  (or Continue  such  Loan  as)  a  Base  Rate  Loan until such
Facility Borrower notifies  the  applicable  Agent  in  accordance
with  SECTION  4.3.   The applicable Facility Borrower shall not be
entitled to elect to Continue any Loan  as or Convert any Loan into
a Eurodollar  Rate  Loan  or  a  Bankers' Acceptance  if  a  Default
or  Event of Default shall have occurred and be continuing.

     4.3  CONVERSIONS  AND  ELECTIONS   OF   SUBSEQUENT  INTEREST  PERIODS.
Subject to the limitations set forth in the definition of "Interest Period"
and  in SECTION 4.2, SECTION 4.13 and ARTICLE VI,  the  Facility  Borrowers
may:

          (a)  upon  delivery  of  telephonic  notice to the Relevant Agent
     (which shall be irrevocable) on or before 11:00  A.M.  on any Business
     Day, Convert any Eurodollar Rate Loan or, in the case of  the Canadian
     Facilities   only,   Bankers'   Acceptance   (including  any  Bankers'
     Acceptance  Segment)  to  a  Base Rate Loan on the  last  day  of  the
     Interest Period for such Eurodollar  Rate Loan or Bankers' Acceptance;
     and

          (b)  provided  that no Default or Event  of  Default  shall  have
     occurred and be continuing,  upon delivery of telephonic notice to the
     Relevant Agent (which shall be  irrevocable)  on  or before 11:00 A.M.
     three  (3)  Business  Days  prior  to  the date of such Conversion  or
     Continuation:

                    (i)  elect  a  subsequent  Interest   Period   for  any
          Eurodollar Rate Loan under any Facility to begin on the last  day
          of  the  then  current  Interest  Period for such Eurodollar Rate
          Loan; or

                    (ii) Convert any Base Rate Loan under any Facility to a
          Eurodollar Rate Loan on any Business Day.

          (c) if such Facility is a Canadian Facility, provided that no
     Default or Event of Default shall have occurred and be continuing,
     upon delivery of telephonic notice to the Canadian Agent (which shall
     be irrevocable) on or before 11:00 A.M. two (2) Business Days prior to
     the date of such Continuation, elect a subsequent period for a new
     Bankers' Acceptance or a Bankers' Acceptance Segment to begin on the
     last day of the then current period for such Bankers' Acceptance or
     Bankers' Acceptance Segment;

          (d) if such Facility is a Canadian Facility, provided that no
     Default or Event of Default shall have occurred and be continuing,
     upon delivery of telephonic notice to the Canadian Agent (which shall
     be irrevocable) on or before 11:00 A.M. two (2) Business Days prior to
     the date of such Conversion, Convert any Eurodollar Rate Loan under
     such Facility to a Bankers' Acceptance (including a Bankers'
     Acceptance Segment) under such Facility to begin on the last day of
     the then current Interest Period for such Eurodollar Rate Loan;

          (e) if such Facility is a Canadian Facility other than the
     Canadian Swing Line Facility, provided that no Default or Event of
     Default shall have occurred and be continuing, upon delivery of
     telephonic notice to the Canadian Agent (which shall be irrevocable)
     on or before 11:00 A.M. two (2) Business Days prior to the date of
     such Conversion, convert any Base Rate Loan under such Facility into a
     Bankers' Acceptance (including a Bankers' Acceptance Segment) under
     such Facility;

          (f) if such Facility is a Canadian Facility, provided that no
     Default or Event of Default shall have occurred and be continuing,
     upon delivery of telephonic notice to the Canadian Agent (which shall
     be irrevocable) on or before 11:00 A.M. three (3) Business Days before
     the last day of the period of any Bankers' Acceptance (including any
     Bankers' Acceptance Segment) under such Facility, convert such
     Bankers' Acceptance (including any Bankers' Acceptance Segment) into a
     Eurodollar Rate Loan under such Facility to begin on the last day of
     the then current period for such Bankers' Acceptance (including any
     Bankers' Acceptance Segment);

          (g) if such Facility is a Canadian Facility, on any Business Day,
     convert any Base Rate Loan under such Facility in Canadian Dollars
     into a Base Rate Loan under such Facility in Dollars or a Base Rate
     Loan under such Facility in Dollars into a Base Rate Loan under such
     Facility in the Canadian Dollar Equivalent of Canadian Dollars.

     Each  such  notice shall be effective upon  receipt  by  the  Relevant
     Agent, shall  specify  the amount of the Loan or Segment affected, the
     type of Loan or Segment  (Revolving  Credit  Loan or Segment of a Term
     Loan Facility) affected, and, if a Continuation  as or Conversion into
     a  Eurodollar  Rate  Loan  or,  in the case of a Facility  that  is  a
     Canadian Facility only, a Bankers'  Acceptance  (including  a Bankers'
     Acceptance Segment), the Interest Period to be used in the computation
     of interest.  The Authorized Representative shall provide the Relevant
     Agent written confirmation of each such telephonic notice in  the form
     of   a   Borrowing  Notice  or  Interest  Rate  Selection  Notice  (as
     applicable)  with  appropriate  insertions but failure to provide such
     confirmation shall not affect the  validity of such telephonic notice.
     Notice of receipt of such Borrowing  Notice or Interest Rate Selection
     Notice, as the case may be, shall be provided by the Relevant Agent to
     each applicable Lender by telefacsimile  transmission  with reasonable
     promptness, but (provided the Relevant Agent shall have  received such
     notice by 11:00 A.M.) not later than 3:00 P.M. on the same  day as the
     Relevant  Agent's  receipt of such notice.  All such Continuations  or
     Conversions of Loans  and Segments shall be effected pro rata based on
     the  Applicable  Commitment  Percentages  of  each  Lender  under  the
     applicable Facility.

     4.4  PAYMENT OF INTEREST.  Each applicable Facility Borrower shall pay
interest on the outstanding  and unpaid principal amount of each Segment of
each Term Loan and on each Revolving  Credit  Loan, commencing on the first
date  of  such  Segment  or  Revolving Credit Loan until  such  Segment  or
Revolving  Credit Loan, as the  case  may  be,  shall  be  repaid,  at  the
applicable Base  Rate  or  Eurodollar  Rate  as designated by such Facility
Borrower in the related Borrowing Notice or Interest  Rate Selection Notice
or as otherwise provided hereunder.  Interest on each Segment  and  on each
Revolving  Credit  Loan shall be paid on the earlier of (a) in the case  of
any  Base Rate Loan,  quarterly in arrears on the last Business Day of each
March, June, September  and  December,  commencing  on  December  31, 2000,
until, as to any Base Rate Segment, the Term Loan Termination Date,  and as
to  any  other  Base  Rate Loans, the Revolving Credit Termination Date, at
which date as applicable  the  entire  principal  amount of and all accrued
interest  on the Term Loans and the Revolving Credit  Loans,  respectively,
shall be paid in full, (b) in the case of any Eurodollar Rate Loan, on last
day of the  applicable  Interest  Period for such Eurodollar Rate Loan, and
(c) upon payment in full of the Term Loans (or any Segments thereof) or the
related Revolving Credit Loans; provided,  however,  that  if  any Event of
Default  shall  occur  and be continuing, all amounts outstanding hereunder
shall bear interest thereafter until paid in full at the Default Rate.

     4.5  PREPAYMENTS OF  EURODOLLAR  RATE  LOANS AND BANKERS' ACCEPTANCES.
Whenever any payment of principal shall be made  in  respect  of  any  Loan
hereunder,  whether  at maturity, on acceleration, by optional or mandatory
prepayment or as otherwise required or permitted hereunder, with the effect
that any Eurodollar Rate  Loan  or  Bankers' Acceptance shall be prepaid in
whole or in part prior to the last day  of  the  Interest  Period or period
applicable  to  such  Eurodollar  Rate  Loan  or Bankers' Acceptance,  such
payment  of principal shall be accompanied by the  additional  payment,  if
any, required by SECTION 6.5.

     4.6  MANNER OF PAYMENT.

          (a)  Each  payment  of  principal  (including any prepayment) and
     payment of interest and fees (other than  acceptance  fees referred to
     in  SECTION  4.1(F)), and any other amount required to be  paid  to  a
     Lender, an Issuing  Bank, an Agent or the Canadian Swing Line Facility
     Lender with respect to  any  Loan,  Letter  of  Credit,  Reimbursement
     Obligation, or Canadian Swing Line Loan, shall be made to the Relevant
     Agent  at the Principal Office in Dollars or in the Dollar  Equivalent
     Amount of  Canadian  Dollars  in  immediately  available funds without
     condition  or  deduction  for  any  setoff, recoupment,  deduction  or
     counterclaim on or before 12:30 P.M.  on the date such payment is due.
     The  Relevant  Agent may, but shall not be  obligated  to,  debit  the
     amount of such payment  from  any  one  or  more  Lock Box Accounts or
     ordinary  deposit accounts of a Facility Borrower with  such  Relevant
     Agent.

          (b) Any  payment made by or on behalf of the Borrower that is not
     made both in Dollars  or  the  Dollar  Equivalent  Amount  of Canadian
     Dollars in immediately available funds and prior to 12:30 P.M.  on the
     date  such  payment  is  to  be made shall constitute a non-conforming
     payment.  Any such non-conforming  payment  shall  not be deemed to be
     received until the later of (i) the time such funds  become  available
     funds and (ii) the next Business Day.  Any non-conforming payment  may
     constitute  or  become  a  Default  or  Event  of Default as otherwise
     provided  herein.  Interest shall continue to accrue  at  the  Default
     Rate on any  principal  or  fees  as  to  which  no  payment or a non-
     conforming  payment  is  made  from the date such amount was  due  and
     payable until the later of (i) the  date  such  funds become available
     funds or (ii) the next Business Day.

          (c) In the event that any payment hereunder  or  under any of the
     Notes  or any other Loan Documents becomes due and payable  on  a  day
     other than a Business Day, then such due date shall be extended to the
     next succeeding  Business  Day  unless  provided  otherwise  under the
     definition of "Interest Period"; provided, however, that interest  and
     applicable fees shall continue to accrue during the period of any such
     extension;  and  provided further, however, that in no event shall any
     such due date be extended  (i) for any Term Loan, beyond the Term Loan
     Termination Date, and (ii) for  any  Revolving Credit Loan, beyond the
     Revolving Credit Termination Date.

     4.7  FEES.

          (a) COMMITMENT FEE.  For the period beginning on the Closing Date
     and ending on the Revolving Credit Termination Date, (i) each Facility
     Borrower under the Canadian Revolving Credit Facility agrees to pay to
     the Canadian Agent, for the pro rata benefit of the Canadian Revolving
     Credit   Facility  Lenders  based  on  their   Applicable   Commitment
     Percentages,  a  commitment fee equal to the Applicable Commitment Fee
     multiplied by the  average  daily amount by which the Total Commitment
     with respect to the Canadian Revolving Credit Facility exceeds the sum
     of the Canadian Revolving Credit  Outstandings  (without giving effect
     to Canadian Swing Line Outstandings except in the case of the Canadian
     Swing   Line   Facility  Lender)  plus  Canadian  Letter   of   Credit
     Outstandings, and  (ii)  each Facility Borrower under the US Revolving
     Credit Facility agrees to  pay  to  the  US  Agent,  for  the pro rata
     benefit  of  the  US Revolving Credit Facility Lenders based on  their
     Applicable Commitment  Percentages,  a  commitment  fee  equal  to the
     Applicable  Commitment  Fee multiplied by the average daily amount  by
     which the Total Commitment  with  respect  to  the US Revolving Credit
     Facility exceeds the sum of the US Revolving Credit  Outstandings plus
     US Letter of Credit Outstandings.  Such fees shall be  due  in arrears
     on  the  last Business Day of each March, June, September and December
     commencing   December  31,  2000,  to  and  on  the  Revolving  Credit
     Termination Date.   Notwithstanding  the  foregoing,  so  long  as any
     Canadian  Revolving  Credit  Facility  Lender  or  US Revolving Credit
     Facility Lender fails to make available any portion  of  its Revolving
     Credit Commitment when requested, such Lender shall not be entitled to
     receive  payment  of its pro rata share of such fee until such  Lender
     shall make available such portion.

          (b) PARTICIPATION  FEE.   In  consideration  of the making of the
     Total Commitments of the Lenders, the Facility Borrowers  agree to pay
     to  the  Relevant  Agent  for  the  pro rata benefit of the respective
     Lenders based on their respective Applicable  Commitment  Percentages,
     an   upfront   participation  fee  equal  to  0.25%  times  the  Total
     Commitment, such  fee  to  be  due  and payable in full on the Closing
     Date.

          (c) LETTER OF CREDIT FACILITY FEES.  The Facility Borrowers under
     a certain Letter of Credit Facility shall,  with respect to any Letter
     of Credit issued thereunder, pay to the Relevant  Agent,  for  the pro
     rata benefit of the Revolving Credit Facility Lenders with respect  to
     the  applicable  Revolving  Credit  Facility based on their Applicable
     Commitment Percentages of the Canadian  Letter  of  Credit Facility at
     such  time,  in  the  case  of the Canadian Revolving Credit  Facility
     Lenders, and of the US Letter  of Credit Facility at such time, in the
     case  of  the US Revolving Credit  Facility  Lenders,  a  fee  on  the
     aggregate amount  available  to be drawn on each outstanding Letter of
     Credit issued under such Letter  of Credit Facility at a rate equal to
     the Applicable Margin in effect from  time to time under the Revolving
     Credit Facilities for Eurodollar Rate Loans.   Such fees (i) under the
     US Letter of Credit Facility, shall be determined based on the average
     daily undrawn aggregate amount of all US Letters of Credit outstanding
     during  the  applicable fiscal quarter and shall be  due  and  payable
     quarterly in arrears  on  the  last day of each March, September, June
     and December, the first such payment to be made on the first such date
     occurring after the date of issuance  of  a Letter of Credit, and (ii)
     under the Canadian Letter of Credit Facility,  (A) in the case of each
     commercial or documentary Letter of Credit, shall  be determined based
     on the available daily amount thereof on the basis of  the  number  of
     days  such  Letter of Credit is outstanding and a year of 365 days and
     shall be due  and  payable  when  such  Letter  of  Credit is drawn or
     otherwise  expired  or cancelled and (B) in the case of  each  standby
     Letter of Credit, shall  be  determined  on the available daily amount
     thereof on the basis of the number of days in the term of such standby
     Letter of Credit and a year of 365 days and  shall  be due and payable
     quarterly in advance, with any excess for the actual  available  daily
     amount  thereunder,  if any, being promptly remitted to the applicable
     Facility Borrower.

          (d)  LETTER OF CREDIT  FRONTING  AND  ADMINISTRATIVE  FEES.   The
     Facility Borrowers under a certain Letter of Credit Facility shall pay
     to the Issuing  Bank for such Letter of Credit Facility (i) a fronting
     fee of 0.125% per  annum  on the initial aggregate amount available to
     be drawn on each outstanding Letter of Credit issued under such Letter
     of Credit Facility, such fee  to  be  due  and  payable  in  full with
     respect  to each Letter of Credit on the date of issuance (or renewal)
     thereof, and  (ii)  such administrative fee and other fees, if any, in
     connection with the Letters  of  Credit  in  such  amounts and at such
     times  as  the  applicable  Issuing  Bank and the applicable  Facility
     Borrowers with respect to such Letter  of  Credit Facility shall agree
     from time to time.

          (e) AGENTS' FEES. The Borrowers agrees  to  pay  to  each  of the
     Agents,  for  their  respective individual accounts, an annual Agent's
     fee as from time to time  agreed to by the Borrowers and the Agents in
     writing.

     4.8  PRO RATA PAYMENTS.  Except  as  otherwise  specified  herein, (a)
each payment on account of the principal of and interest on Loans, the fees
described in SECTION 4.7(A), (B) AND (C), and Canadian Swing Line Loans and
Reimbursement  Obligations  as  to  which  the  Lenders  have  funded their
respective  Participations which remain outstanding, shall be made  to  the
Relevant Agent  for the account of the Lenders under each such Facility pro
rata based on their  Applicable Commitment Percentages with respect to each
such Facility, (b) all  payments  to  be made by the Facility Borrowers for
the account of each of the Lenders on account  of  principal,  interest and
fees,   shall   be   made   without   diminution,  set-off,  recoupment  or
counterclaim, and (c) the Relevant Agent  will  promptly  distribute to the
Lenders  under  the  applicable  Facility  in  immediately available  funds
payments received in fully collected, immediately  available funds from the
applicable Facility Borrower.

     4.9  COMPUTATION OF RATES AND FEES.

          (a) CALCULATION - CANADIAN FACILITIES. Except as may be otherwise
     expressly provided, with respect to the Canadian  Facilities  (i)  the
     interest  is  calculated  each day at the rate as provided for herein,
     until but excluding the day  of full payment of the amount on which it
     accrues and in the case of the  Eurodollar  Rate,  it is calculated on
     the number of days comprised in the applicable Interest  Period;  (ii)
     the interest is calculated daily; (iii) the interest is calculated  on
     the  basis  of a 365-day year (except for the Eurodollar Rate which is
     calculated on  a  360-day  basis);  (iv)  in  the determination of the
     interest rate or the calculation of interest, the  interest paid shall
     not be deemed to have been reinvested; (v) the Applicable  Margin  and
     fees  (including  acceptance  fees)  are  calculated  as  interest  is
     calculated.   For  the  purposes  of the INTEREST ACT (Canada), in the
     case of a leap year, the yearly rate  of interest to which the rate of
     interest calculated on a 365-day basis  is  equivalent  shall  be such
     rate  multiplied  by three hundred and sixty-six (366) and divided  by
     three hundred and sixty-five (365).  For the purposes of the same Act,
     the annual rate of  interest  equivalent  to  the  Eurodollar  Rate is
     calculated  by dividing the amount of the interest calculated for  the
     applicable Interest  Period  by  the  amount  of  the  Eurodollar Rate
     Segment, multiplied by a fraction whose numerator is equal to the true
     number  of  days  included  in  the twelve (12) months making  up  the
     applicable year and whose denominator  is  equal to the true number of
     days accumulated during the applicable Interest Period.

          (b)  CALCULATION - US FACILITIES.  Except  as  may  be  otherwise
     expressly provided,  with  respect  to  the US Facilities all interest
     rates (including the Base Rate, each Eurodollar  Rate, and the Default
     Rate) and fees shall be computed on the basis of a  year  of  360 days
     and calculated for actual days elapsed.

     4.10 DEFICIENCY  ADVANCES;  FAILURE  TO  PURCHASE  PARTICIPATIONS.  No
Revolving  Credit  Facility  Lender shall be responsible for any default of
any other Lender under the same  Facility in respect to such other Lender's
obligation  to  make  any  Revolving Credit  Loan  or  Advance  under  such
Revolving Credit Facility or  to  fund  its  purchase  of any Participation
hereunder nor shall the Revolving Credit Commitment, Term  Loan  Commitment
or  Letter of Credit Commitment of any Lender hereunder be increased  as  a
result  of  such  default  of  any  other  Lender.   Without  limiting  the
generality of the foregoing or the provisions of SECTION 4.11, in the event
any  Revolving  Credit  Facility  Lender shall fail to advance funds to the
applicable  Facility  Borrower  as  herein   provided,   including  without
limitation  as  a  result  of  being  in  any  insolvency  or  receivership
proceeding  (a  "Non-Funding  Lender"),  the  Relevant  Agent  may  in  its
discretion,  but  shall  not  be obligated to, advance under the applicable
Note with respect to such Facility  in  its  favor  as  a Lender all or any
portion of such amount or amounts (each, a "deficiency advance")  and shall
thereafter  be  entitled  to payments of principal of and interest on  such
deficiency advance in the same  manner  and  at  the  same interest rate or
rates to which such Non-Funding Lender would have been entitled had it made
such  Advance  under  its Note; provided that, (i) such Non-Funding  Lender
shall not be entitled to  receive  payments  of principal, interest or fees
with  respect  to  such deficiency advance until  such  deficiency  advance
(together with interest  thereon  as provided in clause (ii)) shall be paid
by such Non-Funding Lender and (ii) upon payment to the Relevant Agent from
such  Non-Funding Lender of the entire  outstanding  amount  of  each  such
deficiency advance, together with accrued and unpaid interest thereon, from
the most  recent  date  or dates interest was paid to the Relevant Agent by
the Facility Borrowers under  the  applicable  Revolving Credit Facility on
each  Revolving  Credit  Loan  comprising  the deficiency  advance  at  the
Reference Rate in the case of the Canadian Revolving Credit Facility and at
the  Federal Funds Rate in the case of the US  Revolving  Credit  Facility,
then such  payment  shall  be  credited  against the applicable Note of the
Relevant Agent in full payment of such deficiency advance and such Facility
Borrowers under the applicable Revolving Credit Facility shall be deemed to
have  borrowed  the  amount  of such deficiency  advance  from  such  other
Revolving Credit Facility Lender  as  of  the most recent date or dates, as
the case may be, upon which any payments of  interest  were  made  by  such
Facility  Borrowers  thereon.   In  the event any Revolving Credit Facility
Lender shall fail to fund its purchase of a Participation after notice from
the applicable Issuing Bank or the Canadian  Swing Line Facility Lender, as
applicable, such Revolving Credit Facility Lender shall pay to such Issuing
Bank or Canadian Swing Line Facility Lender, as  applicable, such amount on
demand, together with interest at the Reference Rate  in  the  case  of the
Canadian  Letter of Credit Facility or Canadian Swing Line Facility and  at
the Federal  Funds Rate in the case of the US Letter of Credit Facility, on
the amount so  due  from  the date of such notice to the date such purchase
price is received by the Issuing  Bank  or the Canadian Swing Line Facility
Lender, as applicable.

     4.11 INTRADAY FUNDING.  Without limiting  the  provisions  of  SECTION
4.10, unless the applicable Facility Borrowers or any applicable Lender has
notified  the Relevant Agent not later than 12:00 Noon of the Business  Day
before the  date any payment (including in the case of Lenders any Advance)
to be made by it is due, that it does not intend to remit such payment, the
Relevant Agent  may,  in its discretion, assume that each Facility Borrower
or each Lender, as the case may be, has timely remitted such payment in the
manner required hereunder  and  may,  in  its  discretion  and  in reliance
thereon,  make  available  such payment (or portion thereof) to the  Person
entitled thereto as otherwise  provided herein.  If such payment was not in
fact remitted to the Relevant Agent in the manner required hereunder, then:

          (i) if a Facility Borrower  failed  to  make  such  payment, each
     Lender  under a Facility with respect to which such Facility  Borrower
     so failed  to make such payment shall forthwith on demand repay to the
     Relevant Agent  the  amount  of such assumed payment made available to
     such Lender, together with interest  thereon  in  respect  of each day
     from  and  including  the  date such amount was made available by  the
     Relevant Agent to such Lender to the date such amount is repaid to the
     Relevant Agent at the Federal Funds Rate; and

          (ii) if any Lender failed  to  make  such payment with respect to
     any  Facility, the Relevant Agent shall be entitled  to  recover  such
     corresponding  amount  forthwith  upon  the  Relevant  Agent's  demand
     therefor,  the  Relevant  Agent  promptly  shall notify the applicable
     Facility Borrowers, and each such Facility Borrower shall promptly pay
     such  corresponding  amount  to  the  Relevant  Agent  in  immediately
     available funds upon receipt of such demand.  The  Relevant Agent also
     shall be entitled to recover interest on such corresponding  amount in
     respect  of each day from the date such corresponding amount was  made
     available  by the Relevant Agent to each such Facility Borrower to the
     date such corresponding amount is recovered by the Relevant Agent, (A)
     from any such  Canadian Facilities Lender at a rate per annum equal to
     the daily Reference  Rate  and from any such US Facilities Lender at a
     rate per annum equal to the  daily Federal Funds Rate or (B) from each
     such Facility Borrower, at a rate per annum equal to the interest rate
     applicable to the applicable Loan  which  includes  such corresponding
     amount.   Until  the  Relevant Agent shall recover such  corresponding
     amount together with interest thereon, such corresponding amount shall
     constitute a deficiency  advance  within  the meaning of SECTION 4.10.
     Nothing  herein  shall  be  deemed  to  relieve any  Lender  from  its
     obligation to fulfill its commitments hereunder  or  to  prejudice any
     rights  which any Agent or any Facility Borrower may have against  any
     Lender as a result of any default by such Lender hereunder.

     4.12 RISK  PARTICIPATION  AMONG LENDERS.  (a)  Each Lender agrees that
if it or any of its affiliates shall,  whether  through  the  exercise of a
right of banker's lien, set-off or counterclaim, as proceeds realized  from
Collateral,  as  payments from any Borrower or any Guarantor, or otherwise,
obtain payment with  respect to Obligations owed to it (other than pursuant
to ARTICLE VI) such that its Applicable Outstanding Percentage is less than
its  Applicable  Total Commitment  Percentage,  then  (i)  such  Lender  (a
"Participating Lender")  shall  be  deemed to have simultaneously purchased
from the other Lenders (each a "Selling  Lender")  a  Participation  in the
Outstandings  owing  to  them  such  that,  following  such  purchase, each
Lender's Applicable Outstanding Percentage is equal to its Applicable Total
Commitment Percentage, and (ii) such other adjustments shall be  made  from
time  to  time  as shall be equitable to ensure that the Lenders share such
payments in such a way that each Lender's Applicable Outstanding Percentage
is equal to its Applicable  Total Commitment Percentage; PROVIDED, HOWEVER,
that for purposes of this SECTION  4.12(A), with respect to any Lender that
has not funded its share of the outstanding  Loans  and  Obligations,  such
Lender's  "Commitments"  as  used  in the term "Applicable Total Commitment
Percentage"  shall  be  determined  after  subtracting  all  such  unfunded
amounts. Each Participating Lender shall  pay to the Relevant Agent for the
account  of  the Selling Lenders in Dollars and  in  immediately  available
funds, an amount equal to its Participation (as given notice thereof by the
Relevant Agent  or  an affected Lender) within five (5) Business Days after
receipt of such notice.   Simultaneously  with  the  making  of  each  such
payment,  each  Participating  Lender  shall, automatically and without any
further action on the part of any Lender,  acquire  a  Participation in the
amount  of  such  payment  in  the  Obligations of the applicable  Facility
Borrowers related to the Outstandings  in  which  each  such  Participating
Lender purchases such Participation. The Borrowers expressly consent to the
foregoing  arrangements  and  agree  that  each  Participating  Lender  may
exercise  all rights of payment (including, without limitation, all  rights
of  set-off,   banker's   lien   or  counterclaim)  with  respect  to  such
Participation as fully as if such  Participating  Lender  were  the  direct
holder  of  such portion.  If all or any portion of any such excess payment
is thereafter  recovered  from  the Participating Lender which received the
same, the purchase provided in this  SECTION  4.12(A) shall be rescinded to
the extent of such recovery, without interest.

     (b)  If at any time on or after any date that  is  the  earlier of (i)
the  last  day  of any fiscal quarter during which an Event of Default  has
occurred, so long  as  such  Event  of  Default is continuing, and (ii) the
occurrence of an acceleration of the Obligations  pursuant to SECTION 11.1,
any  Lender's  Applicable  Outstanding  Percentage  is not  equal  to  such
Lender's  Applicable Total Commitment Percentage, then  each  Participating
Lender shall  purchase  Participations  in  the  Outstandings  owing to the
Selling Lenders in an amount by each Participating Lender such that,  after
giving effect to such Participations, the Applicable Outstanding Percentage
for each Lender shall be equal to such Lender's Applicable Total Commitment
Percentage; PROVIDED, HOWEVER, that for purposes of this SECTION 4.12, with
respect  to  any  Lender  that  has not funded its share of the outstanding
Loans and Obligations, such Lender's  "Commitments"  as  used  in  the term
"Applicable   Total   Commitment  Percentage"  shall  be  determined  after
subtracting all such unfunded amounts.  Each Participating Lender shall pay
to the Relevant Agent for the account of the Selling Lenders in Dollars and
in immediately available  funds,  an  amount equal to its Participation (as
given notice thereof by the Relevant Agent)  within  five (5) Business Days
after receipt of such notice.  Simultaneously with the  making of each such
payment,  each  Participating Lender shall, automatically and  without  any
further action on  the  part  of any Lender, acquire a Participation in the
amount  of  such  payment in the Obligations  of  the  applicable  Facility
Borrowers related to  the  Outstandings  in  which  each such Participating
Lender purchases such Participation. The Borrowers expressly consent to the
foregoing  arrangements  and  agree  that  each  Participating  Lender  may
exercise all rights of payment (including, without  limitation,  all rights
of   set-off,   banker's   lien  or  counterclaim)  with  respect  to  such
Participation as fully as if  such  Participating  Lender  were  the direct
holder of such portion. If all or any portion of any such excess payment is
thereafter recovered from the Participating Lender which received the same,
the  purchase  provided  in this SECTION 4.12(B) shall be rescinded to  the
extent of such recovery, without interest.

     4.13.  UTILIZATION OF  CANADIAN  DOLLARS.   (a)  Each  request  for  a
Canadian  Revolving   Credit  Loan  or  Canadian  Letter  of  Credit  shall
constitute the applicable  Facility  Borrower's  request for (i) a Canadian
Revolving Credit Loan or Canadian Letter of Credit,  as the case may be, of
the Dollar Equivalent Amount of the amount of Canadian Dollars specified in
such  Borrowing  Notice  or request for a Letter of Credit  and  (ii)  such
Canadian Revolving Credit  Loan  or  Canadian Letter of Credit, as the case
may  be,  to be made available by the Canadian  Revolving  Credit  Facility
Lenders or  the  Canadian  Issuing  Bank, as the case may be, to or for the
account  of  the  applicable  Facility  Borrower  in  the  Canadian  Dollar
Equivalent Amount of such Dollar Equivalent  Amount.   The principal amount
outstanding  on  any Canadian Revolving Credit Loan or Canadian  Term  Loan
made in Canadian Dollars  shall be recorded in the Canadian Agent's records
in Dollars as if the Canadian  Revolving  Credit Loan or Canadian Term Loan
had initially been made in Dollars, in the Dollar Equivalent Amount of such
Canadian Revolving Credit Loan or Canadian  Term Loan, as reduced from time
to  time  by the Dollar Equivalent Amount of any  principal  payments  with
respect to  such Canadian Revolving Credit Loan or Canadian Term Loan.  The
principal amount  outstanding  on  any  Canadian Letter of Credit issued in
Canadian Dollars shall be recorded in the  Canadian  Issuing Bank's records
in Dollars as if the Canadian Letter of Credit had been  issued  in Dollars
in the Dollar Equivalent Amount of such Canadian Letter of Credit,  as such
amount  may  be  adjusted  as  provided  in the definition of "Advance Date
Exchange  Rate".  For the purposes of determining  the  maximum  amount  of
Canadian Revolving  Credit Outstandings and Canadian Term Loan Outstandings
hereunder, it is intended by the parties that all Canadian Revolving Credit
Loans  and  segments  of  Canadian  Term  Loans  shall  be  the  functional
equivalent of Canadian Revolving Credit Loans and segments of Canadian Term
Loans  made  and  repaid  in   Dollars   and  shall  be  included  in  such
determination based on their Dollar Equivalent  Amount  as  determined from
time  to  time  as  set forth herein.  For the purposes of determining  the
maximum amount of Canadian  Letter  of  Credit  Outstandings  and  Canadian
Revolving   Credit   Outstandings   and  Canadian  Term  Loan  Outstandings
hereunder,  it is intended by the parties  that  all  Canadian  Letters  of
Credit shall  be  the  functional  equivalent of Canadian Letters of Credit
made and repaid in Dollars and shall  be  included  in  such  determination
based on their Dollar Equivalent Amount as determined from time  to time as
set forth herein.  It is recognized that some Canadian Lenders may elect to
record Canadian Revolving Credit Loans and segments of Canadian Term  Loans
in Canadian Term Loan Outstandings in Canadian Dollars.  The Canadian Agent
shall maintain records (which records, with respect to Canadian Letters  of
Credit,  shall be based upon information furnished to the Canadian Agent by
the Canadian  Issuing  Bank)  sufficient  to  identify  at any time (i) the
Advance  Date  Exchange Rate with respect to, and Dollar Equivalent  Amount
of, each Canadian Revolving Credit Loan and segments of Canadian Term Loans
and each Canadian  Letter of Credit issued in Canadian Dollars and (ii) the
portion of Canadian  Revolving  Credit  Outstandings  attributable  to each
Advance.

     (b)  The applicable Facility Borrower may elect to Continue a Canadian
Revolving Credit Loan or any Segment of the Canadian Term Loan (a "Canadian
Dollar  Loan")  pursuant  to  the  terms  of SECTION 4.3 and subject to the
conditions set forth in this SECTION 4.13.   In the event a Canadian Dollar
Loan is Continued, such election to Continue the Canadian Dollar Loan shall
be treated as an Advance and the Canadian Agent shall notify the applicable
Facility Borrower and the Canadian Facilities  Lenders  of  the new Advance
Date Exchange Rate (determined as provided in the definition  thereof), the
Interest Period and the rate for such Continued Canadian Dollar  Loan.  The
Canadian Facilities Lenders shall each be deemed to have made an Advance to
the  Canadian  Borrower  of  its  Applicable  Commitment Percentage of each
Canadian Dollar Loan in Canadian Dollars and the Canadian Agent shall apply
the new Advance Date Exchange Rate for such new  Interest  Period  to  such
Continued  Canadian  Dollars  Equivalent Amount to determine the new Dollar
Equivalent Amount of such Canadian  Dollar  Loan and shall adjust its books
and the Canadian Revolving Credit Outstandings  or  the  Canadian Term Loan
Outstandings,  as  applicable.   In  the  event  that such adjustment  with
respect  to a Continued Canadian Dollar Loan would  cause  (i)  the  Dollar
Equivalent  Amount  of Canadian Revolving Credit Outstandings plus Canadian
Letter of Credit Outstandings plus Canadian Swing Line Loan Outstandings to
exceed the Total Commitment  for the Canadian Revolving Credit Facility, or
(ii) the Dollar Equivalent Amount  of  all Outstandings under the Revolving
Credit Facilities, the Letter of Credit  Facilities  and the Canadian Swing
Line  Facility  to exceed the sum of the Borrowing Base  as  calculated  in
Dollars at such time,  the  applicable Facility Borrower shall, immediately
on  the effective date of such  Continuation,  repay  (a  "Rate  Adjustment
Payment")  the  portion  of  such  Canadian  Dollar  Loan (applying the new
Advance Date Exchange Rate) necessary to ensure that,  giving effect to the
Continuation of such Canadian Dollar Loan, the terms of  SECTION 2.2(B)(II)
and  (III)  are complied with.  If the Canadian Agent does not  receive  an
Interest Rate Selection Notice giving notice of election of the duration of
an Interest Period  or  Continuation  of a Canadian Dollar Loan by the time
prescribed in SECTION 2.2 or 4.3, as applicable,  the  applicable  Facility
Borrower shall be deemed to have elected to repay such Canadian Dollar Loan
and  if  such  Canadian  Dollar  Loan  is not repaid on the last day of the
applicable Interest Period, together with  accrued  interest  thereon, such
Canadian Dollar Loan shall be converted to a Base Rate Loan in  the  Dollar
Equivalent  Amount  of  such Canadian Dollar Loan.  The applicable Facility
Borrower shall not be entitled  to  elect  to  Continue any Canadian Dollar
Loan  if  a  Default  or  Event  of  Default  shall have  occurred  and  be
continuing.

     (c)  In  the  event  a Canadian Letter of Credit  issued  in  Canadian
Dollars is for a term exceeding  three  (3)  months,  the Dollar Equivalent
Amount of the corresponding Canadian Letter of Credit Outstandings shall be
recalculated  as  of  the  last  Business  Day  of each fiscal  quarter  of
Consoltex  Holdings  and  the  Canadian Agent shall notify  the  applicable
Facility Borrower, the US Agent  and the Canadian Facilities Lenders of the
new Advance Date Exchange Rate (determined  as  provided  in the definition
thereof)  for  such  Canadian Letter of Credit.  The Canadian  Agent  shall
apply the new Advance  Date  Exchange  Rate  to  determine  the  new Dollar
Equivalent  Amount  of such Canadian Letter of Credit and shall adjust  its
books and the Canadian  Letter  of  Credit Outstandings.  In the event that
such adjustment with respect to a Letter  of  Credit  causes (w) the Dollar
Equivalent  Amount  of  Participations  by  any  Canadian Revolving  Credit
Facility Lender in Canadian Letters of Credit and Reimbursement Obligations
with  respect  to  Canadian  Letter  of Credit Commitment  to  exceed  such
Lender's Canadian Letter of Credit Commitment,  (x)  the  Dollar Equivalent
Amount  of  Canadian  Letter  of  Credit Outstandings to exceed  the  Total
Canadian Letter of Credit Commitment,  (y)  the Dollar Equivalent Amount of
Canadian  Revolving  Credit  Outstandings plus Canadian  Letter  of  Credit
Outstandings plus Canadian Swing Line Loan Outstandings to exceed the Total
Commitment for the Canadian Revolving  Credit  Facility,  or (z) the Dollar
Equivalent   Amount   of   all  Outstandings  under  the  Revolving  Credit
Facilities, the Letter of Credit  Facilities  and  the  Canadian Swing Line
Facility to exceed the sum of the Borrowing Base as calculated  in  Dollars
at such time, the applicable Facility Borrower shall immediately make  such
payments and prepayments of Canadian Dollar Loans as shall be necessary  to
comply  with  the  terms of SECTION 2.2(B)(II) and (III) and also to ensure
that  the  Dollar Equivalent  Amount  of  Participations  by  any  Canadian
Revolving  Credit  Facility  Lender  in  Canadian  Letters  of  Credit  and
Reimbursement  Obligation  with  respect to Canadian Letters of Credit does
not exceed such Lender's Canadian  Letter of Credit Commitment and that the
Dollar Equivalent Amount of Canadian Letter of Credit Outstandings does not
exceed the Total Canadian Letter of Credit Commitment.

     (d)  The Dollar Equivalent Amount  of  all  Base  Rate Loans under the
Canadian  Revolving  Credit  Facility and the Canadian Term  Loan  Facility
("Canadian Base Rate Loans") shall  be recalculated as of the last Business
Day of each fiscal quarter of Consoltex  Holdings  and  the  Canadian Agent
shall  notify  the  applicable  Facility  Borrower,  the  US Agent and  the
Canadian  Facilities  Lenders  of  the  new  Advance  Date  Exchange   Rate
(determined  as  provided in the definition thereof) for such Canadian Base
Rate Loans.  The Canadian  Agent  shall apply the new Advance Date Exchange
Rate to determine the new Dollar Equivalent  Amount  of  such Canadian Base
Rate  Loans  and  shall adjust its books and the Canadian Revolving  Credit
Outstandings and the  Canadian  Term  Loan Outstandings, as applicable.  In
the event that such adjustment with respect to the Canadian Base Rate Loans
causes  (i)  the  Dollar Equivalent Amount  of  Canadian  Revolving  Credit
Outstandings plus Canadian  Letter  of  Credit  Outstandings  plus Canadian
Swing  Line  Loan  Outstandings  to  exceed  the  Total Commitment for  the
Canadian Revolving Credit Facility, or (ii) the Dollar Equivalent Amount of
all  Outstandings  under  the Revolving Credit Facilities,  the  Letter  of
Credit Facilities and the Canadian Swing Line Facility to exceed the sum of
Borrowing Base as calculated  in  Dollars  at  such  time,  the  applicable
Facility  Borrower shall immediately make such payments and prepayments  of
Canadian Base  Rate Loans as shall be necessary to comply with the terms of
SECTION 2.2(B)(II) and (III).

<PAGE>




                                 ARTICLE V

                                 Security

     5.1  SECURITY.   As  security  for  the  full  and  timely payment and
performance of all Obligations, the following Facility Borrowers  shall, on
or before the Closing Date, do or cause to be done all things necessary  in
the opinion of the Agents and the Lenders and counsel to the Agents and the
Lenders  to  grant  to  the  Relevant Agent, the US Collateral Agent or the
Canadian Collateral Trustee, as  applicable,  for the benefit of the Agents
and  the  Lenders,  the  following duly perfected first  priority  security
interests and hypothecs, subject  to  no  prior  Lien  other than Statutory
Permitted Liens and Liens permitted pursuant to SECTION  10.4(G)  or  other
encumbrance or restriction on transfer:

          (a) a collateral security interest and, with respect to
     Collateral located in Canada, a security interest, mortgage and
     hypothec, or a security interest under Section 427 of the Bank Act, by
     each of the Facility Borrowers and Guarantors (other than Consoltex
     Mexico and each of the Mexican Companies) in all Collateral as
     described in the Security Instruments;

          (b) pledge of the bonds issued by Consoltex and secured by the
     Collateral of Consoltex;

          (c) cross corporate guarantees of the Obligations of each of the
     Facility Borrowers and of each Guarantor by each of the Guarantors
     (Consoltex Mexico and the Mexican Companies to guarantee only the
     Obligations of Consoltex Mexico, Consoltex, and the Mexican
     Companies); and

          (d) assignment, pledge and hypothec of 100% of the issued and
     outstanding shares of each of the Guarantors (sixty-five percent (65%)
     in the case of the voting shares of Consoltex Mexico and, so long as
     it is a Direct Foreign Subsidiary, Marino Mexico), with the exception
     of the shares issued by Consoltex Holdings;

in  each  case in accordance with the terms, and to the extent required in,
the applicable  Security  Instruments,  and  do all things necessary in the
reasonable  opinion of the Agents and their counsel  to  grant  to  the  US
Collateral Agent and the Canadian Collateral Trustee for the benefit of the
Agents and the Lenders a duly perfected first priority security interest in
all Collateral  subject  to  no  prior  Lien other than Statutory Permitted
Liens and Liens permitted pursuant to SECTION 10.4(G).

     Without  limiting the foregoing, each  Borrower  and  each  Subsidiary
having rights in  any  Subsidiary  Securities  to  be  pledged  pursuant to
SECTION  5.1(D)  shall,  to  the  extent  not previously delivered, on  the
Closing  Date  deliver  to  the Agents, in form  and  substance  reasonably
acceptable to the Agents, (A) a Pledge Agreement which shall  pledge to the
Relevant Agent for the benefit of the Agents and the Lenders the Subsidiary
Securities owned by such Borrower  or  Subsidiary  and described in SECTION
5.1(D),  and  any  supplements  or  amendments  to  any  Pledge   Agreement
previously delivered to the extent necessary to effectuate the purposes  of
this  ARTICLE V, such earlier delivered Pledge Agreement, or the other Loan
Documents,   (B)   if  such  Subsidiary  Securities  are  in  the  form  of
certificated  securities,   such  certificated  securities,  together  with
undated stock powers or other  appropriate  transfer  documents endorsed in
blank  pertaining  thereto,  (C)  if  such  Subsidiary  Securities  do  not
constitute  securities  and  the Subsidiary has not elected  to  have  such
interests treated as securities  under  Article 8 of the Uniform Commercial
Code, a Control Agreement from the Registrar  of such Subsidiary Securities
and (D) Uniform Commercial Code financing statements reflecting the Lien in
favor of the Agents, the US Collateral Agent and  the  Canadian  Collateral
Trustee, or any of them as applicable, on such Subsidiary Securities,  each
in form and substance acceptable to the Agents, and shall take such further
action  and  deliver  or  cause  to  be delivered such further documents as
required by the Security Instruments or otherwise as the Agents may request
to effect the transactions contemplated by this ARTICLE V.  Notwithstanding
anything to the contrary herein, no Borrower, Guarantor or Subsidiary shall
issue Subsidiary Securities that are not certificated.

     5.2  FURTHER  ASSURANCES.  At the  request  of  either  Agent  or  any
Lender, the Borrowers  will  or  will cause their Subsidiaries, as the case
may be, to execute, by their respective  duly authorized officers, alone or
with  either  Agent, the US Collateral Agent  or  the  Canadian  Collateral
Trustee, as applicable,  any  certificate, instrument, financing statement,
control  agreement,  statement  or   document,   or  to  procure  any  such
certificate,  instrument,  statement or document, or  to  take  such  other
action (and pay all connected  costs)  which  either  Agent  or  any Lender
reasonably  deems  necessary  from  time  to  time  to  create, continue or
preserve  the  Liens  and  security  interests in the Collateral  (and  the
perfection and priority thereof) of the  US  Agent, the Canadian Agent, the
US Collateral Agent and the Canadian Collateral Trustee contemplated hereby
and  by  the  other  Loan  Documents  and specifically  including  (a)  all
Collateral acquired by any Borrower or  any  Guarantor  after  the  Closing
Date, (b) with respect to any Collateral located in Canada, any increase in
the amount of the bonds and all security instruments securing repayment  of
the  bonds  at  any time the value of a Canadian Dollar is less than $0.60,
and (c) with respect  to  any  deposit  accounts  held  with  any financial
institution domiciled in Mexico, such action as may be reasonably necessary
to perfect a security interest in or control over any such deposit accounts
by  one  of  the Agents, the US Collateral Agent or the Canadian Collateral
Trustee.  Each  Agent  is hereby irrevocably authorized to execute and file
or cause to be filed, with  or  if  permitted by applicable law without the
signature of a Borrower or any Guarantor  appearing  thereon,  all  Uniform
Commercial  Code  financing  statements  reflecting  such  Borrower  or any
Guarantor  as  "debtor"  and  the  US  Agent,  the  Canadian  Agent, the US
Collateral  Agent  or  the  Canadian Collateral Trustee, as applicable,  as
"secured  party", and continuations  thereof  and  amendments  thereto,  as
either Agent  reasonably deems necessary or advisable to give effect to the
transactions contemplated hereby and by the other Loan Documents.

     5.3  INFORMATION   REGARDING  COLLATERAL.  Each  Borrower  represents,
warrants and covenants that (i) the chief executive office of such Borrower
and each of its Subsidiaries  providing  Collateral  pursuant to a Security
Instrument (each, a "Grantor") prior to or at the Closing  Date  is located
at  the  address  or addresses specified on SCHEDULE 5.3, and (ii) SCHEDULE
5.3 contains a true and correct copy of Schedule 6.3 of the Existing Credit
Agreement, as delivered on the Existing Credit Agreement Closing Date along
with a true and complete  list of (a) the exact legal name, jurisdiction of
formation, and address of each  Grantor  and  of each other Person that has
effected  any  merger  or consolidation with a Grantor  or  contributed  or
transferred to a Grantor  any  property constituting Collateral at any time
since the Existing Credit Agreement  Closing Date (excluding Persons making
sales in the ordinary course of their  businesses  to a Grantor of property
constituting inventory in the hands of such seller),  (b)  each location of
the chief executive office of each Grantor at any time since  the  Existing
Credit  Agreement  Closing  Date,  (c)  each location at which any property
constituting Collateral is or has been located  since  the  Existing Credit
Agreement Closing Date (together with the name of each owner  of  the  real
property  located  at  such  address  if  not  the applicable Grantor and a
summary description of the relationship between  the applicable Grantor and
such Person), and (d) each trade name, trademark or  other trade style used
by  any Grantor since the Existing Credit Agreement Closing  Date  and  the
purposes  for  which  it  was used.  No Borrower shall change or permit any
other Grantor to change its  name,  jurisdiction  of  formation (whether by
reincorporation, merger or otherwise), the location of  its chief executive
office or any location specified in clause (c) of the immediately preceding
sentence, or use or permit any other Grantor to use, any  additional  trade
name,  trademark  or  other  trade  style, except upon giving not less than
thirty (30) days' prior written notice  to each Agent and taking or causing
to  be taken all such action at such Borrower's  or  such  other  Grantor's
expense  as  may be reasonably requested by either Agent, the US Collateral
Agent  or the Canadian  Collateral  Trustee  to  perfect  or  maintain  the
perfection  of the Lien of the US Agent or the Canadian Collateral Trustee,
as applicable, in the applicable Collateral.

     5.4  LOCK  BOXES  AND LOCK BOX ACCOUNTS.  As security for the full and
timely payment and performance of all Obligations now existing or hereafter
arising, each US Borrower and each Canadian Borrower shall, and shall cause
each Guarantor (other than  Consoltex  Mexico and each Mexican Company) to,
by the time provided in SECTION 7.3(A),  deliver  to  the  US Agent, the US
Collateral Agent, the Canadian Agent or the Canadian Collateral Trustee, as
applicable,  in form and substance reasonably acceptable to the  Agents,  a
Cash Collateral Agreement and a Lock Box Agreement to establish one or more
Lock Boxes and  one  or  more  Lock  Box Accounts and by such date (or such
earlier date as any Lock Box shall be  established) shall have directed all
account debtors, including licensees, to  make  all payments exclusively to
the applicable Lock Box of such US Borrower or Canadian Borrower.  SCHEDULE
5.4, containing a true and correct list of each Lock  Box and each Lock Box
Account, shall be delivered by the Borrowers pursuant to  and  at  the time
provided therefor in SECTION 7.3(A).

     5.5  DEPOSIT  ACCOUNTS.  No Borrower maintains any deposit account  of
any nature with any  financial  institution except as set forth in SCHEDULE
5.4 or 5.5, PROVIDED that each deposit account of each Borrower must either
(i) be subject to a Cash Collateral  Agreement delivered in accordance with
and at the time provided for in SECTION  7.3(A)  (or at any time thereafter
in accordance with SECTION 9.20) by the relevant financial  institution  to
the  Relevant  Agent,  the  US  Collateral Agent or the Canadian Collateral
Trustee, as applicable, (ii) be subject  to  a  Deposit  Account  Agreement
delivered in accordance with and at the time provided for in SECTION 7.3(A)
(or  at  any time thereafter with respect to SECTION 10.26) by the relevant
financial institution to the Relevant Agent, the US Collateral Agent or the
Canadian Collateral  Trustee,  as  applicable,  or  (iii)  be an account of
Consoltex  Mexico  or  Rafytek  with  a financial institution domiciled  in
Mexico.   SCHEDULE 5.5 contains a true and  correct  list  of  all  deposit
accounts of  the  Borrowers  as  of  the  Closing  Date,  as updated (x) in
accordance  SECTION  7.3(A)(II),  and (y) at any time thereafter,  PROVIDED
that any additional deposit accounts  described in any updated SCHEDULE 5.5
shall be the subject of a Cash Collateral  Agreement  or  a Deposit Account
Agreement as provided in SECTION 9.20 or 10.26, respectively.

     5.6  POWER  OF  ATTORNEY  OF  CANADIAN  AGENT AND CANADIAN  COLLATERAL
TRUSTEE.  For greater certainty, and without limiting  the  powers  of  the
Canadian  Agent  and  the  Canadian  Collateral  Trustee under the Security
Instruments,  each  of the Lenders hereby acknowledges  that  the  Canadian
Collateral Trustee shall,  for the purposes of holding any security granted
under the hypothecs described  in  SECTION  5.1(A) to secure payment of the
bonds described in SECTION 5.1(B), be the holder of an irrevocable power of
attorney (fonde de pouvoir) (within the meaning  of  Article 2692 of the
Civil Code of Quebec) for all present and future Lenders  and in particular
for  all  present  and future holders of such bonds.  Each of  the  Lenders
hereby constitutes,  to  the  extent  necessary,  the  Canadian  Collateral
Trustee  as  the holder of such irrevocable power of attorney (fonde  de
pouvoir) in order  to  hold security granted under such hypothecs to secure
such bonds.  Each assignee  of  a  Lender shall be deemed to have confirmed
and ratified the constitution of the  Canadian  Collateral  Trustee  as the
holder  of  such  irrevocable  power  of  attorney (fonde de pouvoir) by
execution  of the relevant Assignment and Acceptance.  Notwithstanding  the
provisions of  Section 32 of the Act respecting the Special Powers of Legal
Persons (Quebec),  the  Canadian  Collateral Trustee may acquire and be the
holder of a bond. By executing a bond,  the  issuer  of  the  bond shall be
deemed   to  have  acknowledged  that  the  bond  constitutes  a  title  of
indebtedness,  as  such  term  is used in Article 2692 of the Civil Code of
Quebec.

     5.7  MEXICAN COLLATERAL.

     (a)  At any time after the Closing Date, any Lender, by written notice
to each of the Agents and to the  Borrowers  pursuant  to SECTION 13.2, may
require  that  Consoltex  Mexico  and  the  Mexican Companies  (other  than
Rafytica), or any of them, as security for the  full and timely payment and
performance  of  all  Obligations  of  Consoltex  Mexico  and  the  Mexican
Companies (other than Rafytica), as applicable, do  or cause to be done all
things necessary in the opinion of the Agents and the  Lenders  and counsel
to  the  Agents  and  the  Lenders  to grant to the Relevant Agent, the  US
Collateral Agent or the Canadian Collateral Trustee, as applicable, for the
benefit  of  the  Agents and the Lenders,  duly  perfected  first  priority
security interests, subject to no prior Lien other than Statutory Permitted
Liens and Liens permitted  pursuant  to  SECTION  10.4(G),  and to no other
encumbrance or restriction on transfer, in all or a portion of  its assets,
as directed by such Lender.

     (b)  In the event that notice is given pursuant to SECTION 5.7(A), the
Required Lenders shall promptly determine, and shall give prompt  notice to
the  Borrowers  and  the  Lenders,  of  the  method of taking such security
interest  in  such  assets of Consoltex Mexico and  the  Mexican  Companies
(other than Rafytica).

     (c)  Within sixty  (60)  days  after  receiving the notice required by
SECTION 5.7(A), the Borrowers will, and will  cause  their Subsidiaries, as
the case may be, in compliance with SECTION 5.2 and otherwise,  to execute,
by  their respective duly authorized officers, alone or with either  Agent,
the US  Collateral Agent or the Canadian Collateral Trustee, as applicable,
any certificate, instrument, financing statement, control agreement, pledge
agreement,  mortgage,  statement  or  document,  or  to  procure  any  such
certificate, instrument, agreement, mortgage, statement or document, or  to
take  such other action (and pay all connected costs) which either Agent or
any Lender  reasonably  deems  necessary  to  create the Liens and security
interests contemplated by this SECTION 5.7 and by the other Loan Documents.



<PAGE>




                                ARTICLE VI

                          Change in Circumstances

     6.1  INCREASED COST AND REDUCED RETURN.

          (a)  If, after the date hereof, the adoption  of  any  applicable
     law, rule,  or  regulation, or any change in any applicable law, rule,
     or regulation, or  any  change in the interpretation or administration
     thereof by any governmental  authority,  central  bank,  or comparable
     agency  charged with the interpretation or administration thereof,  or
     compliance  by  any Lender (or its Applicable Lending Office) with any
     request or directive  (whether  or not having the force of law) of any
     such governmental authority, central bank, or comparable agency:

                    (i)  shall  subject  such  Lender  (or  its  Applicable
          Lending Office) to any tax, duty, or other charge with respect to
          any  Eurodollar  Rate  Loans,   any   Advance  under  a  Bankers'
          Acceptance  Segment,  its  Note,  or  its  obligation   to   make
          Eurodollar  Rate  Loans  or  Advances under a Bankers' Acceptance
          Segment, or change the basis of  taxation  of any amounts payable
          to  such  Lender  (or its Applicable Lending Office)  under  this
          Agreement or its Note  in  respect  of  any Eurodollar Rate Loans
          (other  than  taxes imposed on the overall  net  income  of  such
          Lender by the jurisdiction in which such Lender has its principal
          office or such Applicable Lending Office);

                    (ii)  shall  impose,  modify,  or  deem  applicable any
          reserve, special deposit, assessment, compulsory loan, or similar
          requirement (other than the Reserve Requirement utilized  in  the
          determination  of the Eurodollar Rate) relating to any extensions
          of credit or other  assets  of,  or  any  deposits  with or other
          liabilities  or  commitments  of,  such Lender (or its Applicable
          Lending Office), including the Canadian  Term  Loan Commitment or
          the  US Term Loan Commitment or Revolving Credit  Commitment,  as
          applicable, of such Lender hereunder; or

                    (iii)  shall  impose  on such Lender (or its Applicable
          Lending  Office)  or on the London  interbank  market  any  other
          condition affecting  this  Agreement  or  its Note or any of such
          extensions of credit or liabilities or commitments;

     and the result of any of the foregoing is to increase the cost to such
     Lender (or its Applicable Lending Office) of making,  Converting into,
     Continuing, or maintaining any Loans or to reduce any sum  received or
     receivable  by  such  Lender (or its Applicable Lending Office)  under
     this Agreement or its Note  with respect to any Eurodollar Rate Loans,
     then the applicable Facility  Borrowers  shall  pay  to such Lender on
     demand such amount or amounts as will compensate such  Lender for such
     increased  cost or reduction.  If any Lender requests compensation  by
     any  Facility  Borrower  under  this  SECTION  6.1(A),  such  Facility
     Borrower  may,  by  notice to such Lender (with a copy to the Agents),
     suspend the obligation of such Lender to make or Continue Loans of the
     Type with respect to  which  such  compensation  is  requested,  or to
     Convert  Loans  of  any  other Type into Loans of such Type, until the
     event or condition giving  rise to such request ceases to be in effect
     (in which case the provisions  of  SECTION  6.4  shall be applicable);
     provided  that  such  suspension shall not affect the  right  of  such
     Lender to receive the compensation so requested.

          (b) If, after the  date  hereof, any Lender shall have determined
     that the adoption of any applicable law, rule, or regulation regarding
     capital adequacy or any change  therein  or  in  the interpretation or
     administration thereof by any governmental authority, central bank, or
     comparable  agency charged with the interpretation  or  administration
     thereof,  or any  request  or  directive  regarding  capital  adequacy
     (whether or  not  having  the  force  of law) of any such governmental
     authority, central bank, or comparable  agency,  has or would have the
     effect of reducing the rate of return on the capital of such Lender or
     any  corporation  controlling  such  Lender as a consequence  of  such
     Lender's obligations hereunder to a level below that which such Lender
     or such corporation could have achieved but for such adoption, change,
     request,  or directive (taking into consideration  its  policies  with
     respect to  capital  adequacy), then from time to time upon demand the
     applicable Facility Borrowers shall pay to such Lender such additional
     amount or amounts as will compensate such Lender for such reduction.

          (c) Each Lender shall  promptly  notify  the  Borrowers  and  the
     Agents  of  any  event  of which it has knowledge, occurring after the
     date hereof, which will entitle  such  Lender to compensation pursuant
     to this SECTION 6.1 and will designate a  different Applicable Lending
     Office  if such designation will avoid the need  for,  or  reduce  the
     amount of,  such compensation and will not, in the reasonable judgment
     of such Lender,  be  otherwise  disadvantageous  to  it.   Any  Lender
     claiming  compensation  under  this  SECTION  6.1 shall furnish to the
     applicable Facility Borrowers and the Agents a statement setting forth
     the  additional  amount or amounts to be paid to  it  hereunder  which
     shall be conclusive  in the absence of manifest error.  In determining
     such  amount,  such  Lender  may  use  any  reasonable  averaging  and
     attribution methods.

          (d) The provisions  of  this SECTION 6.1 shall continue in effect
     notwithstanding the Facility Termination Date; PROVIDED, HOWEVER, that
     any demand for compensation shall  be  made  by  the applicable Lender
     within  sixty (60) days after the date on which the  officer  of  such
     Lender who  has  responsibility  for  compliance  with the obligations
     under  this  Agreement  knows or has reason to know of  such  Lender's
     right to any compensation  under  this  SECTION  6.1  or,  if any such
     Lender fails to deliver such demand within such sixty-day period, such
     Lender  shall  only  be  entitled to compensation for any compensation
     otherwise owing under this SECTION 6.1 from and after the date that is
     sixty days prior to the date such Lender delivers such demand.

     6.2  LIMITATION ON TYPES OF LOANS.  If on or prior to the first day of
any Interest Period for any Eurodollar Rate Loan or any Bankers' Acceptance
Segment  the  Relevant  Agent  determines  (which  determination  shall  be
conclusive) that:

         (a)  by reason of circumstances  affecting  the  relevant  market,
     adequate and  reasonable  means  do  not  exist  for  ascertaining the
     Eurodollar Rate for such Interest Period; or

         (b) the Eurodollar Rate will not adequately and fairly reflect the
     cost to the Lenders of funding Eurodollar Rate Loans for such Interest
     Period; or

          (c)  no market exists for Bankers' Acceptances;

     then the Relevant Agent shall give the other Agent and  the  Borrowers
     prompt  notice  thereof specifying the relevant Type of Loans and  the
     relevant amounts  or periods, and so long as such condition remains in
     effect, the Lenders  shall  be  under no obligation to make additional
     Loans of such Type, Continue Loans  of  such Type, or to Convert Loans
     of any other Type into Loans of such Type  and the applicable Facility
     Borrowers  shall,  on  the  last day(s) of the then  current  Interest
     Period(s) for the outstanding  Loans  of  the  affected  Type,  either
     prepay  such Loans or Convert such Loans into another Type of Loan  in
     accordance with the terms of this Agreement.

     6.3  ILLEGALITY.    Notwithstanding   any   other  provision  of  this
Agreement,  in  the  event that it becomes unlawful   or  contrary  to  any
directive or guideline  for  any Lender or its Applicable Lending Office to
make,  maintain,  or fund Eurodollar  Rate  Loans  or  Advances  under  any
Bankers' Acceptance  Segment  hereunder,  then  such  Lender shall promptly
notify  the  Borrowers  thereof  and such Lender's obligation  to  make  or
Continue Eurodollar Rate Loans or  Advances  under  any Bankers' Acceptance
Segment and to Convert other Types of Loans into Eurodollar  Rate  Loans or
Advances  under  any  Bankers'  Acceptance Segment shall be suspended until
such time as such Lender may again make, maintain, and fund Eurodollar Rate
Loans or Advances under any Bankers'  Acceptance Segment (in which case the
provisions of SECTION 6.4 shall be applicable).

     6.4  TREATMENT OF AFFECTED LOANS.   If the obligation of any Lender to
make  a  Eurodollar  Rate Loan or Advances under  any  Bankers'  Acceptance
Segment or to Continue,  or  to Convert Loans of any other Type into, Loans
of a particular Type shall be  suspended  pursuant  to  SECTION  6.1 or 6.3
hereof  (Loans  of such Type being herein called "Affected Loans" and  such
Type being herein called the "Affected Type"), such Lender's Affected Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of
the then current  Interest Period(s) for Affected Loans (or, in the case of
a Conversion required  by  SECTION 6.3 hereof, on such earlier date as such
Lender may specify to the Borrowers  with a copy to the Agents) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in SECTION 6.1 or 6.3 hereof that gave rise to such Conversion no
longer exist:

          (a) to the extent that such  Lender's Affected Loans have been so
     Converted,  all  payments  and prepayments  of  principal  that  would
     otherwise be applied to such  Lender's Affected Loans shall be applied
     instead to its Base Rate Loans; and

          (b) all Loans that would otherwise  be  made or Continued by such
     Lender  as  Loans  of  the Affected Type shall be  made  or  Continued
     instead as Base Rate Loans,  and  all  Loans of such Lender that would
     otherwise  be  Converted  into Loans of the  Affected  Type  shall  be
     Converted instead into (or shall remain as) Base Rate Loans.

     If such Lender gives notice  to  the  Borrowers  (with  a  copy to the
     Agents) that the circumstances specified in SECTION 6.1 or 6.3  hereof
     that  gave  rise  to  the  Conversion  of such Lender's Affected Loans
     pursuant to this SECTION 6.4 no longer exist (which such Lender agrees
     to do promptly upon such circumstances ceasing  to  exist)  at  a time
     when Loans of the Affected Type made by other Lenders are outstanding,
     such Lender's Base Rate Loans shall be automatically Converted, on the
     first  day(s)  of  the  next  succeeding  Interest  Period(s) for such
     outstanding  Loans  of the Affected Type, to the extent  necessary  so
     that, after giving effect  thereto,  all  Loans  held  by  the Lenders
     holding  Loans  of  the Affected Type and by such Lender are held  pro
     rata  (as  to principal  amounts,  Types,  and  Interest  Periods)  in
     accordance with  their  respective Term Loan Commitments and Revolving
     Credit Commitments.

     6.5  COMPENSATION.  Upon  the  request  of  any Lender, the applicable
Facility Borrowers shall pay to such Lender such amount or amounts as shall
be sufficient (in the reasonable opinion of such Lender)  to  compensate it
for  any  loss,  cost,  or  expense (including loss of anticipated profits)
incurred by it as a result of:

          (i)  any  payment  of  face  amount  in  respect  of  a  Banker's
     Acceptance or Bankers' Acceptance  Segment  on  a  date other than the
     last  day  of  the  period  of  such  Bankers' Acceptance or  Bankers'
     Acceptance Segment, or any payment, prepayment,  or  Conversion  of  a
     Eurodollar  Rate  Loan  for any reason (including, without limitation,
     the  acceleration  of  the  Loans   pursuant   to  SECTION  11.1,  any
     prepayments  pursuant  to  ARTICLE II and any repayments  pursuant  to
     SECTION 4.13), or the assignment,  purchase  and reallocation of Loans
     pursuant to SECTION 1.1, on a date other than  the  last  day  of  the
     Interest  Period for such Loan or period for such Bankers' Acceptance;
     or

          (ii) any  failure  by  such  Facility  Borrowers (for any reason,
     including the failure of any condition precedent  specified in ARTICLE
     VII  to be satisfied, other than the failure of such  Lender to make a
     Loan notwithstanding satisfaction of all conditions precedent thereto)
     to borrow, Convert, Continue, or prepay a Eurodollar Rate  Loan on the
     date  for  such  borrowing,  Conversion,  Continuation,  or prepayment
     specified   in   the   relevant   notice   of  borrowing,  prepayment,
     Continuation, or Conversion under this Agreement.

          The  provisions  of  this SECTION 6.5 shall  continue  in  effect
     notwithstanding the Facility Termination Date.

     6.6  TAXES.

          (a) Any and all payments  by  each Borrower to or for the account
     of  any  Lender or either Agent hereunder  or  under  any  other  Loan
     Document shall be made free and clear of and without deduction for any
     and all present  or future taxes, duties, levies, imposts, deductions,
     charges or withholdings,  and  all  liabilities  with respect thereto,
     excluding, in the case of each Lender and each Agent, taxes imposed on
     its  income,  and franchise taxes imposed on it, by  the  jurisdiction
     under the laws of which such Lender (or its Applicable Lending Office)
     or such Agent (as  the  case  may  be)  is  organized or any political
     subdivision  thereof  (all  such non-excluded taxes,  duties,  levies,
     imposts,  deductions, charges,  withholdings,  and  liabilities  being
     hereinafter  referred  to  as  "Taxes").   If  any  Borrower  shall be
     required  by  law  to  deduct  any Taxes from or in respect of any sum
     payable under this Agreement or  any other Loan Document to any Lender
     or either Agent, (i) the sum payable  shall  be increased as necessary
     so  that  after  making all required deductions (including  deductions
     applicable to additional  sums  payable  under  this SECTION 6.6) such
     Lender or such Agent receives an amount equal to the sum it would have
     received  had no such deductions been made, (ii) such  Borrower  shall
     make such deductions,  (iii)  such  Borrower shall pay the full amount
     deducted  to the relevant taxation authority  or  other  authority  in
     accordance  with  applicable law, and (iv) such Borrower shall furnish
     to the Agents, at their  respective  address  referred  to  in SECTION
     13.2, the original or a certified copy of a receipt evidencing payment
     thereof.

          (b) In addition, each Borrower agrees to pay any and all  present
     or  future stamp or documentary taxes and any other excise or property
     taxes  or  charges or similar levies which arise from any payment made
     under this Agreement  or any other Loan Document or from the execution
     or delivery of, or otherwise  with  respect  to, this Agreement or any
     other Loan Document (hereinafter referred to as "Other Taxes").

          (c) Each Borrower jointly and severally agrees  to indemnify each
     Lender  and  each Agent for the full amount of Taxes and  Other  Taxes
     (including, without  limitation,  any  Taxes or Other Taxes imposed or
     asserted by any jurisdiction on amounts  payable  under  this  SECTION
     6.6)  paid  by such Lender or such Agent (as the case may be) and  any
     liability  (including   penalties,  interest,  and  expenses)  arising
     therefrom or with respect thereto.

          (d) With respect only  to  the  US Facilities, each US Facilities
     Lender organized under the laws of a jurisdiction  outside  the United
     States, on or prior to the date of its execution and delivery  of this
     Agreement  in  the  case  of each Lender listed on the signature pages
     hereof and on or prior to the date on which it becomes a Lender in the
     case  of each other Lender,  and  from  time  to  time  thereafter  if
     requested in writing by any Borrower or the US Agent (but only so long
     as such  Lender  remains  lawfully  able  to do so), shall provide the
     Borrowers and the US Agent with (i) Internal Revenue Service Form 1001
     or  4224,  as  appropriate, or any successor form  prescribed  by  the
     Internal Revenue  Service,  certifying that such Lender is entitled to
     benefits under an income tax  treaty  to  which the United States is a
     party  which  reduces  the  rate of withholding  tax  on  payments  of
     interest or certifying that the  income  receivable  pursuant  to this
     Agreement  is  effectively  connected  with  the conduct of a trade or
     business in the United States, (ii) Internal Revenue  Service Form W-8
     (including  Form  W-8BEN  or  W-8EC1) or W-9, as appropriate,  or  any
     successor form prescribed by the  Internal  Revenue Service, and (iii)
     any  other  form  or  certificate  required  by any  taxing  authority
     (including any certificate required by Sections  871(h)  and 881(c) of
     the Internal Revenue Code), certifying that such Lender is entitled to
     an  exemption  from  or a reduced rate of tax on payments pursuant  to
     this Agreement or any of the other Loan Documents.

          (e) For any period  with  respect to which a Lender has failed to
     provide  the Borrowers and the US  Agent  with  the  appropriate  form
     pursuant to  SECTION 6.6(D) (unless such failure is due to a change in
     treaty, law, or regulation occurring subsequent to the date on which a
     form originally was required to be provided), such Lender shall not be
     entitled  to indemnification  under  SECTION  6.6(A)  or  6.6(B)  with
     respect to Taxes imposed by the United States; provided, however, that
     should a Lender,  which  is  otherwise  exempt  from  or  subject to a
     reduced  rate  of withholding tax, become subject to Taxes because  of
     its failure to deliver  a form required hereunder, the Borrowers shall
     take such steps as such Lender shall reasonably request to assist such
     Lender to recover such Taxes.

          (f) If the Borrower  is  required to pay additional amounts to or
     for the account of any Lender pursuant  to this SECTION 6.6, then such
     Lender will agree to use reasonable efforts to change the jurisdiction
     of its Applicable Lending Office so as to eliminate or reduce any such
     additional payment which may thereafter accrue  if such change, in the
     reasonable  judgment of such Lender, is not otherwise  disadvantageous
     to such Lender.

          (g) Within  thirty  (30)  days  after  the date of any payment of
     Taxes, the Borrowers shall furnish to the Agents  the  original  or  a
     certified copy of a receipt evidencing such payment.

          (h)  The  provisions of this SECTION 6.6 shall continue in effect
     notwithstanding the Facility Termination Date.

<PAGE>




                                ARTICLE VII

         Conditions to Making Loans and Issuing Letters of Credit

     7.1  CONDITIONS  OF  CLOSING AND THE ADDITIONAL ADVANCE OF THE US TERM
LOAN.  The closing of this  Agreement  and the obligation of the Lenders to
make the Advance of the remainder of the  US  Term  Loan  is subject to the
conditions precedent that:

          (a)  the  Agents shall have received on or prior to  the  Closing
     Date,  in form and  substance  satisfactory  to  the  Agents  and  the
     Lenders, the following:

               (i) executed originals of each of this Agreement, the Notes,
          any  required Facility Guaranty, each Consolidated Amendment, the
          LC Account  Agreement,  any  other required Security Instruments,
          and any other Loan Documents,  together  with  all  schedules and
          exhibits thereto;

               (ii) a fully-executed copy of Third Amendment to Mortgage;

               (iii) the favorable written opinion or opinions with respect
          to  the Loan Documents and the transactions contemplated  thereby
          and  the   perfection   and  priority  of  the  security  granted
          thereunder of special counsel to the Borrowers and the Guarantors
          dated the Closing Date, addressed  to the Agents and the Lenders,
          including opinions of Kirkland & Ellis,  Young, Clement, Rivers &
          Tisdale, LLP; Ogilvy Renault S.E.N.C.; Stewart  McKelvey Stirling
          Scales; Osler Hoskins & Harcourt; Brown Rudnick Freed  &  Gesmer;
          and  Rich,  Heather  and Mueller, such opinions (other than those
          relating to title) substantially  in  the  form  of  EXHIBITS I-1
          through I-7;

               (iv)  resolutions  of  the  boards  of  directors  or  other
          appropriate  governing  body  (or  of  the  appropriate committee
          thereof)   of   each   Borrower   and  each  Guarantor   (without
          duplication) certified by its secretary or assistant secretary as
          of the Closing Date, approving the  increase  in  the  commitment
          amount applicable to the US Term Loan, approving the assignments,
          reallocations  and allocations set forth in SECTIONS 1.1(B),  (C)
          and (D) hereto and  the Facilities as restructured hereunder, and
          approving and adopting  the Loan Documents to be executed by such
          Person, and authorizing the execution and delivery thereof;

               (v) specimen signatures  of  officers  or  other appropriate
          representatives executing the Loan Documents on behalf of each of
          the  Borrowers  and  each  of  the Guarantors, certified  by  the
          secretary or assistant secretary of such Borrower or Guarantor as
          of the Closing Date;

               (vi) the Organizational Documents  of  each of the Borrowers
          and each of the Guarantors certified as of a  recent  date by the
          Secretary  of State or equivalent Governmental Authority  of  its
          jurisdiction of organization;

               (vii) Operating  Documents of each of the Borrowers and each
          of the Guarantors certified  as  of  the Closing Date as true and
          correct by its secretary or assistant secretary;

               (viii)  certificates  issued as of  a  recent  date  by  the
          Secretaries of State or equivalent  Governmental Authority of the
          respective jurisdictions of formation  of  each  of the Borrowers
          and  each  of  the  Guarantors as to the due existence  and  good
          standing of such Person;

               (ix)  appropriate   certificates   of  qualification  to  do
          business,  good  standing  and, where appropriate,  authority  to
          conduct business under assumed name, issued in respect of each of
          the Borrowers and each of the  Guarantors  as of a recent date by
          the  Secretary of State or equivalent Governmental  Authority  of
          each jurisdiction  in  which  the  failure  to be qualified to do
          business or authorized so to conduct business would reasonably be
          expected to have a Material Adverse Effect;

               (x)  certificate of an Authorized Representative  dated  the
          Closing Date demonstrating compliance with the financial covenant
          contained in  SECTION  10.1(A),  substantially  in  the  form  of
          EXHIBIT  J, demonstrating that Available Liquidity (calculated on
          a pro forma  basis for all borrowings on the Closing Date) is not
          less than $15,000,000  on  the  Closing  Date (excluding fees and
          expenses  paid or payable to the Agents, the  Lenders  and  their
          respective  representatives  on the Closing Date not in excess of
          $800,000);

               (xi)  a  certificate  of  the  Chief  Financial  Officer  of
          Consoltex Holdings as to the absence  of  any Default or Event of
          Default  as  of  the Closing Date and as to the  absence  of  any
          material adverse change  since December 31, 1999 in the business,
          assets, liabilities (actual or contingent), operations, condition
          (financial or otherwise) or  prospects of the Borrowers and their
          subsidiaries taken as a whole  or  in  the  facts and information
          regarding such entities as represented to date which has not been
          disclosed to the Agents and the Lenders;

               (xii)  a  marked up irrevocable commitment  from  the  title
          insurer to update  the  policies  insuring  title  on the Initial
          Mortgaged Properties as originally delivered pursuant  to Section
          8.1(xv) of the Original Credit Agreement;

               (xiii) if elected by the applicable Facility Borrowers,  one
          or more Interest Rate Selection Notices;

               (xiv)  evidence  of  the  filing  of Uniform Commercial Code
          financing statements (or amendments to previously filed financing
          statements)  reflecting  the  filing in all  places  required  by
          applicable  law to perfect the Liens  of  the  Agents  under  the
          Security Instruments  as  a  first  priority  Lien as to items of
          Collateral in which a security interest may be  perfected  by the
          filing  of  financing statements, and such other documents and/or
          evidence of other  actions  as  may be necessary under applicable
          law  (including  the laws of Canada,  the  United  States  and/or
          Mexico) to perfect  the  Liens  of  the Agents, the US Collateral
          Agent or the Canadian Collateral Trustee,  as  applicable,  under
          the  Security Instruments as a first priority Lien in and to such
          other  Collateral  as  the  Agents may require, including without
          limitation:

                    (A)  to  the  extent  not   previously  delivered,  the
               delivery   by   the  Borrower  of  all  stock   certificates
               evidencing Pledged  Interests,  accompanied  in each case by
               duly  executed  stock powers (or other appropriate  transfer
               documents) in blank affixed thereto; and

                    (B) the delivery  by  each  Borrower  or  Guarantor  of
               certificates of the Registrar of each partnership or limited
               liability company Subsidiary evidencing the due registration
               on  the  registration  books  of  such Person of the Lien in
               favor   of   the   Agents  conferred  under   the   Security
               Instruments;

               (xv) evidence that all  fees payable by the Borrowers on the
          Closing Date to the Agents, BAS and the Lenders have been paid in
          full, including the due diligence  expenses of the Agents and the
          fees and expenses of counsel for the  Agents  and  other  parties
          performing  related  services  to  the  Agents,  including  asset
          reviews  and  audits  and  consulting  services,  to  the  extent
          invoiced  prior  to  or  on  the  Closing Date (which may include
          amounts  constituting  reasonable  estimates  of  such  fees  and
          expenses  incurred  or  to be incurred  in  connection  with  the
          transaction; provided that  no  such  estimate  shall  thereafter
          preclude  the  final  settling  of  accounts as to such fees  and
          expenses);

               (xvi)  Uniform  Commercial  Code  and  similar  lien  search
          results  in  the United States, Canada and  Mexico  showing  only
          those Liens as are acceptable to the Lenders;

               (xvii) a  certificate of the chief financial officer of each
          issuer of the Subordinated Notes, certifying that the Obligations
          under the US Term  Loan  Facility  as hereby increased qualify as
          "Senior Debt" (as defined in the Subordinated Indenture);

               (xviii) a certified copy of the  written notice by the chief
          financial officer of each issuer of the Subordinated Notes to the
          trustee   under  the  Subordinated  Indenture   designating   the
          Obligations under the US Term Loan Facility, as hereby increased,
          as "Designated Senior Debt" under the Subordinated Indenture;

               (xix)  certified  copies  of  all  fully-executed  documents
          relating  to  the Reorganization not previously delivered to  the
          Agents;

               (xx) certified  copies of all necessary consents, amendments
          and agreements of the  holders  of the Subordinated Notes and the
          PIK Notes relating to (A) this Agreement  and  the Reorganization
          and  the  respective transactions contemplated thereby,  (B)  any
          change in the issuer of the Subordinated Notes, or (C) any change
          in  accounting  procedures  from  generally  accepted  accounting
          principals in Canada to GAAP;

               (xxi)  certified  copies  of the fully-executed Les Gantiers
          Debenture and all other documents  relating  to the PIK Notes not
          previously delivered to the Agents;

               (xxii)  evidence  that Consoltex Holdings has  received  the
          proceeds of each of the  AIP  Investment  and  the  PIK Notes not
          previously delivered to the Agents;

               (xxiii)   certified   copies   of   the  fully-executed  Fee
          Limitation Agreement and all other documents  relating thereto as
          the Agents may request;

               (xxiv)   a   written   audit  of  the  accounts  receivable,
          inventory,  controls  and systems  of  the  Borrowers  and  their
          Subsidiaries;

               (xxv)  appraisal reports  with  respect  to  the  machinery,
          equipment and  real  estate  owned  by  the  Borrowers  and their
          Subsidiaries  and  such  other  report,  information or appraisal
          previously requested by the Agents or the Lenders;

               (xxvi)   (A)  the  consolidated and consolidating  financial
          statements of the Borrowers and their Subsidiaries for the Fiscal
          Years ended December 31,  1997,  1998 and 1999, including balance
          sheets,   income   and   cash   flow   statements,   audited   by
          PricewaterhouseCoopers,  LLP  or  such other  independent  public
          accountants of recognized national  standing as are acceptable to
          the Agents, (B) unaudited interim income,  balance sheet and cash
          flow statements of the Borrowers and their Subsidiaries  for  the
          six-month  period  ended  June  30, 2000, (C) pro forma unaudited
          interim income, balance sheet and  cash  flow  statements  of the
          Borrowers  and  their Subsidiaries for the six-month period ended
          June 30, 2000 giving effect to the recent Reorganization, (D) the
          month-end balance  sheet  of each Borrower most recently prepared
          thereby prior to the Closing Date on a pro forma basis reflecting
          the Reorganization, including without limitation all outstandings
          under the Senior Credit Facilities  after  the  Closing Date, all
          proceeds of the AIP Investment and the proceeds of the PIK Notes,
          (E)  the  actual  month  end balance sheet of each Borrower  most
          recently prepared thereby prior to the Closing Date, and (F) such
          other financial information  as  the  Agents  and the Lenders may
          reasonably  request;  PROVIDED that the balance sheet  listed  in
          subsection (A) above for  the Fiscal Year ended December 31, 1997
          shall be expressed in Canadian Dollars and prepared in accordance
          with GAAP as applied in Canada,  and  all  other  items listed in
          this SECTION 7.1(A)(XXVII) shall be expressed in US  Dollars  and
          prepared in accordance with GAAP as applied in the United States;

               (xxvii)   a  Borrowing  Base Certificate as of September 30,
          2000;

               (xxviii) certified copies  of  all  fully-executed documents
          relating to the AIP Investment not previously  delivered  to  the
          Agents;

               (xxix)  a  certificate  of  the  Chief  Financial Officer of
          Consoltex  Holdings certifying that Royalton has  no  obligations
          owing to either  of  Bancomer,  S.A. or Banco Nacional de Mexico,
          S.A.as of the Closing Date.

               (xxx) such other documents,  instruments,  certificates  and
          opinions  as the Agent or any Lender may reasonably request on or
          prior to the  Closing Date in connection with the consummation of
          the transactions contemplated hereby; and

          (b) In the good faith judgment of the Agents and the Lenders:

               (i) there  shall not have occurred or become known to either
          Agent or any Lender  any  event,  condition,  situation or status
          since  December  31,  1999  that  has had or could reasonably  be
          expected to result in a Material Adverse Effect;

               (ii)  no litigation, action, suit,  investigation  or  other
          arbitral, administrative  or judicial proceeding shall be pending
          or threatened which would reasonably  be  expected to result in a
          Material Adverse Effect;

               (iii)  (A)  the  Borrowers  and  the Guarantors  shall  have
          received all approvals, consents and waivers, and shall have made
          or  given  all  filings  and  notices  as shall  be  required  or
          desirable to consummate the Reorganization  (except  the  Mexican
          Operational  Restructuring,  with  respect  to  which appropriate
          arrangements have been made to obtain the necessary  consents and
          approvals)  and  otherwise in connection with the Agreement,  the
          Loan Documents, or  the transactions contemplated hereby, (B) all
          such approvals and consents  shall  be  in full force and effect,
          (C) all applicable waiting periods shall have expired without any
          action being taken by any authority that  could restrain, prevent
          or impose any material adverse conditions on the Reorganizations,
          the Facilities, this Agreement, the Loan Documents  or any of the
          transactions  contemplated  hereby  or thereby, all of the  above
          without the occurrence of any default  under,  conflict  with  or
          violation  of  (x) any applicable law, rule, regulation, order or
          decree of any Governmental Authority or arbitral authority or (y)
          any agreement, document  or instrument to which any of the Credit
          Parties is a party or by which any of them or their properties is
          bound;

               (iv) the Reorganization  shall  have  been  completed in the
          form and on the terms and conditions disclosed to  the Agents and
          the  Lenders  in  the  summary  of  the Reorganization previously
          provided  thereto,  except  for  those  aspects  of  the  Mexican
          Operational  Restructuring  which  shall not  have  received  all
          necessary governmental approvals prior to the Closing Date; and

               (v) the corporate, capital and  ownership  structure  of the
          Borrowers   and   their   subsidiaries   (including  articles  of
          incorporation, bylaws and management of the  Borrowers  and their
          subsidiaries),  giving  effect  to  the  Reorganization,  and the
          status  of all litigation of the Borrowers and their subsidiaries
          shall be reasonably satisfactory to the Agents and the Lenders.

          (c) the representations and warranties of the Borrowers and their
     Subsidiaries set  forth  in ARTICLE VIII and in each of the other Loan
     Documents shall be true and correct in all material respects on and as
     of the date hereof;

     7.2  CONDITIONS  OF  REVOLVING   LOANS  AND  LETTER  OF  CREDIT.   The
obligations of the Lenders to make any  Revolving  Credit  Loans,  and  the
Issuing  Banks  to issue (or renew) any Letters of Credit, and the Canadian
Swing Line Facility  Lender to make Canadian Swing Line Loans, hereunder on
or subsequent to the Closing  Date  are  subject to the satisfaction of the
following conditions:

          (a) the satisfaction of all conditions  set  forth in SECTION 7.1
     hereof;

          (b) the Agent or, in the case of Canadian Swing  Line  Loans, the
     Canadian  Swing  Line Facility Lender, shall have received a Borrowing
     Notice if required by ARTICLE II;

          (c) the representations and warranties of the Borrowers and their
     Subsidiaries set forth  in  ARTICLE VIII and in each of the other Loan
     Documents shall be true and correct in all material respects on and as
     of the date of such Advance,  Canadian  Swing  Line  Loan or Letter of
     Credit  issuance  or  renewal,  with  the  same effect as though  such
     representations and warranties had been made  on  and as of such date,
     except  to  the  extent  that  such  representations  and   warranties
     expressly  relate  to  an  earlier  date and except that the financial
     statements referred to in SECTION 8.6(A)  shall  be deemed (solely for
     the  purpose  of  the  representation and warranty contained  in  such
     SECTION 8.6(A) but not for  the purpose of any cross reference to such
     SECTION  8.6(A)  or  to  the financial  statements  described  therein
     contained in any other provision  of  SECTION  8.6(A)  or elsewhere in
     ARTICLE VIII) to be those financial statements most recently delivered
     to  the Agents and the Lenders pursuant to SECTION 9.1 from  the  date
     financial  statements  are  delivered to the Agents and the Lenders in
     accordance with such Section;

          (d)  in the case of the issuance  of  a  Letter  of  Credit,  the
     applicable  Facility Borrower shall have executed and delivered to the
     applicable Issuing  Bank  an  Application  and Agreement for Letter of
     Credit in form and content reasonably acceptable  to such Issuing Bank
     together  with  such  other  instruments  and documents  as  it  shall
     reasonably request;

          (e)  at the time of (and after giving effect  to)  each  Advance,
     Canadian Swing  Line  Loan  or  the issuance of a Letter of Credit, no
     Default  or  Event  of Default specified  in  ARTICLE  XI  shall  have
     occurred and be continuing; and

          (f) immediately after giving effect to:

                    (i) a  Revolving  Credit  Loan,  a Letter of Credit (or
          renewal thereof) or a Canadian Swing Line Loan, (A) the amount of
          US  Revolving  Credit  Outstandings  plus  US  Letter  of  Credit
          Outstandings  shall not exceed the Total Commitment  for  the  US
          Revolving Credit  Facility,  (B)  the Dollar Equivalent Amount of
          Canadian Revolving Credit Outstandings  plus  Canadian  Letter of
          Credit  Outstandings  plus  Canadian Swing Line Loan Outstandings
          shall not exceed the Total Commitment  for the Canadian Revolving
          Credit  Facility,  (C)  the  Dollar  Equivalent   Amount  of  all
          Outstandings under the Revolving Credit Facilities, the Letter of
          Credit Facilities and the Canadian Swing Line Facility  shall not
          exceed the SUM of the Borrowing Base as calculated in Dollars  at
          such time, and (D) the amount of US Revolving Credit Outstandings
          of  Consoltex  Mexico  and  Rafytek  shall not exceed the Mexican
          Borrowing Limit applicable thereto;

                    (ii)  a  Letter  of  Credit  or  renewal  thereof,  the
          aggregate principal balance of all outstanding  Participations in
          Letters of Credit and Reimbursement Obligations (or  in  the case
          of  the  applicable  Issuing  Bank,  its remaining interest after
          deduction  of  all  Participations  in  Letters   of  Credit  and
          Reimbursement  Obligations of other Lenders) for each  applicable
          Lender and in the  aggregate  shall not exceed, respectively, (X)
          such  Lender's  Letter of Credit  Commitment  or  (Y)  the  Total
          Canadian Letter of Credit Commitment or Total US Letter of Credit
          Commitment, as applicable; and

                    (iii) a  Canadian  Swing  Line Loan, the Canadian Swing
          Line Loan Outstandings shall not exceed $4,000,000.

     7.3  POST-CLOSING ITEMS.

          (a) After the Closing date but prior  to  December  31,  2000 the
     Borrowers shall:

               (i) deliver to the Relevant Agent (A) a SCHEDULE 5.4 setting
          forth  all  Lock  Boxes and Lock Box Accounts of each US Borrower
          and each Canadian Borrower,  which shall include at a minimum one
          Lock Box and one Lock Box Account  for  each US Borrower and each
          Canadian Borrower, (B) a Lock Box Agreement  with respect to each
          such Lock Box executed by the applicable US Borrower  or Canadian
          Borrower  and each other party required thereby, and (C)  a  Cash
          Collateral  Agreement  with  respect  to  each  Lock  Box Account
          executed by the applicable US Borrower or Canadian Borrower,  the
          applicable  financial  institution  and  any other party required
          thereby; and

               (ii) deliver to the Relevant Agent (A)  an  updated SCHEDULE
          5.5  setting  forth all deposit accounts of each Borrower  as  of
          such date other than those deposit accounts that are set forth on
          SCHEDULE 5.4 and  are  subject  to  an  effective Cash Collateral
          Agreement, and (B) a Deposit Account Agreement  with  respect  to
          each  deposit account of each Borrower identified on SCHEDULE 5.5
          executed  by  the  applicable  Borrower, the applicable financial
          institution and any other party required thereby.

          (b) In the good faith judgment of  the  Agents  and  the Lenders,
     after the Closing Date but on or before December 31, 2000  (i) each US
     Borrower  and  each  Canadian  Borrower  shall  have  established  and
     continued  to  maintain  not less than one Lock Box and one  Lock  Box
     Account under procedures and  pursuant to executed Lock Box Agreements
     and  Cash  Collateral  Agreements,   (ii)  the  Borrowers  shall  have
     established  and continued to maintain  only  those  deposit  accounts
     which are identified  on  SCHEDULE 5.4 or SCHEDULE 5.5 and are subject
     either to a Deposit Account  Agreement or a Cash Collateral Agreement,
     and (iii) the US Borrowers and the Canadian Borrowers shall have given
     notice  to  all obligors, account  parties  and  licensees  to  direct
     payment of all Accounts Receivable to the appropriate Lock Box.

          (c) After  the Closing Date but not later than November 30, 2000,
     the Borrowers shall  have  filed,  or caused the filing of, all UCC-3s
     and any other documentation reasonably  determined  to be necessary by
     the Agents and the Lenders to revise the collateral description  filed
     by certain factors of certain of the Facility Borrowers describing  as
     collateral  assets  of  such  Facility  Borrowers  in  excess  of that
     granted.

          (d) After the Closing Date but not later than November 30,  2000,
     the  Borrowers  shall  deliver to the Agents evidence that (i) LINQ is
     qualified to do business  in  the  state  of Georgia, and (ii) Balson-
     Hercules is qualified to do business in the state of Florida.

          (e) After the Closing Date but not later  than November 30, 2000,
     the  Borrowers  shall  deliver  to  the Canadian Agent  updated  title
     reports to real estate mortgaged or hypothecated in Canada.

          (f) After the Closing Date but not  later than November 30, 2000,
     the Canadian Borrower shall have caused the registration in the proper
     location of that certain Hypothec Amendment  Agreement dated as of the
     Closing  Date  by  and between Consoltex and the  Canadian  Collateral
     Trustee.

          (g) After the Closing  Date but not later than November 30, 2000,
     the Borrower shall have taken  all steps necessary to reduce the scope
     of the security interest of Newcourt in Ontario.

          (h) After the Closing Date  but not later than December 15, 2000,
     the Borrowers shall have delivered to the Agents evidence satisfactory
     to the Agents and the Lenders of the  absence  of  any lien, including
     all  cancellations in and revisions to the relevant public  registries
     or otherwise,  of  (i)  Bancomer,  S.A.,  including  all  filings  and
     registrations relating to a credit facility between Bancomer, S.A. and
     Royalton,  and  (ii)  Banco  Nacional  de  Mexico, S.A., including all
     filings and registrations relating to a credit  facility between Banco
     Nacional de Mexico, S.A. and Royalton.

          (i) After the Closing Date but not later than  November 30, 2000,
     the Borrowers shall have delivered, or caused to be delivered  to  the
     Agents  and each Lender, in form and substance satisfactory to each of
     them, a letter  from  each  of  Bancomer,  S.A.  and Banco Nacional de
     Mexico,  S.A.,  each  of  which  acknowledges  that  Royalton  has  no
     outstanding obligations to such institution, and all prior obligations
     of Royalton owing to it have been paid in full and discharged.

          (j) After the Closing Date but not later than November  30, 2000,
     the  Borrower  shall  provide  to the US Agent a list of all locations
     where  Collateral  is located on the  premises  of  any  converter  or
     warehouseman,  and  shall  execute  and  deliver  such  UCC  financing
     statements or other filings as the US Agent deems necessary to perfect
     the security interest of the Agents and the Lenders on such Collateral
     in such locations.

          (k) From time to  time  after  the  Closing  Date, the applicable
     Facility Borrower will deliver to the Agents a fully  executed  Waiver
     of Lien Rights with respect to each leased location in which Inventory
     to  be  included  in  the  Borrowing  Base  is  located, prior to such
     Inventory  being included on any Borrowing Base Certificate  delivered
     hereunder.




<PAGE>



                               ARTICLE VIII

                      Representations and Warranties

     Each Borrower  represents  and  warrants with respect to itself and to
its Subsidiaries (which representations  and  warranties  shall survive the
delivery of the documents mentioned herein and the making of Loans), that:

     8.1  ORGANIZATION AND AUTHORITY.

          (a)  Each  Borrower  and  each  Guarantor  is a corporation  duly
     organized and validly existing under the laws of  the  jurisdiction of
     its formation;

          (b) Each Borrower and each Guarantor (x) has the requisite  power
     and  authority (including without limitation those under Environmental
     Laws) to own its properties and assets and to carry on its business as
     now being conducted and as contemplated in the Loan Documents, and (y)
     except with respect to Balson-Hercules in Florida and LINQ in Georgia,
     each of  which  have  taken all action necessary to so qualify in such
     jurisdictions and are awaiting governmental approval and confirmation,
     is qualified to do business  in every jurisdiction in which failure so
     to qualify would have a Material Adverse Effect;

          (c) Each Borrower has the power and authority to execute, deliver
     and perform this Agreement and the Notes, and to borrow hereunder, and
     to execute, deliver and perform  each  of  the other Loan Documents to
     which it is a party;

          (d)  Each  Guarantor  has  the  power and authority  to  execute,
     deliver and perform the Facility Guaranty  and  each of the other Loan
     Documents to which it is a party; and

          (e) When executed and delivered, each of the  Loan  Documents  to
     which  any  Borrower  or  any  Guarantor is a party will be the legal,
     valid and binding obligation or agreement, as the case may be, of such
     Borrower or Guarantor, enforceable  against such Borrower or Guarantor
     in accordance with its terms, subject  to the effect of any applicable
     bankruptcy, moratorium, insolvency, reorganization  or  other  similar
     law affecting the enforceability of creditors' rights generally and to
     the  effect  of general principles of equity (whether considered in  a
     proceeding at law or in equity).

     8.2  LOAN DOCUMENTS.   The execution, delivery and performance by each
Borrower and each Guarantor of  each of the Loan Documents to which it is a
party:

          (a) have been duly authorized  by  all  requisite  Organizational
     Action  of  each  Borrower and each Guarantor required for the  lawful
     execution, delivery and performance thereof;

          (b) do not violate any provisions of (i) any applicable law, rule
     or regulation, (ii)  any  judgment, writ, order, determination, decree
     or arbitral award of any Governmental  Authority or arbitral authority
     binding on any Borrower or any Guarantor  or  its properties, or (iii)
     the Organizational Documents or Operating Documents of any Borrower or
     any Guarantor;

          (c) do not and will not be in conflict with,  result  in a breach
     of  or constitute an event of default, or an event which, with  notice
     or lapse  of time or both, would constitute an event of default, under
     any contract,  indenture, agreement or other instrument or document to
     which any Borrower  or  any  Guarantor  is  a  party,  or by which the
     properties  or  assets  of  any  Borrower or any Guarantor are  bound,
     except where such conflict, breach  or  event  of  default  would  not
     reasonably be expected to have a Material Adverse Effect; and

          (d)  do  not and will not result in the creation or imposition of
     any Lien upon any  of  the properties or assets of any Borrower or any
     Guarantor except any Liens  in  favor  of the US Collateral Agent, the
     Canadian Collateral Trustee, the Agents and the Lenders created by the
     Security Instruments.

     8.3  SOLVENCY.  Each Credit Party (other  than,  with  respect only to
subsection  (a)  of  the  definition  of  "Solvent",  each  of  the Mexican
Companies)  is Solvent after giving effect to the transactions contemplated
by the Loan Documents,  and  the  Borrowers and Guarantors, considered on a
consolidated basis, are Solvent.

     8.4  SUBSIDIARIES AND STOCKHOLDERS.   No Borrower has any Subsidiaries
other  than those Persons listed as Subsidiaries  in  SCHEDULE  8.4,  which
SCHEDULE  8.4  states as of the date hereof the organizational form of each
entity, the authorized  and issued capitalization of each Subsidiary listed
thereon, the number of shares  or  other  equity interests of each class of
capital stock or interest issued and outstanding  of  each  such Subsidiary
and  the  number  and/or  percentage of outstanding shares or other  equity
interest (including options,  warrants  and  other  rights  to  acquire any
interest)  of  each  such  class  of capital stock or other equity interest
owned  by Borrower or by any such Subsidiary;  the  outstanding  shares  or
other equity  interests  of  each such Subsidiary have been duly authorized
and validly issued and are fully  paid and non-assessable; and Borrower and
each such Subsidiary owns beneficially  and  of  record  all the shares and
other interests it is listed as owning in SCHEDULE 8.4, free  and  clear of
any  Lien  (other  than  Liens  created  under the Security Instruments and
Statutory  Permitted Liens); there are no shareholders  agreement  existing
among the shareholders of the Borrowers.

     8.5  OWNERSHIP INTERESTS.  No Borrower owns any interest in any Person
other than the  Persons  listed  in  SCHEDULE  8.4,  equity  investments in
Persons not constituting Subsidiaries permitted under SECTION 10.7.

     8.6  FINANCIAL CONDITION.

          (a) Consoltex has heretofore furnished to each Lender  an audited
     consolidated and related consolidating balance sheet of Consoltex  and
     its Subsidiaries as at December 31, 1999 and the notes thereto and the
     related  consolidated  statements  of income, stockholders' equity and
     cash flows for the Fiscal Year then  ended,  as examined and certified
     by  PricewaterhouseCoopers,  LLP,  and  unaudited   consolidated   and
     consolidating  interim  financial  statements  of  Consoltex  and  its
     Subsidiaries  consisting  of  consolidated  and  consolidating balance
     sheets  and  related  consolidated  and  consolidating  statements  of
     income,  stockholders' equity and cash flows,  in  each  case  without
     notes, for  and  as of the end of the six-month period ending June 30,
     2000.   Except  as  set   forth  therein,  such  financial  statements
     (including the notes thereto)  present  fairly the financial condition
     of Consoltex and its Subsidiaries as of the  end  of  such Fiscal Year
     and six-month period and results of their operations and  the  changes
     in  its  stockholders'  equity  for the Fiscal Year and interim period
     then ended, all in conformity with GAAP applied on a Consistent Basis,
     subject however, in the case of unaudited  interim  statements to year
     end audit adjustments;

          (b)  since  the  later  of (i) the date of the audited  financial
     statements delivered pursuant  to  SECTION  8.6(A)  hereof or (ii) the
     date  of  the  audited  financial  statements most recently  delivered
     pursuant to SECTION 9.1(A) hereof, there  has  not occurred any event,
     condition or circumstance (other than as previously  disclosed  to the
     Agents and the Lenders in writing prior to the Closing Date) which has
     had or could reasonably be expected to have a Material Adverse Effect,
     nor  have  the  businesses  or  properties  of the Borrowers and their
     Subsidiaries, taken as a whole, been materially  adversely affected as
     a  result  of  any  fire,  explosion,  earthquake,  accident,  strike,
     lockout, combination of workers, flood, embargo or act of God; and

          (c) except as set forth in the financial statements  referred  to
     in  SECTION  8.6(A)  or  in SCHEDULE 8.6 or permitted by SECTION 10.5,
     neither the Borrower nor any  Subsidiary  has  incurred, other than in
     the ordinary course of business, any material Indebtedness, Contingent
     Obligation or other commitment or liability which  remains outstanding
     or unsatisfied.

     8.7  TITLE TO PROPERTIES.  Each Borrower and each Guarantor  has  good
and marketable title to all its real and personal properties, subject to no
transfer  restrictions  or  Liens  of  any  kind,  except  for the transfer
restrictions and Liens described in SCHEDULE 8.7 and Permitted Liens.

     8.8  TAXES.   Except  as  set forth in SCHEDULE 8.8, the Borrower  and
each Guarantor and each of their  Subsidiaries  has  filed  or caused to be
filed  all  federal, state and local tax returns which are required  to  be
filed by it and,  except  for taxes and assessments being contested in good
faith by appropriate proceedings  diligently  conducted  and  against which
reserves reflected in the financial statements described in SECTION  8.6(A)
or   SECTIONS  9.1(A)  or  (B)  and  satisfactory  to  Consoltex  Holdings'
independent   certified   public   accountants  have  been  established  in
accordance with GAAP, have paid or caused  to be paid all taxes as shown on
said returns or on any assessment received by  it,  to the extent that such
taxes or assessments have become due.

     8.9  OTHER AGREEMENTS.  No Borrower nor any Subsidiary is

          (a)  a  party  to  or  subject  to any judgment,  order,  decree,
     agreement,  lease  or instrument, or subject  to  other  restrictions,
     which individually or in the aggregate could reasonably be expected to
     have a Material Adverse Effect; or

          (b) in default  in  the performance, observance or fulfillment of
     any  of the obligations, covenants  or  conditions  contained  in  any
     agreement  or instrument to which such Borrower or any Subsidiary is a
     party, which default has had, or if not remedied within any applicable
     grace period  could  reasonably  be likely to have, a Material Adverse
     Effect.

     8.10 LITIGATION.  Except as set forth  in  SCHEDULE  8.10, there is no
action,  suit,  investigation or proceeding at law or in equity  or  by  or
before any governmental instrumentality or agency or arbitral body pending,
or,  to the knowledge  of  any  Borrower,  threatened  by  or  against  any
Borrower,  any  Guarantor  or any Subsidiary or affecting any Borrower, any
Guarantor or any Subsidiary  or  any  properties or rights of any Borrower,
any Guarantor or any Subsidiary, which could reasonably be likely to have a
Material Adverse Effect.

     8.11 MARGIN STOCK.  The proceeds of the borrowings made hereunder will
be  used  by  the  respective Borrowers only  for  the  purposes  expressly
authorized herein.   None  of  such  proceeds  will  be  used,  directly or
indirectly, for the purpose of purchasing or carrying any margin  stock  or
for  the  purpose  of  reducing  or  retiring  any  Indebtedness  which was
originally  incurred  to  purchase  or  carry margin stock or for any other
purpose which violates or which would be inconsistent with Regulation U (12
CFR Part 221) or Regulation X (12 CFR Part  224) of the Board.  No Borrower
nor any agent acting in its behalf has taken  or will take any action which
might cause this Agreement or any of the documents or instruments delivered
pursuant hereto to violate any regulation of the  Board  or  to violate the
Securities Exchange Act of 1934, as amended, or the Securities Act of 1933,
as amended, or any state securities laws, in each case as in effect  on the
date hereof.

     8.12 REGULATED  COMPANY.  No  Borrower  nor  any  Subsidiary is (i) an
"investment  company,"  or  an  "affiliated  person"  of, or "promoter"  or
"principal  underwriter" for, an "investment company," as  such  terms  are
defined in the  Investment  Company  Act  of  1940,  as  amended (15 U.S.C.
section  80a-1,  et  seq.)  or (ii) a "holding company" or a  "subsidiary
company" or "affiliate" of a "holding company" as such terms are defined in
the  Public  Utility  Holding  Company   Act  of  1935,  as  amended.   The
application  of  the proceeds of the Loans and  repayment  thereof  by  the
Borrowers and the  performance  by  the Borrowers and the Guarantors of the
transactions  contemplated  by the Loan  Documents  will  not  violate  any
provision of said Act, or any  rule,  regulation  or  order  issued  by the
Securities and Exchange Commission thereunder, in each case as in effect on
the date hereof.

     8.13 PATENTS, ETC. Except as set forth in SCHEDULE 8.13, each Borrower
and  each  Guarantor  owns  or  has  the  right to use, under valid license
agreements  or  otherwise,  all  material  patents,  licenses,  franchises,
trademarks, trademark rights, trade names, trade name rights, trade secrets
and copyrights necessary to or used in the conduct of its businesses as now
conducted and as contemplated by the Loan Documents, without known conflict
with any patent, license, franchise, trademark,  trade  secret, trade name,
copyright,  other  proprietary  right  of any other Person.   No  Borrower,
Guarantor or any Subsidiary owns, or has  the  right  to  use  under  valid
license agreements or otherwise, any material copyrights.

     8.14 NO  UNTRUE  STATEMENT.   Neither (a) this Agreement nor any other
Loan Document or certificate or document  executed  and  delivered by or on
behalf of any Borrower or any Guarantor in accordance with  or  pursuant to
any  Loan  Document  nor  (b)  any  statement,  representation, or warranty
provided to either Agent in connection with the negotiation  or preparation
of the Loan Documents contains any misrepresentation or untrue statement of
material fact or omits to state a material fact necessary, in  light of the
circumstance  under which it was made, in order to make any such  warranty,
representation or statement contained therein not misleading.

     8.15 NO  CONSENTS,   ETC.    Neither   the  respective  businesses  or
properties of any Borrower or any Guarantor, nor any relationship among any
Borrower or any Guarantor and any other Person,  nor  any  circumstance  in
connection  with  the  execution,  delivery  and  performance  of  the Loan
Documents  and the transactions contemplated thereby, is such as to require
a  consent, approval  or  authorization  of,  or  filing,  registration  or
qualification  with,  any Governmental Authority or any other Person on the
part of any Borrower or  any  Subsidiary  as  a condition to the execution,
delivery   and  performance  of,  or  consummation  of   the   transactions
contemplated  by  the  Loan  Documents, which, if not obtained or effected,
would be reasonably likely to  have  a  Material  Adverse Effect, or if so,
such   consent,   approval,   authorization,   filing,   registration    or
qualification has been duly obtained or effected, as the case may be.

     8.16 EMPLOYEE BENEFIT PLANS.

          (a)  Each  Borrower  and  each  ERISA  Affiliate  is  in material
     compliance with all applicable provisions of ERISA and the regulations
     and  published  interpretations  thereunder and in material compliance
     with all Foreign Benefit Laws with  respect  to  all  Employee Benefit
     Plans  except  for  any  required  amendments  for which the  remedial
     amendment period as defined in Section 401(b) of  the Code has not yet
     expired.  Each Employee Benefit Plan that is intended  to be qualified
     under Section 401(a) of the Code has been determined or  the  Borrower
     or its Subsidiaries is in the process of obtaining a determination  by
     the Internal Revenue Service to be so qualified, each trust related to
     such plan has been determined to be exempt under Section 501(a) of the
     Code,  and  each  Employee Benefit Plan subject to any Foreign Benefit
     Law has received the  required approvals by any Governmental Authority
     regulating such Employee Benefit Plan.  No material liability has been
     incurred  by  the  Borrower  or  any  ERISA  Affiliate  which  remains
     unsatisfied for any  taxes  or  penalties with respect to any Employee
     Benefit Plan or any Multiemployer Plan;

          (b) Each Borrower and each ERISA  Affiliate is in compliance with
     all applicable provisions of (i) all Mexican Benefit Laws with respect
     to all Mexican Employee Pension Plans and  (ii)  all  Canadian Benefit
     Laws with respect to all Canadian Employee Pension Plans.  No material
     liability  has  been  incurred by the Borrower or any ERISA  Affiliate
     which remains unsatisfied  for  any taxes or penalties with respect to
     any Mexican Employee Pension Plan or Canadian Employee Pension Plan;

          (c) No Borrower nor any ERISA  Affiliate  has  (i)  engaged  in a
     nonexempt prohibited transaction described in Section 4975 of the Code
     or  Section  406 of ERISA affecting  any of the Employee Benefit Plans
     or the trusts created thereunder which could subject any such Employee
     Benefit Plan or  trust  to  a  material  tax  or penalty on prohibited
     transactions imposed under Section 4975 of the  Code  or  ERISA,  (ii)
     incurred  any  accumulated  funding  deficiency  with  respect  to any
     Employee  Benefit  Plan, whether or not waived, or any other liability
     to  the PBGC which remains  outstanding  other  than  the  payment  of
     premiums  and  there are no premium payments which are due and unpaid,
     (iii)  failed  to  make  a  required  contribution  or  payment  to  a
     Multiemployer Plan,  (iv)  failed  to  make  a required installment or
     other required payment under Section 412 of the Code or Section 302 of
     ERISA, or (v) failed to make a required contribution  or  payment,  or
     otherwise failed to operate in compliance with any Foreign Benefit Law
     regulating any Employee Benefit Plan;

          (d)  No  Termination Event has occurred or is reasonably expected
     to occur with respect  to  any Pension Plan or Multiemployer Plan, and
     no Borrower nor any ERISA Affiliate has incurred any unpaid withdrawal
     liability with respect to any Multiemployer Plan;

          (e) SCHEDULE 8.16(E) sets  forth  a list of all unfunded Employee
     Benefit Plans of the Borrowers and their  Subsidiaries.   The  present
     value of all vested accrued benefits under each Employee Benefit  Plan
     which  is  subject  to  Title  IV of ERISA, or the funding of which is
     regulated by any Foreign Benefit  Law  did  not, as of the most recent
     valuation date for each such plan, exceed the  then  current  value of
     the assets of such Employee Benefit Plan allocable to such benefits;

          (f) The consummation of the Loans and the issuance of the Letters
     of  Credit  provided  for  herein  will  not  involve  any  prohibited
     transaction  under  ERISA  which  is  not  subject  to  a statutory or
     administrative exemption; and

          (g)  No  material proceeding, claim, lawsuit and/or investigation
     exists or, to the  best  knowledge of each Borrower after due inquiry,
     is threatened concerning or involving any Employee Benefit Plan;

          (h) Set forth on SCHEDULE 8.16 is a list of each Employee Benefit
     Plan,  Pension  Plan,  Canadian  Employee  Pension  Plan  and  Mexican
     Employee Pension Plan sponsored  by  any Borrower or Guarantor.  As of
     the date hereof, no Borrower or Guarantor  sponsors  a Pension Plan, a
     Canadian  Employee  Pension Plan, a Mexican Employee Pension  Plan,  a
     Multiemployer Plan or  any  pension  or retirement plan other than (i)
     any pension or retirement plan subject  to  the  laws  of  the  United
     States,  Canadian  Benefit  Law  or  Mexican Benefit Law, and (ii) the
     obligations under the law of Mexico with respect to seniority premiums
     payable to employees of Rafytek, Royalton,  Marino  Mexico, Vestco and
     Vera Pak.

     8.17 NO  DEFAULT.   As  of the date hereof, there does not  exist  any
Default or Event of Default hereunder.

     8.18 ENVIRONMENTAL  LAWS.   Except  as  set  forth  in  the  quarterly
environmental report most recently  delivered  to  the  Agents  pursuant to
SECTION 9.1(G) and except in each case as would not be reasonably  expected
to have a Material Adverse Effect, (i) each Borrower and each Subsidiary is
in  compliance  with  all applicable Environmental Laws and has been issued
and currently maintains  all  required  federal,  state  and local permits,
licenses,  certificates  and  approvals,  and  (ii)  no  Borrower  nor  any
Subsidiary  has  been notified of any pending or threatened  action,  suit,
proceeding or investigation, and no Borrower nor any Subsidiary is aware of
any facts, which (a)  calls  into question, or could reasonably be expected
to call into question, compliance  by  any  Borrower or any Subsidiary with
any Environmental Laws, (b) seeks, or could reasonably  be expected to form
the basis of a meritorious proceeding, to suspend, revoke  or terminate any
license,  permit or approval necessary for the operation of any  Borrower's
or any Subsidiary's business or facilities or for the generation, handling,
storage, treatment  or disposal of any Hazardous Materials, or (c) seeks to
cause, or could reasonably  be  expected to form the basis of a meritorious
proceeding to cause, any property  of  any Borrower or any Subsidiary to be
subject to any restrictions on ownership, use, occupancy or transferability
under any Environmental Law.

     8.19 EMPLOYMENT MATTERS.

          (a) Except as set forth in SCHEDULE  8.19,  none of the employees
     of  any  Borrower  or  any  Subsidiary  is  subject to any  collective
     bargaining  agreement  and  there  are  no  strikes,  work  stoppages,
     election  or  decertification petitions or proceedings,  unfair  labor
     charges,   equal    opportunity   proceedings,   or   other   material
     labor/employee related controversies or proceedings pending or, to the
     knowledge of any Borrower,  threatened  against  any  Borrower  or any
     Subsidiary  or  between  any Borrower or any Subsidiary and any of its
     employees, other than employee  grievances  arising  in  the  ordinary
     course   of   business   which   would  not  reasonably  be  expected,
     individually or in the aggregate,  to  have a Material Adverse Effect;
     and

          (b) Except to the extent a failure  to  maintain compliance would
     not  reasonably be expected to have a Material  Adverse  Effect,  each
     Borrower and each Subsidiary is in compliance in all respects with all
     applicable   laws,  rules  and  regulations  pertaining  to  labor  or
     employment matters,  including  without limitation those pertaining to
     wages, hours, occupational safety  and  taxation  and there is neither
     pending or threatened any litigation, administrative  proceeding  nor,
     to  the  knowledge  of  any Borrower, any investigation, in respect of
     such  matters  which,  if  decided   adversely,  would  reasonably  be
     expected, individually or in the aggregate, to have a Material Adverse
     Effect.

     8.20 RICO.   No  Borrower nor any Subsidiary  is  engaged  in  or  has
engaged in any course of  conduct  that  would  reasonably  be  expected to
subject  any  of their respective properties to any Lien, seizure or  other
forfeiture  under  any  criminal  law,  racketeer  influenced  and  corrupt
organizations law, civil or criminal, or other similar laws.

     8.21 ASSETS  OF  CONSOLTEX  HOLDINGS.  Consoltex Holdings (a) does not
own,  beneficially or of record, any  assets  other  than  (i)  outstanding
shares  of  common  stock  of  Consoltex, (ii) outstanding shares of common
stock of Consoltex USA, (iii) outstanding  shares  of  preferred  stock  of
Consoltex Mexico, and (iv) such other assets as are de minimis with respect
to  the  consolidating balance sheet of Consoltex Holdings on a stand-alone
basis, and  (b)  does  not  conduct  business,  operations  or generate any
revenue except (i) such revenue received as distributions on such shares of
common  stock  of  Consoltex  and Consoltex USA and of preferred  stock  of
Consoltex Mexico, and (ii) such other revenue as is de minimis with respect
to the consolidating income statement  of  Consoltex  Holdings  on a stand-
alone basis.

     8.22 LOCK BOX ACCOUNTS.  As of the date set forth therefor in  SECTION
7.3(A),  or  such earlier date as any Lock Box shall have been established,
the obligors, account parties and licensees have been instructed to and are
directing payment of all Accounts Receivable to the appropriate Lock Box.

     8.23 PERFECTED  SECURITY  INTERESTS.  The US Agent, Canadian Agent, US
Collateral Trustee or Canadian Collateral Trustee, or more than one of them
as applicable, has a duly perfected  first  priority  Lien,  subject  to no
other  Lien  other  than  Statutory  Permitted  Liens  and  Liens permitted
pursuant  to SECTION 10.4(G), on all of the Collateral for the  benefit  of
the Agents and the Lenders.


<PAGE>




                                ARTICLE IX

                           Affirmative Covenants

     Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, each Borrower will, and where applicable will
cause each Subsidiary to:

     9.1  FINANCIAL REPORTS, ETC.

          (a)  As  soon as practical and in any event within 120 days after
     the end of each Fiscal Year of Consoltex Holdings, deliver or cause to
     be delivered to  each  Agent  and each Lender (i) audited consolidated
     and unaudited consolidating balance  sheets  of Consoltex Holdings and
     its  Subsidiaries as at the end of such Fiscal  Year,  and  the  notes
     thereto,  and the related consolidated and consolidating statements of
     income, stockholders'  equity and cash flows, and the respective notes
     thereto,  for  such  Fiscal   Year,  setting  forth  (other  than  for
     consolidating statements) comparative  financial  statements  for  the
     preceding Fiscal Year, all prepared in accordance with GAAP applied on
     a  Consistent  Basis  and containing, with respect to the consolidated
     financial statements of  Consoltex  Holdings,  opinions  of Deloitte &
     Touche,   or  other  such  independent  certified  public  accountants
     selected by  Consoltex  Holdings and approved by the Agents, which are
     unqualified as to the scope  of  the  audit  performed  and  as to the
     "going  concern"  status  of  the  Consoltex  Holdings and without any
     exception not acceptable to the Required Lenders,  and accompanied (in
     the  case of financial statements of any Borrower or  Guarantor  other
     than  Consoltex   Holdings)   by   a   certificate  of  an  Authorized
     Representative  to the effect that such financial  statements  present
     fairly the financial  condition  of such Borrower or Guarantor (as the
     case may be) as of the end of such  Fiscal  Year  and  the  results of
     their operations and the changes in their financial position  for such
     Fiscal  Year,  (ii)  audited consolidated balance sheet of the Textile
     Companies as at the end  of  such  Fiscal Year, and the notes thereto,
     and  the  related  consolidated statements  of  income,  stockholders'
     equity and cash flows,  and  the  respective  notes  thereto, for such
     Fiscal Year, setting forth unaudited comparative financial  statements
     for  the  preceding Fiscal Year, all prepared in accordance with  GAAP
     applied on  a  Consistent  Basis  and  containing, with respect to the
     consolidated financial statements of the  Textile  Companies, opinions
     of  Deloitte  &  Touche,  or  other such independent certified  public
     accountants selected by Consoltex Holdings and approved by the Agents,
     which are unqualified as to the scope of the audit performed and as to
     the "going concern" status of the  Consoltex  Holdings and without any
     exception  not  reasonably acceptable to the Required  Lenders,  (iii)
     audited consolidated  balance  sheet of the Polypropylene Companies as
     at the end of such Fiscal Year, and the notes thereto, and the related
     consolidated  statements  of income,  stockholders'  equity  and  cash
     flows, and the respective notes thereto, for such Fiscal Year, setting
     forth unaudited comparative  financial  statements  for  the preceding
     Fiscal  Year,  all  prepared  in  accordance  with GAAP applied  on  a
     Consistent  Basis  and  containing, with respect to  the  consolidated
     financial statements of Polypropylene  Companies, opinions of Deloitte
     &  Touche,  or  other  such independent certified  public  accountants
     selected by Consoltex Holdings  and  approved by the Agents, which are
     unqualified  as to the scope of the audit  performed  and  as  to  the
     "going concern"  status  of  the  Consoltex  Holdings  and without any
     exception not reasonably acceptable to the Required Lenders,  and (iv)
     a  certificate  of  the  Chief Financial Officer of Consoltex Holdings
     demonstrating  compliance  with  those  subsections  of  SECTION  10.1
     applicable to such fiscal quarter  or month end commensurate with such
     Fiscal Year end, which certificate shall  be substantially in the form
     of EXHIBIT J;

          (b) as soon as practical and in any event  within  45  days after
     the end of each fiscal quarter (except the last fiscal quarter  of the
     Fiscal  Year)  of  Consoltex  Holdings, deliver to each Agent and each
     Lender (i) consolidated and consolidating  balance sheets of Consoltex
     Holdings and its Subsidiaries as at the end  of  such  fiscal quarter,
     and the related consolidated and consolidating statements  of  income,
     stockholders'  equity  and cash flows for such fiscal quarter and  for
     the period from the beginning  of the then current Fiscal Year through
     the end of such reporting period,  and accompanied by a certificate of
     the Chief Financial Officer of Consoltex  Holdings  to the effect that
     such financial statements present fairly the financial position of the
     Consoltex Holdings and its Subsidiaries as of the end  of  such fiscal
     period  and  the results of their operations and the changes in  their
     financial position  for  such  fiscal  period,  in conformity with the
     standards  set  forth  in  SECTION  8.6(A)  with  respect  to  interim
     financial  statements, and (ii) a certificate of the  Chief  Financial
     Officer of Consoltex  Holdings  containing computations for the fiscal
     quarter then ended comparable to  that  required  pursuant  to SECTION
     9.1(A)(IV);

          (c)  as  soon  as practicable and in any event within thirty-five
     (35) days after the end of each calendar month (within forty-five (45)
     days after the end of  each calendar month that is also the end of any
     fiscal  quarter  of  Consoltex  Holdings),  Consoltex  Holdings  shall
     deliver to each Agent  and  each  Lender  (i)  for  each  of  October,
     November  and  December 2000, unaudited consolidated and consolidating
     statements of operations  of  Consoltex  Holdings and its Subsidiaries
     reflecting  performance  through  earnings  before   interest,  taxes,
     depreciation  and  amortization, as well as accounts payable,  capital
     expenditure and interest  expense information, for such calendar month
     and for the period from the  beginning of the then current Fiscal Year
     through the end of such calendar  month, and (ii) with respect to each
     calendar  month  after  December  2000,   unaudited  consolidated  and
     consolidating   balance   sheets   of  Consoltex  Holdings   and   its
     Subsidiaries as at the end of such calendar  month,  and  the  related
     consolidated  and consolidating statements of income for such calendar
     month and for the period from the beginning of the then current Fiscal
     Year through the  end of such calendar month, in each case accompanied
     by a certificate of  the Chief Financial Officer of Consoltex Holdings
     to the effect that he  has no knowledge that such financial statements
     do not present fairly the financial position of the Consoltex Holdings
     and its Subsidiaries as  of  the  end  of  such  calendar month (as to
     subsection  (ii)  only) and the results of their operations  for  such
     calendar month and  such period from the beginning of such Fiscal Year
     through  the  end of such  calendar  month,  in  conformity  with  the
     standards  set  forth  in  SECTION  8.6(A)  with  respect  to  interim
     financial statements, (iii) a projection of the Borrowing Base for the
     balance  of  the term  of  the  Facilities,  and  (iv)  a  certificate
     demonstrating  compliance  with  SECTION  10.1(A), SECTION 10.1(B) and
     SECTION 10.1(E), as applicable, along with  a  schedule of Third Party
     Mexican Accounts Payable as of the end of such calendar month;

          (d)  together  with  each  delivery  of the financial  statements
     required by SECTION 9.1(A)(I), deliver to each Agent and each Lender a
     letter  from  Consoltex  Holdings' accountants  specified  in  SECTION
     9.1(A)(I) stating that in  performing the audit necessary to render an
     opinion on the financial statements delivered under SECTION 9.1(A)(I),
     they obtained no knowledge of  any  Default  or  Event  of  Default by
     Consoltex   Holdings  or  any  other  Borrower  or  Guarantor  in  the
     fulfillment of  the  terms and provisions of this Agreement insofar as
     they relate to financial  matters (which at the date of such statement
     remains uncured); or if the  accountants  have  obtained  knowledge of
     such  Default  or Event of Default, a statement specifying the  nature
     and period of existence thereof;

          (e) promptly  upon their becoming available to any Borrower, such
     Borrower shall deliver to each Agent and each Lender a copy of (i) all
     regular or special reports  or effective registration statements which
     such Borrower or any Subsidiary  shall  file  with  the Securities and
     Exchange Commission (or any successor thereto) or the  "Commission des
     valeurs  mobilieres du Quebec" or any other securities  exchange
     commission   or   securities   exchange,   (ii)  any  proxy  statement
     distributed by such Borrower or any Subsidiary  to  its  shareholders,
     bondholders  or  the  financial  community  in general, and (iii)  any
     management letter or other report submitted to  any  Borrower  or  any
     Subsidiary  by  independent accountants in connection with any annual,
     interim or special audit of any Borrower or any Subsidiary;

          (f) within 15  days  of  approval  by  the  board of directors of
     Consoltex Holdings and in any event within sixty (60)  days  following
     the  end  of  each  Fiscal Year, deliver to each Agent and each Lender
     consolidated and consolidating  capital  and operating expense budgets
     and  consolidated  and consolidating quarterly  financial  projections
     (including balance sheets and statements of income and cash flows) for
     each Borrower or Guarantor,  as  the case may be, and its Subsidiaries
     for the next Fiscal Year, as approved  by  the  board  of directors of
     Consoltex Holdings and prepared in accordance with GAAP  applied  on a
     Consistent Basis;

          (g)  as  soon  as  practicable and in any event within sixty (60)
     days following the end of  each  fiscal quarter, deliver to each Agent
     and each Lender an environmental report  prepared  by  the  applicable
     Borrower  with  respect  to  the  Mortgaged  Properties,  in  form and
     substance  reasonably  satisfactory  to the Agents, and (to the extent
     and in the form actually reported to the  board  of  directors  of the
     applicable Borrower) any other manufacturing facilities;

          (h)  as  soon  as practicable and in any event within twenty-five
     (25) days after the end  of  each  calendar  month, Consoltex Holdings
     shall  deliver  to  each Agent and each Lender (i)  a  Borrowing  Base
     Certificate prepared  as  of  the  end  of  such  month, together with
     related  schedules  of  aged  accounts receivable, letters  of  credit
     issued for the purchase of raw  materials  and  certain finished goods
     and listing of finished goods, undyed and uncut greige  goods  and raw
     materials  inventory,  and (ii) a certificate demonstrating compliance
     with SECTION 10.1(A), including  a  schedule  of  Third  Party Mexican
     Accounts Payable as of the end of such calendar month;

          (i) as soon as practicable and in any event within ten  (10) days
     after  the  15{th}  of each calendar month, and after each other  date
     each month as may be  requested  by  the  Required  Lenders, Consoltex
     Holdings shall deliver to each Agent and each Lender  a Borrowing Base
     Certificate as of the 15{th} day and each such other requested  day of
     such   month,  prepared  using  reasonable  receivable  and  inventory
     estimation  procedures acceptable to the Agents, together with related
     schedules of  aged  accounts  receivable, letters of credit issued for
     the purchase of raw materials and  certain  finished goods and listing
     of  finished goods, undyed and uncut greige goods  and  raw  materials
     inventory;

          (j)  as  soon  as  practicable and in any event no later than the
     Thursday of the following  week,  Consoltex  Holdings shall deliver to
     each Agent and each Lender a consolidated weekly  cash  journal report
     of  the  Borrowers and their Subsidiaries showing, at a minimum,  cash
     receipts and  disbursements for such week, and projected cash flow for
     the immediately following sixteen consecutive weeks;

          (k) no later than March 10, 2001 Consoltex Holdings shall deliver
     to each Agent and  each  Lender  a  written  certificate  by the Chief
     Financial  Officer  of  Consoltex  Holdings,  in  form  and  substance
     reasonably satisfactory to the Agents and the Lenders, certifying that
     (i) the Chief Financial Officer of Consoltex Holdings expects that the
     Borrowers will be in full compliance with all covenants applicable  to
     the  quarter or month ending March 31, 2001 and otherwise in effect on
     such date,  and  no  officer  of any Borrower has any knowledge to the
     contrary, (ii) any adjustments  made and to be made in connection with
     the audit of the Borrowers and their  Subsidiaries for the fiscal year
     ended  December  31,  2000 do not and will  not  materially  adversely
     affect  the  Borrowing  Base   as  at  any  time  then  or  thereafter
     determined, and (iii) Available  Liquidity as at March 10, 2001 is not
     less than $12,000,000;

          (l) no later than September 10,  2001  Consoltex  Holdings  shall
     deliver  to  each  Agent  and each Lender a written certificate by the
     Chief Financial Officer of  Consoltex  Holdings, in form and substance
     satisfactory to the Agents and the Lenders,  certifying that Available
     Liquidity as at September 10, 2001 is not less than $12,000,000; and

          (m) promptly, from time to time, deliver or cause to be delivered
     to  the  Agents and each Lender such other information  regarding  any
     Borrower's  and  any  Subsidiary's  operations,  business  affairs and
     financial  condition  as  the  Agents  or  such  Lender may reasonably
     request.

     The Agents and the Lenders are hereby authorized to  deliver a copy of
any such financial or other information delivered hereunder  to the Lenders
(or  any  affiliate  of any Lender) or to either Agent, to any Governmental
Authority having jurisdiction  over  either  Agent  or  any  of the Lenders
pursuant  to  any  written  request  therefor or in the ordinary course  of
examination of loan files, or, subject  to the confidentiality provision of
SECTION  13.15,  to  any other Person who shall  acquire  or  consider  the
assignment  of,  or acquisition  of  any  participation  interest  in,  any
Obligation permitted by this Agreement.

     9.2  MAINTAIN   PROPERTIES.    Maintain  all  properties  (other  than
property  that  is  substantially  worn,   damaged,  obsolete  or,  in  the
reasonable judgment of any Borrower, no longer  best  used or useful in its
business  or  that of any Subsidiary) necessary to its operations  in  good
working order and  condition,  ordinary  wear  and  tear excepted, make all
needed repairs, replacements and renewals to such properties,  and maintain
free  from Liens (other than Permitted Liens) all trademarks, trade  names,
patents,  copyrights,  trade  secrets,  know-how,  and  other  intellectual
property  and  proprietary  information (or adequate licenses thereto),  in
each case as are reasonably necessary  to conduct its business as currently
conducted or as contemplated hereby, all  in  accordance with customary and
prudent business practices.

     9.3  EXISTENCE,  QUALIFICATION, ETC.  Except  as  otherwise  expressly
permitted under SECTION  10.8,  do or cause to be done all things necessary
to  preserve  and keep in full force  and  effect  its  existence  and  all
material rights  and  franchises, and maintain its license or qualification
to  do  business  as  a foreign  corporation  and  good  standing  in  each
jurisdiction in which its  ownership  or lease of property or the nature of
its business makes such license or qualification  necessary,  except  where
the  failure  to  maintain  such  rights,  franchises or foreign license or
qualification would not reasonably be expected  to  result  in  a  Material
Adverse Effect.

     9.4  REGULATIONS  AND  TAXES.   Observe  and  comply  in  all material
respects  with  all statutes, laws, rules and governmental regulations  and
pay  all  taxes,  assessments,  governmental  charges,  claims  for  labor,
supplies, rent and  any  other  obligation which, if unpaid, would become a
Lien against any of its properties,  except  liabilities being contested in
good faith by appropriate proceedings diligently  conducted  provided  that
(i)  adequate  reserves with respect thereto are maintained on the books of
the applicable Person  in accordance with GAAP and (ii) any Lien arising in
connection with any such  contest shall be permitted to exist to the extent
provided in SECTION 10.4.

     9.5  INSURANCE.

          (a) Maintain, and  cause  each  of  its Subsidiaries to maintain,
     insurance  with  responsible  and  reputable  insurance  companies  or
     associations  in  such  amounts  and  covering such  risks  (including
     without  limitation all-risk property damage,  business  interruption,
     general liability  and  workers  compensation insurance) as is usually
     carried by companies engaged in similar  businesses and owning similar
     properties in the same general areas in which  such  Borrower  or such
     Subsidiary  operates,  which  insurance  may  provide  for  reasonable
     deductibles from the coverage provided thereunder; PROVIDED,  HOWEVER,
     and   subject   to  applicable  law,  that  the  Borrowers  and  their
     Subsidiaries may  self-insure  only  with  respect  to  the repair and
     replacement of vehicles, and in such case to the same extent  as other
     companies  engaged in similar businesses and owning similar properties
     in  the same  general  areas  in  which  any  such  Borrower  or  such
     Subsidiary operates and consistent with prudent business practice.

          (b)  Duly and punctually pay or cause to be paid the premiums and
     other sums  of  money  payable  under  each  of its insurance policies
     required   to  be  maintained  hereunder.   Each  Mortgaged   Property
     insurance policy  held  by  the  Borrowers  shall  contain a "Standard
     Mortgage Clause" reasonably satisfactory to the Agents  providing that
     such  policy may be canceled or modified only upon thirty  (30)  days'
     prior written notice to the Agents.  The insurance policies confirming
     the  insurance   hereunder   shall   not   contain   any  co-insurance
     stipulations except as provided in SECTION 9.5(A).

          (c)  Ensure  that each policy of property damage insurance  of  a
     Borrower or a Guarantor that is providing Collateral shall provide for
     all losses to be paid  directly  to the US Agent and the US Collateral
     Agent or the Canadian Agent and the Canadian Collateral Trustee and to
     such  Borrower  or  such Guarantor, as  the  case  may  be,  as  their
     interests may appear.

          (d) At least ten  (10) Business Days before the expiration of any
     policy referred to in this  SECTION 9.5, provide the Agents with proof
     of its renewal or its replacement  failing  which the Agents may, upon
     reasonable prior notice, renew or replace same  at  the expense of the
     Borrowers,  without  prejudice  to  any other right conferred  to  the
     Agents  in such event.  It is agreed that  the  Agents  are  under  no
     obligation  either  to  note  the  expiration date of any policy or to
     insure the renewal or continuance of any policy.  The Borrowers shall,
     from time to time, at the reasonable  request  of  the Agents, furnish
     the Agents such information relating to insurance as  the  Agents  may
     reasonably  require.   If  the  Borrowers  fail  to  comply  with  any
     provision  of  this  SECTION  9.5,  the  Agents may, after delivery of
     reasonable  notice  to  the  Borrower and at the  Borrowers'  expense,
     obtain any insurance they deem necessary.

          (e) Promptly notify the Agents  of  any  loss  or  damage  to any
     material  portion  of  the  Collateral  and  shall  promptly  take any
     measures reasonably necessary so that the applicable insurer under any
     property   casualty  insurance  shall  pay  the  respective  insurance
     proceeds to the Agents and the Borrowers as required by this Agreement
     and the other  Loan  Documents.   Reimbursement  under  any  liability
     insurance maintained by any Borrower or any Guarantor pursuant to this
     SECTION 9.5 may be paid directly to the Person who shall have incurred
     liability  covered  by  such insurance.  In case of any loss involving
     damage to any Mortgaged Property, other fixed assets, equipment or any
     inventory when subsection (f) below is not applicable, the Borrower or
     the Guarantor that owns such  Mortgaged  Property, other fixed assets,
     equipment or inventory shall make or cause  to  be  made the necessary
     repairs thereto or replacements thereof, and any proceeds of insurance
     properly received and maintained by such Borrower or  such  Guarantor,
     as the case may be, pursuant to this SECTION 9.5 shall be paid to them
     to  pay,  or  to  be  reimbursed,  for  the  costs  of such repairs or
     replacements.

          (f)  Upon  (i) the occurrence and during the continuance  of  any
     Event of Default  or  (ii)  the  actual or constructive total loss (in
     excess of $1,000,000 per occurrence  and  $1,500,000  in the aggregate
     during  the  term  of  this  Agreement)  of  any  Mortgaged  Property,
     equipment, inventory or other fixed assets, pay all insurance payments
     in  respect of such Mortgaged Property, equipment, inventory or  other
     fixed  assets to the Relevant Agent to be applied thereby as specified
     in SECTION 11.5.

     9.6  TRUE BOOKS.  Keep true books of record and account in which full,
true  and correct  entries  will  be  made  of  all  of  its  dealings  and
transactions,  and  set up on its books such reserves as may be required by
GAAP with respect to doubtful accounts and all taxes, assessments, charges,
levies and claims and  with respect to its business in general, and include
such reserves in interim as well as year-end financial statements.

     9.7  RIGHT OF INSPECTION.

          (a) Permit any authorized representative designated by any Lender
     or either Agent to  visit  and  inspect any of the corporate books and
     financial reports of any Borrower or any Subsidiary, at the reasonable
     expense of the Borrowers, and to  discuss  its  affairs,  finances and
     accounts with its principal executive, financial and treasury officers
     and its independent certified public or chartered accountants,  all at
     reasonable  times  during  reasonable  business  hours,  at reasonable
     intervals and with reasonable prior notice.

          (b)  Permit  any  authorized  representative  designated  by  the
     Relevant  Agent  to conduct field audit inspections of the Collateral,
     properties and operations  of  each  Borrower  and each Guarantor, and
     lend all reasonable assistance to such representative in so conducting
     such  field  audit  inspections,  at  the reasonable  expense  of  the
     Borrowers,  effective  as  of January 31,  2001  and  July  31,  2001,
     conducted during normal business  hours and upon reasonable notice (or
     more often, and each time at the sole  expense  of  the  Borrowers, if
     Default  or  an  Event  of  Default  has  occurred and is continuing),
     including without limitation the field audits  of  Freed Maxick or any
     successor thereto in connection with the delivery to  the  Agents  (i)
     not  later  than March 10, 2001 of a written audit with respect to all
     Collateral prepared  as  of  January 31, 2001, and (ii) not later than
     September 10, 2001 of a written  audit  with respect to all Collateral
     prepared as of July 31, 2001.  The Relevant Agent or its designees may
     conduct more frequent inspections and field  audits, PROVIDED THAT (so
     long as no Default or Event of Default has occurred and is continuing)
     the  expenses  of  only such inspections and field  audits  referenced
     above shall be reimbursed by the Borrowers.

          (c) Notwithstanding anything in SECTION 9.7(A) or (B), permit, at
     the sole expense of  the  Borrowers, the continued and ongoing review,
     at   any   time   prior   to  the  Facility   Termination   Date,   by
     PricewaterhouseCoopers LLP  or  any  other  Person  appointed  in lieu
     thereof  by  the  Agents, and preparation of periodic oral and written
     reports thereby to  the  Agents  and  the  Lenders,  of  the business,
     operations,  financial  condition, management and performance  of  the
     Borrowers and their Subsidiaries as requested by the Agents.

     9.8  OBSERVE ALL LAWS.  Except  as would not reasonably be expected to
result in a Material Adverse Effect, conform  to and duly observe all laws,
rules and regulations and all other valid requirements  of any Governmental
Authority with respect to the conduct of its business.

     9.9  GOVERNMENTAL   LICENSES.   Obtain  and  maintain  all   licenses,
permits,  certificates, certifications  and  approvals  of  all  applicable
Governmental Authorities as are required for the conduct of its business as
currently conducted and as contemplated by the Loan Documents, except where
the failure to maintain such license, permit, certificate, certification or
approval would  not  reasonably  be  expected  to  have  a Material Adverse
Effect.

     9.10 COVENANTS  EXTENDING  TO  OTHER  PERSONS.   Cause  each   of  its
Subsidiaries  to  do  with  respect to itself, its business and its assets,
each of the things required of  the  Borrowers in SECTIONS 9.2 through 9.9,
and 9.18 inclusive.

     9.11 OFFICER'S KNOWLEDGE OF DEFAULT.  Upon the Chief Financial Officer
of Consoltex Holdings or Paul Bamatter, Alex DiPalma or C. Suzanne Crawford
(or any successor to any such Person holding  any office previously held by
such  Person  in  any  Borrower)  (collectively,  the   "Notice  Officers")
obtaining knowledge of any Default or Event of Default hereunder  or  under
any  other  obligation  of any Borrower or any Subsidiary to any Lender, or
any event, development or  occurrence which would reasonably be expected to
have  a  Material Adverse Effect,  cause  such  officer  or  an  Authorized
Representative  to  promptly  notify  each Agent of the nature thereof, the
period  of  existence  thereof,  and  what action  such  Borrower  or  such
Subsidiary proposes to take with respect thereto.

     9.12 SUITS OR OTHER PROCEEDINGS.   Upon  any  officer  of the Borrower
obtaining  knowledge  of  any claim, litigation or other proceedings  being
instituted against any Borrower or any Subsidiary, or any attachment, levy,
execution or other process  being  instituted  against  any  assets  of any
Borrower or any Subsidiary, making a claim or claims in an aggregate amount
greater  than $500,000 not otherwise covered by insurance, promptly deliver
to each Agent  written notice thereof stating the nature and status of such
claim, litigation, dispute, proceeding, levy, execution or other process.

     9.13 NOTICE OF ENVIRONMENTAL COMPLAINT OR CONDITION.  Promptly provide
to each Agent true,  accurate  and  complete copies of any and all notices,
complaints,  orders,  directives,  claims  or  citations  received  by  any
Borrower or any Subsidiary which would  reasonably  be  expected  to have a
Material  Adverse Effect relating to any (a) violation or alleged violation
by any Borrower  or any Subsidiary of any applicable Environmental Law; (b)
release or threatened  release by any Borrower or any Subsidiary, or by any
Person handling, transporting  or  disposing  of  any Hazardous Material on
behalf of any Borrower or any Subsidiary, or at any  facility  or  property
owned  or  leased  or  operated  by  any Borrower or any Subsidiary, of any
Hazardous Material, except where occurring  legally;  or  (c)  liability or
alleged  liability  of  any  Borrower  or  any Subsidiary for the costs  of
cleaning up, removing, remediating or responding  to a release of Hazardous
Materials.

     9.14 ENVIRONMENTAL  COMPLIANCE.   If any Borrower  or  any  Subsidiary
shall receive any letter, notice, complaint,  order,  directive,  claim  or
citation  alleging  that  any  Borrower  or any Subsidiary has violated any
Environmental Law, has released any Hazardous  Material,  or  is liable for
the costs of cleaning up, removing, remediating or responding to  a release
of  Hazardous  Materials,  such  Borrower  shall,  within  the  time period
permitted and to the extent required by the applicable Environmental Law or
the  Governmental  Authority  responsible  for enforcing such Environmental
Law,  remove or remedy, or cause the applicable  Subsidiary  to  remove  or
remedy,  such violation or release or satisfy such liability unless (a) the
failure to  remove  or  remedy such violation or release or to satisfy such
liability would not reasonably  be  expected  to  have  a  Material Adverse
Effect, in which case such Borrower shall orally advise each  Agent  of any
decision not to remove or remedy such violation or release or satisfy  such
liability  and  the basis for any such decision, and at each Agent's option
and at its request,  such  Borrower  shall provide written documentation of
such decision, or (b) such violation or  liability  is  being  contested in
good faith by appropriate proceedings and appropriate reserves therefor are
being maintained in accordance with GAAP.

     9.15 INDEMNIFICATION.   Without  limiting  the  generality  of SECTION
13.9, and except to the extent such claim, loss, penalty, liability, damage
or expense has resulted from any gross negligence or willful misconduct of,
or  the  violation  of  applicable  law  by,  such  Indemnified Party, each
Borrower  hereby agrees jointly and severally to indemnify  and  hold  each
Indemnified  Party  harmless  from  and against any and all claims, losses,
penalties,  liabilities,  damages and expenses  (including  assessment  and
cleanup costs and reasonable attorneys', consultants' or other expert fees,
expenses and disbursements)  arising directly or indirectly from, out of or
by reason of (a) the violation  of any Environmental Law by any Borrower or
any Subsidiary or with respect to any property owned, operated or leased by
any   Borrower   or  any  Subsidiary  or   (b)   the   handling,   storage,
transportation, treatment,  emission, release, discharge or disposal of any
Hazardous Materials by or on  behalf  of  any  Borrower  or  any Subsidiary
(including on or with respect to property never owned, leased  or  operated
by any Borrower or any Subsidiary), or on or with respect to property owned
or leased or operated by any Borrower or any Subsidiary.  The provisions of
this  SECTION  9.15  shall  continue in effect notwithstanding the Facility
Termination Date.

     9.16 FURTHER ASSURANCES.   At  the  Borrowers'  cost and expense, upon
request  of  either  Agent, duly execute and deliver or cause  to  be  duly
executed and delivered,  to such Agent such further instruments, documents,
certificates, financing and continuation statements, and do and cause to be
done such further acts that may be reasonably necessary or advisable in the
reasonable  opinion  of  the  Agent  to  carry  out  more  effectively  the
provisions and purposes of this Agreement, the Security Instruments and the
other Loan Documents.

     9.17 EMPLOYEE BENEFIT PLANS.

          (a) With reasonable  promptness,  and  in any event within thirty
     (30) days thereof, give notice to each Agent  of (i) the establishment
     of  any  new  Pension  Plan, stock option plan, bonus  plan,  deferred
     compensation or profit-sharing  plan  of  any  Borrower  (which notice
     shall include a copy of such plan), (ii) the commencement  of material
     contributions  to  any  Employee  Benefit Plan, Pension Plan, Canadian
     Employee Pension Plan or Mexican Employee  Pension  Plan  to  which no
     Borrower or any of their ERISA Affiliates was previously contributing,
     (iii)  any  material increase in the benefits of any existing Employee
     Benefit Plan,  Pension Plan, Canadian Employee Pension Plan or Mexican
     Employee Pension  Plan,  (iv)  each  funding waiver request filed with
     respect to any Pension Plan, Canadian Employee Pension Plan or Mexican
     Employee Pension Plan and all communications  received  or sent by any
     Borrower or any ERISA Affiliate with respect to such request  and  (v)
     the  failure of any Borrower or any ERISA Affiliate to make a required
     installment  or  payment  under Section 302 of ERISA or Section 412 of
     the Code (in the case of Employee  Benefit Plans regulated by the Code
     or ERISA) or under any Foreign Benefit  Law,  Canadian  Benefit Law or
     Mexican  Benefit Law (in the case of Employee Benefit Plans  regulated
     by any Foreign  Benefit  Law,  Canadian Benefit Law or Mexican Benefit
     Law) by the due date;

          (b)  Promptly  and  in any event  within  fifteen  (15)  days  of
     becoming aware of the occurrence  or forthcoming occurrence of any (a)
     Termination Event or (b) nonexempt  "prohibited  transaction," as such
     term is defined in Section 406 of ERISA or Section  4975  of the Code,
     in  connection with any Employee Benefit Plan or Pension Plan  or  any
     trust  created  thereunder,  deliver to each Agent a notice specifying
     the nature thereof, what action  any  Borrower  or any ERISA Affiliate
     has  taken,  is taking or proposes to take with respect  thereto  and,
     when known, any  action  taken  or  threatened by the Internal Revenue
     Service, the Department of Labor or the PBGC with respect thereto; and

          (c) With reasonable promptness but  in  any  event within fifteen
     (15)  days for purposes of clauses (a), (b) and (c),  deliver  to  the
     Agent copies  of  (a)  any  unfavorable  determination letter from the
     Internal Revenue Service regarding the qualification  of  an  Employee
     Benefit  Plan  under  Section  401(a)  of  the  Code,  (b) all notices
     received by any Borrower or any ERISA Affiliate of the PBGC's  or  any
     Governmental  Authority's  intent  to terminate any Pension Plan or to
     have a trustee appointed to administer  any  Pension  Plan,  (c)  each
     Schedule  B  (Actuarial  Information)  to the annual report (Form 5500
     Series)  filed  by  each  Borrower  or any ERISA  Affiliate  with  the
     Internal Revenue Service with respect to each Pension Plan and (d) all
     notices  received  by  any  Borrower or any  ERISA  Affiliate  from  a
     Multiemployer Plan sponsor concerning  the  imposition  or  amount  of
     withdrawal   liability   pursuant  to  Section  4202  of  ERISA.   The
     applicable Borrower will notify  the  Agent in writing within five (5)
     Business  Days  of  such  Borrower  or any ERISA  Affiliate  obtaining
     knowledge or reason to know that such  Borrower or any ERISA Affiliate
     has  filed  or intends to file a notice of  intent  to  terminate  any
     Pension Plan  under  a  distress  termination  within  the  meaning of
     Section 4041(c) of ERISA.

          (d) With reasonable promptness, and in any event within thirty
     (30) days of the date the Authorized Representative receives notice,
     give notice to each Agent of (i) the establishment of any new Canadian
     Employee Pension Plan or Mexican Employee Pension Plan (which notice
     shall include a copy of such plan at the request of either Agent),
     (ii) the commencement of contributions to any Canadian Employee
     Pension Plan to which Consoltex was not previously contributing, or
     (iii) the commencement of contributions to any Mexican Employee
     Pension Plan to which Consoltex Mexico or any Mexican Company was not
     previously contributing, provided in each case, same would be
     reasonably likely to have a Material Adverse Effect;

          (e) Promptly and in any event within thirty (30) days of the
     Authorized Representative's becoming aware of the occurrence or
     forthcoming occurrence of any Canadian Termination Event or Mexican
     Termination Event which would be reasonably likely to have a Material
     Adverse Effect; and

          (f)  With  reasonable  promptness but in any event within fifteen
     (15) Business Days, deliver to  each  Agent  copies of any unfavorable
     determination  letter from Governmental Authority  regarding  (i)  the
     registration of  a Canadian Employee Pension Plan of Consoltex that is
     intended to be registered  under  Canadian  Benefit  Law,  or (ii) the
     registration of a Mexican Employee Pension Plan of Consoltex Mexico or
     any  Mexican  Company that is intended to be registered under  Mexican
     Benefit Law, except  where  such  failure to deliver such copies would
     not reasonably be likely to have a Material Adverse Effect.

     9.18 CONTINUED OPERATIONS.  Continue  at  all  times  to  conduct  its
business  and  engage  principally  in  the  same line or lines of business
substantially  as  heretofore  conducted,  or  other   lines   of  business
substantially related thereto.

     9.19 LEASE  PURCHASE  AGREEMENT.   Notwithstanding  anything  to   the
contrary  contained  in  this  Agreement  or in any Loan Document, LINQ, as
Tenant  under  the  Lease  Purchase Agreement by  and  between  itself  and
Dorchester County, South Carolina dated as of December 31, 1997 (the "Lease
Purchase Agreement"), may take  any  action  permitted  to  be taken by the
Tenant  under  the Lease Purchase Agreement, provided that LINQ  shall  (i)
make such requests  and  take  such  action  which it is permitted, but not
obligated, to do so under the terms of the Lease  Purchase Agreement or the
related documents as from time to time directed in  writing by the Required
Lenders,  including  without  limitation  pursuant to Sections  8.6(D)  and
10.2(A)(6)  of the Lease Purchase Agreement,  (ii)  not  amend,  revise  or
supplement the  Lease  Purchase  Agreement  or the related documents in any
manner materially adverse to the interests of  the  Lenders,  and (iii) not
permit  any  action to be taken by Dorchester County, South Carolina  under
the terms of Section  8.6  of the Lease Purchase Agreement that LINQ is not
otherwise  permitted  to take  under  the  terms  and  conditions  of  this
Agreement or any other  Loan  Document without the approval of the Required
Lenders.

     9.20 LOCK BOXES AND LOCK BOX  ACCOUNTS.   At  all times after the date
set forth in SECTION 7.3(A) therefor, each US Borrower  and  each  Canadian
Borrower  will  maintain  not less than one Lock Box and not less than  one
Lock Box Account, and each  such  Lock  Box  and  Lock Box Account shall be
maintained as provided herein and in the applicable  Lock Box Agreement and
Cash Collateral Agreement, and shall, so long as such Lock Box and Lock Box
Account are required hereunder, notify and instruct all  obligors,  account
parties  and licensees of the Accounts Receivable to direct payment of  all
Accounts Receivable  to the appropriate Lock Box.  All receipts in the Lock
Box shall be deposited  on  a  daily  basis  into  the  applicable Lock Box
Account maintained pursuant to a Cash Collateral Agreement  and as security
for the Facilities.  In the event at any time any US Borrower  or  Canadian
Borrower  wishes  to add any Lock Box or Lock Box Account, such US Borrower
or Canadian Borrower  shall  deliver  to the Agents (a) an updated SCHEDULE
5.4 setting forth all Lock Boxes and Lock Box Accounts maintained by all US
Borrowers and Canadian Borrowers at such  time,  (b)  a fully executed Lock
Box Agreement with respect to each additional Lock Box,  and  (c)  a  fully
executed Cash Collateral Agreement with respect to each additional Lock Box
Account.


<PAGE>



                                 ARTICLE X

                            Negative Covenants

     Until the Facility Termination Date, unless the Required Lenders shall
otherwise  consent  in  writing,  no  Borrower will, nor will it permit any
Subsidiary to:

     10.1 FINANCIAL COVENANTS.

          (a) MINIMUM AVAILABLE LIQUIDITY.   Permit  Available Liquidity as
     of any date of measurement thereof to be less than  the GREATER of (i)
     the book value of the Third Party Mexican Accounts Payable  as of such
     date, and (ii) the amount set forth below for such period or  date, as
     applicable:

          PERIOD                   MINIMUM AVAILABLE LIQUIDITY

     On the Closing Date $ 15,000,000

     At any time after the Closing Date and
     through November 30, 2000 $ 7,000,000

     At any time during December 2000 $ 9,000,000

     At any time from January 1, 2001
     through March 31, 2001 $ 10,000,000

     As of March 10, 2001 $ 12,000,000

     At any time during April 2001 $ 5,000,000

     At any time after April 30, 2001 (except
     on September 10, 2001 and October 31, 2001,
     when the amount set forth below is applicable) $ 0

     As of September 10, 2001 $ 12,000,000

     As of October 31, 2001 $ 5,000,000

     ; PROVIDED, HOWEVER, that at any time prior to December 1, 2000 and at
     any  time  after  Consoltex Mexico and/or any of the Mexican Companies
     grants to the Agents  and  the Lenders Liens in its assets pursuant to
     SECTION  5.7, the book value  of  the  Third  Party  Mexican  Accounts
     Payable shall  be  deemed  to be $0 for purposes of SECTION 10.1(A)(I)
     only.

          (b) MINIMUM REVENUES.   Permit  revenues of the Borrowers and the
     Guarantors, on a consolidated basis, from sales in the ordinary course
     of business for any month set forth below  to be less than that amount
     set forth below opposite such month:

        MONTH                      MINIMUM REVENUE

     October 2000                     $29,740,800

     November 2000                    $28,740,800

     December 2000                    $24,095,200

     ;  PROVIDED,  HOWEVER,  that (i) to the extent  the  revenues  of  the
     Borrowers and the Guarantors,  on  a consolidated basis, from sales in
     the ordinary course of business for  October  2000 exceed $29,740,800,
     such excess shall reduce the revenue required above for November 2000,
     and  (ii)  to  the  extent  the  revenues  of  the Borrowers  and  the
     Guarantors, on a consolidated basis, from sales in the ordinary course
     of business for October and November 2000 combined exceed $58,481,600,
     such excess shall reduce the revenue required above for December 2000.

          (c) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated Leverage
     Ratio as of the end of the applicable period set  forth  below  to  be
     greater than that amount set forth below opposite such period:
                                   Maximum Consolidated
        PERIOD                        LEVERAGE RATIO

     One fiscal quarter ending
     March 31, 2001                   4.80 to 1.00

     Two fiscal quarters ending
     June 30, 2001                    4.45 to 1.00

     Three fiscal quarters ending
     September 30, 2001               4.20 to 1.00

          (d)   CONSOLIDATED   FIXED  CHARGE  COVERAGE  RATIO.  Permit  the
     Consolidated  Fixed  Charge Coverage  Ratio  as  of  the  end  of  the
     applicable period set  forth  below  to  be  less than that amount set
     forth below opposite such period:

                                   Minimum Consolidated
        PERIOD                   FIXED CHARGE COVERAGE RATIO

     One fiscal quarter ending
     March 31, 2001                   0.88 to 1.00

     Two fiscal quarters ending
     June 30, 2001                    0.95 to 1.00

     Three fiscal quarters ending
     September 30, 2001               1.00 to 1.00

          (e) MAXIMUM THIRD PARTY MEXICAN ACCOUNTS PAYABLE. Permit the book
     value of the Third Party Mexican Accounts Payable  as  of  any date of
     measurement thereof to be greater than the amount set forth  below for
     such date:


                              Maximum Third Party
          DATE                     MEXICAN ACCOUNTS PAYABLE

     At any time from February 1, 2001
     through February 28, 2001 $ 8,000,000

     At any time from March 1, 2001
     through March 31, 2001 $ 7,000,000

     At any time from April 1, 2001
     through the Stated Termination Date $ 5,000,000

     ;  PROVIDED, HOWEVER, that if at any time Consoltex Mexico and/or  any
     of the Mexican Companies grants to the Agents and the Lenders Liens in
     its  assets  pursuant  to  SECTION  5.7, compliance with this covenant
     shall no longer be required.


     10.2 ACQUISITIONS.   Enter  into  any  agreement,   contract,  binding
commitment or other binding arrangement providing for any  Acquisition,  or
take  any action to solicit the tender of securities for proxies in respect
thereof  in  order to effect any Acquisition, or in any other manner effect
any Acquisition.

     10.3 CAPITAL  EXPENDITURES.   Make or become committed to make Capital
Expenditures except Capital Expenditures  made during the Fiscal Year ended
December 31, 2001, that do not exceed  $10,000,000  in the aggregate during
such Fiscal Year.

     10.4 LIENS.   Incur,  create or permit to exist any  Lien,  charge  or
other encumbrance of any nature  whatsoever with respect to any property or
assets now owned or hereafter acquired  by  any Borrower or any Subsidiary,
other than

          (a) Liens created under the Security  Instruments in favor of the
     Agents, the US Collateral Agent, the Canadian  Collateral  Trustee and
     the Lenders, and otherwise existing as of the date hereof and  as  set
     forth in SCHEDULE 8.7;

          (b) Liens imposed by law for taxes, assessments or charges of any
     Governmental  Authority  for  claims  not  yet  due or which are being
     contested   in  good  faith  by  appropriate  proceedings   diligently
     conducted and  with  respect  to  which  adequate  reserves  are being
     maintained   in   accordance  with  GAAP,  which  Liens  are  not  yet
     exercisable to effect the sale or seizure of property subject thereto;

          (c)  statutory   Liens   of  landlords  and  Liens  of  carriers,
     warehousemen, mechanics, materialmen  and  other  Liens arising in the
     ordinary course of business and in existence less than  45  days  from
     the  date  of  creation  thereof  for amounts not yet due or which are
     being  contested in good faith by appropriate  proceedings  diligently
     conducted  and  with  respect  to  which  adequate  reserves are being
     maintained   in  accordance  with  GAAP,  which  Liens  are  not   yet
     exercisable to effect the sale or seizure of property subject thereto;

          (d) Liens  incurred  or  deposits  made in the ordinary course of
     business  in  connection  with  workers'  compensation,   unemployment
     insurance and other types of social security benefits or to secure the
     performance  of  tenders,  bids,  leases,  surety  and  appeal  bonds,
     contracts  (other  than  for the repayment of Indebtedness), statutory
     obligations and other similar  obligations  or  arising as a result of
     progress payments under government contracts;

          (e)  easements  (including  reciprocal  easement  agreements  and
     utility agreements), rights-of-way, covenants, consents, reservations,
     encroachments, variations and zoning and other  restrictions,  charges
     or  encumbrances  (whether  or  not recorded) with respect only to any
     real  property  of  any  Borrower or  any  Subsidiary,  which  do  not
     interfere materially with  the ordinary conduct of the business of any
     Borrower or any Subsidiary and  which  do  not materially detract from
     the value of the property to which they attach  or  materially  impair
     the use thereof to any Borrower or any Subsidiary; and

          (f)  purchase  money Liens to secure Indebtedness permitted under
     SECTION 10.5(D) and incurred  to  purchase fixed assets, provided such
     Indebtedness represents not less than  90%  of  the  purchase price of
     such assets as of the date of purchase thereof and no  property  other
     than the assets so purchased secures such Indebtedness;

          (g) Liens granted to factors of Accounts Receivable in connection
     with  Indebtedness  owing  thereto  permitted  hereunder  pursuant  to
     SECTION  10.5(I)  which attach only to those Accounts Receivables that
     are factored;

          (h) Liens arising  in  connection  with  Capital Leases permitted
     under SECTION 10.5(F); provided that no such Lien  shall extend to any
     Collateral or to any other property other than the assets  subject  to
     such Capital Leases;

          (i)  Liens  in  favor  of  issuers  of documentary and commercial
     letters of credit not otherwise prohibited  under  the  terms  of this
     Agreement on (and limited to) the documents and goods covered thereby;

          (j)  the  reservations, limitations, provisos and conditions,  if
     any, expressed in  any  original  grants  from  the  Crown,  statutory
     exception to title and reservation of mineral rights;

          (k) extensions, renewals and replacements of any of the foregoing
     so  long  as  such  Liens  continue  only  to  apply  to  the property
     previously subject thereto;

          (l) Liens in favor of customs and revenue authorities  arising as
     a matter of law to secure the payment of customs duties resulting from
     the  importation  of  goods  and  in  each case attaching only to such
     goods;

          (m) with respect to any real property  or  fixtures, any interest
     or title of a lessor or sublessor and any restriction  or  encumbrance
     to  which  the  interest  or title of such lessor or sublessor may  be
     subject  that would not be reasonably  expected  to  have  a  Material
     Adverse Effect;

          (n) (i)  deposits to secure the performance of leases of property
     (whether  real,   personal  or  mixed)  of  the  Borrowers  and  their
     Subsidiaries (excluding  Capitalized Leases) in the ordinary course of
     business and (ii) Liens arising  from precautionary Uniform Commercial
     Code financing statement filings (or  other similar filings) regarding
     property subject to operating leases;

          (o) Liens arising solely from conditional  sale, title retention,
     consignment  or  other  similar  arrangements for the  sale  of  goods
     entered into by any Borrower or any  Subsidiary in the ordinary course
     of business;

          (p) with respect to any real property,  title exceptions referred
     to in SECTION 8.7 and title defects or irregularities  in  title which
     are of a minor nature in the aggregate and will not materially  impair
     the  use of the property for the purposes for which it is held by  any
     Borrower or any of its Subsidiaries; and

          (q) with respect to any real property, Liens in favor of a public
     utility  or any municipality or governmental or other public authority
     when required  by  such  utility or other authority in connection with
     the operations of any Borrower  or  any  of  its  Subsidiaries  in the
     ordinary course of its business.

     10.5 INDEBTEDNESS.   Incur,  create,  assume  or  permit  to exist any
Indebtedness, howsoever evidenced, except:

          (a) Indebtedness existing as of the Closing Date as set  forth in
     SCHEDULE  8.6;  provided,  none  of  the  instruments  and  agreements
     evidencing  or  governing such Indebtedness shall be amended, modified
     or supplemented after  the  Closing  Date  to  change adversely to any
     Agent,  any  Lender,  any  Borrower  or any Subsidiary  any  terms  of
     subordination, repayment or rights of  enforcement,  conversion,  put,
     exchange,  the aggregate principal amount thereof or the interest rate
     or fees payable thereon, or other rights from such terms and rights as
     in effect on  the  Closing Date, and any amendment or modification of,
     or supplement to, the  Subordinated  Indenture  or  the  Les  Gantiers
     Debenture,  or  any  Subordinated  Note  or  PIK  Note,  is subject to
     compliance with SECTIONS 10.21(B) and 10.22(A), respectively;

          (b)  Indebtedness owing to any Agent or any Lender in  connection
     with this Agreement, any Note or other Loan Document;

          (c) the  endorsement  of  negotiable  instruments  for deposit or
     collection or similar transactions in the ordinary course of business;

          (d) purchase money Indebtedness described in SECTION  10.4(F) not
     to  exceed  an  aggregate outstanding principal amount at any time  of
     $250,000;

          (e) Indebtedness  arising from Rate Hedging Obligations permitted
     under SECTION 10.16;

          (f) Indebtedness (i) consisting of Capital Leases in an aggregate
     amount at any time not to  exceed $250,000 and (ii) in the case of any
     such Capital Leases to which  any  Subsidiary  of  any  Borrower  is a
     party,  guarantees  by such Borrower or any of its Subsidiaries of the
     obligations of such Subsidiary under such leases;

          (g) Subordinated Debt;

          (h)  (i) unsecured  Indebtedness  incurred  by  any  Borrower  or
     Guarantor (other  than  Consoltex Mexico and each Mexican Company) and
     owing to any other Borrower  or Guarantor (other than Consoltex Mexico
     and each Mexican Company), (ii)  unsecured  Indebtedness  incurred  by
     Consoltex  Mexico  or  any  Mexican  Company  and  (A) owing to any of
     Consoltex Mexico or any Mexican Company or (B) owing  to  any Borrower
     or  Guarantor  (other  than  Consoltex  Mexico or any Mexican Company)
     which  does  not violate SECTION 10.7(A), and  (iii)  unsecured  trade
     Indebtedness incurred by any Mexican Company in the ordinary course of
     business and consistent  with  past  business  practices  and owing to
     LINQ, Consoltex or Balson-Hercules;

          (i)  Indebtedness  owing  to factors of Accounts Receivable  from
     time to time from any one or more  of  the Borrowers on a non-recourse
     basis to such Borrowers in principal amount  at  any  time outstanding
     not  to  exceed  $25,000,000 in the aggregate, provided that  of  such
     amount not more than  $7,000,000 in the aggregate shall at any time be
     owing to all factors by  all  Borrowers in connection with their sales
     of inventory produced in and distributed  from  Mexico to customers in
     the United States, and without duplication the guaranty  by a Borrower
     of  payment  of  such  Indebtedness  incurred  by another Borrower  or
     Subsidiary  thereof,   the  payment  of  which  is  secured  by  Liens
     permitted pursuant to SECTION 10.4(G).

          (j)  additional  unsecured  Indebtedness for Money  Borrowed  not
     otherwise covered by clauses (a) through  (i) above, provided that the
     aggregate outstanding principal amount of all  such other Indebtedness
     permitted under this clause (j) shall in no event exceed $1,000,000 at
     any time; and

          (k)  Indebtedness  extending  the  maturity  of,   or   renewing,
     refunding  or  refinancing, in whole or in part, Indebtedness incurred
     under CLAUSES (A)  THROUGH (J) of this SECTION 10.5, provided that the
     terms  of  any  such  extension,  renewal,  refunding  or  refinancing
     Indebtedness (and of any  agreement  or  instrument  entered  into  in
     connection  therewith)  are  no  less  favorable  to the Agent and the
     Lenders than the terms of the Indebtedness as in effect  prior to such
     action,  and provided further that (1) the aggregate principal  amount
     of or interest  rate  or  rates  and  fees  payable  on such extended,
     renewed, refunded or refinanced Indebtedness shall not be increased by
     such  action, (2) the group of direct or contingent obligors  on  such
     Indebtedness shall not be expanded as a result of any such action, (3)
     immediately  before  and  immediately  after giving effect to any such
     extension, renewal, refunding or refinancing,  no  Default or Event of
     Default  shall  have  occurred  and  be continuing, and (4)  any  such
     refunding,  renewing  or  refinancing  of    Indebtedness   which   is
     Subordinated  Debt  shall  be  accomplished  using  other Indebtedness
     subordinate to the Obligations hereunder, the terms of  which shall be
     no less restrictive than the terms of this Agreement and  the terms of
     subordination of which shall be no less favorable to the Lenders  than
     the Subordinated Debt being refinanced.

     10.6 TRANSFER OF ASSETS. Sell, lease, transfer or otherwise dispose of
any assets of any Borrower or any Subsidiary other than:

          (a) dispositions of inventory in the ordinary course of business;

          (b) sales, transfers or other dispositions (i) among any Borrower
     or  Guarantor  and any other Borrower or Guarantor (in each case other
     than Consoltex Mexico  and  each  Mexican  Company),  (ii) from any of
     Consoltex Mexico or any  Mexican Company to any Borrower or Guarantor,
     (iii) between Consoltex Mexico and any Mexican Company or among any of
     the  Mexican Companies, (iv) among one or more Subsidiaries  that  are
     not Guarantors,  (v)  necessary  to  effect  the  Mexican  Operational
     Restructuring, and (vi) in the event operations are ceased at  any one
     or  more  of  the  Atlas  facility in Des Plaines, Illinois, the Atlas
     facility  in Houston, Texas  or  the  Marino  facility  in  Opa-Locka,
     Florida, fixed  assets  and  inventory  previously located at any such
     facility  to  any  Mexican  Company (other than  Rafytica),  up  to  a
     liquidation  value  (based on the  MB  Valuation  study  completed  in
     October 2000) of $300,000;

          (c) the termination  of any lease of real or personal property to
     which any Borrower or any Subsidiary  is subject, whether as lessee or
     lessor, provided such real or personal property is not material to the
     operations  or  properties  of  such Borrower  or  Subsidiary  or,  if
     material, has been acquired by such  Borrower  or Subsidiary effective
     as of the termination of such lease therefor;

          (d) in transactions permitted by SECTION 10.8;

          (e)  sales  (in  the  ordinary  course of business)  of  Accounts
     Receivable  to  factors, provided that any  Indebtedness  incurred  in
     connection therewith  does  not  violate  SECTION  10.5(I)  and  Liens
     granted in connection therewith do not violate SECTION 10.4(G);

          (f) dispositions of property that is substantially worn, damaged,
     obsolete  or, in the judgment of any Borrower, no longer best used  or
     useful in its business or that of any Subsidiary; and

          (g) dispositions  of property not otherwise permitted above which
     has a net book value not  to exceed $1,000,000 in the aggregate during
     the term of this Agreement.

     10.7 INVESTMENTS.  Purchase,  own,  invest  in  or  otherwise acquire,
directly or indirectly, any stock or other securities, or make or permit to
exist  any interest whatsoever in any other Person, or make  or  permit  to
exist any  loans,  advances  or  financial assistance to any Person, except
that any Borrower or any Subsidiary may maintain investments or invest in:

          (a)  any  Guarantor;  PROVIDED,   that   all  investment  capital
     contributions, equity acquisitions and infusions,  loans,  advances or
     financial  assistance  by  all  Borrowers  and Guarantors (other  than
     Consoltex Mexico and each Mexican Company) to Consoltex Mexico and the
     Mexican Companies collectively shall not exceed  $1,000,000  in  total
     principal amount during the term of this Agreement;

          (b)  investments  existing as of the date hereof and as set forth
     in SCHEDULE 8.4;

          (c) accounts receivable  arising  and trade credit granted in the
     ordinary   course   of  business  and  any  securities   received   in
     satisfaction  or  partial  satisfaction  thereof  in  connection  with
     accounts of financially  troubled  Persons  to  the  extent reasonably
     necessary in order to prevent or limit loss;

          (d) Investments consisting of intercompany Indebtedness otherwise
     permitted under SECTION 10.5;

          (e)  loans  and  advances  to  employees of any Borrower  or  any
     Subsidiary  to  satisfy  or  reimburse travel,  relocation  and  other
     similar business related expenses  of  such  employees in the ordinary
     course of business; and

          (f)  other  loans,  advances  and  investments  in  an  aggregate
     principal amount at any time outstanding not to exceed $300,000.

     10.8 MERGER OR CONSOLIDATION.  (a) Consolidate  with or merge into any
other Person, or (b) permit any other Person to merge  into  it;  PROVIDED,
however,  (i)  any Subsidiary of any Borrower may merge or transfer all  or
substantially all  of  its assets into or consolidate with such Borrower or
any wholly-owned Subsidiary  of  such  Borrower  which  is  also a Borrower
(other than Consoltex Mexico and Rafytek), and (ii) the Mexican Operational
Restructuring, to the extent not effected prior to the Closing Date, may be
consummated on or before December 31, 2000; PROVIDED FURTHER  that,  in the
case  of  any merger or consolidation referred to in this SECTION 10.8,  if
the US Collateral  Agent,  the  Canadian  Collateral Agent, or any Agent on
behalf of the Lenders has a perfected Lien  on  any property so transferred
(or owned by any party subject to such merger or  consolidation), such Lien
shall remain continuously perfected.

     10.9 RESTRICTED PAYMENTS.  Make any Restricted Payment or apply or set
apart  any of their assets therefor or agree to do any  of  the  foregoing;
provided,  however,  the  Borrowers  and  Guarantors,  and their respective
Subsidiaries, as applicable, may make the following Restricted  Payments in
any  Fiscal  Year (on a non-cumulative basis, with the effect that  amounts
not paid in any  Fiscal  Year  may  not  be  carried  over for payment in a
subsequent  period)  if immediately prior to and immediately  after  giving
effect thereto no Default  or  Event of Default shall exist or occur and be
continuing:

          (a) any Subsidiary of a Borrower may declare and pay dividends to
     such Borrower or any Subsidiary of such Borrower that is a Borrower;

          (b) any Borrower or any  Subsidiary may declare dividends or make
     distributions in each case payable  solely  in  shares  of its capital
     stock  PROVIDED  that a Change in Control shall not result  from  such
     dividend or distribution, and PROVIDED FURTHER that if such shares are
     transferred to a Borrower,  Guarantor or Subsidiary in connection with
     such a dividend or distribution, the shares shall be pledged under the
     applicable Pledge Agreement and  delivered  to the US Collateral Agent
     or the Canadian Collateral Trustee, as applicable; and

          (c) the issuers of the Subordinated Debt may pay interest thereon
     in accordance with the terms thereof as in effect  on the Closing Date
     in  the  Subordinated  Indenture,  the  Subordinated  Notes,  the  Les
     Gantiers  Debenture  and the PIK Notes (but, in the case  of  the  Les
     Gantiers Debenture and  the PIK Notes, no such payment will be made in
     cash); PROVIDED that no such  issuer  of Subordinated Debt may redeem,
     retire, defease or otherwise acquire for value any principal amount of
     any such Subordinated Debt for any reason  whether  as  an optional or
     mandatory redemption.

     10.10 TRANSACTIONS WITH AFFILIATES.  Other than transactions permitted
under SECTIONS 10.5, 10.6, 10.7, 10.8 and 10.9, enter into any  transaction
after the Closing Date, including, without limitation, the purchase,  sale,
lease  or  exchange  of property, real or personal, or the rendering of any
service, with any Affiliate  of  any Borrower, except (a) that such Persons
may render services to any Borrower  or  any Subsidiary for compensation at
the same rates generally paid by Persons engaged  in  the  same  or similar
businesses for the same or similar services, (b) that any Borrower  or  any
Subsidiary may render services to such Persons for compensation at the same
rates  generally  charged  by  such  Borrower or such Subsidiary and (c) in
either  case  in  the  ordinary course of  business  and  pursuant  to  the
reasonable requirements  of  any  Borrower's (or any Subsidiary's) business
consistent with past practice of such  Borrower  and  its  Subsidiaries and
upon fair and reasonable terms no less favorable to such Borrower  (or  any
Subsidiary) than would be obtained in a comparable arm's-length transaction
with a Person not an Affiliate.

     10.11  COMPLIANCE  WITH ERISA, THE CODE, FOREIGN BENEFIT LAWS, MEXICAN
BENEFIT LAW AND CANADIAN  BENEFIT  LAW.   With respect to any Pension Plan,
Employee  Benefit Plan, Canadian Employee Pension  Plan,  Mexican  Employee
Pension Plan, or Multiemployer Plan, as applicable in each case below:

          (a)  permit  the  occurrence of any Termination Event which would
     result in a material liability  on  the  part  of  any Borrower or any
     ERISA Affiliate to the PBGC or to any Governmental Authority; or

          (b) permit the present value of all benefit liabilities under all
     Pension Plans, under all Canadian Employee Pension Plans, or under all
     Mexican Employee Pension Plans, as applicable, to exceed  the  current
     value  of  the assets of such Pension Plans, Canadian Employee Pension
     Plans by more  than  $5,500,000, or Mexican Employee Pension Plans, as
     applicable, allocable to such benefit liabilities; or

          (c) permit any accumulated  funding  deficiency  (as  defined  in
     Section  302 of ERISA and Section 412 of the Code) with respect to any
     Pension Plan, whether or not waived; or

          (d) fail to make any contribution or payment to any Multiemployer
     Plan which any Borrower or any ERISA Affiliate may be required to make
     under any  agreement  relating  to such Multiemployer Plan, or any law
     pertaining thereto; or

          (e) engage, or permit any Borrower  or  any  ERISA  Affiliate  to
     engage,  in  any  prohibited transaction under Section 406 of ERISA or
     Sections 4975 of the  Code  for  which  a  civil  penalty  pursuant to
     Section 502(I) of ERISA or a tax pursuant to Section 4975 of  the Code
     may be imposed; or

          (f)  permit  the  establishment  of  any  Employee  Benefit  Plan
     providing  post-retirement  welfare benefits or establish or amend any
     Employee Benefit Plan which establishment or amendment could result in
     liability to the Borrower or  any  ERISA  Affiliate  or  increase  the
     obligation  of  any Borrower or any ERISA Affiliate to a Multiemployer
     Plan,  except  where   such   establishment  or  amendment  would  not
     reasonably be likely to have a Material Adverse Effect; or

          (g) fail, or permit any Borrower  or any ERISA Affiliate to fail,
     to  establish,  maintain and operate each  Employee  Benefit  Plan  in
     compliance in all  material respects with the provisions of ERISA, the
     Code, all applicable  Foreign  Benefit  Laws  and all other applicable
     laws and the regulations and interpretations thereof.

          (h) permit the occurrence of any Canadian Termination Event or
     Mexican Termination Event which would result in a material liability
     on the part of any Borrower; or

          (i) engage in a transaction that would render a Canadian Employee
     Pension Plan liable to tax under Part XI of the INCOME TAX ACT or to
     have its registration revoked by any Governmental Authority; or

          (j) fail, or permit to fail, to establish,  maintain  and operate
     each Canadian Employee Pension Plan and Mexican Employee Pension  Plan
     in compliance in all material respects with the provisions of Canadian
     Benefit Law or Mexican Benefit Law, respectively.

     10.12 FISCAL YEAR.  Change its Fiscal Year.

     10.13  DISSOLUTION,  ETC.  Wind up, liquidate or dissolve (voluntarily
or involuntarily) or commence  or  suffer  any proceedings seeking any such
winding up, liquidation or dissolution, except  in connection with a merger
or consolidation permitted pursuant to SECTION 10.8.

     10.14 LIMITATIONS ON SALES AND LEASEBACKS.   Except in connection with
Capital Leases otherwise permitted pursuant to SECTION  10.5(F), enter into
any arrangement or arrangements with any Person providing  for  the leasing
by any Borrower or any Subsidiary of real or personal property, whether now
owned  or  hereafter acquired in a single transaction or series of  related
transactions,  which  has  been  or  is  to  be  sold or transferred by any
Borrower or any Subsidiary to such Person or to any  other  Person  to whom
funds  have  been  or are to be advanced by such Person on the security  of
such property or rental obligations of any Borrower or any Subsidiary.

     10.15 CHANGE IN  CONTROL.   Cause,  suffer or permit to exist or occur
any Change of Control, or cause, suffer or permit any Borrower or Guarantor
(other  than Consoltex Holdings) not to be  wholly  owned  by  a  Borrower,
except for  the minimum number of shares that must be held by third parties
to comply with applicable law.

     10.16 RATE HEDGING OBLIGATIONS.  Incur any Rate Hedging Obligations or
enter into any agreements, arrangements, devices or instruments relating to
Rate  Hedging  Obligations,  except  pursuant  to  Swap  Agreements  in  an
aggregate  notional  amount  not  to  exceed  at  any time 50% of the Total
Commitments for all Facilities for the purpose of interest rate or currency
exchange protection, and not for speculative purposes.

     10.17 NEGATIVE PLEDGE CLAUSES.  Enter into or  cause, suffer or permit
to  exist  any  agreement  with any Person other than the  Agents  and  the
Lenders  pursuant to this Agreement  or  any  other  Loan  Documents  which
prohibits  or  limits  the  ability  of  any  Borrower or any Subsidiary to
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter  acquired, provided that
the  Borrower  and  any  Subsidiary  may  enter into such an  agreement  in
connection with, and that applies only to,  (i)  property acquired with the
proceeds of purchase money Indebtedness permitted  hereunder,  (ii)  assets
financed by a Capital Lease permitted hereunder, and (iii) property subject
to  any  Lien  permitted  by this Agreement and not released after the date
hereof, when such prohibition  or limitation is by its terms effective only
against the assets subject to such Lien.

     10.18 COMPENSATION; REIMBURSEMENT OF EXPENSES.

          (a)  Pay  any  salary,  fees,   and  other  direct  and  indirect
     remuneration and compensation to any of  its  directors  and executive
     officers in an amount in excess of those amounts paid to directors and
     executive officers of comparable companies engaged in the same general
     type of business and in similar financial condition;

          (b)  Reimburse  any  stockholder, officer, director, employee  or
     agent of the Borrower or any  Subsidiary  for any expenses incurred by
     such Person other than reasonable expenses  incurred  for or on behalf
     of the Borrower or any Subsidiary in the ordinary course of business.

     10.19   CHANGE   IN   ACCOUNTANTS.   Change   its  independent  public
accountants.

     10.20 PREPAYMENTS, ETC. OF INDEBTEDNESS.

          (a) Prepay, redeem, purchase, defease or otherwise  satisfy prior
     to  the scheduled maturity thereof in any manner, or make any  payment
     in violation of any subordination terms of, any Indebtedness; or

          (b)  Amend,  modify or change in any manner any term or condition
     of any Indebtedness  or  any  lease  so  that the terms and conditions
     thereof are less favorable to the Agent and the Lenders than the terms
     of such Indebtedness or leases as of the Closing Date.

     10.21. SUBORDINATED DEBT.

          (a) Fail at any time to maintain for any reason the Obligations
     as "Senior Debt" and "Designated Senior Debt" under the Subordinated
     Indenture and the Subordinated Notes; and

          (b) Without limitation of the generality of SECTION 10.20(B),
     amend, revise or supplement, in any manner adverse to the interests of
     the Lenders, the subordination provisions or payment or redemption
     terms of, the other covenants contained in, or events of default
     under, any of the Subordinated Debt.

     10.22. PIK NOTES.

          (a) Without limitation of the generality of SECTION 10.20(B),
     amend, revise or supplement, in any manner adverse to the interests of
     the Lenders, the subordination provisions or payment or conversion or
     redemption terms of the PIK Notes, or any other covenants contained
     in, or Events of Default with respect to, the PIK Notes; or

          (b) Pay any interest due and payable under the PIK Notes in cash,
     and instead will only pay such interest by the issuance of PIK
     Debentures pursuant to Section 1(b) of the Convertible Debenture.

     10.23 FEE LIMITATION AGREEMENT.  Pay any fee  to  AIP  other  than  in
compliance with the Fee Limitation Agreement as delivered to the Agents and
as  in effect on the Closing Date, or amend, modify or change in any manner
any term or condition of the Fee Limitation Agreement.

     10.24.  CONSOLTEX  HOLDINGS.   Allow  or  permit Consoltex Holdings to
conduct any business or own any assets other than  as  set forth in SECTION
8.21.

     10.25  LIMITATIONS  ON  UPSTREAMING.   Except  as otherwise  permitted
herein,  enter into any agreement restricting or limiting  the  payment  of
dividends  or  other  distributions  or  the  transfer  of  assets from any
Subsidiary  to any Borrower or Guarantor or to any other Subsidiary  owning
Subsidiary Securities of such Subsidiary.

     10.26 LIMITATIONS  ON  DEPOSIT ACCOUNTS.  Open or maintain any deposit
account of any nature with any  financial  institution except to the extent
each such deposit account is set forth on either  SCHEDULE  5.4 or SCHEDULE
5.5;  PROVIDED  that  if,  at  any  time,  any  Borrower wishes to open  an
additional deposit account without making such account  a  Lock Box Account
pursuant  to  SECTION 9.20, such Borrower shall deliver to the  Agents  not
later than 10 days after the opening of such additional deposit account (a)
an updated SCHEDULE  5.5  setting  forth  a  complete  description  of such
deposit   account,   including  the  name  and  address  of  the  financial
institution (which must  be  a  Lender  if the Borrower is domiciled in the
United States or Canada) and the account  number,  and (b) a fully executed
Deposit Account Agreement or Cash Collateral Agreement with respect to such
deposit account.

     10.27 LIMITATIONS ON SUBSIDIARIES.  Create or acquire any Subsidiary.


<PAGE>



                                ARTICLE XI

                    Events of Default and Acceleration

     11.1 EVENTS OF DEFAULT.  If any one or more of  the  following  events
(herein  called  "Events of Default") shall occur for any reason whatsoever
(and whether such  occurrence  shall  be  voluntary  or involuntary or come
about or be effected by operation of law or pursuant to  or  in  compliance
with  any  judgment,  decree  or  order of any court or any order, rule  or
regulation of any Governmental Authority), that is to say:

          (a) if default shall be made  in  the due and punctual payment of
     the  principal  of  any  Loan,  Reimbursement   Obligation   or  other
     Obligation,  or  of any fees on Bankers' Acceptances, when and as  the
     same shall be due  and  payable  whether  pursuant to any provision of
     ARTICLE II or ARTICLE III or ARTICLE IV, at  maturity, by acceleration
     or otherwise; or

          (b) if default shall be made in the due and  punctual  payment of
     any amount of interest on any Loan, Reimbursement Obligation  or other
     Obligation  or  of  any  fees  or  other amounts payable to any of the
     Lenders,  either  Agent  or  the  US  Collateral   Agent  or  Canadian
     Collateral  Trustee, on the date on which the same shall  be  due  and
     payable; or

          (c) if (i) default shall be made in the performance or observance
     of any covenant  set  forth  in SECTION 5.1, 5.4, 5.5, 9.1(H), 9.1(I),
     9.1(K) THROUGH (M), 9.5, 9.7,  9.11,  9.12,  9.20  or  ARTICLE X, (ii)
     default shall be made in the performance or observance of any covenant
     set forth in SECTION 9.1(A) through 9.1(G) or SECTION 9.1(J)  and such
     default shall continue for five (5) or more days, or (iii) any  of the
     requirements  of  SECTION  7.3(A) THROUGH (I) are not completed by the
     time provided for therein;

          (d) if a default shall  be  made in the performance or observance
     of,  or  shall  occur  under,  any covenant,  agreement  or  provision
     contained in this Agreement or the  Notes  (other than as described in
     CLAUSES (A), (B) OR (C) above or CLAUSE (K)  below)  and  such default
     shall continue for thirty (30) or more days, or shall occur under, any
     covenant,  agreement  or provision contained in any of the other  Loan
     Documents  (beyond any applicable  grace  period,  if  any,  contained
     therein) or  in  any instrument or document evidencing or creating any
     obligation, guaranty,  or  Lien  in  favor  of  either  Agent,  the US
     Collateral  Agent,  the  Canadian  Collateral  Trustee  or  any of the
     Lenders  or  delivered  to either Agent, the US Collateral Agent,  the
     Canadian Collateral Trustee  or  any of the Lenders in connection with
     or pursuant to this Agreement or any  of  the  Obligations,  or if any
     Loan  Document  ceases  to be in full force and effect (other than  as
     expressly provided for hereunder  or  thereunder  or  with the express
     written  consent  of  the  Required Lenders or all of the Lenders,  as
     applicable in accordance with SECTION 13.6), or if without the written
     consent of the Lenders, this  Agreement  or  any  other  Loan Document
     shall  be  disaffirmed  or  shall  terminate,  be  terminable  or   be
     terminated  or  become void or unenforceable for any reason whatsoever
     (other than as expressly  provided for hereunder or thereunder or with
     the express written consent  of  the  Required  Lenders  or all of the
     Lenders, as applicable in accordance with SECTION 13.6); or

          (e)  if there shall occur (i) a default, which is continuing,  in
     the payment  of  any principal, interest, premium or other amount with
     respect to (A) any  Subordinated Debt or (B) any other Indebtedness or
     Rate Hedging Obligation  (other  than the Loans and other Obligations)
     of any Borrower or any Subsidiary in an amount or Rate Hedge Value, as
     applicable, not less than $1,000,000  in the aggregate outstanding, or
     (ii) a default, which is not waived, in the performance, observance or
     fulfillment  of  any term or covenant contained  in  the  Subordinated
     Indenture, the Les  Gantiers Debenture, any Subordinated Note, any PIK
     Note, or any agreement  or  instrument  under or pursuant to which any
     Subordinated Debt or any other Indebtedness or Rate Hedging Obligation
     may have been issued, created, assumed, guaranteed  or  secured by any
     Borrower,  any Guarantor or any Subsidiary, or (iii) with  respect  to
     any such Rate Hedging Obligation, any termination event shall occur as
     to  which any  Borrower,  any  Guarantor  or  any  Subsidiary  is  the
     "affected party" under the agreement or instrument governing such Rate
     Hedging Obligation, or (iv) any other event of default as specified in
     any agreement  or  instrument  under  or  pursuant  to  which any such
     Subordinated Debt or other Indebtedness may have been issued, created,
     assumed, guaranteed or secured by any Borrower or any Subsidiary, and,
     in  each  case, such default or event of default or termination  shall
     continue for more than the period of grace, if any, therein specified,
     or such default  or  event  of default or termination shall permit the
     holder of any such Indebtedness  (or  any  agent  or trustee acting on
     behalf of one or more holders) to accelerate the maturity  of any such
     Indebtedness  or  terminate any agreement or instrument governing  any
     such Rate Hedging Obligation; or

          (f) if any representation,  warranty  or  other statement of fact
     contained in any Loan Document or in any writing,  certificate, report
     or  written statement at any time furnished to either  Agent,  the  US
     Collateral Agent, the Canadian Collateral Agent or any Lender by or on
     behalf  of  any Borrower or any Guarantor pursuant to or in connection
     with any Loan  Document  shall  be false or misleading in any material
     respect when given; or

          (g) if any Borrower or any Guarantor  or  any Subsidiary shall be
     unable to pay its debts generally as they become  due; file a petition
     to  take advantage of any insolvency statute; make an  assignment  for
     the  benefit   of   its  creditors;  commence  a  proceeding  for  the
     appointment  of a receiver,  trustee,  liquidator  or  conservator  of
     itself or of the whole or any substantial part of its property; file a
     petition or answer  seeking liquidation, reorganization or arrangement
     or similar relief under  the  federal  bankruptcy  laws  or  any other
     applicable law or statute; or

          (h)  if  a  court of competent jurisdiction shall enter an order,
     judgment  or  decree   appointing   a  custodian,  receiver,  trustee,
     liquidator  or  conservator  of any Borrower,  any  Guarantor  or  any
     Subsidiary or of the whole or  any  substantial part of its properties
     and such order, judgment or decree continues  unstayed  and  in effect
     for  a  period of sixty (60) days, or approve a petition filed against
     any Borrower,  any  Guarantor  or  any Subsidiary seeking liquidation,
     reorganization  or arrangement or similar  relief  under  the  federal
     bankruptcy laws or  any  other applicable law or statute of the United
     States of America or any state, which petition is not dismissed within
     sixty (60) days; or if, under  the provisions of any other law for the
     relief  or aid of debtors, a court  of  competent  jurisdiction  shall
     assume custody  or  control  of  any  Borrower,  any  Guarantor or any
     Subsidiary or of the whole or any substantial part of its  properties,
     which control is not relinquished within sixty (60) days; or  if there
     is commenced against any Borrower, any Guarantor or any Subsidiary any
     proceeding  or petition seeking reorganization, arrangement or similar
     relief under  the  federal bankruptcy laws or any other applicable law
     or  statute  of the United  States  of  America  or  any  state  which
     proceeding or  petition remains undismissed for a period of sixty (60)
     days; or if any  Borrower,  any  Guarantor or any Subsidiary takes any
     action to indicate its consent to  or  approval of any such proceeding
     or petition; or

          (i) if (i) one or more judgments or  orders  where the amount not
     covered  by  insurance (or the amount as to which the  insurer  denies
     liability) is  in excess of $500,000 is rendered against any Borrower,
     any Guarantor or  any  Subsidiary,  or  (ii)  there is any attachment,
     injunction or execution against any of the properties of any Borrower,
     any Guarantor or any Subsidiary for any amount  in  excess of $500,000
     in  the  aggregate;  and  such  judgment,  attachment,  injunction  or
     execution   remains   unpaid,  unstayed,  undischarged,  unbonded   or
     undismissed for a period of sixty (60) days; or

          (j) if any Borrower, any Guarantor or any Subsidiary shall, other
     than  in  the ordinary course  of  business  (as  determined  by  past
     practices),  suspend all or any part of its operations for a period of
     more than 60 days  and such suspension would reasonably be expected to
     have  a  Material  Adverse   Effect   on   the   Borrowers  and  their
     Subsidiaries, taken as a whole; or

          (k)   if  the  Borrowers  shall  not  have  complied   with   the
     requirements  of  SECTION  5.7(C)  within  the  time  period  provided
     therefor; or

          (l) if there shall occur and be continuing an Event of Default as
     defined in any of the other Loan Documents;

     then, and in any such event and at any time thereafter, if such  Event
     of Default or any other Event of Default shall be continuing,

               (A)  either  or  both of the following actions may be taken:
          (i) the Agents may, and  at the direction of the Required Lenders
          shall, declare any obligation  of  the  Lenders  and  the Issuing
          Banks  to make further Revolving Credit Loans and Canadian  Swing
          Line Loans  or  to issue additional Letters of Credit terminated,
          whereupon the obligation of each Lender to make further Revolving
          Credit Loans, of  the Canadian Swing Line Facility Lender to make
          further Canadian Swing  Line  Loans,  and of the Issuing Banks to
          issue  additional  Letters of Credit, hereunder  shall  terminate
          immediately, and (ii)  the  Agents  shall at the direction of the
          Required  Lenders,  at their option, declare  by  notice  to  the
          Borrower any or all of  the Obligations to be immediately due and
          payable, and the same, including all interest accrued thereon and
          all other obligations of  the  Borrowers  to  the  Agents, the US
          Collateral  Agent,  the  Canadian  Collateral  Trustee  and   the
          Lenders,  shall  forthwith  become  immediately  due  and payable
          without  presentment,  demand, protest, notice or other formality
          of any kind, all of which  are  hereby expressly waived, anything
          contained herein or in any instrument  evidencing the Obligations
          to   the  contrary  notwithstanding;  provided,   however,   that
          notwithstanding  the  above,  if  there  shall  occur an Event of
          Default under clause (g) or (h) above, then the obligation of the
          Lenders  to  make  Revolving Credit Loans, of the Canadian  Swing
          Line Facility Lender  to  make further Canadian Swing Line Loans,
          and of the Issuing Banks to  issue  Letters  of  Credit hereunder
          shall automatically terminate and any and all of the  Obligations
          shall be immediately due and payable without the necessity of any
          action  by  the Agents or the Required Lenders or notice  to  the
          Agents or the Lenders;

               (B) The  Borrowers  shall,  upon demand of the Agents or the
          Required Lenders, deposit cash with the Agents in an amount equal
          to  the  undrawn  amount  of each Letter  of  Credit  issued  and
          outstanding and the aggregate  face  amount  of  all  outstanding
          Bankers' Acceptances, as collateral security for the repayment of
          any future drawings or payments under such Letters of Credit  and
          Bankers'  Acceptances,  and  such  amounts  shall  be held by the
          Agents pursuant to the terms of the LC Account Agreement  or,  as
          to  Bankers' Acceptances, pursuant to such provisions as shall be
          acceptable to the Canadian Agent in its discretion; and

               (C) the Agents and each of the Lenders shall have all of the
          rights  and  remedies available under the Loan Documents or under
          any applicable law.

     11.2 AGENTS TO ACT.   In  case any one or more Events of Default shall
occur and be continuing, subject  to  the  provisions  of ARTICLE XII, both
Agents  together may, and at the direction of the Required  Lenders  shall,
proceed to  protect  and enforce their rights and remedies contained herein
or in any other Loan Document,  or  as may be otherwise available at law or
in equity.

     11.3 CUMULATIVE RIGHTS.  No right  or remedy herein conferred upon the
Lenders, the Agents, the US Collateral Agent  or  the  Canadian  Collateral
Trustee  is  intended  to  be  exclusive  of  any  other rights or remedies
contained herein or in any other Loan Document, and  every  such  right  or
remedy  shall  be  cumulative  and shall be in addition to every other such
right or remedy contained herein  and  therein or now or hereafter existing
at law or in equity or by statute, or otherwise.

     11.4 NO WAIVER.  No course of dealing  between  any  Borrower  and any
Lender,  either  Agent,  the US Collateral Agent or the Canadian Collateral
Trustee or any failure or  delay  on  the part of any Lender, either Agent,
the US Collateral Agent or the Canadian  Collateral  Trustee  in exercising
any rights or remedies under any Loan Document or otherwise available to it
shall  operate  as  a  waiver  of  any rights or remedies and no single  or
partial exercise of any rights or remedies  shall  operate  as  a waiver or
preclude the exercise of any other rights or remedies hereunder or  of  the
same right or remedy on a future occasion.

     11.5 ALLOCATION  OF PROCEEDS.  If an Event of Default has occurred and
not  been waived, and the  maturity  of  the  Loans  has  been  accelerated
pursuant  to  ARTICLE  XI  hereof,  all payments (including any proceeds of
Collateral) received by either Agent,  any  Lender, the Canadian Collateral
Trustee or the US Collateral Agent hereunder  or  under  any  of  the  Loan
Documents, in respect of any principal of or interest on the Obligations or
any  other  amounts  payable by any Borrower hereunder, shall be applied by
the Agent in the following order:

          (a) the reasonable expenses incurred in connection with retaking,
     holding, preserving,  processing,  maintaining  or preparing for sale,
     lease  or  other disposition of, any Collateral, including  reasonable
     attorney's fees and legal expenses pertaining thereto;

          (b) amounts  due to the Lenders and the Issuing Banks pursuant to
     SECTIONS 4.7(A), 4.7(B),  4.7(C),  4.7(D)  AND 13.5 and all other fees
     owing to any Agent or to any Lender;

          (c) amounts due to the Agent pursuant to SECTION 4.7(E);

          (d) payments

                    (i) first, of interest on Loans,  Canadian  Swing  Line
               Loans  and  Reimbursement Obligations, to be applied for the
               ratable benefit  of  the  Lenders  (with  amounts payable in
               respect  of  Canadian  Swing  Line  Loan Outstandings  being
               included in such calculation and paid  to the Canadian Swing
               Line Facility Lender);

                    (ii) then, of principal of Loans, Canadian  Swing  Line
               Loans  and  Reimbursement Obligations, to be applied for the
               ratable benefit  of  the  Lenders  (with  amounts payable in
               respect  of  Canadian  Swing  Line  Loan Outstandings  being
               included in such calculation and paid  to the Canadian Swing
               Line Facility Lender);

PROVIDED that (i) proceeds of the Collateral belonging to Consoltex and any
          other Borrowers or Guarantors organized under  the laws of Canada
          or any province or other political subdivision thereof  shall  be
          applied  first  to  the  payment  of  the interest owed under the
          Canadian Facilities, second to the payment  of the principal owed
          under the Canadian Facilities, third to payment  of the principal
          owed  under  the  US  Facilities  and  fourth  to the payment  of
          interest  owed under the US Facilities and (ii) the  proceeds  of
          the Collateral  belonging  to  Consoltex Holdings, Consoltex USA,
          Balson-Hercules,  LINQ  or  any  other   Borrower   or  Guarantor
          organized  under the laws of the United States or Mexico  or  any
          state or other  political  subdivision of either thereof shall be
          applied first to the payment  of  the  interest owed under the US
          Facilities, second to the payment of the principal owed under the
          US Facilities, third to the payment of the  principal  owed under
          the  Canadian  Facilities  and  fourth to payment of the interest
          owed  under  the  Canadian  Facilities;  PROVIDED  FURTHER,  that
          proceeds of Collateral to be  applied to principal owed under any
          of the Facilities shall be applied  first  to the payment of Base
          Rate Loans and secondly, and ratably in respect  of  the Canadian
          Facilities, to Bankers' Acceptances and Eurodollar Rate Loans;

          (e)  payments  of  cash  amounts  to  the  Agents  in respect  of
     outstanding Letters of Credit pursuant to SECTION 11.1(B);

          (f) amounts due to the Issuing Banks, the Agents, the Lenders and
     others pursuant to SECTIONS 3.2(H), 9.15 AND 13.9;

          (g)  payments  of  all  other  amounts due under any of the  Loan
     Documents,  if  any, to be applied for  the  ratable  benefit  of  the
     recipients, including  amounts  due  to  any  of  the Lenders or their
     affiliates in respect of Obligations consisting of  liabilities  under
     any  Swap  Agreement with any of the Lenders or their affiliates on  a
     pro rata basis according to the amounts owed; and

          (h) any  surplus  remaining  after  application  as  provided for
     herein, to the Borrower or otherwise as may be required by  applicable
     law.
<PAGE>



                                ARTICLE XII

                                The Agents

     12.1 APPOINTMENT, POWERS, AND IMMUNITIES.  Each of the Lenders  hereby
irrevocably  appoints and authorizes each of the Canadian Agent and the  US
Agent to act as its agent under this Agreement and the other Loan Documents
with such powers  and  discretion  as  are  specifically  delegated  to the
Canadian  Agent  and  the  US  Agent,  respectively,  by  the terms of this
Agreement and the other Loan Documents, together with such  other powers as
are  reasonably incidental thereto.  The Agents (which term, including  the
terms  US Agent and Canadian Agent, as used in this sentence and in SECTION
12.5 and  the  first  sentence of SECTION 12.6 hereof shall include each of
their respective affiliates  and  its  own  and  its  affiliates' officers,
directors, employees, and agents):

          (a)  shall not have any duties or responsibilities  except  those
     expressly set  forth  in  this Agreement and shall not be a trustee or
     fiduciary for any Lender;

          (b) shall not be responsible  to  the  Lenders  for  any recital,
     statement, representation, or warranty (whether written or  oral) made
     in or in connection with any Loan Document or any certificate or other
     document  referred  to or provided for in, or received by any of  them
     under, any Loan Document,  or  for the value, validity, effectiveness,
     genuineness, enforceability, or  sufficiency  of any Loan Document, or
     any  other document referred to or provided for  therein  or  for  any
     failure  by  any  Borrower  or  any  Guarantor  or any other Person to
     perform any of its obligations thereunder;

          (c) shall not be responsible for or have any  duty  to ascertain,
     inquire into, or verify the performance or observance of any covenants
     or agreements by any Borrower or any Guarantor or the satisfaction  of
     any  condition  or  to  inspect  the property (including the books and
     records) of any Borrower or any Guarantor or any of their Subsidiaries
     or affiliates;

          (d) shall not be responsible  for  any action taken or omitted to
     be taken by it under or in connection with  any  Loan Document, except
     for its own gross negligence or willful misconduct.

     Each of the Agents may employ agents and attorneys-in-fact  and  shall
     not be responsible for the negligence or misconduct of any such agents
     or attorneys-in-fact selected by it with reasonable care.  None of the
     terms  "Agent", "Agents", "Canadian Agent", "US Agent", "US Collateral
     Agent" and "Canadian Collateral Trustee" as used in the Loan Documents
     shall  connote   any  fiduciary  or  other  implied  obligation  under
     applicable law, and  is  used  solely  as a matter of market custom to
     connote an administrative relationship between independent contracting
     parties.

     12.2 RELIANCE  BY AGENTS.  Each of the Agents  shall  be  entitled  to
rely, and shall be fully  protected  in  relying,  upon  any certification,
notice,  instrument,  writing,  or other communication (including,  without
limitation, any thereof by telephone or telefacsimile) believed by it to be
genuine and correct and to have been  signed,  sent or made by or on behalf
of the proper Person or Persons, and upon advice  and  statements  of legal
counsel  (including counsel for any Borrower or any Guarantor), independent
accountants,  and  other  experts selected by either Agent.  The Agents may
deem and treat the payee of any Note as the holder thereof or, with respect
to the Canadian Facilities,  treat  the  financial institution set forth as
the  maker  of  any Loan in the Canadian Agent's  records,  as  the  Lender
thereof  for all purposes  hereof  unless  and  until  the  Relevant  Agent
receives and  accepts  an  Assignment and Acceptance executed in accordance
with SECTION 13.1 hereof.  As  to any action not expressly mandated by this
Agreement, neither Agent shall be  required  to  exercise any discretion or
take  any action, but shall be required to act or to  refrain  from  acting
(and shall  be fully protected in so acting or refraining from acting) upon
the instructions  of  the  Required Lenders, and such instructions shall be
binding on all of the Lenders;  provided, however, that neither Agent shall
be required to take any action unless  it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking any such action.

     12.3 DEFAULTS.  The Agents shall not  be  deemed  to have knowledge or
notice  of  the occurrence of a Default or Event of Default  unless  either
Agent has received  written  notice  from a Lender or a Borrower specifying
such Default or Event of Default and stating  that such notice is a "Notice
of Default."  In the event that either Agent receives  such a notice of the
occurrence of a Default or Event of Default, such Agent  shall  give prompt
notice  thereof  to  the other Agent and to the Lenders.  The Agents  shall
(subject to SECTION 12.2  hereof)  take  such  action  with respect to such
Default or Event of Default as shall reasonably be directed by the Required
Lenders,  provided that, unless and until either Agent shall  have received
such directions, the Agents may (but shall not be obligated to)  take  such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it or they shall deem advisable in the best interest of
the Lenders.

     12.4 RIGHTS  AS  LENDER.   With  respect  to  each  Agent's respective
Commitment  to  the  relevant Revolving Credit Facility, Letter  of  Credit
Facility and Term Loan  Facility,  and  the Loans made by it and Letters of
Credit issued by it, each of Bank of America  and  NBC  (and  any successor
acting as US Agent or Canadian Agent) in their respective capacities  as  a
Lender  hereunder  shall  have  the same rights and powers hereunder as any
other Lender and may exercise the  same  as though it were not acting as US
Agent or Canadian Agent, and the term "Lender"  or  "Lenders" shall, unless
the  context  otherwise  indicates,  include such Agent in  its  individual
capacity.  Each of Bank of America and  NBC (and any successor acting as US
Agent  or  Canadian  Agent) and their respective  affiliates  may  (without
having to account therefor  to any Lender) accept deposits from, lend money
to, make investments in, provide  services  to, and generally engage in any
kind  of  lending,  trust,  or  other business with  any  Borrower  or  any
Guarantor or any of their Subsidiaries  or  affiliates  as  if  it were not
acting as US Agent or Canadian Agent, and each of Bank of America  and  NBC
(and  any  successor  acting  as  US  Agent  or  Canadian  Agent) and their
respective  affiliates  may  accept fees and other consideration  from  any
Borrower or any Guarantor or any  of  their  Subsidiaries or affiliates for
services in connection with this Agreement or  otherwise  without having to
account for the same to the Lenders.

     12.5 INDEMNIFICATION.   Each  of the Lenders agrees to indemnify  each
Agent  and  each  of  their  respective Affiliates,  and  their  respective
officers, employees and agents (each, an "Agent Indemnitee") (to the extent
not  reimbursed  under  SECTION 13.9  hereof,   but  without  limiting  the
obligations of any Borrower  or  Guarantor  under  such Section) ratably in
accordance  with  their  respective  Commitments  to the  Revolving  Credit
Facilities  and  Term  Loan  Facilities,  for  any  and  all   liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,  costs,
expenses  (including  attorneys'  fees),  or  disbursements of any kind and
nature whatsoever that may be imposed on, incurred  by  or asserted against
any Agent Indemnitee (including by any Lender) in any way  relating  to  or
arising  out  of any Loan Document or the transactions contemplated thereby
or any action taken  or  omitted  by  any  Agent  Indemnitee  under  or  in
connection  with  any Loan Document or any of the foregoing;  provided that
no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence  or  willful  misconduct  of  the  Person  to  be
indemnified; provided further, however, that no action or omission taken or
occurring  at the direction of the Required Lenders shall constitute either
gross  negligence   or  willful  misconduct.   Without  limitation  of  the
foregoing, each Lender  agrees to reimburse each Agent promptly upon demand
for its ratable share of  any  costs  or  expenses  payable by any Borrower
under  SECTION  13.5,  to  the  extent  that  such  Agent is  not  promptly
reimbursed  for  such costs and expenses by any Borrower.   The  agreements
contained in this  SECTION  12.5 shall survive payment in full of the Loans
and all other amounts payable  under  this  Agreement and the occurrence of
the Facility Termination Date.

     12.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.  Each Lender agrees that
it  has,  independently  and  without  reliance on  either  Agent,  the  US
Collateral Agent, the Canadian Collateral  Trustee or any other Lender, and
based on such documents and information as it  has deemed appropriate, made
its  own  credit  analysis  of  the  Borrowers,  the Guarantors  and  their
Subsidiaries and decision to enter into this Agreement  and  that  it will,
independently  and  without  reliance  upon either Agent, the US Collateral
Agent, the Canadian Collateral Trustee or  any  other  Lender, and based on
such documents and information as it shall deem appropriate  at  the  time,
continue  to  make  its  own analysis and decisions in taking or not taking
action under the Loan Documents.   Except  for  notices, reports, and other
documents and information expressly required to be furnished to the Lenders
by either Agent hereunder, no Agent shall have any  duty  or responsibility
to provide any Lender with any credit or other information  concerning  the
affairs, financial condition, or business of any Borrower, any Guarantor or
any  of  their Subsidiaries or affiliates that may come into the possession
of either Agent or any of their respective affiliates.

     12.7 RESIGNATION  OF  AGENT.   Each  Agent  may  resign at any time by
giving  notice  thereof  to the Lenders and the Borrower.   Upon  any  such
resignation, the Required Lenders with respect to the US Facilities or with
respect to the Canadian Facilities,  as  the  case  may  be, shall have the
right to appoint a successor US Agent or Canadian Agent, respectively.   If
no successor US Agent or Canadian Agent shall have been so appointed by the
Required  Lenders  and  shall  have accepted such appointment within thirty
(30) days after the retiring Agent's  giving of notice of resignation, then
the retiring Agent may, on behalf of the  Lenders,  appoint  a successor US
Agent  which  shall  be a commercial bank organized under the laws  of  the
United States of America  having  combined  capital and surplus of at least
$500,000,000 or a successor Canadian Agent shall be a Schedule I bank under
the  Bank  Act.   Upon the acceptance of any appointment  as  US  Agent  or
Canadian Agent hereunder  by  a  successor,  such successor shall thereupon
succeed  to  and  become  vested with all the rights,  powers,  discretion,
privileges, and duties of the  retiring Agent, and the retiring Agent shall
be  discharged  from  its  duties and  obligations  hereunder.   After  any
retiring Agent's  resignation  hereunder  as  Agent, the provisions of this
ARTICLE  XII shall continue in effect for its benefit  in  respect  of  any
actions taken or omitted to be taken by it while it was acting as Agent.





<PAGE>



                               ARTICLE XIII

                               Miscellaneous

     13.1 ASSIGNMENTS AND PARTICIPATIONS.

          (a)  Each Lender may assign to one or more Eligible Assignees all
     or a portion  of  its  rights  and  obligations  under  this Agreement
     (including,  without  limitation,  all or a portion of its Loans,  its
     Notes, its Commitment under the Revolving  Credit  Facilities  and its
     Commitment under the Term Loan Facilities); provided, however, that

                    (i)  each  such  assignment  shall  be  to  an Eligible
          Assignee;

                    (ii)  except  in  the  case of an assignment to another
          Lender  or  an  assignment  of  all  of  a  Lender's  rights  and
          obligations  under this Agreement, any  such  partial  assignment
          shall be in an amount at least equal to $5,000,000 or an integral
          multiple of $1,000,000 in excess thereof;

                    (iii)  each  such  assignment by a Lender shall be of a
          constant, and not varying, percentage  of  all  of its rights and
          obligations under any specified Facility (but may vary as between
          the separate Facilities to which such Lender is a  party) (except
          that any assignment by NBC or Bank of America shall  not  include
          its  respective rights, benefits or duties as an Issuing Bank  or
          as the provider of Canadian Swing Line Loans in the case of NBC);

                    (iv)  the  parties to such assignment shall execute and
          deliver to the Relevant  Agent  for  its acceptance an Assignment
          and Acceptance in the form of EXHIBIT B hereto, together with any
          Note subject to such assignment and a  processing  fee of $3,500;
          and

                    (v)  an assignment of the Canadian Swing Line  Facility
          shall occur only  if  (A) the entire Canadian Swing Line Facility
          is assigned, (B) the institution  which is the assigning Canadian
          Swing Line Facility Lender also concurrently assigns to any other
          Person  all  of  its rights and obligations  under  the  Canadian
          Revolving Credit Facility,  and  (C) the institution which is the
          new  Canadian  Swing  Line Facility Lender  is  also  a  Canadian
          Revolving Credit Facility Lender.

          For each assignment by  a  Canadian Facility Lender, the relevant
     Facility  Borrowers  hereby  agree to  execute  upon  request  of  the
     Canadian Agent (a) Bankers' Acceptances documentation requested by the
     assignee and (b) any document  as  may  be required under the Security
     Instruments, including any bonds or bond pledge agreements.  Upon such
     execution,  delivery,  approval and acceptance,  from  and  after  the
     effective date specified  in  each  Assignment and Acceptance, (x) the
     assignee thereunder shall be a party  hereto  and,  to the extent that
     rights  and  obligations  hereunder or under any such Note  have  been
     assigned to it pursuant to  such  Assignment  and Acceptance, have the
     rights  and obligations of a Lender hereunder and,  if  applicable,  a
     holder of  such  Note  and  (y)  the assignor thereunder shall, to the
     extent that rights and obligations hereunder and, if applicable, under
     its Note or Notes have been assigned by it pursuant to such Assignment
     and  Acceptance,  relinquish  its rights  and  be  released  from  its
     obligations under this Agreement.   Each  Issuing  Bank may assign its
     rights  and obligations in such capacity to another Lender  only  with
     respect to  the total amount of the Canadian Letter of Credit Facility
     or US Letter  of  Credit Facility (as the case may be), subject to the
     written consent of  each Relevant Agent and, subject to the conditions
     with  respect  to  such   approval  in  the  definition  of  "Eligible
     Assignee", Consoltex Holdings,  and  also  subject  to  execution  and
     delivery  of  documentation by such assignor and assignee Issuing Bank
     as may be satisfactory to the Relevant Agents and the Borrowers.

          Upon execution,  delivery,  and acceptance of such Assignment and
     Acceptance, the assignee thereunder  shall  be  a party hereto and, to
     the  extent  of  such  assignment, have the obligations,  rights,  and
     benefits of a Lender hereunder  and the assigning Lender shall, to the
     extent of such assignment, relinquish  its rights and be released from
     its obligations under this Agreement.  Upon  the  consummation  of any
     assignment pursuant to this Section, the assignor, each Agent and each
     Borrower shall make appropriate arrangements so that, if required, new
     Notes are issued to the assignor and the assignee.  If the assignee is
     not  incorporated under the laws of the United States of America or  a
     state  thereof,  it  shall  deliver  to  the  Borrowers and the Agents
     certification as to exemption from deduction or  withholding  of Taxes
     in accordance with SECTION 6.6.

          (b)  Each  Agent  shall  maintain  at  its address referred to in
     SECTION 13.2 a copy of each Assignment and Acceptance delivered to and
     accepted by it and a register for the recordation  of  the  names  and
     addresses  of  the  Lenders  and  the  Commitments with respect to the
     Revolving  Credit  Facilities and the Term  Loan  Facilities  of,  and
     principal amount of  the Loans owing to, each Lender from time to time
     (the "Register").  The entries in the Register shall be conclusive and
     binding for all purposes,  absent  manifest  error, and the Borrowers,
     the  Agents  and  the  Lenders  may treat each Person  whose  name  is
     recorded in the Register as a Lender  hereunder  for  all  purposes of
     this Agreement.  The Register shall be available for inspection by any
     Borrower  or any Lender at any reasonable time and from time  to  time
     upon reasonable prior notice.

          (c) Upon  its receipt of an Assignment and Acceptance executed by
     the parties thereto, together with any Note subject to such assignment
     and payment of the  processing  fee, the Relevant Agent shall, if such
     Assignment and Acceptance has been  completed  and is in substantially
     the  form  of  EXHIBIT  B  hereto,  (i)  accept  such  Assignment  and
     Acceptance,  (ii)  record  the  information contained therein  in  the
     Register and (iii) give prompt notice thereof to the parties thereto.

          (d) Each Lender may sell participations to one or more Persons in
     all or a portion of its rights, obligations  or rights and obligations
     under  this  Agreement (including all or a portion  of  its  Revolving
     Credit Commitment  or  Term  Loan  Commitment or its Loans); provided,
     however,  that   (i) such Lender's obligations  under  this  Agreement
     shall  remain  unchanged,   (ii)   such  Lender  shall  remain  solely
     responsible to the other parties hereto  for  the  performance of such
     obligations, (iii) the participant shall be entitled to the benefit of
     the yield protection provisions contained in ARTICLE  VI and the right
     of  set-off  contained  in SECTION 13.3, and (iv) the Borrowers  shall
     continue to deal solely and  directly  with  such Lender in connection
     with such Lender's rights and obligations under  this  Agreement,  and
     such  Lender shall retain the sole right to enforce the obligations of
     the Borrowers  relating  to  its Loans and its Note and to approve any
     amendment, modification, or waiver  of any provision of this Agreement
     (other  than  amendments, modifications,  or  waivers  decreasing  the
     amount of principal  of  or  the  rate at which interest is payable on
     such Loans or Note, extending any scheduled  principal payment date or
     date  fixed  for the payment of interest on such  Loans  or  Note,  or
     extending its Revolving Credit Commitment or Term Loan Commitment).

          (e)  Notwithstanding  any  other  provision  set  forth  in  this
     Agreement,  any  Lender  may  at any time assign and pledge all or any
     portion of its Loans and its Note  to  any  Federal  Reserve  Bank  as
     collateral  security  pursuant  to  Regulation  A  and  any  Operating
     Circular  issued  by  such  Federal  Reserve Bank.  No such assignment
     shall release the assigning Lender from its obligations hereunder.

          (f) Subject to the confidentiality  provisions  of SECTION 13.15,
     any Lender may furnish any information concerning any  Borrower or any
     of  their Subsidiaries in the possession of such Lender from  time  to
     time  to  assignees  and participants (including prospective assignees
     and participants).

          (g) Whenever in this  Agreement  any  of  the  parties  hereto is
     referred  to, such reference shall be deemed to include the successors
     and permitted  assigns of such party and all covenants, provisions and
     agreements by or on behalf of the Borrowers which are contained in the
     Loan Documents shall  inure  to  the  benefit  of  the  successors and
     permitted assigns of the Agents, the US Collateral Agent, the Canadian
     Collateral  Trustee,  the  Lenders,  or  any of them.  No Borrower  or
     Guarantor may assign or otherwise transfer  to  any  other  Person any
     right,   power,  benefit,  or  privilege  (or  any  interest  therein)
     conferred  hereunder  or  under  any  of  the other Loan Documents, or
     delegate (by assumption or otherwise) to any  other  Person  any duty,
     obligation,  or liability arising hereunder or under any of the  other
     Loan Documents, and any such purported assignment, delegation or other
     transfer shall be void.

     13.2 NOTICES.   Any  notice  shall be conclusively deemed to have been
received by any party hereto and be  effective  (i)  on  the  day  on which
delivered  (including hand delivery by commercial courier service) to  such
party (against  receipt therefor), (ii) on the date of transmission to such
party,  in  the  case   of   notice  by  telefacsimile  (where  the  proper
transmission of such notice is  either  acknowledged  by  the  recipient or
electronically confirmed by the transmitting device), or (iii) on the fifth
Business  Day after the day on which mailed to such party, if sent  prepaid
by certified  or  registered  mail,  return receipt requested, in each case
delivered, transmitted or mailed, as the  case  may  be,  to the address or
telefacsimile number, as appropriate, set forth below or such other address
or number as such party shall specify by notice hereunder:

          (a) if to the Borrowers:

               to such Borrower, in care of:

               Consoltex (USA) INC.
               1040 Avenue of the Americas
               New York, New York 10018
               Attn: Mr. Paul J. Bamatter, Chief Financial Officer
               Telephone: (212) 596-0480
               Telefacsimile: (212) 596-0483

               with a copy to:

               Consoltex Holdings, Inc.
               c/o Consoltex Inc.
               8555 Autoroute Transcanadieune
               Ville Saint-Laurent, Quebec
               H4S 1Z6
               Attn: Ms. C. Suzanne Crawford, Vice President, Legal
                     Affairs and Corporate Secretary
               Telephone: (514) 335-7024
               Telefacsimile: (514) 335-7020

               with a copy to:

               American Industrial Partners Capital Fund II, L.P.
               c/o American Industrial Partners
               551 Fifth Avenue, Suite 3800
               New York, NY 10176
               Attn: Mr. Kim Marvin, Managing Director
               Telephone: (212) 983-1399
               Telefacsimile: (212) 986-5099


          (b)  if to the Canadian Agent:

               National Bank of Canada
               Sun Life Building
               1155 Metcalfe, 5th Floor
               Montreal, Quebec
               H3B 4S9
               Attn: Ms. Michelle Fradette
               Telephone: (514) 394-8407
               Telefacsimile: (514) 394-4240

               with a copy to:

               National Bank of Canada
               600 de la Gauchetiere West, 9th floor
               Montreal H3B 4L2
               Attn: Ms. Dana Ades, Vice President Special Loans
                                    & Real Estate
               Telephone: (514) 394-8832
               Telefacsimile:                (514) 394-4375

          (c)  if to the US Agent or the US Collateral Agent:

               Bank of America, N.A.
               Independence Center, 15th Floor
               NC1-001-15-04
               Charlotte, North Carolina  28255
               Attention: Agency Services
               Telephone: (704) 386-7637
               Telefacsimile: (704) 386-9923

               with a copy to:

               Bank of America, N.A.
               9 West 57th Street, NY1-301-32-05
               New York, NY 10019
               Attention: Mr. Larry Hess
               Telephone: (212) 847-5005
               Telefacsimile: (212) 847-6847

          (d) if to the Lenders:

            At the addresses set forth on the signature pages hereof and
            on the signature page of each Assignment and Acceptance;

          (e) if to any Guarantor, in care of the Borrowers in accordance
     with clause (a) above; and

          (f)  if to the Canadian Collateral Trustee:

               Desjardins Trust Inc.
               1 Complexe Desjardins
               Bureau 1422
               Casier postal 34
               Montreal, Quebec
               H5B 1E4
               Attention: Denis Chevrette, Managing
                         Director, Corporate Trust Services
               Telephone: (514) 286-5859
               Telefacsimile: (514) 844-3545

     13.3 RIGHT  OF SET-OFF; ADJUSTMENTS.  Upon the occurrence  and  during
the continuance of  any  Event  of  Default,  each  Lender (and each of its
affiliates) is hereby authorized at any time and from  time to time, to the
fullest extent permitted by law, to set off and apply any  and all deposits
(general or special, time or demand, provisional or final) at any time held
and  other  indebtedness at any time owing by such Lender (or  any  of  its
affiliates) to or for the credit or the account of any Borrower against any
and all of the  Obligations  of  such  Borrower  now or hereafter existing,
irrespective of whether such Lender shall have made  any  demand under this
Agreement  or  such  Note  and although such Obligations may be  unmatured.
Each Lender agrees promptly  to  notify  the  applicable Borrower after any
such set-off and application made by such Lender;   provided, however, that
the failure to give such notice shall not affect the  validity of such set-
off and application.  The rights of each Lender under this SECTION 13.3 are
in  addition  to other rights and remedies (including, without  limitation,
other rights of set-off) that such Lender may have.

     13.4 SURVIVAL.    All   covenants,   agreements,  representations  and
warranties made herein shall survive the making by the Lenders of the Loans
and the issuance of the Letters of Credit and the execution and delivery to
the Lenders of this Agreement, the Notes and  all  other Loan Documents and
shall  continue  in  full  force and effect so long as any  of  Obligations
remain  outstanding or any Lender  has  any  Commitment  hereunder  or  the
Borrower  has  continuing  obligations  hereunder unless otherwise provided
herein.

     13.5 EXPENSES.  The Borrowers agree  to  pay  on  demand all costs and
expenses  of  the  Agents in connection with the syndication,  preparation,
execution, delivery,  administration,  modification,  and amendment of this
Agreement,  the  other  Loan  Documents,  and  the  other documents  to  be
delivered hereunder, including, without limitation, the reasonable fees and
expenses of counsel for each Agent with respect thereto and with respect to
advising the Agents as to its rights and responsibilities  under  the  Loan
Documents.   The  Borrowers  further  agree  to pay on demand all costs and
expenses  of  each  Agent  and  each  Lender,  if any  (including,  without
limitation, reasonable attorneys' fees  and  expenses),  in connection with
the  enforcement  (whether  through negotiations,   legal  proceedings,  or
otherwise) of the Loan Documents  and  the  other documents to be delivered
hereunder.

     13.6 AMENDMENTS AND WAIVERS.  Any provision  of  this Agreement or any
other  Loan  Document  may  be  amended  or  waived if, but only  if,  such
amendment  or  waiver  is in writing and is signed  by  each  Borrower  and
Guarantor party to such  Loan  Document  and either the Required Lenders or
(as to Loan Documents other than the Credit  Agreement)  the  US Agent, the
Canadian  Agent,  the  US  Collateral  Agent,  and  the Canadian Collateral
Trustee,  or any of them as applicable, on behalf of the  Required  Lenders
(and, if ARTICLE  XII  or  the  rights  or duties of any Agent are affected
thereby, by such Agent);  PROVIDED that no  such amendment or waiver shall,
unless signed by each Lender directly affected  thereby,   (i) increase the
Commitments  under  any  Facility of such Lenders, or the Total  Commitment
applicable to any Facility, or the Mexican Borrowing Limit, (ii) reduce the
principal of or rate of interest  on  any Loan or any fees or other amounts
payable hereunder,  (iii) postpone any  date  fixed  for the payment of any
scheduled installment of principal of (including, without  limitation,  any
mandatory  prepayment) or interest on any Loan or any fees or other amounts
payable hereunder  or for termination of any Commitment under any Facility,
(iv) change the percentage  of  the Commitment under any Facility or of the
unpaid principal amount of the Notes, or the number of Lenders, which shall
be required for the Lenders or any  of  them  to take any action under this
SECTION  13.6  or any other provision of this Agreement,  (v)  release  any
Guarantor or all  or  any  portion of the Collateral having a book value in
any release, or collectively  in  any  series  of  releases  prior  to  the
Facility  Termination  Date,  in  excess  of  $1,000,000,  except  (A) such
releases  as  are  necessary  to  consummate  any  portion  of  the Mexican
Operational  Restructuring as shall not have been completed by the  Closing
Date, which releases  may  be effected by the Agents without further notice
to or consent of the Lenders,  or (B) as expressly contemplated in the Loan
Documents, (vi) eliminate, or cause the material adverse alteration of, any
Cash Collateral Agreement, any Lock  Box  Agreement  and  the  related Lock
Boxes, Lock Box Accounts and related arrangements, or any provision  herein
providing  for payments or prepayments to be made out of proceeds deposited
in any Lock  Box  or  Lock  Box  Account,  (vii) increase the advance rates
applicable to any portion of the definition  of  "Borrowing  Base",  (viii)
extend  the  time  for  compliance  with, or otherwise materially alter any
requirement of, SECTION 7.3(A), or (ix)  extend  the  time  for  compliance
with,  or  waive  any  Event  of  Default  arising from noncompliance with,
SECTION 5.7(C); and PROVIDED, FURTHER, that  no  such  amendment  or waiver
that  affects  the rights, privileges or obligations of the Canadian  Swing
Line Facility Lender  as  provider  of  Canadian Swing Line Loans, shall be
effective  unless signed in writing by the  Canadian  Swing  Line  Facility
Lender or that   affects  the  rights,  privileges or obligations of either
Issuing  Bank as issuer of Letters of Credit,  shall  be  effective  unless
signed in  writing by such Issuing Bank.  NOTWITHSTANDING ANY WAIVER OF ANY
EVENT OF DEFAULT,  UPON  THE OCCURRENCE OF AN EVENT OF DEFAULT ARISING AS A
RESULT OF A NONCOMPLIANCE WITH SECTION 10.1(A), Borrowers agree promptly to
enter into (and agree to cause their Subsidiaries to enter into) reasonable
negotiations (which will include  a  review  of asset valuations determined
after completion of purchase price adjustments  resulting  from adjustments
relating  to  push-down accounting to the Borrowers' balance sheets  to  be
completed by the Borrowers no later than December 31, 2000) with respect to
the execution,  delivery  and performance of an amendment to this Agreement
and related agreements to provide  for separate borrowing base requirements
and restrictions on intercompany loans and advances, each pursuant to terms
reasonably requested by GMAC.

     No notice to or demand on any Borrower  in  any case shall entitle any
Borrower  to  any other or further notice or demand  in  similar  or  other
circumstances,  except as otherwise expressly provided herein.  No delay or
omission on any Lender's  or  any  Agent's  part  in  exercising any right,
remedy  or  option  shall operate as a waiver of such or any  other  right,
remedy or option or of any Default or Event of Default.

     13.7 COUNTERPARTS;   FACSIMILE  SIGNATURES.   This  Agreement  may  be
executed in any number of counterparts,  each of which when so executed and
delivered shall be deemed an original, and  it  shall  not  be necessary in
making proof of this Agreement to produce or account for more than one such
fully-executed  counterpart.   The  Agents may also require that  any  such
signature be confirmed by a manually-signed  hardcopy  thereof.  Each party
hereto hereby adopts as an original executed signature page  each signature
page hereafter furnished by such party to the Agents (or an agent of either
Agent) bearing (with the consent of the Agents) a facsimile signature by or
on behalf of such party.  Nothing contained in this Section shall limit the
provisions of SECTION 12.2.

     13.8 TERMINATION.   This  Agreement  shall  terminate on the  Facility
Termination Date, except that (x) those provisions  which  by  the  express
terms  thereof  continue in effect notwithstanding the Facility Termination
Date, and (y) obligations  in  the  nature  of  continuing  indemnities  or
expense  reimbursement  obligations not yet due and payable, shall continue
in effect.  Notwithstanding  the foregoing, if after receipt of any payment
of all or any part of the Obligations,  any  Agent, any Issuing Bank or any
Lender  (including  the Canadian Swing Line Facility  Lender)  is  for  any
reason compelled to surrender  such  payment  to  any  Person  because such
payment is determined to be void or voidable as a preference, impermissible
setoff,  a  diversion  of trust funds or for any other reason or elects  to
repay any such amount in  good  faith settlement of a pending or threatened
avoidance claim, (i) this Agreement (including the provisions pertaining to
Participations  in  Letters  of  Credit,   Reimbursement  Obligations,  and
Canadian Swing Line Loans) shall continue in  full  force and the Borrowers
shall be liable to, and shall indemnify and hold the  applicable  Agent  or
such  Lender harmless for, the amount of such payment surrendered until the
applicable  Agent  or  such  Lender shall have been finally and irrevocably
paid in full, and (ii) in the  event  any portion of any amount so required
to be surrendered by any Agent, any Issuing Bank or the Canadian Swing Line
Facility Lender shall have been distributed  to  the  Lenders,  the Lenders
shall  promptly  repay such amounts to the applicable Agent, the applicable
Issuing Bank or the Canadian Swing Line Facility Lender on demand therefor.
The provisions of  the  foregoing  sentence  shall  be and remain effective
notwithstanding any contrary action which may have been taken by any Agent,
any Issuing Bank, the Canadian Swing Line Facility Lender or the Lenders in
reliance upon such payment, and any such contrary action  so taken shall be
without  prejudice  to the Agents', the Issuing Banks', the Canadian  Swing
Line Facility Lender's  or  the  Lenders'  rights  under this Agreement and
shall  be deemed to have been conditioned upon such payment  having  become
final and irrevocable.

     13.9 INDEMNIFICATION; LIMITATION OF LIABILITY.

          (a)  The  Borrower  agrees  to  indemnify  and hold harmless each
     Indemnified  Party  from  and  against  any  and all claims,  damages,
     losses,   liabilities,   costs,  and  expenses   (including,   without
     limitation, reasonable attorneys'  fees)  that  may  be incurred by or
     asserted  or  awarded  against  any  Indemnified Party, in  each  case
     arising  out  of or in connection with or  by  reason  of  (including,
     without limitation,  in connection with any investigation, litigation,
     or proceeding or preparation  of  defense in connection therewith) the
     Loan Documents, any of the transactions  contemplated  herein  or  the
     actual  or  proposed  use  of the proceeds of the Loans, except to the
     extent such claim, damage, loss,  liability, cost, or expense is found
     in  a  final,  non-appealable  judgment   by   a  court  of  competent
     jurisdiction  to  have  resulted from such Indemnified  Party's  gross
     negligence or willful misconduct.   In  the  case of an investigation,
     litigation or other proceeding to which the indemnity  in this SECTION
     13.9 applies, such indemnity shall be effective whether  or  not  such
     investigation,  litigation  or  proceeding is brought by any Borrower,
     its directors, shareholders or creditors  or  an  Indemnified Party or
     any other Person or any Indemnified Party is otherwise a party thereto
     and   whether   or  not  the  transactions  contemplated  hereby   are
     consummated.  Each  Borrower  agrees  that  no Indemnified Party shall
     have any liability (whether direct or indirect, in contract or tort or
     otherwise)  to  it,  any of its Subsidiaries, any  Guarantor,  or  any
     security holders or creditors thereof arising out of, related to or in
     connection with the transactions  contemplated  herein,  except to the
     extent that such liability is found in a final non-appealable judgment
     by  a  court of competent jurisdiction to have directly resulted  from
     such Indemnified Party's gross negligence or willful misconduct.  Each
     Borrower agrees not to assert any claim against any Agent, any Lender,
     any  of their  affiliates,  or  any  of  their  respective  directors,
     officers, employees, attorneys, agents, and advisers, on any theory of
     liability,  for  special, indirect, consequential, or punitive damages
     arising out of or otherwise relating to the Loan Documents, any of the
     transactions contemplated  herein or the actual or proposed use of the
     proceeds of the Loans.

          (b) The agreements and  obligations of each Borrower contained in
     this  SECTION  13.9  shall  continue  in  effect  notwithstanding  the
     Facility Termination Date.

     13.10 SEVERABILITY.  If any provision  of  this Agreement or the other
Loan Documents shall be determined to be illegal  or  invalid  as to one or
more of the parties hereto, then such provision shall remain in effect with
respect  to  all  parties,  if  any,  as  to whom such provision is neither
illegal  nor invalid, and in any event all other  provisions  hereof  shall
remain effective and binding on the parties hereto.

     13.11  ENTIRE AGREEMENT.  This Agreement, together with the other Loan
Documents AND  ANY  SEPARATE  FEE LETTERS ENTERED INTO BETWEEN ANY BORROWER
AND ANY LENDER, constitutes the  entire  agreement  among  the parties with
respect to the subject matter hereof and supersedes all previous proposals,
negotiations, representations, commitments and other communications between
or  among the parties, both oral and written, with respect thereto  (except
that those provisions (if any) which by the express terms of the commitment
letter  dated  as of September 29, 2000 executed by Bank of America and NBC
and accepted by  the Borrowers, the Guarantors and AIP survive the  closing
of any Facility, shall survive and continue in effect).

     13.12 AGREEMENT  CONTROLS.   In  the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of
this Agreement, the terms and provisions of this Agreement shall control to
the extent of such conflict.

     13.13  USURY  SAVINGS  CLAUSE.  Notwithstanding  any  other  provision
herein,  the aggregate interest  rate  charged  under  any  of  the  Loans,
including  all charges or fees in connection therewith deemed in the nature
of interest  under  applicable law shall not exceed the Highest Lawful Rate
(as such term is defined  below).   If  the  rate  of  interest (determined
without regard to the preceding sentence) under this Agreement  at any time
exceeds the Highest Lawful Rate (as defined below), the outstanding  amount
of the Loans made hereunder shall bear interest at the Highest Lawful  Rate
until  the  total  amount  of  interest  due hereunder equals the amount of
interest  which  would  have been due hereunder  if  the  stated  rates  of
interest set forth in this  Agreement  had at all times been in effect.  In
addition, if when the Loans made hereunder  are  repaid  in  full the total
interest  due  hereunder  (taking  into  account the increase provided  for
above) is less than the total amount of interest  which would have been due
hereunder if the stated rates of interest set forth  in  this Agreement had
at  all  times  been in effect, then to the extent permitted  by  law,  the
Borrowers shall pay  to the Agent an amount equal to the difference between
the amount of interest  paid  and  the  amount of interest which would have
been paid if the Highest Lawful Rate had  at  all  times  been  in  effect.
Notwithstanding  the foregoing, it is the intention of the Lenders and  the
Borrowers to conform  strictly  to any applicable usury laws.  Accordingly,
if any Lender contracts for, charges,  or  receives any consideration which
constitutes interest in excess of the Highest  Lawful  Rate,  then any such
excess shall be cancelled automatically and, if previously paid,  shall  at
such Lender's option be applied to the outstanding amount of the Loans made
hereunder  or  be refunded to the Borrower.  As used in this paragraph, the
term "Highest Lawful  Rate" means the maximum lawful interest rate, if any,
that at any time or from  time  to  time may be contracted for, charged, or
received under the laws applicable to  such  Lender  which are presently in
effect or, to the extent allowed by law, under such applicable  laws  which
may  hereafter  be  in  effect and which allow a higher maximum nonusurious
interest rate than applicable laws now allow.

     13.14 GOVERNING LAW; WAIVER OF JURY TRIAL.

          (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE
     SECURITY INSTRUMENTS  WHICH  EXPRESSLY  PROVIDE  THAT  THEY  SHALL  BE
     GOVERNED  BY  THE  LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY,
     AND CONSTRUED IN ACCORDANCE  WITH,  THE  LAWS OF THE STATE OF NEW YORK
     APPLICABLE TO CONTRACTS EXECUTED, AND TO BE  FULLY  PERFORMED, IN SUCH
     STATE.

          (b) EACH OF THE PARTIES HERETO HEREBY EXPRESSLY  AND  IRREVOCABLY
     AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
     OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
     MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE  COUNTY
     OF  NEW YORK, STATE OF NEW YORK, UNITED STATES OF AMERICA AND, BY  THE
     EXECUTION  AND  DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO
     EXPRESSLY WAIVES  ANY  OBJECTION  THAT IT MAY NOW OR HEREAFTER HAVE TO
     THE LAYING OF VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND
     ITS  PROPERTY  BY,  ANY  SUCH  COURT  IN  ANY  SUCH  SUIT,  ACTION  OR
     PROCEEDING, AND EACH OF THE PARTIES HERETO  HEREBY IRREVOCABLY SUBMITS
     GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN
     ANY SUCH SUIT, ACTION OR PROCEEDING.

          (c) EACH OF THE PARTIES HERETO AGREES THAT SERVICE OF PROCESS MAY
     BE MADE BY PERSONAL SERVICE OF A COPY OF THE  SUMMONS AND COMPLAINT OR
     OTHER  LEGAL  PROCESS IN ANY SUCH SUIT, ACTION OR  PROCEEDING,  OR  BY
     REGISTERED OR CERTIFIED  MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH
     PARTY PROVIDED IN SECTION  13.2,  OR  BY  ANY  OTHER METHOD OF SERVICE
     PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT  IN  THE STATE OF NEW
     YORK.

          (d)  NOTHING  CONTAINED  IN  SUBSECTIONS (B) OR (C) HEREOF  SHALL
     PRECLUDE ANY OF THE PARTIES HERETO  FROM  BRINGING ANY SUIT, ACTION OR
     PROCEEDING  ARISING OUT OF OR RELATING TO ANY  LOAN  DOCUMENT  IN  THE
     COURTS OF ANY  JURISDICTION  WHERE ANY OF THE PARTIES HERETO OR ANY OF
     SUCH PARTY'S PROPERTY OR ASSETS  MAY  BE  FOUND  OR  LOCATED.   TO THE
     EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH
     OF  THE  PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
     OF ANY SUCH  COURT  AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT,
     ACTION OR PROCEEDING,  OBJECTION  TO THE EXERCISE OF JURISDICTION OVER
     IT AND ITS PROPERTY BY ANY SUCH OTHER  COURT  OR  COURTS  WHICH NOW OR
     HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW.

          (e)  IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY  RIGHTS
     OR REMEDIES  UNDER  OR  RELATED TO ANY LOAN DOCUMENT OR ANY AMENDMENT,
     INSTRUMENT, DOCUMENT OR AGREEMENT  DELIVERED OR THAT MAY IN THE FUTURE
     BE DELIVERED IN CONNECTION THEREWITH,  EACH  BORROWER,  EACH AGENT AND
     THE  LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY APPLICABLE  LAW,
     THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE TRIED BEFORE A COURT
     AND NOT  BEFORE  A  JURY  AND  HEREBY IRREVOCABLY WAIVE, TO THE EXTENT
     PERMITTED BY APPLICABLE LAW, ANY  RIGHT  SUCH PERSON MAY HAVE TO TRIAL
     BY JURY IN ANY SUCH ACTION, SUIT OR PROCEEDING.

          (f)  EACH  OF  THE  PARTIES HERETO HEREBY  EXPRESSLY  WAIVES  ANY
     OBJECTION IT MAY HAVE THAT  ANY  COURT  TO  WHOSE  JURISDICTION IT HAS
     SUBMITTED PURSUANT TO THE TERMS HEREOF IS AN INCONVENIENT FORUM.

     13.15  CONFIDENTIALITY.   Each  Agent and each Lender agrees  to  keep
confidential any information delivered  or  made  available  to  it  by any
Borrower  or  any  Guarantor  pursuant  to  this  Agreement  that is marked
confidential; PROVIDED that nothing herein shall prevent any Agent  or  any
Lender  from  disclosing such information (i) to any Agent or any Lender or
any affiliate of  any  Agent  or  any  Lender  or  any  officer,  director,
employee,  agent or advisor of any Agent or any Lender or any affiliate  of
any of them,  (ii)  as  required by any law, rule or regulation, (iii) upon
the order of any court or  administrative  agency, (iv) upon the request or
demand  of  any regulatory agency or authority,  (v)  that  is  or  becomes
available to the public or that is or becomes available to any Agent or any
Lender other  than  as  a  result  of disclosure by any Agent or any Lender
prohibited by this Agreement, (vi) in  connection  with  any  litigation to
which any Agent, any Lender or any of their respective Affiliates  may be a
party, (vii) to the extent necessary in connection with the exercise of any
remedy  under  this  Agreement  or  any  other Loan Document, (viii) to any
Agent's  or  any  Lender's  legal counsel, independent  auditors  or  other
advisors, and (ix) to any Person  purchasing  or  proposing  to purchase an
assignment or a participation pursuant to SECTION 13.1 which has  agreed in
writing to be bound by the provisions of this Section 13.15.

                      [Signatures on following pages]




373603                     Signature Page 1 of 9


<PAGE>


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

                         BORROWERS:

                         CONSOLTEX HOLDINGS, INC.,
                         as Borrower and as Guarantor


                         By:/s/_________________________
                         Name: Alex Di Palma
                         Title: Vice-President, Taxation

                         By:/s/_________________________
                         Name:C. Suzanne Crawford
                         Title: Vice-President, Legal Affairs
						and Corporate Secretary

                         CONSOLTEX INC.,
                         as Borrower and as Guarantor

                         By:/s/_________________________
                         Name:Alex Di Palma
                         Title:Vice-President

                         By:/s/_________________________
                         Name:C. Suzanne Crawford
                         Title:Vice-President, Legal Affairs
						and Corporate Secretary

                         CONSOLTEX (USA) INC.,
                         as Borrower and as Guarantor


                         By:/s/__________________________
                         Name:Alex Di Palma
                         Title:Vice-President

                         By:/s/__________________________
                         Name:C. Suzanne Crawford
                         Title:Vice-President, Legal Affairs
						and Corporate Secretary




373603                     Signature Page 2 of 9


<PAGE>


                              THE BALSON-HERCULES GROUP LTD.,
                              as Borrower and as Guarantor

                              By:/s/________________________
                              Name:Alex Di Palma
                              Title:Vice-President, Taxation

                              By:/s/________________________
                              Name:C. Suzanne Crawford
                              Title:Vice-President, Legal Affairs
						and Corporate Secretary

                              LINQ INDUSTRIAL FABRICS, INC.,
                              as Borrower and as Guarantor

                              By:/s/________________________
                              Name:Alex Di Palma
                              Title:Vice-President, Taxation

                              By:/s/________________________
                              Name:C. Suzanne Crawford
                              Title:Vice-President, Legal Affairs
						and Corporate Secretary

                              CONSOLTEX MEXICO, S.A. DE C.V.,
                              as Borrower and as Guarantor

                              By:/s/________________________
                              Name:Alex Di Palma
                              Title:Attorney-in-fact

                              By:/s/________________________
                              Name:C. Suzanne Crawford
                              Title:Attorney-in-fact

                              RAFYTEK, S.A. de C.V.,
                              as Borrower and as Guarantor

                              By:/s/________________________
                              Name:Alex Di Palma
                              Title:Attorney-in-fact

					By:/s/________________________
                              Name:C. Suzanne Crawford
                              Title:Attorney-in-fact






<PAGE>

				GUARANTORS:
                        RAFYTICA, S.A., as Guarantor

 	                  By:/s/______________________
                        Name:Paul Bamatter
                        Title:Director


                        VERA PAK, S.A. de C.V., as Guarantor

                        By:/s/_______________________
                        Name:
                        Title:


                        ROYALTON MEXICANA, S.A. DE C.V.,  as
                        Guarantor

                        By:/s/________________________
                        Name:
                        Title:


                        VEST COMPANY VESTCO, S.A. DE C.V.,  as
                        Guarantor

                        By:/s/________________________
                        Name:
                        Title:


                  MARINO TECHNOLOGIES DE MEXICO, S.A. DE C.V.,
                        as Guarantor


                        By:/s/________________________
                        Name:
                        Title:





<PAGE>

				GUARANTORS:
                        RAFYTICA, S.A., as Guarantor

 	                  By:/s/______________________
                        Name:
                        Title:


                        VERA PAK, S.A. de C.V., as Guarantor

                        By:/s/_______________________
                        Name:Alex Di Palma
                        Title: Attorney-in-fact


                        ROYALTON MEXICANA, S.A. DE C.V.,  as
                        Guarantor

                        By:/s/________________________
                        Name:Alex Di Palma
                        Title:Attorney-in-fact


                        VEST COMPANY VESTCO, S.A. DE C.V.,  as
                        Guarantor

                        By:/s/________________________
                        Name:Alex Di Palma
                        Title:Attorney-in-fact


                  MARINO TECHNOLOGIES DE MEXICO, S.A. DE C.V.,
                        as Guarantor


                        By:/s/________________________
                        Name:Alex Di Palma
                        Title:Attorney-in-fact





<PAGE>


AGENTS:


                            NATIONAL BANK OF CANADA,
                            as Canadian Agent


                            By:/s/_____________________
                            Name:Dana Ades, Vice-President
                            Title:Special Loans and Real Estate


                            BANK OF AMERICA, N.A.,
                            as US Agent


                            By:/s/_____________________
                            Name:
                            Title:




<PAGE>

					AGENTS:


                              NATIONAL BANK OF CANADA,
                              as Canadian Agent


                              By:/s/_____________________
                              Name:
                              Title:


                              BANK OF AMERICA, N.A.,
                              as US Agent


                              By:/s/_____________________
                              Name:W. Larry Hess
                              Title:Managing Director




<PAGE>

LENDERS:

                      NATIONAL BANK OF CANADA


                      By:/s/_____________________
                      Name:Dana Ades, Vice-President
                      Title:Special Loans and Real Estate

                      By:/s/_____________________
                      Name:
                      Title:Senior Manager

                      Lending Office:
                          Sun Life Building
                          1155 Metcalfe, 5th Floor
                          Montreal, Quebec
                          H3B 4S9
                          Attn: Mr. Laurent Genest
                          Telephone: (514) 394-8980
                          Telefacsimile: (514) 394-6073

                          Wire Transfer Instructions:
  	                    $:Bank One International Corporation
                          New York Branch
                          Syndication Loans Department
                          153 West 51st Street, Suite 4800
                          New York, New York
                          ABA No.: 026009797
                          CHIPS No.: 0979
                          Re:  Consoltex
                          Attn: Louise Coulombe or
					Celine Rivard

                         CDN $: Par Swift/Transfert
                         BNDC CAMMINT IN FAVOUR OF:
                         National Bank of Canada
                         Syndication Loans Department
                         600, de la Gauchetiere Street West
                         Main Branch
                         Montreal, Qc Canada H3B 4L2
                         Re: Consoltex
                         Attn: Louise Coulombe or
				      Celine Rivard






<PAGE>


                         BANK OF AMERICA, N.A.


                         By:/s/________________________
                         Name: W. Larry Hess
                         Title: Managing Director

                         Lending Office:
                         Bank of America, National Association
                         Independence Center, 15th Floor
                         NC1-001-15-04
                         Charlotte, North Carolina  28255
                         Attention:  Agency Services
                         Telephone: (704) 386-7637
                         Telefacsimile: (704) 386-9923

                         Wire Transfer Instructions:
                         Bank of America, National Association
                         ABA# 053000196
                         Account No.: 136621-22506
                         Reference: Consoltex
                         Attention: Corporate Credit Support






<PAGE>


                         THE BANK OF NOVA SCOTIA

                         By:/s/_________________________
                         Name:Nicolas Trucmon
                         Title:Director

                         By:/s/_________________________
                         Name:F. DeBroux
                         Title:Managing Director

                         Lending Office:
                            The Bank of Nova Scotia
                            Scotia Tower, Main Branch
                            1002 Sherbrooke Street West
                            Montreal, Quebec, Canada  H3A 3L6
                            Attention: Denis Lagace
                            Telephone: (514) 499-5328
                            Telefacsimile: (514) 499-5815

                            Wire Transfer Instructions:
                            The Bank of Nova Scotia
                            ABA# 002 90001
                            Account No.:_______________
                            Reference: Consoltex
                            Attention: Denis Lagace






<PAGE>


                     GMAC BUSINESS CREDIT, LLC

                     By:/s/___________________
                     Name:W. Wakifield Smith
                     Title:Director


                     Lending Office:
                     GMAC Business Credit, LLC
                     300 Galleria Officentre, Suite 110
                     Southfield, MI 48034
                     Attention: Gwen Julin
                     Telephone: (248) 263-6206
                     Telefacsimile: (248) 356-8978

                     Wire Transfer Instructions:
                     Bank One, Michigan
                     ABA#   072-000-326
                     Account Name: GMAC Business Credit
                     Account No.: 3613249-84
                     Reference: Consoltex, Inc.
                     Attention: Gwen Julin







<PAGE>


                FLEET BUSINESS CREDIT CORPORATION (successor
                  to Sanwa Business Credit Corp.)

                By:/s/
                Name:
                Title:


                Lending Office:
                    Fleet Capital Corp.
                    6100 Fairview Road
                    Charlotte, North Carolina 28210
                    Attention: Leslie Washington
                    Telephone: (704) 553-6717
                    Telefacsimile: (704) 553-6738

               Wire Transfer Instructions:
                    Fleet Business Credit Corporation
                    ABA# 011-900-571
                    Account No.: 937-001-5120
                    Reference: Consoltex
                    Attention: Leslie Washington




<PAGE>


                                 EXHIBIT A

                     Applicable Commitment Percentages

     I.   TOTAL FACILITIES
                                                  Applicable
                                                  Commitment
     LENDER                   COMMITMENT          PERCENTAGE

     National Bank of Canada $ 29,441,495.92 25.2175553919%
     Bank of America, N.A. $ 28,250,319.95 24.1972761884%
     Fleet Business Credit Corporation $ 28,455,882.33 24.3733467495%
     The Bank of Nova Scotia $ 10,602,301.80 9.0812006852%
     GMAC Business Credit, LLC $ 20,000,000.00   17.1306209850%

     Total Commitment $ 116,750,000.00 100.0000000000%

     II.  CANADIAN REVOLVING CREDIT FACILITY
                                                  Applicable
     CANADIAN REVOLVING CREDIT                    Commitment
     FACILITY LENDERS         COMMITMENT          PERCENTAGE

     National Bank of Canada $ 14,184,142.98 74.6835439932%
     The Bank of Nova Scotia $ 4,808,184.14   25.3164560068%

     Total Commitment $ 18,992,327.12 100.0000000000%

     III. CANADIAN TERM LOAN FACILITY
                                                  Applicable
     CANADIAN TERM LOAN                           Commitment
     FACILITY LENDERS         COMMITMENT          PERCENTAGE

     National Bank of Canada $ 15,257,352.94 72.4764232861%
     The Bank of Nova Scotia $ 5,794,117.66   27.5235767139%

     Total Commitment $ 21,051,470.60 100.0000000000%

     IV.  US REVOLVING CREDIT FACILITY
                                                  Applicable
     US REVOLVING CREDIT                          Commitment
     FACILITY LENDERS         COMMITMENT          PERCENTAGE

     Bank of America, N.A. $ 14,184,143.47 36.8345901197%
     Fleet Business Credit Corporation $ 13,823,529.41 35.8981168586%
     GMAC Business Credit, LLC $ 10,500,000.00   27.2672930216%

     Total Commitment $ 38,507,672.88 100.0000000000%




<PAGE>



     V.   US TERM LOAN FACILITY
                                                  Applicable
     US TERM LOAN FACILITY                        Commitment
     LENDERS                  COMMITMENT          PERCENTAGE

     Bank of America, N.A. $ 14,066,176.48 36.8238691409%
     Fleet Business Credit Corporation $ 14,632,352.92 38.3060634790%
     GMAC Business Credit, LLC $ 9,500,000.00   24.8700673801%

     Total Commitment $ 38,198,529.40 100.0000000000%





<PAGE>


                                 EXHIBIT B

                     Form of Assignment and Acceptance

     Reference is made  to the Second Amended and Restated Credit Agreement
dated as of November 7, 2000  (the  "Agreement")  among CONSOLTEX HOLDINGS,
INC., CONSOLTEX INC., CONSOLTEX (USA) INC., THE BALSON-HERCULES GROUP LTD.,
LINQ INDUSTRIAL FABRICS, INC., CONSOLTEX MEXICO, S.A.  de C.V. and RAFYTEK,
S.A. de C.V. (the "Borrowers"), each Subsidiary identified  as  a Guarantor
(as  defined  in  the  Agreement)  therein, the Lenders (as defined in  the
Agreement), and each of National Bank  of  Canada and Bank of America, N.A.
as Agents for the Lenders (the "Agents").  Unless otherwise defined herein,
terms defined in the Agreement are used herein with the same meanings.

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

     1.   The  Assignor hereby sells and assigns to the  Assignee,  WITHOUT
RECOURSE and without  representation  or  warranty  except as expressly set
forth  herein,  and  the  Assignee  hereby purchases and assumes  from  the
Assignor, an interest in and to the Assignor's rights and obligations under
the Agreement and the other Loan Documents  as  of the date hereof equal to
the percentage interest specified on SCHEDULE 1 of  all  outstanding rights
and obligations in the [CANADIAN REVOLVING CREDIT LOANS] [THE CANADIAN TERM
LOAN]  [THE  US  REVOLVING  CREDIT  LOANS]  [THE  US  TERM LOAN] under  the
Agreement and the other Loan Documents.  After giving effect  to  such sale
and assignment, the Assignee's Commitment to the [CANADIAN REVOLVING CREDIT
FACILITY]  [THE  CANADIAN  TERM  LOAN  FACILITY]  [THE  US REVOLVING CREDIT
FACILITY] [THE US TERM LOAN FACILITY] and the amount of the  Loans owing to
the Assignee will be as set forth on SCHEDULE 1.

     2.   The Assignor (i) represents and warrants that it is the legal and
beneficial  owner of the interest being assigned by it hereunder  and  that
such interest  is  free  and  clear  of  any  adverse  claim; (ii) makes no
representation or warranty and assumes no responsibility  with  respect  to
any statements, warranties or representations made in or in connection with
the  Loan  Documents  or the execution, legality, validity, enforceability,
genuineness, sufficiency  or  value  of  the  Loan  Documents  or any other
instrument   or   document  furnished  pursuant  thereto;  (iii)  makes  no
representation or warranty  and  assumes  no responsibility with respect to
the financial condition of any Borrower or any Guarantor or the performance
or observance by any Borrower or any Guarantor  of  any  of its obligations
under  the  Loan  Documents  or any other instrument or document  furnished
pursuant thereto; and (iv) if  the  Commitment  being assigned is in the US
Term Loan Facility or the US Revolving Credit Facility,  attaches the Notes
held by the Assignor with respect to its Commitments assigned hereunder and
requests that the US Agent exchange such Notes for new Notes payable to the
order of the Assignee in an amount equal to the Commitments  assumed by the
Assignee  pursuant  hereto  and to the Assignor in an amount equal  to  the
Commitments retained by the Assignor,  if  any,  as  specified  on SCHEDULE
1.{1*}

     3.   The  Assignee  (i)  confirms  that it has received a copy of  the
Agreement, together with copies of the financial  statements referred to in
SECTION  9.1  thereof and such other documents and information  as  it  has
deemed appropriate  to  make  its own credit analysis and decision to enter
into  this  Assignment  and  Acceptance;   (ii)   agrees   that   it  will,
independently  and  without  reliance  upon any Agent, the Assignor or  any
other Lender and based on such documents  and  information as it shall deem
appropriate  at  the  time, continue to make its own  credit  decisions  in
taking or not taking action  under the Agreement; (iii) confirms that it is
an Eligible Assignee;  (iv) appoints and authorizes each Agent to take such
action as agent on its behalf  and  to  exercise such powers and discretion
under the Agreement as are delegated to such  Agent  by  the terms thereof,
together  with  such  powers  and  discretion as are reasonably  incidental
thereto; (v) agrees that it will perform in accordance with their terms all
of the obligations that by the terms  of  the  Agreement are required to be
performed by it as a Lender; and (vi) attaches any  U.S.  Internal  Revenue
Service or other forms required under SECTION 6.6.

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

     5.   Upon such acceptance and recording  by  the Relevant Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Agreement and,
to the extent provided in this Assignment and Acceptance,  have  the rights
and obligations of a Lender thereunder and (ii) the Assignor shall,  to the
extent  provided  in  this Assignment and Acceptance, relinquish its rights
and be released from its  obligations  under  the Agreement, and (iii) with
respect  to  the  Bankers' Acceptances listed in Schedule  "A"  hereto  the
Assignee  shall pay  to  the  Assignor  upon  demand  of  the  Assignor  in
immediately  available  funds  the  Assignee's portion (to be calculated in
proportion to the percentage interest  mentioned in SECTION 1 above) of the
face  value of such Bankers' Acceptances  which  the  applicable  Borrowers
under a  Canadian  Facility  would not pay to the Assignor upon maturity of
such Bankers' Acceptances, and  thus acquire a portion, to be calculated in
the same manner, of the right of the Assignor to be repaid by such Borrower
any amount owed by such Borrower pursuant thereto.

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

     7.   The  Assignor  shall  cause  the   bond   certificate  issued  by
Consoltex, which is registered in the name of the Assignor  to be presented
to  the  Canadian  Collateral Trustee for cancellation and for issuance  in
lieu thereof of a bond  certificate  to  be  registered  in the name of the
Assignee  (or  in  the  case  of  partial  assignment  of bond certificates
registered in the name of the assignee and bond certificates  registered in
the  name  of  the  assignor,  the  nominal  amount  of  which shall be  in
proportion  to  their respective commitments from and after  the  Effective
Date), and Consoltex  shall  issue  such  bonds and any related bond pledge
agreements pursuant to SECTION 13.1(A) of the Agreement.

     8.   This  Assignment  and  Acceptance  shall   be  governed  by,  and
construed in accordance with, the laws of the State of New York.

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

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


**FOOTNOTES**

{1*}   In the case of National Bank of Canada as Assignor, excluding any
rights, benefits or duties as provider of Canadian Swing Line Loans, or in
the case of either of the Issuing Banks as Assignor, excluding any rights,
benefits or duties as an Issuing Bank.



B-2
373603


<PAGE>


                                Schedule 1
<TABLE>
<CAPTION>
                                                     Canadian
                                US        US Term    Revolving   Canadian
                             Revolving     Loan       Credit     Term Loan
                              Credit     Facility    Facility    Facility
                             Facility
<S>                         <C>         <C>         <C>         <C>

Percentage interest            ____%       ____%       ____%       ____%
assigned

Assignee's commitment       $__________ $__________ $__________ $__________
Aggregate outstanding
principal amount of loans   $__________ $__________ $__________ $__________
assigned
Principal amount of Note
payable to Assignee         $__________ $__________ $__________ $__________
Principal amount of Note
payable to                  $__________ $__________ $__________ $__________
Assignor
Effective Date (if other
than date of acceptance by  _________,  _________,  _________,  _________,
Relevant Agent)                20__        20__        20__        20__
</TABLE>


                         [NAME OF ASSIGNOR], as Assignor


                         By:
                              Title:

                         Dated:  __________, ____



                         [NAME OF ASSIGNEE], as Assignee


                         By:
                              Title:

                         Domestic Lending Office:

                         Eurodollar Lending Office:
____________________________

*   This  date  should  be no earlier than five  Business  Days  after  the
delivery of this Assignment and Acceptance to the Agent.

Accepted [and Approved] **
this ___ day of ___________, ____

BANK OF AMERICA, N.A., as US Agent


By:
Title:


Accepted [and Approved] **
this ___ day of ___________, ____

NATIONAL BANK OF CANADA, as Canadian Agent


By:
Title:


[Approved this ____ day
of ____________, ____

CONSOLTEX HOLDINGS, INC.
CONSOLTEX INC.
CONSOLTEX (USA) INC.
THE BALSON-HERCULES GROUP LTD.
LINQ INDUSTRIAL FABRICS, INC.
CONSOLTEX MEXICO, S.A. de C.V.
RAFYTEK, S.A. de C.V.


By:                      ]**
Title:


_______________________

**  Required if the Assignee is an Eligible Assignee solely by reason of
   clause (iii) of the definition of "Eligible Assignee."




C-1
373603


<PAGE>


                                 EXHIBIT C

    Notice of Appointment (or Revocation) of Authorized Representative

     Reference is made to  the Second Amended and Restated Credit Agreement
dated as of November 7, 2000  (the  "Agreement")  among CONSOLTEX HOLDINGS,
INC., CONSOLTEX INC., CONSOLTEX (USA) INC., THE BALSON-HERCULES GROUP LTD.,
LINQ INDUSTRIAL FABRICS, INC., CONSOLTEX MEXICO, S.A.  de C.V. and RAFYTEK,
S.A. de C.V. (the "Borrowers"), each Subsidiary identified  as  a Guarantor
(as  defined  in  the  Agreement)  therein, the Lenders (as defined in  the
Agreement), and each of National Bank  of  Canada and Bank of America, N.A.
as Agents for the Lenders (the "Agents").  Unless otherwise defined herein,
terms defined in the Agreement are used herein with the same meanings.

     [The   Borrowers  hereby  nominate,  constitute   and   appoint   each
individual named  below  as  an  Authorized  Representative  under the Loan
Documents,  and  hereby  represent and warrant that (i) set forth  opposite
each such individual's name  is  a  true  and  correct  statement  of  such
individual's  office  on the date hereof (to which such individual has been
duly elected or appointed), a genuine specimen signature of such individual
and an address for the  giving of notice to such Authorized Representative,
and (ii) each such individual  has been duly authorized by the Borrowers to
act as an Authorized Representative under the Loan Documents:

     NAME AND ADDRESS         OFFICE         SPECIMEN SIGNATURE







                    ]

[The Borrowers hereby revoke (effective  upon the date specified below) the
prior appointment of ________________ as an Authorized Representative.]


This the ___ day of __________________, ____.


                              CONSOLTEX HOLDINGS, INC.

                              By:
                              Name:
                              Title:





C-2
373603


<PAGE>


                              CONSOLTEX INC.

                              By:
                              Name:
                              Title:


                              CONSOLTEX (USA) INC.

                              By:
                              Name:
                              Title:


                              THE BALSON-HERCULES GROUP LTD.

                              By:
                              Name:
                              Title:


                              LINQ INDUSTRIAL FABRICS, INC.

                              By:
                              Name:
                              Title:


                              CONSOLTEX MEXICO, S.A. de C.V.

                              By:
                              Name:
                              Title:


                              RAFYTEK, S.A. de C.V.

                              By:
                              Name:
                              Title:




D-1
373603


<PAGE>


                                 EXHIBIT D

                    Form of Borrowing Base Certificate


To:  National Bank of Canada
     Sun Life Building
     1155 Metcalfe, 5th Floor
     Montreal, Quebec
     H3B 4S9
     Attn: Ms. Michelle Fradette
     Telephone: (514) 394-8407
     Telefacsimile: (514) 394-4240

     and

     Bank of America, N.A.
     Independence Center, 15th Floor
     NC1-001-15-04
     Charlotte, North Carolina  28255
     Attention: Agency Services
     Telephone: (704) 386-7637
     Telefacsimile: (704) 386-9923

     Reference is made to the Second Amended  and Restated Credit Agreement
dated as of November 7, 2000 (the "Agreement")  among  CONSOLTEX  HOLDINGS,
INC., CONSOLTEX INC., CONSOLTEX (USA) INC., THE BALSON-HERCULES GROUP LTD.,
LINQ  INDUSTRIAL FABRICS, INC., CONSOLTEX MEXICO, S.A. de C.V. and RAFYTEK,
S.A. de  C.V.  (the "Borrowers"), each Subsidiary identified as a Guarantor
(as defined in the  Agreement)  therein,  the  Lenders  (as  defined in the
Agreement),  and each of National Bank of Canada and Bank of America,  N.A.
as Agents for the Lenders (the "Agents").  Unless otherwise defined herein,
terms defined in the Agreement are used herein with the same meanings.

     Consoltex, LINQ, Balson-Hercules and Rafytek, through the undersigned
Authorized Representative, hereby certify to the Agents and the Lenders
that the attached Borrowing Base calculation is calculated under the terms
and conditions of he Agreement.

                              Consoltex Inc.
                              The Balson-Hercules Group Ltd.
                              LINQ Industrial Fabrics, Inc.
                              Rafytek, S.A de C.V.

                              By:
                                   Authorized Representative

                              DATE:

373603
                                   E-1-1



<PAGE>


                                 EXHIBIT E

                         Form of Borrowing Notice

To:  National Bank of Canada
     Sun Life Building
     1155 Metcalfe, 5th Floor
     Montreal, Quebec
     H3B 4S9
     Attn: Ms. Michelle Fradette
     Telephone: (514) 394-8407
     Telefacsimile: (514) 394-4240

     and

     Bank of America, N.A.
     Independence Center, 15th Floor
     NC1-001-15-04
     Charlotte, North Carolina  28255
     Attention: Agency Services
     Telephone: (704) 386-7637
     Telefacsimile: (704) 386-9923

     Reference  is made to the Second Amended and Restated Credit Agreement
dated as of November  7,  2000  (the "Agreement") among CONSOLTEX HOLDINGS,
INC., CONSOLTEX INC., CONSOLTEX (USA) INC., THE BALSON-HERCULES GROUP LTD.,
LINQ INDUSTRIAL FABRICS, INC., CONSOLTEX  MEXICO, S.A. de C.V. and RAFYTEK,
S.A. de C.V. (the "Borrowers"), each Subsidiary  identified  as a Guarantor
(as  defined  in  the  Agreement) therein, the Lenders (as defined  in  the
Agreement), and each of  National  Bank of Canada and Bank of America, N.A.
as Agents for the Lenders (the "Agents").  Unless otherwise defined herein,
terms defined in the Agreement are used herein with the same meanings.

     ______________________, a Facility  Borrower under the [Canadian] [US]
Facility   indicated  below  (the  "Borrower"),   through   an   Authorized
Representative, hereby gives notice to the [Canadian] [US] Agent that Loans
of the type and amount set forth below be made on the date indicated:

     Canadian Revolving Credit Facility
     US Revolving Credit Facility

Type of Loan
(CHECK ONE)    INTEREST PERIOD{2} AGGREGATE AMOUNT{3} DATE OF LOAN{4}

Base Rate Loan
Canadian Dollar{5} __________ CAN $_________     __________

Base Rate Loan
US Dollar     __________    $______________      __________

Eurodollar Rate
Loan          __________    $______________      __________

Bankers'
Acceptances{4}                   __________  CAN $_________ __________


     The Borrower hereby requests that the proceeds of Loans described in
this Borrowing Notice be made available to the Borrower as follows:
[INSERT TRANSMITTAL INSTRUCTIONS]  .

     The undersigned hereby certifies that:

     1.   No Default or Event of Default has occurred and is continuing
either now or after giving effect to the borrowing described herein; and

     2.   All the representations and warranties set forth in ARTICLE VIII
of the Agreement and in the Loan Documents (other than those expressly
stated to refer to a particular date) are true and correct as of the date
hereof except that the reference to the financial statements in SECTION
8.6(A) of the Agreement shall be deemed (solely for the purpose of the
representation and warranty contained in such SECTION 8.6(A) but not for
the purpose of any cross reference to such SECTION 8.6(A) or to the
financial statements described therein contained in any other provision of
SECTION 8.6 or elsewhere in ARTICLE VIII) to refer to those financial
statements most recently delivered to you pursuant to SECTION 9.1 of the
Agreement (it being understood that any financial statements delivered
pursuant to SECTION 9.1(B) have not been certified by independent public
accountants).

     3.   All conditions contained in the Agreement to the making of any
Loan requested hereby have been met or satisfied in full .

     4.   After giving effect to the requested Loan, (i) the amount of US
Revolving Credit Outstandings plus US Letter of Credit Outstandings does
not exceed the Total Commitment under the US Revolving Credit Facility as
of this date, (ii) the Dollar Equivalent Amount of Canadian Revolving
Credit Outstandings plus Canadian Letter of Credit Outstandings plus
Canadian Swing Line Loan Outstandings does not exceed the Dollar Equivalent
Amount of the Total Commitment under the Canadian Revolving Credit Facility
as of this date, and (iii) the Dollar Equivalent Amount of all Outstandings
under the Revolving Credit Facilities, the Letter of Credit Facilities and
the Canadian Swing Line Facility does not exceed the SUM of the Borrowing
Base as calculated in Dollars as in effect on this date.

                              [NAME OF FACILITY BORROWER]


                              BY:
                                   Authorized Representative

                              DATE:



**FOOTNOTES**

{2} For any Eurodollar Rate Loan, one, two or three months.

{3}  Must be  the  Dollar  Equivalent  Amount  of  $100,000  (under  either
   Revolving   Credit  Facility)  (CAN  $500,000  per  Lender  if  Bankers'
   Acceptances) or if greater an integral multiple of the Dollar Equivalent
   Amount of $100,000 (or CAN $100,000 in the case of Bankers' Acceptances)
   unless a Base Rate Refunding Loan.

{4} At least three  (3)  Business  Days later if a Eurodollar Rate Loan, or
   two (2) Business Days later if Bankers' Acceptances.

{5} Canadian Revolving Credit Facility only.

373603

                                    F-1



<PAGE>


                                 EXHIBIT F

                  Form of Interest Rate Selection Notice

To:  National Bank of Canada
     Sun Life Building
     1155 Metcalfe, 5th Floor
     Montreal, Quebec
     H3B 4S9
     Attn: Ms. Michelle Fradette
     Telephone: (514) 394-8407
     Telefacsimile: (514) 394-4240

     and

     Bank of America, N.A.
     Independence Center, 15th Floor
     NC1-001-15-04
     Charlotte, North Carolina  28255
     Attention: Agency Services
     Telephone: (704) 386-7637
     Telefacsimile: (704) 386-9923

     Reference is made to the Second  Amended and Restated Credit Agreement
dated as of November 7, 2000 (the "Agreement")  among  CONSOLTEX  HOLDINGS,
INC., CONSOLTEX INC., CONSOLTEX (USA) INC., THE BALSON-HERCULES GROUP LTD.,
LINQ  INDUSTRIAL FABRICS, INC., CONSOLTEX MEXICO, S.A. de C.V. and RAFYTEK,
S.A. de  C.V.  (the "Borrowers"), each Subsidiary identified as a Guarantor
(as defined in the  Agreement)  therein,  the  Lenders  (as  defined in the
Agreement),  and each of National Bank of Canada and Bank of America,  N.A.
as Agents for the Lenders (the "Agents").  Unless otherwise defined herein,
terms defined in the Agreement are used herein with the same meanings.

     ______________________,  a Facility Borrower under the [Canadian] [US]
Facility  indicated  below  (the    Borrower   ),   through  an  Authorized
Representative, hereby gives notice to the [Canadian]  [US]  Agent  of  the
following selection of a type of Loan or Segment and Interest Period:

FACILITY TO WHICH THIS INTEREST RATE SELECTION NOTICE APPLIES:

   Canadian Revolving Credit Facility
   US Revolving Credit Facility
   Canadian Term Loan Facility
   US Term Loan Facility


Revolving
Credit Loan         Interest            Aggregate
(CIRCLE ONE)        PERIOD{(1)}    AMOUNT{(2)}    DATE OF LOAN{(3)}

1. Base Rate Loan
   Canadian Dollar  ______         CAN $_______   ____________

2. Base Rate Loan
   US Dollar        ______         $____________  ____________

3. Eurodollar Rate
   Loan             ______         $____________  ____________

4. Bankers'
   Acceptances      ______         CAN $_______   ____________


Term Loan Segment   Interest       Aggregate
       (CIRCLE ONE) PERIOD{(1)}    AMOUNT{(2)}    DATE OF LOAN{(3)}

5. Base Rate Loan
   Canadian Dollar  ______         CAN $_______   ____________

6. Base Rate Loan
   US Dollar        ______         $___________   ____________

7. Eurodollar Rate
   Loan             ______         $___________   ____________

8. Bankers'
   Acceptances      ______         CAN $_______   ____________

________________
(1)  For any Eurodollar Rate Loan or Segment, one, two or three months; for
     Bankers' Acceptances from 30 to 364 days.
(2)  Must  be $100,000 (or the Canadian Dollar Equivalent Amount thereof in
     Canadian Dollars) (CAN $500,000 per Lender if Bankers' Acceptances) or
     if greater  an  integral  multiple of $100,000 (or the Canadian Dollar
     Equivalent Amount thereof in  Canadian  Dollars)  (CAN $100,000 in the
     case of Bankers' Acceptances), unless a Base Rate Refunding Loan.
(3)  At least three (3) Business Days later if a Eurodollar  Rate  Loan  or
     Eurodollar  Rate  Segment,  or two (2) Business Days later if Bankers'
     Acceptances.



              Conversion (Canadian Revolving Credit Facility)

Segment no 1, 2, 3, 4 above (circle one) to be a conversion of:

                            Interest period
                             MATURITY DATE          AMOUNT
Base Rate Loan
Canadian Dollar                   N/A             CAN $__________

Base Rate Loan
Dollar                            N/A             $_______________

Eurodollar Rate
Loan                            _______           $______________

Bankers'
Acceptances                     _______           CAN $__________


                 Conversion (Canadian Term Loan Facility)

Segment no 5, 6, 7, 8 above (circle one) to be a conversion of:

                            Interest period
                             MATURITY DATE          AMOUNT
Base Rate Loan
Canadian Dollar                   N/A             CAN $__________

Base Rate Loan
Dollar                            N/A             $_______________

Eurodollar Rate
Loan                            _______           $_______________

Bankers'
Acceptances                     _______         CAN $__________



                 Conversion (US Revolving Credit Facility)

Segment no 2 or 3 above (circle one) to be a conversion of:

                            Interest period
                             MATURITY DATE          AMOUNT

Base Rate Loan
Dollar                            N/A             $______________

Eurodollar Rate
Loan                            _______           $______________


                    Conversion (US Term Loan Facility)

Segment no 6 or 7 above (circle one) to be a conversion of:

                            Interest period
                             MATURITY DATE          AMOUNT
Base Rate Loan
Dollar                            N/A             $______________

Eurodollar Rate
Loan                            _______           $______________



                         [NAME OF FACILITY BORROWER]

                         BY:
                              Authorized Representative
                         DATE:

373603

                                   G-1-1



<PAGE>


                                EXHIBIT G-1

                          Form of Revolving Note

                   Amended and Restated Promissory Note

                      (US Revolving Credit Facility)


$_____________                                                   November
7, 2000

     FOR VALUE RECEIVED, each of CONSOLTEX  HOLDINGS, INC., CONSOLTEX (USA)
INC.,  THE  BALSON-HERCULES  GROUP  LTD.,  LINQ INDUSTRIAL  FABRICS,  INC.,
CONSOLTEX MEXICO, S.A. de C.V. and RAFYTEK, S.A. de C.V. (the "Borrowers"),
hereby   jointly  and  severally  promises  to  pay   to   the   order   of
________________________ (the "Lender"), in its individual capacity, at the
office of  BANK  OF  AMERICA,  N.A.,  as  agent for the US Revolving Credit
Facility Lenders (the "US Agent"), located  at One Independence Center, 101
North Tryon Street, NC1-001-15-04, Charlotte,  North  Carolina 28255 (or at
such other place or places as the US Agent may designate in writing) at the
times set forth in the Second Amended and Restated Credit  Agreement  dated
as  of  November  7,  2000  among  Consoltex  Inc.  and  the Borrowers, the
financial institutions party thereto (collectively, the "Lenders") and each
of the US Agent and National Bank of Canada, as the Canadian Agent, as from
time  to  time  heretofore  and  hereafter  amended  (the "Agreement";  all
capitalized terms not otherwise defined herein shall have  the   respective
meanings set forth in the Agreement), in lawful money of the United  States
of  America,  in  immediately  available  funds,  the  principal  amount of
________________________  AND __/100 DOLLARS ($___________________.__)  or,
if less than such principal  amount,  the aggregate unpaid principal amount
of  all  US Revolving Credit Loans made by  the  Lender  to  the  Borrowers
pursuant  to   the  Agreement  and  outstanding  on  the  Revolving  Credit
Termination Date  or  such  earlier date as may be required pursuant to the
terms of the Agreement, and jointly  and  severally promise to pay interest
from the date hereof on the unpaid principal  amount hereof, in like money,
at said office, on the dates and at the rates provided  in  ARTICLES II AND
IV of the Agreement.  All or any portion of the principal amount  of the US
Revolving Credit Loans may be prepaid or required to be prepaid as provided
in the Agreement.

     If payment of all sums due hereunder is accelerated under the terms of
the  Agreement  or under the terms of the other Loan Documents executed  in
connection with the  Agreement,  the  then  remaining  principal amount and
accrued but unpaid interest thereon evidenced by this Revolving  Note shall
become  immediately due and payable, without presentation, demand,  protest
or notice of any kind, all of which are hereby waived by the Borrowers.

     In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, each Borrower jointly and severally agrees to pay, in
addition  to  the  principal  and  interest  due  hereunder,  all  costs of
collection,   including   reasonable  attorneys'  fees,  and  interest  due
hereunder thereon at the rates set forth above.

     Interest hereunder shall be computed as provided in the Agreement.

     This Revolving Note is  one  of the Revolving Notes referred to in the
Agreement  and is issued pursuant to  and  entitled  to  the  benefits  and
security of  the  Loan  Documents  and  the Agreement to which reference is
hereby made for a more complete statement  of the terms and conditions upon
which the US Revolving Credit Loans evidenced  hereby  were or are made and
are to be repaid.  This Revolving Note is an amendment and  modification of
Amended  and  Restated Promissory Note (US Revolving Credit Facility)  from
each of the Borrowers  other  than  Rafytek,  S.A.  de C.V. in favor of the
Lender dated as of September 29, 2000 and does not constitute a novation of
such  promissory  note.   This  Revolving  Note  is  subject   to   certain
restrictions on transfer or assignment as provided in the Agreement.

     This  Revolving  Note shall be governed by and construed in accordance
with the laws of the State of New York.

     All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties,  guarantors, endorsers or otherwise, hereby
waive to the full extent permitted  by law all defenses based on suretyship
or impairment of collateral and the benefits  of  all provisions of law for
stay  or  delay of execution or sale of property or other  satisfaction  of
judgment against  any of them Borrower on account of liability hereon until
judgment be obtained  and  execution  issued  against any other of them and
returned unsatisfied or until it can be shown that  the  maker or any other
party  hereto had no property available for the satisfaction  of  the  debt
evidenced  by  this  instrument,  or until any other proceedings can be had
against any of them, also their right, if any, to require the holder hereof
to hold as security for this Revolving Note any collateral deposited by any
of  said  Persons  as security.  Protest,  notice  of  protest,  notice  of
dishonor, diligence or any other formality are hereby waived by all parties
bound hereon.

                         [Signature page follows.]

373603

                                   G-1-2



<PAGE>


     IN WITNESS WHEREOF,  the  Borrowers have caused this Revolving Note to
be made, executed and delivered by its duly authorized representative as of
the  date and year first above written,  all  pursuant  to  authority  duly
granted.


                                   CONSOLTEX HOLDINGS, INC.

                                   By:
                                   Name:
                                   Title:

                                   By:
                                   Name:
                                   Title:


                                   CONSOLTEX (USA) INC.

                                   By:
                                   Name:
                                   Title:

                                   By:
                                   Name:
                                   Title:


                                   THE BALSON-HERCULES GROUP LTD.


                                   By:
                                   Name:
                                   Title:

                                   By:
                                   Name:
                                   Title:



373603

                                   G-1-3



<PAGE>


                                   LINQ INDUSTRIAL FABRICS, INC.


                                   By:
                                   Name:
                                   Title:

                                   By:
                                   Name:
                                   Title:


                                   CONSOLTEX MEXICO, S.A. de C.V.


                                   By:
                                   Name:
                                   Title:

                                   By:
                                   Name:
                                   Title:


                                   RAFYTEK, S.A. de C.V.

                                   By:
                                   Name:
                                   Title:

                                   By:
                                   Name:
                                   Title:



373603

                                   G-2-1



<PAGE>


                                EXHIBIT G-2

                             Form of Term Note

                   Amended and Restated Promissory Note

                          (US Term Loan Facility)



$14,066,176.48                                                   November
7, 2000

     FOR  VALUE  RECEIVED,  each  of  LINQ  INDUSTRIAL  FABRICS,  INC.  and
CONSOLTEX  MEXICO,  S.A.  de  C.V.  (the  "Borrowers"),  hereby jointly and
severally  promises  to pay to the order of _______________________________
(the "Lender"), in its  individual  capacity,  at  the  office  of  BANK OF
AMERICA,  N.A.,  as  agent  for  the US Term Loan Facility Lenders (the "US
Agent"), located at One Independence  Center,  101 North Tryon Street, NC1-
001-15-04,  Charlotte,  North Carolina 28255 (or at  such  other  place  or
places as the US Agent may  designate in writing) at the times set forth in
the Second Amended and Restated  Credit  Agreement  dated as of November 7,
2000  among  Consoltex  Inc. and the Borrowers, the financial  institutions
party thereto (collectively,  the  "Lenders")  and each of the US Agent and
National  Bank  of Canada, as the Canadian Agent,  as  from  time  to  time
heretofore and hereafter  amended  (the  "Agreement"; all capitalized terms
not otherwise defined herein shall have the   respective meanings set forth
in  the Agreement), in lawful money of the United  States  of  America,  in
immediately     available     funds,     the     principal     amount    of
________________________ AND __/100 DOLLARS ($________________.__)  on  the
Term Loan Termination Date or such earlier date as may be required pursuant
to  the  terms  of  the Agreement, and jointly and severally promise to pay
interest from the date  hereof  on  the  unpaid principal amount hereof, in
like  money, at said office, on the dates and  at  the  rates  provided  in
ARTICLES  II  AND IV of the Agreement.  All or any portion of the principal
amount of the US  Term  Loan  may  be  prepaid or required to be prepaid as
provided in the Agreement.

     If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the  other  Loan  Documents executed in
connection with the Agreement, the then remaining principal  amount  hereof
and  accrued  but unpaid interest thereon evidenced by this Term Note shall
become immediately  due  and payable, without presentation, demand, protest
or notice of any kind, all of which are hereby waived by the Borrowers.

     In the event this Term  Note  is  not  paid  when due at any stated or
accelerated maturity, each Borrower jointly and severally agrees to pay, in
addition  to  the  principal  and  interest  due hereunder,  all  costs  of
collection,  including  reasonable  attorneys'  fees,   and   interest  due
hereunder thereon at the rates set forth above.

     Interest hereunder shall be computed as provided in the Agreement.

     This  Term Note is one of the Term Notes referred to in the  Agreement
and is issued  pursuant to and entitled to the benefits and security of the
Loan Documents and  the  Agreement  to which reference is hereby made for a
more complete statement of the terms  and conditions upon which the US Term
Loans evidenced hereby were made and is  to be repaid. This Term Note is an
amendment and modification of Amended and Restated Promissory Note (US Term
Loan Facility) from each of the Borrowers  in  favor of the Lender dated as
of  October 25, 1999 and does not constitute a novation  of  such  existing
promissory  note.   This  Term  Note  is subject to certain restrictions on
transfer or assignment as provided in the Agreement.

     This Term Note shall be governed by  and  construed in accordance with
the laws of the State of New York.

     All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers  or otherwise, hereby
waive to the full extent permitted by law all defenses based  on suretyship
or impairment of collateral and the benefits of all provisions  of  law for
stay  or  delay  of execution or sale of property or other satisfaction  of
judgment against any  of them on account of liability hereon until judgment
be obtained and execution  issued  against  any  other of them and returned
unsatisfied  or until it can be shown that the maker  or  any  other  party
hereto had no property available for the satisfaction of the debt evidenced
by this instrument,  or  until any other proceedings can be had against any
of them, also their right,  if any, to require the holder hereof to hold as
security for this Term Note any collateral deposited by any of said Persons
as security.  Protest, notice  of protest, notice of dishonor, diligence or
any other formality are hereby waived by all parties bound hereon.

                         [Signature page follows.]

373603

                                   G-2-2



<PAGE>


     IN WITNESS WHEREOF, the Borrowers  have  caused  this  Term Note to be
made,  executed and delivered by its duly authorized representative  as  of
the date  and  year  first  above  written,  all pursuant to authority duly
granted.


                                   LINQ INDUSTRIAL FABRICS, INC.

                                   By:
                                   Name:
                                   Title:

                                   By:
                                   Name:
                                   Title:


                                   CONSOLTEX MEXICO, S.A. de C.V.

                                   By:
                                   Name:
                                   Title:

                                   By:
                                   Name:
                                   Title:

373603
                                    H-1



<PAGE>


                                 EXHIBIT H

                      Form of Third Amendment to Mortgage


                               SEE ATTACHED.

373603
                                   I-1-1



<PAGE>


                                EXHIBIT I-1

                      Form of Opinion of Kirkland & Ellis


                               SEE ATTACHED.


373603
                                   I-2-1



<PAGE>


                                EXHIBIT I-2

            Form of Opinion of Young, Clement, Rivers & Tisdale, LLP


                               SEE ATTACHED.


373603
                                   I-3-1



<PAGE>


                                EXHIBIT I-3

                   Form of Opinion of Ogilvy Renault S.E.N.C.


                               SEE ATTACHED.


373603
                                   I-4-1



<PAGE>


                                EXHIBIT I-4

                Form of Opinion of Brown Rudnick Freed & Gesmer


                               SEE ATTACHED.


373603
                                   I-5-1



<PAGE>


                                EXHIBIT I-5

                  Form of Opinion of Rich, Heather and Mueller


                               SEE ATTACHED.



373603
                                   I-6-1



<PAGE>


                                EXHIBIT I-6

              Form of Opinion of Stewart McKelvey Stirling Scales


                               SEE ATTACHED.



373603
                                   I-7-1



<PAGE>


                                EXHIBIT I-7

                  Form of Opinion of Osler Hoskins & Harcourt


                               SEE ATTACHED.



373603
                                    J-1



<PAGE>


                                 EXHIBIT J

                      Form of Compliance Certificate

To:  National Bank of Canada
     Sun Life Building
     1155 Metcalfe, 5th Floor
     Montreal, Quebec
     H3B 4S9
     Attn: Ms. Michelle Fradette
     Telephone: (514) 394-8407
     Telefacsimile: (514) 394-4240

     and

     Bank of America, N.A.
     Independence Center, 15th Floor
     NC1-001-15-04
     Charlotte, North Carolina  28255
     Attention: Agency Services
     Telephone: (704) 386-7637
     Telefacsimile: (704) 386-9923


     Reference is made to the Second Amended and Restated Credit Agreement
 dated as of November 7, 2000 (the "Agreement") among CONSOLTEX HOLDINGS,
INC., CONSOLTEX INC., CONSOLTEX (USA) INC., THE BALSON-HERCULES GROUP LTD.,
LINQ INDUSTRIAL FABRICS, INC., CONSOLTEX MEXICO, S.A. de C.V. and RAFYTEK,
 S.A. de C.V. (the "Borrowers"), each Subsidiary identified as a Guarantor
   (as defined in the Agreement) therein, the Lenders (as defined in the
 Agreement), and each of National Bank of Canada and Bank of America, N.A.
as Agents for the Lenders (the "Agents").  Unless otherwise defined herein,
  terms defined in the Agreement are used herein with the same meanings.

     The   undersigned,   a   duly   authorized   and   acting   Authorized
Representative,   hereby   certifies   to   you   as  of  __________   (the
"Determination Date") as follows:

1.   Covenant Compliance

     [(a)  As of the Determination Date, the Borrowers  are  in  compliance
with Section 10.1(a) (See Appendix I attached hereto).]

     [(b)   As  of  the Determination Date, the Borrowers are in compliance
with Section 10.1(b) (See Appendix II attached hereto).]

     [(c)  As of the  Determination  Date,  the Borrowers are in compliance
with Section 10.1(c) (See Appendix III attached hereto).]

     [(d)  As of the Determination Date, the  Borrowers  are  in compliance
with Section 10.1(d) (See Appendix IV attached hereto).]

     [(e)   As  of  the Determination Date, the Borrowers are in compliance
with Section 10.1(e) (See Appendix V attached hereto).]

2.   No Default

          A. Since __________ (the date of the last similar certification),
     (a) no Borrower  has defaulted in the keeping, observance, performance
     or  fulfillment of  its  obligations  pursuant  to  any  of  the  Loan
     Documents;  and  (b)  no  Default  or  Event  of  Default specified in
     ARTICLE XI of the Agreement has occurred and is continuing.

          B. If a Default or Event of Default has occurred since __________
     (the date of the last similar certification), the Borrower proposes to
     take  the following action with respect to such Default  or  Event  of
     Default:
     .

          (NOTE,  if  no  Default  or  Event  of Default has occurred,
          insert "Not Applicable".)

     The  Determination  Date is the date of the  last  required  financial
statements submitted to the  Lenders  in accordance with SECTION 9.1 of the
Agreement,  or  such other date as may be  specified  in  SECTION  9.1  for
reporting compliance with any provision of SECTION 10.1.


     IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, ____.


                              By:

                                   Authorized Representative

                              Name:


                              Title:


373603
                                    J-2



<PAGE>


                   APPENDIX I TO COMPLIANCE CERTIFICATE

AVAILABLE LIQUIDITY:

(a)  Borrowing Base (as of the most recent date of calculation,
     including the date hereof if a Borrowing Base certificate is
     required to be delivered on such date):             $_________________

     (a) Total Commitments of the US Revolving Credit Facility
     and the Canadian Revolving Credit Facility: $_________________

(c)  Lesser of (a) and (b):                              $_________________

(d)  Cash (limited as provided in clause (b) of the definition
     of "Available Liquidity"):                          $_________________

(e)  Sum of (c) and (d): $_________________

(f)  Revolving Credit Outstandings (including Outstandings
     under the Letter of Credit Facilities, all Bankers' Acceptances
     and all Canadian Letters of Credit): $_________________

(g)  all accounts payable of all Borrowers and Guarantors that are
     unpaid more than 30 days past the due date set forth on the
     invoices for such accounts payable: $_________________

(h)  any payroll, taxes or other amounts owed by any of the
     Borrowers and any of the Guarantors that are due but not paid:
     $_________________

(i)  any other accrued but unpaid amount of any
     Borrower or any Guarantor: $_________________

(j)  Sum of (f), (g), (h) and (i): $_________________

(k)  AVAILABLE LIQUIDITY [(e) MINUS (j)]: $_________________


Covenant: Available Liquidity must not be less than the amount set forth
          for the Determination Date in SECTION 10.1(A).


373603
                                    J-3



<PAGE>


                   APPENDIX II TO COMPLIANCE CERTIFICATE


MINIMUM REVENUE:

Revenues of the Borrowers and the Guarantors for the month of:

     (a) October 2000:                                     $_______________

         Required for October 2000:                   $       29,740,800.00


November 2000 (plus any excess from October 2000 permitted
         pursuant to Section 10.1(b)): $_______________

         Required for November 2000:                  $       28,740,800.00


December 2000  (plus any excess from October and
         November 2000, combined, permitted
         pursuant to Section 10.1(b)): $_______________

         Required for December 2000:                  $       24,095,200.00


373603
                                    J-4



<PAGE>


                  APPENDIX III TO COMPLIANCE CERTIFICATE

CONSOLIDATED LEVERAGE RATIO:

1.   Consolidated Total Debt:

(a)  Indebtedness for Money Borrowed (including Subordinated Debt)
$______________
(b)  Rate Hedge Value of Rate Hedging obligations           $______________
(c)  Contingent Obligations                                 $______________
(d)  Atlas or Marino acquisition obligations                $______________
(e)  Consolidated Total Debt [sum of 1(a) through (d)]      $______________

2.   Adjusted Consolidated EBITDA:

1. Consolidated EBITDA for the applicable period (one quarter ended March
   31, 2001; two quarters ended June 30, 2001; three quarters ended
   September 30, 2001):

1.   Consolidated Net Income $______________
2.   Consolidated Interest Expense $______________
3.   income tax expense $______________
4.   amortization expense $______________
5.   depreciation expense $______________
6.   non-recurring or extraordinary non-cash losses (net of gains)
     $______________
7.   all management or other fees payable by Consoltex Holdings
          to AIP accrued, but not paid in cash,
          during such period $______________
8.   foreign currency exchange losses
          (net of gains, negative if gains exceed losses) $______________
9.   SUM of 2(a)(i) through 2(a)(viii) $______________
10.  non-cash expenses related to post-retirement employee benefits
     $______________
11.  2(a)(ix) PLUS 2(a)(x) $______________

1. Annualization:

     (i)  If the period is the one quarter ending March 31, 2001,
          multiply 2(a)(xi) by 4: $______________

     (ii) If the period is the two quarters ending June 30, 2001,
          multiply 2(a)(xi) by 2: $______________

     (iii) If the period is the three quarter ending September 30, 2001,
          multiply 2(a)(xi) by four-thirds ({4}/{3}): $______________

1. Adjusted Consolidated EBITDA:

     (i) The amount for the proper period from 2(b) above: $______________
     1.        fees paid in cash by the Borrowers to consultants,
appraisers
          and field examiners during the Four-Quarter Period ending
          on the last date of the period of computation, but excluding
          any such fees paid prior to January 1, 2001: $______________
     2.        AIP Investment (so long as made within the
          immediately preceding four quarters): $______________
     3.        any Management Investment or Additional Equity
          Investment made within the immediately preceding
          four fiscal quarters: $______________
     4.        Adjusted Consolidated EBITDA [SUM of 2(c)(i) through (iv)]:
$______________

     (i)  Consolidated Leverage Ratio

     (A)  Amount from 1(e) above $______________
     (B)  Amount from 2(c)(v) above $______________

CONSOLIDATED LEVERAGE RATIO [3(a) DIVIDED BY 3(b)]:      ________   to 1.00

373603
                                    J-5



<PAGE>


                   APPENDIX IV TO COMPLIANCE CERTIFICATE


CONSOLIDATED FIXED CHARGE COVERAGE RATIO:

1.   Adjusted Consolidated EBITDA (from Appendix III):      $______________

2.   Annualized Capital Expenditures:                       $______________

3.   1. LESS 2.                                             $______________

4.   Adjusted Consolidated Fixed Charges for the applicable period (one
quarter ended March 31, 2001; two quarters ended June 30, 2001; three
quarters ended September 30, 2001):

1.   Consolidated Fixed Charges
I.             Consolidated Interest Expense paid in cash $______________
II.            interest paid in cash with respect to any Subordinated Debt
     $______________
III.           4(a)(i) MINUS 4(a)(ii) $______________
IV.            factoring expenses $______________
V.             current maturities of Consolidated Total Debt
     $______________
VI.            income tax expense accrued (but excluding any
          deferred income tax expense) $______________
VII.           management fees paid to AIP
          or any Affiliate thereof                          $______________
VIII. Consolidated Fixed Charges [SUM of 4(a)(iii) through (vii)]:
     $______________

1.   Annualization:

1.   If the period is the one quarter ending March 31, 2001,
          multiply 4(a)(viii) by 4: $______________

2.   If the period is the two quarters ending June 30, 2001,
          multiply 4(a)(viii) by 2: $______________

3.   If the period is the three quarter ending September 30, 2001,
          multiply 4(a)(viii) by four-thirds ({4}/{3}): $______________

1.   Adjusted Consolidated Fixed Charges:

1.   The amount for the proper period from 4(b) above: $______________
2.   scheduled payments of interest on Subordinated Debt for
          the immediately succeeding twelve month period $______________
3.   scheduled maturities of Subordinated Debt for
          the immediately succeeding twelve month period: $______________
4.   the balance of scheduled purchase price payments due
          during the immediately succeeding twelve-month period
          relating to the acquisitions of Atlas and Marino: $______________
5.   Adjusted Consolidated Fixed Charges
          [SUM of 4(c)(i) through (iv)]:                    $______________


5.   Consolidated Leverage Ratio

(a)  Amount from 3 above $______________
(b)  Amount from 4(c)(v) above $______________

CONSOLIDATED FIXED CHARGE COVERAGE RATIO [5(a) DIVIDED BY 5(b)]: ________
to 1.00

373603
                                    J-6



<PAGE>


                   APPENDIX V TO COMPLIANCE CERTIFICATE


THIRD PARTY MEXICAN ACCOUNTS PAYABLE:

Total of accounts payable to trade creditors on the balance
     sheets of Consoltex Mexico and each of the Mexican Companies
     (other than Rafytica) arising in the ordinary course of business
     and owing to Persons other than a Borrower or a Guarantor:
$______________




373603

                                    K-1



<PAGE>


                                 EXHIBIT K

                       Form of Waiver of Lien Rights

                           WAIVER OF LIEN RIGHTS

     THIS WAIVER OF LIEN RIGHTS ("WAIVER") is entered into this ____ day of
___________,  20__  among  _________________,  a ____________ [corporation]
[partnership]  [limited partnership] [limited liability  company]  [limited
liability     partnership]     (the     "Landlord")     in     favor     of
_______________________________, a ____________ [corporation] [partnership]
[limited  partnership]   [limited  liability  company]  [limited  liability
partnership] (the "Tenant"),  BANK  OF  AMERICA,  N.A.,  a national banking
association organized and existing under the laws of the United States (the
"US Agent"), and NATIONAL BANK OF CANADA, a bank governed  by  the Bank Act
(Canada)  (the  "Canadian  Agent"  and  together  with  the  US  Agent, the
"Agents"),  each  acting in its capacity as agent for the Secured Creditors
(as defined below).   Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein with the same meaning.
                            W I T N E S S E T H
     WHEREAS, the Tenant  and  certain of its affiliates (collectively, the
"Borrowers") have entered into that  certain  Second  Amended  and Restated
Credit  Agreement  between the Borrowers, the Agents, and the lenders  from
time to time party thereto  (collectively, the "Lenders") dated November 7,
2000  (as from time to time heretofore  and  hereafter  amended,  modified,
extended,  renewed,  restated  or  supplemented,  the  "Credit  Agreement")
pursuant  to which the Lenders have agreed to provide to the Borrowers  two
term loan facilities  in  the  aggregate principal amount outstanding as of
November 7, 2000 of $59,250,000  and  two revolving credit facilities of up
to $57,500,000 in aggregate principal amount  (collectively,  the  "Loans")
(the  Agents,  the  Lenders  and  each  of  their respective successors and
assigns are herein collectively defined as the "Secured Creditors");

     WHEREAS,  pursuant to the terms of the Credit  Agreement  and  certain
other Loan Documents,  the Tenant has granted to the US Agent, the Canadian
Agent, the US Collateral  Agent  or  the  Canadian  Collateral  Trustee, as
applicable,  for  the benefit of the Agents a security interest in  certain
personal property of the Tenant, including without limitation the Inventory
and Accounts Receivable  of the Tenant (all personal property, but not real
estate or fixtures, in which  a  security interest is granted by the Tenant
is referred to as the "Pledged Collateral");

     WHEREAS, certain of the Pledged  Collateral  is  or may be kept at the
following    location:    _________    ____________________________________
(hereinafter the "Premises");

     WHEREAS,   the  Landlord  and the Tenant  entered  into  that  certain
__________ Lease  dated _________________   (the "Lease") pursuant to which
the Landlord leases the Premises to the Tenant;

     WHEREAS, the Agents require a waiver of  all  statutory,  contractual,
and  any  other  lien the Landlord may have on any of the Tenant's  Pledged
Collateral located  on  the Premises before the Tenant can add the value of
certain of the Pledged Collateral  to  the  Borrowing  Base pursuant to the
Credit Agreement;

     NOW THEREFORE, the Tenant, the Landlord and the Agents,  on  behalf of
the  Secured Creditors, in consideration of the sum of ten dollars ($10.00)
and  other   valuable   consideration,  the  receipt  of  which  is  hereby
acknowledged, and other benefits  accruing to the undersigned, and in order
for the Tenant to add the value of certain of the Pledged Collateral to its
Borrowing Base, hereby agree as follows:

     (a)  The Landlord warrants that  it  has  not  assigned  and  will not
assign  its claims for payment from the Tenant, any of its Liens on any  of
the Pledged Collateral, or its rights to foreclose any  Lien against any of
the Pledged  Collateral  or  otherwise  collect the proceeds of disposition
thereof that the Landlord may lawfully undertake, and that the Landlord has
the right to execute this Waiver of Lien Rights.

     (b)  The Landlord hereby waives and relinquishes all rights of levy or
distraint for rent;

     (c)  Any of the Pledged Collateral may  be  installed  in the Premises
and shall not be deemed a fixture or part of the real estate  but  shall at
all times be considered personal property;

     (d)  The  Landlord  disclaims,  waives,  releases  and  quitclaims any
interest or lien in any of the Pledged Collateral and agrees to  assert  no
claim  to  any  of the Pledged Collateral prior to the Facility Termination
Date;

     (e)  The  Agents,   or   either   of   them,   or   either   of  their
representatives, may enter upon the Premises at any time to (i) inspect  or
remove  the Pledged Collateral, (ii) advertise and conduct a public auction
or private  sale thereon, or (iii) process and prepare Inventory (including
any work in process);

     (f)  That at the option of either Agent, any of the Pledged Collateral
may remain upon  (without  any  Secured  Creditor being deemed to be taking
possession of) said Premises without charge  for  a  period  of thirty (30)
days  after  the  receipt  by  any  Agent of written notice by the Landlord
directing removal; either Agent may,  subsequent  to  the  30  day  period,
remain on said Premises at the rental provided under the Lease, prorated on
a  per diem basis to be determined on a thirty day month, without incurring
any other obligations of the Tenant.

     (g)  The  Landlord  agrees  to give notice within five (5) days of any
default by the Tenant of any of the provisions of said Lease to each of the
following:

               National Bank of Canada
               Sun Life Building
               1155 Metcalfe, 5th Floor
               Montreal, Quebec
               H3B 4S9
               Attn: Ms. Michelle Fradette
               Telephone: (514) 394-8407
               Telefacsimile: (514) 394-4240

               and

               Bank of America, N.A.
               Independence Center, 15th Floor
               NC1-001-15-04
               Charlotte, North Carolina  28255
               Attention: Agency Services
               Telephone: (704) 386-7637
               Telefacsimile: (704) 386-9923

Upon  receipt of said notice, the Agents  shall  thereupon  have  at  least
fifteen  (15)  days to cure said default, but no Agent or any other Secured
Creditor shall have no obligation to do so.

     (h)  The Landlord  hereby  indemnifies  and  holds the Tenant and each
Secured  Creditor harmless from and against any and  all  claims,  demands,
liabilities  and expenses, including reasonable attorneys' fees, arising in
connection with the enforcement of this Waiver of Lien Rights.

     (i)  The  Landlord  shall  execute  and discharge any forms reasonably
determined  by any Agent to be necessary to  give  effect  to  any  of  the
foregoing.

     This waiver  is  binding  upon  the  Landlord  and its heirs, personal
representatives, successors and assigns and inures to  the  benefit of each
Secured Creditor and the successors and assigns of each Secured Creditor.

     This  Waiver  of  Liens  was  given  by  the  Landlord this __ day  of
__________, 20__.


                              [LANDLORD]

Witnesses:

                              By:
                              Name:
                              Title:


373603

                                    K-2



<PAGE>


STATE OF _________________
                         SS.
COUNTY OF _____________

On  this  ____  day of ______________________, 20__, before  me  personally
appeared ________________________  to me known, who being by me duly sworn,
did   depose   and   say,   that   (s)he   is   the    _______________   of
____________________,   a   ___________________,    and   that  (s)he,   as
________________,  being  authorized  to  do  so,  executed  the  foregoing
instrument on behalf of the ___________.

     Witness  my  hand  and  official seal or stamp, this the _____ day  of
___________, 20__.

                                   ________________________
                                   Notary Public

My Commission Expires:

________________________


373603

                                    S-1



<PAGE>


                               SCHEDULE 5.3

                        Information Regarding Collateral


                               SEE ATTACHED.




373603

                                    S-2



<PAGE>


                               SCHEDULE 5.4

                   Lock Box and Cash Collateral Accounts

[To be delivered in accordance with Section 7.3, no later than December 31,
                                  2000.]


373603

                                    S-3



<PAGE>


                               SCHEDULE 5.5

                             Deposit Accounts

[To be delivered in accordance with Section 7.3, no later than December 31,
                                  2000.]



<PAGE>


                               SCHEDULE 8.4

                 Subsidiaries and Investments in Other Persons


                               SEE ATTACHED.





<PAGE>


                               SCHEDULE 8.6

                               Indebtedness


                               SEE ATTACHED.






<PAGE>


                               SCHEDULE 8.7

                                   Liens


                               SEE ATTACHED.





<PAGE>


                               SCHEDULE 8.8

                                Tax Matters


                               SEE ATTACHED.





<PAGE>


                               SCHEDULE 8.10

                                Litigation


                               SEE ATTACHED.





<PAGE>


                               SCHEDULE 8.13

                           Intellectual Property


                               SEE ATTACHED.





<PAGE>


                               SCHEDULE 8.16

                               Pension Plans


                               SEE ATTACHED.



<PAGE>


                             SCHEDULE 8.16(E)

                      Unfunded Employee Benefit Plans


                               SEE ATTACHED.




373603

                                    S-1



<PAGE>


                               SCHEDULE 8.19

                            Employment Matters


                               SEE ATTACHED.




373603

                                    S-2

<PAGE>

                                                      EXHIBIT 10.2


Amendment No. 1 to Second Amended & Restated Credit Agreement
=============================================================


December 29, 2000

Consoltex Holdings, Inc. and its Subsidiaries
c/o Consoltex Inc.
8555 TransCanada Highway
Ville Saint-Laurent, Quebec
H4S 1Z6 CANADA
Attn:  Mr. Paul J. Bamatter

RE:  Amendment No. 1 to Second Amended & Restated Credit Agreement

Ladies and Gentlemen:

Reference  is  hereby made to that certain Second Amended & Restated Credit
Agreement dated  as  of  November  7,  2000  by and among each of CONSOLTEX
HOLDINGS,  INC., a Delaware corporation ("Consoltex  Holdings"),  CONSOLTEX
INC., a corporation  incorporated  under  the laws of New Brunswick, Canada
("Consoltex"),  CONSOLTEX (USA) INC., a New  York  corporation  ("Consoltex
USA"), THE BALSON-HERCULES GROUP LTD., a Rhode Island corporation ("Balson-
Hercules"), LINQ INDUSTRIAL FABRICS, INC., a Delaware corporation ("LINQ"),
and CONSOLTEX MEXICO,  S.A.  DE  C.V.,  a  Mexican  corporation ("Consoltex
Mexico"), and RAFYTEK, S.A. DE C.V., a Mexican corporation  ("Rafytek"  and
together   with  Consoltex  Holdings,  Consoltex,  Consoltex  USA,  Balson-
Hercules, LINQ and Consoltex Mexico, the "Borrowers", and each individually
a "Borrower"),  as  Borrowers, the other subsidiaries of Consoltex Holdings
referred to therein as Guarantors, NATIONAL BANK OF CANADA, a bank governed
by the BANK ACT (Canada)  (the  "Bank  Act"),  in  its capacity as a Lender
("NBC"),  BANK  OF AMERICA, N.A., a national banking association  organized
and existing under  the  laws  of  the  United States, in its capacity as a
Lender  ("Bank  of America"), and EACH OTHER  FINANCIAL  INSTITUTION  PARTY
THERETO AS A LENDER  (hereinafter  NBC, Bank of America and each other such
financial institutions may be referred  to  individually  as  a "Lender" or
collectively as the "Lenders"), NATIONAL BANK OF CANADA, in its capacity as
administrative agent for the Canadian Facilities Lenders (as defined in the
Credit  Agreement)  (in such capacity, the "Canadian Agent"), and  BANK  OF
AMERICA,  N.A., in its  capacity  as  administrative  agent  for  the  U.S.
Facilities  Lenders (as defined in the Credit Agreement) (in such capacity,
the "US Agent"  and  together  with  the  Canadian Agent, the "Agents") (as
amended  hereby  and  as  from  time  to  time further  amended,  restated,
modified, supplemented, or amended and restated,  the  "Credit Agreement").
All capitalized terms not otherwise defined herein shall  have  the meaning
given thereto in the Credit Agreement.

Pursuant  to  the request of the Borrowers, the Agents and the Lenders,  by
the execution of  this  letter (the "Letter Amendment") by each of them, as
acknowledged by each Borrower  and  each  Guarantor,  hereby consent to the
extension of the date by which certain post-closing matters are required to
be completed from December 31, 2000 to January 15, 2001, and each Borrower,
each Guarantor, each Lender and each Agent hereby agrees  that  the  Credit
Agreement shall be amended as follows:

     (a)  all  references  in  Section  7.3(a)  of  the Credit Agreement to
"December  31,  2000"  shall be amended to refer instead  to  "January  15,
2001"; and

     (b)  all references  in  Section  7.3(b)  of  the  Credit Agreement to
"December  31,  2000"  shall  be amended to refer instead to  "January  15,
2001".

None of the terms or conditions  of  this  Letter Agreement may be changed,
modified, waived, or canceled, except by writing  signed by all the parties
hereto, specifying such change, modification, waiver,  or cancellation.  No
provision hereof shall affect or impair any term or condition of the Credit
Agreement or any of the other Loan Documents as currently in full force and
effect.

This  Letter Agreement may be executed in any number of counterparts,  each
of which  shall  be  deemed  to  be  an original as against any party whose
signature appears thereon, and all of  which  shall together constitute one
instrument.

                           [SIGNATURE PAGES FOLLOW.]



<PAGE>




Sincerely yours,

BANK OF AMERICA, N.A.


By:
Name: W. Larry  Hess
Title: Managing Director

NATIONAL BANK OF CANADA


By:
Name: Robert Savoie
Title: Senior Manager Special Loans


ACCEPTED AND AGREED TO as of the 29{th} day of December, 2000:

THE BANK OF NOVA SCOTIA

By:
Name:
Title:


FLEET BUSINESS CREDIT CORPORATION

By:
Name:
Title:


GMAC BUSINESS CREDIT, LLC

By:
Name:
Title:




<PAGE>




CONSOLTEX HOLDINGS, INC.
CONSOLTEX INC.
CONSOLTEX (USA) INC.


By:/s/Paul J. Bamatter
Name: Paul J. Bamatter
Title: Vice President, Finance and Chief Financial Officer


THE BALSON-HERCULES GROUP LTD.
LINQ INDUSTRIAL FABRICS, INC.


By:/s/Paul J. Bamatter
Name: Paul J. Bamatter
Title: Vice President, Strategic Planning

CONSOLTEX MEXICO, S.A. DE C.V.
RAFYTEK, S.A. de C.V.
VERA PAK, S.A. DE C.V.
VEST COMPANY VESTCO, S.A. DE C.V.
ROYALTON MEXICANA, S.A. DE C.V.


By: /s/Paul J. Bamatter
Name: Paul J. Bamatter
Title: Director


MARINO TECHNOLOGIES DE MEXICO, S.A. DE C.V.


By: /s/Paul J. Bamatter
Name: Paul J. Bamatter
Title: Director


RAFYTICA, S.A.


By: /s/Paul J. Bamatter
Name: Paul J. Bamatter
Title: Director



 <PAGE>

                                                     EXHIBIT 10.3


Amendment No. 2 to Second Amended & Restated Credit Agreement
=============================================================


March 30, 2001

Consoltex Holdings, Inc. and its Subsidiaries
c/o Consoltex Inc.
8555 TransCanada Highway
Ville Saint-Laurent, Quebec
H4S 1Z6 CANADA
Attn:  Mr. Paul J. Bamatter

RE:  Amendment No. 2 to Second Amended & Restated Credit Agreement

Ladies and Gentlemen:

Reference is hereby made to that certain Second Amended & Restated Credit
Agreement dated as of November 7, 2000 by and among each of CONSOLTEX
HOLDINGS, INC., a Delaware corporation ("Consoltex Holdings"), CONSOLTEX
INC., a corporation incorporated under the laws of New Brunswick, Canada
("Consoltex"), CONSOLTEX (USA) INC., a New York corporation ("Consoltex
USA"), THE BALSON-HERCULES GROUP LTD., a Rhode Island corporation
("Balson-Hercules"), LINQ INDUSTRIAL FABRICS, INC., a Delaware corporation
("LINQ"),and CONSOLTEX MEXICO, S.A. DE C.V., a Mexican corporation
("Consoltex Mexico"), and RAFYTEK, S.A. DE C.V., a Mexican corporation
("Rafytek" and together with Consoltex Holdings, Consoltex, Consoltex USA,
Balson-Hercules, LINQ and Consoltex Mexico, the "Borrowers", and each
individually a "Borrower"), as Borrowers, the other subsidiaries of
Consoltex Holdings referred to therein as Guarantors, NATIONAL BANK OF
CANADA, a bank governed by the BANK ACT (Canada) (the "Bank Act"),
in its capacity as a Lender ("NBC"), BANK OF AMERICA, N.A., a national
banking association organized and existing under the laws of the United
States, in its capacity as a Lender ("Bank of America"), and EACH OTHER
FINANCIAL INSTITUTION PARTY THERETO AS A LENDER (hereinafter NBC, Bank
of America and each other such financial institutions may be referred
to individually as a "Lender" or collectively as the "Lenders"), NATIONAL
BANK OF CANADA, in its capacity as administrative agent for the Canadian
Facilities Lenders (as defined in the Credit Agreement) (in such
capacity, the "Canadian Agent"), and BANK OF AMERICA, N.A., in its
capacity as administrative agent for the U.S. Facilities Lenders
(as defined in the Credit Agreement) (in such capacity,the "US
Agent" and together with the Canadian Agent, the "Agents"), as
amended by Amendment No. 1 to Second Amended & Restated Credit
Agreement dated as of December 29, 2000 (as heretofore amended, as
amended hereby and as from time to time further amended, restated,
modified, supplemented, or amended and restated, the "Credit
Agreement").  All capitalized terms not otherwise defined herein
shall have the meaning given thereto in the Credit Agreement.

Pursuant to the request of the Borrowers, the Agents and the
Lenders, by the execution of this amendment letter ("Amendment
No. 2") by each of them, as acknowledged by each Borrower and each
Guarantor, hereby consent to the amendment to the Credit Agreement
set forth below, and each Borrower, each Guarantor, each Lender
and each Agent hereby agrees that the definition of "Adjusted
Consolidated EBITDA" as set forth in the Credit Agreement be
deleted in its entirety and replaced with the following:

    "Adjusted Consolidated EBITDA" means, for any period of
computation thereof, the SUM (without duplication) of (i) Annualized
Consolidated EBITDA applicable to such period, (ii) the fees paid in
cash by the Borrowers to consultants, appraisers and field examiners
engaged by the Agents and the Lenders during the Four-Quarter Period
ending on the last date of the period of computation, but not
including any such fees paid prior to January 1, 2001, (iii) to the
extent the Four-Quarter Period ending on the last date of the period
of computation includes the fiscal quarter ended December 31, 2000,
the AIP Investment net of all distributions and other Restricted
Payments to AIP or any of their respective Affiliates during such
period, (iv) to the extent the Four-Quarter Period ending on the last
date of the period of computation includes a fiscal quarter in which
such investment is made, the cash amount received by, or the
extinguishment of debt originally owing to third parties by, Consoltex
Holdings in connection with any Management Investment or Additional
Equity Investment, and (v) with respect to the Four-Quarter Period
ending on March 31, 2001, the extinguishment of debt originally owing
to third parties by Consoltex Holdings in connection with an
Additional Equity Investment made after March 31, 2001, but prior to
the date the certificate for the fiscal quarter ending March 31, 2001
required by SECTION 9.1(B)(II) is delivered, provided that any such
amount included in the Four-Quarter Period ending March 31, 2001 shall
not be included in the computations for any Four-Quarter Period ending
after December 31, 2001, notwithstanding such extinguishment of debt
otherwise satisfying the provisions of part (iv) of this definition
for such period.

None of the terms or conditions of this Amendment No. 2 may be changed,
modified, waived, or canceled, except by writing signed by all the parties
hereto, specifying such change, modification, waiver, or cancellation.  No
provision hereof shall affect or impair any term or condition of the Credit
Agreement or any of the other Loan Documents as currently in full force and
effect.

This Amendment No. 2 may be executed in any number of counterparts, each of
which shall be deemed to be an original as against any party whose
signature appears thereon, and all of which shall together constitute one
instrument.

     [SIGNATURE PAGES FOLLOW.]





<PAGE>




Sincerely yours,

BANK OF AMERICA, N.A.

BY: /S/W. LARRY HESS
Name: W. Larry  Hess
Title: Managing Director


NATIONAL BANK OF CANADA

By:
Name:
Title:


ACCEPTED AND AGREED TO as of the 30{th} day of March, 2001:

THE BANK OF NOVA SCOTIA

By:
Name:
Title:


FLEET BUSINESS CREDIT CORPORATION

By:
Name:
Title:


GMAC BUSINESS CREDIT, LLC

By:
Name:
Title:






<PAGE>

CONSOLTEX HOLDINGS, INC.
CONSOLTEX INC.
CONSOLTEX (USA) INC.

By:  /S/ C. SUZANNE CRAWFORD
Name: C. Suzanne Crawford
Title: Vice-President, Legal Affairs and
       Corporate Secretary


THE BALSON-HERCULES GROUP LTD.
LINQ INDUSTRIAL FABRICS, INC.

By:  /S/ C. SUZANNE CRAWFORD
Name: C. Suzanne Crawford
Title: Vice-President, Legal Affairs and
     Corporate Secretary


CONSOLTEX MEXICO, S.A. DE C.V.
RAFYTEK, S.A. de C.V.
VERA PAK, S.A. DE C.V.
VEST COMPANY VESTCO, S.A. DE C.V.
ROYALTON MEXICANA, S.A. DE C.V.

By:  /S/C. SUZANNE CRAWFORD
Name: C. Suzanne Crawford
Title: Attorney-in-Fact


MARINO TECHNOLOGIES DE MEXICO, S.A. DE C.V.

By:  /S/ C. SUZANNE CRAWFORD
Name: C. Suzanne Crawford
Title: Attorney-in-Fact


RAFYTICA, S.A.

By:  /S/C. SUZANNE CRAWFORD
Name: C. Suzanne Crawford
Title: Attorney-in-Fact

<PAGE>

                                                     EXHIBIT 10.4


                       MANAGEMENT SERVICES AGREEMENT
                =========================================


     THIS MANAGEMENT SERVICES AGREEMENT (this "Agreement"), dated as
of October 20, 1999, is between Consoltex (USA) Inc., a New York
corporation (the "Company"), and American Industrial Partners,
a Delaware general partnership ("AIP").

                                BACKGROUND

     Subject to the terms and conditions of this Agreement, the
Company desires to retain AIP to provide certain management services
to the Company and its subsidiaries.

                           TERMS AND CONDITIONS

     In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties agree as follows:

     1.   MANAGEMENT SERVICES.  AIP shall provide general management,
financial and other corporate advisory services to the Company and its
subsidiaries.  These management services shall be performed by the
officers, employees or agents of AIP as it may determine in its
discretion from time to time.

     2.   FEES AND EXPENSES.

         (a)  The Company shall pay to AIP an annual management fee
(the "Management Fee") of One Million Three Hundred and Fifty Thousand
Dollars (US $1,350,000).  The Management Fee shall be payable in advance in
quarterly installments of US$337,500 payable on or before each December 31,
March 31, June 30 and September 30 occurring during the term of this
Agreement, beginning December 31, 1999.  On the date hereof, the Company
shall pay to AIP its pro rata Management Fee for the period beginning on
the Closing Date (as defined in the Shareholders Agreement) and ending on
December 31, 1999.

        (b)  The Company shall promptly, when requested, reimburse
AIP for all reasonable out-of-pocket expenses incurred in the ordinary
course by AIP in connection with AIP's obligations hereunder.

        (c)  Notwithstanding anything to the contrary contained
herein, the Company shall accrue but not pay the Management Fee if
(i) any such payment would violate, breach or otherwise constitute a
default (or any event which might with the lapse of time or the giving
of notice or both, constitute a default) under any of the financing
agreements of the

<PAGE>

Company or Consoltex Group Inc. ("Consoltex"), or
(ii) AIP instructs the Company not to pay all or any portion of the
Management Fee during any fiscal year.

      (d)  Upon the consummation of the sale of all (but not less than
all) of the outstanding capital stock of Consoltex, the amalgamation,
statutory arrangement, consolidation or merger with or into any person,
the sale, lease, assignment or transfer of all or substantially all of the
assets of Consoltex or any of its significant subsidiaries or a
recapitalization of Consoltex or any of its significant subsidiaries, the
Company shall pay to AIP the sum of (i) the lesser of (A) the remaining
Management Fee payable under the term of this Agreement or (B) $10,000,000
PLUS (ii) the accrued and unpaid amounts due under Section 2(c).

     3.   INDEMNIFICATION.  To the extent permitted by law, the
Company shall protect, hold harmless and indemnify AIP from and against any
and all liability, obligations, losses, claims and damages whatsoever and
expenses in connection therewith including, without limitation, reasonable
counsel fees and expenses, penalties and interest arising out of or as the
result of the entering into of this Agreement except to the extent, and
only to the extent, that such liability or claim is the result of the
willful misconduct or gross negligence of AIP.

    4.   INDEPENDENT CONTRACTOR; NO JOINT VENTURE.  AIP is performing
services hereunder as an independent contractor (and not as an agent,
representative or employee of the Company), and AIP is not and shall not be
deemed to be a co-venturer with, or partner of, the Company in any respect.

    5.   ENTIRE AGREEMENT; AMENDMENT.  This Agreement constitutes the
entire agreement and understanding between the parties with respect to the
subject matter hereof.  This Agreement may be amended or modified, or any
provision hereof may be waived, provided that such amendment or waiver is
set forth in a writing executed by the parties.  No courses of dealing
between or among any persons having any interest in this Agreement will be
deemed effective to modify, amend or discharge any part of this Agreement
or any rights or obligations of any person under or by reason of this
Agreement.

    6.   NO ASSIGNMENT.  Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other parties hereto;
PROVIDED that AIP may assign all of its rights and obligations hereunder to
any affiliate of AIP without the consent of the Company; and PROVIDED
FURTHER that AIP may assign any or all of its rights hereunder, without the
consent of the Company (i) to any lender providing financing to AIP or its
affiliates and (ii) in connection with any sale of all or substantially all
of the assets, capital stock or business or a recapitalization of AIP or
Consoltex or any of its subsidiaries (whether effected by sale, exchange,
merger, statutory arrangement, consolidation or other transaction).

    7.   BINDING EFFECT.  In the event of assignment of this
Agreement pursuant to Section 6 hereunder, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their successors
and permitted assigns.

<PAGE>

                                 2

   8.   TERM.  This Agreement shall terminate on the fifteenth
anniversary of the date hereof.  Notwithstanding the foregoing, this
Agreement shall always remain in effect to the extent that any money is
owed under sections 2 or 3 of this Agreement.

  9.   GOVERNING LAW.  The validity, performance, construction and
effect of this Agreement shall be governed by and construed in accordance
with the internal law of the State of New York.

  10.  NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given by personal
delivery, by reputable overnight courier or by mail (registered or
certified mail, postage prepaid, return receipt requested) to the
respective parties as follows:


     If to AIP:

          American Industrial Partners
          One Maritime Plaza, Suite 2525
          San Francisco, CA 94111
          Telecopy: 415-788-5302
          Telephone:415-788-7354
          Attention:Kim A. Marvin

     with a copy to:

          Kirkland & Ellis
          655 Fifteenth Street, N.W.
          Suite 1200
          Washington, D.C.  20005
          Telecopy: (202) 879-5200
          Telephone: (202) 879-5040
          Attention: Michael T. Edsall, Esq.


     If to the Company:

               Consoltex (USA) Inc.
               1040 Avenue of the Americas
               6{th} Floor
               New York, New York 10018
               Attention:  Paul Bamatter
               Telecopy:   (212) 596-0483

or to such other address as any party hereto may, from time to time,
designate in a written notice given in like manner.  Notices will be
deemed to have been given hereunder when delivered

<PAGE>

                                   3
personally, five days after deposit in the U.S. mail and one business
dy after deposit with a reputable overnight courier service.



                               [END OF PAGE]
                         [SIGNATURE PAGE FOLLOWS]





<PAGE>
          IN WITNESS WHEREOF, each of the parties hereto has caused this
writing to be executed as of the day and year first above written.



                              CONSOLTEX (USA) INC.

                              By: /s/Paul J. Bamatter
                                Name: Paul J. Bamatter
                                Title: Director and V-P
                                       Finance and CFO

                              AMERICAN INDUSTRIAL PARTNERS

                              By: /s/Kim A. Marvin
                                Name: Kim A. Marvin
                                Title: Authorized Signatory


<PAGE>

                                                    EXHIBIT 10.5



                   LEASE FOR CONSOLTEX INC.
               ================================



                             - 1 -






                                LEASE



DESIGNATION OF THE PARTIES:


               LIBERTY  SITES  LTD.,  a  company  duly
incorporated, with head office at the City of Saint-Laurent,
Province  of Quebec, herein acting and represented by Sandra
Levy, duly authorized

               (the "LANDLORD")

               CONSOLTEX INC., a company duly incorporated, with
head  office  at the City of Montreal,  Province  of Quebec,
herein acting and represented by Alex Di Palma and C. Suzanne
Crawford, duly authorized

               (the "TENANT")


WHEREAS the Landlord and the Tenant entered  into a lease
agreement dated April 1,  1995,  which  lease agreement was
amended by  an  addendum  no.  1  to  the memorandum of
agreement  of  lease  dated  August  31,  1998 (collectively,
the "LEASE AGREEMENT") with respect to the Premises
(as defined below);

WHEREAS  the  Landlord  and  the  Tenant wish to have this
Lease  published  in accordance with the terms and conditions
of the Lease Agreement;


THE PARTIES HAVE AGREED AS FOLLOWS:


NATURE OF RIGHTS:

     Immovable commercial lease.






<PAGE>

                                     - 2 -





DESCRIPTION OF PROPERTY:

     An office space of approximately  thirty-eight thousand
six hundred square feet (38,600 s.q.), situated in the
building (the  "BUILDING")  bearing  civic number  8555
Trans-Canada Highway, in the City of Saint-Laurent, Province
of Quebec, located on the lands bearing the following
description:

That certain  emplacement known and designated as: Lot number
1164137 of the official cadastre of Quebec, registration
division of Montreal
(the "PREMISES").

     The Tenant shall also  have the right to lease from the
Landlord up to 100 parking spaces, 30 of which shall be in
the Building's indoor lot.

TERM OF THE LEASE:

     Fifteen (15) years and six (6) months commencing July 1,
1995 and terminating on December 31, 2010 (the "TERM").

RENEWAL OPTION:

     Provided the Tenant is not in default  under  the Lease
Agreement, Tenant shall have the option to extend the Term
with respect  to  the  entirety  of the Premises  and  any
additional  space  then leased in the Building, for an
additional period of five (5) years upon  the terms and
conditions set out in  the Lease Agreement. To exercise the
foregoing  option,  Tenant  shall provide  written  notice
thereof to the Landlord no less than twelve (12)
months prior to the expiry  of the Term, in default whereof
said option to extend shall be null and void  and  of  no
further legal effect. After the renewal period, there shall
be no further option to extend the Term.

RIGHTS TO EXPAND:

     The Tenant shall have the option to lease the  portion
of the Building not already leased by Tenant (the "BALANCE")
in accordance with the terms and  conditions  set  out  in
the Lease Agreement. In order to exercise this right, the


<PAGE>

                                     - 3 -


     Tenant shall have to advise the Landlord  in  writing
at  least  six  (6) months  before  the end of the second
year of the Term, failing which said right shall be null
and void and shall have no further legal effect. It is
agreed that the Landlord  or  one  of  its  affiliated
companies shall be entitled to use any part of the Balance
during the Term for its purposes.
After  the second year of the Term, the Landlord shall have
the right  to lease the Balance to any third party with
the prior written consent of the Tenant.

     Provided  it has exercised its right to expand the
Premises set out above, Tenant will  have the option of
increasing the area of the Premises during the first eight
(8) years of the Term by advising the Landlord in writing
that it requires no less than ten thousand square feet
(10,000 s.q.) on an additional floor and  the  Landlord
undertakes to provide said additional space by adding an
additional floor to  the Building finished in the same manner
and quality with respect to leasehold improvements  as
existing building  and under the  same terms and conditions
as  in  the Lease Agreement. Should the Tenant so advise the
Landlord, the term of the Lease for  the  additional  space
shall commence no sooner than one hundred  and twenty (120)
days after  the  date of the notice and its termination shall
coincide with the expiration of the  Term. All other terms and
conditions of the Lease Agreement shall apply to the  Lease
of the additional space. Should the Tenant exercise this option
to lease additional space  after the tenth (10th) year of the
Term, it must first renew the Lease for a further term of
seven (7) years.

RENT:

     The rent under this Lease payable by the Tenant to  the
Landlord shall be of $1 and other valuable consideration set
out in the Lease Agreement.

SPECIAL DECLARATIONS:

The Landlord and the Tenant declare as follows:

(1)  The present Lease is an abbreviated form of the Lease
Agreement;




<PAGE>

                                     - 4 -


     (2)  The  present  Lease  has  been  executed  for
the purposes  of registration of the said Lease Agreement;

     (3)  Notwithstanding the execution of these presents,
the parties  hereto  agree  and  acknowledge  that  the  terms
and conditions of the Lease  Agreement represent the full
obligations  between the parties, and in the event of any
discrepancy between these  presents  and  the  Lease

Agreement, the latter shall prevail.

IN  WITNESS  WHEREOF,  the  Landlord  has  signed  this
Lease at the City of St. Laurent, Province of Quebec, on
the 8{th} day of January, 1999.


WITNESSES:                      LIBERTY SITES LTD.

/s/Helga Steiner               PER: /s/Sandra Levy
                                (I HAVE AUTHORITY TO BIND THE
/s/Debra Rosenberg		   CORPORATION)



IN  WITNESS  WHEREOF,  the  Tenant  has  signed  this  Lease
at  the  City  of St. Laurent, Province of Quebec, on the
4{th} day of January, 1999.


WITNESSES:               CONSOLTEX INC.

/s/Ginette Ricci        PER: /s/C. Suzanne Crawford

				PER: /s/Alex Di Palma

                         (WE HAVE AUTHORITY TO BIND THE
/s/Marie Guay             CORPORATION)








<PAGE>



                              SOLEMN DECLARATION

                  (WITNESS TO THE SIGNATURE OF THE LANDLORD)




     I,  Helga  Steiner,  residing  at  374  Auriol,  Duvernay,
City of Laval, Province of Quebec, being duly sworn, do depose
and say that:

1.   I was present and did see Sandra Levy sign the foregoing
Lease in the name of LIBERTY SITES LTD. as the Landlord named
therein, in my presence and in the presence of Debra Rosenberg,
the other subscribing witness thereto.

2.   I  personally  know  the  said  persons  and  they are of
the full age of majority as is the undersigned.

3.   The signatures affixed to the foregoing Lease are  in
the true and proper handwriting of the said persons respectively.




                              AND I HAVE SIGNED


                              /s/Helga Steiner


Sworn before me
in the City of St. Laurent,
this 8{th} day of January, 1999


/s/Howard Schenk
Commissioner for Oaths (seal)




<PAGE>




                              SOLEMN DECLARATION

                   (WITNESS TO THE SIGNATURE OF THE TENANT)




     I,  Marie Guay, residing at 8402 ave Papineau, City of
Montreal,  Province of Quebec, being duly sworn, do depose
and say that:

1.   I was  present and did see Alex Di Palma and C. Suzanne
Crawford sign the foregoing Lease in  the  name  of  CONSOLTEX
INC.,  as  the  Tenant named therein,  in  my presence and in
the presence of Ginette Ricci, the  other subscribing witness
thereto.

2.   I personally know  the  said  persons  and  they  are  of
the full age of majority as is the undersigned.

3.   The signatures affixed to the foregoing Lease are in the
true and proper handwriting of the said persons respectively.




                              AND I HAVE SIGNED


                              /s/ Marie Guay


Sworn before me
in the City of St. Laurent,
this 4{th} day of January, 1999


/s/Valerie Wells
Lawyer






<PAGE>



MEMORANDUM  OF  AGREEMENT  OF  LEASE  ENTERED  INTO AT THE CITY
AND DISTRICT OF MONTREAL IN THE PROVINCE OF QUEBEC AS OF THE
FIRST (1ST) DAY OF APRIL 1995.

BY AND BETWEEN:

LIBERTY SITES LTD., a body politic and corporate duly
incorporated according to law  and  having its head office at
1450 St. Amour  Street,  in  the  City  and District of  St.
Laurent,  Province  of  Quebec,  H4S  lJ3,  herein acting and
represented  by  Sandra Levy, duly authorized for the purposes
of  the  present Agreement.

(hereinafter referred to as the "Landlord")

AND

CONSOLTEX INC., a body politic and corporate duly incorporated
according to law and having its head  office  at  125  Chabanel
Street  West,  in  the City and District   of  Montreal,
Province  of  Quebec,  H2N  1E4,  herein  acting  and
represented   by   Jean   Talbot, its  Senior  Vice  President,
Finance  and Administration  and  C.  Suzanne Crawford,  its
Director,  Legal  Affairs  and Corporate Secretary, duly
authorized for the purposes of the present Agreement in virtue
of a resolution of  its Board of Directors, a certified copy of
which remains annexed hereto.

(hereinafter referred to as the "Tenant")

1.   DESCRIPTION AND LEASE OF PREMISES

     Landlord, in consideration  of  the rents, covenants and
agreements hereinafter contained on the part of the Tenant to
be paid, kept and performed, hereby leases  to  Tenant  and
Tenant  does  hereby  accept  from  the  Landlord approximately
thirty-seven   thousand    five    hundred   square   feet
(37,500 sq.ft.) (hereinafter referred to as either the  "Leased
Premises" or  the  "Premises").  The said Premises shall be
situated in a three  (3) storey building with a basement  for
interior  parking  to  be  built  by Landlord  and  to be
situated at 8555 Trans-Canada Highway, in the City of
Saint-Laurent, having  a  gross  leasable area of approximately
forty-five thousand square feet (45,000 sq.ft.)
(the  "Building"), the whole as will be determined and
certified by the Landlord's architect in accordance with
BOMA Standards within thirty (30) days of occupancy,  and  as
outlined in red  on  the  floor  plans attached hereto as
Schedule "A" situated  on  a parcel  of land (the "Land")
(the  said  Building  and  Land  hereinafter referred to as
the "Property" as outlined in blue on Schedule "A" attached
hereto).


<PAGE>

                                     - 3 -

     That  portion   of  the  Building  not  being  the
Leased Premises will hereinafter be referred to as the
"Balance".

     The Tenant shall  have  the  right  to  lease  from the
Landlord up to one hundred (100) parking spaces on the
Property, approximately seventy (70)of which parking spaces
will be on the outdoor parking lot shown in yellow on  the
plan attached as Schedule "A" and approximately thirty (30)
spaces will be in the Building indoor lot. For greater clarity,
it is agreed that the Tenant  must lease all of the interior
parking spaces in the Building. The Tenant shall  pay
Seventy-five Dollars ($75.00) per car per month for the interior
parking spaces during the term of the Lease.

     There shall be no rental  charge with respect to the
outdoor parking area, save and except as otherwise
specifically provided herein.

     The Tenant shall have the right  to  lease  the Balance
when needed on the same terms and conditions set out herein in
this Lease including leasehold improvements similar to those
referred to in  Schedules  "B" and "B-1" and the  Minimum Net
Net Rental, which shall be the same as is  applicable  to
the Premises  at  that time, except that there shall be no
free rentals or credits whatsoever  and the term for the Balance
shall be coterminous with the Term hereof. In order to exercise
this right, the Tenant shall have to advise the Landlord in
writing  at least six (6) months before the end of the second
year of the Term, failing  which  said  right shall be null and
void  and  shall  have  no  further  legal effect. It is agreed
that  the Landlord or one of its affiliated companies  shall
be entitled to use any part  of the Balance during the Term for
its purposes.  After  the  second year of  the  Term, the
Landlord shall have the right to lease the Balance
to any third party with the prior written consent of the Tenant.

     Should the Balance be leased to or used by any other person
other than the Tenant or other  than  Liberty Sites Ltd. or
related companies (the "Other Tenant"), there shall be  a
separate  access door for the Other Tenant in the rear of the
Building; there shall be  limited  elevator access to that
said space; the signage of the Other Tenant shall be  in  the
back of the Building  to  identify  the  civic  address,
door  and  entrance to Other Tenant's  premises  in  the
Building; and the Other Tenant shall  only  be entitled to
use its space for office use. There shall be separate electric
and other


<PAGE>

                                     - 4 -

    utility meters installed  for the balance of the building
if it is used by anyone other than the Tenant.

2.   TERM OF LEASE

     The Term of this lease shall  be for a period of fifteen
(15) years and six (6) months, to be computed from the
first  (1{st})  day  of  July  1995  (the "Commencement Date")
and to terminate on December 31, 2010 (the "Term").

3.   DATE OF OCCUPANCY

     The  Tenant  shall  be  allowed  to occupy the Premises,
subject to reasons  or conditions which are beyond the
reasonable control of the Landlord on July 1, 1995
("Date of Occupancy").

   If the Landlord is unable to give possession of the Premises
to the Tenant on the Commencement Date by reason  of the
non-completion of construction, repairs, improvements, additions
or alterations  to  the  Premises, or the building  containing
same,  the lease shall not be void or voidable,  nor
shall the Landlord be liable for  any  loss or damage
resulting therefrom. However,  in  such a case the Landlord
shall  provide  alternative  usable space to the Tenant from
August 1, 1995 until the date of occupancy.

4.   USE OF PROPERTY/PREMISES NOT TO BE VACATED

     The Leased Premises  shall  be  used  solely  for  the
purposes of offices for carrying  on the business of
administration, sales, product  research  and development,
and servicing of accounts and for no other purpose. From and
after  the commencement  date,  Tenant  will  continuously,
actively  and diligently conduct it's business in the whole
of the Leased Premises in an up-to-date, high class,
reputable and efficient manner.

     Should the Tenant wish to vacate the Premises during the
term of the Lease or should it cease to operate its business
therefrom, it shall provide the Landlord  with  an irrevocable
letter of credit in the aggregate amount of one year of Minimum
Net  Rent and Additional Rent at that time valid from
its delivery six (6) months  before  it  vacates the Premises
or ceases to operate  its  business  therefrom  for a period
of  one  year,  renewable annually until the


<PAGE>

                                     - 5 -



     end of the Term with a Canadian chartered  bank acceptable
to the Landlord in the form of a letter of credit annexed
hereto as Schedule "D".

5.   NET NET LEASE

     It is the intention of the parties that the Minimum Net
Net Rental set out in Section  6  of this lease shall be Net
Net to the Landlord  and  that  the Tenant shall  pay  for
its own account, to the complete exoneration of the Landlord,
all costs  and  expenses  affecting  the  Leased Premises or
the business carried on therein, and its proportionate share
of all Property Taxes and Costs as hereinafter defined, other
than that which is otherwise provided  in this lease and
other than any interest, capital, depreciation  of the capital
cost  of the Building (other than depreciation referred to
in section 5) or amortization charges of Landlord in respect
of mortgages, hypothecs, or other security and other than any
capital gain or income tax due by Landlord, save and  except
that Tenant shall be responsible for any business, tax, or any
other  tax  on  rental income that tray be levied by any
government or other applicable taxing  authority against the
Tenant or Landlord whether known as goods and services  tax,
business tax or by any other name.

     Furthermore, any amount and any obligation which is not
expressly declared herein  to  be  that of the Landlord
pertaining to the Premises  shall  be deemed to be an
obligation  of  the  Tenant  and/or  at the expense of the
Tenant.

     Notwithstanding the generality hereof, it is agreed that
the Landlord will be  responsible  for structural repairs or
replacements  to  the  Building during the Term of  the  Lease
and major roof repairs during the first ten (10) years of
the Term, save  and  except  if  such  structural repairs or
replacements are caused by the fault or negligence of  the
Tenant or those for whom it is legally responsible in law.

     It is further agreed that any major repair or replacement
to the Building, excluding major roof repairs during the first
ten (10) years  of the Term, shall  be  amortized  or
depreciated by the Landlord over its useful  life
and only the amortized  annual portion of those expenditures
plus interest thereon at the prime rate  of  interest
charged  by the Canadian Imperial Bank of Commerce plus
one percent


<PAGE>

                                     - 6 -

     (1%) shall be included in the Operating Expenses in any
given year.

6.   NET NET RENTAL

     During the term of the lease, the Tenant shall pay  the
Landlord the following
     Minimum Net Net Rental:

     (a)  from  the  Commencement  Date  to  the fifth (5th)
year of  the  Term inclusively, the sum of Twelve Dollars
($12.00)  per year per square  foot of the Premises;

     (b)  from the beginning of the sixth (6th) year to
the tenth  (10th)  year of  the Term inclusively, the sum of
Fourteen Dollars and Fifty Cents ($14.50) per year per
square foot of the Premises; and

     (c)  from  the  beginning  of  the  eleventh (11th) year
to the end of the Term, the sum of Sixteen Dollars  and
Twenty-five Cents ($16.25) per year per square foot of
the Premises.

     payable in equal monthly instalments in advance  on
the first day of each month.

     The  Minimum  Net  Net  Rental  as herein provided
shall be  paid  to  the Landlord and/or its nominee at the
Head Office of the Landlord in the City of Saint-Laurent,
at 1450 St. Amour  Street, in the Province of Quebec, or
at such other place in Canada as shall  be  designated  by
the Landlord in writing to the Tenant.

     Notwithstanding the generality hereof, the Tenant shall
not  have  to  pay any  Minimum  Net  Net Rental for a period
of six (6) months commencing on July 1, 1995. Notwithstanding
this period of free Minimum Net Net Rental,  the Tenant shall
during this period  pay  all  Operating Expenses and Real
Estate Taxes with respect to the Property as described in
section 8 hereof and  for the costs of all utilities consumed
in the  Premises  as  of  the Commencement Date.



<PAGE>

                                     - 7 -


7.   ADDITIONAL RENTAL

     In this  lease, unless there is something in the context
inconsistent herewith, the parties  agree  that "Additional
Rental" means any and all amounts due or becoming payable to
the Landlord pursuant to this lease other than the
Minimum Net Net Rental, whether  such amounts are
specifically referred to as Additional Rental or not.

     It  is  agreed and understood that such amounts whether
specifically referred to as Additional Rental or not, shall be
payable on the first day of the month immediately following the
date the said amount is claimed, or such other date that
Landlord designates,  except  for amounts governed by section
8 hereof.

8.   OPERATING EXPENSES AND REAL ESTATE TAXES

     The Tenant shall pay without duplication as Additional
Rental  in  each  lease year,  its  proportionate  share  of
all the Property Taxes and Operating Expenses of any nature
whatsoever incurred  by  the  Landlord  or  on  its behalf  to
operate,  clean,  maintain,  repair, manage and administer the
Property and the Premises which include without limitation:

     (a)  The total cost of insuring the Property  (including
such insurance as the  Landlord  shall effect or shall be
required  to  effect  by  any secured creditor)  against  fire
and any other perils which presently are or hereafter may be
from time to time embraced by or defined in a standard fire
insurance policy  with extended coverage, comprehensive
general liability insurance, boiler  and  pressure  vessel
insurance, business interruption and/or loss of rentals
insurance  equal  to  at least  (1)  one  year's Minimum Net
Net Rental and Additional Rental, and such other insurance
as the Landlord, acting reasonably may deem necessary or
advisable.

     (b)  The  cost  of  cleaning,  sweeping,   snow
removal,  gardening  and landscaping, maintaining and
operating the Property.



<PAGE>

                                     - 8 -


          (c) The cost of policing and supervising and seeing
to  the security of  the Property, including policing and
supervising traffic  to  and fom the Property.

     (d)  The cost  of  repairs  and  replacements  to
(including  the  annual depreciation  on  major  repairs
and  replacements as referred to in section 5 hereof, but
excluding repairs due to structural defects and major roof
repairs during the first ten  (10) years of the Term), and
maintenance  of the building and improvements  of  the
Property  and their appurtenances  and  equipment  including
the  common areas and facilities.

     (e)  Remuneration,  including contributions toward usual
fringe  benefits, unemployment  insurance   and  similar
contributions,  of  employees engaged in maintaining,
operating and supervising the Property;

     (f)  The Taxes on Capital as defined hereinafter. "Taxes
on Capital" means an amount imputed by the Landlord  to  the
Property  in  respect  of taxes,  rates,  duties and
assessments presently or hereafter levied, rated, charged or
assessed  from  time to time upon the Landlord and
payable by the Landlord (or by any corporation  acting  on
behalf of the  Landlord)  on  account of its capital. Capital
Taxes shall  be imputed on the basis of the Landlord's
determination of the amount of capital attributable to the
Property.  Capital  Taxes  also means the amount  of  any
capital  or  place  of  business  tax levied by  any
government or other applicable taxing authority against
the Landlord with respect to the Property whether known as
Capital Taxes or by any other name.

     (g)  All  Montreal  Urban Community, municipal, school,
special taxes  and surtaxes on non-residential  immoveables,
for  the Property on which the Leased Premises are situated
and any other taxes assessed against the Property
(hereinafter collectively called "Real  Estate  Taxes").
Tenant  shall  pay  all taxes payable on Tenant's fixtures,
equipment and machinery and any and all taxes that may be
levied


<PAGE>

                                     - 9 -


          upon or reasonably estimated  by  the  Landlord upon
the improvements set out in Sections 24 and 25 hereof. In
addition, Tenant shall also pay all Real Estate Taxes and
Capital Taxes  in  relation to the land used by the Tenant for
it's exterior parking spaces  should  they not be situated on
the Property.

          Should  the  mode  of collecting business taxes,
water taxes or other assessments be such  that  the  Landlord
shall be required to pay for same,  or if the system of Real
Estate  Taxes  shall  be  altered  or varied and  any  new
tax  or  levy shall be levied or imposed on the building
and/or  land and/or the revenues  there  from  and/or  the
Landlord in substitution  for and/or in addition to Real Estate
Taxes presently levied or imposed  on  immoveables  in  the
City  of Ville St.Laurent or Montreal Urban Community in which
the property is situated, then any such new tax or levy shall
be  included within the definition of Real Estate Taxes as
contained in this  section and the provisions of this section
shall apply MUTATIS MUTANDIS.

     (h)  Administrative cost equal to fifteen percent (15 %)
of  all costs and  expenses incurred by the Landlord with
respect to paragraphs (a) to (g) inclusively of this Section 8.

     In  the  event  that  there are separate assessments and
tax bills for the Leased Premises (including  but  not limited
to all licence fees, charges, rates  assessed  against the
Leased  Premises  and/or  all  equipment  and facilities
thereon or therein, and every tax and licence fee in respect of
any and every business  carried on therein, or in respect of
the occupancy of the Leased Premises by  the Tenant), the
Tenant shall pay as Additional Rental to the Landlord or to
the  taxing  authority,  if  the Landlord so directs, and
discharge in each lease year during the Term and  within  the
times provided for by the taxing authority all taxes so levied,
the Tenant shall  provide the Landlord within thirty (30) days
after receipt with a copy of any separate tax bills and
assessments for the Leased Premises and shall promptly deliver
to the Landlord receipts evidencing the payment of such taxes.


<PAGE>

                                    - 10 -

     The Tenant's proportionate share shall be the
proportion of the gross floor area of the Leased Premises
bears to the gross  leasable  floor area of  the  Building.
The  Tenant's  proportionate  share  can  be adjusted,
however, by the Landlord in terms of Real Estate Taxes, Capital
Taxes and Insurance  Costs  to take into consideration the value
of the improvements made to the Premises,  the  whole  to  be
calculated by the Landlord in an equitable and fair manner.

     Notwithstanding the above, it is agreed  that, if and until
the Tenant is the only occupant of the Building, it shall pay
all of the cost stipulated in  paragraphs  8  b),  d)  and  e)
hereof  as of the Commencement  Date. Furthermore, if and until
the Tenant is the only occupant of the Building, it shall pay
all of Real Estate Taxes stipulated in paragraph 8(g) and all
of the costs stipulated in paragraphs 8 b), d) and e) hereof
in regards to the Property after the second year of the Term.

     In the case that there is an Other Tenant, all areas shared
with the Other Tenant shall be designated common and service
areas  and  facilities, and shall be deducted from the number
of square feet of the Premises and there shall  be  added  to
the  square  footage  of  the Premises, the Tenant's
Proportionate  Share  of  the  common  and  service areas  and
facilities calculated according to BOMA standards of
measurement.

     The total costs to the Tenant of Real Estate  Taxes and
Operating Expenses are estimated to be Three Dollars and
Ninety-two  Cents ($3.92) per square foot in 1994, which sum
includes the fifteen percent  (15%) administration fee  thereon,
the whole as set out in the breakdown of such  Real  Estate
Taxes and Operating Expenses set out in Schedule "C" attached
hereto.

     Notwithstanding the generality hereof, it is agreed that
the total cost of the expenses stipulated  in  paragraphs
8 a), b), c), d), and e) will not increase annually after the
Commencement Date  at  a  rate  exceeding  the
Consumer Price Index throughout the Term of the Lease.

     The  amount  payable  by  the  Tenant under the provisions
of this section  shall be estimated by the Landlord in advance
for each calendar year. The Tenant   agrees   to  pay  to
the  Landlord   such   amount   in   equal, monthly
instalments in advance, during such period

<PAGE>

                                    - 11 -


     together with the Minimum Net Net Rental provided for in
Section 6. Within a reasonable period  of  time  after  the end
of the period for which such estimated payments have been made,
the  Landlord  shall  send the Tenant a statement  showing
the  actual  amount  required  to  be  paid under  the
provisions  of  this  Section.  Overpayments or underpayments
shall  be adjusted  within  thirty  (30)  days  after the
delivery of the Landlord's statement.

     The Tenant shall have the right once in  every  lease
year  to verify the amounts charged to the Tenant under the
provisions of this Section.

     Should  the  first  year  of  the  Term  not commence on
the first day  of January,  or  should  the  last  year of the
Term  not  terminate  on  the thirty-first day of December,
then, prior to the commencement of the Term, or of the last
year of the Term, as the case may be, or as soon thereafter
as is reasonably possible, the Landlord  shall  furnish  to
the Tenant an estimate  of  the  charges  for  the part of the
year in question and  the Tenant shall pay to the Landlord on
the first day of each month in advance during  the  part  of
the year in question  forming  part  of  the  Term,
Additional Rental equal to the portion of the estimated
charges divided by the number of months during the part of
the year in question.

9.   UTILITIES AND EQUIPMENT

     If and until the Tenant  is the only occupant of the
Building, the Tenant shall promptly  pay  for  the  electricity
(including without limitation any electricity used for heating
and/or  air  conditioning the Building), for the cost of
operating, repairing, maintaining,  replacing  and  inspecting
the  machinery  and other facilities required for the heating,
ventilating and air conditioning of the Building and facilities,
and gas, water, sewer and electric utility  costs  relating
to  same, telephone and all public utilities with respect to
the Building.

     Throughout the Term of the lease, the Tenant shall
engage a qualified air  conditioning  maintenance contractor
to maintain and repair  the  heating, ventilating and  air
conditioning system. The Tenant shall, within thirty (30) days
of the occupancy of the Premises, provide the Landlord with a
copy  of  a  duly  executed  heating,  ventilating  and  air
conditioning maintenance and repair contract, as well as all
renewals of said contract.



<PAGE>


                                - 12 -

     Should an Other Tenant occupy the Balance,  the  Landlord
shall provide a separate  meter to calculate and measure the
utilities being  consumed  by said Other Tenant. Furthermore,
such Other Tenant would be responsible for its proportionate
share  of any cost of operating, maintaining, replacing and
inspecting  the machinery  and  other  facilities  required
for  the heating, ventilating and air conditioning of the
Building.

10.  OPTION TO RENEW

     Provided the Tenant  is  not  in default under the lease,
Tenant shall have the option to extend the term of the lease
with respect to the entirety of the Premises and any additional
space then leased in the Building, for an additional period
of five (5) years upon the same terms and  conditions of
this lease, save and except that the Premises shall be retained
in  their then  "as  is"  condition,  there  shall  be  no
free  rentals or credits whatsoever,  and  the  Minimum  Net
Net  Rental  rate shall be  the  then prevailing market rental
rate but in no event shall  it  be  less than the Minimum  Net
Net  Rental  rate paid during the last year of the Term.  To
exercise the foregoing option, Tenant shall provide written
notice thereof to the Landlord no less than twelve (12) months
prior to the expiry of the Term, in default whereof said
option to extend shall be null and void and of no further legal
effect. After  the  renewal  period, there shall be no
further option to extend the Term.

11.  SUBLETTING AND ASSIGNMENT

     Subject to the provisions hereinafter detailed, the  Tenant
shall not have the right to sublet the Premises or any part
thereof, or assign its  rights in the present lease, or allow
the Premises or any part thereof to be used by another,  nor
hypothecate  or encumber this lease or the Premises or  any
part thereof, without the prior  written  consent  of  the
Landlord, which consent may not be unreasonably withheld.
Notwithstanding the above, the Tenant may sublet the Premises
or a part thereof or assign its rights  in the present  Lease
to  an  affiliated  company, without the prior written
consent of the Landlord. The Tenant shall,  however, in such
an assignment or  sublet,  give the Landlord at least thirty
(30)  days  prior  written  notice of such a sublet or
assignment. Notwithstanding such subletting and assignment,
or   permitted  use  by  another,  the Tenant shall remain
jointly and severally  liable  with such sub-lessee, assignee
or user, for the performance of all


<PAGE>

                                    - 13 -

     the terms and conditions of the  present  lease,  for
the  residue of the lease, or any renewal thereof.

     If  the  Tenant  wishes  to  so  sublet  or assign the
Premises or a  part thereof, its rights in the present Lease,
it must submit to the Landlord a copy of the offer to sublet
or assign, together with a request for consent
of the Landlord, at least thirty (30) days  prior to the
effective date of the  proposed transfer or assignment and
the Landlord  shall  have  twenty (20) days  from  the  receipt
thereof at the Landlord's option, to cancel this lease or, in
the case of an offer to sublet a part of the Premises to
cancel this Lease only with respect to the part of the Premises
offered to  be sublet as of the effective Commencement Date of
such offer to sublet or assign. However, should the Landlord
not exercise its right to cancel this lease, the Landlord shall
not thereby  be  precluded  from withholding its consent to the
said sublet or assignment, provided said  consent shall not
be unreasonably withheld.

     Should  the net rent per square foot to be paid by an
unrelated  sublessee or unrelated  assignee, whether  in
cash,  goods,  services  or  other consideration, exceed the
Minimum Net Net Rental per square foot payable hereunder, then
Tenant shall  pay to Landlord monthly the amount of, or an
amount equivalent to such excess.  After  deducting therefrom
any expenses incurred in obtaining or achieving such sublet
or assignment.

12.  EXPROPRIATION

     If  the  whole  or  a  substantial  portion  of  the
Property  be  condemned, expropriated or taken in any manner
for any public or quasi-public  use or purpose such that it is
no longer feasible for the Landlord to continue to
operate  the  Property  or in such a manner as to
significantly affect the Tenant's peaceful enjoyment  of
the  Leased  Premises,  then  Landlord or Tenant  may,  at
their  option, terminate this Lease by giving notice  in
writing that the Term hereof shall expire upon tile day when
possession is required for such purpose and in the event of
such expropriation. Landlord shall  have  no liability to
Tenant  of  any  nature  without  prejudice, however, to
Tenant's  rights to claim from the expropriating authority all
damages  resulting  from such condemnation, expropriation
or  other taking  and, without limitation, the value of any
fixtures,  improvements, furniture, partitions, equipment
which it has paid for together with any


<PAGE>

                                    - 14 -


relocation  expenses  and loss of business which it can claim.
In the case where only a portion of  the Leased Premises be
condemned, expropriated or taken and provided no notice  of
termination  has been given as aforesaid  and provided that
such portion so taken does not render the balance of the
Leased Premises unsuitable for the use for which  Tenant  has
leased  the Premises,  Landlord shall, at his expense, restore
the reduced Premises as far  as  practicable,  to  the
condition  existing  just  prior  to  such condemnation,
expropriation  or  taking,  and  the Minimum Net Rent shall
thereafter be equitably abated without prejudice to Tenant's
claim against the expropriating authority for any damages
suffered  as  a result of such partial taking.

13.  INSPECTION AND REPAIR

     Landlord and its agent shall have, upon a prior twenty-four
(24)  hour  notice (except  in  an  emergency),  the right at
all reasonable hours during the Term of this lease and any
renewals  thereof  to enter the Leased Premises to  examine
the  condition  thereof and to ascertain  whether  Tenant  is
performing its obligations hereunder,  and  Tenant  shall make
any repairs which Tenant is obliged to make pursuant to the
terms  of  this  lease. If Tenant  fails  to  make  any  such
repairs  within thirty (30) days after written notice from
Landlord requesting Tenant  to  do  so,  provided that
such repairs may reasonably be made within the said period,
Landlord  may, without  prejudice  to any other rights or
remedies it may have, make such repairs and charge the
cost thereof to Tenant, plus an administrative fee
of fifteen percent (15%) for doing so, which shall be charged
to Tenant as additional rent. Nothing  in  this lease shall be
construed to obligate or require Landlord to make any repairs
for  which the Tenant is responsible hereunder, but Landlord
shall have the right at any time to make emergency
repairs  without prior notice to Tenant and charge  the  cost
thereof  to Tenant, plus  an administrative fee of fifteen
percent (15%) for doing so, which shall be  charged to Tenant
as additional rent. Any costs chargeable to Tenant hereunder
shall  be  payable  forthwith  on  written  demand as
Additional Rental.

     Moreover,  Landlord may, but shall not be obliged, to
make any repairs  of an urgent nature without prior notice to
Tenant provided that the Landlord advises  the   Tenant
thereof   as   soon  as  is  reasonably  possible, but for the
account of Tenant and shall  charge  all costs to Tenant, plus
an administrative fee of fifteen


<PAGE>

                                    - 15 -

     percent  (15  %)  for  doing  so,  which  shall be charged
to  Tenant  as additional rent, which costs shall be payable
forthwith  to  Landlord  on written  demand as Additional
Rental and shall bear interest in the manner hereinbefore
provided.

     Notwithstanding  the  foregoing, this section shall not
apply with respect to the Balance which is not leased by the
Tenant.

14.  OBSTRUCTIONS

     The  sidewalks,  entries,   passage  corridors,  and
stairways  shall  not  be obstructed by the Tenant, its
officers,  agents,  servants, employees, or customers or used
for any other purposes than for ingress and egress to or from
the Leased Premises, and the Tenant shall save  the Landlord
harmless from damages to persons or Property because, of any
nuisance  or other act which obstruct the free movements of
persons to, in and from the building and Property.

15.  EXPIRATION OF LEASE

     Tenant shall give Landlord twelve (12) months' written
notice prior to the date of  expiration  of  this lease of
its intention to renew this lease or  to vacate the Premises,
failing which Landlord may at its option give written
notice to Tenant within  a period of not less than thirty
(30) days before the date of expiration of  this  lease
that  this  lease is renewed for a further  period  of  twelve
(12) months from the said date  of  expiration under the same
terms and conditions as herein set forth. If neither of the
notices hereinabove described  is  given the present lease
shall terminate ipso facto and without notice or demand  on
the  date stated in Section 2 hereof and any continued
occupation of the Premises  by  Tenant  shall not have the
effect of extending the period or of renewing the present lease
for any  period  of  time, the whole notwithstanding any
provisions of law and Tenant shall be presumed  to  occupy
the Premises against the will of Landlord  who shall thereupon
be entitled to  make  use  of  any  and  all remedies by  law
providing  for  the expulsion of Tenant and for damages,
provided, however, that Landlord shall have the right at its
option in the event of such continued occupation by Tenant to
give to Tenant at any time written notice that Tenant may
continue  to  occupy  the  Premises under a tenancy from
month to month in consideration of a net net rental three (3)
times the


<PAGE>

                                    - 16 -
     monthly  Minimum  Net  Net  Rentals  that  was  payable
during  the  year immediately  preceding the expiry date of
this lease, payable monthly  and in advance and otherwise
under the same terms and conditions as are herein set forth.

     The Tenant shall,  at  the expiration or sooner termination
of the Term of this lease, peaceably surrender  with  all
additions, alterations, changes or installations which at any
time during  the  Term  hereof shall be made therein  or
thereon, in good repair and condition, subject  to  reasonable
wear and tear only.

     Notwithstanding  the  foregoing,  the  Tenant  shall  at
or  prior to the expiration  of the Term hereof remove its
movable effects and/or  articles belonging to  or brought upon
the Leased Premises by Tenant and the Tenant shall repair any
damages caused by such removal. The Tenant must forthwith
remove, at Tenant's  expense,  all its alterations or
improvements made to the  Leased  Premises  after the
Commencement  Date,  which  the  Landlord advised the Tenant,
must  be  removed by the Tenant on termination of this
Lease in virtue of section 24 hereof, unless the Landlord
prefers that the whole or any part of such alterations  or
installations excluding movable effects and/or movable
articles should remain,  without  any  compensation
whatsoever  being  allowed  to  the Tenant for same. At the
expiration  or sooner termination of the Term of  this  lease,
Landlord  shall  have the right,  at Tenant's expense, plus an
administrative fee of fifteen percent (15%) for  doing  so,
which shall be charged to Tenant as additional rent, to repair
any damages  caused  to  the Leased Premises and not repaired by
Tenant,  the  whole  subject to reasonable  wear  and  tear.
Furthermore, Landlord shall have the  right  at Tenant's expense
plus an administrative fee of fifteen percent (15%) for  doing
so,  to  remove  any signage that Tenant may have left on the
Building and to repair any damages  caused  by such  removal
and to restore the Building to its original condition, save
and except reasonable wear and tear.

16.  PLATE GLASS AND DOOR SIGNS

     Any breakage of  glass  or  plate glass in or about
the Leased Premises and any damage to signs on Tenant's doors,
shall  be repaired and replaced by the Tenant at its expense.


<PAGE>

                                    - 17 -

17.  WAIVER

     The failure of the Landlord to insist upon the strict
performance of any of the agreements, terms, covenants and
conditions  hereof  shall not be deemed a waiver  of  any
subsequent  breach or default in any of such  agreements,
terms, covenants and conditions.

18.  COMPLIANCE WITH LAWS AND REGULATIONS

     The Tenant shall, at its own expense,  promptly comply
with the requirements of every  applicable statute, law and
ordinance  and  with  every  applicable lawful regulation or
order with respect to the removal of any encroachment
placed by  the Tenant, or to the condition, equipment,
maintenance, or use or occupation  of  the  Leased  Premises,
including  the  making  of  any alteration,  addition  in  or
to  any  structure  upon, connected with or appurtenant  to
the  Leased Premises, whether or not such  alteration  be
structural or be required  on  account  of any particular use
to which the Leased  Premises  or  part thereof may be put
and  whether  or  not  such requirement, regulation  or
order be of a kind now existing or within the contemplation of
the parties hereto;  and shall comply with any applicable
regulation, recommendation or order of  the  Canadian  Fire
Underwriters' Association, or any body having similar functions
or of any liability  or  fire insurance  company  by  which
the  Landlord and/or the Tenant may be insured.

19.  FAILURE OF TENANT TO PERFORM

     If  the Tenant fails to pay any taxes, rates,  insurance
premiums  or  charges which  it  has herein covenanted to pay,
the Landlord may pay the same and shall be entitled  to  charge
the  sums  so  paid  to the Tenant, plus an administrative fee
of fifteen percent (15%) for doing  so,  which shall be  charged
to  Tenant as Additional Rental, who shall pay them forthwith on
demand and the  Landlord,  in addition to any other rights,
shall have the same remedies and may take the  same  steps
for all such sums as it might take for the recovery of rent.

     Such amounts so paid by the Landlord and any payments
of  Minimum Net Net Rental and/or Additional Rental when not
paid on any due date  as provided for  herein shall bear
interest from the due date to the date of  payment, calculated
daily at the prime rate

<PAGE>

                                    - 18 -

     of the Canadian Imperial Bank of Commerce, plus two
percent (2%).

20.  DEFAULT

     The following shall be considered defaults under the terms
of this lease:

     (a)  If  the  Tenant  shall  fail  to  pay the Landlord any
instalments of Minimum Net Net Rental, any Additional  Rental,
or any other amounts owing, after it shall have become due and
payable as herein provided;

     (b)  If the Tenant shall assign, sublet or permit the use
of the Premises by other except in the manner herein permitted;

     (c)  If any seizure is practised against the property of the
Tenant in the Premises, unless in the case of a seizure before
judgment, the Tenant diligently contests such seizure;

     (d)  If, while the Premises are capable of being occupied
the Tenant shall fail to take possession of the Premises or the
Tenant should  abandon or  vacate the Premises, other then in
the manner foreseen in section 4 hereof;

     (e)  If any  insurance carried by the Landlord be cancelled
in consequence of the business  carried by the Tenant, or in
consequence of anything brought into or stored in the Premises
by the Tenant; and

     (f)  If the Tenant shall  default  in  the performance of
any of its other obligations  under  this  lease,  including
without  limitation  the obligation to pay business and water
taxes  in  a  timely manner, or fail  to  effect  any  payment
that  may  result in a charge,  lien, encumbrance, or other
right on the Property,  or shall violate any of the rules and
regulations hereinafter set forth,  or  hereafter to be
established by the Landlord

<PAGE>

                                    - 19 -

          and  such  default  continues for thirty (30) days
following  written notice thereof from the Landlord.

     In the event of any default  of the terms of this lease,
this lease may be terminated ipso facto, at the  option of the
Landlord, upon written notice of five (5) days to the Tenant
to such effect. It is expressly agreed that such right of
termination shall  be,  in addition to and without prejudice
to  all  other  rights as provided by law  or  herein,  the
Landlord  may re-enter and re-let  the  Premises  to  whomsoever
it  may choose without further notice or demand being necessary,
and may recover from the Tenant all  amounts  due  hereunder at
the date of such termination, expenses  of such  re-letting
(including   any  repairs,  decorating,  alterations  or
improvements necessitated thereby), and rental for the six
(6) months next succeeding the date of such termination,  or
such longer period as may be allowed by law, all of which shall
immediately  become  due  and  payable. Thereafter,  the
Tenant  shall  pay to the Landlord as liquidated damages
until the end of the Term an amount  equivalent  to the rental
provided in this  lease,  less the sum of the net receipts
(if any),  derived  by  the Landlord from re-letting  of  the
Premises. As used herein, the expression "rental" shall mean
the Minimum Net Net Rental, and the Additional Rental,
and all other additional rents payable hereunder. Any sums
received by the Landlord from or for the account of the Tenant
when  the  Tenant is in default  hereunder,  may  be  applied
at  the  Landlord's option, to  the satisfaction in whole or
in part of any obligation  of the Tenant then due
hereunder, in such a manner as the Landlord sees fit,  and
regardless  of any  imputation by law, or any designation or
instruction of the Tenant to the contrary.  The  Tenant hereby
irrevocably waives the benefit which may limit or diminish the
Landlord's termination of this lease, and any right
granted to the Tenant to prevent his eviction in the event
of any default, nor will the payment after  legal proceedings
have been instituted entitle the Tenant to avoid the
resiliation of the lease.

21.  BANKRUPTCY AND INSOLVENCY

     In the event that Tenant shall be adjudicated a bankrupt
or make any general assignment  for  the  benefit  of
creditors,  or to the  benefit  of  any insolvency or
bankruptcy act, or if a receiver or trustee be appointed for
the  property   of  the  Tenant,  or  any  part  thereof,
the  present lease shall automatically terminate on the


<PAGE>

                                    - 20 -
     occurrence of any of the aforesaid events without
notice or delay, and Landlord shall  be  entitled to recover
all arrears of Minimum Net Net Rental, Proportionate Expense
Rental, and Additional Rental as well as six (6) months of
future Minimum  Net Net Rental, Proportionate Expense Rental
and Additional Rental or such other accelerated amount that
the law may at any time provide.

     The Tenant hereby irrevocably waives  his  right  to
repudiate this lease pursuant  to  section  65.2 of the
Bankruptcy and Insolvency  Act  or  any section passed to
amend or replace it.

22.  MAINTENANCE AND REPAIRS

     Notwithstanding the provisions  of  Article  1864  of  the
Civil  Code  of the Province of Quebec, the Tenant, at its own
expense shall operate, maintain and  keep  the  Leased  Premises
including  all facilities, equipment and services, both inside
and outside, in such good  order  and  condition, as they would
be kept by a careful owner and shall promptly make  all  needed
repairs  and  replacements  to  the  Leased Premises which a
careful owner would make (save and except for repairs  required
by structural or latent defects  or  major  roof repairs during
the first ten (10)  years  of  the Term), including without
limitation,  the  water,  gas,  drain  and sewer connections,
pipes and mains, electrical wiring, water closets, sinks  and
accessories  thereof, and all equipment belonging to or
connected with the Leased Premises or used in its operation.

     The Tenant shall  also  be  responsible,  at its sole
expense, to wash the inside  and outside of the windows
the Premises  and  to  maintain  and clean the Premises daily.

23.  LEASEHOLD IMPROVEMENTS

     Subject to reasons or conditions which are beyond the
reasonable control of the Landlord,  the  Landlord  shall
have  built  the  building and shall have carried out the base
building finishes and leasehold  improvements  as set forth
in  Schedules "B" and  "B-1", attached hereto and initialled for
identification, (hereinafter referred to as the Landlord's
work), prior to July 1, 1995. All improvements in and to  the
Leased Premises other than those set out in Schedules "B" and
"B-1" and any other documents agreed to by


<PAGE>

                                    - 21 -

     the parties shall be performed at the Tenant's sole cost
and expense.

24.  IMPROVEMENTS AND ALTERATIONS

     The  Tenant  shall have the right to make at its own
expense,  with  the  prior written consent  of  the Landlord,
which consent shall not be unreasonably withheld, additions,
alterations and changes in the Leased Premises in compliance
with   the   following   conditions  (such  alterations  and
construction  of  new  or  additional  buildings   or
structures   being  hereinafter referred to as the "work").

     (a)  Tenant shall furnish to Landlord plans and
specifications showing in reasonably  complete  detail  the
work proposed to be carried out and the estimated cost thereof
and  Landlord shall approve or reject such plans and
specifications within thirty (30) days after receipt of the
same. If such plans and specifications  are  approved, all
work shall be carried out in compliance with the same;

     (b)  The value of the Leased Premises shall not, as  a
result of any work proposed to be carried on by Tenant, be
less than the  value  of  the Leased  Premises  before  the
commencement of such work and Landlord shall be the sole
judge of such value;

     (c)  All  work shall be carried out as  expeditiously  and
diligently as possible, and in a good workmanlike manner and in
compliance with all applicable  permits,  authorizations  and
building and zoning by-laws and  with  all  regulations  and
requirements of all competent authorities having jurisdiction
over the Leased Premises; using first quality materials.

     (d)  The  Leased Premises shall at all times be free of all
conditional bills of sale, workmen's and suppliers' hypothecs
and other similar hypothecs and charges;

     (e)  If  the  cost of any work shall be in excess of
Twenty-five Thousand Dollars ($25,000.00) as reasonably
estimated by Landlord, Landlord may require Tenant to furnish
security satisfactory to Landlord


<PAGE>

                                    - 22 -

         guaranteeing the completion of the work  and  the
payment of the cost thereof  free and clear of all conditional
bills  of  sale,  pledges, privileges, workmen's and legal
hypothec and other similar privileges and charges;

     (f)  Tenant shall  maintain  such  general  liability
insurance for the protection of Landlord and Tenant as Landlord
may reasonably require; (g) All work, when completed, shall be
comprised in, and form part of the Leased  Premises  and
shall be subject to all the provisions of this lease and Tenant
shall not  have  any  right  to  claim  compensation
therefor  and  the same shall not be removed by Tenant on
termination of this lease except  as  required by the Landlord
at the time of its approval  of the plans and specifications
as  described  in  section 24(a) hereof.

     (h)  Tenant shall pay the Landlord all of its out-of-pocket
expenses to have the plans and specifications  of  the  Tenant
approved together with an administration fee of fifteen
percent (15%) thereon.

     The  Tenant shall pay to the Landlord the amount of any
increase  for  any insurance  coverage  or  Real  Estate Taxes
or Capital Taxes to the extent that such increase is attributable
to any action by the Tenant under this Section  or any of the
Landlord's Work  set  out  in  Section  23  hereof. Furthermore,
the Tenant covenants that such insurance shall not thereby be
liable to  avoidance  or  cancellation  by  the  insurer by
reason of such changes, alterations, additions, or
improvements.

     Notwithstanding anything contained in this lease,  if
any  such  repairs, alterations, decorations, additions, or
improvements to the Premises or to any  improvements installed
by or on behalf of the Tenant for the Premises which  are
approved by the Landlord, effect the structure of the Premises
or any part of  the  building, other than the Premises, such
work shall be performed  only  by  the   Landlord   and   the
Tenant   shall  pay  the Landlord  as  additional  rent,  upon
demand,  both  the Landlord's  cost relating   to  such
repairs, alterations, decorations, additions and improvements,
including  the  fees  of  any  architectural or engineering
consultant,


<PAGE>

                                    - 23 -


     plus  a  sum equal to fifteen percent (15%) of the  total
costs  thereof, representing  the Landlord's overhead.
No repairs, alterations, additions, decorations or improvements
to the Premises by or on behalf of the Tenant shall be
permitted which may weaken or endanger the structure, adversely
affect the condition or operation  of  the  Premises,  or the
building, or diminish the value thereof, or restrict or reduce
the Landlord's  coverage for insurance purposes.

25.  MOVABLE HYPOTHEC

     The  Tenant  expressly  undertakes  to  garnish the
Premises at all times  with furniture, fixtures and other
movable effects  whose market value shall be in an amount
equivalent to one (1) year's Minimum  Net  Net Rental and the
Proportionate Expense Rental. The Tenant represents and warrants
that  it is  and  shall  always  be  the  absolute  and
unconditional owner of the furniture, fixtures and other
moveable effects garnishing  the Premises at any time and from
time to time and that the property presently  garnishing
the  Premises  is  free  and  clear of all priorities, hypothecs,
charges, guarantees and any other rights  of any kind whatsoever
existing in favour of persons other than the Landlord  and  that
same are not subject to any instalment sales contract. The
Tenant expressly undertakes to maintain the furniture, fixtures
and other movable effects garnishing  the  Premises at
any  time  and  from  time  to  time,  free  and  clear of all
priorities, hypothecs,  charges, guarantees and other rights of
any  kind  whatsoever existing in favour  of  persons  other
than  the  Landlord  or  from  any instalment sales contracts.

     For  the  purpose  of  securing  the  performance by the
Tenant of all its obligations hereunder including, without
limiting  the  generality of the foregoing, the payment of the
Minimum Net Net Rental and the Proportionate Expense Rental,
the Tenant hypothecates to and in favour of  the  Landlord
the universality of furniture, fixtures and other movable
effects, present and  future,  garnishing the Leased Premises
at any time and from time  to time,  to  the  extent   of  the
sum  of  Six  Hundred  Thousand  Dollars ($600,000.00).
The Tenant  undertakes  to  pay  all  costs relating to the
publicity of the present hypothec, including the costs  of
all  renewals, notices,  hypothecs,  renunciations,
assignments of priority, releases, discharges and mainlevees
related thereto.


<PAGE>

                                    - 24 -

     The  Tenant  undertakes  to maintain the property subject
to  the  present hypothec in good condition without changing
the destination thereof and to care  for same as a prudent  and
diligent administrator so as not to diminish the security
of the Landlord. The Tenant further undertakes to inform  the
Landlord  in advance  of  any  projected  sale,  transfer  or
alienation of the whole  or  any material portion of the
property affected by the present hypothec.

26.  INFORMATION

     The Tenant authorizes the Landlord  to obtain information
relevant or necessary to the execution of this lease and, in
particular,  those relating to the Tenant's solvency and to
establish a file in respect of  such information. For these
purposes, the Tenant authorizes any financial institution, agent
of personal information, contractors and suppliers, and any
other person with such information to communicate such
information to the Landlord during the Term of the lease.

27.  UNDERSTANDING OF THIS LEASE

     Notwithstanding the fact that the Landlord  drafted this
lease and submitted it to the Tenant, the Tenant recognizes that
the  essential  stipulations  of this lease were negotiable and
that he understands all of its stipulations and  that  the
Landlord gave him adequate explanations with respect to the
terms and conditions of this lease.

28.  DAMAGE AND DESTRUCTION

     In the event that the Leased Premises shall be destroyed or
damaged, then:

     (a)  if, in  the  opinion  of  Landlord, the damage or
destruction is such that the Leased Premises are  rendered
wholly unfit for occupancy or it is impossible or unsafe to use
and occupy  them,  and if in either event  the  damage,  in  the
further reasonable opinion of  Landlord (which shall be given by
written  notice  to Tenant within sixty (60)days  of  the
happening of such damage or destruction) cannot he repaired with
reasonable diligence  within  one  hundred  and  eighty
(180) days from the giving of such notice, either Landlord
or Tenant may within fifteen (15)

<PAGE>

                                    - 25 -


          days next  succeeding  the giving of Landlord's
opinion as aforesaid, terminate this lease by giving to the
other notice in writing of such termination, in which event
the Term of this lease shall cease and be at an end as of
the date  of  such destruction or damage and the rent
and all other payments for which  Tenant is liable under
the Terms of this lease shall be apportioned and  paid in
full to the date of such destruction or damage. In the event
that  neither Landlord nor Tenant so  terminates  this
lease, rent and all other  payments  for  which Tenant is
liable hereunder shall abate from the date of the happening
of the damage until the  damage  shall  be made good to the
extent of enabling Tenant to use and occupy the Leased
Premises;

     (b)  if the damage be such that the Leased Premises
are  wholly unfit for occupancy, or if it is impossible or
unsafe to use or occupy them but if  in  either  event  the
damage, in the opinion of Landlord  (which shall be given to
Tenant within sixty (60) days from the happening of such damage)
can be repaired  with  reasonable  diligence  within one
hundred and eighty (180) days of the giving of such notice,
rent and all  other payments for which Tenant is liable
hereunder shall  abate from the  date  of the happening of
the damage until the damage shall be made good to the  extent
of enabling Tenant to use and occupy the Leased Premises;

     (c)  if, in the opinion of Landlord,  the  damage  can
be  made  good  as aforesaid  within  one hundred and eighty
(180) days of the giving of such notice, and the  damage  is
such  that  the Leased Premises are capable of being partially
used for the purposes  for  which  leased,  until such damage
has been repaired, rent and all other payments  for which
Tenant  is liable hereunder shall abate in the proportion that
the part of the Leased Premises rendered unfit for occupancy
bears to the whole of the Leased Premises.



<PAGE>

                                    - 26 -


     In the event that the  building is partially destroyed or
damaged so as to affect twenty-five percent  (25%)  or  more
of  the  rentable area of the building containing the Leased
Premises, or in the opinion of Landlord the building  is
rendered unsafe, and whether or not the Leased  Premises  are
affected, and  in the reasonable opinion of Landlord (which
shall be given by written notice  to  Tenant  within  sixty
(60) days of the happening of such destruction), cannot be
repaired with reasonable diligence within one
hundred and eighty (180) days of the giving  of  such notice,
Landlord may within fifteen (15) days next succeeding the giving
of Landlord's opinion as aforesaid, terminate this lease by
giving to Tenant  notice  in writing of such termination, in
which event the Term of this lease shall cease and
be at an end as of the date of such destruction or damage and
the rent and all other payments for which the Tenant is liable
under the Terms  of this lease  shall  be  apportioned  and
paid  in  full  to  the  date  of such destruction or damage.

     Nothing  herein  contained  shall oblige Landlord to
repair or reconstruct any leasehold alterations or
improvements made to the Premises, including those made by the
Landlord prior  to  the Date of Occupancy for the Tenant
and as set out in Schedules "B" and "B-1" annexed hereto. On
the contrary, all improvements in and to the Premises  shall
be  the  responsibility of Tenant, who shall be obliged to
repair, replace and re-fixture  them  to a standard at least
the equivalent of that which existed prior to the date
of damage and destruction.

     Despite anything  contained  in  this  lease  to the
contrary, and without limiting Landlord's right or remedies
hereunder,  if damage or destruction occurs to the property,
or any part thereof, by reason  of  any  cause  in respect of
which there are no proceeds of insurance available to Landlord,
or  if  the proceeds of insurance are insufficient to pay
Landlord for the cost of rebuilding or making fit the Property,
or any part thereof, or if any mortgagee or any person entitled
to the proceeds of insurance does not consent to the payment
to Landlord of such proceeds for such purpose, or if, such
damage or destruction  is  caused  by any fault or neglect of
Tenant, or those for whom Tenant is in law responsible, or the
Term of the lease  which  remains  is  less  than twenty-four
(24) months, then Tenant agrees   that   Landlord   may,
without obligation or liability to  Tenant,  terminate  this
lease on thirty (30) days written notice to Tenant, and all
rents shall be

<PAGE>

                                    - 27 -


     adjusted as of then, and Tenant  shall  vacate  and
surrender  the leased premises on such termination date.
Notwithstanding the above, the Landlord undertakes to insure
the Property as a normally prudent landlord  of  a
similar property would do.

     If any damage or destruction  by  fire  is  caused  to
the  Building, the Property or the Premises, whether partial
or not, is due to the  fault  or the  neglect  or the Tenant,
its officers, agents, employees, servants, or invitees without
prejudice to any other right or remedies of the Landlord
and without prejudice to rights of subrogation of the
Landlord's insurer:

          i)   Tenant shall be liable for all costs and damages;

          ii)  the damages may be repaired by the Landlord at
Tenant's expense;

          iii) Tenant shall  forfeit  its  right  to  terminate
this  lease as
               provided in section 28(a); and

          iv)  Tenant  shall  forfeit  any  abatement  of rent
provided in this article 28 and rent shall not abate;

29.  INSURANCE REQUIREMENTS

     Tenant shall not do or commit any act upon the Leased
Premises or bring into or keep  upon the premises any article
which will affect  the  fire  risk  or increase the rate of
fire insurance or other insurance on the building.

     Tenant  shall  comply  with  the  rules  and
requirements of the Insurers' Factory Mutual System and
with the requirements of all insurance companies having
policies of any kind whatsoever in  effect  covering  the
building, including policies insuring against tort or
delictual liability.

     In  no  event  shall  any  inflammable  material,  except
for  kinds  and quantities  required  for  ordinary  office
occupancy and permitted by the insurance  policies  covering
the  building,   or   any   explosives   or  radioactive
material whatsoever, be taken into the Leased



<PAGE>

                                    - 28 -

    Premises or retained therein, save and except for
such materials which the Tenant  notifies  the  Landlord  in
order that the Landlord can notify its insurance company.

     Should the rate of any type of insurance  on  the building
be increased by reason of any violation of this lease by Tenant,
Landlord, in addition to all other remedies, shall pay the amount
of such increase,  and the amount so paid shall become due
and payable immediately by Tenant and collectible as
Additional Rental.

     Tenant  shall  take  out  and keep in force during the
Term of this  lease comprehensive general liability  insurance
in amounts and with policies in form  satisfactory  from  time
to time  to  Landlord  and  with  insurers reasonably acceptable
to Landlord,  the  comprehensive  general  liability
insurance   in  no  event  to  be  for  less  than  Five
Million  Dollars ($5,000,000.00),   inclusive  limits  and
all  risks  insurance  covering furniture, fixtures  and
improvements  in  an  amount  equal  to the full insurable value
thereof. Certificates of insurance are to be delivered  to
Landlord,  at  the  request  of  the  Landlord.  The
comprehensive general liability insurance policy shall name
Landlord as an additional insured as its  interest  may appear
and the comprehensive general  liability  policy shall contain
a  cross  liability clause. The cost of premium for each and
every such policy shall be  paid  by  Tenant. Tenant shall
obtain from the insurers  under  the  comprehensive general
liability  insurance  policy, undertakings to notify Landlord
in writing at least ten (10) days prior to any cancellation
thereof.

     Tenant agrees that if Tenant  fails  to  take  out or to
keep in force the comprehensive general liability insurance
policy,  Landlord  will have the  right  to  do so and to
pay the premium therefor and in such event  Tenant
shall repay  to  Landlord the amount paid as premium, plus
fifteen percent (15%) administration fee for doing so, which
repayment shall be collectible as Additional Rental  payable
on  the  first  day of the next month following the said
payment of Landlord.

30.  CANCELLATION OF INSURANCE

     If  any  insurance  policy  on the Property or any part of
it is  cancelled  or threatened by the insurer to be cancelled,
or refused to be renewed, or if the coverage under it is reduced
in any way

<PAGE>

                                    - 29 -

    by the insurer because of the  use or occupation of any
part of the Leased Premises by the Tenant or by any  occupant
of the Leased Premises, and if the Tenant fails to remedy the
condition giving  rise to the cancellation, threatened
cancellation or reduction of coverage within forty-eight (48)
working hours after notice by the Landlord, the Landlord may,
either:

     (a)  renter  and  take  possession  of  the Leased
Premises immediately by leaving upon the Leased Premises a
notice  of  its intention to do so upon which the Landlord
will have the same rights  and  remedies that
are  available  to  him under this lease or in virtue of the
general law; or,

     (b)  enter upon the Leased  Premises  and remedy the
condition giving rise to the cancellation, threatened
cancellation or reduction of coverage and the Tenant will
immediately pay  the  costs  and  expenses to the Landlord,
together with a fee of fifteen percent (15% ) of such costs
and  expenses representing the Landlord's overhead, which
costs  and expenses, may be collected by the Landlord as
Additional Rent and the Landlord  will  not  be liable for any
damage or injury caused to any Property of the Tenant  or
others  located on the Leased Premises as the result of the
entry. Such an entry  by  the  Landlord  is  not  a re-entry
or a breach of any covenant for quiet enjoyment.

     Tenant  will  pay  the amount of any increase in
insurance premiums on the whole of the Property  of  which
the  Leased  Premises form part, if such increase is caused by
Tenant's operations in the  Leased  Premises. Tenant
covenants  that  nothing  will  be done or omitted to be done
whereby  any policy shall be cancelled or the Leased Premises
rendered uninsurable.

31.  SUBORDINATION

     The Landlord declares that it may  assign  its  rights
under  this  lease to a lending institution as collateral
security for a loan to the Landlord and in the event that such
an assignment is given and executed by the Landlord
and  notification  thereof  is  given to the Tenant by or on
behalf of the Landlord, it is expressly agreed between the
Landlord and Tenant that this lease shall not be


<PAGE>

                                    - 30 -

     cancelled or modified for any reason  whatsoever  without
the  consent in writing of such lending institution.

     Tenant  hereby  covenants  and agrees that it will and
whenever reasonably required by Landlord and at  Landlord's
expense,  consent to and become a party to any instrument or
instruments permitting a  mortgage,  trust deed or  hypothec
to be placed on the Property, or any part thereof which  the
Leased Premises are a part as security for any indebtedness
covered by the said trust deed, mortgage or hypothec in order
to subordinate this lease to the said trust deed, mortgage
or hypothec.

     Notwithstanding the above, the  parties  agree that this
section will only be  applicable  to the Tenant if the Landlord
obtains  a  non-disturbance agreement from its mortgage
creditor registered against the Property.

32.  ATTORNEY

     The Tenant will,  upon  request  of  the Landlord or the
mortgagee, hypothecary creditor or any person having an
interest  in  the  project,  execute  and deliver promptly
those instruments and certificates referred to in Section
31  above  which  are requested by the Landlord. However,
if ten (10) days after the date of request  by the Landlord
the Tenant has not executed and delivered them, the Tenant
hereby irrevocably appoints the Landlord as the Tenant's
attorney with full power and authority to execute and deliver in
the name of the Tenant the instruments and certificates required.

33.  LETTER OF CREDIT

     The Tenant has delivered to the  Landlord,  an
irrevocable letter of credit in the  amount of Two Million
Dollars ($2,000,000.00)  CDN  currency  with  a
Canadian Chartered Bank acceptable to the Landlord. Provided
the Tenant is not in  default,  the  letter  of  credit  will
be renewed annually on a declining  basis  reducing by Four
Hundred Thousand Dollars  ($400,000.00)annually.

34.  OPTION TO LEASE ADDITIONAL SPACE

     Provided it has exercised its right to expand the
Premises set out in section 1 hereof, Tenant will have the
option of increasing the


<PAGE>

                                    - 31 -

     area of the Premises  during  the  first  eight  (8)
years of the Term by advising  the  Landlord  in  writing
that  it requires no less  then  ten thousand  square feet
(10,000) on an additional  floor  and  the  Landlord
undertakes  to provide said additional space by adding an
additional floor to the Building  finished  in  the same
manner and quality with respect to leasehold improvements
as the existing  building  and under the same terms
and conditions as in this Lease including, without limitation,
the Minimum Net  Net  Rental  rates set out herein. Should the
Tenant  so  advise  the Landlord, the Term of the Lease for
the additional space shall commence no sooner than one
hundred and twenty (120) days after the date of the notice
and its termination  shall  coincide  with the expiration of
the Term. All other terms and conditions of this Lease  shall
apply to the Lease of the additional  space.  Should  the
Tenant  exercise  this  option  to  lease additional space after
the tenth (10th) year of the  Term,  it  must first
renew the Lease for a further term of seven (7) years.

35.  CLEANING, LANDSCAPING AND GARBAGE DISPOSAL

     The Landlord shall not provide window cleaning of the inside
or outside windows and  the  Tenant  shall contract out, at its
own costs, such services  and shall have the obligation  to
maintain such windows in a clean manner. The Landlord shall
landscape the outside area of the Premises to the standards
of landscaping and of maintenance  for  a first class rental
property. The Landlord will not provide for any garbage
removal  except  for the public services related thereto and
dispensed by the public parties  from time to time.

36.  FAILURE TO DELIVER

     It is understood and agreed that should the Landlord
fail to break  ground for the Tenant's premises on or before
April 3, 1995 and give written notice to this effect to  the
Tenant.  The  Tenant  may,  at its sole option and
discretion cancel this agreement by providing the
Landlord  written notice no less than five (5) business days
following Landlord's notification that the Tenant intends to
cancel this agreement and the letter of  credit held
by the Landlord shall be returned to the Tenant without
reserve  and  this agreement shall be deemed null and void
and of no material effect, without any further liability for
either party.


<PAGE>

                                    - 32 -

37.  ENVIRONMENTAL WARRANTY

     The Landlord represents and warrants that neither the
Premises nor the Property contain any asbestos,
polychlorinated biphenyls (PCBs), urea formaldehyde
foam or other pollutants or contaminants. Furthermore, the
Landlord agrees to indemnify  the Tenant for any payment,
loss or other damage incurred as a result of any and all
breaches of this warranty.

38.  BROKERAGE COMMISSION

     The Tenant represents  and  warrants  to  the  Landlord
that no broker or agent negotiated or was instrumental in
negotiating or  consummating  this Lease other than Colliers
Pierremont Inc. whose commission shall be paid  by the
Landlord, the whole as set out in an agreement to be reached
with the said
broker.

39.  INDEMN1FICATION

     The Landlord shall not be liable nor responsible in any way
for any injury  of any nature  whatsoever  that may be suffered
or sustained by the Tenant or any employee, agent or customer
of the Tenant or any other person who may be upon the Leased
Premises or for  any  loss of or damage to any property
belonging to the Tenant or to its employees  or  to any other
person while such  property  is on the leased Premises and in
particular  (but  without limiting the generality of the
foregoing) the Landlord shall not be liable for any damage or
damages  of  any nature whatsoever to any such property
caused by the failure, by reason  of a breakdown or other
cause, to supply adequate drainage, snow or ice removal,  or
by reason of the interruption of any public utility or service
or in the event  of steam, water, rain or snow which may leak
into, issue or flow from any part  of  the building or from the
water, steam, sprinkler, or drainage pipes or plumbing  works
of the same, or from any other place or quarter or for any
damage caused by anything done or omitted by any tenant, except
as may be caused by its own negligence or the negligence of
its employees, agents and contractors, but the Landlord  shall
use all reasonable diligence to remedy such condition,
failure  or interruption  of  service  when  not  directly  or
indirectly attributable  to  the  Tenant, after notice of same,
when it is within its  power and obligation so  to  do.  Nor
shall the Tenant be entitled to any abatement of Minimum Net
Net Rental


<PAGE>

                                    - 33 -


     and  Additional  Rental  in  respect of any  such
 condition,  failure  or interruption of service.

     The Tenant will indemnify and  save harmless the Landlord
from and against all fines, liability, damage suits,  claims,
demands  and  actions of any kind or nature which the Landlord
shall or may become liable for or suffer by reason of any
breach, violation or non-performance by the Tenant of any
covenant, term or provision hereof or by reason of any injury
(including death resulting at any time therefrom) or damage
to property occasioned to or suffered  by  any person or
persons including the Landlord by reason of any such breach,
violation  or  non-performance  or  of  any wrongful act,
neglect, or default on the part of the Tenant or any of its
employees  or officers.

40.  CONDITION OF PREMISES

     Within  sixty  (60) days of occupancy, the Tenant shall
notify the Landlord  of any defects and faults in the Premises
as a result of the Landlord's work, and failing the  giving  of
notice,  the  Tenant  shall  be  deemed to be
satisfied with the Landlord's work and to have accepted same in
the  then existing condition and the Landlord shall not have
any further obligations with  respect  to  any  defects  and
faults  or  anything  related to the Landlord's work, except
for structural or latent defects and items covered by the
warranty of third parties.

41.  OUTSIDE AREAS

     The Tenant shall not use any part of the exterior parking
and  loading areas or any  other  areas  outside the Leased
Premises for any purpose other  than parking, shipping or
receiving in the areas designated by the Landlord for same.

42.  PERMITS, ETC.

     The Tenant shall obtain  all  necessary  permits  and
licenses required for the occupancy and carrying on of its
business.

43.  HEATING

     Tenant shall suitably heat the Leased Premises at its
own cost and expense.


<PAGE>

                                    - 34 -
44.  SIGNS

     The Tenant or subtenant shall be entitled to install
on  the  leased  Premises  such  signs  as  are  normally
installed in connection with its business, provided such
signs comply with municipal  by-laws and are approved by the
Landlord  in accordance with its criteria, which  approval
shall  not  be unreasonably  withheld.  The sign may be
attached to the upper part of the building. Installation, if
approved,  will  be at the sole expense of the Tenant. At the
expiration of this lease, Tenant  shall remove its signs at
its own cost. Tenant shall be responsible for any and all
damages incurred by  the  removal  of  its  signs, and shall
restore that  portion  of  the building or the Property to
its original condition.

45.  RIGHT OF ENTRY

     Upon a twenty-four (24) hour  notice,  the  Landlord
shall  have  the right to exhibit  the  Property  from  time
to  time to any prospective mortgagee, purchaser or Tenant at
all reasonable hours.

     The Tenant hereby renounces to Article 1885 of the Civil Code.

     Landlord shall have the right at all times  during  the
Term of this lease to  place upon the Leased Premises a notice
of reasonable  dimensions  and
reasonably  placed  so  as  not  to interfere with the business
of Tenant, stating that the Leased Premises are  for  sale  and,
for  six (6) months prior to the end of the Term, Landlord
shall have the right to place upon the Leased Premises a similar
notice that the Leased Premises are for rent and  Tenant  will
not remove such notice or knowingly permit same to  be removed.

46.  DISTURBANCE

     The Tenant will not hold the Landlord in any way
responsible for any damages or annoyance which the Tenant
tray sustain through the fault of any Tenant or Tenants who
occupy any premises  adjacent  to,  near  or  above the Leased
Premises, and not use the Leased Premises for any purpose,
notwithstanding anything  state  herein,  which  may  cause
noise, disturbance or  noxious odours.  to  the  discomfort
of  other tenants and neighbours, and renounces  to any
claims he may have or acquire against the Landlord under
Article 1861 of the Civil Code of the Province of Quebec.
Notwithstanding the above, the Landlord will use its best
efforts

<PAGE>

                                    - 35 -

    to resolve any disturbances caused by any other
tenants or neighbours.

47.  NOTICE AND DEMANDS

     Any notice or  demand given by the Landlord to the
Tenant shall be deemed to be duly  given when  served  upon
the  Tenant  personally,  or  when  mailed (registered)  to
the Tenant at the address of the premises, provided that
the notice is addressed  to  the attention of the President
with a copy to the Corporate Secretary. The Tenant elects
domicile at the Leased Premises for the purpose of service of
all notices, writs of summons or other legal documents in any
suit at law,  action or proceeding which the Landlord may
take under this lease.

     Any notice or demand given by the Tenant to the Landlord
shall be deemed to be duly given when served upon the
Landlord  personally  or when mailed (registered) to the
Landlord at the address designated by the Landlord for
purposes of payment of rent hereunder.

48.  RULES AND REGULATIONS

     The  Landlord  shall have the right at its discretion
to make reasonable  rules and regulations  not contrary to
the spirit and intent of this lease which may from time to time
be  needful  for  the safety, care, cleanliness and
proper administration of the Property including  the
Leased Premises, and for the preservation of good order
therein, and the same  be  observed and performed by the
Tenant and by the clerks, servants, employees, agents and
customers  of  the  Tenant,  and  all  such  rules and
regulations now  or hereafter to be established by the
Landlord as  herein provided shall form
part of this lease as if now set forth at length herein.

49.  PUBLICATION

     The rights resulting from the present Lease may be
published against the title to  the  Property,  by  way  of
a  summary to which shall be  annexed  an
abbreviated  form of the Lease, which  shall  not  contain
any  financial information  in   order  to  keep  such
financial information from the public.  The said abbreviated
lease  and  summary forms shall be prepared and  completed
by  the Tenant who shall submit  them  for  prior  written
approval by the

<PAGE>

                                    - 36 -
     Landlord or its legal  counsel  prior  to  depositing
same at the registry  office for publication. The provisions
of this Lease shall take precedence over the provisions of
the abbreviated lease which shall be executed by the parties
for publication reasons only. The publication costs  and  the
costs for providing copy of the said summary to the Landlord
shall also be at the  Tenant's  expense.  Should  this  Lease
be  published by way of a summary,  the Tenant shall, at the
termination of the Lease,  cause  the registration of such
summary to be cancelled at its expense, failing which the
Landlord will have the right to cause such cancellation and
charge the Tenant with the cost of same.

50.  WASTE OR GARBAGE

     The Tenant agrees that it  will  keep  the  Leased Premises
in a clean and tidy condition and will not permit waste paper,
garbage,  ashes,  waste, debris or  other  objectionable
material  to  accumulate  thereon. Tenant  shall
arrange for removal and disposal of waste or garbage at its
sole expense.

51.  ODOURS, DUST OR NOISE

     The  Tenant  warrants that no noxious odours, dust or
unreasonable  noise  will emanate from the  Leased  Premises
as a result of the operations conducted by the Tenant therein
and Tenant  further covenants that it will not cause
or maintain any nuisance in, at or  on  the  Leased  Premises
and/or the Property.  Accordingly,  the Tenant agrees that
should such noxious odour, dust, or noise conditions  exist,
it  will, at its own expense, take such steps as may be
necessary to rectify tire  same,  provided further that if
the Tenant shall fail to commence to do so within forty-eight
(48)  hours and complete the same within a reasonable time
after notice is received by the Tenant from Landlord,
then  the  Landlord  tray, at its option and
without prejudice to its other rights or recourses:

     (a)  notify Tenant that it must shut down all its
operations in the Leased  Premises; and

     (b)  Landlord may proceed forthwith to take reasonable
measures to correct the situation and the Landlord shall be
entitled  to  cover  the cost  thereof  from  the  Tenant
forthwith  upon demand,  plus  an administrative fee of
fifteen percent (15%) for doing so, which shall

<PAGE>

                                    - 37 -

         be charged to Tenant as additional rent, such cost
to  be considered  as Additional Rental hereunder.

52.  MANAGEMENT OF PROPERTY

     The Landlord shall have the right to have the Property
managed  by  a  property management corporation that it
designates in writing from time to time.

53.  CUMULATIVE REMEDIES

     No  reference  to  or  exercise of any specific right
or remedy by the Landlord shall preclude the Landlord  from
or prejudice the Landlord in exercising any  other  right
under  this  lease in  pursuing  any  other  remedy  or
maintaining any action to which it may otherwise be entitled
at law.

54.  ACCORD AND SATISFACTION

     No payment by the Tenant or receipt by the Landlord of
a lesser amount other than the monthly payment of Minimum Net
Net Rental  is  to be construed as  other than on account of
the earliest stipulated Minimum  Net  Net  Rental
and/or  Property  Expense  rental  and/or  Additional Rental
nor  is any endorsement  or  statement  on  any  cheque or
any letter accompanying any cheque  or payment as rent to be
considered  in  acknowledgement  of  full payment or an accord
and satisfaction, and the Landlord may accept payment
and cash  cheques without prejudice to the Landlord's right
to recover the balance of the rent or pursue its other
remedies.

55.  WAIVER OF COMPENSATION

     The Tenant  hereby waives and renounces any and all
existing and future claims, offsets and compensation against
any Minimum Net Net Rental and Additional Rental or other
amounts  due hereunder and agrees to pay such Minimum Net
Net Rental and Additional Rental  and  other  amounts
regardless  of  any claim,  offset  or  compensation which
may be asserted by the Tenant or on its behalf.

<PAGE>

                                    - 38 -


56.  ACCESS

     Upon a twenty-four (24)  hour  notice  (except  in  an
emergency), the Landlord shall have the right of access to the
Leased Premises only during business hours except in an
emergency, to perform such work as  it  chooses  to  do
upon the Leased Premises, the Tenant renouncing any claim to
any indemnity or  diminution  of  rent  provided the same be
carried out with reasonable diligence.

57.  FLOOR LOADING

     Tenant shall not bring upon  the  Leased  Premises  or
any  part  thereof  any machinery,  equipment,  article  or
thing that by reason of its weight or size might damage the
Leased Premises  and  will  not at any time overload
the  floors  of the Leased Premises and if any damage  is
caused  to  the Leased Premises  by  any  machinery,
equipment,  article  or  thing or by overloading or by any
act, neglect or misuse on the part of Tenant  or any
of  its  servants,  agents or employees or any person having
business with Tenant, Tenant will forthwith  pay to Landlord
the cost of making good the same.

58.  SUCCESSORS AND ASSIGNS

     This  lease  binds  and  benefits  the  parties  and
their  respective  heirs, executors, administrators,
successors  and  assigns  as  limited  in  this lease.

59.  DESCRIPTIVE HEADINGS

     The  descriptive headings of this lease are inserted
for  convenience in reference for possible registration
purposes only and do not constitute  a part of this lease.

60.  INTERPRETATION

     This  lease  shall  be  construed  and  governed by the
laws of the Province of Quebec. Should any of the provisions
of this  least  and/or its conditions be illegal or not
enforceable under the laws of the Province of Quebec, it
or they shall be considered severable and the lease and
its  conditions shall remain  in  force and be binding upon
the parties as though the said provisions or conditions had
never been included.

<PAGE>

                                    - 39 -


61.  WAIVER OF RESPONSIBILITY

     Landlord and Tenant shall not be liable for failure or
delays in performing any of their obligations hereunder,
should such failure or delays be caused by fire or other
casualty,  war, disaster, riots, strikes, walk-outs, acts of
God,  or other causes, except  monetary  inability  beyond
Landlord's  or Tenant's reasonable control.

62.  LANGUAGE

     The Tenant  hereby  confirms that it has requested that
the present document be drafted in the English  language.
Le Locataire certifie qu'il a requis que
les presentes soient redigees en anglais.



IN WITNESS WHEREOF THE PARTIES  HERETO  HAVE SIGNED THE
FOREGOING DEED OF LEASE AT THE DATE AND PLACE
HEREINABOVE MENTIONED.



                         LIBERTY SITES LTD.



/s/Helga Steiner         Per: /s/Sandra Levy
Witness:                      Sandra Levy



                           CONSOLTEX INC.



/s/Caroline Dandavino     Per: /s/Jean Talbot
Witness:                      Jean Talbot


                         Per: /s/C. Suzanne Crawford
                              C. Suzanne Crawford





<PAGE>



EXTRACT OF A RESOLUTION OF THE BOARD OF DIRECTORS  OF
CONSOLTEX INC. CONSENTED TO BY ALL OF THE DIRECTORS OF THE
COMPANY AS OF THE FIRST  (1ST)  DAY  OF APRIL 1995.



BE IT RESOLVED AND TT IS HEREBY RESOLVED:



     THAT  this  Corporation  lease  from  Liberty  Sites
Ltd. a portion of the building  to  be  built  by  Liberty
Sites  Ltd. and to be  situated  at  8555  Trans-Canada
Highway,  in  the  City  of  St.  Laurent,  Province  of
Quebec, containing an office area of approximately
thirty-seven  thousand  five hundred
square feet (37,500 sq.ft.) for a term of fifteen (15)
years and six (6) months commencing on July 1, 1995,
together with one (1) option to renew of  five  (5)
years,  the  whole  pursuant  to  the  terms  of  a draft
lease approved by the directors;



     THAT  Jean Talbot, the Senior Vice President, Finance
and  Administration and C. Suzanne  Crawford,  the Director,
Legal Affairs and Corporate Secretary,
be and are hereby authorized to execute the lease, and to
furthermore sign such further documents and do such  things
that  may  be necessary or incidental in connection with the
foregoing.



     TRUE copy of a resolution of Consoltex Inc. adopted on
the 26{th} day of April, 1995, in  full compliance  with
the relevant provisions  of  the articles and by-laws of
the Corporation,  which resolution is presently in
force, without amendment.



CERTIFIED in Montreal as of the 26{th} day of April, 1995.




                    Name: /s/C. Suzanne Crawford
                          C. Suzanne Crawford











<PAGE>
                                                  EXHIBIT 10.6


       AGREEMENT OF LEASE FOR THE BALSON-HERCULES GROUP LTD.
    =========================================================


STANDARD FORM OF LOFT LEASE
The Real Estate Board of New York, Inc.
Copyright 1982.  All Rights Reserved.
Reproduction in whole or in part prohibited.

AGREEMENT  OF  LEASE,  MADE   AS  OF THIS 3{RD} DAY OF MAY,
1996,   BETWEEN   ROSENTHAL   ASSOCIATES    (A   NEW   YORK
PARTNERSHIP), EDYTHE GLADSTEIN, RHODA HERRICK AND ROBERT M.
ROSENTHAL, EACH HAVING AN OFFICE C/O ROSENTHAL  ASSOCIATES,
1040  AVENUE  OF  THE  AMERICAS,  NEW YORK, NEW YORK 10018,
PARTY OF THE FIRST PART, HEREINAFTER  REFERRED TO AS OWNER,
AND  THE  BALSON-HERCULES  GROUP,  LTD.,  A   RHODE  ISLAND
CORPORATION, HAVING AN OFFICE AT 30 IRVING PLACE, NEW YORK,
NEW  YORK  10003,  PARTY  OF  THE  SECOND PART, HEREINAFTER
REFERRED TO AS TENANT.

<PAGE>

WITNESSETH:   Owner  hereby  leases to  Tenant  and  Tenant
hereby hires from Owner the entire  rentable space on sixth
(6th) floor (as depicted on the floor  plan  annexed hereto
as  Exhibit  "A"  and  made a part hereof) in the  building
known as 1040 Avenue of  the  Americas  (the "Building") in
the Borough of Manhattan, City of New York, for the term to
commence on June 1, 1996 (the "Commencement  Date")  and to
end  on  August 31,  2006 (the "Expiration Date") (or until
such term shall sooner cease and expire as
hereinafter  provided)  both  dates  inclusive, at the
annual  rental  rates set forth in Article  41  hereof
which Tenant agrees  to  pay  in  lawful  money of the
United
States which shall be legal tender in payment  of  all
debts  and  dues,  public  and private, at the time of
payment, in equal monthly installments  in  advance on
the first day of each month during said term,  at  the
office  of  Owner  or  such  other  place as Owner may
designate,   without   any   set   off   or  deduction
whatsoever,  except  that  Tenant shall pay the  first
monthly  instalment  on the execution  hereof  (unless
this lease be a renewal).

<PAGE>

     In the event that,  at the commencement of the term of
this lease, or the reafter
Tenant shall be in default  in the payment of rent to Owner
pursuant to the terms of
another  lease with Owner or with  Owner's  predecessor  in
interest, Owner may at
Owner's option  and without notice to Tenant add the amount
of such arrears to any
monthly instalment  of  rent payable hereunder and the same
shall be payable to
Owner as additional rent.
     The  parties  hereto,  for  themselves,  their  heirs,
distributees, executors,
administrators,  legal   representatives,   successors  and
assigns, hereby covenant as
follows:


Occupancy:
1.   Tenant shall pay the rent as above and as  hereinafter
provided.

USE:

2.   TENANT  SHALL  USE  AND  OCCUPY  DEMISED PREMISES  FOR
EXECUTIVE AND ADMINISTRATIVE OFFICES PROVIDED  SUCH  USE IS
IN  ACCORDANCE  WITH  THE  CERTIFICATE OF OCCUPANCY FOR THE
BUILDING, IF ANY, AND FOR NO OTHER PURPOSE.
ALTERATIONS:

<PAGE>

3.   Tenant shall make no changes  in  or  to  the  demised
premises  of  any  nature  without  Owner's  prior  written
consent.   Subject  to  the prior written consent of Owner,
and to the provisions of  this  article, Tenant at Tenant's
expense, may make alterations, installations,  additions or
improvements  which  are  non-structural and which  do  not
affect utility services or  plumbing  and electrical lines,
in  or  to  the  interior  of  the  demised premises  using
contractors or mechanics first approved  by  Owner.  Tenant
shall,  as  its  expense,  before  making  any alterations,
additions,   installations   or  improvements  obtain   all
permits,  approval  and  certificates   required   by   any
governmental   or   quasi-governmental   bodies  and  (upon
completion)  certificates  of  final approval  thereof  and
shall  deliver promptly duplicates  of  all  such  permits,
approvals  and  certificates  to  Owner.   Tenant agrees to
carry   and  will  cause  Tenant's  contractors  and   sub-
contractors  to  carry such workman's compensation, general
liability, personal  and property damage insurance as Owner
may require.  If any mechanic's  lien  is filed against the
demised premises, or the building of which the same forms a
part, for work claimed to have been done  for, or materials
furnished to, Tenant, whether or not done pursuant  to this
article,  the  same  shall  be  discharged by Tenant within
thirty days thereafter, at Tenant's  expense, by filing the
bond required by law or otherwise.  All  fixtures  and  all
paneling,  partitions,  railings  and  like  installations,
installed in the premises at any time, either  by Tenant or
by  Owner  on  Tenant's  behalf,  shall, upon installation,
become the property of Owner and shall  remain  upon and be
surrendered  with  the  demised  premises unless Owner,  by
notice to Tenant no later than twenty  days  prior  to  the
date  fixed  as  the  termination  of this lease, elects to
relinquish Owner's right thereto and  to  have them removed
by  Tenant, in which event the same shall be  removed  from
the demised  premises  by Tenant prior to the expiration of
the lease, at Tenant's expense.   Nothing  in  this Article
shall  be  construed  to give Owner title to or to  prevent
Tenant's  removal  of  trade  [fixtures],  moveable  office
furniture and equipment,  but upon removal of any such from
the premises or upon removal  of other installations as may
be required by Owner.  Tenant shall  immediately and at its
expense, repair and restore the premises  so  the condition
existing prior to installation and repair any damage to the
demised premises or the building due to such removal.   All
property  permitted or required to be removed, by Tenant at
the  end of  the  term  remaining  in  the  premises  after
Tenant's  removal shall be deemed abandoned and may, at the
election of  Owner,  either be retained as Owner's property
or removed from the premises by Owner, at Tenant's expense.

<PAGE>

Repairs:

4.   Owner shall maintain  and  repair  the exterior of and
the  public  portions  of  the  building.   Tenant   shall,
throughout  the  term  of this lease, take good care of the
demised  premises  including  the  bathrooms  and  lavatory
facilities (if the demised  premises  encompass  the entire
floor  of  the building) and the windows and window  frames
and the fixtures  and appurtenances therein and at Tenant's
sole costs and expense  promptly  make  all repairs thereto
and  to the building, whether structural or  non-structural
in nature, caused by or

resulting  from  the  carelessness,  omission,  neglects or
improper  conduct  of Tenant, Tenant's servants, employees,
invitees, or licensees,  and  whether  or  not arising from
such  Tenant  conduct or omission, when required  by  other
provisions of this lease, including Article 6, Tenant shall
also repair all  damage  to  the  building  and the demised
premises   caused  by  the  moving  of  Tenant's  fixtures,
furniture or equipment.  All the aforesaid repairs shall be
of  quality  of   class  equal  to  the  original  work  or
construction.  If Tenant  fails,  after ten days notice, to
proceed with due diligence to make  repairs  required to be
made  by Tenant, the same may be made by the Owner  at  the
expense  of  Tenant,  and  the expenses thereof incurred by
Owner  shall  be collectible,  as  additional  rent,  after
rendition of a  bill or statement therefor.  If the demised
premises be or become  infested  with vermin, Tenant shall,
at its expense, cause the same to  be exterminated.  Tenant
shall give Owner prompt notice of any  defective  condition
in any plumbing, heating system or electrical lines located
in  the demised premises and following such notice.   Owner
shall  remedy  the condition with due diligence, but at the
expense of Tenant, if repairs are necessitated by damage or
injury attributable  to Tenant.  Tenant's servants, agents,
employees, invitees or  licensees  as aforesaid.  Except as

<PAGE>

specifically  provided in Article 9 or  elsewhere  in  this
lease, there shall  be  no  allowance  to  the Tenant for a
diminution of rental value and no liability  on the part of
Owner  by reason of inconvenience, annoyance or  injury  to
business  arising  from  Owner,  Tenant or others making or
failing  to  make  any repairs, alterations,  additions  or
improvements in or to  any  portion  of the building or the
demised  premises or in and to the fixtures,  appurtenances
or equipment  thereof.   The  provisions  of this Article 4
with respect to the making of repairs shall  not  apply  in
the  case  of  fire  or other casualty with regard to which
Article 9 hereof shall apply.

Window Cleaning:

5.   Tenant will not clean  nor  require, permit, suffer or
allow any window in the demised premises to be cleaned from
the outside in violation of Section  202  of  the  New York
State Labor Law or any other applicable law or of the Rules
of the Board of Standards and Appeals or of any other Board
or body having or asserting jurisdiction.

Requirements of Law, Fire Insurance, Floor Loads:

<PAGE>

6.   Prior to the commencement of the lease term, if Tenant
is then in possession, and at all times thereafter,  Tenant
shall,  at  Tenant's sole cost and expense, promptly comply
with all present and future laws, orders and regulations of
all  state,  federal,   municipal  and  local  governments,
departments, commissions  and  boards  and any direction of
any public officer pursuant to law, and  all  orders, rules
and regulations of the New York Board of Fire Underwriters,
or the Insurance Services Office, or any similar body which
shall  impose  any violation, order or duty upon  Owner  or
Tenant with respect to the demised premises, whether or not
arising out of Tenant's  use  or manner of use thereof, or,
with respects to the building,  if  arising out of Tenant's
use  or  manner  of  use  of  the demised premises  or  the
building  (including the use permitted  under  the  lease).
Except as provided  in  Article  30  hereof, nothing herein
shall  require  Tenant  to  make  structural   repairs   or
alterations  unless Tenant has, by its manner of use of the
demised premises  or  method of operation therein, violated
any such laws, ordinances,  orders,  rules,  regulations or
requirements with respect thereto.  Tenant shall  not do or
permit  any  act  or  thing to be done in or to the demised
premises which is contrary to law, or which will invalidate
or be in conflict with  public  liability,  fire  or  other
policies  of  insurance  at  any time carried by or for the
benefit of Owner, Tenant shall  not  keep  anything  in the
demised  premises  except as now or hereafter permitted  by
the  Fire Department,  Board  of  Fire  Underwriters,  Fire
Insurance  rating  Organization  and other authority having
jurisdiction,  and  then  only  in  such  manner  and  such
quantity so as not to increase the rate  for fire insurance
applicable  to  the  building,  nor use the premises  in  a
manner  which  will  increase the insurance  rate  for  the
building  or any property  located  therein  over  that  in
effect prior to the commencement of Tenant's occupancy.  If
by reason of  failure to comply with the foregoing the fire
insurance rate  shall, at the beginning of this lease or at
any time thereafter,  be higher than it otherwise would be,
then  Tenant  shall reimburse  Owner,  as  additional  rent
hereunder, for  that portion of all fire insurance premiums
thereafter paid by  Owner  which  shall  have  been charged

<PAGE>

because  of  such  failure  by  Tenant.   In any action  or
proceeding wherein Owner and Tenant are parties, a schedule
or  "make-up" or rate for the building or demised  premises
issued  by a body making fire insurance rates applicable to
said premises  shall  be  conclusive  evidence of the facts
therein stated and of the several items  and charges in the
fire  insurance  rates  then  applicable to said  premises.
Tenant shall not place a load upon any floor of the demised
premises  exceeding the floor load  per  square  foot  area
which it was designed to carry and which is allowed by law.
Owner reserves  the  right  to  prescribe  the  weight  and
position  of  all  safes,  business machines and mechanical
equipment.   Such  installations   shall   be   placed  and
maintained  by  Tenant,  at  Tenant's  expense,  in setting
sufficient,  in  Owner's  judgement,  to absorb and prevent
vibration, noise and annoyance.

Subordination:

7.    This lease is subject and subordinate  to  all ground
or underlying leases and to all mortgages which may  now or
hereafter  affect such leases or the real property of which
demised  premises   are   a   part  and  to  all  renewals,
modifications, consolidations,  replacements and extensions
of any such underlying leases and  mortgages.   This clause
shall  be  self-operative  and  no  further  instrument  or
subordination shall be required by any ground or underlying
lessor or by any mortgagee, affecting any lease or the real
property  of  which  the  demised premises are a part.   In
confirmation of such subordination,  Tenant  shall  execute
promptly any certificate that Owner may request.

Property - Loss, Damage, Reimbursement, Indemnity:

8.    Owner  or  its  agents  shall  not  be liable for any
damage  to  property  of Tenant or of others entrusted   to
employees of the building, not for loss of or damage to any
property of Tenant by thefts  or  otherwise,  nor  for  any
injury  or damage to persons or property resulting from any
cause of  whatsoever nature, unless caused by or due to the
negligence  of  Owner,  its  agents, servants or employees:
Owner or its agents shall not  be  liable  for  any  damage
caused  by  other tenants or persons in, upon or about said
building or caused  by  operations  in  connection  of  any
private,  public  or quasi public work.  If at any time any
windows of the demised  premises  are  temporarily  closed,
darkened  or  bricked  up (permanently closed, darkened  or

<PAGE>

bricked up, if required  by  law) for any reason whatsoever
including,  but not limited to  Owner's  own  acts.   Owner
shall not be  liable  for  any  damage  Tenant  may sustain
thereby   and   Tenant   shall   not  be  entitled  to  any
compensation therefor nor abatement  or  diminution of rent
nor  shall  the  same  release Tenant from its  obligations
hereunder  nor  constitute   an   eviction.   Tenant  shall
indemnify  and  save harmless Owner against  and  from  all
liabilities, obligations, damaged, penalties, claims, costs
and expenses for  which  Owner  shall  not be reimbursed by
insurance,  including  reasonable  attorney's  fees,  paid,
suffered or incurred as a result of  any  breach by Tenant,
Tenant's  agents,  contractors,  employees,  invitees,   or
licensees,  of  any covenant or condition of this lease, or
the carelessness,  negligence  or  improper  conduct of the
Tenant,  Tenant's Agents, contractors, employees,  invitees
or licensees.   Tenant's liability under this lease extends
to the acts and omissions of any sub-tenant, and any agent,
contractor, employee,  invitee  or  licensee  of  any  sub-
tenant.   In  case  any  action  or  proceeding  is brought
against  Owner  by  reason of any such claim, Tenant,  upon
written  notice  from Owner,  will,  at  Tenant's  expense,
resign  or defend such  action  or  proceeding  by  counsel
approved  by  Owner  in  writing,  such  approval not to be
unreasonably withheld.

Destruction, Fire and Other Casualty:

9.    (a) If the demised premises or any part thereof shall
be  damaged  by fire or other casualty, Tenant  shall  give
immediate notice  thereof  to  Owner  and  this lease shall
continue in full force and effect except as hereinafter set
forth.   (b) If the demised premises are partially  damaged
or rendered  partially  unusable by fire or other casualty,
the damages thereto shall be repaired by and at the expense
of  Owner  and  the  rent,  until   such  repair  shall  be
substantially completed, shall be apportioned  from the day
following  the  casualty  according  to  the  part  of  the
premises which is usable.  (c) If the demised premises  are
totally  damaged  or  rendered  wholly  unusable by fire or
other casualty, then the rent shall be proportionately paid
up to the [time] the date when the premises shall have been
repaired and restored by Owner, subject to Owner's right to
elect not to restore the same as hereinafter provided.  (d)
If  the  demised premises are rendered wholly  unusable  or

<PAGE>

(whether or  not  the demised premises are damaged in whole
or in part) if the  building shall be so damaged that Owner
shall decide to demolish  it  or to rebuild it, then in any
of such events, Owner may elect  to terminate this lease by
written notice to Tenant, given within  90  days after such
fire  or casualty, specifying a date for the expiration  of
the lease,  which date shall not be more than 60 days after
the giving of  such  notice, and upon the date specified in
such notice the term of  this  lease  shall expire as fully
and  completely  as if such date were the  date  set  forth
above for the termination  of  this  lease and Tenant shall
forthwith quit, surrender and vacate the  premises  without
prejudice  however,  to Owner's rights and remedies against
Tenant under the lease  provisions  in effect prior to such
termination, and any rent owing shall  be  paid  up to such
date and any payments of rent made by Tenant which  were on
account  of  any  period  subsequent  to such date shall be
returned to Tenant.  Unless Owner shall serve a termination
notice  as  provided  for  herein.   Owner shall  make  the
repairs and restorations under the conditions  of  (b)  and
(c)  hereof,  with  all  reasonable  expedition, subject to
delays  due  to  adjustment  of  insurance   claims,  labor
troubles and causes beyond Owner's control.  After any such
casualty,  Tenant shall cooperate with Owner's  restoration
for removing  from  the  premises as promptly as reasonably
possible, all of Tenant's salvageable inventory and movable
equipment,  furniture,  and   other   property.    Tenant's
liability for rent shall resume five (5) days after written
notice from Owner that the premises are substantially ready
for  Tenant's occupancy.  (e) Nothing contained hereinabove
shall  relieve  Tenant  from  liability that may exist as a
result   of   damage   from   fire   or   other   casualty.
Notwithstanding the foregoing, each party shall  look first
to  any  insurance  in  its  favor  before making any claim
against the other party for recovery  for  loss  or  damage
resulting  from  fire  or other casualty, and to the extent
that such insurance is in  force and collectible and to the
extent  permitted by law.  Owner  and  Tenant  each  hereby
releases and waives all right of recovery against the other
or any one claiming through or under each of them by way of
subrogation or otherwise.  The foregoing release and waiver
shall  be  in  force  only  if  both  releasors'  insurance
policies  contain a clause providing that such a release or

<PAGE>

waiver shall  not invalidate the insurance.  If, and to the
extent, that such  waiver  can  be  obtained  only  by  the
payment  of  additional premiums, then the parts benefiting
from the waiver  shall  pay  such  premium  within ten days
after written demand or shall be deemed to have agreed that
the party obtaining insurance coverage shall be free of any
further obligation under the provisions hereof with respect
to waiver of subrogation.  Tenant acknowledges  that  Owner
will  not  carry  insurance  on  Tenant's  furniture and or
furnishings or any fixtures or equipment, improvements,  or
appurtenances  removable  by  Tenant  and agrees that Owner
will  not  be  obligated  to repair any damage  thereto  or
replace the same.  (f) Tenant  hereby waives the provisions
of Section 227 of the Real Property Law and agrees that the
provisions of this article shall govern and control in lieu
thereof.

Eminent Domain:

10.   If  the  whole or any part of  the  demised  premises
shall be acquired  or  condemned  by Eminent Domain for any
public or quasi public use or purpose,  then  and  in  that
event,  the  term  of  this lease shall cease and terminate
from  the  date of title vesting  in  such  proceeding  and
Tenant shall  have  no claim for the value of any unexpired
term of said lease.

Assignment, Mortgage, Etc.:

11.   Tenant,   for  itself,   its   heirs,   distributees,
executors,    administrators,     legal    representatives,
successors and assigns, expressly covenants  that  it shall
not  assign,  mortgage  or  encumber  this  agreement,  nor
underlet,  or  suffer or permit the demised premises or any
part thereof to  be  used  by  others,  without  the  prior
written consent of Owner in each instance.  Transfer of the
majority of the stock of a corporate Tenant shall be deemed
an  assignment.   If  this  lease  be  assigned,  or if the
demised  premises  or  any  part  thereof  be  underlet  or
occupied  by  anybody  other  than Tenant, Owner may, after
default by Tenant, collect rent  from  the  assignee, under
tenant or occupant, and apply the net amount  collected  to

<PAGE>

the   rent   herein   reserved,  but  no  such  assignment,
underletting, occupancy  or  collection  shall  be deemed a
waiver of this covenant, or the acceptance of the assignee,
under tenant or occupant as tenant, or a release  of Tenant
from the further performance by Tenant of covenants  on the
part of Tenant  herein contained.  The consent by Owner  to
an  assignment  or  underletting  shall  not in any wise be
construed  to  relieve  Tenant from obtaining  the  express
consent in writing of Owner  to  any  further assignment or
underletting.

Electric Current:

12.   Rates  and  conditions in respect to  submetering  or
rent inclusion, as  the  case  may be, to be added in RIDER
attached hereto.  Tenant covenants  and  agrees that at all
times  its  use  of electric current shall not  exceed  the
capacity of existing  leaders to the building or the risers
of  wiring  installation   and   Tenant  may  not  use  any
electrical equipment which, in Owner's  opinion, reasonably
exercised,  will overload such installations  or  interfere
with the use thereof by other tenants of the building.  The
change at any  time  of  the  character of electric service
shall  in  no  wise  make Owner liable  or  responsible  to
Tenant, for any loss,  damages or expenses which Tenant may
sustain.

Access to Premises:

13.   Owner or Owner's agents  shall  have  the  right (but
shall  not  be obligated) to enter the demised premises  in
any emergency  at  any time, and, at other reasonable times
on reasonable notice  to  examine the same and to make such
repairs, replacements and improvements  as  Owner  may deem
necessary  and  reasonably desirable to any portion of  the
building  or which  Owner  may  elect  to  perform  in  the
premises after  Tenant's failure to make repairs or perform
any work which Tenant  is  obligated  to perform under this

<PAGE>

lease,  or  for  the  purpose  of  complying   with   laws,
regulations    and   other   directions   of   governmental
authorities.  Tenant shall permit Owner to use and maintain
and replace pipes  and  conduits in and through the demised
premises  and  to  erect new  pipes  and  conduits  therein
provided,  wherever possible,  they  are  within  walls  or
otherwise concealed.  Owner may, during the progress of any
work in the  demised premises, take all necessary materials
and  equipment   into   said   premises  without  the  same
constituting an eviction nor shall  the  Tenant be entitled
to any abatement of rent while such work is in progress nor
to  any  damages  by  reason  of  loss  or interruption  of
business or otherwise.  Throughout the term  hereof,  Owner
shall  have  the  right  to  enter  the demised premises at
reasonable  hours for the purpose of showing  the  same  to
prospective purchasers  or  mortgagees of the building, and
during the last six months of  the  term for the purpose of
showing  the same to prospective tenants  and  may,  during
said six months  period,  place upon the premises the usual
notices "To Let" and "For Sale"  which notices Tenant shall
permit to remain thereon without molestation.  If Tenant is
not present to open and permit an  entry into the premises.
Owner or Owner's agents may enter the  same  whenever  such
entry  may  be  necessary  or  permissible by master key or
forcibly  and  provided reasonable  care  is  exercised  to
safeguard Tenant's  property,  such  entry shall not render
Owner or its agents liable therefor, nor in any event shall
the obligations of Tenant hereunder be affected.  If during
the last month of the term Tenant shall have removed all or
substantially  all of Tenant's property  therefrom.   Owner
may immediately  enter,  alter,  renovate or redecorate the
demised premises without limitation  or  abatement of rent,
or  incurring liability to Tenant for any compensation  and
such  act  shall  have  no effect on this lease of Tenant's
obligations hereunder.

<PAGE>

Vault, Vault Space, Area:

14.   No  Vaults,  vault space  or  area,  whether  or  not
enclosed or covered,  not  within  the property line of the
building  is  leased hereunder, anything  contained  in  or
indicated on any  sketch,  blue  print or plan, or anything
contained  elsewhere  in  this  lease   to   the   contrary
notwithstanding.   Owner  makes  no  representation  as  to
location  of the property line of the building.  All vaults
and vault space  and all such areas not within the property
line of the building,  which Tenant may be permitted to use
and/or  occupy  is  to  be used  and/or  occupied  under  a
revocable license, and if  any  such license be revoked, or
if  the  amount  of  such space or area  be  diminished  or
required by any federal,  state  or  municipal authority or
public  utility.   Owner  shall  not  be  subject   to  nay
liability  nor shall Tenant be entitled to any compensation
or  diminution   or  abatement  of  rent,  nor  shall  such
revocation,   diminution    or    requisition   be   deemed
constructive or actual eviction.  Any tax, fee or charge of
municipal authorities for such vault  or area shall be paid
by Tenant, if used by Tenant, whether or  not  specifically
leased hereunder.

Occupancy:

15.   Tenant will not at any time use or occupy the demised
premises  in  violation  of  the  certificate  of occupancy
issued for the building of which the demised premises are a
part.   Tenant has inspected the premises and accepts  them
as is, subject to the riders annexed hereto with respect to
Owner's work,  if  any.   In  any  event,  Owner  makes  no
representation  as  to  the  condition  of the premises and
Tenant  agrees  to accept the same subject  to  violations,
whether or not of  record.   If any governmental license or
permit shall be required for the  proper and lawful conduct
of Tenant's business, Tenants shall  be responsible for and
shall procure and maintain such license or permit.

<PAGE>

Bankruptcy:

16.   (a) Anything elsewhere in this lease  to the contrary
notwithstanding, this lease may be cancelled  by  Owner  by
sending  of  a written notice to Tenant within a reasonable
time  after the  happening  of  any  one  or  more  of  the
following  events:   (1)  the  commencement  of  a  case in
bankruptcy or under the laws of any state naming Tenant  as
the  debtor  which  is not dismissed within 60 days  of the
commencement thereof;  or  (2)  the  making by Tenant of an
assignment  or  any other arrangement for  the  benefit  of
creditors under any  state statute.  Neither Tenant nor any
person claiming through  or  under  Tenant, or by reason of
any statute or order of court, shall thereafter be entitled
to possession of the premises demised  but  shall forthwith
quit  and surrender the premises.  If this lease  shall  be
assigned  in  accordance  with its terms, the provisions of
this Article 16 shall be applicable  only to the party then
owning Tenant's interest in this lease.

      (b) It is stipulated and agreed  that in the event of
the termination of this lease pursuant to (a) hereof, Owner
shall  forthwith, notwithstanding any other  provisions  of
this lease  to  the  contrary  be  entitled to recover from
Tenant as and for liquidated damages an amount equal to the
difference between the rental reserved  hereunder  for  the
unexpired  portion  of  the  term  demised and the fair and
reasonable  rental value of the demised  premises  for  the
same period.   In  the  computation  of  such  damages  the
difference  between  any  installment  of rent becoming due
hereunder after the date of termination  and  the  fair and
reasonable  rental  value  of the demised premises for  the
period  for which such installment  was  payable  shall  be

<PAGE>

discounted  to  the date of termination at the rate of four
percent (4%) per  annum.   If  such  premises  or  any part
thereof  be  relet  by the Owner for the unexpired term  of
said lease, or any part  thereof,  before  presentation  of
proof  of  such liquidated damages to any court, commission
or tribunal,  the  amounts  of  rent  reserved  upon   such
reletting  shall  be  deemed  to be the fair and reasonable
rental value for the part or the  whole  of the premises so
re-let  during the term of the re-letting.  Nothing  herein
contained  shall  limit or prejudice the right of the Owner
to prove for and obtain  as liquidated damages by reason of
such termination, an amount equal to the maximum allowed by
any statute or rule of law  in effect at the time when, and
governing the proceedings in  which, such damages are to be
proved, whether or not such amount be greater, equal to, or
less than the amount of the difference referred to above.

Default:

17.   (1)  If  Tenant defaults in  fulfilling  any  of  the
covenants of this  lease  other  than the covenants for the
payment  of  rent or additional rent;  or  if  the  demised
premises becomes  vacant  or  deserted "or if this lease be
rejected  under  s.  235  of Title  11  of  the  U.S.  Code
(bankruptcy code);" or if any execution or attachment shall
be  issued  against  Tenant or  any  of  Tenant's  property
whereupon the demised  premises  shall be taken or occupied
by  someone  other  than Tenant; or if  Tenant  shall  make
default with respect  to  any other lease between Owner and
Tenant; or if Tenant shall have failed, after five (5) days
written notice, to redeposit  with Owner any portion of the
security deposited hereunder which Owner has applied to the
payment of any rent and additional  rent  due  and  payable

<PAGE>

hereunder or failed to move into or take possession of  the
premises within fifteen (15) days after the commencement of
the  term  of  this lease, of which fact Owner shall be the
sole judge; then  in  any  one or more of such events, upon
Owner serving a written five  (5)  days  notice upon Tenant
specifying  the  nature  of  said  default  and   upon  the
expiration  of  said  five  (5)  days, if Tenant shall have
failed to comply with or remedy such  default,  or  if  the
said default or omission complained of shall be of a nature
that the same cannot be completely cured or remedied within
said  five  (5)  day  period,  and if Tenant shall not have
diligently commenced during such  default  within such five
(5)  day  period, and shall not thereafter with  reasonable
diligence and in good faith, proceed to remedy or cure such
default, then  Owner  may  serve  a written three (3) days'
notice of cancellation of this lease  upon Tenant, and upon
the expiration of said three (3) days this  lease  and  the
term   thereunder   shall  end  and  expire  as  fully  and
completely as if the  expiration  of  such  three  (3)  day
period were the day herein definitely fixed for the end and
expiration  of  this  lease and the term thereof and Tenant
shall then quit and surrender the demised premises to Owner
but Tenant shall remain liable as hereinafter provided.

      (2) If the notice  provided  for  in (1) hereof shall
have been given, and the term shall expire as aforesaid; or
if  Tenant shall make default in the payment  of  the  rent
reserved  herein  or  any  item  of  additional rent herein
mentioned  or  any part of either or in  making  any  other
payment herein required;  then  and  in  any of such events
Owner  may  without  notice, re-enter the demised  premises
either  by force or otherwise,  and  dispossess  Tenant  by
summary   proceedings   or   otherwise,   and   the   legal

<PAGE>

representative  of  Tenant  or  other  occupant  of demised
premises and remove their effects and hold the premises  as
if  this  lease had not been made, and Tenant hereby waives
the service  of  notice  of  intention  to  re-enter  or to
institute  legal  proceedings to that end.  If Tenant shall
make default hereunder  prior  to  the  date  fixed  as the
commencement  of  any  renewal  or extension of this lease.
Owner may cancel and terminate such  renewal  or  extension
agreement by written notice.

Remedies of Owner and Waiver of Redemption

18.   In  case  of  any  such default, re-entry, expiration
and/or  dispossess  by summary  proceedings  or  otherwise,
(a)  the  rent,  and  additional  rent,  shall  become  due
thereupon and be paid up  to  the  time  of  such re-entry,
dispossess  and/or  expiration,  (b)  Owner may re-let  the
premises or any part or parts thereof,  either  in the name
of  Owner or otherwise, for a term or terms, which  may  at
Owner's  option  be  less  than  or exceed the period which
would otherwise have constituted the balance of the term of
this lease and may grant concessions or free rent or charge
a higher rental than that in this  lease, (c) Tenant or the
legal representatives of Tenant shall  also  pay  Owner  as
liquidated damages for the failure or Tenant to observe and
perform  said  Tenant''  covenants  herein  contained,  any
deficiency   between   the  rent  hereby  reserved  and  or
covenanted to be paid and  the  net  amount, if any, of the
rents  collected  on  account  of the subsequent  lease  or

<PAGE>

leases of the demised premises for each month of the period
which would otherwise have constituted  the  balance of the
term  of  this  lease.  The failure of Owner to re-let  the
premises or any part  or parts thereof shall not release or
affect Tenant's liability  for  damages  in  computing such
liquidated  damages  there  shall  be  added  to  the  said
deficiency  such  expenses as Owner may incur in connection
with re-letting, such  as  legal expenses, attorneys' fees,
brokerage, advertising and for keeping the demised premises
in good order or for preparing  the  same  for  re-letting.
Any  such  liquidated  damages  shall  be  paid  in monthly
installments  by  Tenant on the rent day specified in  this
lease and any suit  brought  to  collect  the amount of the
deficiency for any month shall not prejudice in any way the
rights   of  Owner  to  collect  the  deficiency  for   any
subsequent  month  by  a  similar  proceeding.   Owner,  in
putting the demised premises in good order or preparing the
same  for  re-rental  may,  at  Owner's  option,  make such
alterations,  repairs, replacements, and/or decorations  in
the demised premises  as  Owner,  in Owner's sole judgment,
considers advisable and necessary for the purpose of
re-letting  the demised premises, and the making of such
alterations, repairs,  replacements,  and/or  decorations
shall not operate  or  be  construed to release Tenant from
liability hereunder as aforesaid.   Owner shall in no event
be liable in any way whatsoever for failure  to  re-let the
demised premises, or in the event that the demised premises
are  re-let, for failure to collect the rent thereof  under
such re-letting,  and  in no event shall Tenant be entitled
to receive any excess, if  any, of such net rents collected

<PAGE>

over the sums payable by Tenant to Owner hereunder.  In the
event of a breach or threatened  breach by Tenant of any of
the covenants or provisions hereof,  Owner  shall  have the
right  of  injunction  and  the  right to invoke any remedy
allowed  at  law  or  in  equity  as if  re-entry,  summary
proceedings  and other remedies were  not  herein  provided
for.  Mention in this lease of any particular remedy, shall
not preclude Owner  from  any  other  remedy,  in law or in
equity.  Tenant hereby expressly waives any and  all rights
of  redemption  granted  by  or under any present or future
laws.

Fees and Expenses

19.   If  Tenant  shall  default   in   the  observance  or
performance of any term or covenant on Tenant's  part to be
observed  or  performed  under  or by virtue of any of  the
terms or provisions in any article  of  this  lease,  then,
unless  otherwise  provided elsewhere in this lease.  Owner
may  immediately or at  any  time  thereafter  and  without
notice  perform  the  obligation  of Tenant thereunder.  If
Owner, in connection with the foregoing  or  in  connection
with  any  default  by  Tenant in the covenant to pay  rent
hereunder, makes any expenditures or incurs any obligations
for the payment of money,  including  but  not  limited  to
attorney's  fees,  in instituting, prosecuting or defending
any action or proceedings, then Tenant will reimburse Owner
for such sums so paid or obligations incurred with interest
and costs.  The foregoing  expenses  incurred  by reason of
Tenant's  default  shall  be  deemed to be additional  rent
hereunder and shall be paid by  Tenant to Owner within five

<PAGE>

(5) days of rendition of any bill  or  statement  to Tenant
therefor.  If Tenant's lease term shall have expired at the
time  of  making of such expenditures or incurring of  such
obligations,  such  sums  shall  be recoverable by Owner as
damages.

Building Alterations and Management:

20.   Owner shall have the right at  any  time  without the
same   constituting   an  eviction  and  without  incurring
liability to Tenant therefor  to change the arrangement and
or  location  of  public  entrances,   passageways,  doors,
doorways, corridors, elevators, stairs,  toilets  or  other
public parts of the building and to change the name, number
or  designation  by which the building may be known.  There
shall be no allowance  to  Tenant  for diminution of rental
value and no liability on the part of  Owner  by  reason of
inconvenience, annoyance or injury to business arising from
Owner or other Tenant making any repairs in the building or
any   such   alterations,   additions   and   improvements.
Furthermore, Tenant shall not have any claim against  Owner
by  reason  of  Owner's  imposition  of any controls of the
manner  of  access  to the building by Tenant's  social  or
business visitors as  the  Owner may deem necessary for the
security of the building and its occupants.  Landlord shall
use  reasonable efforts to minimize  any  inconvenience  to

<PAGE>

Tenant   by   reason  of  any  such  repairs,  alterations,
additions,  or  improvements   which   may   hereafter   be
undertaken  by  Landlord.   Landlord shall advise Tenant of
the  date  set  forth  in any contract  for  such  repairs,
alterations,  additions  or  improvements,  and  shall  use
reasonable  efforts to assure  that  such  work  is  timely
completed.

No Representations by Owner:

21.   Neither  Owner  nor  Owner's  agents  have  made  any
representations  or  promises  with respect to the physical
condition  of  the  building, the land  upon  which  it  is
erected  or  the  demised   premises,  the  rents,  leases,
expenses  of  operation  or  any   other  matter  or  thing
affecting  or  related  to  the  demised  premises  or  the
building  except  as  herein expressly  set  forth  and  no
rights, easements or licenses  are  acquired  by  Tenant by
implication  or otherwise except as expressly set forth  in
the provisions  of  this  lease.   Tenant has inspected the
building  and  the  demised  premises  and   is  thoroughly
acquainted with their condition and agrees to take the same
"as is" on the date possession is rendered and acknowledges
that  the  taking of possession of the demised premises  by

<PAGE>

Tenant shall  be conclusive evidence that the said premises
and the building of which the same form a part were in good
and satisfactory  condition at the time such possession was
so taken, except as  to latent defects.  All understandings
and agreements heretofore  made  between the parties hereto
are  merged  in  this  contract,  which   alone  fully  and
completely expresses the agreement between Owner and Tenant
and  any  executory  agreement  hereafter  made   shall  be
ineffective  to  change,  modify,  discharge or effect  and
[abandonment]  of  it  in  whole  or in part,  unless  such
executory agreement is in writing and  signed  by the party
against  whom  enforcement  of  the  change,  modification,
discharge or abandonment is sought.

End of Term:

22.   Upon the expiration or other termination  of the term
of this lease, Tenant shall quit and surrender to Owner the
demised   premises,   [broom]  clean,  in  good  order  and
condition, ordinary wear  and  damages  which Tenant is not
required  to  repair as provided elsewhere  in  this  lease
excepted, and Tenant shall remove all its property from the
demised  premises.    Tenant's  obligation  to  observe  or
perform this covenant shall survive the expiration or other
termination of this lease.   If the last day of the term of
this Lease or any renewal thereof,  falls  on  Sunday, this
lease shall expire at noon on the preceding Saturday unless
it be a legal holiday in which case it shall expire at noon
on the preceding business day.

<PAGE>

Quiet Enjoyment:

23.   Owner  covenants  and  agrees  with Tenant that  upon
Tenant paying the rent and additional  rent  and  observing
and performing all the terms, covenants and conditions,  on
Tenant's  part  to  be  observed  and performed, Tenant may
peaceably  and quietly enjoy the premises  hereby  demised,
subject, nevertheless,  to the terms and conditions of this
lease including, but not  limited to, Article 34 hereof and
to  the  ground  leases, underlying  leases  and  mortgages
hereinbefore mentioned.

Failure to Give Possession:

24.   If Owner is  unable to give possession of the demised
premises  on the date  of  the  commencement  of  the  term
hereof,  because   of  the  holding-over  or  retention  of
possession of any tenant,  undertenant  or  occupants or if
the  demised  premises  are  located  in  a building  being
constructed,   because   such   building   has   not   been
sufficiently  completed  to  make  the  premises ready  for
occupancy  or  because  of  the fact that a certificate  of
occupancy  has  not  been procured  or  if  Owner  has  not
completed any work required  to  be  performed by Owner, or
for any other reason, Owner shall not  be  subject  to  any
liability  for  failure to give possession on said date and

<PAGE>

the validity of the  lease shall not be impaired under such
circumstances, nor shall  the same be construed in any wise
to extend the term of this  lease,  but  the  rent  payable
hereunder   shall   be   abated  (provided  Tenant  is  not
responsible for Owner's inability  to  obtain possession or
complete any work required) until after  Owner  shall  have
given  Tenant  notice  that  the premises are substantially
ready for Tenant's occupancy.   If  permission  is given to
Tenant to enter into the possession of the demised premises
or to occupy premises other than the demised premises prior
to  the date specified as the commencement of the  term  of
this   lease.    Tenant  covenants  and  agrees  that  such
occupancy shall be  deemed  to  be  under  all  the  terms,
covenants,  conditions and provisions of this lease, except
as to the covenant  to  pay  rent.   The provisions of this
article are intended to constitute "an express provision to
the contrary" within the meaning of Section  223.a  of  the
New York Real Property Law.

No Waiver:

25.   The  failure  of  Owner to seek redress for violation
of,  or  to  insist  upon the  strict  performance  of  any
covenant or condition  of this lease or of any of the Rules
or Regulations, set forth  or  hereafter  adopted by Owner,
shall  not  prevent  a  subsequent  act  which  would  have
originally  constituted  a  violation  from having all  the
force and effect of an original violation.   The receipt by
Owner of rent with knowledge of the breach of  any covenant
of  this lease shall not be deemed a waiver of such  breach
and no provision of this lease shall be deemed to have been
waived  by Owner unless such waiver be in writing signed by

<PAGE>

Owner.  No  payment  by  Tenant  or  receipt  by Owner of a
lesser amount than the monthly rent herein stipulated shall
be  deemed  to  be  other  than  on account of the earliest
stipulated rent, nor shall any endorsement  or statement of
any check or any letter accompanying any check  or  payment
as rent be deemed an accord and satisfaction, and Owner may
accept  such  check or payment without prejudice to Owner's
right to recover  the  balance  of  such rent or pursue any
other remedy in this lease provided.   All  checks rendered
to Owner as and for the rent of the demised premises  shall
be  deemed  payments for the account of Tenant.  Acceptance
by Owner of rent from anyone other than Tenant shall not be
deemed to operate as an attornment to Owner by the payor of
such rent or  as  a  consent  by  Owner to an assignment or
subletting by Tenant of the demised premises to such payor,
or as a modification of the provisions  of  this lease.  No
act  or  thing done by Owner or Owner's agents  during  the
term hereby  demised  shall  be  deemed  an acceptance of a
surrender of said premises and no agreement  to accept such
surrender shall be valid unless in writing signed by Owner.
No employee of Owner or Owner's agent shall have  any power

<PAGE>

to   accept   the  keys  of  said  premises  prior  to  the
termination of  the  lease  and the delivery of keys to any
such agent or employee shall  not  operate as a termination
of the lease or a surrender of the premises.

Waiver of Trial by Jury:

26.   It is mutually agreed by and between Owner and Tenant
that the respective parties hereto shall and they hereby do
waive   trial   by  jury  in  any  action,  proceeding   or
counterclaim  brought  by  either  of  the  parties  hereto
against the other  (except  for personal injury or property
damage) on any matters whatsoever  arising out of or in any
way  connected with this lease, the relationship  of  Owner
and Tenant,  Tenant's use of or occupancy of said premises,
and any emergency  statutory or any other statutory remedy.
It is further mutually  agreed  that  in  the  event  Owner
commences  any  summary  proceeding  for  possession of the
premises,  Tenant  will  not interpose any counterclaim  of
whatever nature or description in any such proceeding.

Inability to Perform:

27.   This lease and the obligation  of  Tenant to pay rent
hereunder  and  perform  all  of  the  other covenants  and
agreements  hereunder  on  part of Tenant to  be  performed
shall in no wise be affected,  impaired  or excused because
Owner  is  unable  to fulfill any of its obligations  under
this lease or to supply  or  is  delayed  in  supplying any
service expressly or impliedly to be supplied or  is unable
to  make,  or  is  delayed in making any repair, additions,
alterations or decorations  or  is  unable  to supply or is
delayed in supplying any equipment or fixtures  if Owner is
prevented  or delayed from so doing by reason of strike  or
labour troubles or any cause whatsoever beyond Owner's sole
control  including,   but   not   limited   to,  government
preemption  in connection with a National Emergency  or  by
reason of any  rule,  order or regulation of any department
or subdivision thereof  of  any  government  agency  or  by
reason  of  the  conditions of supply and demand which have
been or are affected by war or other emergency.

<PAGE>

Bills and Notices:

28.   Except as otherwise  in  this lease provided, a bill,
statement, notice or communication  which  Owner may desire
or   be  required  to  give  to  Tenant,  shall  be  deemed
sufficiently given or rendered it, in writing, delivered to
Tenant  personally  or sent by registered or certified mail
addressed to Tenant at  the  building  of which the demised
premises form a part or at the last known residence address
or  business  address  of  Tenant  or left at  any  of  the
aforesaid premises addressed to Tenant, and the time of the
rendition of such bill or statement  and  of  the giving of
such notice or communication shall be deemed to be the time
when  the same is delivered to Tenant, mailed, or  left  at
the premises  as  herein provided.  Any notice by Tenant to
Owner  must  be served  by  registered  or  certified  mail
addressed to Owner  at  the address first hereinabove given
or  at  such other address  as  Owner  shall  designate  by
written notice.

Water Charges:

29.   If  Tenant  requires,  uses or consumes water for any
purpose in addition to ordinary lavatory purposes (of which
fact Tenant constitutes Owner  to  be the sole judge) Owner
may  install  a  water meter and thereby  measure  Tenant's
water consumption for all purposes.  Tenant shall pay Owner
for the cost of the meter and the cost of the installation,
thereof and throughout  the  duration of Tenant's occupancy
Tenant shall keep said meter and  installation equipment in
good  working  order and repair at Tenant's  own  cost  and
expense in default  of which Owner may cause such meter and
equipment to be replaced  or  repaired and collect the cost
thereof from Tenant, as additional  rent.  Tenant agrees to
pay for water consumed, as shown on said  meter as and when
bills are rendered, and on default in making  such  payment

<PAGE>

Owner  may  pay  such  charges  and  collect  the same from
Tenant, as additional rent.  Tenant covenants and agrees to
pay,  as  additional  rent, the sewer rent, charge  or  any
other tax, rent, levy or  charge  which now or hereafter is
assessed, imposed or a lien upon the  demised  premises  or
the realty of which they are part pursuant to law, order or
regulation  made  or  issued  in  connection  with the use,
consumption,  maintenance or supply of water, water  system
or sewage or sewage connection or system.

Sprinklers:

30.   Anything  elsewhere  in  this  lease  to the contrary
notwithstanding, if the New York Board of Fire Underwriters
or  the  New  York  Fire Insurance Exchange or any  bureau,
department  or official  of  the  federal,  state  or  city
government recommend  or  require  the  installation  of  a
sprinkler   system  or  that  any  changes,  modifications,
alterations,   or   additional  sprinkler  heads  or  other
equipment be made or  supplied  in  an  existing  sprinkler
system  by reason of Tenant's business, or the location  of
partitions,  trade  fixtures,  or  other  contents  of  the
demised  premises,  or for any other reason, or if any such
sprinkler system installations, modifications, alterations,
additional sprinkler  heads or other such equipment, become
necessary to prevent the  imposition of a penalty or charge
against the full allowance  for  a  sprinkler system to the
fire insurance rate set by any said Exchange or by any fire
insurance  company.   Tenant  shall, at  Tenant's  expense,
promptly make such sprinkler system installations, changes,
modifications, alterations, and supply additional sprinkler
heads  or  other  equipment as required  whether  the  work

<PAGE>

involved shall be structural  or  non-structural in nature.
Tenant shall pay to Owner as additional  rent  the  sum  of
$200.00  on  the first day of each month during the term of
this lease, as  Tenant's  portion of the contract price for
sprinkler supervisory service.

Elevators, Heat, Cleaning:

31.   As long as Tenant is  not in default under any of the
covenants of this lease Owner shall:  (a) provide necessary
passenger elevator facilities  on business days from 8 a.m.
to 6 p.m. and on Saturdays from  8  a.m.  to 1 p.m.; (b) if
freight  elevator  service  is  provided,  same   shall  be
provided  only  on  regular  business  days  Monday through
Friday inclusive, and on those days only between  the hours
of  9  a.m.  and  12  noon  and  between 1 p.m. and 5 p.m.;
(c)  furnish  heat  to the demised premises,  when  and  as
required by law, on business  days  from  8 a.m. to 6 p.m.;
(d)  clean  the  public  halls and public portions  of  the
building which are used in  common  by all tenants.  Tenant
shall,  at  Tenant's  expense, keep the  demised  premises,
including  the  windows,   clean   and  in  order,  to  the
satisfaction of Owner, and for that  purpose  shall  employ
the  person  or  persons, or corporation approved by Owner.
Tenant shall at its  own expense remove Tenant's refuse and
rubbish from the building.  Tenant  shall  contract nor the
removal  of  such  rubbish  and  refuse  ___________.   The
removal of such refuse and rubbish shall be subject to such
rules  and regulations as, in the judgment  of  Owner,  are
necessary  for the proper operation of the building.  Owner

<PAGE>

reserves  the   right  to  stop  service  of  the  heating,
elevator, plumbing and electric systems, when necessary, by
reason  of  accident,   or   emergency,   or  for  repairs,
alterations, replacements or improvements,  in the judgment
of  Owner  desirable  or  necessary to be made, until  said
repairs, alterations, replacements  or  improvements  shall
have  been completed (but only for a reasonable time).   If
the building  of  which  the  demised  premises  are a part
supplies  manually  operated  elevator  service, Owner  may
proceed with alterations necessary to substitute  automatic
control  elevator service upon ten (10) day written  notice
to Tenant  without  in any way affecting the obligations of
Tenant hereunder, provided that the same shall be done with
the minimum amount of  inconvenience  to  Tenant, and Owner
pursues   with   due   diligence  the  completion  of   the
alterations.

Security:

32.   Omitted.

Captions:

33.   The  Captions  are  inserted  only  as  a  matter  of
convenience and for reference  and  in no way define, limit
or describe the scope of this lease nor  the  intent of any
provision thereof.

<PAGE>

Definitions:

34.   The term "Owner" as used in this lease means only the
owner  of  the fee or of the leasehold of the building,  or
the mortgagee in possession, for the time being of the land
and building (or the owner of a lease of the building or of
the land and building) of which the demised premises form a
part, so that  in  the  event  of any sale or sales of said
land and building or of said lease,  or  in  the event of a
lease  of  said building, or of the land and building,  the
said Owner shall  be  and  hereby  is  entirely  freed  and
relived   of   all   covenants  and  obligations  of  Owner
hereunder, and it shall  be  deemed  and  construed without
further  agreement between the parties or their  successors
in interest,  or  between the parties and the purchaser, at
any such sale, or the  said  lessee  of the building, or of
the land and building, that the purchaser  or the lessee of
the building has assumed and agreed to carry  out  any  and
all  covenants  and  obligations  of  Owner hereunder.  The
words "re-enter" and "re-entry" as used  in  this lease are
not restricted to their technical legal meaning.   The term

<PAGE>

"rent" includes the annual rental rate whether so-expressed
or  expressed  in  monthly  installments,  and  "additional
rent".  "Additional rent" means all sums which shall be due
to  new Owner from Tenant under this lease, in addition  to
the annual  rental  rate.  The term "business days" as used
in this lease, shall exclude Saturdays (except such portion
thereof as is covered  by  specific  hours  in  Article  31
hereof),  Sundays  and  all  days  observed by the State or
Federal Government as legal holidays  and  those designated
as  holidays  by  the  applicable  building  service  union
employees  service contract or by the applicable  Operating
Engineers contract with respect to HVAC service.

Adjacent Excavation - Sharing:

35.   If an  excavation shall be made upon land adjacent to
the demised premises,  or  shall  be authorized to be made,
Tenant shall afford to the person causing  or authorized to
cause  such excavation, license to enter upon  the  demised
premises  for the purpose of doing such work as said person
shall deem  necessary  to preserve the wall or the building
of which demised premises form a part from injury or damage
and to support the same  by  proper foundations without any
claim for damages or indemnity against Owner, or diminution
or abatement of rent.

<PAGE>

Rules and Regulations:

36.   Tenant  and  Tenant's  servants,  employees,  agents,
visitors,  and  licensees  shall  observe  faithfully,  and
comply  strictly with, the Rules  and  Regulations  annexed
hereto and  such  other  and  further  reasonable Rules and
Regulations as Owner or Owner's Agent may from time to time
adopt.  Notice of any additional rules or regulations shall
be given in such manner as Owner may elect.  In case Tenant
disputes  the  reasonableness  of  any additional  Rule  or
Regulation hereafter made or adopted  by  Owner  or Owner's
agents, the parties hereto agree to submit the question  of
the  reasonableness of such Rule or Regulation for decision
to  the   New  York  office  of  the  American  Arbitration
Association,   whose   determination  shall  be  final  and
conclusive upon the parties  hereto.   The right to dispute
the  reasonableness  of any additional Rule  or  Regulation
upon Tenant's part shall  be  deemed waived unless the same
shall be asserted by service of  a  notice, in writing upon
Owner  within  ten  (10) days after the  giving  of  notice
thereof.   Nothing  in   this   lease  contained  shall  be
construed to impose upon Owner any  duty  or  obligation to
enforce  the  Rules and Regulations or terms, covenants  or
conditions in any  other lease, as against any other tenant
and Owner shall not  be  liable  to Tenant for violation of
the  same  by  any other tenant, its  servants,  employees,
agents, visitors or licensees.

<PAGE>

[Glass]

37.   Owner shall  replace,  at  the expense of the Tenant,
any and all plate and other glass  damaged  or  broken from
any  cause  whatsoever  in  and about the demised premises.
Owner may insure, and keep insured,  at  Tenant's  expense,
all  plate and other glass in the demised premises for  and
in the  name  of  Owner.   Bills  for the premiums therefor
shall be rendered by Owner to Tenant at such times as Owner
may elect, and shall be due from, and  payable  by,  Tenant
when  rendered,  and the amount thereof shall be deemed  to
be, and be paid, as additional rent.

Estoppel Certificate:

38.   Tenant, at any  time,  and from time to time, upon at
least  10  days'  prior  notice by  Owner,  shall  execute,
acknowledge  and deliver to  Owner,  and/or  to  any  other
person, firm or corporation specified by Owner, a statement
certifying that  this Lease is unmodified in full force and
effect (or, if there have been modifications, that the same
is in full force and  effect  as  modified  and stating the
modifications),  stating  the dates to which the  rent  and
additional rent have been paid,  and stating whether or not
there exists any default by Owner under this Lease, and, if
so, specifying each such default.

<PAGE>

Directory Board Listing:

39.   If, at the request of and as accommodation to Tenant,
Owner shall place upon the directory  board in the lobby of
the  building,  one  or  more names of persons  other  than
Tenant, such directory board listing shall not be construed
as the consent by Owner to  an  assignment or subletting by
Tenant to such person or persons.  Tenant shall be entitled
to no fewer than 3 lobby listings and 1 floor listings.

Successors and Assigns:

40.   The covenants, conditions and agreements contained in
this lease shall bind and inure to the benefit of Owner and
Tenant and their respective heirs, distributees, executors,
administrators,   successors,  and  except   as   otherwise
provided in this lease, their assigns.

SEE RIDER ANNEXED HERETO AND MADE A PART HEREOF


<PAGE>


                     ACKNOWLEDGEMENTS



CORPORATE TENANT

STATE OF NEW YORK, no.:

County of

On          this                                  day
of                               , 19     , before me


<PAGE>

personally came



to me known, who being by me duly sworn, did depose and say
that he resides



and he is the                              of



the  corporation  described   in  and  which  executed  the
foregoing instrument, as TENANT:  that he knows the seal of
said corporation; that the seal  affixed to said instrument
is such corporate seal; that it was  so affixed by order of
the  board of Directors of said corporation,  and  that  he
signed his name thereto by like order.



                    * * * * * * * * * *

             RULES AND REGULATIONS ATTACHED TO
               AND MADE A PART OF THIS LEASE
               IN ACCORDANCE WITH ARTICLE 36

1.    The   sidewalks,   entrances,   driveways,  passages,
courts, elevators, vestibules, airways,  corridors or halls
shall not be obstructed or encumbered by any Tenant or used
for any purpose other than for ingress or  egress  from the
demised  premises  and  for  delivery  of  merchandise  and
equipment  in a prompt and efficient manner using elevators
and passageways  designated  for  such  delivery  by Owner.
There  shall not be [     ] in any space, or in the  public
hall of the building, either by any Tenant or by [     ] or
others in  the delivery or receipt of merchandise, any hand
trucks,  except   those  equipped  with  rubber  tires  and
sideguards.  If said  premises  are  situated on the ground
floor of the building.  Tenant thereof  shall  further,  at
Tenant's  expense,  keep  the sidewalk and curb in front of
said  premises clean and free  from  ice,  snow,  dirt  and
rubbish.

<PAGE>

2.    The  water  and  wash  closets  and plumbing fixtures
shall  not be used for any purposes other  than  those  for
which they  were  designed or constructed and no sweepings,
rubbish, rags, acids or other substances shall be deposited
therein, and the expense  of  any  breakage,  stoppage,  or
damage  resulting  from the violation of this rule shall be
borne by the Tenant who, or whose clerks, agents, employees
or visitors, shall have caused it.

3.    No carpet, rug  or  other  article  shall  be hung or
shaken  out  of  any  window of the building; and no Tenant
shall sweep or throw or  permit  to be swept or thrown from
the demised premises any dirt or other  substances into any
of the corridors or halls, elevators, or  out  of the doors
or  windows  or stairways of the building and Tenant  shall
not use, keep  or  permit  to  be  used or kept any foul or
noxious gas or substance in the demised premises, or permit
or suffer the demised premises to be  occupied or used in a
manner  offensive  or  objectionable  to  Owner   or  other
occupants  of the buildings by reason of noise, odors,  and
or vibrations,  or interfere in any way, with other Tenants
or those having business  therein, nor shall any animals or
birds  be  kept  in  or  about the  building.   Smoking  or
carrying lighted cigars or  cigarettes  in the elevators of
the building is prohibited.

4.    No awnings or other projections shall  be attached to
the outside walls of the building without the prior written
consent of Owner.

<PAGE>

5.    No  sign,  advertisement,  notice or other  lettering
shall be exhibited, inscribed, painted  or  affixed  by any
Tenant  on  any part of the outside of the demised premises
or the building or on the inside of the demised premises if
the  same is visible  from  the  outside  of  the  premises
without the prior written consent of Owner, except that the
name of  Tenant  may  appear  on  the  entrance door of the
premises.  In the event of the violation  of  the foregoing
by any Tenant, Owner may remove same without any  liability
and  may  charge  the  expense incurred by such removal  to
Tenant or Tenants violating  this  rule.  Interior signs on
doors and directory tablet shall be  inscribed,  painted or
affixed  for  each  Tenant by Owner at the expense of  such
Tenant, and shall be  of a size, color and style acceptable
to Owner.

6.    No Tenant shall mark,  paint,  drill  into, or in any
way deface any part of the demised premises or the building
of which they form a part.  No boring, cutting or stringing
of wires shall be permitted, except with the  prior written
consent of Owner, and as Owner may direct.  No Tenant shall
lay linoleum, or other similar floor covering,  so that the
same  shall  come in direct contact with the floor  of  the
demised premises,  and,  if linoleum or other similar floor
covering is desired to be  used in interlining of builder's
deadening felt shall be first  affixed  to  the floor, by a
paste  or  other  material,  soluble in water, the  use  of
cement or other similar adhesive  material  being expressly
prohibited.

<PAGE>

INDIVIDUAL TENANT

STATE OF NEW YORK no.:

County of

On          this                                  day
of                               , 19     , before me



personally came



to  me known and known to me to be the individual described
in and who, as TENANT, executed

the   foregoing   instrument   and   acknowledged   to   me
that                he executed the same.



                    * * * * * * * * * *




7.    No  additional  locks  or  bolts of any kind shall be
placed upon any of the doors or windows  by any Tenant, nor
shall  any changes be made in existing locks  or  mechanism
thereof.   Each  Tenant  must,  upon the termination of his
Tenancy, restore to Owner all keys  of  stores, offices and
toilet  rooms,  either furnished to, or otherwise  procured
by, such Tenant,  and in the event of the loss of any keys,
so furnished, such  Tenant  shall  pay  to  Owner  the cost
thereof.

<PAGE>

8.    Freight,  furniture,  business equipment, merchandise
and bulky matter of any description  shall  be delivered to
and removed from the premises only on the freight elevators
and through the service entrances and corridors,  and  only
during  hours  and  in  a  manner approved by Owner.  Owner
reserves the right to inspect  all  freight  to  be brought
into  the  building  and  to exclude from the building  all
freight which violates any  of  these Rules and Regulations
of the lease of which these Rules  and  Regulations  are  a
part.

9.    No  Tenant  shall  obtain  for  use  upon the demised
premises  ice,  drinking  water,  towel  and other  similar
services, or accept barbering or bootblacking  services  in
the  demised  premises,  except  from persons authorized by
Owner, and at hours and under regulations  fixed  by Owner.
Canvassing,  soliciting  and  peddling  in the building  is
prohibited and each Tenant shall cooperate  to  prevent the
same.

10.   Owner reserves the right to exclude from the building
between  the  hours of 6 p.m. and 8 a.m. on business  days,
after 1 p.m. on  Saturdays, and at all hours on Sundays and
legal holidays all persons who do not present a pass to the
building signed by  Owner.   Owner  will  furnish passes to
persons for whom any Tenant requests same in writing.  Each
Tenant  shall be responsible for all persons  for  whom  he
requests  such  pass  and  shall be liable to Owner for all
acts of such persons.  Notwithstanding the foregoing, Owner
shall not be required to allow  Tenant  or  any  person  to
enter  or  remain  in the building, except on business days
from  8:00  a.m.  to  6:00  p.m.,  and  on  Saturdays  from
8:00 a.m. to 1:00 p.m.

<PAGE>

11.   Owner  shall  have   the   right   to   prohibit  any
advertising  by any Tenant which in Owner's opinion,  tends
to  impair  the   reputation   of   the   building  or  its
desirability  as  a loft building, and upon written  notice
from Owner, Tenant  shall  refrain from or discontinue such
advertising.

12.   Tenant shall not bring  or  permit  to  be brought or
kept  in  or  on  the  demised  premises,  any inflammable,
combustible  or  explosive  fluid,  material,  chemical  or
substance, or cause or permit any odors of cooking or other
processes, or any unusual or other objectionable  odors  to
permeate in or emanate from the demised premises.

13.   Tenant shall not use the demised premises in a manner
which  disturbs  or  interferes  with  other Tenants in the
beneficial use of their premises.

<PAGE>

RIDER ANNEXED TO AND FORMING A PART OF AGREEMENT  OF LEASE,
DATED  AS  OF MAY 3, 1996 BETWEEN ROSENTHAL ASSOCIATES,  ET
AL., AS LANDLORD,  AND  THE  BALSON-HERCULES GROUP LTD., AS
TENANT, AFFECTING SPACE ON THE  SIXTH  FLOOR AT 1040 AVENUE
OF THE AMERICAS NEW YORK NEW YORK

          41.  Tenant shall pay rent at  an  annual  rental
rate (hereinafter sometimes called the "BASE RENT") of; (i)
Two  Hundred  Seven  Thousand  Six  Hundred  Forty-Five and
25/100  ($207,645.25)  Dollars  ($17,303.77 per month),  in
respect of the period commencing  on  the Rent Commencement
Date through and including August 31, 2001,  and  (ii)  Two
Hundred Seventeen Thousand Six Hundred Fifty-Two and 25/100
($217,652.25) Dollars ($18,137.69 per month) for the period
commencing  on  September 1, 2001 through and including the
Expiration Date. Tenant agrees to pay the aforesaid rent in
lawful money of the  United  States  which  shall  be legal
tender  in  payment  of  all  debts  and  dues,  public and
private,   at   the  time  of  payment,  in  equal  monthly
installments, in  advance,  on  the first day of each month
during the term of this lease, at the office of Landlord or
such  other  place as Landlord may  designate  in  writing,
without any set-off  or  deduction whatsoever. For purposes
hereof,  the  term  "RENT  COMMENCEMENT  DATE"  shall  mean
September 1, 1996. Notwithstanding anything to the contrary
contained herein, provided Tenant shall not have previously
defaulted in any of its obligations  hereunder  beyond  any
applicable  grace,  notice or cure period, the monthly Base
Rent for period commencing  on  the  Rent Commencement Date
through and including October 31, 1998  shall  be $9,798.52
(instead of $17,303.77) and the monthly Base Rent  for  the
month of November, 1998 shall be $12,440.27.

<PAGE>
          42.  Tenant   acknowledges   and   represents  to
Landlord that it has thoroughly inspected and  examined, or
caused to be thoroughly inspected and examined, the demised
premises  and  that it is fully familiar with the  physical
condition and state  of  repair  thereof,  and  Tenant does
hereby  agree to accept same in its existing condition  and
state of  repair,  subject  to any and all defects therein,
latent or otherwise, "AS IS",  and  landlord  shall have no
obligation to do any work or make any installation,  repair
or  alteration of any kind to or in respect thereof, except
as elsewhere  in  this  lease otherwise expressly provided.
Further, the taking of possession  of  the demised premises
or  any  portion  or  portions thereof by Tenant  shall  be
conclusive evidence that same are in satisfactory condition
at the time such possession is so taken.

          43.  Unless expressly  provided  in this lease to
the  contrary,  Landlord shall not be responsible  for  the
upkeep  or maintenance  of  the  demised  premises  or  any
installation   therein.  In  no  event  shall  Landlord  be
responsible for  any  installation  trade by Tenant. Should
Landlord hereafter agree, in writing  or  otherwise, at the
request  of Tenant or otherwise, to do any work  in  or  in
respect of  the demised premises (other than in performance
of Landlord's  obligations  hereunder),  the  same shall be
paid for by Tenant not later than ten (10) days after being
billed  therefor,  at a rate and gum equal to the  cost  to
Landlord of any such  work plus twenty-three (23 %) percent
of such cost. Any sum or  charge  (except Base Rent) at any
time  required  to  be paid by Tenant  under  this  or  any
Article  of  this lease  is  and  shall  be  deemed  to  be
additional rent  under  this lease, and if same is not paid
as in this lease provided  Landlord  shall  have  the  same
rights,   remedies   and  privileges  in  respect  of  such
non-payment  as  if  Base   Rent   were   not   paid   and,
additionally,  Landlord  shall  have the right to terminate
this lease on three (3) days' written notice to such effect
given to Tenant after such additional  rent  remains unpaid
for  a  period  of  ten  (10)  days  after  written request
therefor by Landlord to Tenant.

<PAGE>

          44.  It  is  expressly  noted,  acknowledged  and
confirmed by Tenant that a breach, default  or  failure  to
observe,  perform  or  otherwise  comply  with  all  or any
obligations,  covenants,  conditions, rules and regulations
in this lease on Tenant's part to be observed, performed or
complied with beyond any applicable  cure,  notice or grace
periods, shall be and be deemed to be a violation by Tenant
of a substantial obligation of the tenancy created  by this
lease  entitling  Landlord  to  pursue  any and all rights,
remedies and privileges provided under this lease or at law
or in equity, including, without limitation,  the  right to
terminate  said  tenancy  and  recover  possession  of  the
demised premises.

          45.  (A)  For  the  purposes of this Article, the
following quoted words, terms,  or  phrases  shall have the
meaning  in  this  subdivision  (A)  ascribed to them:  (1)
"LEASE YEAR" shall mean the period of twelve (12) months or
less commencing with the commencement  date  of the term of
this lease and ending on the following December  31st,  and
each  successive  period  of  twelve (12) months thereafter
during the term, and the final period of twelve (12) months
or less commencing with January  1st  immediately preceding
the expiration of the term; (2) "BASE TAX  YEAR" shall mean
the   twelve  month  period  ending  June  30,  1997;   (3)
"BUILDING"  shall  mean  the  building in which the demised
premises are located and the land  upon which such building
is situated; (4) "BASIC WAGE RATE" shall  mean  the minimum
regular   hourly  wage  rate  (excluding  fringe  benefits)
required to  be paid to Porters in Class A office buildings
in effect on January  1,  1996,  pursuant  to  an agreement
between  the  Realty  Advisory  Board  on  Labor Relations,

<PAGE>

Incorporated ("RAB") and Local 3213 of the Building Service
Employees International Union, AFL-CIO ("3213");  (5) "BASE
OPERATING  YEAR"  shall  mean  the calendar year 1996;  (6)
"CURRENT WAGE RATE" shall mean the  minimum  regular hourly
wage rate (excluding fringe benefits) required  to  be paid
to  Porters  in  Class  A  office buildings pursuant to any
agreement in effect as of, on  or at any time after January
1,  1996  between  the  RAB, or any  successor  thereto  or
replacement thereof, and  3213, or any successor thereto or
replacement there of; (7) "WAGE  RATE  MULTIPLE" shall mean
the   figure   10,007;   (8)  "PORTERS"  shall  mean   that
classification  of  employee   engaged   in   the   general
maintenance  and  operation of office buildings most nearly
comparable to that classification now applicable to Porters
in the current agreements  between  the  RAB and 32B (which
classification  is  currently  termed  "others"   in   such
agreements);  (9)  "TENANT'S  PERCENTAGE" shall mean 4.55%;
and (10) "UTILITY COSTS" shall mean the actual cost charged
to   Landlord   for   heating,  electricity   (other   than
electricity   costs  for  which   Landlord   is   otherwise
reimbursed by Tenant  or  other  tenants  in  the  Building
pursuant  to  the electric inclusion or submeter provisions
in  the  respective   leases   for   the  Building),  water
(including sewer rental), steam, coolant, utility taxes and
all other utility-type charges of any  kind whatsoever paid
or incurred in respect of the Building.

               (B)  (1)  In the event that  the real estate
taxes  payable with respect to the Building for  any  Lease
Year in  which  this  lease  shall  be  in effect, shall be
greater  than  the  amount  of such taxes due  and  payable
during the Base Tax Year, whether  by reason of an increase
in either the tax rate or the assessed  valuation, or both,
or by reason of the levy, assessment or imposition  of  any
tax  on real estate as such, ordinary or extraordinary, not
now levied,  assessed  or imposed, or for any other reason,
Tenant shall pay and does  covenant  to  pay  to  Landlord,

<PAGE>

within  twenty  (20)  days prior to the date on which  each
such tax or installment  thereof  shall be due and payable,
as additional rent for the Lease Year  in  which  such date
occurs,  an  amount  equal  to  Tenant's  Percentage of the
increase in the amount of such tax or installment  over the
corresponding  tax  or  installment  for the Base Tax Year.
Tenant shall also pay and does covenant to pay to Landlord,
within twenty (20) days prior to the time the same shall be
due and payable, as additional rent for  the  Lease Year in
which  such  date  occurs,  an  amount  equal  to  Tenant's
Percentage  of  any  assessment or installment thereof  for
public betterments or improvements which may be levied upon
or  in  respect  of the Building.  Landlord  may  take  the
benefit  of the provisions  of  any  statute  or  ordinance
permitting  any such assessment to be paid over a period of
time and in such  event  Tenant  shall  be obligated to pay
only Tenant's Percentage of the installments  of  any  such
ASSESSMENTS  which  shall become due and payable during the
term of this lease. Upon  request,  Landlord  shall furnish
Tenant  with  a  copy of the real estate tax bill  for  any
Lease Year in which  Tenant  is  hereunder  required to pay
additional  rent.  If at any time during the term  of  this
lease the method(s)  of  taxation prevailing at the date of
execution hereof shall be  altered so that in lieu of or as
an addition to or as a substitution  for  the  whole or any
part  of  the taxes, assessments, levies or impositions  or
charges now  levied, assessed or imposed on real estate and
the improvements  thereon,  there shall be levied, assessed
or imposed an alternative, additional  or  new  tax or fee,
same  shall  be  considered  "real  estate  taxes" for  the
purposes hereof and if in excess of the real  estate  taxes
due and payable during the Base Tax Year, Tenant shall  pay
Tenant's  Percentage of such excess as herein provided. For

<PAGE>

the  purposes   of  this  subdivision  (1),  at  Landlord's
election, vault taxes  or  charges shall be considered real
estate taxes.

                    (2)  Notwithstanding  anything  in this
subdivision  (B)  to  the  contrary,  it  is understood and
agreed  that  if  Landlord  shall receive a refund  of  any
portion of real estate taxes  in  respect  of  which Tenant
shall  have  paid  additional rental under this subdivision
(B), then and under  such  circumstances  and if this lease
shall then be in full force and effect without  default  on
the  part  of  Tenant, Tenant shall be entitled to a credit
against future payments  of  additional  rental  under this
subdivision  (B)  in an amount equal to Tenant's Percentage
of  such refund, after  first  deducting  from  such  total
refund all fees, costs and expenses incurred by Landlord in
collecting  same.  If at the expiration of the term of this
lease any credit to which Tenant might be entitled pursuant
to the preceding sentence  shall  not  have  been used as a
credit  as in such sentence provided, then and  under  such
circumstances

<PAGE>


and subsequent  to  Tenant  properly  vacating  the demised
premises  as herein provided and so long as Tenant  is  not
and has not  been  otherwise  in  default hereunder, Tenant
shall be entitled to a payment equal  to  the amount of any
such remaining credit. If the taxes for the  Base  Tax Year
shall  be  reduced  by certiorari proceedings or otherwise,
Landlord shall be entitled  to  recalculate  the additional
rent in respect of arty fiscal tax year after  the Base Tax
Year  that  would have been payable by Tenant hereunder  in
accordance with  (1)  of  this  subdivision  (B)  had  such
reduction  occurred  or  been known at or prior to the time
additional rent for any such  fiscal  tax  year  was  being
originally calculated, and Tenant agrees to pay any further
additional rent resulting from such recalculation.

               (C)  If  during  any  Lease Year the Current
Wage Rate shall exceed or shall in any  manner  reflect  an
increase  above  the Basic Wage Rate, then Tenant shall pay
as additional rent  hereunder, an amount per annum equal to
the product obtained  by multiplying the Wage Rate Multiple
by the number of cents (including any fraction of a cent as
an additional cent) of  such increase; such additional rent
shall be paid by Tenant to  Landlord,  from  and  after the
effective  date  of  any  such  increase as set forth in  a
written  notice  from Landlord, in  equal  monthly  advance
installments on the  dates  upon which installments of Base
Rent are payable hereunder (except, however, that the first
installment  related  to  each  or  any  such  increase  or
increases  hereunder shall be in an  amount  sufficient  to
cover all amounts  due from the effective date of each such
increase).

<PAGE>
               (D)  In  the  event  that  the Utility Costs
incurred by Landlord during any Lease Year shall be greater
than the Utility Costs incurred by Landlord during the Base
Operating Year, Tenant shall pay and covenants  to  pay  to
Landlord as additional rent for the Lease Year in question,
on  or  before  the first day of April next succeeding such
Lease Year, an amount  equal  to Tenant's Percentage of the
increase.

               (E)  If the first  or final Lease Year shall
contain less than twelve (12) months,  the  additional rent
payable  under this Article for such Lease Years  shall  be
prorated (and in determining whether any additional rent is
payable therefor,  the  Base Tax Year and/or Base Operating
Year  shall  also  be considered  on  a  pro  rata  basis).
Tenant's obligation  hereunder  to  pay additional rent for
any Lease Year shall survive the expiration  or termination
of  the  term  of  this  lease,  In  cite  event  that  the
additional rent to be paid by Tenant under this Article for
the  final  Lease Year has not then as yet been determined,
Tenant covenants to pay to Landlord on the first day of the
month next preceding  the expiration of the term hereof, as
additional  rent and on  account  of  the  additional  rent
required to be  paid pursuant to this Article for the final
Lease Year, a sum  equal  to  the  additional  rent paid or
required to be paid by Tenant hereunder for the  Lease Year
next preceding the final Lease Year prorated to the  extent
that  the  final  Lease  Year  is less than a full calendar
year, Upon a determination being  made  by  Landlord of the
precise amount of additional rent required to  be  paid  by
Tenant  pursuant to this Article for such final Lease Year,
there shall  be  an  adjustment of said additional rent for
said Lease Year to the extent that Tenant shall be required
to  pay  to  Landlord  promptly   the  sum  by  which  said
determination exceeds the prorated  sum previously paid, or
Landlord shall promptly refund to Tenant  the  sum by which
said determination is less than the prorated sum previously

<PAGE>

paid.  For the non-payment of any additional rent  Landlord
shall have  the  same  remedies, rights and privileges that
Landlord  has  for  the  non-payment   of   any  Base  Rent
hereinbefore  provided  for.  Receipt  and  acceptance   by
Landlord of any installment of Base Rent provided for under
this  lease  or  any  of  the  additional rent that tray be
required to he paid by Tenant under this lease shall not be
or be deemed to be a waiver OF any other additional rent or
Base Rent then due and no delay  in  determining or billing
the  amount  of any additional rent due  pursuant  to  this
Article shall  be or be deemed to be a waiver of Landlord's
rights thereto.

               (F)  (1)  Commencing  with  the Second Lease
Year, it is agreed that if the Current Wage  Rate  for  the
then   current  Lease  Year  shall  be  undetermined,  then
Landlord  shall  be entitled to charge, receive and collect
firm Tenant and Tenant  agrees  to  pay  to Landlord on the
first  day  of each month during each such Lease  Year  and
each Lease Year  thereafter  an  amount  equal to 1/121h of
105% of the additional rent hereunder required  to  be paid
by  Tenant  to  Landlord for the preceding Lease Year (such
preceding Lease Year's additional rent to be annualized for
the purposes hereof,  if  such  LEASE  YEAR was a period of
less than twelve (12) months), it being  further understood
and  agreed  that if the precise amount of additional  rent
required to be  paid  by  Tenant  for such Lease Year shall
ultimately  be  determined to be in excess  of  the  amount
theretofore  paid   by   Tenant   hereunder,  Tenant  shall
forthwith pay to Landlord the amount of such excess, and if
such determination shall be that Tenant  paid more than the
precise amount of additional rent required  to  be  paid by
Tenant for such Lease Year, the amount of such excess shall
be  credited to future payments of additional rent required
to be paid by Tenant under this lease.

<PAGE>

                    (2)  Additionally,  any tire during any
I-ease  Year  that  it  becomes  evident  to Landlord  that
monthly  payments  under  this  subdivision  (P)   will  be
insufficient   to   satisfy   Tenant's   additional  rental
obligation   under  this  Article  for  such  Lease   Year,
Landlord, on notice  to  Tenant, may appropriately increase
the monthly payments hereunder  and  Tenant  agrees  to pay
same.

               (G)  Any   statement  sent  to  Tenant  with
respect to additional rent payable pursuant to this Article
45 shall be binding upon Tenant  unless  within thirty (30)
days after Landlord shall furnish such statement to Tenant,
Tenant shall send a written notice to Landlord objecting to
the  statement and specifying the respects  in  which  such
statement   is   claimed   to  be  incorrect.  Pending  the
determination  of  any  dispute   Tenant   shall   pay  all
additional  rent  shown on such statement, and such payment
and  acceptance shall  be  without  PREJUDICE  TO  Tenant's
position.  In  the  event  that  Tenant  has  overpaid  the
additional rent payable pursuant to this Article 45 pending
resolution  of  the  dispute,  Landlord  shall,  upon  such
resolution,   credit   the  amount  overpaid  to  the  next
additional rents corning due under this Article 45.

          46.  Article 11  hereof  is hereby amended to add
the following:


<PAGE>

               A.   If Tenant desires  to assign this lease
or  sublet  all  or  any  portion of the demised  premises,
Tenant shall promptly notify  Landlord  thereof and, except
with  respect  to  any  assignment  or  sublease  permitted
without Landlord's consent under paragraph (B) below, shall
use as its exclusive rental agent for such purpose the then
managing  agent  of the Building and notify  such  managing
agent of its desire  to  assign  this  lease  or sublet the
demised  premises.  Upon  obtaining a proposed assignee  or
sublessee upon terms satisfactory  to  Tenant, Tenant shall
submit to Landlord in writing (i) the name  of the proposed
assignee or subtenant; (ii) the terns and conditions OF the
proposed assignment or subletting; and (iii) the nature and
character  of  the  business  of  the proposed assignee  or
subtenant and any other information reasonably requested by
Landlord.

               Except with respect  to  any  assignment  or
sublease   permitted   without   Landlord's  consent  under
paragraph  (B)  below, Landlord shall  have  the  following
options which may be exercised within thirty (30) days from
any notice or submission  by Tenant to Landlord pursuant to
the last sentence of the preceding paragraph.

               (a)  In the  case  of  a desired or proposed
assignment   of  this  lease  or  a  desired  or   proposed
subletting for  all  or  substantially  all  of the demised
premises,  Landlord  shall  have  the option to cancel  and
terminate this lease as of the date  proposed by Tenant for
such  assignment  or  subletting,  which  option  shall  be
exercised within the aforesaid thirty (30) day period.


<PAGE>

               (b)  If   any   such  desired  or   proposed
subletting shall be for less than  all or substantially all
of the demised premises, Landlord shall  have  the  further
option  to  be  exercised  within  the said thirty (30) day
period of canceling and terminating  this lease, only as to
any portion of the demised premises covered by the proposed
sublease,  as  of  the  date  proposed by Tenant  for  such
subletting.

          In the event of the exercise of said option under
subparagraph (b) of this Article,  the  Base  Rent  and all
other   charges   payable   hereunder  shall  be  equitably
apportioned. In the event that  Landlord  fails to exercise
its options under subparagraphs (a) or (b)  of this Article
within  said  thirty  (30)  day period, Landlord  will  not
unreasonably   withhold  its  consent   to   the   proposed
assignment  or subletting  which  was  under  consideration
during such thirty  (30)  day  period, except that Landlord
shall not be required to consent  to  and  no assignment or
subletting  shall  be proposed by Tenant with  any  person,
firm  or  entity that  shall,  (w)  at  the  time  of  such
proposal, or  within  six  (6)  months prior thereto, be or
have been a tenant, subtenant or  occupant  of space at the
Building  or be or have been negotiating with  landlord  or
its agent to  become  a  tenant,  subtenant  or occupant of
space thereat, or (x) be in a business not in  keeping with
the standards and character of the Building, or  (y)  be  a
government  or governmental agency, department or affiliate
thereof, or (z)  in any way be dependent upon government or
donation  financing  for  support.  As  further  conditions
precedent  to   granting   consent  to  any  such  proposed
assignment or subletting, Landlord may require that: Tenant
first  agree,  in  a  written  agreement   satisfactory  to
Landlord's counsel (which agreement shall be  secured  by a
collateral  assignment  of any such sublease, if applicable

<PAGE>

and/or such other security  as Landlord may require) to pay
monthly  to  Landlord,  as additional  rent  hereunder,  an
amount equal to fifty percent  (50%)  of  all  rent  and/or
other   consideration  payable  by  any  such  assignee  or
sublessee  to  Tenant  to  the extent that such rent and/or
other consideration exceeds,  on  a  pro rata basis, a sum,
amount  or  rate  in excess of the Base Rent  at  the  time
payable hereunder by  Tenant  per  square  rentable foot so
affected  by  any  such  assignment  or sublease;  and  the
proposed  assignment  or  sublease  and  the  documentation
therefor  shall  be  otherwise  reasonably  acceptable   to
Landlord.  (In  calculating the additional rent that may be
due Landlord under  the preceding sentence, Tenant shall be
credited with the actual  reasonable  costs  paid  by it in
connection with consummating such assignment or subletting,
averaged  over  the  remaining  term  in  respect  of  such
assignment  or  subletting).  In  connection  with any such
proposed assignment or subletting, Tenant and such proposed
assignee or sublessee shall also provide Landlord with such
other  information as it may reasonably request,  including
(but not  limited  to) a certification in affidavit form of
all rental and other  consideration  proposed to be paid in
connection with the proposed assignment  or  subletting. If
Tenant  shall  at any time claim that Landlord unreasonably
withheld  its  consent   to   a   proposed   assignment  or
subletting, that question shall be submitted to arbitration
and  if  Tenant  prevails  Landlord's  sole  obligation  or
liability shall be to so consent thereto. Any and all costs
related to separating the demised premises to accommodate a
subletting or a partial termination of this lease resulting
from  Tenant's seeking to enter into a partial  subletting,
including  all  construction costs related to modifying the
demised premises,  shall  be  borne  and paid for solely by
Tenant.

<PAGE>
               B.   If Tenant is a corporation, Tenant may,
without  Landlord's consent, assign its  interest  in  this
Lease (i) to any corporation which is a successor to Tenant
either by  merger  or consolidation, (ii) to a purchaser of
all or substantially  all of Tenant's assets (provided such
purchaser  shall have also  assumed  substantially  all  of
Tenant's liabilities),  or  (iii) to a corporation or other
entity which shall (1) control,  (2)  be  under the control
of, or (3) be under common control with, Tenant  (the  term
"control"  as used herein shall be deemed to mean ownership
of more than  50`70  of  the  outstanding voting stock of a
corporation, or other majority equity and control interest,
if not a corporation). Tenant may  also sublease all or any
portion of the Premises to an entity  described  in  clause
(iii) without Landlord's consent. As conditions to any such
assignment  or  subletting,  (a)  Tenant  shall  not  be in
default  in the performance of any of its obligations under
this Lease,  (b)  prior  to  such  subletting  Tenant shall
furnish   landlord  with  the  name  of  any  such  related
corporation,  together  with  a certification of Tenant and
such other proof as Landlord may  reasonably  request  that
such  assignee  or  sublessee  is  a related corporation of
Tenant, and (c) in the reasonable judgment  of Landlord the
proposed subtenant shall be of a character in  keeping with
the standards of Landlord for the Building. In the event of
any assignment or subletting described above, (a)  any such
assignee  or subtenant shall use the Premises in accordance
with Article  2 of this Lease, (b) the principal purpose of
such assignment or sublease shall tot be the acquisition of
Tenant's interest  in this Lease (except if such assignment
or sublease is made  pursuant  to  clause (iii) and is made
for a valid intracorporate business  purpose,  and  (c) any

<PAGE>

such assignee shall have a net worth and annual income  and
cash flow, determined in accordance with generally accepted
accounting  principles,  consistently applied, after giving
effect  to  such  assignment,  equal  to  or  greater  than
Tenant's net worth  and  annual income and cash flow, as so
determined, on the date of  such  assignment. Tenant shall,
within ten (10) days after execution  thereof,  deliver  to
Landlord  (a) a duplicate original instrument of assignment
(or sublease) in form and substance reasonably satisfactory
to Landlord,  duly  executed by Tenant (and the subtenant),
and (b) an instrument  in  form  and  substance  reasonably
satisfactory to Landlord, duly executed by the assignee, in
which such assignee shall assume observance and performance
of, and agree to be personally bound by, all of the  terms,
covenants and conditions of this Lease on Tenant's part  to
be  observed  and  performed; provided, however, that in no
event shall such assignment  relieve or release Tenant from
any  of  its obligations hereunder.  Except  as  set  forth
above, either  a  transfer of a controlling interest in the
shares of Tenant (if Tenant is a corporation or trust) or a
transfer of a majority  of the total interest in Tenant (if
Tenant is a partnership)  at  any one time or over a period
of time through a series of transfers,  shall  be deemed an
assignment of this Lease and shall be subject to all of the
provisions  of  paragraph  11,   and  this  paragraph   46,
including,  without limitation, the requirement that Tenant
obtain Landlord's  prior  consent  thereto. The transfer of
shares of Tenant (if Tenant is a corporation or trust), for
purposes of this paragraph, shall not  include  the sale of
shares by persons other than those deemed "insiders" within
the  meaning  of  the  Securities Exchange Act of 1934,  as
amended,    which    sale   is   effected    through    the
"over-the-counter market"  or  through any recognized stock
exchange.

<PAGE>
               C.   Tenant agrees  not  to  advertise or in
arty manner list the demised premises, or any part thereof,
for  rent  or  assignment or subletting without  Landlord's
prior written consent in each instance. Any consent granted
by  Landlord pursuant  hereto  shall  not,  in  any  event,
otherwise  alter  or  modify  the  other provisions of this
lease related to assignments or sublettings by Tenant.

               Except as specifically  set  forth  in  this
Article,  nothing in this Article is intended to modify the
provisions of Article 11 of this lease.

          47.  Landlord  and  Tenant represent, warrant and
confirm that Winoker Realty Co.,  Inc.  is  the only broker
with  whom it has dealt with respect to this lease  or  the
demised  premises.  Landlord  and Tenant agree to indemnify
and save each other harmless of,  from and against any, and
all claims (and all expenses and fees,  including attorneys
fees, related thereto) for commissions or compensation made
by any other broker or entity, arising out  of  or relating
to  the  acts  of the indemnifying party, its employees  or
agents.  As, if and  when  this  lease  shall  be  mutually
executed and  delivered  by  Landlord  and Tenant, Landlord
agrees  to  pay  any  commission  that  may  be   due   the
above-named   broker  in  connection  with  this  lease  in
accordance with  a  separate agreement between Landlord and
said broker.

<PAGE>
          48.  Tenant  agrees,  at  its  sole  expense,  to
maintain  and  keep in good order, condition and repair all
air-conditioning  equipment  now or at any time serving the
demised premises. In furtherance  thereof,  Tenant,  at its
sole  cost  and expense, shall obtain (and maintain in full
force and effect during the term hereof) a service contract
covering   the    repair    and    maintenance    of   such
air-conditioning equipment, which service contract shall be
reasonably acceptable to Landlord. If Tenant shall  fail to
obtain  (or maintain) the aforesaid service contract,  then
Landlord,  at Tenant's sole cost and expense, may procure a
reasonable service  contract on Tenant's behalf. Tenant, at
its cost and expense,  shall  have  the  right to add to or
replace the existing air conditioning units  with new units
(including  air-cooled units), subject to Landlord's  prior
approval thereof,  which shall not be unreasonably withheld
or delayed. To the extent  that  any  air-conditioning unit
now  or at any time servicing the demised  premises  is  or
shall  be connected to a central water cooling tower of the
Building, Tenant shall be obligated to pay to Landlord (for
each calendar  year during the term hereof, and prorated to
the extent of any  year  less  than  a  calendar  year)  as
additional   rent,   One   Thousand   Two  Hundred  Dollars
($1,200.00) per annum in equal monthly advance installments
on  the  dates  upon which installments of  Base  Rent  are
payable hereunder.  Tenant  agrees  to reasonably cooperate
with  Landlord  and otherwise to abide  by  all  reasonable
regulations and requirements  which  Landlord may prescribe
to  permit  the  proper functioning and protection  of  the

<PAGE>

heating and air conditioning  systems.  Tenant  understands
that  the  Building's  cooling  tower(s) shall be available
between  May  15th  and  September 15th  on  business  days
(Monday through Friday, holidays excepted) from 8 A.M. to 6
P.M. If Tenant requires the use of such facilities on other
days or other hours, Tenant  agrees  to  pay  as additional
rent such charges therefor as Landlord may require.

          49.  (1)  As long as Tenant is not in  default in
the  payment  of  any  Base Rent or additional rent or  any
other charge at any time  due  and payable hereunder or the
performance or observance of any covenants or provisions of
this lease on Tenant's part to be  observed  or  performed,
but  subject  in any event to the other provisions of  this
Article, Landlord  shall  furnish  the electric energy that
Tenant shall reasonably require for ordinary reasonable use
in the demised premises on a rent inclusion basis. That is,
there shall be no charge to Tenant for such electric energy
by way of measuring the same on any  meter,  such  electric
energy  being  included  in  Landlord's  services which are
covered by the Base Rent reserved hereunder. Landlord shall
not  be  liable  in  any way to Tenant for any  failure  or
defect  in  the  supply or  character  of  electric  energy
furnished  to  the  demised   premises  by  reason  of  any
requirement, act or omission of  the public utility serving
the  Building  with  electricity or for  any  other  reason
whatsoever  (other  than  Landlord's  gross  negligence  or
willful misconduct).  Throughout  the  term  of this lease,
Landlord  reserves  the  right  to  approve  the electrical
equipment which Tenant may desire to utilize in the demised
premises  (other  than  ordinary office equipment  such  as
personal  computers)  and  any  additions,  supplements  or

<PAGE>

replacements thereof. Tenant  shall  furnish,  and maintain
and install all fighting tubes, lamps, starters, bulbs, and
ballasts  required  in  the  demised  premises, at Tenant's
expense,  or, at Landlord's election, shall  purchase  same
from Landlord  and shall pay Landlord's charges therefor on
demand,

               (2)  Tenant's   use  of  and/or  demand  for
electric energy in the demised premises  shall  not  at any
time   exceed   the  capacity  of  any  of  the  electrical
conductors, risers,  feeders,  wiring  and  equipment in or
otherwise serving the demised premises. In order  to insure
that  such  capacity  is not exceeded and to avoid possible
adverse effect upon the  electric  service of the Building,
Tenant shall not, without Landlord's  prior written consent
in   each   instance,  connect  any  additional   fixtures,
appliances or  equipment  (other  than  lamps, typewriters,
personal  computers and other usual small  business  office
machines having  electric  current  requirements similar to
electric typewriters and the electrical  equipment that may
have been initially approved by Landlord)  to  the electric
distribution system of the Building or make any  alteration
or addition to the electric system of the demised premises.
If  Landlord  grants  such  consent, all additional risers,
feeders, or other conductors or equipment required therefor
shall be provided by Landlord and the cost thereof shall be
paid by Tenant upon Landlord's  demand.  As  a condition to
granting such consent, Landlord may require Tenant to agree
to  an  increase  in the Base Rent by an amount which  will
reflect the then value  to Tenant of the additional service
to  be  furnished  by  Landlord,  that  is,  the  potential
additional  electrical energy  and/or  demand  to  be  made
available to  Tenant  based  upon  the estimated additional
capacity of such additional risers,  feeders, conductors or
other  equipment.  If  Landlord  and  Tenant  cannot  agree
thereon, such amount shall be determined in accordance with

<PAGE>

the procedure set forth in subdivision (3) of this Article.
Pending  the  determination of such increase  Landlord,  if
requested by Tenant,  may  make  such additional electrical
service  available  to  Tenant provided  Tenant  agrees  in
writing to pay the increase  in  accordance with Landlord's
initial   determination   while  such  dispute   is   being
determined.  When  the  amount   of  such  increase  is  so
determined,   the  patties  shall  execute   an   agreement
supplementary  to  this  lease  in  the  form  prepared  by
Landlord to reflect  such  increase  in  the amount of Base
Rent  and  the  amount  as determined by the procedure  set
forth in said subdivision (3), effective from the date such
additional service is made  available  to  Tenant, but such
increase  shall  be effective from such date even  if  such
supplementary  agreement  is  not  executed.  Landlord  may
withhold its consent  until  a written agreement thereon is
reached. Additionally, throughout  the  term of this lease,
Landlord shall have the right and privilege,  from  time to
time,  to  survey  the  plans  and  specifications  for the
demised  premises  and  the  actual  installations  made or
utilized by Tenant therein in order to determine the nature
of  Tenant's  equipment and installations and the value  of
the electrical  service being or to be furnished to Tenant.
It is agreed that  on  the  date of execution of this lease
there is included in Base Rent  the  sum  of  $27,519.25 in
respect of electrical service. Such estimate of  the  value
of  electrical  service to Tenant shall be based upon total
connected load, as  well  as  the  electrical  service then
necessary  for  the  operation  of  all lighting and  other
electrical equipment in the demised premises.  If  any such
survey  shall  result in a determination that the value  to
Tenant  of  the  electrical  service  and/or  demand  being


<PAGE>

furnished is or should be above that then included therefor
in the Base Rent hereunder,  Landlord  shall  notify Tenant
thereof and (unless Tenant objects thereto within  ten (10)
days of receipt of such notice - in which event the  amount
of the =tease in Base Rent shall be determined pursuant  to
the  procedure  set forth in subdivision (3)) the Base Rent
shall be appropriately  increased  on  an annual basis from
and  as  of  the  date of any such survey, or  as  of  such
earlier date as it  may  be determined that Tenant has been
receiving such additional  value. Upon request of Landlord,
Tenant  shall execute an agreement  supplementary  to  this
lease  confirming  any  increases  in  Base  Rent  pursuant
hereto, but such increase shall become effective regardless
of whether any such supplementary agreement is executed.

               (3)  Wherever in this Article it is provided
that an  amount  or value shall be determined in accordance
with the procedure  set  forth  in  subdivision  (3), it is
intended that the following procedure shall be followed:

       Landlord    shall    select   a   reputable
       independent electrical  engineer or utility
       consultant at the expense  of  land-lord to
       determine  the  amount or value. If  Tenant
       disagrees with the  findings  of Landlord's
       engineer,  Tenant,  within  ten  (10)  days
       after  Landlord  shall have delivered  such
       findings to Tenant,  shall  have the right,
       at Tenant's expense, to select  a reputable

<PAGE>

       independent    electrical    engineer    to
       determine  the  amount and such party shall
       make such determination  within twenty (20)
       days  after  such  selection.  If  Tenant's
       engineer  disagrees with  the  findings  of
       Land-lord's   representatives,   Landlord's
       representative and Tenant's engineer  shall
       select   a   third   reputable  independent
       engineer  or  utility  consultant,  at  the
       equal expense of Landlord  and  Tenant,  to
       determine such amount and his determination
       shall   be   binding  and  conclusive  upon
       Landlord   and   Tenant.    If   Landlord's
       representative and Tenant's engineer cannot
       agree   upon  the  selection  of  a   third
       engineer  or utility consultant, the amount
       shall  be  determined   by  arbitration  as
       provided    for   hereinafter.    In    all
       situations,    however,     pending     the
       determination  of  such  dispute,  the Base
       Rent and increases thereof shall be payable
       in   accordance   with  Landlord's  initial
       determination.

               (4)  If at  any time or times after the date
of  this lease the public utility  rate  schedule  for  the
supply  of  electric  current  to  the  Building  shall  be
increased  for  whatever  reason  during  the  term of this
lease,  or  any  charges,  fuel  adjustments  or taxes  are
imposed  upon  landlord  in  connection  therewith  or  are
increased,   the   Base   Rent  herein  reserved  shall  be
appropriately  increased by  the  same  percentage  as  the
resulting increase  in Landlord's actual cost of furnishing
electric service to the  demised premises. When the amounts
of such adjustments are so  determined, Landlord and Tenant
shall execute an agreement supplementary hereto as prepared
by Landlord to reflect such adjustments  in  the  amount of

<PAGE>


the  Base  Rent, effective from the effective date of  such
increase in  the  public  utility  rate  schedule; but such
adjustment  shall be effective from the effective  date  of
the change in  rates  or imposition of or change in charges
or  taxes,  as the case may  be,  whether  or  not  such  a
supplementary   agreement  is  executed.  If  Tenant  shall
require electric  energy for the conduct of business or use
of electric energy  (other  than  DE MINIMIS amounts) after
normal business hours, then Landlord  shall  have the right
to cause a survey to be made as herein provided.

               (5)  In  any  event. Landlord also  reserves
the  right,  for  any  reason,  to  discontinue  furnishing
electric energy to Tenant in the  demised  premises  at any
time  upon not less than thirty (30) day's notice to Tenant
or upon  such  shorter  notice  as  may  be required by the
public utility serving the Building. However,  in the event
of  Tenant's  default in payment of any rent due under  the
terms of this lease or otherwise, in addition to Landlord's
other remedies  by  reason  thereof,  Landlord may, without
notice, discontinue the service of electric  energy  to the
demised  premises  for  the duration of such default or the
term  hereof (as Landlord  may  elect),  without  releasing
Tenant  from  any  liability  under  this lease and without
Landlord  incurring any liability for any  damage  or  loss
sustained by  Tenant  by such discontinuance of service. If
Landlord exercises such right of discontinuance, this lease
shall  continue in full  force  and  effect  and  shall  be
unaffected  thereby, and the same shall not be deemed to be
a lessening or diminution of services within the meaning of

<PAGE>

any law, rule  or  regulation  now  or  hereafter  enacted,
promulgated or issued, except only that, from and after the
effective  date of such discontinuance, Landlord shall  not
be obligated  to  furnish electric energy to Tenant and the
Base Rent shall be  reduced  to exclude the amount included
in Base Rent in respect of electrical  service,  but  in no
event   shall  the  Base  Rent  be  reduced  by  more  than
$27,519.25  on  an  annual  basis, plus any increase in the
Base Rent effected pursuant to this Article 48. If Landlord
so  discontinues  furnishing  electric  energy  to  Tenant,
Tenant at Tenant's expense shall arrange to obtain electric
energy directly from the public  utility company furnishing
electric   service  to  the  Building.   Except   in   such
circumstances  where  a discontinuance of the furnishing of
electric energy results  from  or  relates  to a default by
Tenant, such electric energy may be furnished  to Tenant by
means of the then existing Building system feeders,  risers
and  wiring  to  the  extent  that  the same are available,
suitable  and  safe  for  such  purposes.  All  meters  and
additional panel boards, feeders,  risers, wiring and other
conductors and equipment which may be  required  to  obtain
electric  energy  directly from such public utility company
shall be installed and maintained by Tenant at its expense;
provided, however, that Tenant shall make no alterations or
additions  to  the  electric  equipment  and/or  appliances
without  the prior written  consent  of  Landlord  in  each
instance.  Landlord  shall  not  in  any  wise be liable or

<PAGE>

responsible  to  Tenant for any loss or damage  or  expense
which Tenant may sustain or incur if either the quantity or
character of electric  energy  is  changed  or is no longer
available  or  suitable  for Tenant's requirements.  Tenant
shall  be  liable  for  all loss  or  damage  sustained  in
connection with its supply of the electric energy.

               (6)  At no  time  shall  Tenant's  connected
electrical load in the demised premises exceed 4 watts  per
square  foot.  Tenant  has reviewed the electrical capacity
available to the demised premises and represents that it is
satisfied therewith. For  the  purposes of this subdivision
(6) only, it is agreed that the  demised  premises  contain
10,007 square feet.

               (7)  If  any  tax  is  imposed upon Landlord
with respect to electrical energy furnished as a service to
Tenant  by  any  Federal,  State  or  Municipal  Authority,
Tenant,  unless  prohibited by law or by  any  governmental
authority  having jurisdiction  over  same,  shall  pay  to
Landlord, on  demand, Tenant's pro rata share of such taxes
net of tenant's  share  of any credits received by Landlord
attributable  to  the period  succeeding  the  Commencement
Date.

               (8)  Tenant    shall    enter    into   such
modifications  of this lease as Landlord may from  time  to
time request in  connection  with  any  requirement  of any
public  utility  or  any  requirement  of law pertaining to
electric energy service or charges therefor.

<PAGE>

          50.  Tenant  shall  not create or  suffer  to  be
created or to remain, and shall  (within  thirty  (30) days
after   the   filing   or  imposition  thereof)  remove  or
discharge, by bonding or  payment, any lien, encumbrance or
charge upon the demised premises  or  the  real property of
which  the  same  forms a part caused by or in  any  manner
related to any act or alleged act of commission or omission
on the part of Tenant, or any of its agents or contractors.
Further, should any such lien be bonded and should landlord
or its agents be thereafter  named as a party to any action
or  proceeding in respect of such  bond  or  claim,  Tenant
agrees  to  indemnify  and  save  harmless Landlord and its
agents in respect thereof and to pay all costs and expenses
(including legal fees) of Landlord  and  its agents related
thereto.  Tenant  agrees to surrender the demised  premises
free  and  clear  of all  liens,  charges  or  encumbrances
thereon of every nature and description, and free and clear
of all violations thereon  placed  by  any  governmental or
quasi-governmental body resulting from any act  of omission
or commission on the part of Tenant or any of its agents or
contractors,  or  otherwise  related  to  Tenant's  use  or
occupancy  of  the  demised premises. Nothing in this lease
contained shall be construed as constituting the consent or
request  of  Landlord  to   any   contractor,   laborer  or
materialman for the perfoRMANCE of any labor or services or
the  furnishing  of  any  materials for the improvement  or
repair of the demised premises.

<PAGE>

          51.   Whenever Landlord is required or desires to
send any notice or other communication  to  Tenant under or
pursuant  to this lease, it is understood and  agreed  that
such notice  or  communication, if sent by Landlord's agent
(of whose agency Landlord  shall  have advised Tenant), for
all purposes shall be deemed to have been sent by Landlord.
Landlord  hereby  advises  Tenant that  Landlord's  current
agent is Winoker Realty Co.,  Inc. 1410 Broadway, New York,
New York 10018. Copies of all notices by Tenant to Landlord
shall  be sent to Landlord's agent,  attention:  Mr.  Barry
Bernstein,  in  the  same  manner as provided in Article 28
hereof for the giving of notices to Landlord.

          52.  At any time and  from  time  to  time within
five  (5)  business  days  after  written  demand therefor,
Tenant shall execute, acknowledge and deliver  to Landlord,
without  charge, a statement addressed to Landlord  (and/or
such other  persons  or parties as Landlord shall require),
certifying that to the best knowledge of Tenant, this lease
is in full force and effect and is unmodified (or, if there
have been modifications, specifying same) and setting forth
the dates to which the  rentals  and  other charges payable
hereunder have been paid and stating that  Landlord  is not
in  default  in the performance of any of the covenants  or
agreements on  its  part  to be performed hereunder (or, if
that is not the case, specifying  each  particular in which
Tenant alleges that Landlord is in default)  and certifying
as to such other items in respect of this lease as Landlord
may reasonably require.

<PAGE>
          53.  Landlord  and  Tenant, respectively,  hereby
each releases the other party (which  term  as used in this
Article  shall  include  such  party's  employees,  agents,
partners,  officers, shareholders and directors)  from  all
liability,  whether   for   negligence   or  otherwise,  in
connection  with  loss  covered  by any insurance  policies
which  the  releasor carries with respect  to  the  demised
premises, or  any  interest  or property therein or thereon
(whether or not such insurance  is  required  to be carried
under this lease), but only to the extent that such loss is
collectible under such insurance policies. Such  release is
also  conditioned  upon  the  inclusion  in  the applicable
policy or policies of a provision whereby any  such release
shall not adversely affect said policies, or prejudice  any
right  of  the  releasor  to recover thereunder. Each party
agrees that its insurance policies  aforesaid  will include
such  a  provision  so long as the same shall be obtainable
without extra cost, or  if  extra  cost  shall  be  charged
therefor,  so  long as the other party shall be willing  to
pay such extra cost.  If  extra  cost  shall  be chargeable
therefor, the holder of the policy shall advise  the  other
parry  of the amount of the extra cost, and the other patty
at  its election  may  pay  the  same,  but  shall  not  be
obligated to do so.

<PAGE>
               Additionally,  Tenant  hereby  covenants and
agrees forever to indemnify and hold Landlord harmless from
and   against  any  and  all  claims,  actions,  judgments,
damages,   liabilities,   losses,  or  expenses,  including
attorneys' fees, in connection  with  damage to property or
injury or death to persons, or any other  matters,  arising
from  or  out of the use, alteration, or occupation of  the
demised premises. In case Landlord shall be made a party to
any litigation  commenced  against  Tenant or others, their
Tenant shall protect and hold Landlord forever harmless and
shall  pay  all  costs  and expenses, including  attorneys'
fees, incurred or paid by  Landlord in connection with such
litigation. In furtherance of  Tenant's  obligations  under
this Article and this lease (but not in limitation thereof)
Tenant  covenants and agrees, at its sole cost and expense,
to carry  and  maintain in force from and after the date of
this lease and throughout  the  term  hereof  (i) workmen's
compensation   and   other  required  statutory  forms   of
insurance, in statutory  limits,  and  u comprehensive
general public liability insurance, which  shall be written
on  an occurrence basis, naming Tenant as the  insured  and
naming   Landlord  and  its  agent  and,  if  requested  by
Landlord,  the  lessor under any ground or underlying lease
or  others having  an  interest  in  the  land  and/or  the
Building  of  which  the  demised  premises form a part, as
additional insureds, in limits of not  less than $5,000,000

<PAGE>

combined  single  limit for bodily and personal  injury  or
death and for property  damage  of not less than $1,000,000
per  occurrence,  including  water  damage   and  sprinkler
leakage  coverage,  protecting  the aforementioned  parties
from all such claims for bodily or personal injury or death
or  property  damage  occurring  in or  about  the  demised
premises and its appurtenances. All  insurance  required to
be maintained by Tenant shall be carried with a company  or
companies acceptable to Landlord licensed to do business in
the  State  of  New York, shall be written for terms of not
less than one year,  and Tenant shall furnish Landlord (and
any other parties required  to  be designated as additional
insureds  under  any  such  policies)   with   certificates
evidencing  the  maintenance  of  such  insurance arid  the
payment of the premiums therefor, and with renewals thereof
and  evidence  of the payment of the premiums  therefor  at
least thirty (30)  days prior to the expiration of any such
policy or policies.  Such  policy  or  policies  shall also
provide that it or they shall not be canceled or materially
altered  without giving Landlord at least twenty (20)  days
prior  written   notice   thereof,   sent  to  Landlord  by
registered mail at Landlord's address  to which notices are
required  to be sent to Landlord hereunder.  Upon  Tenant's
default in  obtaining  or  delivering  any  such  policy or
policies  or failure to pay the premiums therefor, Landlord
(in addition  to and not in limitation of its other rights,

<PAGE>

remedies and privileges  by  reason thereof) may (but shall
not be obligated to) secure or pay the premium for any such
policy or policies and charge  Tenant  as  additional  rent
therefor  an amount equal to one hundred ten (110%) percent
of Landlord's costs therefor.

          54.  Notwithstanding  anything  herein  or in any
rule  of  law  or  statute to the contrary, it is expressly
understood and agreed  that  to  the  extent  that Landlord
shall at any time have any liability under, pursuant  to or
in  connection  with  this  lease,  neither  Tenant nor any
officer,  director,  partner,  associate, employee,  agent,
guest, licensee, or invitee of Tenant  (or  any other party
claiming  through  or  on behalf of Tenant) shall  seek  to
enforce any personal or  money  judgment  against Landlord,
but  shall only pursue any such rights or remedies  against
Landlord's   interest   in   the  Building  (including  all
insurance proceeds and condemnation awards). In addition to
and not in limitation of the foregoing  provision  of  this
Article  it  is  agreed  that,  in  no  event  and under no
circumstances,  shall  Landlord  nor any officer, director,
partner,  associate,  employee,  agent,   guest,  licensee,
invitee or principal (disclosed or undisclosed) of Landlord
have any personal liability or monetary or other obligation
of any kind under or pursuant to this lease. Any attempt by
Tenant   or  any  officer,  director,  partner,  associate,
employee,  agent, guest, licensee, or invitee of Tenant (or
any other party claiming through or on behalf of Tenant) TO
seek to enforce  any such personal liability or monetary or

<PAGE>

other  obligation  shall,   in   addition  to  and  not  in
limitation of Landlord's other rights,  powers,  privileges
and  remedies under the terms and provisions of this  lease
or  otherwise   afforded   by   law   in  respect  thereof,
immediately vest Landlord with the unconditional  right and
option  to  cancel  this lease on five (5) days' notice  to
Tenant.

          55.  Anything  contained  in  Article 7 hereof to
the contrary notwithstanding, Tenant covenants  and  agrees
that,  except  as  herein  otherwise  set forth, this lease
shall  not  terminate upon the termination  of  any  ground
lease or underlying lease or mortgage at any time affecting
the real property  of  which  the  demised premises forms a
part. If for any reason or cause whatsoever any such ground
or  underlying  lease is terminated by  summary  dispossess
proceedings or otherwise  or  if  such ground or underlying
lease is terminated through foreclosure proceedings brought
by  the  holder  of any mortgage to which  such  ground  or
underlying  lease  is   subject   and/or   subordinate   or
otherwise, or if Landlord's fee title is foreclosed upon by
the  holder  of  any  mortgage  thereon, all without Tenant
having  been  made  a party in any such  dispossess  and/or
foreclosure proceeding,  Tenant  shall attorn to the lessor
under such ground or underlying lease  or  the purchaser in
any such foreclosure proceeding, as the case  may  be,  and
this  lease  shall  not  be  affected in any way whatsoever
(except as herein otherwise expressly provided) by any such
proceeding or termination, and this lease shall continue in

<PAGE>

full force and effect in accordance  with its terms; but if
Tenant.  shall  be  named  in  any  such dispossess  and/or
foreclosure  proceeding,  this  lease and  Tenant's  estate
shall be terminated thereby.

               If  such ground or  underlying  lease  shall
terminate or any such  mortgage  be  foreclosed, and Tenant
shall attorn to the lessor under such  ground or underlying
lease or the purchaser in any such foreclosure  proceeding,
such  lessor  or purchaser shall not be required to  accept
attornment  by  Tenant  unless  such  attornment  shall  be
pursuant to a written  agreement required by such lessor or
purchaser,  which,  among   other   things,  shall  contain
provisions to the effect that in no event shall such lessor
or  purchaser,  as  landlord, (a) be obligated  to  repair,
replace or restore the  Building or the demised premises in
the  event of damage or destruction,  beyond  such  repair,
replacement   or   restoration   as   can   be   reasonably
accomplished  from  the  net proceeds of insurance actually
received by or made available  to  such  landlord,  (b)  be
responsible  for  any  previous  act  or  omission  of  the
landlord  or  the  tenant  under  such ground or underlying
lease  or  for  the return of any security  deposit  unless
actually received  by  such landlord, (c) be subject to any
liability or offset accruing  to  Tenant  against Landlord,
(d) be bound by any previous modification or  extension  of
this  lease unless previously consented to, or (e) be bound
by any previous prepayment of more than one month's rent or
other charge.

<PAGE>
          56.  Article  22  hereof is hereby amended to add
the following:

               If the demised  premises are not surrendered
and vacated as and at the time required by this lease (time
being of the essence), Tenant shall  be  liable to Landlord
for (a) all losses and damages which Landlord  may incur or
sustain  by  reason thereof, including, without limitation,
attorneys'  fees,   and  Tenant  shall  indemnify  Landlord
against all claims made  by  any succeeding tenants against
Landlord or otherwise arising  out of or resulting from the
failure  of  Tenant  timely  to surrender  and  vacate  the
demised premises in accordance  with the provisions of this
lease, and (b) per diem use and occupancy in respect of the
demised  premises  equal to two times  the  Base  Rent  and
additional rent payable  hereunder for the last year of the
term  of  this  lease (which  amount  Landlord  and  Tenant
presently agree is  the  minimum to which Landlord would be
entitled and is presently  contemplated  by  them  as being
fair  and  reasonable  under  such circumstances and not  A
penalty).  In  no  event  shall  any  provision  hereof  be
construed as permitting Tenant to  hold  over in possession
of the demised premises after expiration or  termination of
the term hereof.

<PAGE>
          57.  Supplementing Article 9 hereof,  if landlord
shall not have substantially completed any repairs required
to be made by Landlord pursuant to Article 9 hereof (or any
repairs  Landlord  shall  elect  to  make pursuant to  such
Article) within twelve (12) months after  the fire or other
casualty, then Tenant may elect to terminate  this Lease by
notice  to Landlord not later than ten (10) days  following
the expiration  of  such  twelve  (12)  month  period.  The
aforesaid  period  shall  be  extended to the extent of any
delays  caused by Tenant. If Tenant  makes  such  election,
then the Term of this Lease shall expire upon the thirtieth
(30th) day after notice of such election is given by Tenant
and Tenant shall vacate the Premises and surrender the same
as if such date were the Expiration Date. Tenant shall give
prompt notice  to  Landlord  of any fire, accident, loss or
damage  or  dangerous  or  defective  condition  materially
affecting the demised premises  or  any part thereof or the
fixtures  or other property of Landlord  therein  of  which
Tenant has  any  knowledge. Such notice shall not, however,
be  deemed  or  construed   to  impose  upon  Landlord  any
obligation to perform any work  to  be  performed by Tenant
under this lease or not otherwise hereunder  undertaken  to
be performed by Landlord.

          58.  Tenant  understands  and  acknowledges  that
Landlord  may  alter,  restore and/or renovate the entrance
lobby and/or other portions  of  the Building and that such
alterations, restoration and/or renovation or other work in
the  Building  may  result  in  certain  inconveniences  or
disturbances to Tenant and other  occupants of the Building
(including, without limitation, the temporary relocation of
the  entrance  to  the Building). Tenant  agrees  that  the
performance of any such  work  shall  not  constitute or be
deemed  to be a constructive eviction or be grounds  for  a
termination of this lease or the term hereof, nor shall the
same in any way affect the obligations of Tenant under this
lease, including, without limitation, the obligation to pay

<PAGE>

the rents herein reserved or give Tenant the right to claim
damages or  any matter or thing from Landlord or Landlord's
agent(s) or contractor(s).  Landlord  reserves  the  right,
without  liability  to Tenant and without any abatement  of
Rents  or  claim  of  constructive  eviction,  to  stop  or
interrupt any or all services under this Lease, and the use
of any Building Systems  or other facilities, at such times
as  Landlord may deem reasonably  necessary  by  reason  of
accidents,  strikes,  making  of  repairs,  alterations  or
improvements,  inability to secure a proper supply of fuel,
gas, steam, water,  electricity,  labor or supplies, or any
other  similar  or  dissimilar  causes   whatsoever  beyond
Landlord's   reasonable   control.  No  such  stoppage   or
interruption shall entitle  Tenant  to  any  diminution  or
abatement of Rents or any other compensation whatsoever, or
result  in  alteration  or  reduction  of  any  of Tenant's
obligations  under this Lease. Notwithstanding anything  to
the contrary contained in this Lease, in the event landlord
is not providing  basic  services  under  this  Lease for a
period  of  seven  (7)  consecutive Business Days and  such
interruption is not as a  result  of labor strikes or force
majeure, then Tenant shall be entitled  to  an abatement of
rent hereunder until such services are restored.

          59.  If  during  the  term of this lease,  Tenant
shall fail to pay the Base Rent or  additional  rent or any
other  charge  at any time due or payable hereunder  within
ten (10) days after  same is due and payable, Tenant agrees
to pay to Landlord, as  and  for  a  late  charge by reason
thereof,  without further notice or demand by  Landlord,  a
sum equal to $.10 for every dollar thereof, which sum shall
be considered as additional rent. Nothing contained in this
Article is  intended  to grant Tenant any extension of time
in respect of the due dates  for  any  payments  under this

<PAGE>

lease, nor shall same be construed to be a limitation of or
a   substitution   for   any  other  rights,  remedies  and
privileges of Landlord under this lease or otherwise.

          60.  Whenever any  default,  request,  action  or
inaction  by  Tenant  causes Landlord to engage an attorney
and/or incur any other  costs  or  expenses,  Tenant agrees
that it shall pay and/or reimburse Landlord for  such costs
or  expenses  within  ten  (10)  days  after  being  billed
therefor.

          61.  Article  31 hereof is hereby amended to  add
the following:

               Subject   to   its   security   regulations,
Landlord shall allow access  to  the  premises  twenty-four
(24)  hours  a  day, seven (7) days a week and outside  the
periods provided  in  (a)  hereof, one elevator shall be on
call.

          62.  Article 32 hereof  is  hereby amended to add
the following:

If  Landlord  at  any  time  utilizes  any portion  of  the
security  deposit  in respect or by reason  of  default  by
Tenant, Tenant shall,  within  five  (5) days after demand,
restore and pay to Landlord the amount so utilized.

<PAGE>

          63.  If at the commencement of, or at any time or
times during the term of this lease, the  rents reserved in
this lease shall not be fully collectible by  reason of any
Federal,  State,  County,  City or other governmental  law,
proclamation, order or regulation, or direction of a public
officer or body pursuant to  law,  Tenant  shall enter into
such agreements and take such other steps as  Landlord  may
request  and  as  may  be  legally  permissible  to  permit
Landlord  to  collect the maximum rents which may from time
to  time  during   the   continuance  of  such  legal  rent
restriction be legally permissible  (but  not  in excess of
the  amounts  reserved  therefor  under  this lease).  Upon
termination  of such legal rent restriction  prior  to  the
expiration of  the  tern of this lease, (a) the rents shall
become and thereafter  be  payable  hereunder in accordance
with  the amounts reserved in this lease  for  the  periods
following  such  termination  and  (b)  Tenant shall pay to
Landlord, if legally permissible, an amount  equal  to  (i)
the rents which would have been paid pursuant to this lease
but  for  such  legal  rent restriction less (ii) the rents
paid by Tenant to Landlord  during  the  period  or periods
such legal rent restriction was in effect.


<PAGE>
          64.  Article 17 hereof is hereby amended  to  add
the following:

               If  Tenant  defaults  in the payment of Base
Rent or any item of additional rent reserved  herein or any
part  of  either  or  in  making  any  other payment herein
required,  then  in  any one or more of such  events,  upon
Landlord  serving a written  ten  (10)  days'  notice  upon
Tenant specifying  the  default  and upon the expiration of
said ten (10) days if Tenant shall have failed to cure such
default, then Landlord may serve a  written three (3) days'
notice of cancellation of this lease  upon Tenant, and upon
the expiration of said three (3) days this  lease  and  the
term hereunder shall end and expire as fully and completely
as  if the expiration of said three (3) day period were the
day herein  definitely  fixed for the end and expiration of
this lease anti the term  hereof and Tenant shall then quit
and surrender the demised premises  to Landlord, but Tenant
shall remain liable as in this lease provided, it being the
intention  of  the  parties  hereto  to  create   hereby  a
conditional limitation.

               Except  as  specifically  set forth in  this
Article, nothing in this Article is intended  to modify the
provisions of Article 17 of this lease.

          65.  A  default by Tenant under this lease  shall
be considered a default under any other lease Tenant may at
any time have in respect  of other space in the Building or
other  space owned or controlled  by  Landlord  or  any  of
Landlord's principals. Similarly, a default by Tenant under
any such  other  lease  shall be considered a default under
this lease.

<PAGE>
          66.  Tenant shall  deposit  with  Landlord on the
signing  of this lease the sum of Fifty-Four Thousand  Four
Hundred Thirteen  and  061100  ($54,413.06)  Dollars, or at
Tenant's option, a "clean," unconditional, irrevocable  and
transferable  letter  of credit (the "LETTER OF CREDIT") in
the same amount, issued by and drawn on a bank satisfactory
to Landlord and which is  a member of the New York Clearing
House for the account of Landlord,  for  a term of not less
than one (1) year, as security for the faithful performance
and  observance  by  Tenant  of  the terms, conditions  and
provisions of this lease, including  without limitation the
surrender of possession of the demised premises to Landlord
as herein provided. If Tenant defaults in respect of any of
the  terms,  provisions  and  conditions  of   this  lease,
including,  but  not limited to, the payment of Base  Rent,
additional rent or  any other sum required to be paid under
this lease, Landlord  may  apply or retain the whole or any
part of the security so deposited, or present the Letter of
Credit for payment and apply  or  retain  the  whole or any
part  thereof,  as the case may be, to the extent  required
for the payment of  any  Base Rent, additional rent, or any
other such sum as to which  Tenant is in default or for any
sum which Landlord may expend  or may be required to expend
by reason of Tenant's default in  respect  of  any  of  the

<PAGE>

terms,  covenants  and  conditions of this lease, including
but  not  limited  to, any damages  or  deficiency  in  the
reletting of the demised  premises, whether such damages or
deficiency  accrue  or  accrues  before  or  after  summary
proceedings  or other re-entry  by  Landlord.  If  Landlord
applies or retains  any  part of the proceeds of the Letter
of Credit or security so deposited,  as  the  case  may be,
Tenant, upon demand, shall deposit with Landlord the amount
so applied or retained so that Landlord shall have the full
deposit on hand at all times during the term of this lease.
If Tenant shall fully and faithfully comply with all of the
terms,  provisions, covenants and conditions of this lease,
the Letter of Credit or security, as the case may be, shall
be  returned   to  Tenant  reasonably  promptly  after  the
Expiration Date  and  after  delivery  of possession of the
entire demised premises to Landlord as provided  herein. In
the  event  of  a  sale  of the Building or leasing of  the
Building, Landlord shall have  the  right  to  transfer the
Letter  of  Credit or security to the vendee or lessee  and
Landlord shall  thereupon  be  released  by Tenant from all
liability  for  the  return  of  such Letter of  Credit  or
security, as the case may be, and  Tenant  shall  cause the
bank  which  issued  the  Letter  of  Credit  to  issue  an
amendment to the Letter of Credit or a new Letter of Credit
naming  the vendee or lessee as the beneficiary thereunder.
Tenant shall look solely to the new Landlord for the return
of said LETTER  OF  Credit or security, as the case may be.
The provisions hereof  shall  apply  to  every  transfer or
assignment  of the Letter of Credit or security made  to  a
new landlord. Tenant will not assign or encumber or attempt
to  assign or  encumber  the  monies  deposited  herein  as
security and neither Landlord nor its successors or assigns
shall   be  bound  by  any  such  assignment,  encumbrance,

<PAGE>

attempted assignment or attempted encumbrance. Tenant shall
renew any  Letter  of  Credit  from  time to time, at least
thirty  (30)  days  prior  to the expiration  thereof,  and
deliver  to  Landlord  a  new  Letter   of   Credit  or  an
endorsement to the Letter of Credit, and any other evidence
required  by  Landlord that the Letter of Credit  has  been
renewed for a period  of  at  least one (1) year. If Tenant
shall  fail to renew the Letter  of  Credit  as  aforesaid,
Landlord  may  present the Letter of Credit for payment and
retain the proceeds  thereof  as  security  in  lieu of the
Letter of Credit.

          67.  If any provision of this lease shall be held
invalid    or    unenforceable,    such    invalidity    or
unenforceability shall affect only such provision and shall
not in any manner affect or render invalid or unenforceable
any  other provision of this lease, and this lease shall be
enforced  as if any such invalid or unenforceable provision
were not contained herein.

          68.  Neither the submission of this lease form to
Tenant nor  the  execution  of  this  lease by Tenant shall
constitute  an  offer by Landlord to Tenant  to  lease  the
space  herein  described   as   the   demised  premises  or
otherwise. This lease shall not be or become  binding  upon
landlord  to any extent or for any purpose unless and until
it is executed  by  landlord  and  a  fully  executed  copy
thereof is delivered to Tenant or Tenant's counsel.

<PAGE>
          69.  Landlord  shall  contribute an amount not to
exceed  Two  Hundred  Thousand ($200,000.00)  Dollars  (the
"TENANT'S WORK ALLOWANCE"),  toward  the  cost of preparing
the demised premises for Tenant's occupancy.  The  Tenant's
Work  Allowance will be disbursed by Landlord to Tenant  as
Tenant's  work  progresses  in  the manner set forth in the
following paragraphs:

               (a)  Disbursements shall be made by Landlord
only to Tenant upon Tenant's delivery of the following: (i)
requisition  specifying the work and  materials  for  which
payment is requested together with copies of bills from the
contractors and suppliers for such work and materials, (ii)
the written certification  of  Tenant's  architect  to  the
effect  that the amounts so requisitioned are proper in all
respects  and  that  the  work  and  materials  represented
thereby have been installed in accordance with the Tenant's
approved plans, (iii) a written approval by Tenant  of  its
general  contractor's or construction manager's request for
payment, (iv)  full  or  partial  releases of lien from all
parties  performing  work  described  in   the  requisition
referred to in clause (i) above with respect to the work or
materials for which payment is being requisitioned, and (v)
such  other documentation as Landlord or Landlord's  lender
may reasonably  require.(b)Such  payments  by  Landlord  to
Tenant  shall  be  made  once each month within thirty (30)
days after Tenant's requisition  package  is  submitted  to
Landlord.  In the event any mechanic's lien shall have been
filed relating  to any of Tenant's work, the amount thereof
may be withheld from  payment  until  such  lien  has  been
removed by bond or otherwise.

               (c)  Each  payment  by  Landlord shall be in
the  amount properly requisitioned in accordance  with  the
foregoing,  less  a  retainage  of ten (10%) percent of the
amounts requisitioned.

<PAGE>
               (d)  Upon the completion  of  Tenant's  work
and  the  taking  of  occupancy  by  Tenant  of the demised
premises  for  Tenant's  normal  business  operations,  any
retainage  held  by Landlord shall be paid to  Tenant  upon
receipt  of:  (i) the  certificate  of  Tenant's  architect
stating that Tenant's Work has been completed in compliance
with  Tenant's  plans,  (ii)  an  affidavit  from  Tenant's
general contractor  or construction manager (and any direct
contractors  or  subcontractors   performing   portions  of
Tenant's  Work)  stating that all subcontractors,  laborers
and material suppliers  who supplied labor and/or materials
for  Tenant's work (whose  names  and  addresses  shall  be
recited  in such affidavit) have been paid in full and that
all liens  therefor that have been, or might be, filed have
been discharged  of  record  or  waived,  (iii) a complete,
final  release  and  waiver  of  lien with respect  to  the
demised  premises  and the Building  executed  by  Tenant's
general  contractor  or   construction   manager  and  such
contractors,   subcontractors  or  material  suppliers   as
landlord may designate, (iv) any certificates and approvals
with respect to  Tenant's  work that may be required by any
governmental authority, and (v) such other documentation as
landlord or Landlord's lender may reasonably require.

               (e)  The  Tenant   Work   Allowance  may  be
utilized   by   Tenant  solely  for  the  construction   of
improvements in the  demised  premises  of  a  nature which
would  require  Landlord's consent hereunder (in additions,
installations, electrical and plumbing work) and may not be
applied  toward  the  cost  of  other  Tenant  improvements
including, but not  limited  to,  Tenant's  trade fixtures,
furniture,  equipment,  carpet,  artwork and drapery.  Upon
disbursement of the entire Tenant  Work  Allowance  (or the
portions  thereof disbursed if, upon completion of Tenant's
taking  occupancy   of   the   demised   premises  and  the
performance  of  all alterations to prepare  the  same  for
occupancy, the Tenant  Work  Allowance  is  not exhausted),
Landlord   shall  have  no  obligation  or  liability   for
disbursement  of  any  further  funds  from the Tenant Work
Allowance,  and  the amount of any excess  funds,  if  any,
shall be retained by Landlord.

<PAGE>
               (f)  Tenant  shall have the right to utilize
the Building's freight elevator  between  the hours of 6:00
p.m. and 8:00 a.m. on weekdays and all day on Saturdays and
Sundays, provided, however, that Tenant shall  pay Landlord
for  such  freight  elevator  usage  (at  the  regular  and
reasonable  rates charged from time to time by Landlord  to
all tenants at  the  Building) as additional rent hereunder
within fifteen (15) days  of receiving an invoice therefor.
Additionally,  during Tenant's  initial  build-out,  Tenant
shall  have the right  to  utilize  such  freight  elevator
during the  hours  of 8:00 a.m. to 12:00 noon, on weekdays,
without charge, and  Landlord  shall use reasonable efforts
to make available such freight elevator  to  Tenant  during
the hours of 12:00 noon to 6:00 p.m., without charge.

          70.  Tenant,  at its sole cost and expense, shall
clean the interior windows of the demised premises not less
than twice per annum. All Building contractors which are to
be engaged by Tenant for  maintenance  (including,  but not
limited  to  air  conditioning,  window  cleaning,  general
cleaning  and  trash  removal)  shall  provide  services at
market rates to Tenant. If Landlord's designated contractor
for  any  such service charges more than ten (10%)  percent
above market  rates  for  such  services, then Tenant shall
have  the  right to engage another  contractor  subject  to
Landlord's reasonable approval.

          71.  Tenant  hereby  guarantees  to  Landlord, as
additional rent hereunder, the payment of any and  all Base
Rent and escalation additional rent that are due under that
certain  lease,  dated June 11, 1992, between Landlord,  as
landlord,   and   N.  Erlanger   Blumgart   &   Co.,   Inc.
("ERLANGER"), as tenant,  covering  the tenth and a portion
of the eleventh floors in the Building,  as  such lease has
been amended by First and Second Amendments of  Lease,  for
the  period  May  1,  1996  through August 31, 1996. Tenant
shall  pay  same  to  Landlord  within  ten  (10)  days  of
receiving written notice from Landlord  that  Erlanger  has
defaulted in the payment of any such amounts. Tenant hereby
confirms  that  it has reviewed the aforesaid lease and all

<PAGE>

amendments thereto.  Landlord agrees not to amend or modify
the  Erlanger  lease  or   that   certain   Surrender   and
Termination  Agreement,  of  even  date  herewith,  between
Landlord and Erlanger.

          72.  If  there shall be any conflict between  any
provision  contained   in   this   Rider  and  the  printed
provisions  of  this lease, the provisions  of  this  Rider
shall prevail.

<PAGE>
          IN WITNESS  WHEREOF, the parties have caused this
Agreement to be executed as of the day and year first above
written.

LANDLORD    			TENANT
ROSENTHAL ASSOCIATES,		THE BALSON-HERCULES GROUP LTD.
a New York Partnership

By: /s/Robert Rosenthal      By:
	, as Trustee	     Name: William Milowitz
                	           Title: President


Edythe Gladstein


/s/Rhoda Herrick		    By:
Rhoda Herrick 		    Name:  Jean Talbot
 			    	    Title: Vice-President, Finance and
                                   Administration and Treasurer
/r/Robert M. Rosenthal
Robert M. Rosenthal

<PAGE>
          72.  If  there  shall be any conflict between any
provision  contained  in  this   Rider   and   the  printed
provisions  of  this  lease,  the provisions of this  Rider
shall prevail.

          IN WITNESS WHEREOF, the  parties have caused this
Agreement to be executed as of the day and year first above
written.

LANDLORD    			TENANT
ROSENTHAL ASSOCIATES,		THE BALSON-HERCULES GROUP LTD.
a New York Partnership

By: The Rosenthal Family
	Trust, as partner


By: __________________        By:
        , as Trustee		Name:William Milowitz
                              Title: President

/s/Edythe Gladstein
Edythe Gladstein


                              By:
Rhoda Herrick    			Name:  Jean Talbot
	 				Title: Vice President, Finance and
				            Administration and Treasurer

Robert M. Rosenthal

<PAGE>

          72.  If  there shall be any conflict between any
provision contained in this Rider and the printed provisions
of this lease, the provisions of this Rider shall prevail.

          IN WITNESS  WHEREOF, the parties have caused this
Agreement to be executed as of the day and year first above
written.

LANDLORD                         TENANT
ROSENTHAL ASSOCIATES,            THE BALSON-HERCULES GROUP LTD.
a New York Partnership

By: The Rosenthal Family
Trust, as partner

By: _____________________         By:/s/William Milowitz
       , as Trustee             	 Name: William Milowitz
                                     Title: President


Edythe Gladstein


                                     By: /s/Larry Mannes
Rhoda Herrick 	                   Name: Larry Mannes
                                     Title: Assistant Secretary Finance

Robert M. Rosenthal


<PAGE>

STATE OF NEW YORK      )
                       ) ss:
COUNTY OF NEW YORK     )

          On  the  14{th}  day of May, 1996, before me came
William Millowitz, to me known,  who, being duly sworn, did
depose and say that he resides at  454  Prospect Avenue, W.
Orange  N.J. and that he is the President  of  The  Balson-
Hercules  Group  Ltd.  and  that he, being duly authorized,
executed the foregoing Agreement  of  Lease  as the act and
deed of said corporation

                 		/s/Kristine M. Kenefick
                        Notary Public

                        Kristine M. Kenefick
                        Notary Public, State of New York
                               No. 01KE5051718
                        Qualified in Queens County
                        Commission Expires Nov. 13, 1997

<PAGE>

STATE OF NEW YORK      )
                       ) ss:
COUNTY OF NEW YORK     )

          On  the 14{th} day of May, 1996, before  me  came
Larry Mannes, to  me  known,  who,  being  duly  sworn, did
depose  and  say that he resides at 861 Whetsone Mill  Rd.,
Somerset, MA 02726  and  that he is the Assistant Secretary
Finance of The Balson-Hercules  Group  Ltd.  and  that  he,
being  duly authorized, executed the foregoing Agreement of
Lease as the act and deed of said corporation

                     /s/Kristine M. Kenefick
                     Notary Public

                     Kristine M. Kenefick
                     Notary Public, State of New York
                                No. 01KE5051718
                     Qualified in Queens County
                     Commission Expires Nov. 13, 1997









<PAGE>

                                                     EXHIBIT 10.7


      LEASE FOR MARINO TECHNOLOGIES DE MEXICO, S.A. DE C.V.
    ========================================================











                                     LEASE

                             Made and Entered Into
                                    Between

                  IMMOBILIARIA DE MEXQUITIC S.A. DE C.V.

                                  AS LANDLORD

                           MARINO TECHNOLOGIES INC.,
                            a Delaware corporation

                                   AS TENANT

                              Property Located in
                             Mexquitic de Carmona
                            San Luis Potosi, Mexico

                           Dated as of July 21, 1996







<PAGE>





                           TABLE OF CONTENTS

ARTICLE TITLE                                      PAGE

     1 PREMISES..................................... 1
     2 TERM..........................................1
     3 PURPOSE AND OPERATIONS........................2
     4 RENT........................................  2
     5 REPAIRS...................................... 4
     6 ALTERATIONS...................................6
     7 SIGNS.........................................7
     8 UTILITIES.....................................7
     9 INSURANCE.....................................7
    10 TAXES.........................................8
    11 END OF TERM...................................9
    12 DAMAGE AND RESTORATION....................... 9
    13 EMINENT DOMAIN...............................10
    14 RIGHTS OF ACCESS.............................11
    15 QUIET ENJOYMENT; SUSPENSION OF OPERATIONS....11
    16 INDEMNIFICATION .............................12
    17 DEFAULT .....................................13
    18 ASSIGNMENT AND SUBLETTING................... 15
    19 HOLDING OVER ................................16
    20 ATTORNEYS' FEES .............................16
    21 NOTICES .....................................16
    22 REMEDIES CUMULATIVE .........................17
    23 WAIVER ......................................17
    24 INTERPRETATION; GOVERNING LAW ...............18
    25 ENTIRE INSTRUMENT ...........................18
    26 SUCCESSORS AND ASSIGNS ......................19
    27 ASSIGNMENT OF RENTS .........................19
    28 LANDLORD'S IMPROVEMENTS .....................19
    29 CONDITIONS TO AND TERMINATION OF LEASE ......22
    30 CERTIFICATES................................ 22
    31 COMMISSIONS .................................23

Exhibit    "A"   Legal Description of Premises
           "B"   Site Plan
           "C"   Specifications Outline
           "D"   Services Outline
           "E"   Section 12.4


                                     - 1 -


<PAGE>





                                 LEASE

         THIS LEASE is made and entered into this 1st day of
				July, 1996, by and between

                IMMOBILIARIA DE MEXQUITIC S.A. DE C.V.

                                  and

                      MARINO TECHNOLOGIES INC.,
                        a Delaware corporation

    hereinafter referred to as "Landlord" and 'Tenant",
				respectively.

                              WITNESSETH:

          1. PREMISES

          1.1  Landlord  hereby  leases  to  Tenant,  and  Tenant
leases from Landlord, upon the terms and conditions hereinafter
set forth, that certain land situated in Mexquitic de Carmona,
San Luis Potosi, Mexico, more particularly described in Exhibit
"A" attached hereto, and outlined in red on the site plan
attached hereto as Exhibit "B" (the "Land");

               Together with the building and improvements to
be constructed by Landlord pursuant to Article 31 hereof and all
other improvements now or hereafter constructed upon the Land
(the Land  and  said  buildings and improvements being
collectively referred to as the "Premises");

               Together with the easements granted Tenant in
this Lease and all other rights, easements and  appurtenances
pertaining to the Premises (the "Easements").

          2. TERM

          2.1 The term of this Lease  shall  be  for an initial
period of seven (7) years, which term shall commence on the earlier
of  the  date  of delivery  of  possession  of  the   Premises
in  substantially  completed condition (as hereinafter defined
in  Paragraph  28.6)  or the date Tenant opens for business in
the Premises.

               The  entry of Tenant into the Premises for any of
the  purposes  described in Section  14.1 shall, not constitute
delivery of possession of the Premises.

          2.2 Provided that  Tenant  is not then in default
under this Lease or any  extension thereof, Tenant is  hereby
granted  three  (3)  successive options  to  extend  the term of
this Lease for additional periods of five (5) years each upon
giving  written  notice  of  its exercise of each said option
at least six (6) months but not more than twelve (12) months
before the

                                     - 2 -


<PAGE>





expiration of the original Lease term or preceding  option
period, as the case  may be. The terms and conditions for
said renewal periods  shall  be all of  the  same  terms  and
conditions  as for the original Lease term, except only that the
rental to be paid by Tenant  shall be as specified in
Section 4.4.

          2.3 Provided Tenant is not then in default under  any
of the terms of this  Lease  and subject to the rights of
FRAGANCIAS AROMATICAS,  S.A.  DE C.V. and GRUPO  MEXQUITIC,
S.A.  DE C.V. under the terms of their leases, Tenant  shall
have  an option to purchase  the  industrial  park  in  its
entirety only during the last year of the initial term and
during the last year of each subsequent  renewal  term  at  the
then  current fair market value.

          2.4 Provided Tenant is not then in default under any
of the terms of the Lease and subject to the rights of
FRAGANCIAS AROMATICAS, S.A. DE C.V. and GRUPO MEXQUITIC,
S.A. DE C.V. under the terms of their leases,  Tenant shall have
a right of refusal in the event landlord enters into a contract
to  sell  the  industrial  park on the same terms provided for
in any such sale contract. Said right of  refusal  may be
exercised within ten days of Landlord providing Tenant with a
copy of the proposed sale contract.

          3. PURPOSE AND OPERATIONS

          3.1 The Premises are leased to Tenant for purposes of
warehousing and assembly of bags and related activities.

          3.2 Nothing contained in this Lease  shall  be deemed
or construed to impose any affirmative obligation an Tenant to
make  any particular use of the  Premises,  or any use thereof at
all; and nothing contained  in  this Lease shall be deemed  or
construed to require Tenant to keep the Premises open for the
conduct of  any  business  during any particular hours, or on
any particular days, or at all.

          4. RENT

          4.1 Tenant shall pay to Landlord as  rent for the
Premises during the Lease term, at Vickerman, Inc., as Agent for
Immobiliaria  de  Mexquitic, S.A.  de  C.V., P.O. Box 726,
Highland Park, Illinois 60036, the following sums per year
(to be adjusted as hereinafter provided), payable in advance
in equal monthly  installments  on  the first day of each month
during the Lease term:

Total Dollar Total Dollar

YEAR:  1 - 3
DOLLARS/SQ. FT./MO.: $.18
AMOUNT PER YEAR: $245,747.52 (as per 4.3)
AMOUNT PER MONTH: $20,478.96

YEAR:  4 - 7
DOLLARS/SQ. FT./MO.: $.18 plus CPI (as per 4.4(a))
AMOUNT PER YEAR: $245,747.52 (as per 4.3)
AMOUNT PER MONTH: $20,478.96

<PAGE>

     In addition to base rent, Tenant shall pay to Landlord
Mexican IVA Tax.

          4.2  Rent  for  the  first and last  month  of  the
term  shall,  if necessary, be prorated based  on  the  number
of  days  within such month falling within the term as compared
with the total number  of  days within such month.

          4.3  If  the  floor  area  of  the  building  on  the
Premises  when constructed shall be more or less than One Hundred
Thirteen Thousand Seven Hundred Seventy-Two (113,772),
square feet, then the yearly rent set out in Section 4.1 shall
be  adjusted upward or downward, as appropriate, by a dollar
amount equal to the number of the square foot difference
multiplied by the applicable rent per  square foot. Any such
recalculation shall take effect  as of the commencement  of
the  term.  The  "floor  area  of  the Premises",  as  that
term  is  used  in this Lease, shall mean the square footage of
the each floor of the building located on the Premises measured
from the exterior of all perimeter walls  as  certified
to  Landlord  and Tenant by Landlord's architect in writing
upon commencement of the term.

          4.4  (a)  On  the first day of the fourth lease year
and on the first day of each lease year  thereafter including
each of the option periods as set forth in Section 2.2,  the
rent shall be increased to an amount equal to  an  amount
determined by multiplying  the  then  current  rent  by  a
fraction, the denominator  of  which shall be the Consumer Price
Index (as hereinafter defined) figure published  for the month
immediately preceding the commencement of the third (3rd) year
of  the original Lease term, and the numerator of which shall be
the Consumer Price  Index figure published for the month
immediately preceding the date of such adjustment; provided,
however, that in no event shall any such adjustment result
in  a decrease of  the rent nor an increase of the rent in
excess of three percent  (3*%) for the  first  such  adjustment
or three percent (3%) for each subsequent adjustment. As used
herein, the term "Consumer Price Index" shall mean the
United States Department  of  Labor's Bureau of Labor
Statistics' Consumer Price  Index,  All Urban Wage Earners
and  Clerical  Workers,  All  Items (1982-84 equals 100),
for the United States.

               b) If  Landlord lacks the information necessary
to determine the adjustment specified  in  this Section 4.4 on
the date of such adjustment, then Tenant shall continue  to
pay  the rent payable immediately prior to such adjustment
date and Landlord shall  as soon as possible determine the
adjustment to the rent and notify Tenant.  If  the  rent  for
the  period following  such  adjustment  date  exceeds  the
amount previously paid by Tenant for such period, then Tenant
shall pay the  difference  to Landlord within thirty (30) days
of Landlord's written request therefor.

               (c) If the Consumer Price Index is changed so
that the base year differs from the base year used as of the
month immediately preceding  the commencement  of  the  second
(2nd) year of the original Lease term, then Landlord shall
convert the Consumer  Price  Index  in  accordance with the
conversion factor published by the United States


<PAGE>

     Department  of  Labor's Bureau of Labor Statistics (jcs. If
the  Consumer Price Index is discontinued  or  revised  during
the  term, then Landlord shall  use such other government index
or computation which  replaces  the Consumer  Price  Index in
order to obtain substantially the same result as would be
obtained if the Consumer Price Index had not been
discontinued or revised.

          4.5 Security Deposit. Tenant, contemporaneously with
the execution of this Lease, has deposited  with  Landlord's
attorneys,  Arnstein  &  Lehr Client  Funds  Account  (also
referred  to as escrow account), the sun of Sixty One Thousand
Four Hundred Thirty Six and 88/100 Dollars ($61,436.88)
(the  "Security  Deposit"), receipt of which  is  hereby
acknowledged  by Landlord.  The Security  Deposit  shall  be
held  without  liability  for interest. Upon  Tenant  taking
possession of the premises, an amount equal to the first two
months rent  shall  be  divided from the security deposit and
paid to Landlord as rent for the first two months of the initial
term and the remainder of the funds being held shall be  paid
to  Landlord to hold as a security deposit. In the event of
Tenant's failure to  keep and  perform  any  of  the terms,
covenants, and conditions of this Lease to be kept and performed
by Tenant, Landlord at its option may appropriate and apply
the Security Deposit,  or  so  much  thereof as may be
necessary, to compensate  Landlord  for  all  loss or damage
sustained  or  suffered  by Landlord by reason thereof. Should
the  entire  Security  Deposit or any  portion thereof be so
appropriated and applied, Tenant upon written demand from
Landlord  forthwith  shall  remit to Landlord a sufficient
amount in cash to restore the Security Deposit  to  the
original sum deposited, and Tenant's  failure  to  do so
within ten (10) days after  receipt  of  such demand, at the
option of Landlord, shall constitute a default by Tenant in
Tenant's obligations under this Lease and Landlord may pursue
its remedies set forth in this Lease  without further notice of
any kind. Should Tenant comply with all of said terms,
covenants and conditions, and promptly pay all of the rental
herein provided  for as it falls due, and all other sums
payable by Tenant to Landlord and other  parties,  including
governmental bodies,  as provided hereunder, the Security
Deposit shall be returned  in full to Tenant  within  thirty
(30) days after the date on which Tenant vacates the Leased
Premises.

          5. REPAIRS

          5.1  Tenant shall keep the Premises in good condition
and  repair (including necessary replacements)  at  Tenant's
sole expense, including, without limiting the generality of the
foregoing, all plumbing, heating, air conditioning, ventilating,
electrical and lighting facilities and equipment, windows,
doors, plate glass, and signs located on the Premises,
excluding, however, repairs necessary because of a casualty
loss, whether insured or not, and repairs that are the
responsibility of Landlord.



                                     - 3 -


<PAGE>



        5.2 Landlord shall, at its expense:

               (a) Make all repairs, replacements and
alterations necessary or appropriate  and  provide  maintenance
o keep the exterior, structure and interior and exterior of
the perimeter wall of the Premises in good order, repair and
condition. The exterior  and  structure  shall include,
without limitation, each of the following:

                    (1) The outside walls and exterior faces
thereof,  bearing  and  structural  walls,  beams  and  columns,
landscaping,  driveways and  parking lots, but excluding sweeping
or cleaning of the driveway;

                    (2) The roof, the roof structure and
supports, and all roof covering and components; and

                    (3) The foundations, structural supports
and structural integrity of the floor slab.

               (b)  Make  all  repairs,  replacements  and
alterations to  the Premises which become necessary or
appropriate prior to  the  end  of  the first  year  from  the
date that the Landlord's Improvements have been substantially
completed, or such additional  period of time covered by any
implied  warranties,  because of faulty installation  or
construction  or because of the installation  of  defective
equipment. Landlord shall also make all repairs, replacements
and alterations  which  become necessary or appropriate at any
time because of the settling of the Premises or to keep the
Premises and any basement thereunder dry, or which are  at
any  time necessitated  by  any  act,  negligence  or  default
under this Lease of Landlord, its agents, employees, licensees
or contractors.

               (c) Repair all damages as required by Articles
12 and 13.

               (d) Provide Tenant the services set forth in the
memo dated May 23, 1996 to the event that memo is not
inconsistent with the terms of this Lease.

          5.3 Landlord will provide Tenant with access to three
telephone lines for its exclusive use and will make application
on behalf of Tenant for an additional three (3) telephone lines.
Tenant will be responsible  for  all costs associated with the
telephone lines.

          5.4 Tenant shall institute and maintain a program of
regular maintenance and repair work for any heating or air
conditioning systems.

          5.5 If Landlord shall fail to maintain and repair
those items for which Landlord is responsible pursuant to this
Article, and if said failure shall extend beyond thirty
(30) days

<PAGE>

from  the  date  of  written  notice  by  Tenant  to
Landlord to make such repairs,  or  beyond  a  shorter  period
from such written  notice  as  is reasonable due to urgent
circumstances,  then  Tenant shall have the right to make
such repairs for and on behalf of Landlord.  In  addition,
Tenant may,  without  notice,  make  emergency  roof  and
structural  repairs at Landlord's expense. Any sums of money
reasonably so expended by Tenant for said purposes shall be
paid by Landlord to Tenant promptly upon demand. If Landlord
unreasonably shall fail to pay any such sum to Tenant within
thirty (30) days of demand then, in that event  only,
Tenant  may  deduct said sum from the next rent payment.

          5.6  Landlord  shall  provide  Tenant  reasonable
notice prior to the beginning  of  any  reconstruction  repair
of the  Premises  by  Landlord. Landlord  shall  use reasonable
efforts  to  repair  and  reconstruct  the Premises so as to
cause the least interference possible with Tenant's  business.

          6. ALTERATIONS

          6.1  Tenant shall have the right, at its sole expense,
to  make  any non-structural  alterations  or  improvements to
the Premises which do not diminish the value of the Premises as
a whole or require an expenditure in excess of $25,000.00 for
any incident of alteration or improvement. Tenant shall make no
other alterations or  improvements to the Premises except as
provided  herein  without in each instance  obtaining  the
prior  written approval of Landlord,  such  approval  not
to be unreasonably withheld or delayed. All furniture, fixtures
and equipment  and all other improvements placed in or on the
Premises by or at the expense of Tenant, and which are
susceptible of being removed without substantial  physical
injury  to the Premises,  shall remain the property of Tenant,
and Tenant may remove  the same or any  part  thereof  at  any
time or times during the term hereof. Tenant shall, however,
repair any damage to the Premises occasioned by  such removal.

          6.2  Landlord shall cooperate with Tenant, without
expense to Landlord, in securing such permits as may be necessary
or appropriate to accomplish any work to  the Premises Tenant
is permitted to do by this Lease.

          6.3  Tenant shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished
to or for Tenant at or for use in the Premises,  which  claims
are or may be secured by any lien against the Premises or any
interest therein.  If  Tenant  shall,  in  good faith, contest
the validity of any such lien, claim or demand, then Tenant
shall, at its sole expense defend itself and Landlord against
the same and shall pay  and  satisfy  any  such adverse judgment
that may be rendered thereon before the enforcement thereof
against the Landlord or the Premises, upon the condition that
if Landlord shall  require,  Tenant  shall  furnish  to
Landlord  a surety bond satisfactory to Landlord in an amount
equal to not less than one hundred percent (100%) of such
contested lien claim
<PAGE>

indemnifying  Landlord  against  liability
for  the  same and holding the Premises free from the effect
of such lien or claim.

          6.4  Landlord  shall  make all repairs or alterations
which  may  be required by any governmental authorities having
jurisdiction  over  the Premises;  provided, however, Tenant
shall make all repairs or alterations which may be  required
by said governmental authorities which relate to a change in
use of the Premises  by  Tenant during the term of this Lease
or which  are  required  as  a  result of Tenant's  failure
to  perform  its obligations under Section 5.1 hereof.

          7. SIGNS

               Tenant  shall  have  the  right  to  erect  such
temporary  and permanent signs of Tenant's design  as  shall
be detailed in the approved plans  and  specifications,  which
sign or signs may  be  erected  on  the interior or exterior
of the Premises,  at  its  expense  and in conformity with
applicable law. All other signs which Tenant desires  to  erect
upon the  Premises  shall be subject to the prior written
approval of Landlord, such approval not  to  be  unreasonably
withheld or delayed. Landlord will assist Tenant, at Tenant's
expense,  in securing any permits and approvals from
governmental bodies necessary for Tenant's signs.

          8. UTILITIES

               Tenant shall pay before delinquency  all charges
for water, gas, heat,  air  cooling, electricity, power, sewer,
telephone  and  all  other utility services
(herein  "Utilities")  used  solely  by  Tenant  on  the
Premises  during  the  Lease  term.  Landlord  agrees that it
will provide separate metering, if reasonably possible,
for all  utilities  serving the Premises.

          9. INSURANCE

          9.1 Tenant shall during the Lease term, at its sole
expense, maintain in full force the following insurance
naming Landlord as an additional insured:

               (a)  General  civil  liability  insurance issued
by one or  more insurance carriers, insuring against liability
for  injury to or death of persons  and  loss  of  or  damage
to property occurring in  and  on  the Premises. Said
liability insurance shall  be in an amount of not less than
One Million Dollars ($1,000,000) per occurrence.

               (b) Omitted.

          9.2  Prior to commencement of the Lease  term  and
at all times thereafter, Tenant shall deliver to Landlord
and any lender who has provided Tenant with an address for




                                     - 4 -


<PAGE>




notices certificates  issued by the insurance carrier or
carriers for each policy of insurance required to maintain
by this Lease.

          9.3  (a)  Landlord  shall,  during  the  Lease  Term,
maintain  fire insurance and an extended  coverage  endorsement
to the extent of the full replacement value, exclusive of
foundation  and excavation costs. The cost of fire and extended
coverage insurance shall  be  included  in  the  base
rent.  In  the event Landlord's fire and casualty insurance
premiums shall increase due  to Tenant's operations during the
term of this Lease, Tenant agrees to pay to  Landlord  all
increased  premiums  to the extent of the increase  within
fifteen  (15)  days  from receipt of Landlord's  written
notice of an increase accompanied by supporting documents.

               (b) Omitted.

          9.4 Any insurance required by this  Article  to  be
procured  by one party for the benefit of another party shall
contain a provision that  the other  party's  insurance  cannot
be  terminated without thirty (30) days prior written notice.
All insurance under this Article shall be maintained with
insurance companies approved by Landlord in writing.

          10. TAXES

          10.1 PAYMENT.  Tenant shall pay before delinquency as
additional rent hereunder any and all IVA taxes upon the  rent
reserved herein and, while there are not any real property
taxes assessed against  the  property,  in the  future  any
real property taxes and assessments, whether ordinary or
extraordinary, which  shall  be  assessed  against the
Premises and solely allocable to the Lease term. Taxes and
assessments  for the first and last Lease year hereunder shall,
if necessary, be prorated based on a three hundred sixty-five
(365)  day  year and apportioned between Landlord and Tenant
to coincide with the commencement of the Lease term and vacation
by Tenant of the Premises, as the case may be. Upon termination
of the Lease by expiration of time or otherwise, taxes
attributable to the Lease term, but not yet due and payable,
shall be equitably  adjusted  between  the parties hereto
based upon the last known ascertainable taxes, and shall be
readjusted between  the  parties when the actual taxes for such
period are known. Nothing contained in  this  Lease,  however,
shall  be  deemed  or construed  to  require Tenant to pay or
discharge: (i) any tax or increase thereof which may  be
levied  as a result of the voluntary or involuntary assignment
or transfer of all or any portion of Landlord's interest in the
Premises or as a result of any construction  on property not a
part of the Premises, (ii) any tax upon the income, profits  or
business of Landlord, (iii) any personal property taxes,
franchise, inheritance  or estate taxes which  may  be  levied
against  the estate or interest of Landlord,  even
though such taxes may become a lien  against  the  Premises,
or  (iv) any other  taxes,  unless  any  of  such  taxes are
levied or assessed against Landlord as a substitute for or as
an addition  to, as a whole or in part, the real property
taxes and assessments Tenant is required pay hereunder.

          10.2 REFUNDS.  If there shall be any refunds or
rebates on account of taxes paid by Tenant under the provisions
of this  Lease,  such  refund or rebate shall belong to Tenant.


                                     - 5 -


<PAGE>




     Landlord will sign any documents which may be necessary or
appropriate to secure payment to Tenant of any refund or rebate.

          11. END OF TERM

               At  the  expiration  or  earlier termination of
the term of this Lease; (i) Tenant shall surrender the
Premises  in  the same condition as they were upon delivery
of possession thereof at the commencement of the Lease  term,
subject to normal wear and tear, damage by the elements,
alterations and Tenant's Improvements permitted  under
Article  6; damage that  pursuant  to  Articles  12  and  13
does not have to be repaired and repairs  that are the
Landlord's responsibility  to  make,  and  additions required
to be made to the Premises by Landlord; (ii) Tenant shall deliver
all keys to the Premises to Landlord, and (iii) Tenant
shall have the right  to remove from the Premises all of its
signs,  sign  supports  and pylons,  trade fixtures
(including those constructed by Tenant), equipment and other
personal  property  and  shall repair all damages caused to
the Premises by such removal.

          12. DAMAGE AND RESTORATION

          12.1 (a) If the Premises are damaged  by fire or
other casualty, then Landlord  shall,  within thirty (30) days
after  the  occurrence  of  such damage, begin the complete
repair,  restore and rebuild the same with all reasonable
dispatch and diligence, so  far as practicable and lawful, to
a complete  unit of like quality, character  and  condition,
and  the  same layout and  parking  to  rentable  square foot
ratio as that which existed immediately prior to the damage.
Said  repair,  restoration and rebuilding shall be performed
in accordance with plans and specifications approved in
writing by Tenant, and performed by a licensed general
contractor selected and employed by Landlord and approved
in writing  by  Tenant.  None of the approvals  to  be obtained
from Tenant in the previous sentence  shall  be unreasonably
withheld  or  delayed.  During  such  repair, restoration and
rebuilding Tenant shall at all times have access to  the
Premises for the purpose of making inspections of the work
in progress.

               (b)  The  cost  of  such repair in excess of
insurance proceeds received shall be paid by Landlord.

          12.2 (a) In the event that  the  Premises  are
damaged to the extent that they are not reasonably suitable
for the normal conduct  of  Tenant's business  as  carried  on
prior  to  said damage, and despite such damage Tenant elects
to continue occupancy of the Premises, then from the date of
such damage until completion of repair,  restoration and
rebuilding, there shall be an equitable adjustment in annual
rent,  and  any imposition and charges,  including  but  not
limited to real estate taxes,  taking  into account the
interference with Tenant's normal conduct of business and loss
of profit resulting therefrom. If  Tenant elects to
discontinue occupancy, then the annual rent and any impositions
and charges,



                                     - 6 -


<PAGE>





including but not limited to real estate  taxes,  shall
completely  abate during the period of repair.

               (b)   Tenant  shall  not  be  required  to
accept  delivery  of possession of the  Premises  and  to
commence paying annual rent and other charges payable by Tenant
to Landlord  hereunder  until the earlier of (i) the  date on
which Tenant recommences to conduct business  on  the  entire
Premises,  or  (ii)  sixty (60) days after the date by
which the following events have occurred:

                    (1) The  architect  in  charge  of  the
construction on the Premises  certifies in writing to Tenant
that said construction has  been substantially  completed
in strict accordance with the approved plans and specifications;

                    (2) All requisite  permits necessary for
Tenant to lawfully occupy and refixture the Premises are  issued
by  the  appropriate  legal authorities  issuing  same
(Landlord shall deliver to Tenant certified or photostatic
copies of same); and

          12.3 (a) If more that one-third  (1/3)  of  the
improvements upon the Premises are destroyed and such
destruction occurs  within  the last three (3) years of the
initial Lease term or within three (3) years  of  the end
of  a  renewal  term, Landlord or Tenant at its option,
within thirty (30) days of the date  of  the  occurrence  of
such damage, may terminate this Lease.

               (b)  Subject to delays caused by circumstances
beyond  the reasonable control of Landlord, if Landlord does
not either:

                    (1)  Obtain a building permit for any
repairs,  rebuilding and restoration required  hereunder
within one (1) month from the date of such damage or
destruction; or

                    (2)  Complete  such  repairs, rebuilding
restoration  and comply with the conditions in Section  15.2
for the resumption of rent and other payments by Tenant within
four (4)  months after the date of such damage or destruction;

     then  in  either  event  Tenant  may  at  any  time
thereafter cancel and terminate this Lease by sending sixty
(60) day written  notice  thereof to Landlord;  provided,
however,  that  notice of cancellation shall not  be effective
if Landlord within said sixty  (60) day period shall obtain
such permit or complete and comply as aforesaid, as the case
may be.

          12.4 (a) Attached.

          13. EMINENT DOMAIN



                                     - 7 -


<PAGE>




     13.1  If  there is any taking of or damage to  all  or  any
part of the Premises, or Tenant's leasehold interest therein,
or access roads to the Premises, because of the exercise of
the power of eminent domain, whether by condemnation proceedings
or  otherwise, or any transfer of any part of the Premises or
any interest therein  made in avoidance of the exercise of
the  power  of  eminent  domain (all of the  foregoing  being
hereinafter referred to as "taking") prior  to  or  during the
term hereof, the rights and obligations of the parties with
respect to such taking shall be as provided in this Article.

          13.2 If there is a taking of all of the Premises, or
the Premises are permanently  deprived  of  all  access  to
public roads, this Lease shall terminate as of the date of such
taking. The  event  of  taking  shall  be deemed  to  occur
upon  passage  of title or possession, whichever occurs sooner.
No money or other consideration  shall  be  payable by
Landlord to Tenant for the right of cancellation and Tenant
shall  have  no  right  to share in the condemnation award
excepting: Tenant shall be entitled to any award  for  Tenant
improvements and interruption of Tenant's business. In the
event of a partial  taking  of  the  premises,  Landlord may
offer the Tenant  the option of a reduction in rent, provide
alternative contiguous space, if feasible, or in the event
the partial taking materially effects the utilization of the
remainder, offer the Tenant the right to terminate the Lease.

          14. RIGHTS OF ACCESS

          14.1 Tenant may enter the Premises prior to the
proposed commencement of the term of this  Lease  for  the
purposes  of  installing  its  trade fixtures,  equipment,
merchandise,  advertising  and signs, provided such  entry
shall not materially interfere with Landlord's construction
work. No such  entry  shall  constitute  any acceptance of
the Premises  or  render Tenant liable for any charge for use
and occupancy of the Premises.

          14.2 Provided that Tenant's  business  is  not
materially interfered with,  Landlord  and  its authorized
agents and representatives  shall  be entitled to enter the
Premises  at reasonable times, upon reasonable prior notice,
for the purpose of inspecting  same  and  to  show the Premises
to prospective  purchasers  and  lenders.  Landlord  further
agrees that no forcible entry will be  made, except to
prevent injury to persons or substantial damage to property.

          15. QUIET ENJOYMENT; SUSPENSION OF OPERATIONS

          15.1 Landlord covenants  and  represents  that  it
now has and shall continue  to  have  sufficient  title  to
the Premises and to any other property affected by this Lease
to make this Lease  for the term set forth herein, and that
the execution and delivery of this Lease  does  not,  and
the  consummation of the transactions contemplated hereby
will not, result in the  acceleration  of any obligation
under any mortgage, deed of trust, lien, lease,


                                     - 8 -


<PAGE>




     license, agreement, instrument, order, arbitration award,
judgment  or decree,  or  violate or conflict with any other
restriction of any kind or character which would hinder, delay
or affect Tenant's right to possession or to quiet enjoyment
of the Premises. Landlord covenants and agrees that Tenant
shall have uninterrupted quiet and peaceful possession of the
Premises  and  shall  enjoy  all  of  the  rights  herein
granted without interference.

          15.2 If Tenant is prohibited from conducting business
in the Premises by any governmental authority having
jurisdiction because of  any  act  or default  of  the
Landlord,  the rent and other charges reserved hereunder shall
be wholly abated while such prohibition remains in effect, and
Landlord shall forthwith refund to Tenant all unearned rent
and other
charges paid in advance by Tenant. If such  prohibition
shall continue in effect  for a period of sixty (60) days,
Tenant shall have  the  right  to terminate  this Lease by
written notice sent to Landlord at any time after the expiration
of  such sixty (60) day period, but before the prohibition
is ended. Landlord shall  promptly  initiate  and  diligently
prosecute to completion  any  action which may be necessary to
abate  the  condition(s) which gave rise to the prohibition.

          16. INDEMNIFICATION

          16.1 Notwithstanding  any  investigations  made  by
Landlord, Tenant hereby indemnifies and holds Landlord and its
agents, employees, invitees, licensees and permittees harmless
from  and  against any claim,  loss, liability,  damage,
judgment, expense, cost or deficiency (including attorneys'
and professional fees and costs and court costs) (collectively
"Indemnification Claims") by reason of, arising out of,
connected with or resulting  from,  in whole or part,
(i) any misrepresentation, breach of warranty or nonfulfillment
of any agreement on the part of Tenant contained in this Lease;
(ii)  any act, omission or condition for which Tenant is
responsible; or (iii) Tenant's  use  of  the  Premises  or  the
conduct of Tenant's business, or from any activity, work
or things done, permitted or suffered by  Tenant in or about
the Premises, excluding acts of negligence. The foregoing
indemnification  shall apply even if Landlord and/or its agents,
employees, invitees, licensees and/or permittees may be strictly
liable as a matter of law for the payment of such
Indemnification Claims.

          16.2  Notwithstanding  any investigations made  by
Tenant,  Landlord hereby indemnifies and holds  Tenant  and
its agents, employees, invitees, licensees and permittees
harmless from  and  against  any  Indemnification Claims  or
contractual  liability  except  as  provided  in  this  lease,
excluding acts of negligence, by reason of, arising out of,
connected with or resulting from, in whole or part (i) any
misrepresentation, breach  of warranty  or  nonfulfllment
of  any  agreement  on  the  part of Landlord contained  in
or  given  in  connection  with  this Lease; (ii) any  act,
omission or condition occurring on or existing at real
property other than the Premises controlled by or subject
to the control  of  Landlord  or any other   person  or
entity  other  than  Tenant;  or  (iii)  any  work  of
construction,  improvement  or  demolition controlled by or
subject to the control of Landlord and/or its


                                     - 9 -


<PAGE>





agents, employees, invitees, licensees  and/or  permittees.
The foregoing indemnification  shall apply even if Tenant
and/or its agents,  employees, invitees, licensees  and/or
permittees may be strictly liable as a matter of law for the
payment of such Indemnification Claims.

          16.3 Each party agrees that  promptly  after  it
becomes aware of any Indemnification Claim or threatened
Indemnification  Claim with respect to which either party may
seek indemnification pursuant to  this  Article 16, it  will
give  written notice of such Indemnification Claim or threatened
     Indemnification Claim  to  the other party. The party
obligated to provide indemnity pursuant to this Article 16
shall promptly and diligently resist and dispose of such
Indemnification  Claim  or  threatened Indemnification Claim
in such manner as it deems appropriate; provided, however, that
if the party entitled to indemnity waives its claim to
indemnity, it shall at all times have the right (at its expense)
to participate in or take  over the defense  and  disposition
of such Indemnification Claim or threatened Indemnification
Claim, and the party  obligated to provide indemnity shall
not  compromise  or settle any such Indemnification  Claim
or  threatened Indemnification Claim  without  the  prior
written  consent  of the party entitled to indemnity.

          17. DEFAULT

          17.1 The following shall be deemed the acts of
default under this Lease:

               (a)  The  failure  of  Tenant  to  pay  when
due  the  rents or additional  charges  provided  for in this
Lease, and the continuation  of such failure for a period of
fifteen  (15)  days  after  Tenant shall have received written
notice of such failure. After Tenant has  received  three
(3) such notices and cure periods in any period of twelve
(12) consecutive months the cure period shall be reduced
to five (5) days.

               (b) The failure of a party to perform any other
term, condition, covenant or agreement of this Lease, or the
failure to make any payment to or  for  the benefit of the other
party (whether required under this Lease or otherwise), and the
continuation of such failure for a period of thirty (30) days
after  such  defaulting  party has received written notice
specifying the same or in  a case where default cannot be
cured within thirty (30) days, if the defaulting party shall
not promptly within such period commence and thereafter
diligently pursue to completion the remedy of such default.

          17.2 In addition to any other rights under this Lease,
in the event of an act of default by Landlord, Tenant may
perform the obligation  as to which Landlord is in default,
and Landlord shall pay Tenant the amount of Tenant's expenses
incurred in performing Landlord's obligation promptly upon
demand. If Landlord shall fail to pay such amount within
thirty (30) days of demand then Tenant shall have the right
to deduct said amount from the next month's rent payment
provided there is no reasonable dispute regarding the
Landlord's duty to pay the obligation.


                                    - 10 -


<PAGE>





          17.3 In the event of an act of default by Tenant,
Landlord may at its option:

               (a) Perform the obligation as to which Tenant
is in default, in which  case Tenant shall pay Landlord upon
demand the amount of Landlord's expenses incurred in performing
Tenant's obligation.

               (b)  Give Tenant no less than thirty (30) days
written notice of termination of this  Lease, in which case
this Lease will terminate on the date specified in such  notice
unless  by  that date Tenant has cured the default; provided
that Landlord shall not be entitled to regain possession
of the Premises without a court order.

               (c) Commence legal proceedings to regain  the
possession of the Premises.

          17.4 Nothing contained in Sections 17.2 and 17.3
shall  be  deemed to limit  the  remedies  available  to a
party upon an act of default by  the other party, and the
nondefaulting  party  shall be entitled to pursue any other
rights and remedies afforded to it by law or in equity.

          17.5  If  Landlord  regains  possession  of   the
Premises  without terminating this Lease, it may relet the
same on Tenant's  account  for  a term shorter or longer
than the remaining term of this Lease, applying the rent
therefrom  to  the amounts due by Tenant under this Lease and
if the amounts received from  such  reletting  during any
month are less than the amount to be paid during that month
by Tenant hereunder, then Tenant shall pay  any  such
deficiency to Landlord on a  monthly  basis. The balance
remaining,  if  any,  after  the  expiration or sooner
termination of this Lease shall belong to Tenant. Landlord
shall  have an obligation to make commercially reasonable
efforts to relet the Premises.

          17.6  (a)  Any  sum  accruing  to either party under
the  terms  and provisions of this Lease which shall  not
be  paid  when  due  shall bear interest at the rate of ten
percent (10%) per annum or the highest  lawful rate, whichever
is less, from the date the same becomes due and payable by
the terms and provisions of this Lease until paid.

               (b)  Tenant  shall serve any notice of claimed
default or breach by Landlord under this Lease  upon  the
lender holding a first mortgage or trust  deed  against the
Premises, provided  Tenant  has  received  prior written
notice of the name and address of such lender; and
notwithstanding anything  contained herein,  shall  allow
such lender the same  period following any default to cure
same as is allowed Landlord.

               (c)  The performance by either party of the
defaulted obligation of the other party  shall be deemed a
cure of that default, giving rise to an obligation of the
other party to pay the performing party the amount of ts
cost of performance. However, the failure to pay said amount
within fifteen (15) days after written demand therefor shall be



                                    - 11 -


<PAGE>




     an act of default without the necessity of any further
notice, anything contained in Section 20 to the contrary
notwithstanding.

               (d)  In determining the cost  of  either  party
performing  the obligation of the other under this Lease, the
performing party may include all costs, expenses  and  fees
incurred  in  performing the other party's obligation.

          18. ASSIGNMENT AND SUBLETTING

          18.1  (a) Tenant may assign or transfer this  Lease
and  all  rights hereunder, or  sublet  all  or  any  part
of  the  Premises, to a parent, affiliate  or subsidiary
corporation, or to a purchaser  of  substantially all of the
assets  of  Tenant's  business at this location without the
consent  of  Landlord, provided  such  assignee  possesses
substantially similar or greater assets, net worth and credit
worthiness.

               (b)  Tenant may assign or transfer this Lease
or sublet  all  or any part of the  Premises  to a party
other than as stated in the previous sentence only upon
obtaining  the  prior written consent of Landlord, such
     consent not to be unreasonably withheld  or  delayed,
provided,  however, that no such assignment shall confer upon
any such assignee the rights  of Tenant  to  exercise  any
previously  unexercised  extension  options  as provided  in
Section 2.2; the right to exercise such options being hereby
waived by Tenant  in  the  event  of  such an assignment unless
the Tenant shall elect to not be released from liability under
this Lease as a result of  any  assignment  or  sublease, but
shall  elect  to  remain  primarily responsible for performance
of  all obligations to be performed by Tenant hereunder  or
the  assignee or sublessee  has  substantially  similar  or
greater assets, net worth  and  creditworthiness then, in that
event only, Tenant will not continue to be liable hereunder.

          18.2 (a) If Tenant assigns or transfers its leasehold
interest under this Lease and is not released from liability
accruing after the assignment date, no default by the holder
of  the  Tenant's  interest  or termination of  this Lease by
Landlord shall be binding upon Tenant unless it receives the
appropriate notices required by Article 17.

               (b) If  Tenant  assigns  its leasehold interest
under this Lease and is not released from liability accruing
after  the assignment date as provided in Paragraph 18.1, and
reserves the right in the event of default by the holder of
said leasehold to have the leasehold reassigned or revert to
Tenant and/or to re-enter and resume possession of  the
Premises under the  terms  of  this  Lease,  Landlord will
recognize the reassignment  or reversion of the leasehold
and/or Tenant's resumption of possession of the Premises under
the terms of this  Lease,  provided  that  Landlord has not
terminated  this  Lease  as  to Tenant for an act of default
binding  upon Tenant. In the event Tenant exercises one of
the aforementioned rights and Landlord has not terminated
this  Lease as to Tenant for an act of default binding upon
Tenant, Landlord will  accept  Tenant's  cure of any defaults
and



                                    - 12 -


<PAGE>





     performance of the Tenant's obligations under this Lease,
and Landlord and Tenant will be bound to each other on the
terms of this Lease.

          18.3 Landlord may assign or transfer the Landlord's
interest in this Lease to another entity; provided that, in any
event, Landlord shall remain fully liable for all of its
obligations under this Lease accruing (or which with the
passage of time would accrue) prior to the date  of
Landlord's assignment or transfer, and the assignee or
transferee shall assume and be bound by all of the obligations
of Landlord under this Lease on and after such assignment or
transfer.

          19. HOLDING OVER

               If  Tenant  remains in possession  of  the
Premises after the expiration of the Lease  term  or  any
written extension or renewal of the Lease term, such continued
possession shall create a tenancy from month to month upon the
same terms and conditions  contained  herein  so  far  as
applicable, at  a  monthly rental equal to one hundred
twenty-five percent (125%) of the monthly rent for the last
Lease year prior to the end of the term, or the last hold
over year, prorated and payable in arrears at the end of each
month for the period of such occupancy.

          20. ATTORNEYS' FEES

               In the event either party  hereto  brings or
commences any legal proceeding to enforce any of the terms of
this Lease, the substantially prevailing party as determined by
the court in such proceeding shall then be entitled to receive
from the other party, a reasonable sum of attorneys' fees end
costs incurred in connection therewith.

          21. NOTICES

          21.1  Any  notice  or  demand  required  or  desired
to be given in connection  with  this Lease shall be in writing
and sent or delivered to the recipient at its notice address.
Notice sent by registered or certified mail, postage prepaid,
return receipt requested, shall be deemed given and received
three (3) days after deposit thereof in the United States Mail,
or on the delivery date endorsed by the Postal Service on the
return receipt, whichever date is earlier, except that notice
changing name or address to which future notice should be sent
will be made when delivered. Refusal to accept delivery at the
notice address shall not prevent notice from being made.

          21.2 Tenant may act on any notice given by the
designated officer or agent of Landlord.






                                    - 13 -


<PAGE>





      21.3 The notice addresses of the parties are as follows:

            Landlord: Immobiliaria de Mexquitic S.A. de C.V.
                              c/o Vickerman, Inc.
                              P.O. Box 726
                              Highland Park, Illinois 60036
                              Attn: William Vickerman

               With a copy to: Michael A. Abramson
                              Arnstein & Lehr
                              120 S. Riverside Plaza
                              Suite 1200
                              Chicago, Illinois 60606

               Tenant Marino Technologies Incorporated
                              13260 NW 45th Avenue
                              Opa-Locka, Florida 33054

               With a copy to: Ken Sandler, Esq.
                              4700-B Sheridan Street
                              Hollywood, Florida 33021

               Either  party  may  change  its notice address
or the person  or agent to whom notice should be directed by
giving notice of such change in the manner provided by this
Article 21.

          22. REMEDIES CUMULATIVE

               Each right and remedy which either  party  may
have  under this  Lease  or  by  operation of law shall be
distinct and separate from every other such right and remedy;
all  such  rights and remedies shall be cumulative, and
unless specifically stated herein to the contrary none  of
them  shall be deemed inconsistent with or exclusive of any
other, whether or not  exercised;  and any two or more or all
of such rights and remedies may be exercised at the same time
or successively.

          23. WAIVER

          23.1 The waiver  of either party of any default in
the performance by the other of any covenant  contained herein
shall not be construed to be a waiver of any preceding or
subsequent  default  of  the  same or any other covenant
contained herein.




                                    - 14 -


<PAGE>





          23.2  If  any  action  by either party shall require the
consent or approval of the other party, the grant of such consent
or approval on any one occasion shall not be deemed  a  consent
to or approval of that action on any subsequent occasion or of
any other action on the same  or  any  subsequent occasion,
unless agreed to otherwise in writing.

          24. INTERPRETATION; GOVERNING LAW

          24.1 The Table of Contents and captions by which the
Articles of this Lease  are  identified  are for convenience
only, and shall have no effect upon the interpretation of this
Lease. This Lease shall be construed with equal weight for the
rights of both parties, the terms hereof having been determined
by fair negotiations with due consideration for the rights and
requirements of both parties.

          24.2 Any reference made in this Lease  to an Article
or Section shall be construed as a reference to the entire
Article (including all of its Sections and other subdivisions),
or to the entire Section (including all of its other subdivisions),
as the case may be, and shall also be construed  as  a
reference  to  any appendix provision which complements,
supplements or modifies the provision referred to.

24.3 Wherever the context so  requires,  the  singular  number
shall include  the  plural,  the  plural shall refer to the
singular, the neuter gender shall include the masculine  and
feminine genders, and the words "Landlord", Tenant", and
"person" shall include corporations, partnerships, associations
and individuals. If the named Landlord  or  any successor to the
named Landlord is a group or combination (such as a group of
tenants-in-common), rather than a single person or a
single corporation, the covenants and liabilities of Landlord
shall be pint and several obligations of all the persons and
legal entities comprising such group or combination and may be
enforced in a proceeding  brought against one or more of the
members of the group or combination with the same effect as if
each member had been  made  a  party  thereto and duly served
with process. If any provision of this Lease shall be  held  to
be invalid by a court, the remaining provisions of this Lease
(and the application of such provision to other persons or
circumstances) shall remain  in  effect and shall in no way be
impaired thereby.

          24.4  This Lease is intended to be performed in the
country and state where the Land is located and the laws of
that state and country shall govern its interpretation and
effect.  The parties agree that any disputes hereunder may be
adjudicated in the United States District Court for the
Southern District of Florida.  The parties waive any
objection as to jurisdiction, venue and forum non conveniens
and agree that any judgment rendered by that court shall be
entitled to full faith and credit and be enforceable in
San Luis Potosi, Mexico.

          25. ENTIRE INSTRUMENT


                                    - 15 -


<PAGE>





               The  parties acknowledge and agree that at all
times  they  have intended that none  of  the  preliminary
negotiations would be binding on either party, and that they
would be bound  to each other only by a single formal
comprehensive document containing this  Article  and  all  of
the agreements  of  the  parties,  in  final  form, which has
been executed by Tenant and by Landlord. The parties acknowledge
that  none  of  the prior oral  and written agreements between
them (and none of the representations on which either of them
has relied) relating to the subject matter of this Lease shall
have any force or effect whatever, except as and to the extent
that such  agreements  and  representations have been
incorporated in this Lease.  This  Lease shall not be  modified,
altered  or  changed  in  any respect, except by writing
executed by Landlord and Tenant.

          26. SUCCESSORS AND ASSIGNS

               This Lease shall be binding upon and inure to the
benefit of the heirs, personal representatives, successors and
assigns of each party.

          27. ASSIGNMENT OF RENTS

               (a) Landlord and Tenant agree that in the event
Landlord assigns this lease and/or  the  rents  payable to
Landlord under the terms of this lease to Banco National de
Comericio Exterior,  S.N.C.,  that Bancomex or its  successor
or assignee, or any other mortgage holder then  would  be
entitled to enforce the provisions of the lease and the payment
of rent on its own behalf in either Mexico or in the United
States at its option.

               (b) Upon the  condition  that  Tenant  and  the
holder  of  any mortgage,  trust  deed or other financing or
security instrument placed on the Premises enters  into  a
subordination, non-disturbance and attornment agreement  in
form  approved by  Tenant,  which  approval  shall  not  be
unreasonably withheld or delayed, Tenant's interest hereunder
shall be subject and subordinate to all mortgages, trust deeds,
and other financing and security instruments placed on the
Premises  by  Landlord from time to time  ("Mortgages"), except
that no assignment or transfer  of  Landlord's rights hereunder
to a lender as collateral security in connection with a Mortgage
shall affect Tenant's right to possession, use or occupancy of
the  Premises in accordance with this Lease.  The provisions
of  this paragraph shall be self-operating. As an accommodation
to Landlord and at its request, Tenant shall furnish Landlord
current and past balance sheets  and operating statements in the
form reasonably requested by the holder of any Mortgagee to
which Landlord applies for financing concerning the Property.

          28. LANDLORD'S IMPROVEMENTS

          28.1 Landlord shall, at its sole cost and expense,
construct or cause to be constructed  upon  the Land a typical
warehouse factory building and related improvements containing
approximately  113,772  square  feet  of ground  floor  area
(collectively,


                                    - 16 -


<PAGE>






     "Landlord's Improvements") in conformance  with  this Lease
and with those final  detailed plans and specifications approved
by Tenant as provided herein (hereinafter  referred  to  as
the  "Plans  and  Specifications")prepared in accordance with
the Specifications Outline attached hereto as Exhibit "C'.

          28.2 (a) If the Plans and Specifications do not exist
when this Lease is executed,  Landlord  shall,  at  its  sole
cost and expense, have them prepared  by a licensed architect
selected and employed  by  Landlord  and approved in  writing
by Tenant. The initial Plans and Specifications shall
incorporate the items specified in the Specifications
Outline set forth in Exhibit "C" and  shall  be  delivered
to Tenant (2 copies to each of the parties to receive copies
of notices for Tenant  as  provided  in  Section 21.3). Tenant
shall either accept said Plans and Specifications or totally
or  partially reject them within fifteen (15) days from the
date they  are delivered  to Tenant in final form. Tenant shall
signify its acceptance or rejection by  returning a copy of
the Plans and Specifications to Landlord with  each  page
marked  "Approved"  or  "Rejected",  and  if  rejected,
specifying the reasons  therefor in detail. If Tenant does
not deliver the Plans and Specifications  marked  in this manner
within the aforementioned fifteen (15) day period it shall be
deemed  to  have rejected them.  If Tenant  rejects  the
Plans  and Specifications in whole or in part and if they are
not modified and approved within fifteen (15)days thereafter,
this Lease shall terminate and neither party shall be liable to
the other.

               (b) Landlord acknowledges that Landlord solely,
and not Tenant, is responsible in all respects for the Plans
and Specifications, including but not limited to their accuracy,
completeness and sufficiency.  Further, Landlord  acknowledges
that  even  though  the architect who prepares the Plans  and
Specifications and supervises the construction  may  have  been
used in such capacities in the construction of other facilities
of Tenant, Landlord  solely,  and not Tenant, is responsible
for the selection of the architect and his performance of his
duties.

          28.3  (a)  Landlord   shall   perform   construction
of Landlord's Improvements or cause it to be performed,
diligently and continuously  and in  accordance  with  the
Plans  and  Specifications  and  all applicable governmental
requirements until substantial completion, which  shall occur
no later than five months following execution of this Lease. For
each day Landlord is late in the completion of construction,
Tenant shall receive a two day rent abatement.

               (b)  The  time  for  substantial  completion of
construction set forth in Section 28.3(a) shall not be extended
for any reason without the prior written approval of Tenant which
approval may  be  withheld  in  its sole  discretion,  provided,
however, the time for substantial completion shall be extended
for a period  of  time equal to delays caused by acts of God,
strikes, unforeseeable weather conditions,  and  Change  Orders
(as defined in Section 28.4).



                                    - 17 -


<PAGE>





          28.4  Landlord  and  Tenant  shall  cooperate  to
alter existing and planned  construction  to  conform  to any
reasonable change that Tenant desires in the Plans Specifications
("Change  Order'),  provided  that the Change  Order  (i)  is
in  writing,  (ii)  states  the additional cost of construction
(including  overhead and profit, not to exceed  10%  of  the
actual costs of labor and materials)  resulting from the change,
and (iii) is signed by one or more persons specifically
designated for that purpose by  Landlord  and  Tenant. Any delay
in the construction  of  Landlord's Improvements caused by any
change  order  shall  automatically  extend any time  set  for
Landlord's performance hereunder by a period equal to  such
delay. Tenant  shall  not  be  required  to accept and/or pay
for any work deviating from the Plans and Specifications  that
is  not  covered  by  a proper Change Order or pay more for such
work than is stated in the Change Order.  If  the  changes  by
Tenant under this Section 28.4 result, in the aggregate, in a
net increase  in  the  cost  of  Landlord's  Improvements,
Landlord  shall  amortize the cost of the first $100,000 of
Change  Orders(excluding electrical  installations)  over  the
initial term of the Lease and Tenant shall pay Landlord the
amount of the net increase which exceeds $100,000.00  or  which
relates to electrical installations  within  thirty 30) days
after completion  of  the  construction  covered  by  the change
order.  If  Tenant's  changes  under  this  Section  28.4  result,
in the aggregate,  in  a  net  decrease  in  the cost of
Landlord's Improvements, Landlord shall amortize the amount of
the net decrease to Tenant over the term.

          28.5 During construction, Tenant shall  at  all
times have access to the project for the purpose of making
inspections of the work in progress. Nothing herein contained
shall be construed as an obligation  upon  Tenant to  make  such
inspections,  and  it is agreed that it is Landlord's sole
obligation  to  insure  that  Landlord's  Improvements  are
completed  in compliance  with  the Plans and Specifications.
If during  construction, Tenant shall reasonably  determine
that construction is not proceeding in accordance with the Plans
and Specifications,  and  if  Tenant  shall give notice  to
Landlord  specifying  the particular deviation, deficiency  or
omission, Landlord shall forthwith  take such steps as may be
necessary to correct such deviation, deficiency or omission.

          28.6  (a)  Landlord's  Improvements  shall  be  deemed
substantially completed when all of the following events shall
 have occurred:

                    (1) All approvals, certificates and
filings  relating to construction of Landlord's Improvements
that are necessary before Tenant may occupy and use Landlord's
Improvements have been issued:

                    (2)  The  construction  has  been
sufficiently completed in accordance with the Plans and
Specifications, as modified by Change Orders and all applicable
laws and governmental rules and regulations that Tenant
can substantially use Landlord's Improvements as intended; and


                                    - 18 -


<PAGE>






                    (3) Only items commonly considered  to  be
in the nature of punch list" items remain to be completed.

        28.7 (a) Landlord expressly represents and covenants that:

                    (1)  The  Plans and Specifications comply or
shall omply when they are created with  all applicable laws
and governmental rules and regulations;

                    (2)  Landlord's   Improvements   shall
 be  constructed  in accordance   with   all  applicable  laws
and  governmental   rules   and regulations; and

                    (3) Landlord's  Improvements  will be
constructed in a good and workmanlike manner and free of defects
in workmanship or materials.

          29. CONDITIONS TO AND TERMINATION OF LEASE

          29.1  Subject  to  delays caused by change orders and
circumstances beyond the reasonable control of Landlord as set
forth  in  paragraph
          28.3(b), Tenant may terminate this Lease by written
notice to Landlord if:

               (a)  Construction  of Landlord's Improvements
have not commenced in accordance with a plan to complete  or
as set forth in paragraph 28.3, whichever is later.

               (b) The term of this Lease does not commence
pursuant to Section 2.1 by February 1, 1997.

          29.2 The provisions of Section 17.1(b)  and  Section
17.2  shall not apply  to termination of this Lease by Tenant
pursuant to Section 29.1.  A notice by  Tenant terminating this
Lease pursuant to Section 29.1 shall be effective immediately
or  at  any  time  stated in the notice or upon the expiration
of any grace period stated in the notice.

          30. CERTIFICATES

               Either party shall, without charge, at any time
and from time to time hereafter within ten (10) days after
written  request of the other, certify by written instrument
duly executed and acknowledged to any  (i) beneficiary under
a mortgage or other encumbrance on the Premises, (ii) assignee
of Tenant's leasehold, (ii) sublessee of Tenant, or (iv) any
proposed beneficiary, purchaser, assignee or sublessee:

               (a) As to whether this Lease has been
supplemented or amended, and if so, identifying the documents
that do so;



                                    - 19 -


<PAGE>





               (b)  As to the validity and force and effect of
this Lease,  in accordance with the tenor as then constituted;

               (c) As to  the existence of any default under
this Lease, and if so, specifying the same:

               (d) As to the performance of any specific
obligation under this Lease;

               (e) As to the dates to which the annual
rent and any other charges due under this Lease have been paid;

               (f) As to the existence of any offset,
counterclaims or defenses on the part of either party;

               (g) As to the commencement and expiration dates
of the  term  of this Lease and the number and length of any
renewal options; and

               (h)  As  to  any  other  specific  matter  as
may reasonably be requested.

          31. COMMISSIONS

          31.1  Landlord  shall  be solely responsible for the
payment  of  any commissions or compensation of any kind which
may be due on account of the execution of this Lease or the
negotiations therefor.

          31.2 Tenant represents that  no  broker  facilitated
this  Lease and Tenant  shall indemnify and hold Landlord
harmless against all claims for commissions for or compensation
of any kind, including costs of attorneys'fees incurred in
resisting any claims, which are based in any way on the
execution of this Lease or the negotiations therefor.

          IN WITNESS WHEREOF,  the  parties hereto have
executed this Lease the day and year first above written  by
their  respective officers thereunto duly authorized.

     LANDLORD: TENANT:

     IMMOBILIARIA DE MEXQUITIC 		MARINO TECHNOLOGIES INC.,
     S.A. DE C.V. 				a Delaware Corporation

     /s/BENJAMIN MORALES TOPETE 	   /s/ANTHONY MARINO, PRESIDENT





<PAGE>



Subscribed and Sworn to before me
this ____ day of ______, 1996.

__________________________________
Notary Public Notary Public


Subscribed and Sworn to before me
this 31 day of July, 1996.

/s/illegible signature



<PAGE>



                                        EXHIBIT A
                                 LEGAL DESCRIPTION


<PAGE>



                                        EXHIBIT B
                                     SITE PLAN

<PAGE>




                                        EXHIBIT C

                                 SPECIFICATIONS OUTLINE




<PAGE>


                           Marino Technologies, Inc.
                           New Plant Proposal Details
                           San Luis Potosi, Mexico

     BACKGROUND

          Marino Technologies, Inc. has requested that
Immobliaria Mexquitic S.A. de C.V. prepare a proposal for a
plant in San Luis Potosi, Mexico. Immobliaria Mexquitic met with
the plant manager in San Luis,and presented initial concept
plans for the project to Mr. Anthony Marino in late April,
1996. As a result of further meeting and review of the plant
requirements, the plans were refined and those changes are
included in this current project analysis.

     GENERAL PROJECT

          We have been asked to present two options for a new
plant. One option is to meet current and near term needs with
a plant of 77,551 ft2. The second option is to construct a
113,772 ft2 plant which includes construction of projected
expansions.

          Both projects are proposed for the industrial park
"Pueblo Viejo" in San Luis Potosi. Included are the construction
specifications of the Marino plant, offices, services and common
areas. Also included are a description of the services to be
provided to Marino by the industrial park. Each plant contains
the same construction specifications. The larger plant has an
extension of the warehouse and relocated loading docks.

          Based upon changes requested by Marino the initially
quoted rental rates have been reduced to 19.4 cent (USD) per
square foot per month for under roof areas in the 77,551 ft2
building and 18 cent for the expanded warehouse. Rentals are
subject to Mexican IVA tax which is not included in the above
quote. In accordance with Mexican tax laws, IVA can qualify for
refund to a maquilladora company. The proposed plant expansion
to 113,772 ft2 can be provided as an option in the lease during
the first three years of the lease term at a quoted rate.



<PAGE>


     Page 2

          If this proposal meets with your approval, a
non-binding letter of intent will be prepared and executed by
the parties: that letter, a draft lease and three years of
tenant's audited financial statements will be submitted for
approval of project financing. The lease term will be seven
years with two five year options. Additional terms are subject
to discussion between Marino and Immobiliaria Mexquitic as
represented by Vickerman in the US.




<PAGE>


     Page 3

                     SERVICES PROVIDED BY "PUEBLO VLEJO"

     SECURITY
        a. Control of entrance to the Park
        b. Roving security, 24 hours a day, 365 days per year
        c. Closed circuit monitors of park and individual plant
		entrances
        d. Intercommunication between Marino plant and front gate
        e. Completely enclosed Marino plant within enclosed Park

     COMMON SERVICES
          a. Maintenance of green areas
          b. Maintenance of exteriors of all construction
          c. Employee "comidor" and lunch facilities in a
			landscaped area

     INFRASTRUCTURE
          a. Water from Park cistern, metered to Marino plant
			at the current rate of $2.00 per cubic yard
          b. Electricity - CFE connections and Marino
			transformer supplied, metered power for Marino
          c. Decorative exterior lighting provided throughout
			Park including exteriors of Marino plant
          d. General telephone lines provided for Marino
			contract with Telemex
          e. Park provided and maintained sewage treatment
			plant.

     CORPORATE BUILDING
          a. General offices of the Park on site
          b. Conference center for Park use. Services
			(food, coffee, receptionists) are available
			(reservations subject to
			 availability)
          c. Exterior "Plaza" available for events

     ADDITIONAL BENEFITS
          a. Beautiful Mexican colonial design throughout Park
          b. Landscaped green areas
          c. Chapel (1996) and recreation area (1997) for
			employees on site
          d. Immediate on site assistance
          e. Park owners are also industrial tenants
          f. Chicago office to assist Marino as needed




<PAGE>


     Page 4

           TECHNICAL SPECIFICATIONS FOR MARINO TECHNOLOGIES, INC.
		PROJECT INDUSTRIAL WAREHOUSES

          Pueblo Viejo will construct four(or six)
interconnected warehouses each with open areas of
65.6 by 262.4 feet. Construction will be in accordance with
the architectural design of the Pueblo Viejo park. Steel
support columns are placed at 65.6 feet apart by 19.6 feet
along the length of each building. Support columns are the only
interior structure.

          Floor. Reinforced concrete floor of 5 inches except in
two areas specified by Marino for additional support. Interior
floors finished and sealed.

          Walls: Concrete block, interior painted, exterior
finished with concrete aggregate and painted in style of the
Park. Included are perimeter louvered metal ventilation
windows of 1.9 feet, covered with screen, located at roof
and wall intersection. Walls are 20 feet at the eaves
and 29.5 feet at the roof peak.

          Roof: Steel structure with roof supports at 19.68 feet
covered with galvanized steel roof with 14% of translucent
sheets to provide natural light to the interior. Interior of
roof painted to Marino specifications, exterior coated with
reflective paint and sealed. Steel support beams on exterior
walls are covered with concrete and integrated into the wall.
Turbine type exhaust ventilators are calculated at one per
2,010 square feet of roof (approximately 36 for the option one).

          Others: Exterior walls will contain fixed glass windows
protected on the exterior with decorative wrought iron
grates, in similar fashion to other park buildings.
Windows designed to provide natural light to the interior.
Metal roll up door will be installed at each truck bay.



<PAGE>


     Page 5

Number of bays specified by Marino. Decorative wooden
doors installed on visible exterior doors (employee
entrances and exterior bay doors, if desired by Marino).

Electrical installation: General interior fluorescent lighting
provided with illumination of one 75 watt fixture for each
1,290 square feet. Transformer with 300 KVA and connections
provided. Park will contract and supervise installation of
specialized Marino lighting and electrical installations at
Marino expense.

     GENERAL OFFICES

          The office building will be constructed with
architectural design in accordance with the Pueblo Viejo park
theme and will contain an exterior plaza constructed of hand
cut stone and fountain or reflecting pool. The building will
have two floors with a total area of 4,305 square feet. General
offices with two bathrooms will be on the first floor. Marino
will specify number of private interior offices. Windows will
overlook plant as specified by Marino. The second floor will
contain two executive office, a meeting salon and executive
apartment with full bath. General offices will be constructed
in a functional style. The second floor will have additional
architectural detail, including hand cut stone, balcony and
patio with decorative features similar to the Park style. Extra
specifications such as wood floors, marble or carpeting are
installed by the Park at Marino expense.

          Floors:        Mexican style tile

          Walls:         Concrete block, covered and painted in
					style similar to the Park.

          Roof:          Reinforced concrete, sealed and edged
					with concrete or cut stone moldings.



<PAGE>


     Page 6

          Windows:       Clear glass, designed to open for
ventilation. Exterior decorative wrought iron or cut stone applied
in a style similar to the Park.

          Wood:          Wood doors on all interior and exterior
doors. (Glass entry door at Marino option.) Wood on windows at
Park option.

          Electrical:    General (fluorescent) lighting and
electrical connections provided. Decorative interior lighting
installed by Park at Marino expense. Exterior decorative lighting
by Park.

          Water:         Marino cistern on site to service plant.
Water is metered from Park cistern to Marino. Standard white
ceramic fixtures with copper connections provided. Hot water
provided in executive bath and apartment. Fixture
upgrades in executive baths are optional at incremental
cost to Marino.

     EMPLOYEE BATHROOMS and INFIRMARY

          The employee (factory) bathrooms are located adjacent
to, but outside of plant. Connected to green area (future comidor)
and access to Park comidor.

          Bathrooms:     Construction of 527 square feet.
Women will have 10 toilets and 10 sinks. Men will have 4 toilets,
4 urinals and 4 sinks. The sinks will be on the exterior
in accordance with Marino instructions.

          Infirmary:     Construction of 161 square feet divided
into two sections. Equipped with sink in treatment area.

          Total area:    688 square feet

          Floor:         Commercial tile.  Mexican or ceramic.



<PAGE>


     Page 7

          Walls:         Commercial tile. Mexican or ceramic.
Large mirror in area of sinks for men and women.

          Roof:          Reinforced concrete, sealed and finished.

          Bath furnishing: Commercial white.

          Electrical:   Fluorescent lighting and outlets included.

          Water:        Cold water only, copper and PVC plumbing.

          Windows:      Translucent with decorative wrought iron
on exterior.

          Construction:  Painted metal doors on bathroom and
individual toilets. Constructed in style of Park.

     ACCESS CONTROL

          A small access control will be constructed at the gate
entrance to the Marino plant. The area will be 161 square feet.
The structure will have windows with sight lines to the access
doors and common interior areas. A small bathroom is installed.

          Floor: Commercial ceramic tile

          Walls: Block, covered in concrete and painted in style
of Park.

          Roof: Reinforced concrete.

          Wood: Rustic door in style of Park.

          Electrical: Lighting and outlet.

          Water: Water to bath. Bath is standard white commercial.
                         Cold water only.





<PAGE>


     Page 8

     LOADING DOCKS WITH ROOF

     Inclined exterior loading docks with access to plant and
patio (truck parking) area. Covered area is projected at
2,583 square feet.

          Floor:         Reinforced concrete.

          Roof:          Same as warehouse except without
ventilators and translucent panels.

     OPEN AREA for TRAILERS

     Area for trailer movement is projected to be 12,357
square feet.

          Floor: Reinforced concrete or asphalt.

          Walls:         Perimeter walls are of brick covered
with concrete and painted. Exterior moldings, decorative stone,
parking areas and fountain provided by Park in style of Park.
Interior walls painted and provided with architectural
detail as need to the style of the Park. Large wooden
and wrought iron gates for vehicle and employee access,
respectively.

     OFFICE BUILDING PARKING

     An interior office parking area is included for access
control of office employees.  The area is 3,293.5 square feet and
will accommodate 12 cars.

          Floor: Concrete and cut stone, similar to existing
lots at Park.

          Walls:         The parking area is separated from the
Park with a 7 foot wrought iron fence accented with carved stone
pilasters. Adjacent Marino and Park green areas provide open
vista for Marino plant.


<PAGE>


     Page 9

     WALKWAYS and OFFICE BUILDING PLAZA

          All areas of the plant interior will be interconnected
with walkways of concrete and cut stone. The office patio will
be of cut stone and contain a reflecting pool or fountain.

          Floor: Concrete and hand cut stone, similar to the
Park style.

          Walls: Wrought iron and hand carved stone pilasters
as required for separation of Marino plant and Park. property
(in area of parking lot, green area and employee comidor access).

          Landscape:     Gardens, grass and trees with water
outlets provided in the style of the park.

     GREEN AREAS

          The exterior areas including the walks, walls entry,
parking areas and streets around the Marino plant will be
landscaped and maintained in a style similar to the Park.
Decorative exterior lighting and decorative Marino entrance
lights are provided. The green area adjacent to the offices,
office parking and employee bathrooms will be planted with grass
and landscaped. Separation between this area and Park areas
are as described above. The Marino reserve area will be planted
with grass and provided with water outlets for maintenance.


<PAGE>



                                        EXHIBIT E

                                      SECTION 12.4

          12.4 (a) If Landlord fails or is unable to  obtain  a
building permit for  repair,  rebuilding  and restoration of
the Premises within  one  (1) month from the date damage  occurs,
Tenant shall have the right to apply for  that  permit  and
Landlord shall cooperate with Tenant  in  its application.

               (b) If Landlord fails to repair, restore or
rebuild  the  damage with  all  reasonable  dispatch  and
diligence,  or if Landlord stops the restoration  of  the
Premises  or  if  Tenant obtains a  building  permit pursuant
to Section 12.4(a), Tenant may take  over  the restoration of
the Premises. If Tenant elects to take over the restoration
of  the Premises, Tenant  shall  provide Landlord with a copy
of a fixed price contract  for the reconstruction  of  the
Premises  in  a  like  kind  and  quality  of construction
as initially built together with a performance bond insuring
that contractor  will complete the project for the bid price
in accordance with the contract specifications. Landlord shall:

                    (1)  Turn over all insurance proceeds in its
possession and assign its right to all  uncollected insurance
proceeds to a trust company mutually agreed upon by the parties
with instructions to make progress payments to the contractor.

                    (2) Assign to Tenant its right under ant
contracts with the architect and general contractor with respect
to the work done and to be done on the Premises.








<PAGE>

                                                     EXHIBIT 10.8


           WAREHOUSE LEASE FOR MARINO TECHNOLOGIES, INC.
         ================================================



                       WAREHOUSE LEASE

THIS WAREHOUSE LEASE ("Lease"), made and entered into as of
this 30th day of September, 1996, by and between J.R REALTY
CORPORATION("Landlord")and MARINO TECHNOLOGIES,INC.("Tenant").

THE  Landlord, for and in consideration of the rent herein
reserved to be paid by the Tenant, and in consideration of the
covenants and provisions to be kept and performed  by  the
Tenant, does hereby lease unto Tenant, and said Tenant does
hereby hire and take as Tenant under the Landlord the property
located at 13260 NORTHWEST 45TH AVENUE,  OPA LOCKA, FLORIDA
33054 Dade County, consisting of approximately 75,000 square
feet  of  office/warehouse  space ("Building") together  with
the  land  ("Land")  (hereinafter  the Building and  Land  are
collectively referred to as the "Premises"), together  with
all  improvements therein  and  thereon  belonging or
pertaining to the Premises, including  all rights,
privileges,  easements  and  appurtenances  belonging  or
pertaining thereto.

TO HAVE AND TO HOLD the  Premises,  together with the rights
and appurtenances unto the Tenant, subject to the following
conditions and covenants:

WITNESSETH:

TERM: The Tenant is to have and to hold  the  Premises  for
a term of Five (5)Years beginning January 1, 1997 and ending
December 31, 2001 ("Lease Term").

RENT: Tenant agrees to pay the Landlord the rent due hereunder
"Rent") in the sum of One Million Four Hundred Twenty Six
Thousand Three  Hundred  Sixty  One and 64/100 ($1,426,361.64)
Dollars, payable as follows:


Commencing January I, 1997 and on the first day of each month
through December 31, 1997, the sum of Twenty Two Thousand
Three Hundred Eighty Eight and 48/100 ($22,388.48) Dollars.

Commencing January 1, 1998 and on the first day of each month
through December 31,  1998,  the  sum  of  Twenty  Three
Thousand Sixty and 13/100 ($23,060.13)Dollars.

Commencing January 1, 1999 and on the first day of each month
through December 31, 1999, the sum of Twenty Three Thousand
Seven Hundred Fifty One and 94/100 ($23,751.94) Dollars.

Commencing January 1, 2000 and on the first day of each
month through December 31, 2000, the sum of Twenty Four
Thousand Four Hundred Sixty Four and 49/100($24,464.49)Dollars.

Commencing January 1, 2001 and on the first day of each month
through December 31, 2001, the sum of Twenty Five Thousand
One Hundred Ninety  Eight and 43/100($25,198.43) Dollars.

payable  to  the  Landlord,  J.R  REALTY  CORPORATION,
469 WEST 83RD  STREET, HIALEAH, FLORIDA 33014 in advance,
plus applicable Florida  Sales Tax, without notice  or demand
or set-off, during each and every month of the  Lease  Term.
Such monthly installments of Rent shall be due on or before
the first day of each and every calendar month of the Lease
Term, with beginning and ending terms of less than one month
being adjusted based  on  the number of days that Tenant
is obligated to pay Rent during such periods. Tenant  shall
pay to Landlord monthly all applicable sales and use taxes
imposed from time to time on the Rent, all amounts deemed to
be additional rent and all other sums payable  by  Tenant
under this Lease. The Rent shall be payable to Landlord's
office or elsewhere as  designated  from  time  to  time  by
written notice to Tenant.


<PAGE>


IT  IS  FURTHER  AGREED  AND COVENANTED BY AND BETWEEN THE
PARTIES  HERETO  AS FOLLOWS:

1. SECURITY: Tenant, concurrently  with  the  execution  of
this Lease, has deposited with Landlord the sum of $37,500.00,
the receipt of which is hereby acknowledged by Landlord, which
sum shall be retained by Landlord as security for the payment
by Tenant of the rents herein agreed to be paid by Tenant and
for the faithful performance  by  Tenant  of  the  terms and
covenants of this Lease. It is agreed that Landlord, at
Landlord's option, may at any time apply said sum or any part
thereof toward the payment of the  rents  and  all  other
sums  payable  by Tenant under this Lease, and towards the
performance of each and every of Tenant's  covenants  under
this  Lease,  but  such covenants and Tenant's  liability  under
this  Lease shall thereby be discharged  only  pro tanto; that
Tenant shall remain liable  for any amounts that such sum shall
be insufficient to pay; that Landlord may exhaust  any or all
rights and remedies against Tenant before resorting to said sum,
but nothing herein contained shall require or be  deemed  to
require Landlord so to do. Tenant shall pay to Landlord on demand
the amount so applied in order to restore the security deposit
to its original amount. In the event this deposit shall not be
utilized  for  any  such purposes, then such  deposit  shall
be returned by Landlord to Tenant within ten days after the
expiration of the Lease Term. Landlord shall not be required to
pay Tenant any  interest  on  said  security deposit and may
commingle it with other funds of Landlord.

2.  ASSIGNMENT: (A) Without the prior written consent of Landlord
obtained in each case, Tenant shall not assign, transfer, mortgage,
pledge, or otherwise encumber or dispose of this Lease or the term
thereof, or sublease the Premises or any part thereof or permit
the Premises to be occupied  by  other persons. If this Lease be
assigned, or if the Premises or any part thereof be subleased
or occupied  by  anybody  other  than  the Tenant, the Landlord
may, after default by the Tenant, collect rent from the assignee,
subtenant, or occupant and apply the net amount collected to the
rent herein reserved but no such collection shall be deemed a
waiver of this covenant, or the acceptance of the assignee,
subtenant, or occupant as Tenant or a release of the Tenant from
the further observance and performance by the Tenant of the
covenants herein contained. The consent of the Landlord to
an assignment shall not be unreasonably withheld provided the
net worth of the assignee, as determined in accordance  with
generally  accepted  accounting  principles  is  equal to or
greater than that of Marino Technologies, Inc. as of
[December 31, 1996].

     (B)  The  joint  and  several  liability  of Tenant named
herein and  any immediate  and  remote  successor in interest
of Tenant  (by  assignment  or otherwise),  and  the due
performance of the  obligations  of  this  Lease  on Tenant's
part to be performed or observed, shall not in any way be
discharged, released or impaired  by any (i) agreement which
modifies any of the rights or obligations of the parties
under  this  Lease, (ii) stipulation which extends the time
within which an obligation under this Lease is to be performed,
(iii) waiver of the performance of an obligation required under
this Lease, or (iv) failure to enforce any of the obligations
set forth in this Lease.

3. EXAMINATION OF PREMISES: Tenant having examined the Premises
is familiar with the condition thereof and relying solely
on such examination will take them in their present condition,
unless otherwise expressly agreed upon in writing.

(4. DELAY OF POSSESSION: If the Landlord is unable  to  give
possession of the demised  Premises  on  the date of the
commencement of the aforesaid  term  by reason of the holding
over  of  any  prior  tenant or tenants or for any other reason;
an abatement or diminution of the rent  to  be paid hereunder
shall be allowed Tenant under such circumstance, but nothing
herein  shall  operate  to extend  the  term  of  the  Lease
beyond the agreed expiration date; and said abatement in rent
shall be the full  extent  of Landlord's liability to Tenant
for  any  loss  or  damage to Tenant on account of  said  delay
in  obtaining possession of the Premises.If Landlord is unable
to give possession of the

<PAGE>

demised Premises to Tenant within N/A days  next after the
commencement of the term of this Lease, then Tenant shall have
the  right  to  cancel  this  Lease upon written notice thereof
delivered to Landlord within ten days after the  lapse of said
N/A day period;  and,  upon  such  cancellation,  Landlord  and
Tenant shall  each  be released an discharged from all liability on
this Lease.)

5.  USE:  The  Premises  shall  be  used  by  Tenant  for
manufacturing   and distribution  of packaging containers and
affiliated items and for offices and showrooms and for  no
other  purposes,  and further, Tenant agrees to use the entire
Premises as hereinabove provided.

6. ALTERATIONS: (A) Tenant will make no alterations, additions
or improvements in or to the Premises without the prior written
consent  of Landlord; and all Tenant improvements upon the
Premises and any replacements  thereof, including all  air
conditioning systems, additions, fixtures, or improvements,
except only store and office furniture  and  fixtures  which
can be  readily removable without injury to the Premises, shall
be and remain  a part of the Premises at the  expiration  of
this  Lease. In the event tenant makes  any  alterations,
additions or improvements to  the  Premises,  Tenant shall pay
to Landlord its reasonable  fees and costs for architectural
services  in  connection  with  a review of the proposed
alterations, additions or improvements.

     (B) In the  event  Landlord  consents  to  the making of
any alterations, additions or improvements to the Premises
by Tenant:  (i)  the  same  shall be made  by  Tenant  at
Tenant's  sole  cost  and expense by licensed and bonded
contractors;  (ii)  upon the expiration or termination  of  the
term  hereof, Tenant shall, upon written demand by Landlord,
given at least thirty (30) days prior to the end of the term,
at Tenant's sole cost and expense, forthwith and with all due
diligence remove any alterations, additions, or improvements
made by  Tenant and designated  by  Landlord  to  be  removed;
and  Tenant  shall, forthwith and with all due diligence, at
its sole cost and expense, repair any damage  to  the  Premises
caused by such removal; (iii) Landlord shall not be responsible
for the repair, replacement or maintenance of any alterations,
additions or improvements to the Premises by Tenant.

     (C)  Tenant  shall,  at  its expense, before commencing any
alterations, additions, installations or improvements  obtain
all  permits,  approvals and certificates  required  by  any
governmental or quasi-governmental bodies  and (upon completion)
certificates  of  final  approval  thereof and shalt deliver
promptly  duplicates  of  all  such  permits,  approvals and
certificates  to Landlord. Tenant agrees to carry and will cause
Tenant's contractors and sub-contractors to carry such workman's
compensation,  general liability, personal and property damage
insurance as Landlord may require.

7. EXTERIOR: (A) Landlord agrees to keep the exterior part of
the Premises and roof  in  good  repair  unless  damaged  by
the acts of Tenant, its agents, employees, invitees, customers
or contractors.  Tenant shall give to Landlord seven (7) days
written notice of needed repairs and Landlord  shall  have a
reasonable time  thereafter  to  make them. Notwithstanding
the foregoing , if any part of the exterior or interior of the
Premises is injured or damaged by any vandalism (including but
not limited  to  graffiti),  or  by  any breaking and/or
entering  the  Premises,  or by any attempt to break and/or
enter  the Premises, by any third person or persons,  Tenant
agrees to promptly cause all necessary repairs to be made at
Tenant's expense so as to promptly restore the Premises to
its condition immediately prior to said vandalism, breaking
and/or entering or said attempt to break and/or enter.  The
Tenant acknowledges that it  is  responsible for maintenance of
the parking lot and  related  drainage, fencing, driveways,
alleys and the gates and electronic entry systems.

     (B)  In  the event additional sanitary facilities are
required because of the nature of the operation conducted by
the Tenant, it shall be the Tenant's obligation to supply such
additional facilities at his own expense.



<PAGE>


8. INTERIOR: (A) Tenant  agrees  to  keep  the  interior  of
the Premises, all windows, screens, awnings, doors, including
the overhead truck  loading doors, dock  boards  and  dock
bumpers,  interior  walls, pipes, machinery, plumbing
(including sewer lines, if applicable), electrical  systems
and  wiring, fire sprinkler  system and other fixtures and
interior appurtenances, in  good  and substantial  repair
and  clean  condition  at  Tenant's  own  expense - fire,
windstorm,  or  other  act  of  God,  alone  excepted.  Tenant
shall also  be responsible for regular removal of garbage,
trash and debris.

     (B) All glass both interior and exterior, is at the sole
risk  of  Tenant and  Tenant agrees to replace at Tenant's own
expense, any glass broken during the Lease Term.

     (C)  It  is hereby understood and agreed that in the event
that there are any air conditioning  systems  in  the Premises,
the Tenant shall maintain the same including replacement thereof
during the Lease Term and shall return said systems to the
Landlord at the termination  of  this  Lease  in  good  working
order,  reasonable  wear  and  tear  excepted.  Tenant  agrees
to maintain, at Tenant's  sole  expense, a monthly maintenance
contract with  a  licensed  air conditioning contractor to
perform regularly scheduled preventive maintenance and service
of the five (5)  central  air  conditioning  systems  and make
all necessary  repairs  throughout the Lease Term and any
extensions thereof.  The maintenance contractor and contract
must be reasonably acceptable to Landlord.


     (D)  If  the Premises  be  or  become  infested  with
vermin  (including termites), Tenant shall, at its expense,
cause the same to be exterminated.

     (E) If Tenant  fails to perform any repair or maintenance
which Tenant is required to make under  this  Lease,  Landlord
may demand that Tenant perform such repair or maintenance
immediately. If Tenant  refuses or neglects to make such repair
and to complete the same with reasonable  dispatch,  Landlord
may make  such repair and Tenant shall, on demand, immediately
pay to Landlord the cost of  said  repair,  together  with
interest  at  the maximum lawful rate. Landlord shall not be
liable to Tenant for any loss or  damage that may accrue to
Tenant's stock or business by reason of such work or its
results.

9.  REGULATIONS AND INSURANCE: (A) Tenant shall promptly execute
and comply with all statutes,  ordinances, rules, orders,
regulations and requirements of the Federal, State and  City
Government, and of any and all their Departments and Bureaus
including the Americans With Disabilities Act, applicable to the
Premises for the correction, prevention, and  abatement  of
nuisances or other grievances, in, upon, or connected with the
Premises, during  said  term,  and shall also promptly comply
with and execute all rules, orders, recommendations and
regulations   of  the  Southeastern  Underwriters  Association
for the prevention of fires, at Tenant's own cost and expense.

     (B) Tenant agrees  to  carry  $1,000,000.00  liability
insurance  naming Landlord as additional insured and fire legal
liability insurance in an amount not  less  than 80% of the
insurable replacement value of the Premises. Tenant shall carry
throughout the Lease Term, at its sole cost and expense, a
policy insuring both Landlord and Tenant against all claims,
demands or actions arising out of or in connection with:
(i) the Premises;  (ii) the condition of the  Premises;
(iii) Tenant's operations in and maintenance  and  use  of  the
Premises;  and (iv) Tenant's liability assumed under this Lease,
the limits of such policy or policies to  be  in  the amount
of not less than $1,000,000 aggregate liability for injury to
persons or  damage  to  property.  All  such policies  shall  be
procured  by  Tenant from responsible insurance companies
satisfactory to Landlord. Certified  copies  of  such  policies,
together with receipt  evidencing  payment of premiums therefor,
shall be  delivered  to Landlord prior to the commencement date
of this Lease. Not  less  than fifteen (15) days prior to the
expiration date of any such policies, certified  copies
of  the  renewals thereof (bearing notations evidencing the
payment of renewal premiums) shall be delivered

<PAGE>

to Landlord.Such policies shall further provide that not less than
thirty (30) days written notice  shall  be  given  to  Landlord
before such policy may be canceled or changed to reduce insurance
provided thereby.

     (C)  Tenant  will  not  do anything to jeopardize the
owner's  insurance coverage, create an additional  risk,  or
cause  an increase in his insurance premiums. In the event that
Tenant's use or occupancy causes an increase in the Landlord's
insurance premiums (including but not limited to its  all-risk
property and liability coverage), then Tenant shall, within
10 days after written demand, pay as additional rent any increase
in the amount of insurance premiums over and above the rate now
in force that may be caused by Tenant's use or occupancy of the
Premises. Tenant shall also pay  within  10 days after written
demand, as additional rent any increases above the 1986 premium
charge for  all-risk property and liability insurance covering
the Premises.  In  the event  Tenant  fails  to  pay  any  such
increases within five (5) days after demand, Landlord shall be
entitled to collect interest on the unpaid amount at the rate of
18% per annum.

     (D) Tenant will comply with all recommendations  and
requirements  of an insurance  company  insuring  the  Premises
which requirements relate to the condition or use of the Premises,
equipment, installations  therein, operating procedures  or  the
health or safety of the Tenant, its employees, invitees,
customers, agents or contractors, at his own expense.

     (E) If Tenant's alteration, use or occupancy of the Premises
violates a law, regulation, insurance company requirement  or
recommendation, Tenant will pay to make any changes needed to
comply including structural alterations.

10. ABANDONMENT: If Tenant shall abandon or vacate the Premises
before the end of the Lease Term, or shall suffer the rent to be
in arrears, Landlord may, at his option, cancel this Lease, in
the manner stated in Paragraph 34 hereof, or Landlord may enter
the Premises as the agent of Tenant, by force or otherwise,
without being liable in any way therefor, and relet the Premises
with or without any furniture or equipment that may be therein,
as the agent of Tenant, at such price and upon such terms and
for such duration of time as Landlord may determine, and receive
the rent therefor, applying the same to the payment of the rent
due by these  presents,  and if the full rental herein provided
shall not be realized by Landlord over and  above the expenses
to Landlord in such reletting, Tenant shall pay any deficiency.

11. ATTORNEY'S  FEES: In the event Tenant fails to pay when due
any portion of the Rent, amounts  deemed  to  be additional rent
or any other sums payable by Tenant under this Lease, Tenant
agrees to pay all costs and expenses incurred by  Landlord
(including but not limited  to  reasonable  attorney's  fees)
in connection with any efforts, actions, mediation or proceedings
to collect such amounts or to dispossess the Tenant, regardless
of whether Landlord files suit. In the event of any other
litigation  between the parties arising out of this  Lease,
the prevailing party shall be entitled to recover all costs
incurred, including without limitation reasonable attorney's
fees and costs, whether such fees and costs are  incurred  at
pretrial, trial, on appeal or in any bankruptcy proceedings.

12. ASSIGNMENT OF CHATTELS: It is understood  and agreed that
any merchandise, fixtures, furniture or equipment left in the
Premises  when  Tenant  vacates shall be deemed to have  been
abandoned  by  Tenant  and  by such abandonment Tenant
automatically relinquishes any right or interest therein and
Landlord is authorized to sell, dispose of or destroy same.

13.  CASUALTY:  In the event the Premises shall be destroyed or
so damaged  or injured  by  fire or other casualty, during the
Lease Term, whereby the same shall be rendered untenantable,
then Landlord shall have the right to render the  Premises
tenantable by repairs within ninety days therefrom. If the
Premises are not rendered




<PAGE>


tenantable within  said time, it shall be optional with either
party hereto to cancel this Lease within  ten  (10)  days after
expiration of said ninety (90)days, and in the event of such
cancellation the rent shall be paid only to the date of such
fire or casualty. The cancellation  herein  mentioned shall be
evidenced  in  writing. During any time that the Premises are
untenantable due to causes set forth in this Paragraph, the rent
or a just and fair proportion thereof shall be abated.

14. PERSONAL PROPERTY:  All  personal property placed or moved
in the Premises shall be at the risk of Tenant or the owner
thereof, and Landlord shall not be liable to Tenant for any
damages to said personal property unless caused by the gross
negligence of Landlord, Landlord's agents or employees.

15.  CHARGES FOR SERVICES: It is understood and  agreed  between
the  parties hereto  that any charges against Tenant by Landlord
for services, utilities or for work  done on the Premises by order
of Tenant, or otherwise accruing under this Lease,  shall be
considered as rent due and shall be included in any lien for rent.
It is  further understood that the Tenant will pay promptly
when due any fees) for sprinkler standby charge, by the supplier
of water to the Premises and storm water utility fee(s).

16. SIGNS, AWNINGS: No awnings, sign or signs shall be attached
to  or erected on the exterior of the Premises without the
written consent of Landlord having first been obtained.

17.  RIGHT  OF ENTRY: Landlord, or any of his agents, shall have
the right  to enter the Premises during all reasonable hours,
to examine the same or to make such repairs,  additions,  or
alterations  as may be deemed necessary for the safety, comfort,
or preservation thereof, or  of  said building, or to exhibit
the Premises, and to put or keep upon the doors or  windows
thereof  a notice "FOR  RENT" at any time within ninety (90)
days before the expiration of  this Lease.  Said  right  of
entry shall likewise exist for the purpose of removing
placards, signs, fixtures,  alterations,  or additions which
do not conform to this Lease.

18. TIME: It is understood and agreed between  the parties
hereto that time is the essence of all of the terms and
provisions of this Lease.

19.  NOTICES:  It is understood and agreed between  the
parties  hereto  that written notice addressed  to  Tenant
and  sent by reputable overnight courier (such as Federal
Express, United Parcel Service,  etc.) or mailed Certified
Mail,  Return  Receipt  Requested  to  the  Premises  leased
hereunder shall constitute sufficient notice to the Tenant,
and written notice addressed to Landlord and sent by reputable
overnight  courier  (such  as  Federal Express,
United  Parcel  Service,  etc.)  or  mailed  Certified  Mail,
Return Receipt Requested to the office of Landlord shall
constitute sufficient notice to  the Landlord, to comply
with the terms of this Lease.

                    Tenant:        Marino Technologies, Inc.
                                   13260 Northwest 45th Avenue
                                   Opa Locka, Florida
                    Landlord:      J.R. Realty Corporation
                                   469 West 83rd Street
                                   Hialeah, Florida 33014

Either  party,  from time to time, by such notice, may specify
another address to which subsequent  notice  shall  be  sent.
If  sent by certified mail, the notice shall be deemed
effectively made when the receipt is signed or when the
attempted  initial delivery is refused, and if sent by
personal  delivery  or reputable overnight courier, the
notice shall be effective when received.





<PAGE>


20. NON-PAYMENT:  In  addition  to  all  other  rights Landlord
has under this Lease, Landlord shall have the right to enter
upon  the Premises and place and thereafter maintain a
"FOR RENT" sign in a place where  the sign would be most
likely seen by the public immediately following the Tenant's
failure  to  pay rental  due  within  the  ten (10) day limit
set forth in Paragraph 34 (b). In addition, the Landlord will
have  the right to enter upon the Premises and to
show same to any prospective tenants or buyers.

21. WRITTEN AGREEMENT: This Lease contains  the  entire
agreement between the parties hereto and all previous
negotiations leading thereto,  and  it  may be modified
only  by  an  agreement in writing signed and sealed by
Landlord and Tenant. No surrender of the  Premises,  or of the
remainder of the Lease Term, shall be valid unless accepted by
Landlord in writing.

22. INDEMNIFY LANDLORD: In consideration  of the Premises being
leased  to Tenant  for  the  above rental, Tenant agrees: That
Tenant, at all times, will indemnify  and keep  harmless
Landlord  from  all  losses,  claims,  damages, liabilities and
expenses which may arise or be claimed against Landlord and be
in favor of  any  person,  firm or corporation, for any injuries
or damages to the person or property of any  person,  firm  or
corporation, consequent upon, arising from or relating to the
use or occupancy of the Premises by Tenant, or consequent upon,
arising from or relating to any  acts,  omissions, neglect or
fault  of  Tenant  (his agents, servants, employees, licensees,
customers  or invitees), or consequent upon, arising from or
relating to Tenant's failure to comply with the aforesaid  laws,
statutes,  ordinances  or  regulations; that Landlord shall not
be liable to Tenant for any damages, losses  or injuries to the
person  or  property of Tenant which may be caused by the acts,
neglect, omissions or faults of any person, firm or corporation,
and that Tenant will indemnify and keep harmless  Landlord  from
all damages, liabilities, losses, injuries, or expenses which
may arise or be claimed against Landlord and be in favor of any
person, firm or corporation, for any injuries or damages to the
person or property of any person, firm or corporation, where
said injuries or damages arose about or upon the Premises.

Notwithstanding anything in this Lease to the contrary:
(a) Tenant  shall not be  required to indemnify Landlord
for any injury to any person, firm, corporation or property
caused by Landlord, his agents, servants,  employees,
licensees, customers  or  invitees  and  (b)  Landlord's
liability shall be strictly limited to Landlord's interest
in the Premises.

23.  WAIVER:  No waiver of any condition or covenant of this
Lease by Landlord shall be deemed  to  imply  or  constitute
a further waiver by Landlord of any other condition or covenant
of this  Lease. The rights and remedies created by this Lease
are cumulative and the use of one remedy shall not be taken to
exclude or waive the right to the use of another.

24.  RIGHT TO MORTGAGE OR LEASE: (A). This Lease is and shall be
subject  and subordinate  only to a first mortgage, whether
presently existing or hereafter encumbering the Premises or
the Building and to any renewals, modifications, refinancings
or extensions thereof.

     (B). Tenant shall, in the event of the sale or assignment
of all or any portion of Landlord's interest in the Premises
or  in  the  event  of  any
proceedings brought for the foreclosure of, or in the event
of exercise of the power of sale under, or taking  by  deed
in lieu of foreclosure of, any first mortgage  made  by
Landlord covering the Premises,  give  full  and  complete
attornment to the purchaser and recognize the purchaser as
Landlord under this Lease for the balance of the Lease Term,
including any extensions or renewals thereof.

     (C). Landlord is hereby  irrevocably vested with full
power and authority to subordinate this Lease to any  first
mortgage,  now  existing or hereafter placed  upon the Premises
or the Building as a whole, and Tenant agrees upon demand to



<PAGE>


execute such  further instruments evidencing the subordination
of the Lease or the attornment to the holder of any such first
lien as Landlord may request.

     (D). Tenant  agrees  that  it  will  from  lime  to  time
upon request by Landlord  execute  and  deliver  to such persons
as Landlord shall request a statement in recordable form
certifying  that  this Lease is unmodified and in full force
and effect (or if there have been modifications,  that  the
same is in full force and effect as so modified), stating the
dates to which  rent and other  charges  payable under this
Lease have been paid, stating that Landlord is not in default
hereunder (or if Tenant alleges a default stating the nature
of such alleged default) and further stating such other matters
as Landlord or its mortgagee(s) shall reasonably require.

25. HEIRS AND ASSIGNS: This Lease and all provisions, covenants
and conditions thereof shall be  binding  upon  and  inure to
the benefit of the heirs, legal representatives, successors
and assigns  of the parties hereto, except that no person,
firm, corporation, or court officer holding under or through
Tenant in violation of any of the terms, provisions  or
conditions of this Lease, shall have any right, interest or
equity in or to this  Lease,  the  terms  of  this
Lease or the Premises covered by this Lease.

26.  BEYOND  LANDLORD'S  CONTROL:  None of the acts, promises,
covenants, agreements  or obligations on the part of the Tenant
to be kept, performed  or not performed as the case may be, nor
the obligation of the Tenant to pay rent and/or additional  rent
or other charge or payment shall be in anywise waived, impaired,
excused or  affected  by  reason of the Landlord being unable at
any time or times during the Lease Term to  supply, or being
prevented from, or delayed in supplying heat, light, or any
other service expressly or implied on the  part of the Landlord
to be supplied, or by reason of the  Landlord  being
unable  to  make  any  alterations,  repairs  or  decorations or
to supply any equipment or fixtures, or any other promise,
covenant, agreement or obligation on the part of the Landlord
to be performed, if the  Landlord's inability or delay shall
arise by reason of any law, rule or regulation of any Federal,
State,  Municipal or other  governmental  department,  agency
or  subdivision thereof, or by reason of conditions of supply
and demand due to National Emergency or other conditions or
causes beyond the Landlord's control.

27. EMINENT DOMAIN: (A) In the event any portion of the Building
is taken by any condemnation or eminent domain proceedings or
as part  of  a  private purchase in lieu of condemnation
(collectively,  a  "Taking"),  the  (minimum) monthly rental
herein specified to be paid shall be ratably reduced according
to the area of the Building which is taken, and Tenant shall be
entitled to no other consideration  by reason of such taking,
and any damages suffered by Tenant on account of the Taking
of any portion of the Building and any damages to any structures
erected on the Premises respectively  that  shall be awarded
to Tenant in the Taking shall be paid to and received by Landlord,
and Tenant shall have no right therein or thereto or to any part
thereof, and Tenant does hereby relinquish and assign to Landlord
all of Tenant's rights and equities in and to any such damages.
Should all of the Premises be taken by any Taking, then  and
in that event Tenant  shall  be  entitled  to  no  damages  or
any consideration   by   reason  of  such  Taking,  except
the  cancellation  and termination of this Lease as of the date
of said taking.

     (B) Except to the extent set forth in Subparagraph
(c) below, all awards in condemnation, whether recovered as a
result of litigation, or in settlement thereof, or as part of
a private purchase in lieu of condemnation, and whether termed
compensation or damages, but payable in any event for the
Taking of all or a portion of the Premises or the Building
shall belong solely to Landlord. Tenant hereby assigns to Landlord
all of Tenant's right, title, and interest, if  any,  in  and
to  such  awards in condemnation,  and  all  rights  to  an
apportionment thereof, including,  but  not  limited  to, all
compensation and damages representing the value of any property
or improvements taken, damages by way of the reduction in value
of the remaining property not taken, damages on account of
any  reduction  in  the value of Tenant's leasehold estate or
representing the value of Tenant's leasehold



<PAGE>


improvements, damages for any loss or  impairment  of access,
and, in general, all compensation and damages of whatever kind,
nature, or description may be payable on account of any Taking
or on account of the use of  the  property so taken by the
condemning authority. Tenant shall, accordingly, make no claim by
way of apportionment or otherwise to any awards in condemnation
payable to Landlord pursuant to the provisions of this
Paragraph 27 and, therefore, consents to Landlord's withdrawal
of any sum deposited into the court registry of any court of
competent jurisdiction by a condemning authority, at any time
during  the  pendency of condemnation proceedings, should such
proceedings be initiated against  Landlord,  except  to  the
extent  to  which  any  sums so deposited represent damages or
compensation which belong to Tenant pursuant to the provisions
of Subparagraph (c) below.

     (C)  Tenant  shall  have  the right to claim and recover,
provided Tenant asserts and pursues such claims  against  the
condemning authority, only that compensation or damage
representing Tenant's moving  and  relocation  expenses and the
value of Tenant's personal property and trade fixtures owned by
Tenant and which do not become the property of Landlord upon
the expiration or sooner termination  of  this  Lease. Tenant
may also pursue its business damage claim against the condemning
authority;  provided,  however,  that  to the extent to which
any business damage claim asserted by Tenant serves as a basis
upon which the condemning authority elects to take or condemn
more of Landlord's property than otherwise required for its
project in order to save acquisition costs, Tenant hereby assigns
such claims to Landlord  and  Landlord shall be entitled to
either pursue, compromise, or abandon any of such claims as
Landlord, in its sole discretion, shall determine.

28. SURRENDER PREMISES: Tenant agrees to surrender to Landlord,
at the end of the Lease Term and/or upon any cancellation of
this Lease, the Premises in as good condition as the Premises
were  at  the beginning of the Lease Term, ordinary wear and
tear for a dry storage warehouse  and  damage  by  fire  and
windstorm  or  other  act of God, excepted. Tenant agrees that,
if Tenant does not surrender to Landlord, at the end of the
Lease  Term, or upon any cancellation of the Lease Term, the
Premises, then Tenant will pay to Landlord all damages that
Landlord  may  suffer on account of Tenant's failure to so
surrender to Landlord possession of  the Premises, and will
indemnify and save Landlord harmless from and against all
claims made by any succeeding tenant of the Premises against
Landlord on account  of  delay  of Landlord in delivering
possession of the Premises to said succeeding tenant so  far
as such delay is occasioned  by  failure  of  Tenant  to  so
surrender the Premises and  unless otherwise agreed in
writing, such holding over shall constitute and be construed
as a tenancy from month to month only at a monthly rental equal
to two hundred percent (200%) of the then current Rent and all
other payments to be made by Tenant which are applicable as of
the last month of the Lease Term and otherwise subject to the
conditions, provisions  and  obligations  of this Lease
insofar as the same are applicable to a month-to-month Tenancy.

29.  LIENS:  Tenant shall keep the Premises and all parts thereof
at all times free of mechanic's liens and any other lien for
labor, services, supplies, equipment or material purchased or
procured, directly or indirectly, by or for Tenant. Tenant
further agrees that Tenant will promptly pay and satisfy all
liens  of  contractors, subcontractors, mechanics, laborers,
materialmen,  and other items  of  like  character,  and  will
indemnify  Landlord  against all expenses, costs and charges,
including bond premiums, for release of liens and reasonable
attorney's fees and costs incurred in connection with the release
of the lien or the defense of any suit in discharging the
Premises, the Building or any part thereof from any liens,
judgments, or encumbrances caused or suffered by Tenant.
In the event any such lien shall be made or filed, Tenant shall
bond against or discharge the same within ten (10) days after the
same has been made or filed. It is understood and agreed between
the parties hereto that  the  expenses,  costs  and  charges
above  referred  to shall be considered as additional rent due
and shall be included in any lien for rent.

     The Tenant shall not have any authority to create any
liens for labor or material on the Landlord's interest in the
Premises and all persons contracting with the Tenant for the
construction or removal of any facilities or




<PAGE>


other improvements on or about the Premises, and all materialmen,
contractors, mechanics, and laborers are hereby charged with
notice that they must look only to the Tenant and to the
Tenant's interests in the Premises to secure the payment of
any bill for work done or material  furnished at the request or
instruction  of Tenant. Landlord may, at Landlord's option,
record a notice of this provision in the public records of
Dade County, Florida.

30. PROPERTY TAX:  (A)  Tenant shall, within ten (10) days of
written demand, pay as additional rent any increase above
the 1986 levy in the Real Property Taxes assessed against
the Premises.

     (B)  The  amount  of such excess payable by  Tenant  from
time to time hereunder shall be prorated as to the first and
last years of this Lease based upon the number of days during
the respective calendar years in which this Lease is in effect.
Even though the term has expired  and  Tenant  has vacated
the Premises, when the final determination is made of Tenant's
share  of  said adjustments  for  the  year  in  which  this
Lease terminates, Tenant shall immediately pay any increase due.
Failure of Landlord to submit statements as called for herein
shall not be deemed to be a waiver of Tenant's requirement
to pay sums as herein provided.

     (C) Tenant shall be responsible for and shall pay before
delinquent, all municipal, county,  or  state taxes assessed
during the Lease Term against any occupancy interest or personal
property of any kind, owned by or placed in, upon or about the
Premises by Tenant.

31. LANDSCAPE: The Tenant, at its own cost and  expense,  shall
maintain  all portions  of  the Premises and adjoining areas
(including, but not limited to, swales in the adjacent  right
of way)in a clean, and orderly condition, free of dirt, litter,
rubbish and unlawful  obstructions  and  shall  keep  the
landscaped areas thereof and trees watered, trimmed and
fertilized including replacement  thereof  and  shall  also
maintain the  lawn  sprinkler  system, including  replacement
thereof, during the Lease Term and any extensions thereof.
Tenant shall perform  the  foregoing  obligations  on  the
following schedule:  all lawns and grassed areas shall be cut
and edged twice per month from April 1  to  November  30 and
once per month for the period December I to March 31 of each
year; all shrubs shall be trimmed once per month; all trees
shall be trimmed as needed but not less than once per year
and the lawns, grassed areas, shrubs and trees shall be
fertilized and sprayed for  pests  as needed but not less than
twice per year.

     If  Tenant fails to perform its landscaping maintenance
obligations hereunder, Landlord may demand that Tenant perform
such obligations immediately.  If Tenant refuses or neglects
to perform  such  landscaping maintenance obligations and to
complete the same within three (3) days after notice from
Landlord, Landlord  may perform such obligations and Tenant
shall, on  demand, immediately pay to Landlord the cost
of said landscaping maintenance, together with interest at the
maximum lawful rate per annum.

32. RADON GAS: Radon is a naturally occurring radioactive  gas
that,  when it has  accumulated  in  a  building in sufficient
quantities, may present health risks to persons who are exposed
to it over time. Levels of radon that exceed federal and state
guidelines  have been  found  in  buildings  in  Florida.
Additional information regarding radon  and radon testing may
be obtained from your county public health unit.

33. ENVIRONMENTAL: (A) Tenant shall not use or suffer the
Premises to be used in any manner so as to create an
environmental violation or hazard, nor shall Tenant cause or
suffer to be caused any chemical  contamination or the release
or  discharge  of  a substance of any nature which is noxious,
offensive  or harmful or which under  any  law,  rule or
regulation  of  any  governmental authority   having
jurisdiction   constitutes  a  "Hazardous  Substance"  or
"Hazardous Waste". Tenant shall also immediately notify Landlord
in writing of any  environmental  concerns relating to  Hazardous
Substances  or  Hazardous Waste.  Tenant shall also  immediately
notify Landlord in writing of any environmental concerns of
which Tenant is or becomes aware or which are raised by any
private party or government agency with regard to each
of the Environmental Laws. Tenant shall also notify Landlord



<PAGE>


immediately  of  any  spills  or  releases of any Hazardous Waste
or Hazardous Substances  at  the Premises or of any  other
hazardous  waste  or  hazardous substances of which  Tenant
becomes aware. Not in limitation of the generality of the
foregoing, but as additional covenants, Tenant specifically agrees
that
(i) Tenant shall not generate,  manufacture,  refine, transport,
treat, store, handle, release, dispose of or otherwise deal with
any Hazardous Substances or Hazardous Waste as now or hereafter
defined by applicable law; and (ii)Tenant shall defend, indemnify
and hold Landlord harmless against any liability, loss, cost or
expense, including reasonable attorney's fees and costs (whether
or not legal action has been instituted) at investigative, trial
and appellate levels incurred by reason of the existence of or
any failure by Tenant to comply with any environmental law now or
hereafter in effect. For the purposes hereof, the phrase
Hazardous Substances or Hazardous Waste includes but is not
limited  to, (i)  materials defined as "hazardous waste"  under
the  Federal Resource Conservation and Recovery Act and similar
state laws, (ii) "hazardous substances"  as identified under
the Federal Comprehensive Environmental Response, Compensation
and Liability Act and as set forth in Title 40, Code of Federal
Regulations, Part 302, as amended, (iii) those elements or
compounds which are contained in the list of hazardous substances
adopted by the United States Environmental Protection Agency
(the  "EPA")  and  the  list  of toxic pollutants  designated by
Congress or the EPA or defined by any other federal, state or
local statute, law, ordinance, code, rule, regulation, order or
decree regulating, relating to or imposing liability or
standards of conduct concerning any hazardous, toxic, polluting
or dangerous waste, substance or materials, as such lists are
now or at any time hereafter in effect, (iv) asbestos and radon,
(v) polychlorinated biphenyl's, (vi) petroleum products,
(vii) such other materials, substances or waste which are
otherwise dangerous, hazardous, harmful or deleterious to human,
plant or animal health or well being.


     (B) Tenant shall fully cooperate in allowing, from time
to time, such examinations, tests, inspections, and reviews of
the Premises as Landlord, in its sole and absolute discretion,
shall determine  to be advisable in order to evaluate any
potential environmental problems. Landlord expressly reserves
the right to conduct examinations, tests (including but not
limited to a geohydrologic survey of soil and subsurface
conditions), inspections, and reviews of the Premises as
Landlord in its sole and absolute discretion may determine to
be necessary.

     (C) No portion of the Premises will be used as  a landfill
or  a dump. Tenant  shall  not  install any underground tanks of
any type; nor will Tenant allow any surface or subsurface
conditions  to  exist or come into existence that constitute,
or with the passage of time may constitute, a public or
private nuisance.

     (D) This Paragraph 33 shall survive termination of the
Lease.

34. DEFAULTS. The occurrence of any one or more of the following
events shall constitute a material default and breach of this
Lease by Tenant;

     (A)       The vacating or abandonment of the Premises by
Tenant.

     (B)  The failure by Tenant to make any payment of rent
or any other payment required to be made by Tenant hereunder,
as and when due where such failure shall continue for a period
of ten (10) days after written notice thereof from Landlord to
Tenant. In the event that Landlord serves Tenant with a Notice
to Pay Rent or Quit pursuant to applicable Unlawful Detainer
statutes such Notice to Pay Rent or Quit shall also constitute
the notice required by this Subparagraph.

     (C)  The failure by Tenant to observe or perform any  of
the  covenants, conditions or provisions of this Lease to be
observed or performed by Tenant other than described in
Subparagraph (b) above, where such failure shall continue for
a period of 30 days after written notice thereof from Landlord
to Tenant provided, however, that if the nature of the Tenant's
default is such that more than 30 days are reasonably required
for its cure then Tenant


<PAGE>


shall not be deemed to be in default if Tenant commenced such
cure within said 30-day period and thereafter diligently
prosecutes such cure to completion.

     (D) (i) The making by Tenant of any general arrangement or
assignment for the benefit of creditors:  (ii)  Tenant becomes
a "debtor" as defined in l I U.S.C.  SI0I or any successor statute
thereto (unless,  in  the  case  of  a petition filed against
Tenant,  the  same is dismissed within 60 days). (iii)the
appointment of a trustee or receiver  to  take possession of
substantially all of Tenant's assets located at the Premises or
of Tenant's interest in this Lease, where possession is not
restored to Tenant  within  30 days or (iv) the attachment,
execution  or  other judicial "seizure" of substantially all of
Tenant's assets located at the Premises or of Tenant's interest
in this Lease, where such seizure is not discharged within 30
days. Provided, however, in the event that any provision of this
Subparagraph  34  (d) is contrary to any applicable law, such
provision shall be of no force or effect.

     (E)  The  discovery  by  Landlord  that  any financial
statement given to Landlord  by  Tenant, any assignee of Tenant,
any subtenant of Tenant, any successor in interest of Tenant
or  any  guarantor  of  Tenant's obligation hereunder, and any
of them was materially false or misleading.

          34.1 REMEDIES. In the event of any such material
default or breach by Tenant, Landlord may at any time
thereafter with or without notice or demand and without limiting
Landlord in the exercise of any right or remedy which Landlord
may have by reason of such default or breach;

     (A) Terminate this Lease and Tenant's right to possession
of the Premises by any lawful means, in which case Tenant shall
immediately surrender possession of the Premises to Landlord.

     (B) Maintain Tenant's right to possession in which case this
Lease shall continue in effect whether or not Tenant shall have
abandoned the Premises. In such event Landlord shall be entitled
to enforce all of the  Landlord's rights and remedies under this
Lease, including the right to recover  the  rent as it becomes
due hereunder.

     (C)   Without terminating this Lease, terminate Tenant's
right to possession by entering upon and retaking possession of
the Premises and expelling or removing Tenant and any other
person who may be occupying the Premises or any part thereof,
and relet the Premises for Landlord's or Tenant's account, as
Landlord elects;

     (D) Alter all locks and other security devices at the
premises without terminating this Lease.

     (E) Without terminating  or canceling this Lease, declare
all amounts and rents due under this Lease for  the  remainder
of the existing term (or any applicable extension or renewal
thereof), to be immediately  due  and payable, and thereupon
the present worth of same, net of amounts actually collected by
Landlord, and all other charges due hereunder to the end of the
initial term or any renewal term, if applicable, shall be paid
by Tenant.

     (F) Pursue any  other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the state
wherein the Premises are located. Unpaid installments of rent
and other  unpaid  monetary  obligations of Tenant under the
terms of this Lease shall bear interest from the date due at the
maximum rate then allowable by law.

In  the  event  Landlord  elects  to  take  possession of the
Premises without terminating the Lease, or in the event Landlord
elects to terminate the Lease, Landlord  shall be entitled to
recover from Tenant all damages incurred  by Landlord by reason
of Tenant's default including, but not limited to, the cost
of recovering possession of the Premises, expenses of reletting
including necessary repairs, remodeling, renovation and
alteration of the Premises,


<PAGE>


reasonable attorney's fees and any real estate commission
actually  paid, the balance  of  rent due for the Lease Term
reduced by any rent actually received by the Landlord from any
other tenant during such term and that portion of the leasing
commission paid by Landlord pursuant to Paragraph 39 applicable
to the unexpired Lease Term on a pro rata basis based on the
actual recovery from the Tenant. If the Tenant pays all
amounts due the Landlord is not entitled to reimbursement of
leasing commissions.

In no event shall Tenant be entitled to any excess of any rental
obtained by reletting  over  and  above the rental herein
reserved.  Actions to collect amounts due by Tenant to Landlord
under this Subparagraph may be brought from time to time, on one
or more  occasions,  without  the necessity of Landlord's
waiting until expiration of the Lease Term.

Notwithstanding anything in this Lease to the contrary, all
amounts payable by Tenant to or on behalf of Landlord under this
Lease, whether or not expressly denominated as rent, shall
constitute rent for the purposes  of the Bankruptcy Code,
11 U.S.C. section 502(b)(7). This is a contract under which
applicable law excuses Landlord from accepting performance from
(or rendering performance to) any person or entity other than
Tenant within the meaning of the Bankruptcy Code, I1 U.S.C.
section 365(c), 365(e)(2).

     34.2  DEFAULT  BY  LANDLORD.  Landlord shall not be
in default unless Landlord fails to perform obligations required
of Landlord within a reasonable time  but  in  no  event later
than thirty (30) days after written notice by Tenant to Landlord
and to the holder of any first mortgage or deed of trust
covering the Premises whose name and  address  shall have
theretofore been furnished to Tenant in writing, specifying
wherein Landlord has failed to perform such obligation;
provided, however, that if the nature of the Landlord's
obligation is such that more than thirty (30) days are required for
performance then Landlord  hall not be in default if Landlord
commences performance within such 30-day period and thereafter
diligently prosecutes the same to completion.


     34.3 LATE CHARGES. Tenant hereby acknowledges that late
payment by Tenant to Landlord of rent and other sums due
hereunder will cause Landlord to incur costs not contemplated
by this Lease, the exact amount of which will be difficult to
ascertain. Such costs include but are not limited to, processing
and accounting charges and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed covering the
Premises. Accordingly if any installment of rent or any other sum
due from Tenant shall not be received by Landlord or Landlord's
designee within ten (10) days after such amount shall be due,
then, without any requirement for notice to Tenant, Tenant shall
pay to Landlord a late charge equivalent to Five Percent (5%) of
such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of late payment by Tenant.
Acceptance  of  such late charge  by  Landlord shall in no event
constitute a waiver of Tenant's default with respect  to  such
overdue amount nor  prevent  Landlord  from  exercising any of
the other rights and  remedies granted hereunder.

35. CONSENT: Wherever Tenant must first obtain the Landlord's
consent prior to undertaking or performing any action  pursuant
to  the  terms  of this Lease, Landlord hereby agrees that it
shall not unreasonably withhold its  consent to such  proposed
action and furthermore that it shall expeditiously provide its
reply to  any  such  request  of  Tenant.  In  the  event Tenant
requests from Landlord  that  Landlord  execute,  join  in  or
consent  to   any  approval, authorization,    permission,
joinder,   release,   waiver,   subordination, assignment,
sublease, consent or any other agreement, then Tenant shall
pay to Landlord its reasonable  attorney's fees and costs
incurred in connection with such request.

36. QUIET ENJOYMENT: Subject  to  the  terms, conditions and
covenants of this Lease, Landlord agrees that Tenant shall  and
may  peaceably  have,  hold and enjoy  the  Premises  above
described,  without  hindrance  or molestation by Landlord so
long as Tenant is not in default of this Lease.


<PAGE>


37. OPTION TO RENEW: Provided Tenant is not in default under
any  of the terms and  conditions  of this Lease, Landlord
hereby grants to Tenant an option  to extend this Lease  and
the  Lease  Term  for  an  additional  Five  (5) years
commencing January 1, 2002.

Rental for this period shall be as follows:

Commencing January 1, 2002 and on the first day of each month
through December 31,  2002,  the sum  of Twenty Six Thousand
Two  Hundred  Six  and 37/100
($26,206.37) Dollars.

Commencing January 1, 2003 and on the first day of each month
through December 31, 2003, the sum of Twenty Seven Thousand Two
Hundred Fifty Four and  62/100($27,254.62) Dollars.

Commencing January 1, 2004 and on the first day of each month
through December 31, 2004, the sum of Twenty Eight Thousand
Three Hundred Forty Four and 81/100 ($28,344.81) Dollars.

Commencing January I, 2005 and on the first day of each month
through December 31, 2005, the sum of Twenty Nine Thousand Four
Hundred Seventy Eight and 60/100 ($29,478.60) Dollars.

Commencing January 1, 2006 and on the first day of each month
through December 31,  2006,  the sum of Thirty Thousand Six
Hundred  Fifty  Seven  and  74/100 ($30,657.74) Dollars.

Notice of the exercise of this option must be made in writing,
Certified Mail, Return Receipt Requested, to Landlord by
June 30, 2001.

38. TERMINATION:  Landlord  hereby  grants  Tenant the right to
terminate this Lease by giving Landlord written notice of
termination not less than six (6) months prior to the termination
date, as hereinafter defined,  and  by  paying Landlord  a
termination fee of $310,000.00 plus sales tax, if any, which fee
must accompany the notice of  termination. Any such notice of
termination must be given to Landlord by certified mail return
receipt requested not earlier than  January  1, 1998. Upon
exercise of the right of termination the Lease shall terminate
("termination date") at the later of the date set forth in the
notice of termination or six (6) months from receipt by Landlord
of the notice of termination and  termination  fee;  provided,
however, the termination date must be the last day of a month.
The termination  fee  shall  be additional to all rent and
additional rent due to and including the termination date.

Should  Tenant  not  exercise  its  right to terminate this Lease
as provided herein, said right shall expire at midnight
June 30, 2001.

39. BROKERAGE: Landlord hereby acknowledges  that The Fiur
Organization, Inc., Licensed Real Estate Broker, has negotiated
this  Lease and agrees to pay them a leasing fee or commission
on the Lease Term and on  any  options or purchase thereof.
The terms and conditions of said leasing fee or commission shall
be set forth in a separate letter of agreement. Except as
otherwise provided in Paragraph 34.1, Tenant has no liability
for payment of said commission.

40. COUNTERPARTS:  This  Lease  may be executed in any number of
counterparts. Each such counterpart hereof shall be deemed to be
an original instrument, but all such counterparts together
shall constitute but one Lease.



<PAGE>


41. FACSIMILE: A facsimile copy of this Lease and any signatures
hereon shall be considered for all purposes as originals.

42. WAIVER OF JURY TRIAL: TENANT AND LANDLORD HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE
TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON,
OR  ARISING  OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE AND
ANY AGREEMENT CONTEMPLATED TO  BE  EXECUTED  IN CONJUNCTION
HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER
PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LANDLORD
ENTERING INTO THIS WAREHOUSE LEASE WITH TENANT.

IN WITNESS WHEREOF, the parties hereto have signed, sealed and
delivered this Lease at Miami, Florida on this _____ day of
September, 1996, as of January 1, 1997.

                                LANDLORD:
Witnesses to Landlord:          J.R. REALTY CORPORATION


/s/illegible signature          By: /s/Herbert G. Kanarick

                                Print Name: Herbert G. Kanarick



                              TENANT:
Witnesses to Tenant:          MARINO TECHNOLOGIES, INC.


/s/illegible signature         By: /s/Anthony Marino

                               Print Name: ANTHONY MARINO

<PAGE>
                                                     EXHIBIT 10.9


 LEASE FOR JOHN KING, INC. A DIVISION OF THE BALSON-HERCULES GROUP LTD.
========================================================================


                                   LEASE
                            (MULTI TENANT-NET)



                                  BETWEEN



                THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

                                    AND

                             JOHN KING, INC.,
                               A DIVISION OF
                      THE BALSON-HERCULES GROUP LTD.,
                        A RHODE ISLAND CORPORATION









<PAGE>


                             TABLE OF CONTENTS

                                                  Page


1.   Parties..........................................1

2.   Premises, Parking and Common Areas...............1
     2.1  Premises....................................1
     2.2  Vehicle Parking............................ 1
     2.3  Common Areas - Definition.................. 2
     2.4  Common Areas - Lessee's Rights............. 2
     2.5  Common Areas - Rules and Regulations....... 2
     2.6  Common Areas - Changes..................... 2

3.   Term.............................................3
     3.1  Term....................................... 3
     3.2  Delay in Possession........................ 3
     3.3  Early Possession........................... 4

4.   Rent.............................................4
     4.1  Base Rent.................................. 4
     4.2  Operating Expenses......................... 4
     4.3  Rent Escalations - Initial Term............ 7

5.   Security Deposit.................................8

6.   Use..............................................9
     6.1  Use........................................ 9
     6.2  Compliance with Law........................ 9
     6.3  Conditions of Premises.................... 10

7.   Maintenance, Repairs, Alterations and Common Area
	Services...................................... 11
     7.1  Lessor's Obligations...................... 11
     7.2  Lessee's Obligations...................... 11
     7.3  Alterations and Additions................. 12
     7.4  Utility Additions......................... 17
     7.5  Condition of Premises Upon Termination; Additional Use
          Provisions..........................................17

8.   Insurance; Indemnity.....................................18


<PAGE>


9.   Damage or Destruction..................................22
     9.1  Definitions...................................... 22
     9.2  Premises Partial Damage; Premises Building Partial
		Damage......................................... 23
     9.3  Premises Total Destruction; Premises Building Total
          Destruction; Industrial Center Buildings Total
		Destruction.................................... 24
     9.4  Damage Near End of Term ..........................24
     9.5  Abatement of Rent; Lessee's Remedies............. 25
     9.6  Termination - Advance Payments................... 25
     9.7  Waiver........................................... 25

10.  Real Property Taxes....................................26
     10.1 Payment of Taxes................................. 26
     10.2 Additional Improvements.......................... 26
     10.3 Definition of "Real Property Tax"................ 26
     10.4 Joint Assessment................................. 26
     10.5 Personal Property Taxes.......................... 26
     10.6 Additional Provisions Regarding Real Property Taxes 27

11.  Utilities................................................27

12.  Assignment and Subletting................................27
     12.1 Lessor's Consent Required.......................... 27
     12.2 Lessee Affiliate................................... 29
     12.3 Lessees Other Than Individuals..................... 29
     12.4 Terms and Conditions of Assignment................. 30
     12.5 Terms and Conditions Applicable to Subletting...... 30
     12.6 Attorney's Fees.................................... 32

13.  Default Remedies.........................................33
     13.1 Default............................................ 33
     13.2 Remedies........................................... 34
     13.3 Default by Lessor.................................. 34
     13.4 Large Charges ......................................36

14.  Condemnation.............................................36

15.  Broker's Commissions.....................................37

16.  Estoppel Certificate.....................................38

17.  Lessor's Liability.......................................38


<PAGE>


18.  Severability.............................................39

19.  Interest on Past-due Obligations.........................39

20.  Time of Essence..........................................39

21.  Additional Rent..........................................39

22.  Incorporation of Prior Agreements; Amendments............39

23.  Notices..................................................39

24.  Waivers..................................................41

25.  Recording................................................41

26.  Holding Over.............................................41

27.  Cumulative Remedies......................................41

28.  Covenants and Conditions.................................41

29.  Binding Effect; Choice of Law............................41

30.  Subordination............................................41

31.  Attorneys Fees...........................................42

32.  Lessor's Access..........................................43

33.  Auctions.................................................43

34.  Signs....................................................43

35.  Merger...................................................43

36.  Consents.................................................43

37.  Guarantor................................................43

<PAGE>


38.  Quiet Possession.........................................44

39.  [Intentionally Omitted]..................................44

40.  Security Measures........................................44

41.  Easements................................................44

42.  Performance Under Protest................................44

43.  Authority................................................44

44.  Cashiers Checks..........................................45

45.  Amendments to Lease......................................45

46.  Storage Tanks............................................45

47.  Hazardous Materials......................................46
     47.1 Lessee's Covenants Regarding Hazardous Materials 46
     47.2 Indemnification of Lessor.......................... 48

48.  Lessor's Default.........................................48

49.  Recovery of Concessions Upon Early Termination...........48

50.  Easements and Restrictions of Record.....................49

51.  Offer....................................................49

52.  Prior Tenancy............................................49


<PAGE>


                                   LEASE



     1.   PARTIES. This Lease, dated, for reference purposes
only, April 23, 1997, is made by and between THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, a New Jersey corporation
(herein called "Lessor") and JOHN KING, INC., a division of
The Balson-Hercules Group Ltd., a Rhode Island corporation
(herein called "Lessee").

     2.   PREMISES, PARKING AND COMMON AREAS.

          2.1  PREMISES. Lessor hereby leases to Lessee and
Lessee leases from Lessor for the term, at the rental, and upon
all of the conditions set forth herein, that certain real
property situated in the County of Los Angeles, State of
California, commonly known as 5434 and 5432 Slauson Avenue,
Commerce, California and described as the portion containing
44,005 square feet of the building located on the property
shown on EXHIBIT "A" hereto, said 44,005 square feet herein
referred to as the "Premises," and cross-hatched on Exhibit
"A" attached hereto, including rights to the Common Areas as
hereinafter specified but not including any rights to the
roof of the Premises or to any Building in the Industrial Center.
The Premises are a portion of a building, herein referred to as
the "Building." The Premises, the Building, the Common Areas,
the land upon which the same are located, along with all other
buildings and improvements thereon, are herein collectively
referred to as the "Industrial Center."

          2.2  VEHICLE PARKING. Lessee shall be entitled to
forty-four (44) vehicle parking spaces, unreserved and
unassigned, on those portions of the Common Areas designated by
Lessor for parking. Lessee shall not use more parking spaces than
said number. Said parking spaces shall be used only for parking
by vehicles no larger than full size passenger automobiles or
pick-up trucks, herein called "Permitted Size Vehicles." Vehicles
other than Permitted Size Vehicles are herein referred to as
"Oversized Vehicles."

               2.2.1 Lessee shall not permit or allow any
vehicles that belong to or are controlled by Lessee or Lessee's
employees, suppliers, shippers, customers, or invitees to be
loaded, unloaded, or parked in areas other than those designated
by Lessor for such activities.

               2.2.2 If Lessee permits or allows any of the
prohibited activities described in paragraph 2-2 of this Lease,
then Lessor  shall have the right, without






<PAGE>





notice, in addition to such other rights and remedies that it
may have, to remove or tow away the vehicle involved, and charge
the cost to Lessee, which cost shall be immediately payable upon
demand by Lessor.

          2.3  COMMON AREAS - DEFINITION. The term "Common Areas"
is defined as all areas and facilities outside the Premises and
within the exterior boundary line of the Industrial Center that
are provided and designated by the Lessor from time to time for
the general non-exclusive use of Lessor, Lessee and of other
lessees of the Industrial Center and their respective employees,
suppliers, shippers, customers and invitees, including parking
areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, parkways, driveways and landscaped areas.

          2.4  COMMON AREAS - LESSEE'S RIGHTS. Lessor hereby
grants to Lessee, for the benefit of Lessee and its employees,
suppliers, shippers, customers and invitees, during the term of
this Lease, the non-exclusive right to use, in common with
others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges
reserved by Lessor under the terms hereof or under the terms of
any rules and regulations or restrictions governing the use of
the Industrial Center. Under no circumstances shall the right
herein granted to use the Common Areas be deemed to include the
right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the
prior written consent of Lessor or Lessor's designated agent,
which consent may be revoked at any time. In the event that any
unauthorized storage shall occur then Lessor shall have the
right, without notice, in addition to such other rights and
remedies that it may have, to remove the property and charge the
cost to Lessee, which cost shall be immediately payable upon
demand by Lessor.

          2.5  COMMON  AREAS  - RULES AND REGULATIONS. Lessor
or such other person(s) as Lessor may appoint shall have the
exclusive  control  and management of the Common Areas and
shall have the right, from time to time, to establish,  modify,
amend  and enforce reasonable rules and regulations with respect
thereto.  Lessee agrees  to  abide  by and conform to all such
rules  and  regulations, and to cause its employees,  suppliers,
shippers, customers, and  invitees  to  so  abide  and  conform.
Lessor shall not be responsible   to  Lessee  for  the
non-compliance  with  said  rules   and regulations by other
lessees of the Industrial Center.

          2.6  COMMON  AREAS  --  CHANGES.  Lessor shall have
the right, in Lessor's sole discretion, from time to time:

               (a) To make changes to the Common Areas,
including, without limitation, changes in the location, size,
shape and number of driveways,







<PAGE>





     entrances, parking spaces, parking areas, loading and
unloading areas, ingress, egress, direction of traffic,
landscaped areas and walkways;

               (b) To close temporarily any of the Common
Areas for maintenance purposes so long as reasonable access
to the Premises remains available;

               (c) To designate other land outside the
boundaries of the Industrial Center to be a part of the
Common Areas;

               (d) To add additional buildings and improvements
to the Common Areas;

               (e) To use the Common Areas while engaged in
making additional improvements, repairs or alterations to the
Industrial Center, or any portion thereof;

               (f) To do and perform such other acts and make
such other changes in, to or with respect to the Common Areas
and Industrial Center as Lessor may, in the exercise of sound
business judgment, deem to be appropriate.

               2.6.1 Lessor shall at all times provide the
parking facilities required by applicable law and in no event
shall the number of parking spaces that Lessee is entitled to
under paragraph 2.2 be reduced.

     3.   TERMS.

          3.1  TERM. The term of this Lease shall be for eight
(8) years and four (4) months commencing on May 1, 1997 and
ending on August 31, 2005, unless sooner terminated pursuant
to any provision hereof.

          3.2  DELAY IN POSSESSION. Lessee is in possession of
the portion of the Premises known as 5434 Slauson Avenue
(the "Existing Premises"). The portion of the Premises known as
5432 Slauson Avenue is sometimes referred to herein as the
"Additional Premises." Notwithstanding said commencement
date, if for any reason Lessor cannot deliver possession of the
Additional Premises to Lessee on said date, Lessor shall not be
subject to any liability therefor, nor shall such failure affect
the validity of this Lease or the obligations of Lessee
hereunder or extend the term hereof, but in such case,
Lessee shall not be obligated to pay rent or perform any
other obligation of Lessee under the terms of this Lease,
except as may be otherwise provided in this Lease, until
possession of the Premises is tendered to Lessee;







<PAGE>





provided, however, that if Lessor shall not have delivered
possession of the Additional Premises within sixty (60) days
from said commencement date, Lessee may at Lessee's option,
by notice in writing to Lessor within ten (10) days thereafter,
cancel this Lease, in which event the parties shall be
discharged from all obligations hereunder and the Existing Lease
(as defined below) shall continue with respect to the Existing
Premises; provided further, however, that if such written
notice of Lessee is not received by Lessor within said ten
(10) day period, Lessee's right to cancel this Lease hereunder
shall terminate and be of no further force or effect.

          3.3  EARLY POSSESSION. If Lessee occupies the
Additional Premises prior to said commencement date, such
occupancy shall be subject to all provisions of this Lease,
such occupancy shall not advance the termination date, and
Lessee shall pay rent for such period at the initial monthly
rates set forth below.

     4.   RENT.

          4.1  BASE RENT. Lessee shall pay to Lessor, as Base
Rent for the Premises, without any offset or deduction, except
as may be otherwise expressly provided in this Lease, on the
first day of each month of the term hereof, monthly payments
in advance of $15,000.00. The Base Rent is subject to adjustment
as provided herein. Lessee shall pay Lessor upon the execution
hereof $15,000.00 as Base Rent for May,1997. Rent for any period
during the term hereof which is for less than one month shall be
a pro rata portion of the Base Rent. Rent shall be payable in
lawful money of the United States to Lessor at the address stated
herein or to such other persons or at such other places as Lessor
may designate in writing.

          4.2  OPERATING EXPENSES. Lessee shall  pay  to  Lessor
during the term hereof, in addition to the Base Rent, Lessee's
Share,  as  hereinafter defined,  of  all  Operating Expenses,
as hereinafter defined, during  each calendar year of the  term
of this Lease, in accordance with the following provisions:

               (a) "Lessee's Share" is defined, for purposes of
this Lease, as 24.43 percent.

               (b) "Operating Expenses" is defined, for
purposes of this Lease, as all costs incurred by Lessor,
if any, for:

                    (i) The operation, repair and maintenance,
in neat, clean, good order and condition, of the following:







<PAGE>





               (aa) The Common Areas, including parking areas,
loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways, landscaped areas, striping,
bumpers, irrigation systems, Common Area, lighting facilities
and fences and gates;

                         (bb) Trash disposal services;

                         (cc) Tenant directories;

                         (dd) Fire detection systems including
sprinkler system maintenance and repair;

                         (ee) Security services;

                         (ff) Any other service to be provided
by Lessor that is elsewhere in this Lease stated to be an
"Operating Expense."

                    (ii) Any deductible portion of an insured
loss concerning any of the items or matters described in this
paragraph 4.2;

                    (iii) The cost of the premiums for the
liability and property insurance policies to be maintained by
Lessor under paragraph 8 hereof; provided that if Lessor elects
to self-insure or includes the Premises under blanket
insurance policies covering multiple properties, then the cost
included in Operating Expenses shall include the portion of the
reasonable cost of such  self-insurance or blanket insurance
that is allocated to the Premises;

                    (iv) The amount of the real property tax to
be paid by Lessor under paragraph 10.1 hereof;

                    (v) The cost of water, gas and electricity
to service the Common Areas;

                    (vi) the cost of Lessor's performing the
maintenance obligations, described in paragraph 7.1, including
replacements;

                    (vii) the cost of operating, repairing,
replacing and maintaining the Building, the roof, and any
other utilities or equipment,






<PAGE>





          wherever situated, that are for the common use of the
tenants of the Building or Industrial Center; and

                    (viii) the cost of a Commercial General
Liability policy of insurance, insuring Lessor, but not Lessee,
against liability arising out of the ownership, use, occupancy
or  maintenance of the Industrial Center, in amounts
determined by Lessor, if Lessor determines to obtain such
insurance.

               (c) The inclusion of the improvements, facilities
and services set forth in paragraph 4.2(B)(I) of the definition
of Operating Expenses shall not be deemed to impose an obligation
upon Lessor to either have said improvements or facilities or to
provide those services unless the Industrial Center already has
the same, Lessor already provides the services, or Lessor has
agreed elsewhere in this Lease to provide the same or some of
them.

               (d) Lessee's Share as set forth in paragraph
4.2(A) above, is Lessee's Share of Operating Expenses applicable
only to the Building in which the Premises are located. The
percentage set forth in paragraph 4.2(A) has been determined
by dividing the approximate square footage of the Premises by
the total approximate square footage of rentable space contained
in the Building. It is understood and agreed that the percentage
figure set forth in 4.2(A) is an approximation which Lessor and
Lessee agree is reasonable and shall not be subject to revision
except in connection with an actual change in the size of the
Premises or a change in the space available for lease in the
Building.

               (e) Lessee's Share of Operating Expenses
applicable to the Industrial Center shall be reasonably
determined by Lessor as the percentage created by dividing
the square footage of the Premises by the total square footage
of the Buildings in the Industrial Center that are involved in
the item covered by the particular expense.

               (f) Lessee's Share of Operating Expenses shall
be payable by Lessee within ten (10) days after a reasonably
detailed statement of actual expenses is presented to Lessee by
Lessor. At Lessor's option, however, an amount may be
estimated by Lessor from time to time of Lessee's Share of
annual Operating Expenses and the same shall be payable monthly
or quarterly, as Lessor shall designate, during each
twelve-month period of the Lease term, on the same day as
the Base Rent is due hereunder. In the event that Lessee pays
Lessor's estimate of Lessee's Share of Operating Expenses as
aforesaid, Lessor shall deliver to Lessee within sixty (60)
days after the expiration of each






<PAGE>





     calendar year, or as soon thereafter as practicable, a
reasonably detailed statement showing Lessee's Share of the
actual Operating Expenses incurred during the preceding year.
If Lessee's payments under this paragraph 4.2(F) during said
preceding year exceed Lessee's Share as indicated on said
statement, Lessee shall be entitled to credit the amount of
such overpayment against Lessee's Share of Operating Expenses
next falling due. If Lessee's payments under this paragraph
during said preceding year were less than Lessee's Share as
indicated on said statement, Lessee shall pay to Lessor the
amount of the deficiency within ten (10) days after delivery
by Lessor to Lessee of said statement.

               (g) Lessor and Lessee shall promptly adjust
between them by appropriate cash payment any balance determined
to exist with respect to Lessee's Share of Operating Expenses
after the end of the calendar year in which this Lease
terminates, prorating for any partial year involved.

          4.3 RENT ESCALATIONS - INITIAL TERM.

               (a) On the first day of each of the 34th month
and the 67th month of the term of this Lease, the monthly Base
Rent payable under Paragraph 4.1 of this Lease shall be adjusted
by the increase, if any, from the date this Lease commenced,
in the Consumer Price Index of the Bureau of Labor Statistics
of the U.S. Department of Labor for Urban Wage Earners and
Clerical Workers, Los Angeles-Anaheim-Riverside,
California (1982-84=100), "All Items", herein referred to
as "C.P.I.".

               (b) The monthly Base Rent payable in accordance
with Paragraph
		   (a) above shall be calculated as follows: the
Base Rent payable as set forth in Paragraph 4.1 of this Lease,
shall be multiplied by a fraction the numerator of which shall
be the C.P.I. of the calendar month during which the adjustment
is to take effect, and the denominator of which shall be the
C.P.I. for the calendar month in which the original Lease term
commences. The sum so calculated shall constitute the new
monthly Base Rent hereunder, subject to Subparagraph (e), below.

               (c) Pending receipt of the required C.P.I. and
determination of the actual adjustment, Lessee shall pay an
estimated adjusted rental, as reasonably determined by
by reference to the then available C.P.I. information. Upon
notification of the actual adjustment after publication of the
required C.P.I., any overpayment shall be credited against the
next installment of rent due, and any nderpayment shall be
immediately due and payable by






<PAGE>





     Lessee. Lessor's failure to request payment of an estimated
or actual rent adjustment shall not constitute a waiver of the
right to any djustment provided for in this Lease or this
Paragraph 4.3.

               (d) In the event the compilation and/or
publication of the C.P.I. shall be transferred to any other
governmental department or bureau or agency or shall be
discontinued, then the index most nearly the same as the C.P.I.
shall be used to make such calculation. In the event that Lessor
and Lessee cannot agree on such alternative index, then the
matter shall be submitted for decision to the American
Arbitration Association in accordance with the then rules of
said association and the decision of the Arbitrators shall
be binding upon the parties. The cost of said Arbitrators shall
be paid equally by Lessor and Lessee.

               (e) The adjustment(s) required by this Rent
Escalation Paragraph shall be subject to the following
additional agreements:

                    (i) The increase under Subparagraph
(b), above, shall be subject to the following minimum and
maximum percentage increases per year involved in the adjustment
period, on a cumulative and compounded basis:

               Minimum yearly percentage increase: 3%

               Maximum yearly percentage increase: 6%

          The "adjustment period" is defined as the period
commencing with the month designated in Subparagraph (b) as the
reference for determining the "denominator", and ending with the
month preceding the month designated therein as the reference for
determining the "numerator". Should the adjustment period include
a partial year, the minimum and maximum percentages shall be
prorated for that partial year-by multiplying them by a fraction,
the numerator of which shall be the number of full calendar
months or major portion thereof contained in said partial year,
and the denominator of which is twelve (12).

                    (ii) The new monthly Base Rent shall in no
event be less than the rent in effect immediately preceding the
rent adjustment.

     5.   SECURITY DEPOSIT. Lessee shall deposit with Lessor
upon execution hereof $15,000.00 as security for Lessee's
faithful performance of Lessee's obligations hereunder.
If Lessee fails to pay rent or other charges due hereunder,
or otherwise






<PAGE>





defaults with respect to any provision of this Lease, Lessor may
use, apply or retain all or any portion of said deposit for the
payment of any rent or other charge in default or for the payment
of any other sum to which Lessor may become obligated by reason
of Lessee's default, or to compensate Lessor for any loss or
damage which Lessor may suffer thereby. If Lessor so uses
or applies all or any portion of said deposit, Lessee shall within
ten (10)days after written demand therefor deposit cash with
Lessor in an amount sufficient to restore said deposit to the
full amount then required of Lessee. If the monthly rent shall,
from time to time, increase during the term of this Lease,
Lessee shall, at the time of such increase, deposit with Lessor
additional money as a security deposit so that the total amount
of the security deposit held by Lessor shall at all times bear
the same proportion to the then current Base Rent as the
initial security deposit bears to the initial Base Rent set
forth in paragraph 4. Lessor shall not be required to keep said
security deposit separate from its general accounts. If Lessee
performs all of Lessee's obligations hereunder, said
deposit, or so much thereof as has not theretofore been applied
by Lessor, shall be returned, without payment of interest or
other increment for its use, to Lessee (or, at Lessor's option,
to the last assignee, if any, of Lessee's interest hereunder) at
the expiration of the term hereof, and after Lessee has vacated
the Premises. No trust relationship is created herein between
Lessor and Lessee with respect to said Security Deposit. The
Security Deposit shall be held by Lessor in accordance with
Section 1950.7 of the California Civil Code.

     6.   USE.

          6.1  USE. The Premises shall be used and occupied
only for warehousing and wholesale of textiles and related
material and for no other purpose.

          6.2  COMPLIANCE WITH LAW.

               (a) Lessor warrants to Lessee to Lessor's actual
knowledge that the Additional Premises, in the state existing
on the date that the Lease term commences, but without regard
to alterations by Lessee or to the use for which Lessee will
occupy the Additional Premises, does not violate any covenants
or restrictions of record, or any applicable building code,
regulation or ordinance in effect on such Lease term
commencement date. In the event it is determined that this
warranty has been violated, then it shall be the obligation
of the Lessor, after written notice from Lessee, to promptly,
at Lessor's sole cost and expense, rectify any such violation.
In the event Lessee does not give to Lessor written notice of
the violation of this warranty within six months from the date
that the Lease term commences, the correction of same shall be
the obligation of Lessee at Lessee's sole cost. The warranty
contained in this paragraph 6.2(A) shall be of no force or
effect if, prior to the date of this Lease, Lessee was an owner
or







<PAGE>





     occupant of the Premises and, in such event, Lessee shall
correct any such violation at Lessee's sole cost. Lessee is
hereby notified that it should make its own investigation into
the compliance by the Premises with the Americans with
Disabilities Act and no representation or warranty as to such
compliance is being made by Lessor.

               (b) Except as provided in paragraph 6.2(A)
Lessee shall, at Lessee's expense, promptly comply with all
applicable statutes, ordinances, rules, regulations, orders,
covenants and restrictions of record, and requirements of any
fire insurance underwriters or rating bureaus, now in effect
or which may hereafter come into effect, whether or not they
reflect a change in policy from that now existing, during the
term or any part of the term hereof, relating in any manner
to the Premises and the occupation and use by Lessee of the
Premises and of the Common Areas. Lessee shall not use nor
permit the use of the Premises or the Common Areas in any
manner that will tend to create waste or a nuisance or shall
tend to disturb other occupants of the Industrial Center.

          6.3  CONDITIONS OF PREMISES.

               (a) Lessor shall deliver the Additional
Premises to Lessee clean and free of debris on the Lease
commencement date (unless Lessee is already in possession)
and Lessor warrants to Lessee to Lessor's actual knowledge
that the plumbing, lighting, air conditioning, heating, and
loading doors in the Premises other than those portions
constructed by Lessee shall be in good operating condition on
the Lease commencement date. In the event that it is determined
that this warranty has been violated, then it shall be the
obligation of Lessor, after receipt of written notice from
Lessee setting forth with specificity the nature of the
violation, to promptly, at Lessors sale cost, rectify such
violation. Lessee's failure to give such written
notice to Lessor within thirty (30) days after the Lease
commencement date shall cause the conclusive presumption that
Lessor has complied with all of Lessor's obligations hereunder.
The warranty contained in this paragraph 6.3(A) shall be of no
force or effect if prior to the date of this Lease, Lessee was
an owner or occupant of the Premises.

               (b) Except as otherwise provided in this Lease,
Lessee hereby accepts the Premises in their condition existing
as of the Lease commencement date or the date that Lessee takes
possession of the Premises, whichever is earlier, subject to
all applicable zoning, municipal, county and state laws,
ordinances and regulations governing and regulating the use
of the Premises, and any covenants, easements or restrictions
of record and accepts this Lease






<PAGE>





     subject thereto and to all matters disclosed thereby
and by any exhibits attached hereto. Lessee acknowledges that
neither Lessor nor Lessor's agent has made any representation or
warranty as to the present or future suitability of the Premises
for the conduct of Lessee's business.

     7.   MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA
		SERVICES.

          7.1  LESSOR'S OBLIGATIONS. Subject to the provisions
of paragraph 4.2 (Operating Expenses), 6 (Use), 7.2 (Lessee's
Obligations) 7.5, (Condition of Premises Upon Termination)
and 9 (Damage or Destruction) and except for damage caused by
any negligent or intentional act or omission of Lessee,
Lessee's employees, suppliers, shippers, customers, or
invitees, in which event Lessee shall repair the damage,
Lessor, at Lessor's expense, subject to reimbursement
pursuant to paragraph 4.2, shall keep in good condition and
repair the foundations, exterior walls, structural condition
of interior bearing walls, and roof of the Premises, as well
as the parking lots, walkways, driveways, landscaping,
fences, signs and utility installations of the Common Areas
and all parts thereof. Lessor shall not, however, be obligated
 to paint the exterior or interior surface of exterior walls,
nor shall Lessor be required to maintain, repair or replace
windows, doors or plate glass of the Premises, or to maintain
or repair anything required to be maintained by Lessee under
paragraph 7.2. Lessor shall have no obligation to make
repairs under this paragraph 7.1 until a reasonable
time after receipt of written notice from Lessee of the
need for such repairs. Lessee expressly waives the benefits
of any statute now or hereafter in effect which would otherwise
afford Lessee the right to make repairs at Lessor's expense
or to terminate this Lease because of Lessor's failure to keep
the Premises in good order, condition and repair. Lessor
shall not be liable for damages or loss of any kind or nature
by reason of Lessor's failure to furnish. any Common Area
services when such failure is caused by accident, breakage,
repairs, strikes, lockout, or other labor disturbances or
disputes of any character or by any other cause beyond the
reasonable control of Lessor.

          7.2  LESSEE'S OBLIGATIONS.

               (a) Subject to the provisions of paragraphs 6
(Use), 7.1 (Lessor's Obligations), and 9 (Damage or Destruction),
Lessee, at Lessee's expense, shall keep in good order,
condition and repair the Premises and every part thereof
(whether or not the damaged portion of the Premises or
the means of repairing the same are reasonably or readily
accessible to Lessee) including, without limiting the
generality of the foregoing, any plumbing, heating,
ventilating and air conditioning systems (Lessee shall
procure and maintain, at Lessee's expense, a ventilating
and air conditioning system maintenance contract), electrical
and lighting facilities and equipment within the Premises, or






<PAGE>





     that serves only the Premises wherever situated, fixtures,
interior walls and interior surfaces of exterior walls,
ceilings, windows, doors, plate glass, and skylights located
within the Premises. Lessor reserves the right to procure and
maintain the ventilating and air conditioning system
maintenance contract and if Lessor so elects, Lessee shall
reimburse Lessor, upon demand for the cost thereof.

               (b) If Lessee fails to perform Lessee's
obligations under this paragraph 7.2 or under any other
paragraph of this Lease, Lessor may enter upon the Premises
after ten (10) days' prior written notice to Lessee
(except in the case of emergency, in which no notice shall
be required) perform such obligations on Lessee's behalf
and put the Premises in good order, condition and repair,
and the cost thereof together with interest thereon at the
maximum rate then allowable by law shall be due and payable
as additional rent to Lessor together with Lessee's next
Base Rent instalment.

               (c) On the last day of the term hereof, or on
any sooner termination, Lessee shall surrender the Premises
to Lessor in the same condition as received, ordinary wear and
tear excepted, clean and free of debris. Any damage or
deterioration of the Premises shall not be deemed ordinary wear
and tear if the same could have been prevented by good
maintenance practices. Lessee shall repair any damage to the
Premises occasioned by the installation or removal of Lessee's
trade fixtures, alterations, furnishings and equipment.
Notwithstanding anything to the contrary otherwise stated in
this Lease, Lessee shall leave the air lines, power panels,
electrical distribution systems, lighting fixtures, space
heaters, air conditioning, plumbing and fencing on the
Premises in good operating condition.

          7.3   ALTERATIONS AND ADDITIONS.

               (a) Lessee shall not, without Lessor's prior
written consent make any alterations, improvements, additions,
or Utility Installations in, on or about the Premises, or the
Industrial Center, except for nonstructural alterations to the
Premises not exceeding $2,500 in cumulative costs, during the
term of this Lease. In any event, whether or not in excess of
$2,500 in cumulative cost, Lessee shall make no change or
alteration to the exterior of the Premises nor the exterior
of the Building nor the Industrial Center without Lessor's
prior written consent. As used in this paragraph 7.3 the term
"Utility Installation" shall mean carpeting, window coverings,
air lines, power panels, electrical distribution systems,
lighting fixtures, space heaters, air conditioning, plumbing,
and fencing. Lessor may require that Lessee remove any or
all of said alterations,






<PAGE>





     improvements, additions or Utility Installations at the
expiration or earlier termination of the term, and restore the
Premises and the Industrial Center to their prior condition.
Lessor may require Lessee to provide Lessor, at Lessee's sole
cost and expense, a lien and completion bond in an amount equal
to one and one-half times the estimated cost of such
improvements, to insure Lessor against any liability for
mechanic's and materialmen's liens and to insure completion of
the work. Should Lessee make any alterations, improvements,
additions or Utility Installations without the prior
approval of Lessor, Lessor may, at any time during the term
of the Lease, require that Lessee remove any or all of the same.

               (b) Any alterations, improvements, additions, or
Utility Installations made by Lessee during the term of this
Lease shall be done in a good and workmanlike manner and of
good and sufficient materials, and Lessee shall, within thirty
(30) days after completion of such alteration, improvements,
addition or Utility Installation, provide Lessor with
as-built plans and specifications for same. Notwithstanding
anything contained in this Lease to the contrary,
Paragraphs 7.3(D),(I)(BB) and (cc) shall apply to
non-structural alterations, improvements, additions or
Utility Installations not exceeding $2,500 in cost.

               (c) Any alterations, improvements, additions or
Utility Installations in or about the Premises or the
Industrial Center that Lessee shall desire to make and which
requires the consent of the Lessor shall be presented to
Lessor in written form, with proposed detailed plans.
If Lessor shall give its consent, the consent shall be
deemed conditioned upon Lessee acquiring a permit to do so
from appropriate governmental agencies, the furnishing of a
copy thereof to Lessor prior to the commencement of the work
and the compliance by Lessee of all conditions of said
permit in a prompt and expeditious manner.

               (d) For any additions, alterations,
improvements, or Utility Installations requiring Lessor's
prior written  consent:

                    (i) Lessee shall:

                         (aa) Request Lessor's approval in
writing at least thirty (30) days prior to proposed
construction.







<PAGE>





               (bb) Employ a California licensed architect,
contractor and structural engineer in connection with the
proposed construction.

                         (cc) Be fully responsible for the acts
of Lessee's consultants, employees, contractors, subcontractors,
invitees and agents, and cause them to fully comply with any
applicable terms of this Lease and documents referred to by
this Lease and all applicable laws, rules and regulations.

                         (dd) Enter into written agreements with
an architect and general contractor on standard American
Institute of Architects (AIA) form or reasonable equivalent
for the contract itself as well as payment schedules, change
orders, etc. Copies of executed agreements will be forwarded
to Lessor within five (5) days of execution.

                        (ee) Cause to be obtained an applicable
building permit for any and all construction and modifications,
and construct the additions and alterations and perform the
construction work in accordance with all applicable laws,
including without limitation the Americans With Disabilities
Act.

                    (ii) Lessee's Architect Shall:

                         (aa) Be licensed by the State of
					California.

                         (bb) Design and specify within the
parameters of the building work letter (if any) and approved
building specifications (if any) or have received specific
written exceptions from Lessor.

                         (cc) Secure Lessor's written approval
before submitting plans to the general contractor for bidding
or to governmental agencies for approval.

                         (dd) Secure Lessor's written approval
of any changes or alternates to the plans recommended by the
general contractor or required by governmental agencies.







<PAGE>





               (ee) Submit a copy of the final application for
permit and issued permit to Lessor.

                         (ff) Incorporate the building standard
details (if any) supplied by Lessor onto the drawings.

                         (gg) Submit final plans for Lessor's
written approval prior to construction.

                         (hh) Be available for final inspection
with Lessor at job completion.

                         (ii) Secure Lessor's written
of details of any changes in specifications or finishes during
construction.

                         (jj) Provide samples and specifications
as required by Lessor.

                         (kk) Sign off' on the as-built drawings
as the Architect's certification that the improvements have,
in fact, been built as per the Architect's design.

                    (iii) Lessee's General Contractor and/or
Subcontractors Shall:

                         (aa) Be licensed by the State of
California.

                         (bb) Have substantial experience
providing similar quality and quantity of improvements.
Work history shall be provided to Lessor prior to being
awarded contract.

                         (cc) Have a bonding capacity equal to
or exceeding the valuation of the job. Lessor may, at its sole
option, require the job to be bonded.

                         (dd) Maintain in full force and effect,
throughout the duration of its performance under the contract
with the Lessee, a Worker's Compensation insurance policy and
a Commercial General Liability insurance policy issued by an
insurer satisfactory to Lessor with liability coverage of
not less than $1,000,000.00 for personal injury and
$500,000.00 to cover






<PAGE>





               property damage. The Commercial General
Liability insurance policy shall include assumption of
contractual liability. Certificates of insurance containing
a thirty (30) day cancellation clause shall be furnished to
Lessor prior to commencement of performance under the
construction contract naming Lessor (The Prudential Insurance
Company of America)and its managing agent (currently Cushman &
Wakefield of California, Inc.) as additional insureds.

                         (ee) Provide a construction schedule
to Lessor prior to commencement of work and weekly written
progress reports.

                         (ff) Warrant the General Contractor's
work and that of the General Contractor's subcontractors, for
a minimum of one (1) year.

                         (gg) Provide Lessor with as-built
drawings of all improvements.

                    (iv) All approvals by Lessor, as herein
provided for, shall not be unreasonably withheld. All requests
to be submitted to Lessor shall be submitted through Lessor's
managing agent.

               (e) Lessee shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished
to or for Lessee at or for use in the Premises, which claims are
or may be secured by any mechanic's or materialmen's lien
against the Premises, or the Industrial Center, or any interest
therein. Lessee shall give Lessor not less than thirty (30)
days' notice prior to the commencement of any work in the
Premises, and Lessor shall have the right to post notices of
non-responsibility in or on the Premises or the Building as
provided by law. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall,
at its sole expense defend itself and Lessor against the same
and shall pay and satisfy any such adverse judgment that may
be rendered thereon before the enforcement thereof against the
Lessor or the Premises or the Industrial Center, upon the
condition that if Lessor shall require, Lessee shall furnish to
Lessor a surety bond satisfactory to Lessor in an amount equal
to such contested lien claim or demand indemnifying Lessor
against liability for the same and holding the Premises and the
Industrial Center free from the effect of such lien or claim.
In addition, Lessor may require Lessee to pay Lessor's attorneys
fees and costs in participating in such action if Lessor shall
decide it is to Lessor's best interest to do so.

               (f) All alterations, improvements, additions
and Utility Installations (whether or not such Utility
Installations constitute trade fixtures of Lessee), which may
be made on the Premises, shall be the property of Lessor and
shall remain upon and be surrendered with the Premises at
expiration or earlier termination of the Lease term, unless
Lessor requires their removal pursuant to paragraph 7.3(A).
Notwithstanding the provisions of this paragraph 7.3(F),
Lessee's machinery and equipment, other than that which is
affixed to the Premises so that it cannot be removed without
material damage to the Premises, and other than Utility
Installations, shall remain the property of Lessee and may be
removed by Lessee subject to the provisions of paragraph 7.2.

          7.4  UTILITY ADDITIONS. Lessor reserves the right
to install new or additional utility facilities throughout the
Building and the Common Areas for the benefit of Lessor or
Lessee, or any other lessee of the Industrial Center,
including, but not by way of limitation, such utilities
as plumbing, electrical systems, security systems,
communication systems, and fire protection and detection
systems, so long as such installations do not unreasonably
interfere with Lessee's use of the Premises.

          7.5  CONDITION  OF  PREMISES  UPON  TERMINATION,
ADDITIONAL  USE PROVISIONS.

               7.5.1 Lessee shall maintain the Premises as
provided in Paragraph 7.2 and in accordance with the
requirements of any covenants or restrictions as may from time
to time be applicable to the Premises. Lessee, in keeping the
Premises in good order, condition and repair, shall exercise
and perform good maintenance practices and any damage or
deterioration shall not be deemed "ordinary wear and tear" if
the same could have been prevented by good maintenance practice.
Lessee's obligations shall include restorations, replacements
or renewals when necessary to keep the Premises and all
improvements thereon or a part thereof in good order, condition
and state of repair. Notwithstanding anything contained in the
Lease to the contrary, Lessee shall make all repairs whatsoever
on the Premises necessitated by the negligence, misconduct or
fault of Lessee, or its agents, licensees, contractors, or
invitees.

               7.5.2 If the term of this Lease, as the same may
be extended or renewed, exceeds five (5) years, Lessor shall
have the right to require Lessee to repaint the interior of
the improvements every four (4) to six (6) years, but not more
often that once every five (5) years, as reasonably necessary.







<PAGE>





7.5.3 Notwithstanding anything to the contrary in paragraph 7.2
of this Lease, upon termination of this Lease, Lessee shall
leave all plumbing, heating (including space heaters), air
conditioning, electrical and mechanical systems, on the Premises
and in good condition and operating order, and Lessee shall
upon demand pay to Lessor that portion of the cost to restore
such items to good condition and operating order as may be
reasonably allocable to Lessee' tenancy.

               7.5.4 Notwithstanding anything to the contrary
contained in this Lease, the Premises shall not be used for
the warehousing or distribution of hazardous or explosive
products, substances or materials, or of products, substances
or materials that are detrimental to the Premises, the
Industrial Center or other tenants thereof.

     8.   INSURANCE, INDEMNITY.

          8.1  Lessee hereby agrees to indemnify, defend and
hold harmless Lessor, its successors, assigns, subsidiaries,
directors, officers, agents and employees from and against any
and all damage, loss, liability or expense including, but not
limited to, attorney's fees and legal costs suffered by same
directly or by reason of any claim, suit or judgement
brought by or in favor of any person or persons for damage,
loss or expense due to, but not limited to, bodily injury,
including death resulting anytime therefrom, and property
damage sustained by such person or persons which arises out of,
is occasioned by or in any way attributable to the use
or occupancy of the Premises by the Lessee, the acts or omission
of the Lessee, its agents, employees or any other contractors or
invitees brought onto said Premises by the Lessee, or any
breach or default in the performance of any obligation on
Lessee's part to be performed under the terms of this Lease,
except to the extent caused by the sole gross negligence or
wilful misconduct of Lessor, its employees, and agents. If any
action or proceeding is brought against Lessor by reason of any
such claim, Lessee, upon notice from Lessor, shall defend same
at Lessee's expense by counsel satisfactory to Lessor. Such
loss or damage shall include, but not be limited to, any injury
or damage to Lessor's personnel (including death resulting
anytime therefrom) on the Premises. Lessor shall not be liable
for any damages arising from any act or neglect of any other
tenant, if any, of the building or industrial park in which the
Premises are located. Lessee agrees that the obligations
assumed herein shall survive the termination of this Lease.

          8.2 Lessee hereby agrees to maintain in full force
and effect at all times during the term of this Lease, at
Lessee's own expense, for the protection of Lessee, Lessor and
Lessor's property manager, as their interest may appear,
policies of insurance issued by a responsible carrier
or carriers to Lessor which afford the following coverages:

               (a) Workers' Compensation with statutory limits.

               (b) Employers' Liability insurance with the
following minimum limits:

               Bodily injury by disease per person $1,000,000
               Bodily injury by accident policy limit $1,000,000
               Bodily injury by disease policy limit $1,000,000

               (c) Property insurance on a special causes of loss
insurance form covering any and all personal property of Lessee
including but not limited to improvements, betterments,
furniture, fixtures, Utility Installations, and equipment in an
amount not less than their full replacement cost, with a
deductible not to exceed $10,000. This policy should contain
a waiver of subrogation.

               (d) Commercial General Liability Insurance
including Broad Form Property Damage and Contractual Liability
with the following minimum limits:

           General Aggregate $2,000,000
           Products/Completed Operations Aggregate $2,000,000
           Each Occurrence $1,000,000
           Personal & Advertising Injury $1,000,000
           Medical Payments $5,000 per person

               (e) Umbrella/Excess Liability on a following
form basis with the following minimum limits:

               General Aggregate $10,000,000
               Each Occurrence $10,000,000

     The limits of said insurance in this Paragraph 8.2 shall
not, however, limit the liability of Lessee hereunder.

          8.3  If Lessor is providing property insurance on the
Premises, then Lessor shall, at all times during the term of
this Lease, maintain the following insurance:

               (a) a policy or policies of all-risk property
insurance, issued by and binding upon some solvent insurance
company, insuring for the full replacement






<PAGE>





cost of the building on the Premises. Lessor shall not be
obligated to insure, and shall not assume any liability or risk
of loss for, any of Lessee's furniture, equipment, machinery,
goods, supplies, utility installations, improvements, or
alterations upon the Premises. This policy shall contain an
agreed amount endorsement and be written with no coinsurance.
Lessor may, but shall not be obligated to, obtain earthquake
and flood insurance.

               (b) Rent insurance on an all-risk basis in an
amount equal to all that is called for under Paragraph 4 of
this Lease (Base Rent and any additional rents payable under
this Lease including tax and insurance costs) for a period of
at least twelve (12) months commencing with the date of loss.

               (c) Boiler and machinery insurance in an amount
satisfactory to Lessor on a comprehensive coverage form.

          8.4  The Lessee shall deliver to Lessor prior to
taking possession of the Premises, and thereafter at least
thirty (30) days prior to expiration of such policy,
certificates of insurance evidencing the above coverage with
limits not less than those specified above. Insurance required
hereunder shall be in companies holding a "General Policyholders
Rating" of at least A-VIII as set forth in the most current
issue of "Best's Insurance Guide". Such Certificates with the
exception of Worker's Compensation, shall name Lessor, its
subsidiaries, directors, agents and employees, and its property
manager as additional insureds and shall expressly provide that
the interest of same herein shall not be affected by a breach
by Lessee of any insurance policy provision for which such
Certificates evidence coverage. Further, all Certificates shall
expressly provide that no less than thirty (30) days prior
written notice shall be given to Lessor in the event of
material alteration to or cancellation of the coverage
evidenced by such Certificates.

          8.5  Lessor may secure and maintain, at Lessee's
expense, increased amounts of insurance and other insurance
coverage in such limits, as Lessor may require in its sole
judgment to afford Lessor adequate protection.

          8.6  Lessor makes no representation that the limits of
liability specified to be carried by Lessee under the term of
this Lease are adequate to protect Lessee against Lessee's
undertaking under this Paragraph 8 and in the event Lessee
believes that any such insurance coverage called for under this
Lease is insufficient, Lessee shall provide, at its own expense,
such additional insurance as Lessee deems adequate.

          8.7  Anything in this Lease to the contrary
notwithstanding, Lessor and Lessee hereby waive and release
each other of and from any and all rights of recovery,






<PAGE>





claims, action or cause of action, against each other, their
agents, officers and employees, for any loss or damage that
may occur to the Premises, improvements to the building of which
the Premises are a part, personal property (building contents)
within the building on the Premises, any furniture, equipment,
machinery, goods or supplies not covered by this Lease which
Lessee may bring or obtain upon the Premises or any additional
improvements which Lessee may construct on the Premises, by
reason of fire, the elements or any other cause which could be
insured against under the terms of all risk property insurance
policies, regardless of cause or origin, including negligence
of Lessor or Lessee and their agents, officers and employees.
Because this Paragraph will preclude the assignment of any
claim mentioned in it by way of subrogation (or otherwise) to
an insurance company (or any other person) each party to this
Lease agrees immediately to give to each insurance company,
written notice of the terms of the mutual waivers contained in
this Paragraph, and to have the insurance policies properly
endorsed if necessary to prevent the invalidation of the
insurance coverages by reason of the mutual waivers contained
in this Paragraph. Lessee also waives and releases Lessor,
its agents, officers and employees of and from any and all
rights of recovery, claim, action or cause of action for any
loss or damage insured against under any other policies of
insurance carried by Lessee.

          8.8  PAYMENT OF PREMIUM INCREASE.

               (a) After the term of this Lease has commenced,
Lessee shall not be responsible for paying Lessee's Share of any
increase in the property insurance premium for the Industrial
Center specified by Lessor's insurance carrier as being caused
by the use, acts or omissions of any other lessee of the
Industrial Center, or by the nature of such other lessee's
occupancy which create an extraordinary or unusual risk.

               (b) Lessee, however, shall pay the entirety of
any increase in the property insurance premium for the Industrial
Center over what is was immediately prior to the commencement
of the term of this Lease if the increase is specified by
Lessor's insurance carrier as being caused by the nature of
Lessee's occupancy or any act or omission of Lessee.

          8.9  EXEMPTION OF LESSOR FROM LIABILITY. Lessee
hereby agrees that Lessor shall not be liable for injury to
Lessee's business or any loss of income therefrom or for damage
to the goods, wares, merchandise or other property of Lessee,
Lessee's employees, invitees, customers, or any other person
in or about the Premises or the Industrial Center, nor shall
Lessor be liable for injury to the person of Lessee, Lessee's
employees, agents or contractors, whether such damage or injury
is caused by or results from fire, steam, electricity, gas,
water or rain, or from the breakage, leakage,






<PAGE>





obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air conditioning, or lighting fixtures,
or from any other cause, whether said damage or injury results
from conditions arising upon the Premises or upon other portions
of the Industrial Center, or from other sources or places and
regardless of whether the cause of such damage or injury or the
means of repairing the same is inaccessible to Lessee, Lessor
shall not be liable for any damages arising from any act or
neglect of any other lessee, occupant or user of the Industrial
Center, nor from the failure of Lessor to enforce the
provisions of any other lease of the Industrial Center.

     9.   DAMAGE OR DESTRUCTION.

          9.1  DEFINITIONS.

               (a) "Premises Partial Damage" shall mean if the
Premises are damaged or destroyed to the extent that the cost
of repair is less than fifty percent of the then replacement
cost of the Premises.

               (b) "Premises Total Destruction" shall mean if
the Premises are damaged or destroyed to the extent that the
cost of repair is fifty percent or more of the then replacement
cost of the Premises.

               (c) "Premises Building Partial Damage" shall mean
if the Building of which the Premises are a part is damaged or
destroyed to  the extent that the cost to repair is less than
fifty percent of the then replacement cost of the Building.

               (d) "Premises Building Total Destruction" shall
mean if the Building of which the Premises are a part is
damaged or destroyed to the extent that the cost to repair is
fifty percent or more of the then replacement cost of the
Building.

               (e) "Industrial Center Buildings" shall mean
all of the buildings on the Industrial Center site.

               (f) "Industrial Center Buildings Total
Destruction" shall mean if the Industrial Center Buildings are
damaged or destroyed to the extent that the cost of repair is
fifty percent or more of the then replacement cost of the
Industrial Center Buildings.

               (g) "Insured Loss" shall mean damage or
destruction which was caused by an event required to be covered
by the insurance described in






<PAGE>





     paragraph 8. The fact that an Insured Loss has a deductible
amount shall not make the loss an uninsured loss.

               (h) "Replacement Cost" shall mean the amount of
money necessary to be spent in order to repair or rebuild the
damaged area to the condition that existed immediately prior to
the damage occurring excluding all improvements made by lessees.

9.2  PREMISES PARTIAL DAMAGE; PREMISES BUILDING PARTIAL DAMAGE.

               (a) Insured Loss: Subject to the provisions of
paragraphs 9.4 and 9.5, if at any time during the term of this
Lease there is damage which is an Insured Loss and which falls
into the classification of either Premises Partial Damage or
Premises Building Partial Damage, then Lessor shall, at Lessor's
expense, repair such damage to the Premises, but not Lessee's
fixtures, equipment, tenant improvements or Utility Installations,
as soon as reasonably possible and this Lease shall continue
in full force and effect.

               (b) Uninsured Loss: Subject to the provisions of
paragraphs 9.4 and 9.5, if at any time during the term of this
Lease there is damage which is not an Insured Loss and which
falls within the classification of Premises Partial Damage or
Premises Building Partial Damage, unless caused by a negligent
or willful act of Lessee or its agents, contractors or invitees
(in which event Lessee shall make the repairs at Lessee's
expense), which damage prevents Lessee from using the Premises,
Lessor may at Lessor's option either (i) repair such damage as
soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) give
written notice to Lessee within thirty (30) days after the date
of the occurrence of such damage of Lessor's intention to
cancel and terminate this Lease as of the date of the occurrence
of such damage. In the event Lessor elects to give such notice
of Lessor's intention to cancel or terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of
such notice to give written notice to Lessor of Lessee's
intention to repair such damage at Lessee's expense, without
reimbursement from Lessor, in which event this Lease shall
continue in full force and effect, and Lessee shall proceed to
make such repairs as soon as reasonably possible. If Lessee
does not give such notice within such 10-day period this Lease
shall be cancelled and terminated as of the date of the
occurrence of such damage.







<PAGE>





9.3  PREMISES TOTAL DESTRUCTION: PREMISES BUILDING TOTAL
DESTRUCTION: INDUSTRIAL CENTER BUILDINGS TOTAL DESTRUCTION.

               (a) Subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this Lease there is
damage, whether or not it is an Insured Loss, and which falls
into the classifications of either (i) Premises Total Destruction,
or (ii) Premises Building Total Destruction, or (iii) Industrial
Center Buildings Total Destruction, then Lessor may at Lessor's
option either (i) repair such damage or destruction, but not
Lessee's fixtures, equipment, tenant improvements or Utility
Installations as soon as reasonably possible at Lessor's expense,
and this Lease shall continue in full force and effect, or
(ii) give written notice to Lessee within thirty (30) days after
the date of occurrence of such damage of Lessor's intention
to cancel and terminate this Lease, in which case this Lease
shall be cancelled andterminated as of the date of the
occurrence of such damage.

          9.4   DAMAGE NEAR END OF TERM.

               (a) Subject to paragraph 9.4(B), if at any time
during the last six months of the term of this Lease there is
substantial damage, whether or not an Insured Loss, which falls
within the classification of Premises Partial Damage, Lessor
may at Lessor's option cancel and terminate this Lease as of
the date of occurrence of such damage by giving written notice
to Lessee of Lessor's election to do so within 30 days after
the date of occurrence of such damage.

               (b) Notwithstanding paragraph 9.4(A), in the
event that Lessee has an option to extend or renew this Lease,
and the time within which said option may be exercised has not
yet expired, Lessee shall exercise such option, if it is to be
exercised at all, no later than twenty (20) days after the
occurrence of an Insured Loss falling within the classification
of Premises Partial Damage during the last six months of the
term of this Lease. If Lessee duly exercises such option during
said twenty (20) day period, Lessor shall, at Lessor's expense,
repair such damage, but not Lessee's fixtures, equipment or
tenant improvements, as soon as reasonably possible and this
Lease shall continue in full force and effect provided Lessee
first deposits with Lessor any shortfall in necessary funds. If
Lessee fails to exercise such option during said twenty (20)
day period, then Lessor may at Lessor's option terminate and
cancel this Lease as of the expiration of






<PAGE>





said twenty (20) day period by giving written notice to
Lessee of  Lessor's election to do so within ten (10) days
after the expiration of said twenty (20) day period,
notwithstanding any term or provision in the grant of option
to the contrary.

          9.5  ABATEMENT OF RENT; LESSEE'S REMEDIES.

               (a) In the event Lessor repairs or restores the
Premises  pursuant to the provisions of this paragraph 9, the
rent payable hereunder for the period during which such damage,
repair or restoration continues shall be abated in proportion
to the degree to which Lessee's use of the Premises is impaired
to the extent Lessor receives proceeds from rent abatement
insurance. Except for abatement of rent, if any, Lessee shall
have no claim against Lessor for any damage suffered by reason
of any such damage, destruction, repair or restoration.

               (b) If Lessor shall be obligated to repair or
restore the Premises under the provisions of this paragraph 9
and shall not commence such repair or restoration within ninety
(90) days after such obligation shall accrue, Lessee may at
Lessee's option cancel and terminate this Lease by giving Lessor
written notice of Lessee's election to do so at any time prior
to the commencement of such repair or restoration. In such event
this Lease shall terminate as of the date of such notice. In the
event that Lessor shall be obligated to repair or restore the
Premises pursuant to Paragraph 9 of this Lease and shall not
commence such repair or restoration within ninety (90)
days after such obligation shall accrue, the right of Lessee to
terminate this Lease pursuant to this Paragraph 9.5(B) ll be
the sole right and remedy of Lessee against Lessor, and Lessor
shall have no other liability to Lessee, for damages, specific
performance or otherwise, in connection with any such failure.

          9.6  TERMINATION -- ADVANCE PAYMENTS. Upon termination
of this Lease pursuant to this paragraph 9, an equitable
adjustment shall be made concerning advance rent and any advance
payments made by Lessee to Lessor, Lessor shall, in addition,
return to Lessee so much of Lessee's security
deposit as has not theretofore been applied by Lessor.

          9.7  WAIVER. Lessor and Lessee waive the provisions of
any statute which relate to termination of leases when leased
property is destroyed and agree that such event shall be governed
by the terms of this Lease.







<PAGE>





10.  REAL PROPERTY TAXES.

          10.1 PAYMENT OF TAXES. Lessor shall pay the real
property tax, as defined in paragraph 10.3, applicable to the
Industrial Center subject to reimbursement by Lessee of Lessee's
Share of such taxes in accordance with the provisions of
paragraph 4.2, except as otherwise provided in paragraph 10.2.

          10.2 ADDITIONAL IMPROVEMENTS. Lessee shall not be
responsible for paying Lessee's Share of any increase in real
property tax specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon
the Industrial Center by other lessees or by Lessor for the
exclusive enjoyment of such other lessees. Lessee shall,
however, pay to Lessor at the time that Operating Expenses are
payable under paragraph 4.2(C) the entirety of any increase in
real property tax if assessed solely by reason of additional
improvements placed upon the Premises by Lessee or at Lessee's
request.

          10.3 DEFINITION OF "REAL PROPERTY TAX". As used
herein, the term "real property tax" shall include any form
of real estate tax or assessment, general, special, ordinary
or extraordinary, and any license fee, commercial rental tax,
mprovement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed on the Industrial
Center or any portion thereof by any authority having the direct
or indirect power to tax, including any city, county, state or
federal government, or any school, agricultural, sanitary, fire,
street, drainage or other improvement district thereof, as
against any legal or equitable interest of Lessor in the
Industrial Center or in any portion thereof, as against Lessor's
right to rent or other income therefrom, and as against Lessor's
business of leasing the Industrial Center. The term "real
property tax" shall also include any tax, fee, levy, assessment
or charge (i) in substitution of, partially or totally, any tax,
fee, levy, assessment or charge hereinabove included within the
definition of "real property tax," or (ii) the nature of which
was hereinbefore included within the definition of "real
property tax" or (iii) which is imposed for a service or right
not charged prior to June 1, 1978, or, if previously charged,
has been increased since June 1, 1978 or (iv) which is imposed
as a result of a transfer, either partial or total, of Lessor's
interest in the Industrial Center or which is added to a tax
or charge hereinbefore included  within the definition of real
property tax by reason of such transfer, or (v) which is imposed
by reason of this transaction, any modifications or changes
hereto, or any transfers hereof.

          10.4 JOINT ASSESSMENT. If the Industrial Center is
not separately assessed, Lessee's Share of the tire real
property tax liability shall be an equitable proportion of the
real property taxes for all of the land and improvements
included within the tax parcel assessed, such proportion to be
determined by Lessor from the






<PAGE>





respective valuations assigned in the assessor's work sheets
or such other information as may be reasonably available,
Lessor's reasonable determination thereof, in good faith,
shall be conclusive.

     10.5 PERSONAL PROPERTY, TAXES.

               (a) Lessee shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all other personal property of
Lessee contained in the Premises or elsewhere. When possible,
Lessee shall cause said trade fixtures, furnishings, equipment
and all other personal property to be assessed and billed
separately from the real property of Lessor.

               (b) If any of Lessee's said personal property
shall be  assessed with Lessor's real property, Lessee shall
pay to Lessor the Shares attributable to Lessee within ten
(10) days after receipt of a written statement setting forth
the taxes applicable to Lessee's property.

      10.6 ADDITIONAL PROVISIONS REGARDING REAL PROPERTY TAXES.
Lessor shall have the sole right to contest or appeal any real
property taxes or assessments applicable to all or any portion
of the Industrial Center and to seek a reduction in the assessed
valuation of all or any portion of the Industrial Center
(collectively, "Tax Contests"). Any refund of real property taxes
resulting from any such Tax Contest shall be applied first
to reimburse Lessor for its costs and expenses in connection
with the Tax Contest (including, without limitation attorneys'
fees and the costs of consultants) and then, out of and to the
extent of the balance of such refund, Lessor shall reimburse to
Lessee the portion of such reduction attributable to the
Premises and the term of this Lease, as and to the
extent previously paid by Lessee as part of Lessee's Share
of Operating Expenses.

     11.   UTILITIES.  Lessee shall pay for all water, gas, heat,
light, power, telephone and other utilities and services
supplied to the Premises, together with any taxes thereon. If any
such services are not separately metered to the Premises, Lessee
shall pay at Lessor's option, either Lessee's Share or a
reasonable proportion to be determined by Lessor of all charges
jointly metered with other premises in the Building.

     12.  ASSIGNMENT AND SUBLETTING.

          12.1 LESSOR'S CONSENT REQUIRED. Lessee shall
voluntarily or by operation of law assign, transfer, mortgage,
sublet, or otherwise transfer or encumber






<PAGE>





all or any part of Lessee's interest in the Lease or in the
Premises, without Lessor's prior written consent, which Lessor
shall not unreasonably withhold. Lessor shall respond to
Lessee's request for consent hereunder in a timely manner and
any attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall
constitute a noncurable breach of this Lease without the need
for notice to Lessee under paragraph 13.1. If at any time or
from time to time during the term of this Lease, Lessee desires
to assign or sublet all or any part of Lessee's interest in this
Lease or in the Premises, Lessee shall give prior written notice
to Lessor setting forth the terms of the proposed assignment
or subletting and the space so proposed to be assigned or sublet.
Such assignment or sublease shall be subject to, without
limitation, all the conditions in this Paragraph 12 and the
following conditions:

               (a) The assignment or sublease shall be on the
terms set forth in the notice given to Lessor. Any subsequent
changes or modifications will require Lessor's prior written
consent.

               (b) Lessee acknowledges that Lessor's agreement
to lease these Premises to Lessee at the rent and terms stated
herein is made in material reliance upon Lessor's evaluation
of this particular Lessee's background, experience and ability,
as well as the nature of the use of the Premises by this Lessee
as set forth in Paragraph 6. In the event that Lessee shall
request Lessor's written consent to assign or sublease the
Premises as required in this Paragraph 12.1, then each such
request for consent shall be accompanied by the following:

                    (i) Financial statements of the proposed
assignee or sublessee;

                    (ii) A statement of the specific uses for
which the Premises will be utilized by the proposed assignee
or sublessee; and

                    (iii) Preliminary plans prepared by an
architect or civil engineer for all alterations to the
Premises that are contemplated to be made by Lessee, the
proposed assignee or sublessee.

               (c) No assignment or sublease shall be valid and
no assignee or sublessee shall take possession of the Premises
assigned or subleased until an executed counterpart of such
assignment or sublease has been delivered to Lessor.







<PAGE>





     (d) No sublessee or assignee shall have a right further
to sublet or assign.

               (e) 100% (after deduction of reasonable real
estate brokerage commission paid by Lessee) of any sums or
other economic consideration received by Lessee as a result
of such assignment or subletting (except rental or other
payments received which are attributable to amortization of the
cost of leasehold improvements other than building standard
tenant improvements made to the assigned or sublet portion of
the Premises by Lessor) whether denominated rentals under the
assignment or sublease or otherwise which exceed, in
the aggregate, the total sums which Lessee is obligated to pay
Lessor under this Lease (prorated to reflect obligations
allocable to that portion of the Premises subject to such
assignment or sublease) shall be payable to Lessor as additional
rental under this Lease without affecting or reducing any other
obligation of Lessee hereunder. In the event of subletting of
only a portion of the Premises, in calculating whether the rent
received by Lessee exceeds the rent payable under
this Lease, the rent payable under the Lease shall be prorated
according to the square footage involved in order to reflect the
rent applicable to the space sublet.

          12.2 LESSEE AFFILIATE. Notwithstanding the provisions
of paragraph 12.1 hereof, Lessee may assign or sublet the
Premises, or any portion thereof, without Lessor's consent, to
any corporation which controls, is controlled by or is under
common control with Lessee, or to any corporation resulting
from the merger or consolidation with Lessee, or to any person
or entity which acquires all the assets of Lessee as a going
concern of the business that is being conducted on the Premises,
all of which are referred to as "Lessee Affiliate," provided
that before such assignment shall be effective said assignee
shall assume, in full, the obligations of Lessee under this
Lease. Any such assignment shall not, in any way, affect or
limit the liability of Lessee under the terms of this
Lease, even if after such assignment or subletting the terms of
this Lease are materially changed or altered without the
consent of Lessee, the consent of whom shall not be necessary.

          12.3 LESSEES OTHER THAN INDIVIDUALS.

               (a) If Lessee is a partnership, a transfer of any
interest of a general partner, a withdrawal of any general
partner from the partnership, or the dissolution of the
partnership, shall be deemed to be an assignment of this Lease.







<PAGE>





b) If Lessee is a corporation, unless Lessee is a public
corporation whose stock is regularly traded on a national
stock exchange, or is regularly traded in the over-the-counter
market and quoted on NASDAQ, any sale or other transfer of a
percentage of capital stock of Lessee which results in a change
of controlling persons, or the sale or other transfer of
substantially all of the assets of Lessee, shall be deemed
to be an assignment of this Lease.

          12.4 TERMS AND CONDITIONS OF ASSIGNMENT. Regardless
of Lessor's consent, no assignment shall release Lessee of
Lessee's obligations hereunder or alter the primary liability
of Lessee to pay the Base Rent and Lessee's Share of Operating
Expenses, and to perform all other obligations to be performed
by Lessee hereunder. Lessor may accept rent from any person
other than Lessee pending approval or disapproval of such
assignment. Neither a delay in the approval or disapproval
of such assignment nor the acceptance of rent shall constitute
a waiver or estoppel of Lessor's right to exercise its remedies
for the breach of any of the terms or conditions of this
paragraph 12 of this Lease. Consent to one assignment shall not
be deemed consent to any subsequent assignment. In the event of
default by any assignee of Lessee or any successor of Lessee,
in the performance of any of the terms hereof, Lessor may
proceed directly against Lessee without the necessity of
exhausting remedies against said assignee, Lessor may consent
to subsequent assignments of this Lease or amendments or
modifications to this Lease with assignees of Lessee, without
notifying Lessee, or any successor of Lessee, and without
obtaining its or their consent thereto and such action shall
not relieve Lessee of liability under this Lease.

          12.5 TERMS AND CONDITIONS APPLICABLE TO SUBLETTING.
Regardless of Lessor's consent, the following terms and
conditions  shall apply to any subletting by Lessee of all or
any part of the Premises and shall be included in subleases:

               (a) Lessee hereby assigns and transfers to Lessor
all of Lessee's interest in all rentals and income arising from
any sublease heretofore or hereafter made by Lessee, and Lessor
may collect such rent and income and apply same toward Lessee's
obligations under this Lease; provided, however, that until a
default shall occur in the performance of Lessee's obligations
under this Lease, Lessee may, subject to paragraph 12.1(E)
receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of this or any other
assignment of such sublease to Lessor nor by reason of the
collection of the rents from a sublessee, be deemed liable
to the sublessee for any failure of Lessee to perform and comply
with any of Lessee's obligations to such sublessee under such
sublease. Lessee hereby irrevocably authorizes and directs any
such sublessee, upon receipt of a written notice from Lessor
stating that a default exists in the performance of Lessee's
obligations under this Lease,







<PAGE>





to pay to Lessor the rents due and to become due under the
sublease, Lessee agrees that such sublessee shall have the
right to rely upon  any such statement and request from Lessor,
and that such sublessee  shall pay such rents to Lessor without
any obligation or right to inquire as to whether such default
exists and notwithstanding any notice from or claim from Lessee
to the contrary. Lessee shall have no  right or claim against
such sublessee or Lessor for any such rents so paid by said
sublessee to Lessor.

               (b) No sublease entered into by Lessee shall be
effective unless and until it has been approved in writing
by Lessor. In entering into any sublease, Lessee shall use
only such form of sublease as is satisfactory to Lessor, and
once approved by Lessor, such sublease shall not be changed or
modified without Lessor's prior written consent. Any sublessee
shall, by reason of entering into a sublease under this Lease,
be deemed, for the benefit of Lessor, to have assumed and
agreed to conform and comply with each and every obligation
herein to be performed by Lessee other than such obligations
as are contrary to or inconsistent with provisions contained in
a sublease to which Lessor has expressly consented in writing.

               (c) If Lessee's obligations under this Lease
have been guaranteed by third parties, then a sublease, and
Lessor's consent thereto, shall not be effective unless said
guarantors give their written consent to such sublease and the
terms thereof.

               (d) The consent by Lessor to any subletting
shall not release Lessee from its obligations or alter the
primary liability of Lessee to pay the rent and perform and
comply with all of the obligations of Lessee to be performed
under this Lease.

               (e) The consent by Lessor to any subletting
shall not constitute a consent to any subsequent subletting
by Lessee or to any assignment or subletting by the sublessee.
However, Lessor may consent to subsequent sublettings and
assignments of the sublease or any amendments or modifications
thereto without notifying Lessee or anyone else liable on the
Lease or sublease and without obtaining their consent and
such action shall not relieve such persons from liability.

               (f) In the event of any default under this Lease,
Lessor may proceed directly against Lessee, any guarantors or
any one else responsible for the performance of this Lease,
including the sublessee, without first exhausting






<PAGE>





     Lessor's remedies against any other person or entity
responsible therefor to Lessor, or any security held by
Lessor or Lessee.

               (g) In the event Lessee shall default in the
performance of its obligations under this Lease, Lessor, at its
option and without any obligation to do so, may require any
sublessee to attorn to Lessor, in which event Lessor shall
undertake the obligations of Lessee under such sublease from
the time of the exercise of said option to the termination of
such sublease; provided, however, Lessor shall not be liable for
any prepaid rents or security deposit paid by such sublessee to
Lessee or for any other prior defaults of Lessee under such
sublease.

               (h) Each and every consent required of Lessee
under a sublease shall also require the consent of Lessor.

               (i) No sublessee shall further assign or sublet
all or any part of the Premises without Lessor's prior written
consent.

               (j) Lessor's written consent to any subletting
of the Premises by Lessee shall not constitute an acknowledgement
that no default then exists under this Lease of the obligations
to be performed by Lessee nor shall such consent be deemed a
waiver of any then existing default, except as may be otherwise
stated by Lessor at the time.

               (k) With respect to any subletting to which
Lessor has  consented, Lessor agrees to deliver a copy of any
notice of default by Lessee to the sublessee. Such sublessee
shall have the right to cure a default of Lessee within ten
(10) days after service of said notice of default upon such
sublessee, and the sublessee shall have a right of reimbursement
and offset from and against Lessee for any such defaults
cured by the sublessee.

          12.6 ATTORNEY'S FEES. In the event Lessee shall
assign or sublet the Premises or request the consent of Lessor
to any assignment or subletting or if Lessee shall request the
consent of Lessor for any act Lessee proposes to do then Lessee
shall pay Lessor's reasonable attorney's and/or consultants'
fees incurred in connection therewith, such attorney's fees
not to exceed $350.00 for each such request. Notwithstanding
anything to the contrary in this Paragraph 12.6, the parties
agree that a payment of $750.00 is a reasonable fee for
Lessor's review of Lessee's request to assign or sublet.







<PAGE>





13.  DEFAULT REMEDIES.

          13.1 DEFAULT. The occurrence of any one or more of
the following events shall constitute a material default of
this Lease by Lessee:

   (a) The vacating or abandonment of the Premises by Lessee.

               (b) The failure by Lessee to make any payment
of rent or any other payment required to be made by Lessee
hereunder, as and when due, where such failure shall continue
for a period of three (3) days after written notice thereof
from Lessor to Lessee. In the event that Lessor serves Lessee
with a Notice to Pay Rent or Quit pursuant to applicable
Unlawful Detainer statutes such Notice to Pay Rent or Quit
shall also constitute the notice required by this subparagraph.

               (c) Except as otherwise provided in this Lease,
the failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease to be
observed or performed by Lessee, other than described in
paragraph (b) above, where such failure shall continue for a
period of thirty (30) days after written notice thereof
from Lessor to Lessee; provided, however, that if the nature of
Lessee's noncompliance is such that more than thirty (30) days
are  reasonably required for its cure, then Lessee shall not
be deemed to be  in default if Lessee commenced such cure
within said thirty (30)day period and thereafter diligently
prosecutes such cure to completion. To the extent permitted by
law, such thirty (30) day notice shall constitute the sole and
exclusive notice required to be given to Lessee under
applicable Unlawful Detainer statutes.

               (d) (i) The making by Lessee of any general
arrangement or general assignment for the benefit of creditors;
(ii) Lessee becomes a "debtor" as defined in 11 Section 101
or any successor statute thereto (unless, in the case of a
petition filed against Lessee, the same is dismissed within
sixty (60) days); (iii) the appointment of a trustee or receiver
to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease,
where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within thirty (30) days. In the event
that any provision of this paragraph 13.1(D) is contrary to
any applicable law, such provision shall be of no force or effect.







<PAGE>





     (e) The discovery by Lessor that any financial statement
given to Lessor by Lessee, any assignee of Lessee, any subtenant
of Lessee, any successor in interest of Lessee or any guarantor
of Lessee's obligations hereunder, was materially false.

          13.2 REMEDIES. If Lessee fails to perform any
affirmative duty or obligation of Lessee under this Lease,
within ten (10) days after written notice to Lessee (or in case
of an emergency, without notice), Lessor may at its option
(but without obligation to do so), perform such duty or
obligation on Lessee's behalf including but not limited to
the obtaining of reasonably required bonds, insurance
policies, or governmental licenses, permits or approvals. The
costs and expenses of any such performance by Lessor shall be
due and payable by Lessee to Lessor upon invoice therefor.
In the event of a breach of this Lease by Lessee, as defined in
Paragraph 13.1, with or without further notice or demand, and
without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of
such breach, Lessor may:

               (a) Terminate Lessee's right to possession of
the Premises by any lawful means, in which case this Lease and
the term hereof shall terminate and Lessee shall immediately
surrender possession of the Premises to Lessor. In such event
Lessor shall be entitled to recover from Lessee: (i) the worth
at the time of the award of the unpaid rent which had been
earned at the time of termination; (ii) the worth at the time
of award of the amount by which the unpaid rent which would have
been earned after termination until the time of award
exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided; (iii) the worth at the time
of award of the amount by which the unpaid rent for the balance
of the term after the time of award exceeds the amount of such
rental loss that the Lessee proves could be reasonably avoided;
and (iv) any other amount necessary to compensate Lessor for all
the detriment proximately caused by the Lessee's failure to
perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom,
including but not limited to the cost of recovering possession
of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable
attorneys' fees, and that portion of the leasing commission
paid by Lessor applicable to the unexpired term of this Lease.
The worth of the time of award of the amount referred to in
provisions (i) and (ii) of the prior sentence shall be
calculated based on an interest rate equal to the highest
rate permitted by applicable law. The worth at the time of
award of the amount referred to in provision (iii) of the prior
sentence shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco
at the time of award plus






<PAGE>





     one percent. Efforts by Lessor to mitigate damages caused
by Lessee's breach of this Lease shall not waive Lessor's right
to recover damages under this Paragraph. If termination of this
Lease is obtained through the provisional remedy of unlawful
detainer, Lessor shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable
therein, or Lessor may reserve therein the right to recover
all or any part thereof in a separate suit for such rent
and/or damages. If a notice and grace period required under
subparagraphs 13.1(B), (C) or (D) was not previously given,
a notice to pay rent or quit, or to perform or quit, as the
case may be, given to Lessee under any statute authorizing the
forfeiture of leases for unlawful detainer shall also
constitute the applicable notice for grace period purposes
required by subparagraphs 13.1(B), (C) or (D). In such case,
the applicable grace period under subparagraphs 13.1(B),
(C) or (D)  and under the unlawful detainer statute shall run
concurrently after the one such statutory notice, and the
failure of Lessee to cure the default within the greater of
the two such grace periods shall constitute both an unlawful
detainer and breach of this Lease entitling Lessor to the
remedies provided for in this Lease and/or by said statute.

               (b) Continue the Lease and Lessee's right to
possession in effect (in California under California Civil
Code Section 1951.4)after Lessee's breach and abandonment and
recover the rent as it becomes due, provided Lessee has the
right to sublet or assign,subject only to reasonable
limitations. See Paragraphs 12 and 36 for the limitations on
assignment and subletting which limitations Lessee and Lessor
agree are reasonable. Acts of maintenance or preservation,
efforts to relet the Premises, or the appointment of a
receiver to protect the Lessor's interest under the Lease,
shall not constitute a termination of the Lessee's right to
possession.

               (c) Pursue any other remedy now or hereafter
available to Lessor under the laws or judicial decisions of
the State of California. Unpaid instalments of rent and other
unpaid monetary obligations of Lessee under the terms of this
Lease shall bear interest from the date due at the maximum rate
allowed by law.

               (d) The expiration or termination of this Lease
and/or the termination of Lessee's right to possession shall
not relieve Lessee from liability under any indemnity provisions
of this Lease as to matters occurring or accruing during the
term hereof or by reason of Lessee's occupancy of the Premises.

          13.3 DEFAULT BY LESSOR. Lessor shall not be in default
unless Lessor fails to perform obligations required of Lessor
within a reasonable time, but in no event






<PAGE>





later than thirty (30) days after written notice by Lessee to
Lessor and to the holder of any first mortgage or deed of trust
covering the Premises whose name and address shall have
theretofore been furnished to Lessee in writing, specifying
wherein Lessor has failed to perform such obligation;
provided, however, that if the nature of Lessor's obligation
is such that more than thirty (30) days are required for
performance then Lessor shall not be in default if Lessor
commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.

          13.4 LATE CHARGES. Lessee hereby acknowledges that
late payment by Lessee to Lessor of Base Rent, Lessee's Share
of Operating Expenses or other sums due hereunder will cause
Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed on
Lessor by the terms of any mortgage or trust deed covering
the Property. Accordingly, if any instalment of Base Rent,
Operating Expenses or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within ten (10)
days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall pay to Lessor
a late charge equal to 6% of such overdue amount. The parties
hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason
of late payment by Lessee. Acceptance of such late charge by
Lessor shall in no event constitute a waiver of Lessee's
default with respect to such overdue amount, nor prevent
Lessor from exercising any of the other rights and remedies
granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for three (3)
consecutive instalments of any of the aforesaid monetary
obligations of Lessee, then Base Rent shall automatically
become due and payable quarterly in advance; rather than
monthly, notwithstanding paragraph 4.1 or any other provision
of this Lease to the contrary.

     14.  CONDEMNATION. If the Premises or any portion thereof
or the Industrial Center are taken under the power of eminent
domain, or sold under the threat of the exercise of said
power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date
the condemning authority takes title or possession,
whichever first occurs. If more than ten percent of the floor
areas of the Premises, or more than twenty-five percent of
that portion of the Common Area designated as parking for the
Industrial Center is taken by condemnation, Lessee may, at
Lessee's option, to be exercised in writing only within ten
(10) days after Lessor shall have given Lessee written notice
of such taking (or in the absence of such notice, within ten (10)
days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning authority
takes such possession. If Lessee does not terminate this Lease
in accordance with the foregoing, this Lease shall remain in
full force and effect as to the portion of the Premises
remaining, except that







<PAGE>





the rent shall be reduced in the proportion that the floor
area of the Premises taken bears to the total floor area of
the Premises. No reduction of rent shall occur if the only
area taken is that which does not have the Premises located
thereon. Any award for the taking of all or any part of
the Premises under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the
property of Lessor, whether such award shall be made as
compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any award for loss
of or damage to Lessee's trade fixtures and removable
personal property. In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall to the
extent of severance damages received by Lessor in connection
with such condemnation, repair any damage to the Premises
caused by such condemnation except to the extent that Lessee
has been reimbursed therefor by the condemning authority.
Lessee shall pay any amount in excess of such severance
damages required to complete such repair.

     15.  BROKER'S COMMISSIONS.

     Lessee and Lessor each represent and warrant to the other
that neither has had any dealings with any person, firm,
broker or finder (other than those persons, if any, whose names
are set forth at the end of this paragraph 15) in connection
with the negotiation of this Lease and/or the consummation of
the transaction contemplated hereby, and no other broker or
other person, firm or entity is entitled to any commission or
finder's fee in connection with said transaction and Lessee
and Lessor do each hereby indemnify and hold the other harmless
from and against any costs, expenses, attorneys' fees or
liability for compensation, commission or charges which may
be claimed by any such unnamed broker, finder or other similar
party by reason of any dealings or actions of the indemnifying
party. Named brokers:

      Lessor's Broker: Cushman & Wakefield of California, Inc.

      Lessee's Broker: None

The commission payable to Lessor's Broker with respect to this
Lease shall be pursuant to the terms of the separate commission
agreement in effect between Lessor and Lessor's Broker. Lessor's
Broker shall pay a portion of its commission to Lessee's Broker,
if so provided in any agreement between Lessor's Broker and
Lessee's Broker. Nothing in this Lease shall impose any
obligation on Lessor to pay a commission or fee to any party
other than Lessor's Broker.







<PAGE>





16.  ESTOPPEL CERTIFICATE.

               (a) Each party (as "responding party") shall at
any time upon not less than ten (10) days' prior written notice
from the other party, ("requesting party") execute, acknowledge
and deliver to the requesting party a statement in writing (i)
certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification
and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are
paid in advance, if any, and (ii) acknowledging
that there are not, to the responding party's knowledge, any
uncured defaults on the part of the requesting party, or
specifying such defaults if any are claimed. Any such statement
may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Premises or of the business of the
requesting party.

               (b) At the requesting party's option, the failure
to deliver such statement within such time shall be a material
default of this Lease by the party who is to respond, without
any further notice to  such party, or it shall be conclusive
upon such party that (i) this Lease is in full force and effect,
without modification except as may be represented by the
requesting party, (ii) there are no uncured defaults in the
requesting party's performance, and (iii) if Lessor is the
requesting party, not more than one month's rent has been paid
in advance.

               (c) If Lessor desires to finance, refinance, or
sell the Property, or any part thereof, Lessee hereby agrees to
deliver to any lender or purchaser designated by Lessor such
financial statements of Lessee as may be reasonably required
by such lender or purchaser. Such statements shall include the
past three (3) years' financial statements of Lessee. All such
financial statements shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for
the purposes herein set forth.

          17.  LESSOR'S LIABILITY. The term "Lessor" as used
herein shall mean only the owner or owners, at the time in
question, of the fee title or a lessee' interest in a ground
lease of the Industrial Center, in the event of any transfer of
such title or interest. Lessor herein named (and in case of any
subsequent transfers then the grantor) shall be relieved from and
after the date of such transfer of all liability as respects
Lessor's obligations thereafter to be performed, provided that
any funds in the hands of Lessor or the then grantor at the
time of such transfer, in which Lessee has an interest, shall
be delivered to the grantee. The obligations contained in this
Lease to be performed by Lessor shall, subject as aforesaid, be
binding on Lessor's successors and assigns, only during their
respective periods of ownership.

          18.  SEVERABILITY. The invalidity of any provision
of this Lease as determined by a court of competent
jurisdiction, shall in no way affect the validity of any
other provision hereof.

          19.  INTEREST ON PAST-DUE OBLIGATIONS. Except as
expressly herein provided, any amount due to Lessor not paid
when due shall bear interest at the maximum rate then allowable
by law from the date due. Payment of such interest shall not
excuse or cure any default by Lessee under this Lease;
provided, however, that interest shall not be payable on late
charges incurred by Lessee nor on any amounts upon which late
charges are paid by Lessee.

          20.  TIME OF ESSENCE. Time is of the essence with
respect to the obligations to be performed under this Lease.

          21.  ADDITIONAL RENT. All monetary obligations of
Lessee to Lessor under the terms of this Lease, including but
not limited to Lessee's Share of Operating Expenses and
insurance and tax expenses payable shall be deemed to be rent.

          22.  INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS.
This Lease contains all agreements of the parties with respect
to any matter mentioned herein. No prior or contemporaneous
agreement or understanding pertaining to any such matter shall
be effective. This Lease may be modified in writing only, signed
by the parties in interest at the time of the modification.
Except as otherwise stated in this Lease, Lessee hereby
acknowledges that neither the real estate broker listed in
paragraph 15 hereof nor any cooperating broker on this
transaction nor the Lessor or any employee or agents of any of
said persons has made any oral or written warranties or
representations to Lessee relative to the condition or use by
Lessee of the Premises or the Property and Lessee acknowledges
that Lessee assumes all responsibility regarding the Occupational
Safety Health Act, the legal use and adaptability of the Premises
and the compliance thereof with all applicable laws and
regulations in effect during the term of this
Lease except as otherwise specifically stated in this Lease.

          23.  NOTICES. Any notice required or permitted to
be given hereunder shall be in writing and may be given by
personal delivery or by certified mail and if given personally
or by mail, shall be deemed sufficiently given if addressed
to Lessee or to Lessor at the address noted below the signature
of the respective parties, as the case may be. Either
party may by notice to the other specify a different address
for notice purposes except that upon Lessee's taking possession
of the Premises, the Premises shall constitute Lessee's address
for notice purposes. A copy of all notices required or
permitted to be given to Lessor hereunder shall be concurrently
transmitted to such






<PAGE>





party or parties at such addresses as Lessor may from time to
time hereafter designate by notice to Lessee.

     Any notice given pursuant to this Lease shall be
personally delivered, delivered by Federal Express or
comparable overnight courier, providing written evidence of
delivery, or delivered by U.S. registered or certified
mail, return receipt requested, postage prepaid and sent to
Lessor and Lessee at the following addresses:

LESSOR:

               Prudential Real Estate Investors
               2029 Century Park East
               Suite 2050
               Los Angeles, California 90067
               Attn: Regional Counsel

     With a copy by the same method to:

               Cushman & Wakefield of California, Inc.
                555 South Flower Street, Suite 4200
               Los Angeles, California 90017-2413
               Attn: Mark Harryman

LESSEE:

               John King, Inc., a division of
                 The Balson-Hercules Group, Ltd.
               5434 E. Slauson Avenue
               Commerce, California 90040
               Attn: Mr. John King

          With a copy by the same method to:

               The Balson-Hercules Group, Ltd.
               1040 Avenue of the Americas, 6th Floor
               New York, New York 10018
               Attn: Mr. William Milowitz







<PAGE>





     and:

               Consoltex Group, Inc.
               8555 Autoroute Transcanadienne
               Ville Saint-Laurent, Quebec H45-1Z6
               Canada
               Attn: Vice-President, Legal Affairs
                    and Corporate Secretary

or such other address as either party may from time to time
designate as its notice address by notifying the other party
thereof. Notice so sent shall be deemed given (a) when
personally delivered, or (b) on the first business day
following deposit with Federal Express or a comparable
overnight courier service providing written evidence of delivery,
or (c) five business days following deposit in the United
States mail, if notice is sent by registered or certified mail,
return receipt requested, postage prepaid.

          24.  WAIVERS. No waiver by Lessor of any provision
hereof shall be deemed a waiver of any other provision hereof
or of any subsequent breach by Lessee of the same or any other
provision. Lessor's consent to, or approval of, any act shall
not be deemed to render unnecessary the obtaining of Lessor's
consent to or approval of any subsequent act by Lessee. The
acceptance of rent hereunder by Lessor shall not be a waiver of
any preceding breach by Lessee of any provision hereof, other
than the failure of Lessee to pay the particular rent so
accepted, regardless of Lessor's knowledge of such preceding
breach at the time of acceptance of such rent.

     25.  RECORDING. Lessee shall not record this Lease.

     26.  HOLDING OVER. If Lessee, with Lessor's consent,
remains in possession of the Premises or any part thereof after
the expiration of the term hereof, such occupancy shall be a
tenancy from month to month upon all of the provisions of this
Lease pertaining to the obligations of Lessee,except that the
monthly rent shall be 150% of the rent payable in the last
month of the lease term but all Options, if any, granted under
the terms of this Lease shall be deemed terminated and be of
no further effect during said month to month tenancy.

     27.  CUMULATIVE REMEDIES. No remedy or election hereunder
shall be deemed exclusive but shall, wherever possible, be
cumulative with all other remedies at law or in equity.

     28.  COVENANTS AND CONDITIONS. Each provision of this
Lease performable by Lessee shall be deemed both a covenant
and condition.

     29.  BINDING EFFECT; CHOICES OF LAW. Subject to any
provisions hereof restricting assignment or subletting by
Lessee and subject to the provisions of paragraph 17, this
Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the
laws of the State where the Industrial Center is located
and any litigation concerning this Lease between the parties
hereto shall be initiated in the county in which the Industrial
Center is located.

     30.  SUBORDINATION.

               (a) This Lease, and any Option granted hereby, at
Lessor's option, shall be subordinate to any ground lease,
mortgage, deed of trust, or any other hypothecation or security
now or hereafter placed upon the Industrial Center and to any
and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and
extensions thereof. Notwithstanding such subordination,
Lessee's right to quiet possession of the Premises shall not
be disturbed if Lessee is not in default and so long as
Lessee shall pay the rent and observe and perform all of the
provisions of this Lease, unless this Lease is otherwise
terminated pursuant to its terms. If any mortgagee, trustee
or ground lessor shall elect to have this Lease and any
Options granted hereby prior to the lien of its mortgage,
deed of trust or ground lease, and shall give written notice
thereof to Lessee, this Lease and such Options
shall be deemed prior to such mortgage, deed of trust, or ground
lease, whether this Lease or such Options are dated prior or
subsequent to the date of said mortgage, deed of trust or
ground lease or the date of recording thereof.

               (b) Lessee agrees to execute any documents
required to effectuate an attornment, a subordination or to
make this Lease or any Option granted herein prior to the lien
of any mortgage, deed of trust or ground lease, as the case may
be, Lessee's failure to execute such documents within ten (10)
days after written demand shall constitute a material default
by Lessee hereunder without further notice to Lessee or, at
Lessor's option,: Lessor shall execute such documents on behalf
of Lessee as Lessee's attorney-in-fact. Lessee does hereby make,
constitute and irrevocably appoint Lessor as Lessee's
attorney-in-fact and in Lessee's name, place and stead,
to execute such documents in accordance with this paragraph 30(B).

     31.  ATTORNEYS FEES.

          31.1 If either party brings an action or proceeding
to enforce the terms hereof or declare rights hereunder, the
prevailing party in any such proceeding, action, or appeal
thereon, shall be entitled to his reasonable attorney's fees
and such fees as may be awarded in the same suit or recovered
in a separate suit, whether or not such action or proceeding
is pursued to decision or judgment. The term, "prevailing party"
shall include, without limitation, a party who obtains legal
counsel or brings an action against the other by reason of the
other's breach or default, or who defends such action, and
substantially obtains or defeats the relief sought, whether
by compromise, settlement, judgment, or abandonment of the
claim or defense by the other party.

          31.2 The attorney's fee award shall not be computed
in accordance with any court fee schedule, but shall be such
as to fully reimburse all attorney's fees reasonably incurred
in good faith.

          31.3 Lessor shall be entitled to attorney's fees,
costs and expenses incurred in the preparation and service of
notices of default and consultations in connection therewith,
whether or not a legal action is subsequently commenced in
connection with such default. Lessor and Lessee agree that
$350.00 is a reasonable sum per occurrence for legal services
and costs per preparation and service of a notice of default
and that Lessor may include $350.00 as additional rent due in
each such notice of default as an amount that must be paid to
cure said default.

          32.  LESSOR'S ACCESS. Lessor and Lessor's agents
shall have the right to enter the Premises at reasonable times
for the purpose of inspecting same, showing the same to
prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to
the Premises or to the building of which they are part as
Lessor may deem necessary or desirable. Lessor may at any time
place on or about the Premises or the Building any ordinary
"For Sale" signs and Lessor may at any time during the last
120 days of the term hereof place on or about the Premises
any ordinary "For Lease" signs. All activities of Lessor pursuant
to this paragraph shall be without abatement of rent, nor shall
Lessor have any liability to Lessee for the same.

          33.  AUCTIONS. Lessee shall not conduct, nor permit
to be conducted, either voluntarily or involuntarily, any
auction upon the Premises or the Common Areas without first
having obtained Lessor's prior written consent. Notwithstanding
anything to the contrary in this Lease, Lessor shall not be
obligated to exercise any standard of reasonableness in
determining whether to grant such consent.

          34.  SIGNS. Lessee shall not place any sign upon the
Premises or the Industrial Center without Lessor's prior
written consent. Under no circumstances shall Lessee place a
sign on any roof of the Industrial Center.

          35.  MERGER. The voluntary or other surrender of this
Lease by Lessee, or a mutual cancellation thereof, or a
termination by Lessor, shall not work a merger, and







<PAGE>





shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an
assignment to Lessor of any or all of such subtenancies.

          36.  CONSENTS. Except for paragraphs 33, 34, 46 and
47 hereof, wherever in this Lease the consent of one party is
required to an act of the other party, such consent shall not
be unreasonably withheld or delayed.

          37.  GUARANTOR. In the event that there is a
guarantor of this Lease, said guarantor shall have the same
obligations as Lessee under this Lease.

          38.  QUIET POSSESSION. Upon Lessee paying the rent
for the Premises and observing and performing all of the
covenants, conditions and provisions on Lessee's part to be
observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease and all easements,
covenants, conditions and restrictions of record. The individuals
executing this Lease on behalf of Lessor represent and warrant
to Lessee that they are fully authorized and legally capable
of executing this Lease on behalf of Lessor and that such
execution is binding upon all parties holding an ownership
interest in the Property.

     39.  [Intentionally Omitted]

     40.  SECURITY MEASURES. Lessee hereby acknowledges that
Lessor shall have no obligation whatsoever to provide guard
service or other security measures for the benefit of the
Premises or the Industrial Center. Lessee assumes all
responsibility for the protection of Lessee, its agents and
invitees and the property of Lessee and of Lessee's agents
and invitees from acts of third parties. Nothing herein
contained shall prevent Lessor at Lessor's sole option,
from providing security protection for the Industrial Center
or any part thereof, in which event the cost thereof
shall be included within the definition of Operating
Expenses, as set forth in paragraph 4.2(B).

     41.  EASEMENTS. Lessor reserves to itself the right,
from time to time, to grant such easements, rights and
dedications that Lessor deems necessary or desirable, and to
cause the recordation of Parcel Maps and restrictions, so
long as such easements, rights, dedications, Maps and
restrictions do not unreasonably interfere with the use of
the Premises by Lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor and failure
to do so shall constitute a material default of this
Lease by Lessee without the need for further notice to Lessee.

     42.  PERFORMANCE UNDER PROTEST. If at any time a dispute
shall arise as to any amount or sum of money to be paid by
one party to tire other under the provisions







<PAGE>





hereof, the party against whom the obligation to pay the
money is asserted shall have the right to make payment
"under protest" and such payment shall not be regarded as a
voluntary payment, and there shall survive the right on the
part of said party to institute suit for recovery of such sum.
If it shall be adjudged that there was no legal obligation on
the part of said party to pay such sum or any part thereof,
said party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the
provisions of this Lease.

     43.  AUTHORITY. If Lessee is a corporation, trust, or
general or limited partnership, each individual executing this
Lease on behalf of such entity represents and warrants that he
or she is duly authorized to execute and deliver this Lease on
behalf of said entity. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days
after execution of this Lease, deliver to Lessor evidence of
such authority satisfactory to Lessor.

     44.  CASHIERS CHECKS.

          44.1 In the event that any check given to Lessor by
Lessee shall not be honored by the bank upon which it is drawn
on two or more occasions, then Lessor, at its option may
require all future payments to be made by Lessee under this
Lease to be made by Cashier's Checks.

          44.2 Any payment made by Lessee pursuant to a written
notice to pay or be deemed in default under this Lease shall
be made by Cashier's Check.

     45.  AMENDMENTS TO LEASE.

          45.1 At such times as a rental adjustment is made to
this Lease by virtue of any provision of this Lease, the
parties shall execute a written amendment to this Lease to
reflect said change.

          45.2 Lessee agrees to make any non-monetary
modifications to this Lease that may be required by an
institutional mortgagee of Lessor.

     46.  STORAGE TANKS.

          46.1 Notwithstanding anything to the contrary in
Paragraph 7.3 ereof, Lessee shall not install storage tanks of
any size or shape in the Premises, above or below ground,
without the consent of the Lessor which can be withheld in
Lessor's sole discretion. If Lessor elects to grant its
consent, Lessor shall have the right to condition its consent
upon Lessee agreeing to give to Lessor such assurances that
Lessor, in its






<PAGE>





sole discretion, deems necessary to protect itself against
potential problems concerning the installation, use, removal
and contamination of the Premises as a result of the
installation and/or use of such tank, including but not
limited to the installation of a concrete encasement for said
tank. Lessee shall comply at its expense with all applicable
permit and/or registration requirements and repair any damage
caused by the installation, maintenance or removal of such
tank. Upon termination of the Lease, Lessee shall, at its sole
cost and expense, remove any tank from the Premises, remove and
replace any contaminated soil or materials (and compact or treat
the same as then required by law) and repair any damage or change
to the Premises caused by said installation and/or removal.
Nothing contained herein shall be construed to diminish or
reduce Lessee's obligations under Paragraph 47.

          46.2 Lessor shall have the right to employ experts
and/or consultants, at Lessee's expense, to advise Lessor with
respect to the installation, operation, monitoring,
maintenance and removal and restoration of any such tank.

     47.  HAZARDOUS MATERIALS.

     47.1 LESSEE'S COVENANTS REGARDING HAZARDOUS MATERIALS.

               (a) LESSOR'S PRIOR CONSENT. Notwithstanding
anything contained in this Lease to the contrary, Lessee has
not caused or permitted, and shall not cause or permit any
"Hazardous Materials" (as defined in subparagraph (b) below)
to be brought upon, kept, stored, discharged, released or used
in, under or about the Premises by Lessee, its agents,
employees, contractors, subcontractors, licensees or invitees,
unless (1)  such Hazardous Materials are reasonably necessary
to Lessee's  business and will be handled, used, kept, stored
and disposed  of in a manner which complies with all "Hazardous
Materials Laws"  (as defined in subparagraph (b) below); (2)
Lessee will comply with such other rules or requirements as
Lessor may from time to time impose, including without
limitation that (i) such materials are in small quantities,
properly labelled and contained, (ii) such materials are
handled and disposed of in accordance with the highest
accepted industry standards for safety, storage, use and
disposal, (iii) such materials are for use in the ordinary
course of business (I.E. as with office or cleaning supplies),
(3) notice of and a copy of the current material safety data
sheet is provided to Lessor for each such Hazardous Material,
and (4) Lessor shall have granted its prior written consent
to the use of such Hazardous Materials.

      (b) COMPLIANCE WITH HAZARDOUS MATERIALS LAWS.
As used herein, the term "Hazardous Materials" means any
(1) oil, petroleum,






<PAGE>





petroleum products, flammable substances, explosives,
radioactive materials, hazardous wastes or substances,
toxic wastes or substances or any other wastes, materials or
pollutants which (i) pose a hazard to the Premises or to
persons on or about the Premises or (ii) cause the Premises
to be in violation of any Hazardous Materials Laws (as
hereinafter defined); (2) asbestos in any form, urea
formaldehyde foam insulation, transformers or other equipment
which contain dielectric fluid containing levels of
polychlorinated biphenyls, or radon gas;(3) chemical, material
or substance defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous waste," "restricted
hazardous waste," or "toxic substances" or words of similar
import under any applicable local, state or federal law or
under the regulations adopted or publications promulgated
pursuant thereto, including, but not limited
to, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601,
ET SEQ.; the Resources Conservation Recovery Act, 42 U.S.C.
Section 6901, ET SEQ.; the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. Section 1801, ET SEQ.; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. Section
1251, ET SEQ.; Sections 25115, 25117, 25122.7, 25140, 25249.8,
25281, 25316 and 25501 of the California Health and Safety Code;
and Title 22 of the California Code of Regulations, Division
4.5, Chapter 11; (4) other chemical, material or substance,
exposure to which is prohibited, limited or regulated by
any governmental authority or may or could pose a hazard to the
health and safety of the occupants of the Premises or the
owners and/or occupants of property adjacent to or surrounding
the Premises, or any other Person coming upon the Premises or
adjacent property; and (5) other chemical, materials or
substance which may or could pose a hazard to the environment.
As used here the term "Hazardous Materials Laws" means any
federal, state or local laws, ordinances, regulations or
policies relating to the environment, health and safety, and
Hazardous Materials (including, without limitation, the use,
handling, transportation, production, disposal, discharge or
storage thereof) or to industrial hygiene or the environmental
conditions on, under or about the Premises, including,
without limitation, soil, groundwater and indoor and ambient
air conditions. Lessee shall at all times and
in all respects comply with all Hazardous Materials Laws.

               (c) HAZARDOUS MATERIALS REMOVAL. Upon
expiration or earlier termination of this Lease, Lessee shall,
at Lessee's sole cost and expense, cause all Hazardous
Materials brought on the Premises with Lessor's consent to be
removed from the Premises in compliance with all applicable
Hazardous Materials Laws. If Lessee or its employees,
agents, or contractors violates the provisions of the
foregoing two paragraphs, or if Lessee's acts, negligence
or business operations contaminate, or expand the scope of
contamination of, the







<PAGE>





     Leased Premises from such Hazardous Materials, then Lessee
shall promptly, at Lessee's expense, take all investigatory
and/or remedial action (collectively, the "Remediation")
that is necessary in order to clean up, remove and dispose of
such Hazardous Materials causing the violation on the Leased
Premises or the underlying groundwater or the properties
adjacent to the Leased Premises to the extent such
contamination was caused by Lessee, in compliance with all
applicable Hazardous Materials Laws. Lessee shall further
repair any damage to the Leased Premises caused by the
Hazardous Materials contamination. Lessee shall provide prior
written notice to Lessor of such Remediation, and Lessee shall
commence such Remediation no later than thirty (30) days after
such notice to Lessor and diligently and continuously complete
such Remediation. Such written notice shall also include
Lessee's method, time and procedure for such Remediation and
Lessor shall have the right to require reasonable changes in
such method, time or procedure of the Remediation. Lessee
shall not take any Remediation in response to the presence of
any Hazardous Materials in or about the Premises or enter into
any settlement agreement, consent decree or other compromise
in respect to any claims relating to any Hazardous Materials
in any way connected with the Premises, without first notifying
Lessor of Lessee's intention to do so and affording Lessor ample
opportunity to appear, intervene or otherwise appropriately
assert and protect Lessor's interests with respect thereto.

               (d) NOTICES. Lessee shall immediately notify
Lessor in writing of: (i) any enforcement, cleanup, removal
or other  governmental or regulatory action threatened,
instituted, or completed pursuant to any Hazardous Materials
Laws with respect to the Premises; (ii) any claim, demand, or
complaint made or threatened by any person against Lessee or
the Premises relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous
Materials; and (iii) any reports made to any governmental
authority arising out of any Hazardous Materials on or
removed from the Premises. Lessor shall have the right
(but not the obligation) to join and participate, as a party,
in any legal proceedings or actions affecting the Premises
initiated in connection with any Hazardous Materials Laws.

          47.2 INDEMNIFICATION OF LESSOR. Lessee shall indemnify,
protect, defend and forever hold Lessor harmless from any and
all damages, losses, expenses, liabilities, obligations and
costs arising out of any failure of Lessee to observe the
covenants contained in Paragraphs 46 and 47.







<PAGE>





48.  LESSOR'S DEFAULT.

          Any damages or judgments arising out of Lessor's
default of its obligations under this Lease shall be satisfied
only out of Lessor's interest and estate in the Premises, and
Lessor shall have no personal liability beyond such interest
and estate with respect to such damages or judgments.

     49.  RECOVERY OF CONCESSIONS UPON EARLY TERMINATION. In the
event that Lessee's right of possession of the Premises is
terminated prior to the end of the initial term by reason of
default, legal process, abandonment, or any other reason other
than mutual agreement of the parties, then immediately upon
such termination, an amount shall be due and payable by
Lessee to Lessor equal to the unamortized portion as of
that date (which amortization shall exclude any Option Terms
and shall be based on an interest rate of eleven percent
(11%) per annum) of the amount of all commissions paid by
Lessor in order to procure this Lease.

     50.  EASEMENTS AND RESTRICTIONS OF RECORD

          50.1 Lessee accepts the Premises and Industrial
Center subject to the easements and covenants or restrictions
of record.

          50.2 Lessor and Lessee agree to cooperate and use
their best efforts to participate in traffic management programs
generally applicable to businesses located in the area which
includes the Industrial Center and, initially, shall encourage
and support van and car pooling by Lessee's employees to the
fullest extent permitted by the requirements of Lessee's
business. Neither this Paragraph nor any other provision in this
Lease, however, is intended to or shall create any rights or
benefits in any other person, firm, company, governmental
entity or the public.

     51.  OFFER. Preparation of this Lease by Lessor or Lessor's
agent and submission of same to Lessee shall not be deemed an
offer to lease. This Lease shall become binding upon Lessor and
Lessee only when fully executed by Lessor and Lessee.

     52.  PRIOR TENANCY. Lessee is the current Lessee in the
Existing Premises under one or more existing leases
(collectively, the "Existing Lease"). Accordingly,
notwithstanding anything to the contrary in this Lease, the
following shall apply:

          52.1 Lessee accepts the Existing Premises in their
existing "AS IS" condition, with representation or warranty
of any kind.







<PAGE>





52.2 Lessee's security deposit under the Existing Lease (not
to exceed the amount of the security deposit required under
this Lease) shall be deemed returned to Lessee and redeposited
with Lessor as the security deposit under this Lease. Lessee
shall deposit with Lessor upon execution of this Lease the
difference between the security deposit held under the Existing
Lease and the amount required under Paragraph 5 of this Lease. ,

          52.3 Lessee has not installed or permitted to be
installed any storage tanks of any kind, above ground or
below ground, on or in the Premises.

          52.4 To the extent that Lessee is obligated or would
be obligated upon the passage of time or the giving of notice,
or both, under the Existing Lease to remove any addition,
improvement, alteration or fixture existing on the Premises
or to restore the Premises to the condition that would exist
except for such alteration, addition, improvement or fixture,
Lessee shall also be obligated under this Lease to perform such
removal and restoration as if such additions, improvements,
alterations or fixtures had been made or installed by Lessee
under this Lease, and Lessee shall have been obligated to
remove the same and restore the Premises with respect to the
same in accordance with this Lease.

          52.5 Lessor has no obligation to improve or modify
the Premises pursuant to the terms of the Existing Lease.

          52.6 Lessee has no option to extend the term of the
Existing Lease.

          52.7 The Existing Lease shall terminate effective
upon the delivery of possession of the Additional Premises
to Lessee.

          52.8 Lessee has accepted full and complete
possession of the existing Premises and is the actual occupant
in possession and has not sublet, assigned or hypothecated or
otherwise transferred all or any portion of Lessee's leasehold
interest.

          52.9 All of Lessor's obligations under the Existing
Lease which have accrued prior to the date hereof have been
performed in full.

          52.10 There exists no breach or default, nor state of
facts nor condition which, with notice, the passage of time, or
both, would result in a breach or default on the part of
Lessor under the Existing Lease.







<PAGE>





LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE
AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION
OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT
THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE 'PERMS OF THIS LEASE ARE COMMERCIALLY
REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR
AND LESSEE WITH RESPECT TO THE PREMISES.

"LESSOR"                              "LESSEE"

THE PRUDENTIAL INSURANCE               JOHN KING, INC., a division
COMPANY OF AMERICA                     of the Balson-Hercules Group
                                       Ltd., a Rhode Island Corp.,

By Cushman & Wakefield of              By: /s/William Milowitz
California, Inc.,                          William Milowitz, President
Its Managing Agent                     Printed Name and Title


By:/s/Mark Harryman                    By: /s/Lawrence Mannes
Mark Harryman, Portfolio Manger         Asst Secretary - Finance
Printed Name and Title By               Printed Name and Title

By: /s/William Durslag
Director
Printed Name and Title

Executed					Executed
on 5/23/97                 		on May 8, 1997



<PAGE>
                                                    EXHIBIT 10.10



            LEASE AGREEMENT FOR RAFYTEK, S.A. DE C.V.
            =========================================




            TRANSLATION FROM SPANISH - LANGUAGE ORIGINAL

LEASE  AGREEMENT  entered into by CIGARRERA LA MODERNA, S.A. DE
C.V., the taxpayers'  registration   number   of   which  is
CMO-7110019P9,  herein represented  by  EUGENIO  SOLTERO GONZALEZ,
hereinafter  the  "Owner"  and RAFYTEK, S.A. DE C.V., the
taxpayers' registration number of which is RAF-811112-V32,
herein represented  by  JESUS  LOPEZ  ROSAS,  hereinafter  the
"Lessee", in terms of the following Representations and Clauses:

                      REPRESENTATIONS AND WARRANTIES

1.-  The Owner represents and warrants:

 a)   That  it  is  a  variable  capital  corporation  organized under
      Mexican laws.

 b)   That   it   is   the   owner  of  the  real  estate  located  at
      Prolongacion Ave. Once,  without  number,  which makes corner
      with  Calle  39,  at  Cordoba, Veracruz, with an  approximate
      surface   of  51,072.50  square   meters   and   the   following
      measurements  and boundaries: to the Northeast, in 99.75 meters,
      with plots of land of Beneficios Mexicanos de Cafe and in 202
      meters with the city water discharge gutter, to the Southeast in
      282 meters with  the  property of Ricardo Cespedes Garcia,
      to  the Northeast in 252  meters  with  property  of  Beneficios
      Mexicanos de Cafe and in 10 meters with Calle 39 and to the
      Southwest in 190  meters  with  the  rail-trails  of Ferrocarril
      Mexicano.


 c)   That  in  the land forming part of the real estate described  in
      paragraph b)  above, warehouses identified with numbers 1, 2 and
      3 were built and  they  are used for general industrial, storage
      and commercial purposes according  to the period (Area Achurada)
      that by means of agreement executed  by  the  parties  hereto is
      attached to this Agreement forming an integral part thereof.

d)   That  it  is  willing to lease to the Lessee in terms hereunder,
     the property referred to in paragraphs b) and c) above.

II.  The Lessee represents and warrants:

<PAGE>

     a)   That  it  is  a  variable   capital   corporation   per  shares,
          incorporated  under  Mexican  laws, by means of public deed  No.
          9,428, dated October 27, 1978,  granted  before  Rafael Rebollar
          Garduno, Notary Public No. 84 of the Federal District.

     b)   That  it  has  seen  the  real  estate  of  the  owner  and  the
          constructions existing thereon described in paragraphs b) and c)
          of Representation and Warranty I above and it is willing to take
          such  property  in  lease, to use it for the development of  its
          commercial and industrial activities.

III.- Both parties represent and  warrant  that according to the foregoing
Representations, they agree to the following:


                                 CLAUSES

FIRST.-  The Owner gives in lease to the Lessee the real estate identified
in paragraph c) of Representation and Warranty  I above, which is received
by the Lessee at its entire satisfaction and in proper  conditions  to  be
used for the purposes of the Lessee.

SECOND.-   Both  parties hereto agree that the term of this Lease shall be
of two years binding  upon  the Owner and optional for the Lessee, running
from September 1, 1997 and to  terminate  it  in  August 1, 1999, provided
that at any time, this Agreement  may be terminated  during  the agreed to
term at the option of the Lessee, by means of written notice six months in
advance to the date of termination.

THIRD.-    The   Owner  may  renovate  this  Lease  Agreement  upon  prior
negotiation of new conditions.

If at the end of the term of this Agreement as provided above, the parties
do not agree in writing  upon  new  terms  and  conditions  of a new Lease
Agreement,  the Lessee shall deliver the leased property without  need  of
further requirements or previous notice as no legal or automatic extension
exits other than such previously agreed.

In the event  that,  at  the end of the term of this Agreement, the Lessee
shall continue occupying the real estate mentioned in paragraph b) against
the will of the Owner, the  Lessee

<PAGE>

shall pay 100% over the rent agreed to
in Clause Fourth hereof, provided that the rights of the Owner to initiate
any action deemed convenient in order  to  recover  the  possession of the
leased property from the Lessee shall not be precluded.

FOURTH.-   The  Lessee  shall pay to the Owner as rent for the  Lease  the
following:

For the land and constructions mentioned in paragraph c) of Representation
and Warranty I, the amount of $45,000.00 (FORTY FIVE THOUSAND PESOS 00/100
MEXICAN CURRENCY) per month, during the months of September 1, 1997 to May
31,  1998, and from June 1,  1998  to  August  31,  1999,  the  amount  of
$85,000.00 (EIGHTY FIVE THOUSAND PESOS 00/100 MEXICAN CURRENCY), per month
plus the  Value Added Tax in both cases.  The parties agree that every six
months, the monthly rent shall be reviewed, increasing or decreasing it in
the same proportion  of  the variation in the Mexican consumer price index
determined by Banco de Mexico  by  means of publication in the Official
Daily of the Federation or whichever index  replaces  it,  which  shall be
effective during the following three months.

FIFTH.-   In  the  event  the  Lessee fails to comply with its obligations
hereunder, it shall pay to the Owner  a  penalty  interest  similar to the
interest payable in active banking transactions; in the event  the default
of the Lessee exceeds one month, the same penalty interest shall apply and
the Owner may proceed to rescind the Agreement.

SIXTH.-   The Lessee shall pay to the Owner the monthly rent, in  advance,
on the first  day  of  each month, at the domicile of the Owner located in
Ave. Francisco I. Madero No. 2750 Pte., Monterrey, N.L. or through banking
deposit to the account designated  in  writing  by  the  Owner.  The Owner
reserves  itself  the right to receive rents in different dates  to  those
provided hereunder,  as  well  as  to  receive  partial  payments thereof,
without such circumstance being deemed as an amendment of  the  provisions
of  this  Agreement  or as an amendment to the payment conditions of  such
rents.

SEVENTH.-  The Lessee  acknowledges and agrees to the existence of a right
of way servicing the plots  of land that are contiguous to the real estate
leased  hereunder, and therefore  the  Lessee  binds  itself  to  continue
respecting  such  right  of way, refraining from establishing obstacles or
impediments not

<PAGE>

permitting  the free access of vehicles and persons and to
service the contiguous plots  of land.  In the event the provision of this
Clause are breached, the Lessee  shall  be responsible for the damages and
prejudices caused by such breach to any third parties.

EIGHTH.-  At the termination of the Lease,  the  Lessee  binds  itself  to
deliver  to  the  Owner the real estate, improvements and constructions as
provided in this Agreement,  in  the  same  condition  in  which  they are
received, normal tear and wear excepted.

NINTH.-   The  parties  agree  that the cost and expenses to maintain  the
leased  property  in  good  conditions  shall  be  borne  by  the  Lessee.
Likewise, the Lessee may make  any  improvements considered convenient for
the better functioning of its industry,  as  long as it requests the prior
consent in writing of the Owner, running into  the  account  of the Lessee
the expenses derived from such improvements.  The Lessee binds  itself  to
maintain the property with all its accessories and to return it at the end
of  the  Lease in the same conditions in which it receives it, normal tear
and wear excepted;  those improvements that due to their nature may not be
disattached from the  property without causing damage thereto shall remain
as part of the property  returned  to  the Owner.  The Lessee shall not be
entitled to payment of any kind for such improvements.

TENTH.-  The Lessee is bound to obtain the  prior  written  consent of the
Owner before carrying out any change, amendment, destruction or alteration
to the real estate of the Owner.

The  Lessee  binds  itself  to  pay  to the Owner the value of all  losses
suffered by it in its books due to tax  charges or otherwise, derived from
the changes, amendments or alterations authorized  by  the  Owner  in  the
property, in terms hereof.

The  Owner  shall  not  be  bound  to  reconstruct  or  improve the leased
property,  nor  shall  it  be  bound  to repair, replace or return  goods,
equipment, fixtures and improvements that  are  in  or  correspond  to the
leased  property,  in  the  event  of misuse, decomposition or destruction
thereof.

<PAGE>

ELEVENTH.-  The Lessee shall be able to use, from the date of execution of
this Agreement and until the termination  date  hereof  pursuant to Clause
Second, the energy, water and drainage services, as well  as the telephone
services benefiting in the leased property and currently registered in the
name of the Owner.  It is hereby understood between the parties  that  for
the  use  of  such  services,  the  Owner  shall  receive  no payment, and
therefore, should a failure of such services occur, the Owner shall not be
bound  before  the Lessee, within five days after the date in  which  such
services are paid by the Lessee.

The Lessee shall  be  bound at all times to maintain at its own costs such
services and installations  functioning,  being  bound  to  timely pay the
costs  corresponding  to their use, maintenance, repair, rent and  further
payments  derived  therefrom,   agreeing  to  return  them  to  the  Owner
functioning and free from any indebtedness at the termination date hereof.
After  the  termination date, the Owner  will  be  able  to,  without  any
authorization, freely use such services.

The Lessee binds  itself to pay on its own account to the Water and Sewage
companies, the telephone  company  and  the electric energy company, their
monthly charges for their services, delivering copies of the corresponding
receipts to the Owner.

The  Lessee  shall  be liable for the reimbursement  of  the  damages  and
prejudices caused to  the  Owner  in the event it fails to comply with the
foregoing, that is if it fails to pay for any of such services.

The Lessee shall bear the cost of any  repair  needed  with respect to the
above mentioned services.

TWELFTH.- The  Lessee  binds  itself  to acquire at its own  cost  and  to
maintain in effect, insurance policies  against  damages  in  favor of the
Owner,  for  amounts  covering  the  replacement  value  of the buildings,
accessories  and  auxiliary  constructions  forming  part  of  the  leased
property.   The Lessee shall deliver a copy of such policies to the  Owner
within a maximum  term  of  thirty  days  after the execution date of this
Agreement, and within a maximum term of ten  days  after  any  renewals of
such  policies.   In  the event of failure to comply with this obligation,
the Owner may freely contract  total  or  partial  policies  equivalent to
those  mentioned  above and the

<PAGE>

costs thereof shall be reimbursed to the Owner by the Lessee in a term not
exceeding 10 days.

THIRTEENTH.-  The leased  property  shall  be  used  by the Lessee for the
development of its commercial and industrial activities;  the Lessee binds
itself  not  to  assign  its  rights hereunder nor to sublease the  leased
property without the prior written consent of the Owner.

FOURTEENTH.-  At the termination  hereof,  the  Lessee  may  not,  for any
concept,  request any amount as consideration for the return of the leased
property, nor  shall it be entitled to appoint a new Lessee nor to request
payment against  delivery  of  the  leased  property,  and  therefore,  it
expressly  waives  to the benefits of the provisions giving it such rights
under the Civil Code  for  the  State of Nuevo Leon and the correlative
provisions of the Civil Codes of the other states of the Mexican Republic.

FIFTEENTH.-  The Lessee shall deliver  to  the Owner the equivalent of two
months  of  rent as deposit in guarantee of the  due  performance  of  the
provisions of  this  Agreement,  based  in the amounts mentioned in Clause
Fourth hereof.  Such deposit shall be reimbursed  to  the  Lessee  at  the
termination  of  the lease, as long as the leased property is delivered to
the Owner in the conditions in which it was leased to the Lessee.

If any repairs are  required by the leased property, the Owner shall apply
the deposit in guarantee  to  the  payment  of  such repairs, without such
circumstance  implying  the  release  for  the Lessee  of  its  contracted
obligations.

The Lessee may not use the deposit as rent payment;  the  deposit shall be
increased  in  the  same proportion in which the rents are increased,  the
Lessee binding itself  to  pay  to  the Owner quarterly, any complementary
amounts, as required.

SIXTEENTH.-  The Lessee may not fixe  signs of its own or of third parties
in the leased property, unless it obtains the prior written consent of the
Owner.

SEVENTEENTH.-  In order to guarantee the  due  and punctual payment of the
rents provided hereunder, the Lessee binds to deliver  to the Owner a bond
issued  by  a  bonding  company,

<PAGE>

covering  the  aggregate  of  the  rents
corresponding to the term of this Agreement in the name of the Owner.  The
original  of  the bond shall be delivered to the Owner, and it is attached
to this Agreement  as  Exhibit  "A", which executed by the parties hereto,
forms an integral part hereof.

EIGHTEENTH.-  In the event the leased  property  is sold, the Lessee shall
have a preferential right, unless the property is  sold to a subsidiary or
affiliate of the Owner.

NINETEENTH.-   Failure  to comply with the obligations  provided  in  this
Agreement, and with the obligations  provided in the Law as obligations of
the Lessee, shall be reason enough for  the Owner to, at its own election,
enforce compliance of this Agreement or to  rescind  it.  Likewise, in the
event  of  failure to punctually pay its obligations by  the  Lessee,  the
Lessee shall  present  a  joint  obligor  to  guarantee  compliance of the
obligations contracted hereunder, in a term not exceeding 30 days.

TWENTIETH.-   The  Lessee  shall  be  the  only responsible party  of  the
personnel that it hires, and therefore, from  the  date  hereof,  it binds
itself  to  protect  the  Owner  and  maintain  it free and clear from any
conflict, as well as from any claim or controversy  of a labor nature that
may derive or be initiated against either the Lessee  or  the  Owner  with
respect to the personnel contracted, hired or employed by the Lessee.  The
Lessee  shall  be  the  only  responsible  party for the compliance of the
obligations of a labor and social security nature derived to the Lessee in
connection with its employees, therefore, the  Owner  recognizes not labor
relationship  with  the  personnel  or employees of the Lessee,  whichever
their category.

TWENTY  FIRST.-  The parties appoint as  their  respective  domiciles  the
following:

THE OWNER:     Ave. Francisco I. Madero No. 2750 Pte.
               Monterrey, N.L.
               C.P.  64000 Mexico

THE LESSEE:    Colonia Parque Industrial
               Atlacomulco
               Estado de Mexico

<PAGE>

TWENTY SECOND.-   For  anything  not  provided  hereunder,  the provisions
regarding leases included in title second of the second part  of book four
of  the  Civil  Code  for  the  State of Nuevo Leon and the correlative
articles in the Civil Codes of the  other  states  of the Mexican Republic
shall be applicable.

TWENTY  THIRD.-   In  the event of controversy as to the  construance  and
compliance hereof, both  parties submit themselves to the competent courts
of Monterrey, Nuevo Leon,  hereby  waiving  any other jurisdiction that
due to their present or future domiciles they may be entitled to.

THE PARTIES RECOGNIZING THE VALUE AND LEGAL FORCE OF THIS INSTRUMENT, SIGN
IT BEFORE TWO WITNESSES IN THE CITY OF MONTERREY,  NUEVO LEON ON AUGUST 1,
1997.



     THE OWNER                         THE LESSEE
CIGARRERA LA MODERNA,             RAFYTEK, S.A DE C.V.
S.A. DE C.V.


/s/Eugenio Soltero Gonzalez        /s/Jesus Lopez Rosas


     WITNESS                           WITNESS
/s/illegible signature   	     /s/Mauricio Hernandez
___________________________       _________________________


<PAGE>
                                                  EXHIBIT 10.11


LEASE AND PURCAHSE AGREEMENT OPTION AGREEMENT FOR ROYALTON
MEXICANA, S.A. DE C.V.
===========================================================




                              EXECUTION COPY

LEASE AND PURCHASE OPTION AGREEMENT (THE "AGREEMENT") ENTERED INTO BY AND
BETWEEN INMOBILIARIA PRI, S.C. (THE "LESSOR") AND ON THE OTHER PART,
ROYALTON MEXICANA, S.A. DE C.V. (THE "LESSEE" OR "ROYALTON"), PURSUANT TO
THE FOLLOWING REPRESENTATIONS AND CLAUSES:

REPRESENTATIONS

I.   The Lessor hereby represents and warrants:

     a)   It is a limited liability entity (SOCIEDAD CIVIL), duly organized
          and validly existing in accordance with the laws of the United
          Mexican States ("MEXICO"), authorized to subscribe this Agreement
          and to perform its obligations hereunder.

     b)   Neither the execution nor delivery by the Lessor of this
          Agreement, nor compliance by such Lessor with any of the
          provisions hereof, will violate, conflict with or result in a
          breach of or default under, any loan agreement, commitment or
          obligation for the borrowing of money or obtaining of credit, its
          corporate by laws, or any other agreement, license, permit or
          other instrument to which the Lessor is a party or by which it or
          its properties or assets may be bound, will violate any order,
          rule, regulation, injunction, decree, judgment, statute, law or
          ruling of any court, administrative agency or governmental agency
          applicable to the Lessor, any of its properties or assets.

     c)   The Lessor has full power and authority to enter into, and
          perform its obligations hereunder, which constitute valid and
          binding obligations of the Lessor.

     d)   The Lessor shall not be required to obtain any consent or
          approval from any third parties or regulatory authorities, for
          the execution of this Agreement or for the compliance by the
          Lessor with any of the provisions hereof.

     e)   It is the rightful owner of the land and buildings located in
          Parque Industrial Naucalpan, Naucalpan, State of Mexico, Mexico
          (the "PROPERTY"), which consist of a total land surface of 2,800
          square meters and constructions of 4,598 square meters. The
          Lessor acquired the Property by means of (i) public deed No.
          9,426 dated April 5, 1973, granted before Mr. Miguel Gontran
          Rodriguez, Notary Public No. 5 of Tlalnepantla, State of
          Mexico, registered in the Public Registry of Property of
          Tlalnepantla, State of Mexico under number 258, volume 218, book
          first, section first

<PAGE>
          and (ii) public deed No. 2,384 dated June
          30, 1973, granted before Mr. Oscar Mendez, Notary Public No. 6 of
          Tlalnepantla, State of Mexico, registered in the Public Registry
          of Property of Tlalnepantla, State of Mexico under number 201,
          volume 218, book first, section first. Copy of the aforementioned
          public deeds are attached hereto as ANNEX "A"

     f)   The Property has all permits, authorizations and licenses
          necessary to carry on activities such as those as Royalton is
          carrying out thereon. Likewise, the Property has access to all
          municipal and state services such as water, electricity, the
          sewer system and telephone.

     g)   The Property is free from any and all mortgages, trusts,
          encumbrances, easements, defects, rights of way or other similar
          charges or limitations with respect thereto, except for the first
          priority mortgage granted in favor of Consoltex Mexico, S.A. de
          C.V.

     h)   It has paid all taxes and other charges in regards to the
          Property, whether property tax, water rights, or others.

     i)   It intends to lease the Property to Royalton for a term of 10
          (ten) years, and grant Royalton (i) an option to purchase the
          Property at any moment during the term of this Agreement, and
          (ii) a right of first refusal in the event it intends to sell,
          assign or otherwise transfer the Property.

     j)   Its representative, Mr. Enrique Stern F. has sufficient authority
          to subscribe this Agreement; such authority has not been revoked
          nor modified in any way.

II.  The Lessee hereby represents and warrants:

     a)   It is a variable capital limited liability stock corporation,
          duly organized and validly existing in accordance with the laws
          of Mexico authorized to enter into this Agreement and to perform
          its obligations hereunder.

     b)   Its main corporate purpose is the purchase, sale, importation,
          exportation and manufacture of garments.

     c)   It is currently carrying on its business activities (including
          production, and distribution activities) on the Property, and
          wishes to continue making use of the Property for conducting its
          business as set forth in this Agreement.

     d)   Any two of Messrs. Alex Di Palma, Christopher Schaller, Jean
          Talbot or any of them together with either of Jesus Lopez or
          Mauricio Hernandez,

                                   2

<PAGE>


          have sufficient authority to enter into this
          Agreement on behalf of the Lessee; such authority has not been
          revoked nor modified in any way.

     NOW THEREFORE, based upon the foregoing Precedents and
Representations, the parties hereto agree as follows:



CLAUSES

First..  LEASE OF THE PROPERTY.   By means of their execution of this
Agreement, the Lessor leases to the Lessee and the Lessee accepts to lease
the Property on the terms and conditions set forth hereinafter.

SECOND.  USE OF THE PROPERTY. The Lessee will use the Property for
conducting its business in an ordinary manner. To this effect, the Lessee
accepts the Property in the condition as it is at this time,
notwithstanding any rights the Lessor may be entitled to pursuant to the
provisions of this Agreement and the Civil Code for the Federal District in
Local Matters and the Entire Republic in Federal Matters (CODIGO CIVIL PARA
EL DISTRITO FEDERAL EN MATERIA COMUN Y PARA TODA LA REPUBLICA EN MATERIA
FEDERAL; the "CIVIL CODE").

The Lessee may, at its own expense, carry out all constructions upon or
improvements to the Property as it deems necessary or convenient for
conducting its business, on the understanding that it shall notify the
Lessor in writing of any such construction or improvement prior to its
execution.

The improvements made to the Property may be removed by the Lessee upon
termination of this Agreement, as long as such removal does not harm the
Property in any way, in which case, the improvements would be for the
benefit of the Lessor.

The Lessee shall be exclusively responsible for obtaining and maintaining
such permits, licenses or authorizations as is necessary for its business.

FOURTH.  DELIVERY OF THE PROPERTY. The parties hereto acknowledge that the
Lessee is currently in possession of the Property and will continue in
possession thereof throughout the duration of this Agreement. Therefore,
the Lessee will be deemed to have received the possession of the Property
for the purposes of this Agreement at the moment of execution hereof.

FIFTH.  TERM; RENEWAL. This Agreement will remain in effect for a term of
10 (ten) years counted as from March 1, 1999 and ending on February 28,
2009. This term will be obligatory for the Lessor but not for the Lessee.
The Lessee may terminate this Agreement prior to the expiration of its term
by means of written notice given to the Lessor with 90 (ninety) calendar
days of anticipation.

                               3

<PAGE>


The term of this Agreement may be extended by the mutual agreement of the
parties, in which case, such extension will have to be documented in a
separate instrument, which instrument will include any new provisions
regarding Rent payments.

SIXTH.  RENT.  a)  The Lessee will pay as rent for the Property, the amount
of Ps.$90,000.00 (Ninety thousand Pesos 00/100)  (the "RENT") plus value
added tax.

b)   The Rent will be payable on a monthly basis, within the first 5 (five)
business days of the month.

c)   The Rent payable under this Agreement will be paid by the Lessee to
the Lessor by check issued in the favor of the Lessor and delivered to the
Lessor at the Lessor's domicile set forth in Clause Sixteenth hereof, or
deposited in a bank account as notified by Lessor to Lessee in writing with
at least 3 (three) business days of anticipation.

d)   The Lessor will deliver to the Lessee, at the time of payment, the
corresponding receipt or invoice, which receipt or invoice shall comply
with all Mexican tax requirements. If such receipt or invoice is not
delivered to the Lessee, the Lessee may withhold payment of the Rent or
other amount.

e)   Except as provided in section (d) above and as provided in Clause
Eighth, the Lessee may not withhold any Rent payment.

f)   In the event the Lessee fails to pay the Rent when due, and except for
valid withholdings thereof as provided in section (e) above, such Rent will
accrue interest at an annual rate of the Average Interbank Interest Rate
(TASA DE INTERES INTERBANCARIA DE EQUILIBRIO) times 1.5 (one point five)
divided by 360 (three hundred and sixty) and applied for each day such Rent
remains outstanding.


SEVENTH.  RENT ADJUSTMENTS. The Rent shall be adjusted as follows:

a)   On each Inflation Adjustment Date, the Rent will be adjusted in
accordance to the variations of the National Consumer Price Index (INDICE
NACIONAL DE PRECIOS AL CONSUMIDOR) determined by Banco de Mexico, Mexico's
Central Bank (the "INDEX") for the calendar year immediately preceding such
Inflation Adjustment Date. For purposes of this Agreement "INFLATION
ADJUSTMENT DATE" shall mean March 1 of each 2000, 2001, 2003, 2004, 2006,
2007 and 2008.

b)   Effective March 1 of each of 2002 and 2005, the Lessor and the Lessee
will adjust the Rent in accordance with market conditions then in effect.
In the event the parties do not agree to such adjustment within by March 1
of the corresponding year, both parties will appoint one of Cushman &
Wakefield, LaSalle Partners, Century 21, Wallsten, Schutte or CB Comercial
de Mexico, S.A. de C.V. to determine the Rent in accordance with then
prevailing market conditions. In the event the parties do not agree on any
such broker, each of the Lessor and the Lessee will appoint one nationally

                              4

<PAGE>

recognized real estate broker to determine the Rent in accordance with then
prevailing market conditions, and such Rent will be the average of the
amounts determined thereby.

EIGHTH.  REPAIRS AND MAINTENANCE. The Lessee will, at its own cost and
expense (i) make all repairs that it deems necessary or convenient upon the
Property, and (ii) provide all maintenance services in regards to the
Property.

Notwithstanding the provisions of the immediately preceding paragraph, the
Lessee will have a 90 (ninety) calendar day term, counted as of March, 1,
1999 to inspect the Property, in the understanding that if any defects are
uncovered by the Lessee which need be repaired for the Lessee to be able to
conduct its business on the Property, such repairs shall be made by the
Lessor at its own expense within a reasonable period of time taking into
account the type of repairs warranted. If the Lessor fails to carry out the
aforementioned repairs, the Lessee may make such repairs and deduct the
cost thereof from future Rent payments.

NINTH.  INSURANCE. The Lessee shall obtain, a general insurance policy
covering any damage to the Property in terms customary to the type of
property.

TENTH.  RE-DELIVERY OF THE PROPERTY. The Lessee shall vacate the Property
on the date of expiration of this Agreement. The Lessee will nevertheless
have a tolerance period of 6 (six) months (the "TOLERANCE PERIOD") counted
as of the expiration date of this Agreement, to vacate the Property,
without this Agreement being deemed extended and without the payment of the
penalty set forth in the following paragraph, in the understanding that the
Lessee will continue paying Rent for the duration of such Tolerance Period.

In the event the Lessee does not vacate the Property on the last day of the
Tolerance Period, it shall pay to the Lessor, in addition to the
corresponding Rent, an amount equal to 30% (thirty percent) of the Rent
payable for the period of such delay.

ELEVENTH.  SUBLEASES. In accordance to article 2481 of the Civil Code and
its correlative article in the Civil Code of the State of Mexico, the
Lessor authorizes the Lessee to sublease the Property to any entity with
which it maintains economic or managerial ties. For the effects of this
Agreement it is understood that the Lessee has economic or managerial ties
to corporations or entities in which it participates directly or indirectly
in its capital stock or when such corporation or entity directly or
indirectly participates in the Lessee's capital stock. Likewise, it is
understood that the Lessee maintains managerial ties with such corporations
or entities in which the Lessee has the authority to intervene in any way
in its administration.

Likewise, and pursuant to article 2482 of the Civil Code and its
correlative article in the Civil Code for the State of Mexico, the Lessor
agrees to grant its consent upon the

                              5

<PAGE>


written request of Lessee so that the Lessee may sell or assign
any and all its rights and obligations hereunder to any of the
corporations or entities set forth above.

The abovementioned authorizations may not be withheld without justified
cause.

TWELFTH.  PURCHASE OPTION. a) The Lessor hereby grants the Lessee, in the
terms of article 2243 of the Civil Code and the correlative article in the
Civil Code for the State of Mexico, the right to purchase the Property at
its option in accordance with the terms of this Clause Twelfth (the
"PURCHASE OPTION"), on the understanding that the Lessee will not be
obligated to exercise the Purchase Option at any time.

     b)   The Purchase Option may be exercised by the Lessee at any time
during the duration of this Agreement or of any extension hereto.

     c)   The Purchase Option may be exercised by the Lessee by means of a
written notice given to the Lessor at the Lessor's domicile set forth in
Clause Sixteenth hereof (an "NOTICE OF EXERCISE").  Once the Lessor has
received a Notice of Exercise, the Lessor shall execute such documents and
carry out such acts as are necessary or convenient and which are requested
in writing by the Lessee to transfer full and legal title to the Property
to the Lessee within the 60 (sixty) calendar days immediately following the
receipt of such Notice of Exercise.  If the Lessor does not execute the
documents or carry out the acts that are necessary to transfer title upon
the Property to the Lessee within the term set forth above, such documents
and acts may be subscribed or carried out in accordance to the terms of
articles 2247 of the Civil Code and its correlative article in the Civil
Code for the State of Mexico and article 517 of the Civil Procedures Code
for the Federal District (CODIGO DE PROCEDIMIENTOS CIVILES PARA EL DISTRITO
FEDERAL) and its correlative article in the Civil Procedures Code for the
State of Mexico (CODIGO DE PROCEDIMIENTOS CIVILES PARA EL ESTADO DE
MEXICO).

     d)   The Lessee shall pay the Lessor as purchase price for the
Property, the market value thereof prevailing at the time of exercise as
agreed by the parties. If no such agreement is reached within the 30
(thirty) calendar days following the receipt by Lessor of the Notice of
Exercise, both parties will appoint one of Cushman & Wakefield, LaSalle
Partners, Century 21, Wallsten, Schutte or CB Comercial de Mexico, S.A. de
C.V. to determine the price in accordance with then prevailing market
conditions. In the event the parties do not agree on any such broker, each
of the Lessor and the Lessee will appoint one nationally recognized real
estate broker to determine the price in accordance with then prevailing
market conditions, and such price will be the average of the amounts
determined thereby.

THIRTEENTH.  RIGHT OF FIRST REFUSAL. In the event the Lessor decides to
sell, assign or otherwise transfer the Property (a "PROSPECTIVE TRANSFER"),
the Lessee shall have a preferential right to acquire the Property on the
same terms and conditions as those contained in the Prospective Transfer.
This preferential right may be exercised as follows:

                                   6

<PAGE>


     a)   The Lessor must notify the Lessee in writing, its intention to
sell or otherwise transfer the Property to a third party (the "PROSPECTIVE
TRANSFEREE"), specifying in such notice (i) the price to be paid, or the
assets to be paid by such Prospective Transferee as consideration (the
"PROSPECTIVE PRICE"), (ii) the payment conditions granted to such
Prospective Transferee, (iii) the name of the Prospective Transferee, and
(iv) any other relevant terms or conditions of the Prospective Transfer
(the "PROSPECTIVE TRANSFER NOTICE").

     b)   The Lessee will have a term of 20 (twenty) calendar days to
notify the Lessor in writing its intention to make use of its preferential
right to acquire the Property in the same terms and conditions as described
in the Prospective Transfer Notice. In the event the Lessee does not notify
the Lessor of its desire to acquire the Property within the relevant term,
the Lessor shall be free to proceed with the Prospective Transfer.

     c)   Once the Lessee has notified the Lessor of its intent to acquire
the Property as set forth above, the Lessor and the Lessee will have a 60
(sixty) calendar day term counted as of the receipt by Lessor of such
notice to execute such documents and carry out such acts as are necessary
or convenient to transfer full and legal title to the Property to the
Lessee.

FOURTEENTH.  NOTARIZATION AND REGISTRATION. This Agreement shall be
notarized within 5 (days) counted as of its execution, and pursuant to the
terms of article 3042 of the Civil Code and its correlative article in the
Civil Code for the State of Mexico, this Agreement shall be registered in
the Public Registry of Property of Tlalnepantla, State of Mexico.

FIFTEENTH.  TERMINATION. This Agreement will be terminated, in addition to
the scenarios set forth in Clause Fifth of this Agreement, in the event any
one of the parties to this Agreement substantially breaches its obligations
hereunder and does not take any action to remedy such default within the 90
(ninety) days immediately following the date such party receives written
notice from the counterpart of such default.

SIXTEENTH.  DOMICILES. The Lessor and the Lessee hereby state as their
domiciles, the following:

Lessor:

Ave. Industria Textil No. 20
Parque Industrial Naucalpan
53370 Naucalpan, Estado de Mexico
Atn: Enrique Stern F.
Fax: 301-34-98


                                    7

<PAGE>


Lessee:

Ave. Industria Textil No. 20
Parque Industrial Naucalpan
53370 Naucalpan, Estado de Mexico
Atn: General Director
Fax: 301-34-98

As long as no change in domicile is notified by any party hereto to the
counterpart, all notices, notifications and other proceedings made at the
domiciles stated above, shall be valid and fully effective.

SEVENTEENTH. COSTS, EXPENSES AND TAXES.  The Lessee will pay all costs,
expenses, taxes, rights and duties derived from the granting of the public
deed containing this Agreement, as well as those derived from its
registration in the Public Registry of Property of Tlalnepantla, State of
Mexico. Lessor shall pay its income taxes in respect of payments received
hereunder and all property taxes payable in respect of the Property and
make all required filings with tax authorities with respect to this
Agreement.

EIGHTEENTH.  TERMINATION OF PRIOR AGREEMENTS. Any existing agreements
between the Lessor and the Lessee in regards to the Property shall be
hereby terminated and superseded by this Agreement.

NINETEENTH.  LAW AND JURISDICTION. This Agreement shall be governed by the
laws of the Mexico, and specifically by the laws of the location of the
Property. For everything related to the interpretation and fulfillment of
the obligations derived from this Instrument, the parties hereto hereby
submits to the jurisdiction and competence of the courts sitting in Mexico
City, Federal District and to the courts of the location of the Property
exclusively in regards to any action related to the same, waiving any other
jurisdiction they may now or hereafter be entitled to by reason of their
domicile or other.


IN WITNESS WHEREOF, the parties hereto executed this Agreement in Mexico
City, Federal District on February 26, 1999.

     THE LESSOR

     Inmobiliaria Pri, S.C.

                       /S/ENRIQUE STERN F.
                       By: Enrique Stern F.
                       Title: Attorney in fact


                                -8-

<PAGE>


     THE LESSEE

     Royalton Mexicana, S.A. de C.V.


                    /S/JEAN TALBOT
                    By: Jean Talbot
                    Title: Attorney in fact


                    /S/CHRISTOPHER SCHALLER
                    By: Christopher Schaller
                    Title: Attorney in fact




                                   -9-




<PAGE>
                                                    EXHIBIT 10.12



              SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
            ===========================================



                  SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                        (Effective January 1, 1996)

                                 PREAMBLE

Consoltex (USA) Inc. and the other corporations referred to in
Section 1.6  below  have  adopted  this  Supplemental  Executive
Retirement  Plan, effective  January  1,  1996,  for  a  select
group  of  senior management personnel to ensure that the overall
effectiveness  of  the Company's executive compensation program
will attract, retain and motivate  qualified senior management
personnel.

                                 ARTICLE I

                                DEFINITIONS

When used herein, the following words have the respective meanings
below unless the context clearly indicates otherwise:

1.1  "Actuarial Equivalent Value" means a value deemed to be
equal to another value, determined as follows: (a) investment
increment (including dividends, interest, realized gains and
losses and unrealized gains and losses)  shall  be  compounded
annually at the applicable interest rate equal to the average
annual interest rate on 30-year Treasury securities for the 2nd
month preceding the month containing the date on which the lump
sum payment is  made, as specified  by the Commissioner of
Internal Revenue in the Internal Revenue Bulletin; and (b)
mortality shall be determined according to the mortality
table which  is  prescribed  by  the  Commissioner of
Internal Revenue for purposes of Section 417(e) of the Code,
as published in the Internal Revenue Bulletin.

12.  "Affiliated  Company" means any domestic or foreign trade or
business entity or holding  company, or a predecessor of any such
entity or holding company, which is a member of a Controlled
Group of Companies of which the Company is also a member.

1.3. "Basic Retirement Plan" means the Consoltex (USA) Inc. 401
(k) Plan (sponsored  by Benefit Management Inc., and naming the
Balson Hercules Group Ltd., LINQ Industrial Fabrics, Inc. and
Consoltex (USA) Inc. as Employer), as amended from time to
time, and any successor thereto.

1.4. "Chairman" means the Chairman of the Compensation Committee.

1.5  "Code" means the United States Internal Revenue Code of 1986,
as
     amended.

<PAGE>

1.6.  "Company" means, collectively, Consoltex (USA) Inc. and any
and all of its domestic parent, sister and subsidiary corporations
and any successor to any of the foregoing.

1.7. "Compensation   Committee" means the Management Resources and
Compensation Committee of Consoltex Group Inc., the indirect corporate
parent of Consoltex (USA) Inc.

1.8. "Controlled  Group of Companies" includes all members of a
controlled group of corporations (as defined in Code Section 414(b),
as modified by Code Section 415(h)), all commonly controlled trades
or businesses (as  defined in Code Section  414(c), as modified by
Code Section 415(h)), all affiliated service groups (as defined
in Code Section 414(m)), and all other entities required  to  be
aggregated with the Company pursuant to regulations under Code
Section 414(o).

1.9. "Designated  Beneficiary"  means  an individual other than a
Surviving Spouse who has been designated by a  Participant  to
receive benefits under this Plan.

1.10.  "Executive"  means  an  employee  holding a position in the
Company deemed eligible to participate in this  Plan  as  set forth
in Article II.

1.11.  "Final  Average  Earnings"  means  the  average of the  sum
of the Participant's  base  annual  salary plus his actual  bonus
under the Company's Annual Incentive Plan  (expressed  as  a
percentage of base annual salary) for the last two complete calendar
years prior to the event (whether retirement, death or termination
of employment) giving rise to its determination.

1.12. "Participant" means any Executive who is designated and
approved as such pursuant to Article II.

1.13. "Plan" means this Supplemental Executive Retirement Plan.

1.14. "Retirement" means a termination  of employment with the
Company at a Participant's  Early Retirement Date, Normal Retirement
Date or Deferred Retirement Date, as defined in Article III of this
Plan.

1.15.   "Retirement  Date"  means,  as  applicable  in the context,
a Participant's  Normal Retirement Date, Early Retirement Date or
Deferred Retirement Date, each as defined in Article III of this Plan.

1.16. "Surviving Spouse" means a Participant's spouse who survives the
Participant's death; PROVIDED, HOWEVER, that such spouse is either (a)
the  Participant's  legal  spouse or (b) the Participant's  common-law
spouse (i) of at least two years'  standing  and  (ii) held out to the
world  as  the  Participant's  spouse;  PROVIDED, FURTHER,  that  each
requirement of the

                              -2-

<PAGE>

applicable test set forth in the immediately preceding proviso must be
fulfilled at and as of the time of the Participant's death.

1.18. "Total Consoltex Credited Service" means the number of complete
years of  service  by the Participant to the Company  or any one or
more Affiliated Companies, as an employee, director or officer of the
Company or another corporation; PROVIDED, HOWEVER, that such number of
years shall in no event exceed thirty.

                                ARTICLE II

                        PARTICIPATION IN THIS PLAN

An Executive of the Company shall become a Participant in this Plan
as of  the date as of which such individual is designated as a
Participant  by the Compensation  Committee  in  writing.  Any
designation made pursuant to this Article II shall be subject to
such vesting  requirements  (if any) as the Compensation Committee
shall in its discretion impose at or before  the time of
designation.  Once  an  Executive becomes a Participant, he shall
remain  a Participant until the termination  of  his  employment
with  the Company and  thereafter until all benefits to which he
and/or his Surviving Spouse, Designated Beneficiary or estate is
entitled under this Plan have been paid.

                                ARTICLE III

                            RETIREMENT BENEFITS

3.1. RETIREMENT DATES. Subject to Section 3.6  below, each
Participant is eligible to receive a benefit under this Plan
beginning on one of the following dates:

a) "Normal Retirement Date," which is the first  day of the calendar
month  coincident  with or next following the Participant's  65th
birthday;

b)  "Early Retirement Date,"  which  is the first day of any calendar
month coincident with or next following  the  Participant's  55th
birthday  but  which is prior to the Participant's 65th birthday;
and

c)  "Deferred Retirement  Date," which is the earlier to occur of
(i) the first day of the calendar month coincident with or next
following  the  termination  of the Participant's employment with
the Company after his Normal Retirement  Date,  or (ii) the first
day of the calendar month coincident with or next  following  the
Participant's 71{st} birthday.

                             -3-

<PAGE>

3.2.  NORMAL RETIREMENT BENEFIT. The Normal Retirement Benefit of
a Participant who retires on or after his  Normal  Retirement Date
shall be a monthly amount, payable in the form of a joint  and
survivor life annuity as set forth in Section 6.1, below, and
providing the benefits over the life of the Participant and
his Surviving Spouse, the annual sum of which monthly amounts
shall be equal to:

a) 2% of  his  Final Average Earnings multiplied by Total
Consoltex Credited Service; less,

b) the annual amount of accrued pension payable to the Participant
as a result of his membership  in  any  other  defined benefit or
defined contribution pension arrangement or equivalent (such as a
401(k) plan) to which Company or Affiliated Company contributions
have  been  made  (in the case of such a defined contribution  or
equivalent  plan,  the  annual  benefit  will  be  the  Actuarial
Equivalent Value based upon a joint and survivor 60% life annuity
or, if the Participant  has  no  surviving  spouse, a single life
annuity with 10 years of guaranteed payments).

In the event that the Participant who retires on or after his Normal
Retirement Date does not have a Surviving Spouse at that time, the
Normal Retirement Benefit calculated as hereinabove shall be payable
in the form of a single life annuity over the life of the Participant,
with a guarantee of 10 years of payments in the event of the
Participant's death.

3.3. EARLY RETIREMENT BENEFIT.

a) RETIREMENT AT OR AFTER AGE 60. The Early Retirement Benefit of a
Participant who retires upon  or  after attaining age 60 shall be
calculated as set forth in Section  3.2  based on Total Consoltex
Credited Service as of the Participant's Early Retirement Date.

b) RETIREMENT BEFORE AGE 60. The Early Retirement Benefit of a
Participant, who retires at  or  after  age  55 but before age 60
shall be calculated as set forth in Section 3.2  based  on  Total
Consoltex   Credited   Service  as  of  the  Participant's  Early
Retirement Date, but the monthly benefit to which the Participant
would otherwise be entitled under Section 3.2 shall be reduced by
5/12 of one percent for  each  full  calendar  month by which the
commencement  of  payment  of  benefits  hereunder  precedes  the
Participant's 60th birthday.

3.4. DEFERRED RETIREMENT BENEFIT. The Deferred Retirement Benefit of a
Participant  shall be a monthly amount  calculated  as  set  forth  in
Section 3.2 based  on  Total  Consoltex  Credited  Service  as  of his
Deferred  Retirement  Date.  Deferred Retirement Benefits shall become
payable no later than the first  day  of the calendar month coincident
with or next following the Participant's  71{st}  birthday (regardless
of whether the Participant has actually terminated his employment with
the Company by such date). Total Consoltex Credited Service shall not

                              -4-

<PAGE>

include any time period after Deferred Retirement Benefits become
payable, even if the Participant's employment with the Company
continues after such date.

3.5. BENEFIT TO PARTICIPANT ON TERMINATION OF EMPLOYMENT.  If a
Participant's employment with the Company is terminated prior to
the Participant's earliest possible Early Retirement Date, benefits
accrued under this Plan (calculated as set forth in Section 3.2 at
the time of his termination of employment) shall become  payable
to the Participant as a deferred pension at his Normal Retirement
Date. Notwithstanding the foregoing, the Participant  may  elect to
receive such deferred pension at or subsequent to his Early Retirement
Date but prior to his Normal Retirement Date, in which event full
reduction based upon Actuarial Equivalent Value shall apply in lieu
of the percentage  reduction  provided  by  Section 3.3(b). (See
Section  4.3 regarding death benefits payable if employment is
terminated prior to the Early Retirement Date.)

3.6. LUMP SUM PAYMENT. Notwithstanding anything to the  contrary
contained in the Plan, the Participant may irrevocably elect no
later than one year  prior  to  the  termination of his employment
to receive the benefits accrued under this Plan in the form of a
lump sum payment. If the Participant so elects, such payment shall
be paid within  ninety (90) days following the date that the
Participant ceases to be an employee of the Company for any reason
and shall be equal to the Actuarial Equivalent Value of the
Participant's benefits otherwise payable at such date.

                                ARTICLE IV

                              DEATH BENEFITS

4.1. DEATH SUBSEQUENT TO RETIREMENT.

a) BENEFITS TO SURVIVING SPOUSE. Upon the death of a Participant
after Retirement, the Participant's Surviving Spouse, if any,
shall be entitled to  a  monthly amount, payable in the form of a
single life annuity over the  life of the Surviving Spouse, equal
to (i) 60 percent of the monthly  amount which was payable to the
Participant prior to his death (if  the  Participant  died in the
course of receiving benefits hereunder) or (ii) 60 percent of the
monthly amount to which the Participant would have been  entitled
under  Section  3.2,  3.3  or  3.4  (whichever  would  have  been
applicable)  had  the  Participant  elected to commence receiving
benefits on the first day of the calendar  month  coincident with
or immediately preceding the Participant's date of death.

b) BENEFITS TO DESIGNATED BENEFICIARY UPON DEATH OF PARTICIPANT.
Upon  the  death  of a Participant after Retirement  (where  such
Participant  leaves   no  Surviving  Spouse),  the  Participant's
Designated Beneficiary,  if  any,  shall be entitled to a monthly
amount  equal  to  that  which the Participant  would  have  been
entitled  to  receive  pursuant to Section  3.2,  3.3  or  3.4
(whichever is or would have been applicable) over the

                          -5-

<PAGE>

remainder, at the Participant's death, of the guarantee of 10
years  of  payments (if any) which commenced at the Participant's
Retirement.

c) BENEFITS TO ESTATE UPON DEATH OF PARTICIPANT. Upon the death of
a Participant  after  Retirement  (where such Participant leaves no
Surviving   Spouse   and   no   Designated    Beneficiary), the
Participant's  estate  shall  be  entitled to a lump-sum  payment
equal to the Actuarial Equivalent Value  of the amounts otherwise
payable to the Participant's Designated Beneficiary  pursuant  to
Section 4.1 (b).

4.2  DEATH  BEFORE  RETIREMENT  BUT  AFTER  EARLY  RETIREMENT  DATE.
If a Participant  who  has  reached his Early Retirement Date dies
prior to actual Retirement from the  Company,  benefits shall be
payable to the Participant's Surviving Spouse, Designated
Beneficiary or estate (as appropriate) on the basis of Section 4.1
and Section 3.3 or 3.4 (whichever is applicable) as if the
Participant's Retirement had occurred on the day immediately
preceding his death.

4.3. DEATH OR TERMINATION PRIOR TO EARLY  RETIREMENT DATE. If a
Participant (a) dies prior to termination of employment with the
Company and before reaching his Early Retirement Date or (b)
terminates employment with the Company prior to his Early
Retirement Date and dies before receiving benefits hereunder,
his Surviving Spouse, Designated Beneficiary (if no Surviving
Spouse  exists), or estate (if no Surviving Spouse or Designated
Beneficiary  exists) shall be entitled on the Participant's
death to a lump-sum payment equal to the Actuarial Equivalent
Value of the Participant's  Normal Form Survivorship Benefits
(as defined below in Section 6.1), calculated as set forth in
Section 3.2, at the time  of  death  or  termination  and
assuming such survivorship benefits became payable at the
Normal Retirement Date.

                                 ARTICLE V

                                DISABILITY

If a Participant incurs a disability (a "Disability") which
qualifies him  for  long-term  disability benefits under an
applicable group benefits program of the Company  or  an  Affiliated
Company, he shall be entitled to monthly  annuity  payments,
commencing  on  his  Normal  Retirement  Date, calculated as set
forth in Section  3.2  and based upon his Total Consoltex Credited
 Service and Final Average Earnings  as  of  such Normal Retirement
Date. In calculating the amount of such payments, Total  Consoltex
Credited Service shall include the period of Disability, and,
unless the Participant returns to work for the Company for at least
two full calendar  years after recovery from such Disability, Final
Average Earnings shall be based  upon the Participant's final two
complete calendar years of service preceding the date of Disability.

                                -6-

<PAGE>

                                ARTICLE VI

                     FORM AND COMMENCEMENT OF BENEFITS

6.1. FORM OF BENEFITS. The normal form of payment of benefits
provided by this Plan is a joint and survivor 60% life annuity or a
single life annuity with a guarantee of 10 years of payments if the
Participant has no Surviving Spouse. For purposes of Section 4.3 above,
benefits which are payable subsequent  to death are referred to as
"Normal Form Survivorship Benefits". A Participant may elect to have
benefits payable under this  Plan  paid  in  any  optional  form of
single life annuity  or joint and survivor life annuity, with or
without  minimum guarantee  of  payment, available under qualified
pension plans. If an optional form of  benefits  payments  is  elected,
benefits payable in accordance with such election shall be so calculated
as to be of Actuarial Equivalent Value with benefits payable under the
normal form of benefits payments provided herein. The election of an
optional form of benefits payments  must  be made by the Participant in
writing with respect to his benefits hereunder  and  submitted  to the
Compensation Committee in the manner prescribed by the Compensation
Committee.

6.2. COMMENCEMENT  AND  TERMINATION  OF BENEFITS. Subject to  Section
3.6, benefits payable to a Participant  pursuant to Section 3.2, 3.3
or 3.4 will  commence  on  the Participant's Normal  Retirement  Date,
Early Retirement Date or Deferred Retirement Date, as applicable, and
will terminate with the payment made on the first day of the calendar
month in which the Participant dies. Subject to Section 4.1(c) and 4.3
above,  benefits  payable  to  a  Participant's  Surviving  Spouse  or
designated  Beneficiary  pursuant  to  Article IV will commence on the
first  day  of  the  calendar month next following  the  Participant's
death. Benefit payments  to a Surviving Spouse will terminate with the
payment made on the first  day  of  the  calendar  month  in which the
Surviving  Spouse  dies.  Lump sum benefits payable on a Participant's
death pursuant to Article IV will be paid as soon as practicable after
the Participant's death.

                                ARTICLE VII

                         AMENDMENT AND TERMINATION

7.1. AMENDMENT OR TERMINATION. The Company intends this Plan to be
permanent but reserves the right to amend or terminate this Plan when,
in the sole opinion of the Compensation  Committee,  such amendment or
termination is advisable. Any such amendment or termination  shall  be
made  pursuant to a resolution of the Compensation Committee and shall
be effective  as  of  the  date  of  such  resolution. No amendment or
termination  of  this  Plan shall directly or indirectly  deprive  any
Participant, Surviving Spouse, Designated Beneficiary or Participant's
estate of all or any portion  of any benefits which have accrued prior
to the effective date of the resolution  amending  or terminating this
Plan.

                                 -7-

<PAGE>

7.2  TERMINATION BENEFIT. The termination of this Plan shall not
operate  to deprive any actively employed or disabled  Participant
of benefits accrued as of the termination date. Such accrued benefits
shall be calculated as set forth  in  Section  3.2,  3.3  or  3.4,  as
applicable,  based  on  the  Participant's  Total  Consoltex  Credited
Service  and  Final  Average Earnings as of the termination date.  For
purposes of determining  a  Participant's accrued benefits pursuant to
this Section 7.2, the amount determined under Section 3.2(b), relating
to benefits from other defined  benefit or defined contribution plans,
shall be based on the premise that  such  other  benefits shall become
payable to the Participant at his Normal Retirement Date. Payment of a
Participant's accrued benefits under this Plan shall  not be dependent
upon  his  continuation of employment with the Company following  this
Plan's termination  date,  and  such  benefits  shall  become  payable
pursuant to the terms of Section 6.2 or Section 3.6 applied as if  the
Participant had terminated his employment with the Company on the Plan
termination date.

7.3. CORPORATE SUCCESSORS. This Plan shall be automatically binding
on any successor to any of the corporations comprised by the term
"Company" by reason of the merger or consolidation of such corporation
into or with any other corporation or other entity.

                               ARTICLE VIII

                               MISCELLANEOUS

8.1. NO EFFECT ON EMPLOYMENT RIGHTS. Nothing contained herein will
confer upon any Participant  the  right  to be retained in the
service of the Company or limit the right of the Company  to
discharge  or otherwise deal with any Participant without regard
to the existence of  this Plan.

8.2. SPENDTHRIFT PROVISION. No benefit payable under this Plan shall
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance  or  charge  prior  to  actual receipt
thereof  by  the  payee;  and  any attempt so to anticipate, alienate,
sell, transfer, assign, pledge,  encumber  or  charge  prior  to  such
receipt  shall  be  void;  and  the Company shall not be liable in any
manner   for  or  subject  to  the  debts,   contracts,   liabilities,
engagements  or  torts  of  anyone  entitled to any benefit under this
Plan.

8.3. ADMINISTRATION. The Compensation Committee shall be responsible
for the general operation and administration of this Plan and for
carrying out  the  provisions  hereof.  The  Compensation  Committee
shall  be entitled   to   rely   conclusively   upon   all  tables,
valuations, certificates,   opinions  and  reports  furnished  by
any   actuary, accountant, controller, counsel or other person employed
or engaged by Consoltex (USA) Inc.  (or  any  of the other corporations
comprised by the term "Company") at the request  of the Compensation
Committee with respect to this Plan.

                                     -8-

<PAGE>

8.4. DISCLOSURE. Each Participant shall  receive  a  copy of this
Plan and the Compensation Committee will make available for inspection
by any   Participant  or  Surviving  Spouse  a  copy  of  the  rules
and regulations  used  by the Compensation Committee in administering
this Plan.

8.5. STATE LAW: CONSTRUCTION.  This  Plan  is established under and
will be construed according to the laws of the State of New York to
the extent that  such laws are not preempted by the  Employee
Retirement Income Security Act and valid regulations published
thereunder. This Plan shall be construed liberally from the viewpoint,
and for the benefit,of the Participant and his Surviving Spouse,
Designated Beneficiary or estate, as applicable.

8.6. GENDER AND NUMBER. Where the context requires, the singular as
used herein includes the plural and vice versa and references herein
to a gender shall include the other gender.

8.7. MINIMAL  BENEFITS.  If  the  Actuarial Equivalent Value of any
benefit payable in the form of an annuity  is  less  than  $5,000,
any of the corporations  comprised  by the term "Company" may, in
its discretion, pay such value to the Participant or his Surviving
Spouse or Designated Beneficiary in a  single lump sum in lieu of
any further benefit payments by the Company hereunder.

8.8. INCAPACITY OF RECIPIENT. In the event a Participant or his
Surviving Spouse or Designated Beneficiary is declared incompetent
and a conservator  or  other  person  legally  charged  with the
care of his person or of his estate is appointed, any benefits under
this Plan to which such Participant, Surviving Spouse or Designated
Beneficiary is entitled shall be paid to such conservator or other
person  legally charged with the care of his person or his estate.

8.9. UNCLAIMED BENEFIT. Each Participant shall keep the Compensation
Committee informed of  his  current address and the current address of
his spouse. The Compensation  Committee  shall  not  be  obligated  to
search  for  the  whereabouts  of  any  person.  If  the location of a
Participant  is  not  made known to the Compensation Committee  within
three (3) years after the date on which any payment to the Participant
under this Plan may be made, the Compensation Committee may attempt to
make payment as though  the  Participant  had  died at the end of such
three-year  period.  If,  within  one  additional  year   after   such
three-year  period, the Compensation Committee is unable to locate any
Surviving  Spouse,   Designated   Beneficiary,   or   duly   appointed
representative  of the estate, of the Participant entitled to benefits
with respect to the missing Participant's employment, then the Company
shall have no further  obligation  to  pay  any  benefit  hereunder to
anyone  with  respect  to  such employment, and such benefit shall  be
irrevocably forfeited.

8.10. LIMITATIONS ON LIABILITY. Notwithstanding any other provision of
this Plan, the Company shall not  be  Liable  to any Participant,
former Participant, Surviving Spouse, Designated Beneficiary, estate
or anyone else for any loss or expense incurred in connection with this
Plan and neither the Compensation Committee nor any individual acting
as an employee or agent  of  Consoltex  (USA) Inc (or any of the other
corporations comprised by the term "Company") or as a

                          -9-

<PAGE>

member of the Compensation Committee shall be liable to any
Participant, former  Participant, Surviving Spouse, Designated
Beneficiary, estate or anyone else for any claim, loss,  liability
or expense incurred in connection with this Plan.

8.11.  UNFUNDED  PLAN.  All  benefits payable under this Plan
constitute an unfunded obligation of the Company.  Payments  shall
be made, as due, from the general funds of the Company. The Company
may,  in  its sole and absolute discretion, establish one or more
accounts, funds  or trusts to reflect its obligations under  the
Plan  and  may make such investments  as  it  may  deem desirable
to assist it in meeting  such obligations. Any assets held  in
such accounts, funds or trusts shall remain assets of the Company
subject  to  the claims of its creditors. No person eligible for
a benefit under this Plan shall have any right, title or interest
in any such assets.


<PAGE>

                                                  EXHIBIT 10.13


SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN FOR RICHARD H. WILLETT
==============================================================



                  SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                        (Effective January 1, 1996)
                                 (Willett)


                                 PREAMBLE

Consoltex (USA) Inc. and the other corporations referred to in Section
1.6  below  have  adopted  this  Supplemental  Executive  Retirement
Plan, effective  January  1,  1996,  for  a  select  group  of  senior
management personnel  to  ensure  that  the  overall  effectiveness
of  the Company's executive compensation program will attract, retain
and motivate  qualified senior management personnel.


                                 ARTICLE I

                                DEFINITIONS

When  used  herein,  the  following words have the respective meanings
below unless the context clearly indicates otherwise:

1.1  "Actuarial Equivalent Value"  means a value deemed to be equal
to another value,  determined as follows: (a) investment increment
(including dividends, interest, realized  gains  and losses and
unrealized gains and losses) shall be compounded annually at  the
applicable interest rate equal to the average annual interest rate on
30-year Treasury securities  for  the  2nd  month preceding the month
containing the date  on  which  the  lump sum payment is made, as
specified by the Commissioner of Internal  Revenue in the Internal
Revenue Bulletin; and (b) mortality shall be determined according to
the mortality table which is prescribed by the Commissioner of
Internal Revenue for purposes of Section 417(e) of the Code, as
published in the Internal Revenue Bulletin.

1.2. "Affiliated  Company" means any domestic or foreign trade or
business entity or holding  company,  or  a  predecessor  of any
such entity or holding company, which is a member of a Controlled
Group of Companies   of which the Company is also a member.

1.3. "Basic  Retirement  Plan" means the Consoltex (USA) Inc.  401(k)
Plan (sponsored by Benefit  Management Inc., and naming the Balson
Hercules Group Ltd., LINQ Industrial  Fabrics, Inc. and Consoltex
(USA) Inc. as Employer), as amended from time to time, and any
successor thereto.

1.4. "Chairman" means the Chairman of the Compensation Committee.

1.5. "Code" means the United States Internal Revenue Code of 1986,
as amended.

<PAGE>

1.6.  "Company"  means, collectively, Consoltex (USA) Inc. and any
and all of its domestic parent, sister and subsidiary corporations
and any successor to any of the foregoing.

1.7. "Compensation  Committee" means the Management Resources and
Compensation Committee of Consoltex Group Inc., the indirect
corporate parent of Consoltex (USA) Inc.

1.8. "Controlled  Group  of Companies" includes all members of a
controlled group of corporations  (as defined in Code Section 414(b),
as modified by Code Section 415(h)),  all commonly controlled trades
or businesses (as  defined in Code Section  414(c),  as  modified
by  Code  Section 415(h)),  all  affiliated  service  groups (as
defined in Code Section 414(m)), and all other entities required
to  be  aggregated  with the Company pursuant to regulations under
Code Section 414(o).

1.9. "Designated  Beneficiary"  means  an individual other than a
Surviving Spouse who has been designated by a  Participant  to
receive benefits under this Plan.

1.10.  "Executive"  means  an  employee  holding a position in the
Company deemed eligible to participate in this  Plan  as  set forth
in Article II.

1.11.  "Final  Average  Earnings"  means  the  average of the  sum
of the Participant's  base  annual  salary plus his actual  bonus
under  the Company's Annual Incentive Plan  (expressed  as  a
percentage of base annual salary) for the last two complete calendar
years  prior  to the event (whether retirement, death or termination
of employment) giving rise to its determination.

1.12. "Participant"  means  any Executive who is designated and
approved as such pursuant to Article II.

1.13. "Plan" means this Supplemental Executive Retirement Plan.

1.14. "Retirement" means a termination  of employment with the
Company at a Participant's  Early  Retirement  Date,   Normal
Retirement  Date  or Deferred Retirement Date, as defined in Article
III of this Plan.

1.15.  "Retirement  Date"  means,  as  applicable in the context,
a Participant's   Normal  Retirement  Date,  Early  Retirement
Date  or Deferred Retirement Date, each as defined in Article III
of this Plan.

1.16. "Specially Designated  Participant" means a Participant
designated by the Compensation Committee  in writing as entitled
to a minimum annual benefit of 25% of the Participant's Final
Average Earnings.

                            -2-

<PAGE>

1.17. "Surviving Spouse" means a Participant's spouse who survives
the Participant's death; provided,  ever,  that  such spouse is
either (a) the  Participant's  legal  spouse or (b) the Participant's
common-law spouse (i) of at least two years'  standing  and  (ii) held
out to the world  as  the  Participant's  spouse;  PROVIDED, FURTHER,
that each requirement  of  the  applicable  test set forth  in  the
immediately preceding proviso must be fulfilled  at  and  as  of  the
time of the Participant's death.

1.18. "Total Consoltex Credited Service" means the number of complete
years of  service  by  the  Participant  to  the  Company or any one
or more Affiliated  Companies,  as an employee, director  or  officer
of the Company or another corporation; PROVIDED, HOWEVER, that such
number of years shall in no event exceed thirty.


                                ARTICLE II

                        PARTICIPATION IN THIS PLAN

An Executive of the Company shall become a Participant in this Plan
as of the date as of which such individual  is  designated as a
Participant by the Compensation Committee in writing. Any designation
made  pursuant to this Article II shall be subject to such vesting
requirements (if any) as the Compensation Committee  shall in its
discretion impose at or before the time of designation. Once an
Executive  becomes  a  Participant,  he shall remain a Participant
until the termination of his employment with the Company and
thereafter until all benefits to which  he and/or his Surviving
Spouse, Designated Beneficiary or estate is entitled  under  this
Plan have been  paid.  A  Participant  who  is  designated  as a
Specially Designated Participant by the Compensation Committee in
writing  shall be and remain a Specially Designated Participant
as  long  as  he  is  and  remains   a Participant.


                                ARTICLE III

                            RETIREMENT BENEFITS

3.1. RETIREMENT  DATES.  Subject  to Section 3.6 below, each
Participant is eligible to receive a benefit  under this Plan
beginning on one of the following dates:

a)  "Normal Retirement Date," which  is the first day of the calendar
month coincident with or next following  the  Participant's  65th
birthday;

b)  "Early  Retirement  Date," which is the first day of any calendar
month coincident with  or  next  following the Participant's 55th
birthday but which is prior to the  Participant's  65th birthday;
and
                            -3-

<PAGE>

c) "Deferred Retirement Date," which is the earlier  to occur of
(i) the first day of the calendar month coincident with  or  next
following  the  termination  of the Participant's employment with
the Company after his Normal Retirement  Date,  or (ii) the first
day of the calendar month coincident with or next  following  the
Participant's 71st birthday.

3.2. NORMAL RETIREMENT BENEFIT. The Normal Retirement Benefit of
a Participant  who  retires on or after his Normal Retirement Date
shall be a monthly amount,  payable in the form of a joint and
survivor life annuity as set forth in Section 6.1, below, and
providing the benefits over the life of the Participant and his
Surviving Spouse, the annual sum of which monthly amounts shall
be equal to:

a) 2% of his Final Average Earnings multiplied by Total Consoltex
Credited Service; less,

b) the annual amount of accrued pension payable to the Participant
as a result  of  his  membership  in any other defined benefit or
defined contribution pension arrangement or equivalent (such as a
401(k) plan) to which Company or Affiliated Company contributions
have been made (in the case of such  a  defined  contribution  or
equivalent  plan,  the  annual  benefit  will  be  the  Actuarial
Equivalent Value based upon a joint and survivor 60% life annuity
or,  if  the  Participant has no surviving spouse, a single  life
annuity with 10 years of guaranteed payments);

PROVIDED, HOWEVER, that, in the case of a Specially Designated
Participant, the amount determined  under  Section 3.2(a) shall
in no event be less than  25%  of the Specially Designated
Participant's  Final  Average Earnings. In the event that the
Participant who retires on or after his Normal Retirement Date
does not have a Surviving Spouse at that time, the Normal
Retirement Benefit calculated as hereinabove shall be
payable in the form of a single life annuity over the life of
the Participant,  with a guarantee of 10 years of payments
in the event of the Participant's death.

3.3. EARLY RETIREMENT BENEFIT.

a) RETIREMENT  AT OR AFTER AGE 60. The Early Retirement Benefit
of a Participant who  retires  upon or after attaining age 60
shall be calculated as set forth in  Section  3.2 based on Total
Consoltex Credited Service as of the Participant's Early Retirement
Date.

b) RETIREMENT  BEFORE  AGE  60. The Early Retirement  Benefit of
a Participant, who retires at  or  after  age  55 but before age
60 shall be calculated as set forth in Section 3.2 based on Total
Consoltex Credited Service as of the Participant's Early Retirement
Date, but the monthly benefit to which the Participant  would
otherwise be entitled under Section 3.2 shall be reduced by
5/12 of one percent for each full

                            -4-

<PAGE>

calendar month by which the commencement of payment of benefits
hereunder precedes the Participant's 60th birthday.

3.4. DEFERRED RETIREMENT BENEFIT. The Deferred Retirement Benefit
of a Participant  shall  be  a  monthly  amount  calculated as set
forth in Section  3.2  based  on Total Consoltex Credited  Service
as of his Deferred Retirement Date.  Deferred  Retirement Benefits
shall become payable no later than the first day of the calendar
month coincident with or next following the Participant's 71st
birthday (regardless of whether the Participant has actually
terminated his employment with the Company by such date). Total
Consoltex Credited Service shall not include any time period after
Deferred  Retirement  Benefits  become payable, even if the
Participant's employment with the Company continues after such date.

3.5. BENEFIT TO PARTICIPANT ON TERMINATION OF EMPLOYMENT.  If a
Participant's  employment  with the Company is terminated prior to the
Participant's  earliest  possible   Early  Retirement  Date,  benefits
accrued under this Plan (calculated as set forth in Section 3.2 at the
time of his termination of employment)  shall  become  payable  to the
Participant  as  a  deferred  pension  at  his Normal Retirement Date.
Notwithstanding the foregoing, the Participant  may  elect  to receive
such  deferred  pension at or subsequent to his Early Retirement  Date
but prior to his Normal Retirement Date, in which event full reduction
based upon Actuarial  Equivalent  Value  shall  apply  in  lieu of the
percentage  reduction  provided  by  Section 3.3(b). (See Section  4.3
regarding death benefits payable if employment  is terminated prior to
the Early Retirement Date.)

3.6 LUMP SUM PAYMENT. Notwithstanding anything to the contrary
contained in the Plan, the Participant may irrevocably elect no later
than one year prior to the termination of his employment to receive the
benefits accrued under this Plan in the form of a lump sum payment. If
the  Participant  so elects, such payment shall be paid within  ninety
(90) days following  the  date  that  the  Participant ceases to be an
employee  of  the Company for any reason and shall  be  equal  to  the
Actuarial Equivalent  Value  of  the  Participant's benefits otherwise
payable at such date.


                                ARTICLE IV

                              DEATH BENEFITS

4.1  DEATH SUBSEQUENT TO RETIREMENT.

a) BENEFITS TO SURVIVING SPOUSE. Upon the death of a Participant
after Retirement, the Participant's Surviving Spouse,  if  any,
shall be entitled to  a  monthly amount, payable in the form of a
single life annuity over the  life of the Surviving Spouse, equal
to (i) 60 percent of the monthly  amount which was payable to the
Participant prior to his death (if  the  Participant  died in the
course of receiving benefits hereunder) or (ii) 60

                          -5-

<PAGE>

percent of the monthly amount to which the Participant would have
been entitled under Section 3.2, 3.3 or 3.4 (whichever would have
been   applicable)   had  the  Participant  elected  to  commence
receiving  benefits on  the  first  day  of  the  calendar  month
coincident with  or  immediately preceding the Participant's date
of death.

b) BENEFITS TO DESIGNATED BENEFICIARY UPON DEATH OF PARTICIPANT.
Upon  the  death  of  a Participant after Retirement (where  such
Participant  leaves  no  Surviving   Spouse),  the  Participant's
Designated Beneficiary, if any, shall  be  entitled  to a monthly
amount  equal  to  that  which  the  Participant would have  been
entitled  to  receive  pursuant  to  Section   3.2,  3.3  or  3.4
(whichever is or would have been applicable) over  the remainder,
at  the  Participant's  death,  of  the guarantee of 10 years  of
payments   (if   any)  which  commenced  at   the   Participant's
Retirement.

c) BENEFITS TO ESTATE UPON DEATH OF PARTICIPANT. Upon the death of
a Participant after Retirement (where such Participant leaves no
Surviving   Spouse   and   no   Designated   Beneficiary), the
Participant's  estate  shall  be  entitled  to a lump-sum payment
equal to the Actuarial Equivalent Value of the  amounts otherwise
payable to the Participant's Designated Beneficiary  pursuant  to
Section 4.1 (b).

4.2. DEATH BEFORE RETIREMENT BUT AFTER EARLY RETIREMENT DATE. If a
Participant  who  has  reached his Early Retirement Date dies prior to
actual Retirement from the  Company,  benefits shall be payable to the
Participant's Surviving Spouse, Designated  Beneficiary  or estate (as
appropriate)  on  the  basis  of  Section  4.1 and Section 3.3 or  3.4
(whichever  is  applicable)  as  if the Participant's  Retirement  had
occurred on the day immediately preceding his death.

4.3. DEATH OR TERMINATION PRIOR TO EARLY RETIREMENT DATE. If a
Participant (a) dies prior to termination of employment with the
Company and before reaching his Early Retirement Date or (b)
terminates employment with the Company  prior to his Early Retirement
Date and dies before receiving  benefits  hereunder, his Surviving
Spouse, Designated Beneficiary (if no Surviving Spouse exists), or
estate (if no Surviving Spouse or Designated Beneficiary  exists)
shall be entitled on the Participant's death to a lump-sum payment
equal to the Actuarial Equivalent Value of the Participant's Normal
Form Survivorship Benefits (as defined below in Section 6.1),
calculated as set forth in Section 3.2, at the time of death or
termination and assuming such survivorship benefits became
payable  at the Normal Retirement Date.


                                 ARTICLE V

                                DISABILITY

If a Participant incurs a disability (a "Disability") which
qualifies him for long-teen disability benefits under an applicable
group benefits program of the Company or an Affiliated Company, he
shall be entitled to monthly annuity payments, commencing on his
Normal Retirement Date,

                                -6-

<PAGE>

calculated as set forth in Section  3.2  and based upon his Total
Consoltex Credited Service and Final Average Earnings as of such
Normal Retirement Date. In calculating the amount of such payments,
Total  Consoltex Credited Service shall include the period of
Disability, and, unless the Participant returns to work for the
Company for at least two full calendar  years after recovery from
such Disability, Final Average Earnings shall be based upon the
Participant's final two complete calendar years of service
preceding the date of Disability.


                                ARTICLE VI

                     FORM AND COMMENCEMENT OF BENEFITS

6.1. FORM OF BENEFITS. The normal form of payment of benefits provided
by this Plan is a joint and survivor 60% life annuity or a single
life annuity with a guarantee of 10 years of payments if the
Participant has no Surviving Spouse. For purposes of Section 4.3 above,
benefits which are payable subsequent to death are referred to as
"Normal Form Survivorship Benefits". A Participant may elect to have
benefits payable under this  Plan  paid  in  any  optional  form of
single life annuity  or joint and survivor life annuity, with or without
minimum guarantee of payment, available under qualified pension plans.
If an optional form of benefits payments is elected, benefits payable
in accordance  with  such election shall be so calculated as to be of
Actuarial Equivalent Value with benefits payable under the normal form
of benefits payments provided herein. The election of an optional form
of benefits payments  must  be made by the Participant in writing with
respect to his benefits hereunder  and  submitted  to the Compensation
Committee in the manner prescribed by the Compensation Committee.

6.2. COMMENCEMENT AND TERMINATION OF BENEFITS. Subject to Section 3.6,
benefits payable to a Participant  pursuant to Section 3.2, 3.3 or 3.4
will  commence  on  the Participant's Normal  Retirement  Date,  Early
Retirement Date or Deferred  Retirement  Date, as applicable, and will
terminate with the payment made on the first day of the calendar month
in  which  the Participant dies. Subject to  Section  4.1(c)  and  4.3
above,  benefits  payable  to  a  Participant's  Surviving  Spouse  or
Designated  Beneficiary  pursuant  to  Article IV will commence on the
first  day  of  the  calendar month next following  the  Participant's
death. Benefit payments  to a Surviving Spouse will terminate with the
payment made on the first  day  of  the  calendar  month  in which the
Surviving  Spouse  dies. Lump stun benefits payable on a Participant's
death pursuant to Article IV will be paid as soon as practicable after
the Participant's death.

                                   -7-

<PAGE>


                                ARTICLE VII

                         AMENDMENT AND TERMINATION

7.1. AMENDMENT OR TERMINATION.  The Company intends this Plan to be
permanent but reserves the right to amend or terminate this Plan when,
in the sole opinion  of  the  Compensation Committee such amendment or
termination is advisable. Any such  amendment  or termination shall be
made pursuant to a resolution of the Compensation  Committee and shall
be effective as of the date of such resolution. No amendment or
termination of this Plan shall directly or indirectly deprive any
Participant, Surviving Spouse, Designated Beneficiary or Participant's
estate of all  or any portion of any benefits which have accrued prior
to the effective  date  of the resolution amending or terminating this
Plan.

7.2  TERMINATION BENEFIT. The termination of this Plan shall not
operate to deprive any actively employed  or  disabled  Participant
of  benefits accrued as of the termination date. Such accrued benefits
shall be calculated as set forth in Section  3.2, 3.3 or 3.4, as
applicable, based on the Participant's Total Consoltex  Credited Service
and Final Average Earnings as of the termination date.  For purposes of
determining a Participant's accrued benefits pursuant  to this Section
7.2, the amount determined under Section 3.2(b), relating  to benefits
from  other  defined  benefit or defined contribution plans, shall  be
based on the premise that  such other benefits shall become payable to
the  Participant  at  his  Normal   Retirement   Date.  Payment  of  a
Participant's accrued benefits under this Plan shall  not be dependent
upon  his  continuation of employment with the Company following  this
Plan's termination  date,  and  such  benefits  shall  become  payable
pursuant to the terms of Section 6.2 or Section 3.6 applied as if  the
Participant had terminated his employment with the Company on the Plan
termination date.

7.3  CRATE  SUCCESSORS.  This  Plan  shall  be automatically binding
on any successor to any of the corporations comprised  by  the term
"Company" by reason of the merger or consolidation of such corporation
into or with any other corporation or other entity.


                               ARTICLE VIII

                               MISCELLANEOUS

8.1  NO  EFFECT  ON EMPLOYMENT RIGHTS. Nothing contained herein will
confer upon any Participant  the  right  to be retained in the service
of the Company or limit the right of the Company  to  discharge or
otherwise deal with any Participant without regard to the existence
of this Plan.

                               -8-

<PAGE>

8.2. SPENDTHRIFT PROVISION. No  benefit payable under this Plan shall
be subject in any manner to anticipation,  alienation, sale, transfer,
assignment,  pledge,  encumbrance or charge prior  to  actual  receipt
thereof by the payee; and  any  attempt  so  to  anticipate, alienate,
sell,  transfer,  assign,  pledge, encumber or charge  prior  to  such
receipt shall be void; and the  Company  shall  not  be  liable in any
manner   for   or   subject  to  the  debts,  contracts,  liabilities,
engagements or torts  of  anyone  entitled  to  any benefit under this
Plan.

8.3  ADMINISTRATION. The Compensation Committee shall be responsible
for the general operation and administration of this Plan and for
carrying out  the  provisions  hereof.  The  Compensation  Committee
shall  be entitled   to   rely   conclusively   upon   all  tables,
valuations,certificates,   opinions  and  reports  furnished  by
any   actuary, accountant, controller, counsel or other person
employed or engaged by Consoltex (USA) Inc.  (or  any  of the other
corporations comprised by the term "Company") at the request of
the Compensation Committee with respect to this Plan.

8.4  DISCLOSURE. Each Participant shall receive a copy of this Plan
and the Compensation  Committee  will make available  for  inspection
by  any Participant or Surviving Spouse  a  copy  of the rules and
regulations used by the Compensation Committee in administering this
Plan.

8.5  STATE LAW: CONSTRUCTION. This Plan is established  under  and
will be construed according to the laws of the State of New York to
the extent that  such  laws  are  not preempted by the Employee
Retirement Income Security Act and valid regulations  published
thereunder.  This  Plan shall  be construed liberally from the
viewpoint, and for the benefit, of the Participant and his
Surviving Spouse, Designated Beneficiary or estate, as applicable.

8.6  GENDER AND  NUMBER.  Where  the context requires, the singular
as used herein includes the plural and  vice  versa and references
herein to a gender shall include the other gender.

8.7. MINIMAL BENEFITS. If the Actuarial Equivalent  Value  of  any
benefit payable  in  the  form  of  an annuity is less than $5,000,
any of the corporations comprised by the  term  "Company" may, in
its discretion, pay  such  value  to  the  Participant  or  his
Surviving  Spouse  or Designated Beneficiary in a single lump sum
 in  lieu  of  any  further benefit payments by the Company hereunder.

8.8. INCAPACITY OF RECIPIENT. In the event a Participant or his
Surviving Spouse or Designated  Beneficiary  is  declared
incompetent and a conservator or  other  person  legally  charged
with  the care of his person or of his estate is appointed, any
benefits under  this Plan to which such Participant, Surviving
Spouse or Designated Beneficiary is entitled shall be paid to
such conservator or other person legally charged with the care
 of his person or his estate.

8.9. UNCLAIMED  BENEFIT.  Each  Participant  shall  keep  the
Compensation Committee informed of his current  address  and
the current address of his  spouse.  The Compensation Committee
shall not be obligated to search for the whereabouts of any
person. If the location of a

                                 -9-

<PAGE>

Participant is  not  made  known  to the Compensation Committee
within three (3) years after the date on which any payment to the
Participant under this Plan may be made, the Compensation Committee
may attempt to make payment as though the Participant had died  at
the end of such three-year   period.  If,  within  one additional
year  after   such three-year period,  the Compensation Committee
is unable to locate any Surviving  Spouse, Designated Beneficiary,
or duly appointed representative of the estate, of the Participant
entitled to benefits with respect to the missing Participant's
employment, then the Company shall have no further obligation
to pay  any  benefit  hereunder to anyone with respect to
such employment, and such benefit shall be irrevocably forfeited.

8.10. LIMITATIONS ON LIABILITY. Notwithstanding any other provision
of this Plan, the Company shall not  be  liable  to  any  Participant,
former Participant,  Surviving  Spouse,  Designated  Beneficiary,
estate or anyone  else  for any loss or expense incurred in connection
with this Plan and neither  the Compensation Committee nor any
individual acting as an employee or agent  of  Consoltex (USA) Inc.
(or any of the other corporations comprised by the  term  "Company")
or as a member of the Compensation Committee shall be liable to
any Participant, former Participant, Surviving Spouse, Designated
Beneficiary, estate or anyone else for any claim, loss, liability
or expense incurred in connection with this Plan.

8.11. UNFUNDED  PLAN.  All  benefits  payable under this Plan
constitute an unfunded obligation of the Company.  Payments shall
be made, as due, from the general funds of the Company. The Company
may, in its sole and  absolute  discretion,  establish  one  or more
accounts, funds or trusts to reflect its obligations under the Plan
and may make such investments as it may deem desirable to assist it
in meeting such obligations. Any assets held in such accounts,
funds or trusts shall remain assets of the Company subject to the
claims  of  its creditors. No person eligible for a benefit under
this Plan shall have any right, title or interest in any such
assets.

                                -10-



<PAGE>
                                                EXHIBIT 10.14


                                   - 1 -


                              CONSOLTEX INC.
                      (FORMERLY CONSOLTEX GROUP INC.)
                         MANAGEMENT RESOURCES AND
                          COMPENSATION COMMITTEE

                          Secretary's Certificate


PLAN TEXT FOR SERP FOR RICHARD H. WILLETT


     Crawford referred to a Plan Text which had been distributed to the
Committee member prior to the meeting.  She said that in addition to the
change from 12.5% to 25%, the percentage for the determination of
pension benefits, there were also changes made to the text so that it
would conform with the text of the other SERP of which Paul J. Bamatter,
Jay Tavormina and Chris Schaller were participants. There was some dis-
cussion about the conforming changes. Respecting the interest rate
assumption used in the definition of "Actuarial Equivalent Value",
Rotman asked what type of assumption a respectable life insurance com-
pany would use in this case.  Crawford said that she would as Watson &
Wyatt this question and would get back to the Committee members.

     IT WAS RESOLVED THAT the Plan Text of the SERP for Richard H.
Willett as presented to the Committee be approved other than the pro-
posed amendments to Sections 1.1 and 3.6.



           ****************************************************



     The  undersigned,  C. Suzanne Crawford, Vice-President, Legal
Affairs and Corporate Secretary of Consoltex Inc., hereby certifies that
the foregoing  is  a  resolution  of  the Management Resources and
Compensation Committee of the Company passed on  January  18,  1999
and that the said resolution is in full force and effect on the date
hereof.


          Dated at Montreal, Quebec, this 7th day of February, 2000.


                                   /s/ C. Suzanne Crawford
                                   ____________________________________
                                   C. Suzanne Crawford
                                   Vice-President, Legal Affairs and
                                   Corporate Secretary






<PAGE>
                                             EXHIBIT 10.15


                                   - 1 -


                              CONSOLTEX INC.
                      (FORMERLY CONSOLTEX GROUP INC.)
                         MANAGEMENT RESOURCES AND
                          COMPENSATION COMMITTEE

                          Secretary's Certificate





AMENDMENT TO SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS (U.S. AND WILLETT)


     IT  WAS  RESOLVED  THAT Section 3.2(b) of the Plans be amended so
that the employer will deduct  only  the  amount which represents the
employer's contribution to the 401K Plan not the individual's contri-
bution for the purpose of calculating the "Normal Retirement Benefit."




          *******************************************************




     The undersigned, C. Suzanne Crawford, Vice-President, Legal Affairs
and  Corporate  Secretary of Consoltex Inc., hereby certifies that the
foregoing is a resolution of the Management Resources and Compensation
Committee of the Company passed on January 18, 1999 and that the said
resolution is in full force and effect on the date hereof.


          Dated at Montreal, Quebec, this 7th day of February, 2000.



                                   /s/ C. Suzanne Crawford
                                   ____________________________________
                                   C. Suzanne Crawford
                                   Vice-President, Legal Affairs and
                                   Corporate Secretary








<PAGE>

                                                          EXHIBIT 10.16


                           MANAGEMENT INCENTIVE PLAN
              =============================================





MARTINEAU PROVENCHER
CONSEIL ET VISION









                           CONSOLTEX GROUP INC.

                         MANAGEMENT INCENTIVE PLAN

                            SUMMARY DESCRIPTION











July 1996


1000, rue De La Gauchetiere Ouest, bureau 3300
Montreal (Quebec) Canada H3B 4W5
Tel: 514-861-0526
Fax: 514-862-2983

Membre de NORACS  Affilie a EURACS
Services d'actuariat-conseil

<PAGE>






                           CONSOLTEX GROUP INC.

                         MANAGEMENT INCENTIVE PLAN

                            SUMMARY DESCRIPTION



1. PURPOSE OF THE PLAN



The purpose of Consoltex Group Inc. (CGI) Management Incentive Plan is
to link our managers' cash compensation with the financial performance
of the Company, in other words, pay for results.



2. CONCEPT OF TIDE PLAN

The concept of CGI's Management Incentive Plan includes the following
key elements:

Plan Year runs from January 1 to December 31 of each year;

each eligible management position has a specific target bonus based
on its level of responsibilities;

bonus calculation is based on the annual financial performance of
an Operation, of a Company or of a Sector;

the weighting of Operation, Company or Sector results is calculated
as follows:

  75 % for the Operation, Company or Sector in which the Manager
  operates;
  25 % for the organizational level above;

annual financial performance is determined based on a combination of
Profits and Return on Net Assets achieved versus the objectives.



<PAGE>


3. TARGET BONUS


Each eligible management position has an annual target bonus expressed
as a percentage of the annualized Base Salary as at December 31 of the
Plan Year; the target in percent of salary varies according to the level
of responsibilities of the position. Your target bonus will be confirmed
to you in the attached letter.


The target bonus is the bonus paid when both of the financial performance
objectives are met as planned. If the financial performance achieved
exceeds the objectives substantially, the actual bonus paid may equal twice
the target and may be even greater at the discretion of CGI's Chairman when
exceptional results are achieved. Conversely, when financial performance
objectives are not fully met but exceed a threshold level, a reduced bonus
will be paid, whereas if the threshold level is not met, no bonus is
payable.



4. FINANCIAL PERFORMANCE OBJECTIVES


The bonus is based on the combined achievement of two financial performance
measures, namely Profits and Return on Net Assets (RONA) defined below:

Profits:  - for CGI consolidated: Profits refer to Earnings before
            Taxes (EBT) of the Group;

         -  for Operations, Company and Sectors: Profits mean Earnings
            before Interest, Taxes and Amortization (EBITA) of the
            Operation, of the Company or of the Sector.


RONA:     Return on Net Assets means EBITA of CGI, of the Operation, of
          the Company or of the Sector divided by the corresponding average
          quarterly net assets. Net assets for the Fashion and Performance
          Fabrics Sectors and for the Apparel Operations is as calculated
          on average monthly basis in the "Blue Book".



The two financial performance objectives are combined in a matrix (see
example of matrix herebelow) to determine the corresponding bonus payout
factor. Hence, depending on the actual achievement of the two financial
performance objectives, the bonus payout factor will vary as per the
matrix.



    MODEL FINANCIAL PERFORMANCE MATRIX - BONUS PAYOUT FACTORS

             EBITA
RONA    Level 1   2       3    4      5      6        7
 &      $ m      $ m    $ m   $ m    $ m    $ m    $m
Level
1:  %    0      0.167  0.333  0.500  0.667  0.833  1.000
2:  %   0.167   0.333  0.500  0.667  0.833  1.000  1.167
3:  %   0.333   0.500  0.667  0.833  1.000  1.167  1.333
4:  %   0.500   0.667  0.833  1.000  1.167  1.333  1.500
5:  %   0.667   0.833  1.000  1.167  1.333  1.500  1.667
6:  %   0.833   1.000  1.167  1.333  1.500  1.667  1.833
7:  %   1.000   1.167  1.333  1.500  1.667  1.833  2.000

     Both the Profit measure and the RONA measure have seven levels of
 achievement determined at the beginning of each Plan Year. Achieving the
middle level on each measure (level 4 in the matrix) means that the target
bonus will be paid in full, i.e. a bonus payout factor of 1.0. This middle
level of achievement is based on the corresponding previous year's
financial results plus a reasonable improvement, where appropriate.









<PAGE>


   The 1996 financial performance matrices relevant to your position are
attached herewith or will be provided to you by your immediate supervisor.

5. WEIGHTING OF THE BONUS PAYOUT FACTORS

 The Bonus Payout Factor for corporate (CGI) managers is weighted 100% on
 CGI's consolidated financial performance. The Bonus Payout Factor of all
 other managers is weighted 75 % on the Operation, Company or Sector's
 financial results in which the manager works and 25 % on the financial
 results achieved by the organization level immediately above, as shown in
 the table below.

                         Applicable Financial Performance
Location of     Corporate  Operation      Sector    Company
the Position    CGI        Apparel Ops    Fashion   Rafytek
                           Polyprop. Ops  Perform.


CGI             100%
Operation       25%         75%
Sector                      25%           75%
Company                     25%                      75%

 Example: the Bonus Payout Factor of a Manager in the Performance Fabrics
   Sector is weighted 75 % on the combined financial performance of that
   Sector and 25 % on the combined financial performance of the Apparel

                                Operations.



                             6. BONUS FORMULA


   The bonus formula under the Management Incentive Plan is as follows:

       Bonus   =      Base    X  Target Bonus as X     Bonus Payout
          payable        Salary     % of Salary           Factor









<PAGE>


7. EXAMPLE (using 1996 figures)

A Fashion Sector Manager has an annual base salary at December 31
of $60,000 and a target bonus of 10%.

The financial results achieved are as follows:
  - Fashion Sector profits : level 5 achievement (between $21.3
    and $22.2 million)

  - Fashion Sector RONA: level 4 achievement (between 29.4 % and
    31.3 %)

 - Apparel Operations profits: level 4 achievement (between $31.7
   and $33.6 million)


 - Apparel Operations RONA: level 3 achievement (between 19.6 %
   and 20.5%)



The Fashion Sector financial performance matrix (see item 4 above)
indicates a Bonus Payout Factor of 1.167 while the Apparel Operations
matrix indicates a Bonus Payout Factor of 0.833. The Sector Bonus Payout
Factor is weighted 75 % and the Operations Bonus Payout Factor is weighted
25 % . The weighted Bonus Payout Factor is thus 1.0835, calculated as
follows: (1.167 X 75%) + (0.833 X 25%) = 1.0835.



The bonus payable as per the formula in 6 above is:

Base    X  Target bonus as X   Bonus Payout  =    Bonus Payout
Salary     % of salary         Factor (weighted)  payable

$60,000 X     10%         X    1.0835        =    $6,501



8. PAYMENT OF BONUS

The actual payment of bonus, if any, will take place immediately after
relevant year-end audited financial results have been tabulated.
In the event of death, disability or retirement of a Manager during a Plan
Year, the manager or his estate may be eligible for payment of a bonus
based on a prorata of the actual number of completed months of service
prior to the event.

In case of voluntary termination of employment, no bonus or fraction
thereof (unless fully earned but with payment pending) will be paid to
the Manager who terminated employment.

For Managers hired during a Plan Year, they ate eligible to participate in
the CGI Management Incentive Plan based on the target bonus applicable to
their position, but calculated on a prorata of their number of completed
months of service over 12 during the Plan Year.

For Managers who are promoted during a Plan Year to a position with a
higher target bonus, their bonus for purposes of the Management Incentive
Plan is based on the target bonus applicable prior to the promotion times
the number of months of service in the previous position plus the target
bonus after the promotion times the number of months of service in the new
position.

9. REVISION OF FINANCIAL PERFORMANCE OBJECTIVES

Under lire new CGI Management Incentive Plan, the 1996 RONA objective for
the Operations, Company , Sectors and CGI consolidated are planned to
remain unchanged throughout Plan Years 1996, 1997 and 1998. The
corresponding Profit objective will change to reflect variations in
average net assets used during the year, with levels 1 to 3 being a
$500,000 increment for each of the Sector and levels 4 to 7 being
a $1,000,000 increment for each of the Sectors. Beyond 1998,
the setting


<PAGE>


of the RONA objective will be based on the average of the three
previous years' actual RONA.


10. FUTURE OF THE MANAGEMENT INCENTIVE PLAN

Although the new 1996 CGI Management Incentive Plan rests exclusively on
the achievement of financial performance objectives, it is intended to be
modified in the next couple of years to include the achievement of a
limited number of individual/strategic objectives.





<PAGE>


                  MATRICES FOR EXECU'T'IVES AND MANAGERS
                        AT THE FASHION SECTOR LEVEL


                             - 25% OF BONUS -
          1996 FINANCIAL PERFORMANCE MATRIX - APPAREL OPERATIONS


                           EBITA ($ MILLIONS)

RONA (%)  28.7-29.6 29.7-30.6 30.7-31.6 31.7-33.6 33.7-35.6 35.7-37.6 >37.7
 17.6-      0      0.167     0.333     0.500     0.667     0.833    1.000
 18.5
 18.6-    0.167    0.333     0.500     0.667     0.833     1.000    1.167
 19.5
 19.6-    0.333    0.500     0.667     0.833     1.000     1.167    1.333
 20.5
 20.6-    0.500    0.667     0.833     1.000     1.167     1.333    1.500
 21.5
 21.6-    0.667    0.833     1.000     1.167     1.333     1.500    1.667
 23.5
 23.6-    0.833    1.000     1.167     1.333     1.500     1.667    1.833
 25.5
 25.6   1.000    1.167     1.333     1.500     1.667     1.833    2.000


                             - 75*% OF BONUS -
            1996 FINANCIAL PERFORMANCE MATRIX - FASHION SECTOR
                        EBITA ($ MILLIONS)

RONA (%)   18.8-   19.3-   19.8-   20.3-   21.3-   22.3-   > 23.3
           19.2    19.7    20.3    21.2    22.2    23.2
 26.4-       0     0.167   0.333   0.500   0.667   0.833    1.000
 27.3
 27.4-     0.167   0.333   0.500   0.667   0.833   1.000    1.167
 28.3
 28.4-     0.333   0.500   0.667   0.833   1.000   1.167    1.333
 29.3
 29.4.-    0.500   0.667   0.833   1.000   1.167   1.333    1.500
 31.3
 31.4-     0.667   0.833   1.000   1.167   1.333   1.500    1.667
 33.3
 33.4-     0.833   1.000   1.167   1.333   1.500   1.667    1.833
 35.3
 > 35.4    1.000   1.167   1.333   1.500   1.667   1.833    2.000





                  MATRICES FOR EXECU'T'IVES AND MANAGERS
                        AT THE FASHION SECTOR LEVEL


                             - 25% OF BONUS -
          1996 FINANCIAL PERFORMANCE MATRIX - APPAREL OPERATIONS


                             EBITA ($ MILLIONS)

RONA (%)  28.7-29.6 29.7-30.6 30.7-31.6 31.7-33.6 33.7-35.6 35.7-37.6 >37.7

 17.6-      0      0.167     0.333     0.500     0.667     0.833    1.000
 18.5
 18.6-   0.167    0.333     0.500     0.667     0.833     1.000    1.167
 19.5
 19.6-   0.333    0.500     0.667     0.833     1.000     1.167    1.333
 20.5
 20.6-   0.500    0.667     0.833     1.000     1.167     1.333    1.500
 21.5
 21.6-   0.667    0.833     1.000     1.167     1.333     1.500    1.667
 23.5
 23.6-   0.833    1.000     1.167     1.333     1.500     1.667    1.833
 25.5
 > 25.6  1.000    1.167     1.333     1.500     1.667     1.833    2.000




                             - 75*% OF BONUS -
                     1996 FINANCIAL PERFORMANCE MATRIX
                        PERFORMANCE FABRICS SECTOR

                EBITA
            ($ MILLIONS)

RONA (%)  9.8-10.2 10.3-10.7 10.8-11.3 11.4-12.3 12.4-13.3 13.4-14.3 > 14.4

 11.4-        0      0.167     0.333     0.500     0.667     0.833    1.000
 12.3
 12.4-      0.167    0.333     0.500     0.667     0.833     1.000    1.167
 13.3
 13.4-      0.333    0.500     0.667     0.833     1.000     1.167    1.333
 14.3
 14.4-      0.500    0.667     0.833     1.000     1.167     1.333    1.500
 16.3
 16.4-      0.667    0.833     1.000     1.167     1.333     1.500    1.667
 18.3
 18.4-      0.833    1.000     1.167     1.333     1.500     1.667    1.833
 20.3
 > 20.4     1.000    1.167     1.333     1.500     1.667     1.833    2.000










<PAGE>


                   MATRICES FOR EXECUTIVES AND MANAGERS
                 AT THE APPAREL OPERATIONS DIVISION LEVEL


                             - 25*% OF BONUS -
                     1996 FINANCIAL PERFORMANCE MATRIX
                             CGI CONSOLIDATED


                EBT
           ($ MILLIONS)
RONA (%)  5.4-6.5 6.6-7.7 7.8-8.9 9.0-10.7 10.8-12.5 12.6-14.4 > 14.4


 13.2-       0     0.167   0.333    0.500    0.667     0.833    1.000
 14.1
 14.2-     0.167   0.333   0.500    0.667    0.833     1.000    1.167
 15.2
 15.3-     0.333   0.500   0.667    0.833    1.000     1.167    1.333
 16.3
 16.4-     0.500   0.667   0.833    1.000    1.167     1.333    1.500
 18.5
 18.6-     0.667   0.833   1.000    1.167    1.333     1.500    1.667
 20.7
 20.8-     0.833   1.000   1.167    1.333    1.500     1.667    1.833
 23.0
 > 23.0    1.000   1.167   1.333    1.500    1.667     1.833    2.000









                            - 75*% OF BONUS -

          1996 FINANCIAL PERFORMANCE MATRIX - APPAREL OPERATIONS
                EBITA
            ($ MILLIONS)

RONA (%)  28.7-29.6 29.7-30.6 30.7-31.6 31.7-33.6 33.7-35.6 35.7-37.6   >
                                                                     37.7
 17.6-        0       0.167     0.333     0.500     0.667     0.833   1.000
 18.5
 18.6-      0.167     0.333     0.500     0.667     0.833     1.000   1.167
 19.5
 19.6-      0.333     0.500     0.667     0.833     1.000     1.167   1.333
 20.5
 20.6-      0.500     0.667     0.833     1.000     1.167     1.333   1.500
 21.5
 21.6-      0.667     0.833     1.000     1.167     1.333     1.500   1.667
 23.5
 23.6-      0.833     1.000     1.167     1.333     1.500     1.667   1.833
 25.5
 > 25.6     1.000     1.167     1.333     1.500     1.667     1.833   2.000






<PAGE>


                  MATRICES FOR EXECUTIVES AND MANAGERS
                        AT THE CGI CORPORATE LEVEL


                     1996 FINANCIAL PERFORMANCE MATRIX
                            CGI CONSOLIDATED



                EBITA
            ($ MILLIONS)

RONA (%)  5.4-6.5 6.6-7.7 7.8-8.9 9.0-10.7 10.8-12.5 12.6-14.4 > 14.4
 13.2-       0     0.167   0.333    0.500    0.667     0.833    1.000
 14.1
 14.2-     0.167   0.333   0.500    0.667    0.833     1.000    1.167
 15.2
 15.3-     0.333   0.500   0.667    0.833    1.000     1.167    1.333
 16.3
 16.4-     0.500   0.667   0.833    1.000    1.167     1.333    1.500
 18.5
 18.6-     0.667   0.833   1.000    1.167    1.333     1.500    1.667
 20.7
 20.8-     0.833   1.000   1.167    1.333    1.500     1.667    1.833
 23.0
 > 23.0    1.000   1.167   1.333    1.500    1.667     1.833    2.000


<PAGE>

                                                  EXHIBIT 10.17


               Consoltex (USA) Inc.
                  Memorandum


          STRICTLY PRIVATE & CONFIDENTIAL

Date:    March 8, 2000

To:      HUMAN RESOURCE AND COMPENSATION COMMITTEE
         Kim M arvin
         Ted Rogers
         Richard Willett

From:    Paul J. Bamatter

# of Pages: 6

Re:     YEAR 2000 MANAGEMENT INCENTIVE PLAN (-MIP") MATRIX
        FOR ASSOCIATES IN THE POLYPROPYLENE OPERATIONS
================================================================
As  discussed with Kim Marvin, this incentive plan has some
changes  from  the prior year's plan, which we believe will
act as a better  incentive  to  increase the performance of
the associates, as well as the cooperation  among  them. We
have  reviewed  this MIP plan with our senior polypropylene
associates at a meeting held on March 3rd.

This MIP is similar  to the Textile Operations MIP, however,
there is only one grid,  the  Polypropylene Operations grid.
Previously, the same concept which  existed  in  the Textile
Operations  also  applied  to  the Polypropylene Operations.
There was a Rafytek grid and a LINQ  grid  and associates in
each one of those girds received a bonus based  75%  on that
grid and 25% on the Polypropylene Operations grid. With  our
recent  two  acquisitions, Atlas and Marino, and considering
the significant  volume  of  intercompany transactions among
the various divisions within the  Polypropylene  Operations,
we felt strongly that one grid was required so that  all  of
our  associates would take those actions for the common good
of the Polypropylene Operations. Thus, the associates listed
in Appendix  I will receive 100% of their bonus based on the
results of the  Polypropylene  Operations. As in the Textile
Operations, we will eliminate the  crossover  of  associates
having 25% of their bonus based on the Consoltex Group  Inc.
consolidated results.

Another  small  difference  between  the  Polypropylene  and
Textile  MIP is that certain of the Polypropylene associates
will have predefined personal goals and objectives to reach.
This relates  to the six associates listed in Appendix I. We
want to motivate  and incentives them on achieving important
criteria,  regardless   of   the   overall  results  of  the
Polypropylene Operations.

Establishing the year 2000 matrix was  based  on  a  similar
formula  as  in the Textile Operations. If the Polypropylene
Operation achieves  their  targeted average assets, targeted
EBITDA and targeted RONA they  will receive a bonus equal to
1.66  times  their target bonus. (See  Appendix  II.)  Their
budgeted EBITDA amount was reduced by $1.5 million to arrive
at targeted EBITDA.  This  was  done  to  take  into account
stretch   synergies,  negative  effect  on  EBITDA  of  more
aggressive   clearing  off-quality  fabrics,  severance  and
restructuring  costs,  and  rapidly  rising resin costs. The
Polypropylene Operation's budgeted EBITDA amount is based on
the stretch target which includes approximately  $880,000 in
synergies  that  we  established  were  possible, albeit,  a
stretch. For your information, the Polypropylene  Operations
actual RONA for 1999 was 8.9% and the budgeted RONA for year
2000 is 15.5% (Appendix III).

<PAGE>
Another important factor in determining the Polypropylene
bonus matrix is the high average resin purchase cost. The
Polypropylene Operations budgeted a year 2000 average resin
purchase cost of 27/lb. We currently expect the
average resin cost to be approximately 29/lb. to
30/lb. The Polypropylene Operation is responsible for
managing the increase in the average resin cost from
20/lb. in 1999 to a much higher cost in 2000.

The payouts under various scenarios are shown below.

Scenario 1 EBITA is 20% higher than targeted ($17,934) -
$1,102K
Scenario 2 EBITA is 10% higher than targeted ($16,440) - $881K
Scenario 3 EBITA is on target ($14,945) - $735K
Scenario 4 EBITA is 10% lower than targeted ($13,450) - $514K
Scenario 5 EBITA is 20% lower than targeted ($11,956) - $294K

If management sells the idle Merida plant and reduces
obsolete inventory and improves working capital usage, they
will decrease their average net assets used and increase
their RONA for the year 2000, thus helping them achieve a
higher bonus.

The Polypropylene Operations will possibly be writing down
and/or selling idle assets this year including a number of
direct extrusion lines, winders, Merida, LINQ's old tenter,
etc. As we do not want to penalize management in the
Polypropylene Operations for selling these or other idle
assets and turning these assets into cash, we will exclude
any loss on sale of fixed assets from EBITA. Likewise, the
reduction in average net assets resulting from the sale or
the write down of idle fixed assets will need to be
reflected in an amended matrix should the write-down be
significant.

The Polypropylene Operation matrix has never previously been
calculated using the goodwill amount on the acquisition of
LINQ. The question now arises as to whether the goodwill on
acquisition of Atlas or Marino should be included in the
average net asset base. I believe it should be excluded so
that in our external presentations to banks, noteholders,
etc., the average net asset base is lower and thus RONA is
higher and, more importantly, management has no operational
influence on the book value of goodwill and hence including
an asset which they cannot control will be a disincentive.

For your information, there also exists a second incentive
plan for associates in the Polypropylene Operations. This
second plan is for less senior associates and comprises
approximately 35 associates at LINQ and 15 at Rafytek with
an annual payout of approximately $125,000. This memorandum
does not cover this second bonus plan which is administrated
directly by Jay Tavormina and Jesus Lopez.

Should you have any questions on this plan, please do not
hesitate to phone me.

Best regards.

/s/Paul Bamatter
================


<PAGE>
                              Appendix I

Polypropylene Operations participants is MIP
==================================================================
Title                              Name      Year 2000    Target
                                             Base Salary  Bonus
                                             (US$000's)
==================================================================
President                        J. Tavormina    $260      40%
Chief Financial Officer          S. Womack        120      20%
LINQ Plant Manager               C. Moye*         100      20%
FIBC Fabric Sales Manager        M. Carr*         100      20%
VP Sales Geotextiles             S. Kiniry*       117      20%
Director C.I.S.                  D. Bowers*        95      10%
Director Human Resources         P. Camp*          70      10%
President Rafytek                J. Lopez         148      25%
VP Manufacturing Rafytek         Fernando *        70      15%
VP Finance Rafytek               M. Hernandez      78      15%
SVP Sales Packaging
   Fabrics/Bags                 C. Roy            165      25%
VP Sales FIBC Bags              S. Brekken        140      20%
VP Product Marketing &
  Development                   L. Marino         185      35%
VP FIBC B Manufacturing Plants  C. Echeverria     140      35%
===============================================================
Total salary/weighted average bonus            $1,7022     5.9%

* 5O% of their bonus is based on achieving approximately three
personal goals and objectives

BONUS FOR:
20%>target (EBITA=$17,934K)/RONA 16.86%)=$1,702K X 0.259%
X 2.500 = $1,102K

10%>target (EBITA=$16,440K)/BONA 15.46%)=$1,702K X 0.259%
X 2.000=$881K

On target (EBITA=$14,945K)/RONA 14.05%)=$1,702K X 0.259%
X 1.667=$735K


<PAGE>

POLYPROPYLENE OPERATIONS YEAR 2000 MIP MATRIX


RONA %        10.5-  11.20- 12.26- 13.33- 14.39- 15.45- 16.56- 17.56+
             11.19   12.25  13.32  14.38  15.44  16.55  17.55
====================================================================
  9.0-9.99  0.167   0.333   0.500  0.667  0.833  1.000  1.167  1.333
10.0-10.99  0.333   0.500   0.667  0.833  1.000  1.167  1.333  1.500
11.0-11.99  0.500   0.667   0.833  1.000  1.167  1.333  1.500  1.667
12.0-12.99  0.667   0.833   1.000  1.167  1.333  1.500  1.667  1.833
13.0-13.99  0.833   1.000   1.167  1.333  1.500  1.667  1.833  2.000
14.0-14.99  1.000   1.167   1.333  1.500  1.667  1.833  2.000  2.167
15.0-15.99  1.167   1.333   1.500  1.667  1.833  2.000  2.167  2.333
16.0-16.99  1.333   1.500   1.667  1.833  2.000  2.167  2.333  2.500
17.0+       1.500   1.667   1.833  2.000  2.167  2.333  2.500  2.667

A- Budgeted EBITA $16,445K (EBITDA $24,495K)
B- Targeted EBITA $14,945 (EBITDA $23,995) (Note: set at $1.5 million less)
C- Budgeted average net assets $106,360K
D- Targeted RONA 14.05% (B/C)

<PAGE>



CONSOLTEX GROUP INC.
IN THOUSAND OF CANADIAN DOLLARS
QUARTERS TRAILING
1-RONA (RETURN ON NET ASSETS EBITA/NET ASSETS)

                     1999.                       2000 Budget
=========================================================================
                     Q1    Q2     Q3    Q4     Q1       Q2    Q3    Q4
CGI Consolidated   16.26% 13.68% 13.17% 12.63% 12.71% 13.53% 15.08% 17.64%
Textile Ops.       24.65% 21.74% 20.66% 18.99% 17.95% 18.46% 19.71% 22.41%
Polypropylene Ops. 11.02%  8.91%  8.58%  8.90%  9.81% 10.83% 12.94% 15.46%
Rafytek            14.01% 10.00%  9.58%  8.83%  9.07%  9.92% 10.66% 10.83%
LINQ                8.13%  7.78%  7.01%  5.09%  4.00%  2.54%  3.77%  6.41%
Marino                           48.84% 62.75% 61.80% 64.41% 70.43% 74.96%
Atlas                                   25.49% 37.44% 40.48% 48.14% 62.71%
Rafytica           46.98% 18.04% 14.62%  9.96%  9.86% 11.04% 11.14% 11.21%


                           1998
========================================================
                      Q1        Q2       Q3      Q4
CGI Consolidated    17.34%   17.82%   17.00%   16.82%
Textile Ops.        22.54%   23.63%   23.77%   24.86%
Polypropylene Ops.  15.69%   15.05%   13.10%   11.41%
Rafytek             20.50%   20.15%   17.56%   16.08%
LINQ                13.28%   11.55%    9.08%    7.78%
Marino
Atlas
Raytica             17.57%   41.71%   42.59%   45.89%

2) NET ASSETS (TOTAL CURRENT ASSETS (EXCL.INTERCOMPANY AND CASH)
PLUS NET FIXED ASSETS LESS A/P, ACCRUED LIAB. & I/T PAY.)



                              1999                2000 Budget
========================================================================
                         Last 4 Qtrs         Last 4 Mrs
=========================================================================
              Q1     Q2      Q3      Q4      Q1      Q2      Q3     Q4
==========================================================================
CGI Consol.285,613 286,982 291,316 298,986 301,831 304,632 301,196 296,980
Tex. Ops.  147,234 147,559 149,558 154,660 156,091 156,981 153,859 150,291
Polypro.   145,669 146,730 150,703 153,464 155,327 157,498 156,037 155,286
Rafytek     49,540  51,396  53,522  54,435  54,541  54,377  54,283  54,408
LINQ        95,598  95,088  93,050  90,650  87,924  85,987  84,288  83,356
Marino                      12,211  22,414   8,295  10,673  10,234  10,117
Atlas                                7,045   3,435   5,200   7,081   7,140
Rafytica     2,797   2,822   2,716   2,651   2,769   2,899   2,998   3,113


                              1998
======================================================
                          LAST 4 QTRS
======================================================
                        Q1     Q2        Q3       Q4

CGI Consolidated    259,858  266,207  275,263  280,740
Textile Ops.        139,814  141,722  145,592  146,579
Polypropylene Ops.  127,616  132,048  137,151  141,457
Rafytek              39,881   42,156   44,140   46,408
LINQ                 84,929   87,688   91,216   93,839
Marino
Atlas
Rafytica              3,216    3,014    3,045    2,940


3- EBITA (EARNINAS BEFORE INTEREST. TAXES AMORTIZATION MANAGEMENT
FEES FOREIGN EXCHANGE & OTHER INCOME)





                                            1999 2000
==================================================================
                       Last 4 Qtrs          Last 4 Qtrs
==================================================================
               Q1    Q2    Q3     Q4     Q1     Q2     Q3     Q4

CGI Consol. 46.433 39,261 38,377 37,750 38,349 41,216 45,406 52,384
Tex. Ops.   36,286 32,085 30,900 29,365 28,015 28,971 30,330 33,683
Poly.       16,056 13,074 12,927 13,652 15,244 17,062 20,187 24,010
Rafytek      6,941  5,142  5,128  4,806  4,947  5,395  5,784  5,894
LINQ         7,776  7,398  6,525  4,615  3,519  2,185  3,176  5,340
Marino                     5,964 14,064  5,126  6,874  7,208  7,584
Atlas                             1,796  1,286  2,105  3,409  4,477
Rafytica     1,314   509     397    264    273    320    334    349


                             1998
=================================================
                         LAST 4 QTRS
=================================================
                    Q1       Q2      Q3      Q4
=================================================

CGI Consolidated   45,052  47,426  46,783  47,216
Textile Ops.       31,521  33,493  34,603  36,437
Polypropylen Ops.  20,021  19,878  17,967  16,138
Rafytek             8,177   8,495   7,751   7,464
LINQ               11,281  10,128   8,282   7,302
Marino
Atlas
Rafytica              565   1,257   1,297    1,349

<PAGE>

CONSOLTEX GROUP INC.
IN THOUSANDS OF CANADIAN DOLLARS
RONA (RETURN ON NET ASSETS EBITA/NET ASSETS)




                             1999                     2000 Budget
=================================================================
               Q1    Q2     Q3      Q4    Q1     Q2     Q3     Q4

CGI Consol. 13.47% 13.61% 12.44% 11.12% 13.76% 16.91% 18.70% 21.25%
Tex. Ops.   21.68% 20.87% 17.22% 16.58% 17.33% 22.90% 22.28% 27.33%
Poly.        9.05%  9.71%  8.94%  7.93% 12.68% 13.84% 17.26% 18.12%
Rafytek     11.21%  3.63%  7.51% 12.99% 12.15%  7.01% 10.42% 13.68%
LINQ         7.33% 12.92%  4.65% -5.55%  3.06%  7.82%  9.75%  4.93%
Marino                    48.84% 79.39% 59.82% 73.50% 69.82% 98.66%
Atlas                            25.49% 50.01% 46.41% 69.31% 83.35%
Rafytica    16.90% 11.38%  8.50%  3.80% 15.42% 15.50%  9.20%  5.13%


                               1998
===================================================
                       Q1     Q2     Q3      Q4
===================================================
CGI Consolidated     15.62%  23.96%  14.39%  13.23%
Textile Ops.         22.49%  32.51%  21.18%  23.35%
Polypropylene Ops.   10.45%  18.37%  10.31%  18.75%
Rafytek              19.51%  19.55%   9.01%  16.50%
LINQ                  5.76%  14.24%   7.80%   3.15%
Marino
Atlas
Rafytica             18.32% 140.42%  21.36%  21.22%


2- NET ASSETS (TOTAL CURRENT ASSETS (EXCL. INTERCOMPANY AND CASH)
PLUS NET FIXED ASSETS LESS AIP, ACCRUED LIAB. & I/T PAY.)



                              1999               2000 Budget
=========================================================================
             Q1     Q2      Q3       Q4      Q1      Q2      Q3      Q4
=========================================================================

CGI Conso.286,769 289,870 308,512 310,794 298,147 301,074 294,770 293,927
Tex. Ops. 147,075 148,033 162,441 161,091 152,799 151,592 149,955 146,816
Poly.     149,273 146,738 162,441 155,402 156,727 155,423 156,594 152,401
Rafylek    54,632  54,327  54,849  53,930  55,058  53,670  54,473  54,429
LINQ       95,004  92,655  90,609  84,332  84,100  84,905  83,814  80,605
Marino                     12,211  10,203  10,765  9,513   10,455   9,734
Atlas                           -   7,045   6,694  7,059    7,526   7,280
Rafytica    2,485   2,602   2,778   2,738   2,957  3,123    3,173   3,200

                           1998
==============================================
              Q1       Q2       Q3      Q4
==============================================

CGI Consol. 267,277  284,397  291,174  280,113
Tex. Ops.   144,456  146,732  154,448  140,681
Poly.       132,424  142,497  146,546  144,361
Rafytek      42,104   46,903   46,344   50,279
LINQ         87,968   94,695   98,761   93,932
Marino
Atlas
Rafytica      3,056    2,504    3,202    2,997


3- EBITA (EARNINGS BEFORE INTEREST. TAXES, AMORTIZATION,
MANAGEMENT FEES, FOREIGN EXCHANGE & OTHER INCOME)



                         1999                2000 Budget
===============================================================
              Q1    Q2    Q3    Q4    Q1     Q2     Q3     Q4
===============================================================

CGI Consol. 9,657 9,863 9,592 8,638 10,256 12,730 13,782 15,616
Tex. Ops.   7,970 7,723 6,993 6,679 6,620   8,679  8,352 10,032
Poly.       3,377 3,561 3,632 3,082 4,969   5,379  6,757  6,905
Rafytek     1,531   493 1,030 1,752 1,672     941  1,419  1,662
LINQ        1,740 2,993 1,053(1,171)  644   1,659  2,044    993
Marino                  1,491 2,025 1,610   1,748  1,825  2,401
Atlas                      -    449   837     819  1,304  1,517
Rafytica      105   74     59    26   114     121     73     41


                          1998
==========================================
              Q1      Q2      Q3      Q4
==========================================

CGI Consol.  10,440  17,035  10,476  9,265
Tex. Ops.     8,121  11,924   8,178  8,214
Poly.         3,459   6,543   3,779  2,357
Rafytek       2,054   2,292   1,044  2,074
LINQ          1,266   3,371   1,926   739
Marino
Atlas
Rafytica        140     879     171   159



<PAGE>

                                                     EXHIBIT 10.18


                         CONSOLTEX (USA) INC.
                             MEMORANDUM


                   STRICTLY PRIVATE 8S CONFIDENTIAL

DATE:   March 15, 2000
To:     HUMAN RESOURCE & COMPENSATION COMMITTEE
        Kim Marvin
        Ted Rogers
        Richard Willett

FROM:   Paul J. Bamatter

# OF PAGES: 6

Re:    MANAGEMENT INCENTIVE PLAN ("MIP") FOR SENIOR MANAGEMENT
       OF CONSOLTEX INC. - CORPORATE GROUP AND CONSOLTEX (USA)
       INC.

==============================================================

 The MIP for senior management of Consoltex Group Inc.
 (renamed Consoltex Inc. - Corporate Group) and Consoltex
 (USA) Inc. has historically been the combination of the
 Textile and Polypropylene Operations' management incentive
 plans. We propose the same approach for year 2000.

 We propose to take the midpoint RONA and midpoint EBITA of
 the Textile and Polypropylene Operations and deduct budgeted
 foreign exchange, factoring interest and interest expense to
 arrive at a pre-tax, amortization and AIP fees amount. Thus,
 Group employees' bonus is based on the consolidated earnings
 before tax, amortization and AIP fees and Consoltex's
 consolidated RONA. The bonus will be 1.667 times target
 bonus on achieving the consolidated target RONA and target
 earnings before tax, amortization and AIP fees.

 The bonus matrix is attached as Appendix I and is similar
 to the matrices for each of the Textile and Polypropylene
 Operations, except that the top line is consolidated
 earnings before tax, amortization and AIP fees rather than
 EBITA.

 The target earnings before tax, amortization and AIP fees
 on which management will receive the 1.0 X bonus payout,
 translates into an EBITA amount of $45,579K or EBITDA of
 $67,269K. This reconciliation can be seen in Appendix II.

 The payout under the following five scenarios is
 as follows.

 Scenario 1  Earnings before tax, amortization and AIP fees 20%
             above target - $681K
 Scenario 2  Earnings before tax, amortization and AIP fees 10% above
             target - $596K
 Scenario 3  On target - $426K
 Scenario 4  Earnings before tax, amortization and AIP fees 10% below
             target - $371K
 Scenario 5  Earnings before tax, amortization and AIP fees 20% below
             target - $185K

 I look forward to receiving your comments on this MIP and
 discussing it with you.

 Best regards.

<PAGE>

                                                       (C$000's)
Textile Operations midpoint EBITA to achieve a 1.0 X
payout of bonus (based on a midpoint RONA of 21.45%)    $33,500
(See Appendix 111)

Polypropylene Operations midpoint EBITA to achieve a
1.0 X payout of bonus (based on a midpoint RONA of
13.5%) - US$11,725K (See Appendix IV)                    17,118
                                                         ======
Consolidated midpoint EBITA to achieve a 1.0 X payout
of bonus                                                 50,618

Less Consolidated:
  Interest expense                                      (31,682)
  Factor interest expense                                (2,568)

Less Holding Companies:
  Budgeted corporate selling and administration not
  deducted from either Textile or Polypropylene
  Operations' EBITA                                      (5,309)
                                                         ======
  Target earnings before tax, amortization and AIP fees $11,059
                                                         ======
                                                         ======


Midpoint matrix RONA is 21.45% for Textile and 13.5% for Polypropylene
Operations. Their budgeted RONA is 22.4% and 15.5% respectively. Thus,
on average the two Operations' midpoint RONA is 1.50% below their
budgeted RONA. As Consoltex Group's RONA is budgeted at 17.64%, the
midpoint Group RONA for the matrix should be set at 16.14%.

Consolidated target EBITA and EBITDA:                   (C$000'S)
Target earnings before tax, amortization and AIP fees   $11,059
Plus Consolidated factor interest expense                 2,568
Plus consolidated interest expense                       31,682
Plus foreign exchange loss                                  270
Target EBITA                                             45,579
Plus Consolidated depreciation                           21,690
                                                        =======
Target EBITDA for 1.0 X payout of bonus                 $67,269
                                                        =======
                                                        =======
<PAGE>

                                                    Appendix I

YEAR 2000 MATRIX FOR SENIOR MANAGEMENT IN GROUP COMPANIES


      Earnings before Tax, Amortization and AIP fees ("EBITDA")
     ============================================================



RONA %        7.75-   8.57-   9.57-  10.56-  11.57-  12.57-  13.57+
              8.56    9.56   10.56   11.56   12.56   13.56
====================================================================

12.65-13.64       0   0.167   0.333   0.500   0.667   0.833   1.000
13.65-14.64   0.167   0.333   0.500   0.667   0.833   1.000   1.167
14.65-15.64   0.333   0.500   0.667   0.833   1.000   1.167   1.333
15.65-16.64   0.500   0.667   0.833   1.000   1.167   1.333   1.500
16.65-17.64   0.667   0.833   1.000   1.167   1.333   1.500   1.667
17.65-18.64   0.833   1.000   1.167   1.333   1.500   1.667   1.833
18.65 +       1.000   1.167   1.333   1.500   1.667   1.833   2.000

Midpoint RONA = 16.14%
Midpoint EBTAA = 11.06 million



<PAGE>
                                                      APPENDIX II

            LISTING OF ASSOCIATES IN THE CONSOLTEX HEAD OFFICE
                     MANAGEMENT INCENTIVE PLAN

                                    (C$000)
                               (US$ to C$ @1.46)


Name          Title           Base Salary   Bonus Rate   TARGET BONUS
=================================================================

R. Willett    President, CEO  US$420          40%        $245
              and COO          C$613

P. Bamatter   CFO             US$285          40%         166
                               C$416

A. Di Palma    VP Taxation     C$152          25%          38

S. Crawford    VP Legal        C$148          25%          37

A. Lapolla     VP Treasurer    C$125          20%          25

Total/weighted               C$1.454       35.14%        $511
average                       =======        ======      ====

Payout based on earnings before tax, amortization and AIP
fees (EBTAA)


1: EBTAA 20% > TARGET $13,271 /RONA OF 16.1% ($47,791
/$296,980)=1.333 X 35.14% X $1,454 = $681 K

2: EBTAA 10% > TARGET $12,165/RONA OF 15.7%
($46,685/$296,980)=1.167 X 35.14% X $1,454=$596K

3: EBTAA ON target ($11,059/BONA OF 15.4%
($45,579/$296,980)=0.833 X 35.14% X $1,454=$426K


<PAGE>
                PROPOSED MATRICES FOR EXECUTIVES AND MANAGERS


                         2000 Financial Performance
                                 Matrix
                           TEXTILE OPERATIONS

                          EBITA (CDN$ MILLIONS)
RONA(%)        28.1- 29.7-   31.3-  32.8-  34.4-   36.0- 37.5+
               29.6  31.1    32.7   34.2   35.8    37.4
============================================================

18.0%-18.9*%      0  0.167   0.333  0.500  0.667  0.833 1.000
19.0%-19.9%   0.167  0.333   0.500  0.667  0.833  1.000 1.167
20.0%-20.9%   0.333  0.500   0.667  0.833  1.000  1.167 1.333
21.0%-21.9%   0.500  0.667   0.833  1.000  1.167  1.333 1.500
22.0-22.9%    0.667  0.833   1.000  1.167  1.333  1.500 1.667
23.0%-23.9%   0.833  1.000   1.167  1.333  1.500  1.667 1.833
24.0% +       1.000  1.167   1.333  1.500  1.667  1.833 2.000

Average Net Assets CDN$ $156,376
Op. Income: $36,789 M
RONA 23.5%


                     2000 Financial Performance Matrix
                             CONSOLTEX INC.

                         EBITA (CDN$ MILLIONS)
RONA(%)           21.6-  22.8-  24.0-  25.1-  26.3-  27.5-  28.7+
                  22.7   23.8   25.0   26.2   27.4   28.5
==================================================================

18.4%-19.3%         0   0.167   0.333  0.500  0.667  0.833  1.000
19.4%-20.3%     0.167   0.333   0.500  0.667  0.833  1.000  1.167
20.4%-21.3%     0.333   0.500   0.667  0.833  1.000  1.167  1.333
21.4%-22.3%     0.500   0.667   0.833  1.000  1.167  1.333  1.500
22.4%-23.3%     0.667   0.833   1.000  1.167  1.333  1.500  1.667
23.4%-24.3%     0.833   1.000   1.167  1.333  1.500  1.667  1.833
24.4% +         1.000   1.167   1.333  1.500  1.667  1.833  2.000

CDN$ $117,433
Op. Income: $27,901 M
RONA 23.8%

                      2000 Financial Performance
                             Matrix
                      BALSON-HERCULES GROUP, LTD.

                         EBITA (US$ MILLIONS)
RONA(%)           3.8-   4.0-   4.2-   4.4-   4.7-   4.9-   5.2+
                  4.0    4.2    4.4    4.6    4.8    5.1
====================================================================

18.2%-19.1%         0   0.167   0.333  0.500  0.667  0.833  1.000
19.2%-20.1%     0.167   0.333   0.500  0.667  0.833  1.000  1.167
20.2%-21.1%     0.333   0.500   0.667  0.833  1.000  1.167  1.333
21.2%-22.1%     0.500   0.667   0.833  1.000  1.167  1.333  1.500
22.3%-23.1%     0.667   0.833   1.000  1.167  1.333  1.500  1.667
23.2%-24.1%     0.833   1.000   1.167  1.333  1.500  1.667  1.833
24.2% +         1.000   1.167   1.333  1.500  1.667  1.833  2.000

U.S.$20,950
Op. Income: US$4,937 M
RONA: 23.6%


                   2000 Financial Performance
                            Matrix
                   ROYALTON MEXICANA, S.A. DE C.V.

                       EBITA (US$ MILLIONS)

RONA(%)         0.84-   0.89-  0.95-   1.01-   1.06-  1.12-  1.18+
                0.89    0.94   1.00    1.06    1.12   1.17
==================================================================

14.6%-15.5%       0    0.167   0.333   0.500   0.667  0.833  1.000
15.6%-16.5%   0.167    0.333   0.500   0.667   0.833  1.000  1.167
16.6%-17.5%   0.333    0.500   0.667   0.833   1.000  1.167  1.333
17.6%-18.5%   0.500    0.667   0.833   1.000   1.167  1.333  1.500
18.6%-19.5%   0.667    0.833   1.000   1.167   1.333  1.500  1.667
19.6%-20.5%   0.833    1.000   1.167   1.333   1.500  1.667  1.833
20.6% +       1.000    1.167   1.333   1.500   1.667  1.833  2.000

U.S.$5,722
Op. Income: US$1.150 M
RONA: 20.1%

<PAGE>


                                              Appendix IV

POLYPROPYLENE OPERATIONS YEAR 2000 MIP MATRIX

RONA %        10.5-  11.20- 12.26-  13.33- 14.39- 15.45-  16.56- 17.56+
             11.19   12.25  13.32   14.38  15.44  16.55   17.55
=========================================================================

  9.0-9.99   0.167    0.333   0.500  0.667  0.833  1.000  1.167  1.333
10.0-10.99   0.333    0.500   0.667  0.833  1.000  1.167  1.333  1.500
11.0-11.99   0.500    0.667   0.833  1.000  1.167  1.333  1.500  1.667
12.0-12.99   0.667    0.833   1.000  1.167  1.333  1.500  1.667  1.833
13.0-13.99   0.833    1.000   1.167  1.333  1.500  1.667  1.833  2.000
14.0-14.99   1.000    1.167   1.333  1.500  1.667  1.833  2.000  2.167
15.0-15.99   1.167    1.333   1.500  1.667  1.833  2.000  2.167  2.333
16.0-16.99   1.333    1.500   1.667  1.833  2.000  2.167  2.333  2.500
17.0+        1.500    1.667   1.833  2.000  2.167  2.333  2.500  2.667

A- Budgeted EBITA $16,445K (EBITDA $25,495K)
B- Targeted EBITA $14,945 (EBITDA $23,995) (Note: Set at $1.5 million less)
C- Budgeted average net assets $106,360K
D- Targeted RONA 14.05% (B/C)

<PAGE>
                                                EXHIBIT 10.19


             SEVERANCE AGREEMENT FOR RICHARD H. WILLETT
            =============================================


                            SEVERANCE AGREEMENT


This  Severance  Agreement  (this "Agreement") made effective
the 15th day of February, 2001 (the "Effective  Date") among
CONSOLTEX (USA) INC., a New York corporation (the "Company"),
CONSOLTEX  HOLDINGS, INC., a Delaware corporation ("Holdings"),
AMERICAN INDUSTRIAL PARTNERS  CAPITAL  FUND  II, L.P., a Delaware
limited  partnership  ("AIP"), and RICHARD H. WILLETT, 96 Kokopelli
Lane, Philipsburg, Montana 59858 ("Willett").

WHEREAS, Willett is currently employed  by the Company in the capacity
of President, Chief Executive Officer and Chief Operating Officer;

WHEREAS,  the  Company  and  Willett have agreed  to  sever  Willett's
employment relationship with the Company  effective as of the Effective
Date; and

WHEREAS, the parties desire to set forth the terms and conditions upon
which the said severance of employment shall be based.

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


1. TERMINATION OF EMPLOYMENT.  Willett's employment by the Company
shall cease as of the Effective Date.  Thereafter, Willett shall have
no duties or obligations to the Company other than as set forth in this
Agreement.

2. SEVERANCE PAY.  The Company shall pay to Willett  the  sum  of Nine
Hundred Forty Thousand ($940,000) Dollars in twenty-nine (29) equal
monthly installments commencing on March 15, 2001 and on the fifteenth
(15{th}) day of each succeeding month until the entire amount has been
paid.

3. PAYMENT OF MONTANA OFFICE EXPENSES.  After the Effective Date, the
Company will not reimburse Willett for any expenses related to his
office in Montana except as follows:

a. Any reasonably  documented  business  expenses  attributable  to
periods  prior to the Effective Date but not paid until after the
Effective Date shall be reimbursed upon the Company's receipt of such
documentation.

b. Willett's  assistant,  Mitzi  Puccinelli,  shall  be entitled to
receive, at her option communicated to the Company in writing (i) a
payment on the Effective Date of


<PAGE>
                                  2

Twenty-Five Thousand ($25,000) Dollars or (ii) a continuation of her
current salary with benefits for a period of six (6) months following
the Effective Date.

4. COMPANY PROPERTY.

a. On the Effective  Date, Willett shall turn over to the Company
all Company-provided credit cards, keys, telephones and stationery.

b. Willett shall purchase his Company-provided  automobile  on  the
lease termination date in April of 2001 at the net book value as
determined by the leasing company.

c. On  the  Effective  Date,  Willett shall become the owner of all
other Company  property located either  at  his  home  or  at the
Company's Montana office upon the payment to the Company of the
amount of  One  ($1) Dollar.

5. TRAVEL AND ENTERTAINMENT EXPENSES.  Willett shall be reimbursed
for reasonably  documented  business-related  travel and entertainment
expenses only if the actual travel or entertainment  occurred  before
the Effective Date.

6. HEALTH AND MEDICAL INSURANCE.  Willett and his spouse shall
receive without cost full health and medical insurance at the same
levels currently provided for a period of twenty-nine (29) months
following the  Effective Date.

7. LEGAL SERVICES. Willett  shall be responsible for paying invoices
of Pryor Cashman Sherman & Flynn LLP  attributable to services rendered
and expenses incurred after January 31, 2001 in relation to then certain
action between Willett and others, on the one  hand,  and Lincolnshire
Management,Inc., on the other.

8. COMPANY STOCK OPTION PLAN.  Willett shall  have  no  entitlement
to participate  in  any  stock  option  plan hereafter adopted by the
Company regardless of its effective date.

9. PROCEEDS OF CONDOMINIUM SALE.  The Company shall pay to Willett the
proceeds of the sale by the Company of its condominium apartment
located in New York City (less any fees or expenses incurred by the
Company in connection therewith) less the amount of Twenty-five
Thoudsand ($25,000) Dollars in equal monthly installments
commenceing on the fifteenth (15th) day of the month following
the month in which the sale occurs and continuing on the fifteenth
(15th) day of each month thereafter with the last payment being
due on July 15, 2003.  The Company shall make reasonable

<PAGE>
                                3

efforts to sell the aforementioned condominium prior to January
1, 2002 and shall, in any event, make reasonable efforts to secure
the best price therefor.  If for any reason the condominium has not
been sold by July 15, 2003, Willett shall be entitled to purchase
the condominium for the amount of Twenty-Five Thousand ($25,000)
Dollars.

10. SERP.  The parties hereby  confirm Willett's participation
in the Company-sponsored Supplemental Executive Retirement
Plan ("SERP"), effective January  1,  1996, as amended, a copy
of which said plan and amendments is attached hereto. In addition,
the provisions of the SERP are hereby amended to provide  that
Willett  shall  be entitled to receive all benefits accrued under
the SERP in the form of a lump  sum  payment  if the
Company's Textile or Polypropylene Operations are sold.  Such
payment shall be made within thirty (30) days following the closing
of the sale of one or both  of  the  Operations  in question.  The
amount of the lump-sum payment shall be equal to the Actuarial
Equivalent  Value, as such term is defined in the SERP, of Willett's
benefits otherwise payable  on  the  payment date except that, if
Willett shall not agree with the determination made  by the Company,
he  shall  be  entitled  to  designate  his own actuary to make a
separate determination.  If the determinations made  by  the  two
actuaries are less than five (5%) percent apart, an average of the
two values will be used.   If  the said determinations are more than
five (5%) percent  apart, the Company and  Willett  shall jointly
appoint a third actuary, who shall make an independent determination.
The  determination  made  by the third actuary  and  the closest
determination of the determinations made  by  the Company's actuary
and Willett's actuary shall be averaged to determine the Actuarial
Equivalent Value.

11. MUTUAL RELEASE AND INDEMNITY.

a. The Company, Holdings  and AIP hereby fully and forever settle,
release, remises, discharge and acquit  Willett  of  and  from  any
and all obligations, covenants, agreements, duties, claims, liabilities
and  causes of action, whether legal or equitable, known or unknown,
matured or inchoate, under or in connection with Willett's service
as an employee or a director  of  the  Company.   The Company, Holdings
and AIP agree  to  hold Willett harmless against any and  all  liability
which  he  may incur as a result of his service as an employee or director
of the Company  and  shall maintain  sufficient  directors' and officers'
insurance  to cover their obligations to Willett in this regard.

<PAGE>
                              4

b. Other than as set forth in this Agreement, Willett  hereby fully
and forever settles, releases, remises, discharges and acquits the
Company, Holdings and AIP of and from any and all obligations,
covenants, agreement, duties,  claims,  liabilities  and  causes
of action, whether legal or equitable,  known  or  unknown, matured
or inchoate, under or in connection with Willett's employment by the
Company, including pay, benefits, equity and  option  ownership,
separation   of  employment and the surrounding circumstances
thereof, as they may have  any  effect whatsoever on Willett,
and further from any claim, right, action, liability, or demand
of whatever nature which might be raised by Willett pursuant to
any law, constitution, regulation, statute, or common law theory,
including,  without  limitation, Title VII of the Civil Rights
Act  of  1964,  as  amended,  the Age Discrimination in Employment
Act, as amended, the Americans With Disabilities Act, as amended,
and the  Employee  Retirement Income Security Act, as amended.

12. OWBPA COMPLIANCE.  Willett understands that, pursuant to
the Older Workers Benefit Protection Act (OWBPA), he has been
offered twenty-one (21) days from the date of his receipt of
this Agreement to consider and execute the Agreement. Willett
further acknowledges that  he  has  seven  (7) days from the
date of his execution of this Agreement within which to revoke
the Agreement and notify the Company of that revocation.

13. REPRESENTATIONS AND WARRANTIES.  Each party to this Agreement
represents and warrants as follows:

a. It  has full power and authority to enter into and perform this
Agreement.

b. The entry  into  and performance of this Agreement by such party
have  been  authorized by all necessary  corporate  action  or
partnership action, as the case may be, of such party.

c. The  entry  into and performance of this Agreement by such party
does not and will not violate  any  prior  or  contemporaneous
commitment, pledge,  contract  or  undertaking,  or  any restraining
order, injunction, court order, decree or judgment to which it is
a  party or by which it is bound.

d. This Agreement constitutes a valid and binding  release  by,
and obligation  of,  such  party,  enforceable  in  accordance
with its terms.

<PAGE>
                              5

e.  Such  party has not in any manner sold, transferred,  assigned,
pledged, encumbered  or  otherwise  disposed  of any claim or other
matter  which  it  purports  to release by this Agreement,  or  any
interest in any such claim or other matter.

14. EXPENSES.   Except  as  otherwise   expressly provided in this
Agreement,  each  party to this Agreement will bear its respective
expenses incurred in connection  with  the preparation, execution
and performance of this Agreement and the transactions contemplated
herein, including all fees and expenses of agents, representatives,
counsel and accountants.

15. NOTICES.  Unless otherwise specified, whenever this Agreement
requires or permits any consent,  approval,  notice, request or
demand from one party to another, that communication must be in
writing (which may be by telecopy) to be effective and is deemed
to have been  given (i) if  by telecopy, when transmitted to
the  appropriate telecopy number (and all communications sent by
telecopy must be  promptly  confirmed  by telephone; but any
requirement in this parenthetical does not affect the date when the
telecopy  is  deemed  to  have  been  delivered),  (ii) if by
certified  or registered  mail,  on the third business day after
it is enclosed in an envelope and properly  addressed, stamped,
sealed  and  deposited  in the appropriate official postal service
with a return receipt requested or (iii) if by any other means,
when actually delivered.   Until  changed  by notice pursuant
to this Agreement, the address (and fax number) for the

Company and Willett, the Company, Holdings and AIP are:

          If to Willett: Mr. Richard H. Willett
                         96 Kokopelli Lane
                         Philipsburg, Montana 59858
                         Telephone: (406) 859-3088/3189
                         Telecopy: (406) 859-3679

          with a copy to: Bruce E. Hood
                         Howe & Addington LLP
                         450 Lexington Avenue, Suite 3800
                         New York, New York 10017
                         Telephone: (212) 490-1700
                         Telecopy: (212) 490-0536

          If to the Company,
          Holdings or AIP: Mr. Kim Marvin
                           American Industrial Partners Capital
                           Fund II, L.P.
                         551 Fifth Avenue, Suite 3800

<PAGE>
                          6


                         New York, New York 10176-3801
                         Telephone: (212) 983-1399
                         Telecopy: (212) 986-5099

          with a copy to: Terrance L. Bessey, Esq.
                         Kirkland & Ellis
                         655 Fifteenth Street, N.W., Suite 1200
                         Washington, DC  20005-5793
                         Telephone: (202) 879-5943
                         Telecopy: (202) 879-5200


16. FURTHER ASSURANCES.  The parties  agree  to furnish upon request
to each other such further information, to execute and  deliver to
each other such other documents and to do such other acts and things,
all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement and the documents referred
to in this Agreement.

17. WAIVER.  The rights and remedies of the parties to this Agreement
are cumulative and not alternative.   Neither  the failure nor any
delay by any arty in exercising any right, power or privilege under
this Agreement or the documents referred to in this Agreement will
operate as  a waiver of such  right, power or privilege, and no single
or partial exercise  of  any such right, power or privilege will
preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
To the maximum extent permitted by applicable law, no claim or right
arising out of this Agreement or the documents referred to in this
Agreement can be  discharged by one party, in whole or in part, by
a waiver or renunciation of the claim or right unless in writing
signed by the other party, no waiver that  may be given by a party
will be applicable except in the specific instance for which it is
given and no notice to or demand on one party will be deemed to be
a wavier  of any obligation of such party or of the right of the
party giving such notice  or  demand  to  take  further action
without  notice  or  demand  as  provided  in this Agreement or
the documents referred to in this Agreement.

18. ENTIRE AGREEMENT AND MODIFICATION.  This Agreement supersedes
all prior agreements between the parties with respect to its
subject matter and constitutes  (along  with  the  documents
referred to in this Agreement) a complete and exclusive statement
of the terms  of the agreement between the parties  with respect
to its subject matter.

<PAGE>
                                    7


This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.

19. ASSIGNMENTS,  SUCCESSORS  AND NO THIRD-PARTY RIGHTS.  Neither
party may assign any of its rights under this Agreement without
the prior consent of the other parties.  Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted
assigns of the parties.  Nothing  expressed or referred to in
this Agreement will be construed to give any person  other than
the parties  to this Agreement any legal or equitable right, remedy
or claim under or with  respect  to  this  Agreement  or any
provision of this Agreement.  This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit
of the parties to this  Agreement  and their successors and assigns.

20. SEVERABILITY.  If any provision of this Agreement is held
invalid or unenforceable  by any court of competent jurisdiction,
the  other provisions of this Agreement  will  remain  in  full
force and effect.  Any provision of this Agreement held invalid
or unenforceable  only  in part or degree will remain in full
force and effect to the extent not held  invalid or unenforceable.

21. SECTION  HEADINGS; CONSTRUCTION.  The headings of Sections of
this Agreement are provided  for  convenience  only  and  will
not  affect  its construction or interpretation.  All references
to "Section" or "Sections" refer to the corresponding  Section
or  Sections  of  this Agreement.  All words used in this
Agreement will be construed to be of  such  gender  or number
as the  circumstances require.  Unless otherwise expressly provided,
the word "including" does not limit the preceding words or terms.

22. GOVERNING  LAW.  This Agreement will be governed by the laws
of the State of New York without regard to conflicts of laws
principles.

23. COUNTERPARTS.   This  Agreement  may  be  executed  in  one
or more counterparts, each of which will be deemed to be an
original copy  of  this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.

<PAGE>
                             8

24. GUARANTY  BY HOLDINGS.  By signing this Agreement, Holdings
hereby guaranties the due  performance  by the Company and AIP
of their respective obligations contained herein.

                    EXECUTED as of the date first set forth above.

                          CONSOLTEX (USA) INC.

                          By: /s/C. Suzanne Crawford
                          Name: C. Suzanne Crawford
                          Title: Vice-President, Legal Affairs
                                 and Corporate Secretary

                          CONSOLTEX HOLDINGS, INC.

                           By: /s/C. Suzanne Crawford
                           Name: C. Suzanne Crawford
                           Title: Vice-President, Legal Affairs
                                  and Corporate Secretary


                           AMERICAN INDUSTRIAL PARTNERS CAPITAL
                           FUND II, L.P.

                           By: American Industrial Partners Corporation,
                              its General Partner

                           By:
                           Name:
                           Title:


                           RICHARD H. WILLETT


<PAGE>
                             8

24. GUARANTY  BY HOLDINGS.  By signing this Agreement, Holdings
hereby guaranties the due  performance  by the Company and AIP
of their respective obligations contained herein.

                    EXECUTED as of the date first set forth above.

                          CONSOLTEX (USA) INC.

                          By:
                          Name:
                          Title:

                          CONSOLTEX HOLDINGS, INC.

                           By:
                           Name:
                           Title:


                           AMERICAN INDUSTRIAL PARTNERS CAPITAL
                           FUND II, L.P.

                           By: American Industrial Partners Corporation,
                              its General Partner

                           By: /s/Theodore C. Rogers
                           Name: Theodore C. Rogers
                           Title: Chairman


                           RICHARD H. WILLETT

<PAGE>
                             8

24. GUARANTY  BY HOLDINGS.  By signing this Agreement, Holdings
hereby guaranties the due  performance  by the Company and AIP
of their respective obligations contained herein.

                    EXECUTED as of the date first set forth above.

                          CONSOLTEX (USA) INC.

                          By:
                          Name:
                          Title:

                          CONSOLTEX HOLDINGS, INC.

                           By:
                           Name:
                           Title:


                           AMERICAN INDUSTRIAL PARTNERS CAPITAL
                           FUND II, L.P.

                           By: American Industrial Partners Corporation,
                              its General Partner

                           By:
                           Name:
                           Title:

                           /s/Richard H. Willett
                           RICHARD H. WILLETT






<PAGE>



                                                      EXHIBIT 10.20


              EMPLOYMENT AGREEMENT FOR PAUL J. BAMATTER
            =============================================


                             EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") made effective
the first day of April, 1997 between CONSOLTEX (USA) INC., a Company
incorporated under the laws of the State of New York, having its head
office in the City of New York, State of New York (hereinafter called
the "COMPANY"), CONSOLTEX GROUP INC., the parent of the Company,
and PAUL J. BAMATTER, 21 Turtleback Lane, East New Canaan,
Connecticut 06840, (hereinafter called the "EXECUTIVE").

                             W I T N E S S E T H:

      WHEREAS the Company desires to employ the Executive, and the
Executive desires to be employed by the Company, on the terms and
conditions hereinafter set forth,

      NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree with one another
as follows:

     1.   EMPLOYMENT. ETC.

          The Company hereby confirms the employment of the Executive
as the Vice President Finance and Chief Financial Officer of the
Company, subject to the terms and conditions hereinafter set forth,
and the Executive hereby accepts such employment on such terms and
agrees to use his best efforts well and faithfully to serve the
Company.

          2.   TERM.

          This Agreement shall take effect as of April 1, 1997 and
shall supersede as of such date each and every prior employment
agreement between the Company and/or any affiliate and the Executive.
The Executive's employment with the Company shall continue until
terminated by either the Company or the Executive in accordance
with the further provisions of this Agreement.  Upon the
termination of the Executive's employment with the Company pursuant
to the provisions of this Agreement, the Executive shall cease to
be an employee of the Company for all purposes except in the case
of a disability as contemplated in paragraph 6.

          3.   DUTIES OF EXECUTIVE.

          (a)  During the period that the Executive is employed
pursuant to this Agreement, the Executive shall well and faithfully
serve the Company as its Vice President Finance and Chief Financial
Officer, and shall devote substantially all of his business time
and attention to and use his best efforts in the performance of
the duties of such employment and the advancement of the best
interests of the Company.  In addition, the Executive agrees to
serve in such other capacities or offices to which he may be
assigned, appointed or elected from time to time by the Chairman
of the Board of Directors of the Company (the "Board").
The Executive

<PAGE>
                         2

shall have the powers inherent in the position of
Vice President Finance and Chief Financial Officer, and shall
report directly to the President and Chief Executive Officer of
the Company.

          (b)  The Executive's place of employment shall be at the
offices of the Company located at 1040 Sixth Avenue, New York,
New York 10018 (or such other location within or without the State
of New York as the Board may designate from time to time), but the
Executive shall travel to the extent and to the places necessary
for the performance of his duties to the Company.

          (c)  The Company or Consoltex Group Inc. may require the
Executive to perform services from time to time for one or more of
its subsidiaries. The Executive acknowledges that the compensation
and benefits provided hereunder shall compensate him for all
services provided by him for the benefit of such subsidiaries.

          4.   REMUNERATION.

          During the term of this Agreement, the Executive shall be
entitled to compensation from the Company as hereinafter provided:

          (a)  SALARY.  The Executive shall be entitled to an annual
salary of two hundred sixty one thousand five hundred dollars
($261,500) (such salary, as it may be increased from time to time
pursuant to this paragraph 4(a),being herein sometimes called
the "BASE SALARY") which shall be payable in equal consecutive
installments in arrears every two (2) weeks or as may be otherwise
agreed by the Company and the Executive.  Such annual salary shall
be reviewed annually by the Management Resources and Compensation
Committee of the Board of Directors of Consoltex Group Inc.
(the "COMPENSATION COMMITTEE"), before January 1 of each year, and
may be increased (but shall not be reduced) in the discretion of
the Compensation Committee during the term of this Agreement.

          (b)  ANNUAL BONUS.  In addition, the Executive shall be
entitled to an annual cash bonus based on the achievement of financial
goals as determined under the Bonus Plan for Executives of the Company
and Consoltex Group Inc. The target bonus amount shall be 40% of the
Executive's base salary for the year to which such bonus applies
and shall reflect the achievement of such financial goals.  Such bonus
shall be determined and paid to the Executive at the same time as
bonuses are paid to the executives of Consoltex Group Inc.

          (c)  SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN.  The Executive
shall be deemed a participant in the Supplemental Executive Retirement
Plan established by the Compensation Committee, which is substantially
in the form attached hereto as EXHIBIT A and made a part hereof
(the "SERP").

<PAGE>
                            3

(d)  EMPLOYEE BENEFITS.  The Executive shall be entitled to such
group life insurance, accidental death, disability, hospitalization,
major medical, dental and similar insurance as may be approved by the
Compensation Committee from time to time; PROVIDED, HOWEVER, that no
insurance benefits currently in place for the Executive shall be
reduced or eliminated.  The Executive acknowledges that certain of
the above benefits are not yet in place and are accordingly not
available to him on the date of execution of this Agreement, and
that the Compensation Committee shall determine in its discretion
what additional benefits, if any, of the above types shall be provided
by the Company.

          (e)  AUTOMOBILE.  The Executive shall be entitled to the use
of a car provided by the Company up to a capital value (excluding tax)
of $50,000,and reimbursement for the operating and maintenance expenses
of such car.Such car shall be replaced once every three years.

          (f)  CLUB MEMBERSHIP.  The Company will pay the initiation
and membership fees for the Executive's membership in a club of his
choice up to a combined maximum of ten thousand dollars ($10,000)
per annum.  The Executive  may, at his election, receive this benefit
in cash in lieu of receiving such club membership.

          (g)  PAYMENT OF EXPENSES.  The Executive shall be entitled
to reimbursement of all reasonable expenses incurred by him for travel
and entertainment relating to the business and affairs of the Company
as approved by the Chief Executive Officer; such reimbursement shall
take into account the expenses required in order for the Executive to
travel to the extent envisioned by paragraph 3(b).

          5.   VACATION.

          During each calendar year of the term of this Agreement,
the Executive shall be entitled to up to 20 business days' paid
vacation, in addition to holidays observed by the Company.  The date
or dates of such vacations shall be selected by the Executive in
consultation with the Chairman of the Board, having reasonable
regard to the business needs of the Company and the convenience
and personal preference of the Executive.  A maximum of 20 days
of unused vacation may be carried forward to and used in a
subsequent calendar year.

          6.   TERMINATION DUE TO DISABILITY.

          Notwithstanding anything herein contained and without
prejudice to the Executive's rights under the Company's disability
insurance coverage, in the event of illness or other disability of
the Executive during the term of this Agreement that renders the
Executive incapable of performing his duties hereunder for a
period of 180 consecutive days, or periods aggregating 180 days
during any period of 360 consecutive days, the Company may, effective
upon written notice, terminate this Agreement; PROVIDED, HOWEVER,
that in such event, the

<PAGE>
                            4

Executive shall remain an employee (without compensation) of the
Company to the extent that, and for so long as, the Executive's
continued employment is necessary to qualify for benefits under
the Company's disability insurance coverage.  In the event of
a termination of this Agreement pursuant to the preceding
sentence, the Company shall pay the Executive for a period of
two years following the date of tennination an amount such that
together with amounts payable by the Company's disability
insurance the Executive would receive 100% of his base salary
as in effect immediately prior to the date of termination.

          7.   TERMINATION FOR CAUSE.

          (a)  Notwithstanding any other provision herein contained,
the Company may terminate the Executive's employment with the Company
at any time for "cause" as defined below.  In the event of termination
for cause, the Executive shall only be entitled to receive his unpaid
salary and accrued vacation pay to the date of notice of termination,
and reimbursement of his bona fide unpaid out-of-pocket expenses
chargeable to the Company; PROVIDED, HOWEVER, the Executive shall be
entitled to benefits as provided in other benefit plans provided
by the Company or Consoltex Group Inc., including, but not limited
to, the Consoltex Group Inc. Stock Option Plan and the SERF.

        (b)  For the purposes of this Agreement "cause" shall
             mean:

            (i) Any willful act or omission that constitutes a
            material breach by the Executive of any of his
            obligations under this Agreement;

           (ii) The conviction of the Executive by a court of
           competent jurisdiction of a felony involving (A) violence
           or moral turpitude which felony would reasonably be
           regarded as a major crime, or (B) theft or fraud
           against the Company;

          (iii) The willful misconduct by the Executive causing
          material injury to the Company;

         (iv) The willful and continued failure by the Executive to
     substantially perform the Executive's duties with the Company
     in the Executive's established position on a full-time basis
     (other than any such failure resulting from the Executive's
     disability and other than  termination by the Executive
     pursuant to paragraph 8(b)) after a written demand for
     substantial performance is delivered to the Executive by the
     Chairman of the Board, which demand specifically identifies
     the manner in which the Chairman of the Board believes that
     the Executive has not substantially performed the
     Executive's duties; or

<PAGE>
                                   5

       (v) The commission of a breach of the restrictive covenants
       in paragraph 20(a), (c), (f) and (g), which has not been
       cured (to the extent susceptible to cure) within 30 days
       following written notice from the Chairman of the Board.

(c)  For purposes of this paragraph 7, no act, or failure to act,
on the Executive's part shall be deemed "willful" unless knowingly
done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive's action or omission
was in the best interest of the Company.

          8.   TERMINATION WITHOUT CAUSE.

    (a)  If the duties and responsibilities of the Executive in
his capacity as Chief Financial Officer or Vice President-Finance
are substantially reduced or eliminated (other than as a result of
the Executive's disability), or if a successor to the Company fails
to assume and agree to be bound by the terms of this Agreement as
required in paragraph 14 and either of such events has not been
cured (to the extent susceptible to cure) within 30 days following
written notice from the Executive, the Executive will be entitled
to terminate his employment with the Company upon three months prior
written notice.

     (b)  If the Executive terminates as provided in paragraph 8(a),
or if this Agreement is terminated by the Company at any time without
cause on the part of the Executive, then the Executive shall be entitled
to receive as a severance indemnity an amount equal to three times his
average annual Base Salary for the last two full calendar years during
the term of his employment hereunder (such average annual Base Salary
being calculated as the last two full calendar years' Base Salary
actually paid under this Agreement or the Executive's previous
employment agreement with the Company after its assignment to
and assumption by the Company).  Notwithstanding the foregoing
provisions of this paragraph 8, the amount of the severance indemnity
required by this paragraph 8 shall in no event be less than seven
hundred eighty-four thousand five hundred dollars ($784,500).
In addition, the Executive shall also be entitled to receive a
pro rata share of his bonus for the year in which the termination
occurs.  Such pro rata portion shall be paid at such time as
bonuses are generally paid to executives and shall be calculated on
the basis of the actual performance of the Company.  In addition,
to the extent such continuation is permitted by the terms of the
relevant policies, the Company shall continue to provide the Executive
with such health and life insurance benefits as he had immediately
prior to such termination up to the date on which the Executive
obtains new employment which provides him with comparable coverage
with no preexisting condition exclusion (and with respect to
health insurance, comparable coverage for his family) or, if earlier,
the third anniversary of the termination of the Executive's employment
by the Company.  Further, the Executive shall have the right to purchase
the automobile provided to him pursuant to paragraph 4(c) at the leasing
company's net book value.  The Executive shall also be entitled to
payment equal to his unused vacation pay for the year of termination.
Subject to regulatory approval, the Executive shall have up to six
months from the date of such termination of his

<PAGE>
                                 6

employment (unless the Committee exercises its discretion to extend
such six-month period) to exercise any stock option rights he received,
other than any vested stock option rights he received in his capacity
as a Director of Consoltex Group Inc.

          9.   RESIGNATION OF THE EXECUTIVE.

     The Executive shall give at least three months prior written
notice to the Company if he wishes to resign from his employment
with the Company. Upon termination of such employment, he shall be
entitled to receive only his accrued but unpaid salary and unused
vacation pay.  This paragraph 9 shall apply only to a resignation
for personal reasons, as distinguished from the Executive's
election to terminate pursuant to paragraph 8(a), in which case
paragraph 8(b) shall apply.  The Company reserves the right to relieve
the Executive of his obligations to perform all or part of his duties
during the notice period, and such action shall not be a reduction
or elimination of the Executive's duties or responsibilities
for the purposes of paragraph 8(a).

        10.  SURRENDER OF COMPANY PROPERTY UPON TERMINATION.

    Upon termination of this Agreement for any reason, the
Executive shall immediately surrender to the Corporation his
Company-provided credit card(s), and all documents and information
wherever located pertaining to the business of the Company as
well as keys for entry into Company premises and any other
property belonging to the Company and shall pay all moneys
payable to the Company whether or not due at the time, unless
the plan pursuant to which the loan was made provides otherwise.

          11.  LIABILITY AND INDEMNIFICATION.

     The Executive shall not be liable, responsible or accountable
in damages or otherwise to the Company for any act performed or
omitted by the Executive in good faith on behalf of the Company
and in a manner reasonably believed by him to be (a) within the
scope of the authority granted to him by this Agreement, by
law, by the Company's by-laws or by the Board and (b) in the
best interests of the Company.  The parties hereto acknowledge
and agree that the Executive is entitled to indemnification as
provided in the Company's by-laws as in effect on the date hereof,
and the Company agrees not to repeal, replace or make any changes
to such indemnification provisions, including as a result of
any merger or other reorganization, without the Executive's prior
written consent.

          12.  NOTICE.

   Any notice required or permitted under this Agreement
shall be in writing and shall be delivered by hand or by
Federal Express or other responsible commercial courier service

<PAGE>
                           7

with guaranteed overnight delivery or shall be sent by prepaid
registered or certified mail, return receipt requested, addressed
as follows:

          If to the Company:

          Consoltex (USA) Inc.
          108 East Park Street
          Post Office Box 667
          Anaconda, Montana 59711
          Attention: President and Chief Executive
                     Officer

          with a copy to Consoltex Group Inc. at its address
          below.

          If to Consoltex Group Inc.:

          Consoltex Group Inc.
          8555, autoroute Transcanadienne
          Ville Saint-Laurent (Quebec) Canada H4S IZ6
          Attention: Chairman of the Management Resources
                     and Compensation Committee

          If to the Executive:

          21 Turtleback Lane East
          New Canaan, Connecticut 06840

Either party may change its address for service of notice by notice
in writing to the other party hereto.  Any notice hereunder shall
be deemed given on the date of actual receipt thereof by its
addressee.

          13.  AMENDMENT, MODIFICATION OR WAIVER.

     This Agreement may be amended, modified or waived only by
a written agreement signed by the parties hereto.  Waiver by
either party of a breach of any of the provisions of this
Agreement shall not operate or be construed as a waiver
of any subsequent breach of the terms hereof.

          14.  NON-ASSIGNMENT.

    This Agreement shall not be assigned by either party
hereto without the prior written consent of the other party;
PROVIDED, HOWEVER, that the Company or Consoltex Group Inc.
may assign this Agreement to a subsidiary thereof.
The foregoing notwithstanding, the Company

<PAGE>
                          8

will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company
to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken
place.  Failure of the Company to obtain such assumption
and agreement prior to the effectiveness of any such
succession or prior to the expiration of the cure period
set forth in paragraph 8(a) above, shall entitle the Executive
to compensation from the Company in the same amount and on
the same terms as the Executive would be entitled to hereunder
if the Executive's employment was terminated by the Company
without "cause".  The date on which any such succession becomes
effective shall be deemed the date of termination.  As used in
this Agreement, the "Company" shall mean the Company as
hereinbefore defined and any successor to its business or
assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law, or otherwise.

          15.  ENTIRE AGREEMENT.

     This Agreement represents the entire agreement of the parties
hereto with respect to the subject matter hereof and supersedes
any prior understanding or agreement of the parties with respect
to such subject matter.

          16.  BINDING EFFECT.

    This Agreement shall bind and inure to the benefit of the
parties hereto and their respective legal and personal
representatives and, subject to paragraph 14, successors and assigns.

          17.  GOVERNING LAW.

  This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, exclusive of its
conflicts-of-laws principles.

          18.  SEVERABILITY.

    In the event that any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality
and enforceability of the remaining provisions shall in no way be
affected or impaired thereby (provided that both parties
nevertheless receive substantially all of the benefits of
this Agreement).

          19.  PARAGRAPH HEADINGS, ETC.

     All paragraph headings have been inserted herein for
convenience only and do not form part of this Agreement.
References to one or more "paragraphs" are, unless the context

<PAGE>
                              9

clearly indicates otherwise, to numbered paragraphs of this
Agreement.  To the extent the context requires, the singular
when used herein shall include the plural and vice versa and
references herein to a gender shall include the other gender.
All references to dollars in this Agreement are to United
States Dollars.

          20.  SPECIAL PROVISIONS.

    (a)  During the term of this Agreement, the Executive agrees
that he shall not, directly or indirectly, alone or as a partner,
officer, director, shareholder, employee or consultant be engaged
or interested in any other commercial activity whatsoever;
PROVIDED, HOWEVER, that this provision shall not prohibit the
Executive from holding less than 5% of the securities of any
publicly traded corporation, nor from passive financial investment
in any non-competitive business.

    (b)  The Executive shall not hold public office without the
prior written consent of the Company.

   (c)  Any invention or process the Executive discovers during
his employment connected with the business of the Company shall
belong to the Company.  Similarly, copyright created by him relative
to the business of the Company shall be the property of the
Company.  In all cases the Executive undertakes to execute
appropriate documents confirming the Company's ownership.

  (d)  The Executive shall advise the Company promptly of any
legal action or proceedings in which the Executive may become
involved.

  (e)  At any time during or after the termination of the
Executive's employment or the termination of this Agreement
pursuant to paragraph 6, at the request of the Company the
Executive shall resign from the office of director of the
Company or any affiliate thereof (unless he serves as a
director as a nominee of a shareholder of the Company or
such affiliate and such termination was not for Cause) without
claim for compensation, but without prejudice to any claim
the Executive may have for compensation due to him pursuant
to the terms of this Agreement.  If the Executive fails to
do so, the Company is hereby authorized by the Executive
to appoint some person for and on behalf of the Executive
as his attorney-in-fact to execute any documents for the
purpose of giving effect to such resignation.

    (f)  The Executive acknowledges that the Company carries
on the business of textile manufacturing and that the Executive
has heretofore and will continue to have access to and be
entrusted with confidential information and trade secrets
relating to the present and future business of the Company,
Consoltex Group Inc. and their respective subsidiaries.  The
Executive acknowledges that the disclosure of such confidential
information or trade secrets to competitors of the Company or
to others would be highly detrimental to the business and
affairs of the

<PAGE>
                          10

Company.  The Executive hereby covenants and agrees with the
Company that he will not either during the term of this Agreement
or at any time thereafter disclose any confidential information
or trade secrets of the Company, Consoltex Group Inc. and their
respective subsidiaries, including without limitation, patents,
formulae, technical innovations or processes or computer codes
(to the extent any of the foregoing constitute trade secrets),
whether or not developed by the Executive, to any person,
corporation, firm, business entity or individual except as
required by law or pursuant to a confidentiality agreement
between the Company authorized by its officers, other than
himself, or the Board of Directors of the Company, nor shall
he use the same for any purpose other than the purposes of the
Company, nor shall he disclose or use for any purposes other
than those of the Company any of the private matters or
affairs of the Company which he may acquire during the
period of his employment with the Company.

   (g)  The Executive covenants and agrees that during his
employment with the Company, and for a period of 12 months
thereafter, he shall not engage or own an interest, directly
or indirectly, as an officer, director, employee, shareholder,
partner, consultant or in any manner whatsoever, in any business,
firm or corporation located in any country which is a party to the
North American Free Trade Agreement and which carries on the
manufacture, distribution and/or sale of fabrics primarily made
from man made or synthetic fibers.  The provisions of this
paragraph shall not prevent the Executive from owning up to
5% of the issued shares of any corporation engaged in the
manufacture, distribution or sale of textile products whose
shares are traded on any recognized stock exchange, so long
as the Executive is not actively engaged in such business as
an officer, director, employee or consultant thereto and he
promptly provides written notice of such ownership to the
Vice-President, Legal Affairs and Corporate Secretary of the
Company.  The Executive acknowledges and agrees that the
restrictions contained in this paragraph are reasonable in
time and area in the circumstances and have been inserted for
the reasonable and necessary protection of the Company.  The
Executive agrees that, in the event of an actual or threatened
breach by the Executive of the provision of this paragraph,
the Company may obtain temporary and permanent injunctive
relief without the necessity of proving actual damages
to the Company.

  (h)  Notwithstanding anything in this Agreement to the
contrary, if any amounts due to the Executive under this
Agreement and any other plan or program of the Company or
Consoltex Group Inc. constitute a "parachute payment" as
such term is defined in Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (the "Code"), and the amount
of the parachute payment reduced by all federal, state, and
local taxes applicable thereto, including the excise tax
imposed pursuant to Section 4999 of the Code, is less than the
amount the Executive would receive if he were paid three times
his "base amount", as defined in Section 280(b)(3) of the Code,
less $1.00, reduced by all federal, state and local taxes applicable
thereto, and the aggregate of the amounts constituting the parachute
payment shall be reduced to an

<PAGE>
                          11

amount that will be equal to three times his base amount
less $1.00.  The determination to be made with respect to this
paragraph 20(h) shall be made by an accounting firm acceptable
to both the Company and the Executive, and which may be the
Company's independent auditors, and shall be paid by the Company.

          21.  TAXES.

All payments hereunder shall be subject to any applicable federal,
state, local or foreign withholding taxes.

          22.  SURVIVAL.

All provisions of this Agreement (other than those requiring or
relating to the Executive's continued employment by the Company
or his performance of services for the Company or its affiliates)
shall survive the termination of the Executive's employment.

IN WITNESS WHEREOF, THE PARTIES hereto have executed this Agreement
as of the day and year first above written.

                       CONSOLTEX (USA) INC.

                       By: /s/Richard H. Willett
                           Richard H. Willett, Chairman


                       CONSOLTEX GROUP INC.

                       By: /s/Henry D. Winterstern
                           Henry Winterstern, Chairman of the
                           Management Resources and Compensation
                           Committee

                       By: /s/Paul J. Bamatter
                           Paul J. Bamatter







<PAGE>

                                         EXHIBIT  10.21


       EMPLOYMENT ARRANGEMENT FOR CHRISTOHER L. SCHALLER
      ========================================================

                              CONSOLTEX INC.

                                  MEMORANDUM


STRICTLY PRIVATE & CONFIDENTIAL

To:   Christopher L. Schaller
FROM: Richard H. Willett
RE:   compensation effective august 31, 1998
DATE: August 6, 1998


We propose the following arrangement to be effective August 31, 1998
which replaces all existing arrangements with respect to your
employment.

1. Effective August 31, 1998,  you  will  be  appointed President and
CEO of Consoltex  Inc. ("Consoltex" or the "Company") and of the
Apparel Operations of Consoltex Group Inc.  You will report directly
to the Chief Executive Officer of Consoltex Group Inc.  and for
compensation purposes, you will be an employee of The Balson Hercules
Group  Ltd. or such other subsidiary of Consoltex Group Inc. as may be
appropriate.

2. Your place of employment will be at The Balson Hercules Group Ltd.
offices located in New York, New York or such other location as the Board
of Consoltex Inc. may designate from  time to time and you will travel to
the extent and to the places necessary  to  fulfill your responsibilities
to the Company.

3. Your base salary will be US$250,000 and will be reviewed annually
starting on January 1, 2000.

4. You  will become eligible for membership in the Consoltex (USA) Inc.
Supplemental Employee Retirement Plan ("SERP") and your commencement date
for the purposes of the SERP will be deemed to be January 1, 1997.

5. You will continue to be a member of the Executive Benefits Plan and
Consoltex's 401K Plan.

6. Consoltex will continue to provide you the use of a company car, in
accordance  with Consoltex's company car policy, up to a capital value
of US$40,000 excluding taxes.

7. Your bonus plan target percentage will be 40% of base salary. This
amount  can  reach  up  to  80% based on achieving certain  profitability
hurdles.

<PAGE>

					- 2 -

8. You will be entitled to an annual health or sport membership of
up to US$7,500, inclusive of any initiation fees.

9. You will be entitled to a payment equal to one year of base salary
if terminated without cause or should you be terminated without cause
within one year  subsequent  to a change of control of Consoltex Group
Inc., you will be entitled to a payment equal to two years of base
salary.  For the purpose of this paragraph, "change  of control" means
the acquisition of more than 50% of the voting securities  of  Consoltex
Group  Inc. by any person or group of persons acting together and will
not include  a change of  control  which  may  arise  as a result of the
conversion of multiple voting share owned by Les Gantiers Holding
B.V.  to  subordinate voting shares.

10.You will be entitled to four weeks of vacation annually  to be taken
at a time mutually convenient to you and the Company.

11.Your responsibility will include full Profit and Loss and  Balance
sheet responsibility of the Apparel Operations, including strategic
planning.

12.The  above  points will be incorporated into a formal employment
contract within six months.   This  employment  contract  will  contain
all of the usual  terms  and  conditions  normal  for  such  a
document,  including appropriate confidentiality and non-competition
provisions to protect the Company.

13.Upon  your  acceptance  hereof,  this  memorandum  would  constitute
all arrangements  with respect to your employment from the effective
date and will not be amended  except  by writing signed by you and the
Chairman of the Board of Consoltex Inc.

If you are in agreement with the above, I ask that you please execute
this document and return it to me.

Best regards,

/s/Richard H. Willett
Richard H. Willett
CHAIRMAN OF THE BOARD OF CONSOLTEX INC.

/s/Christopher L. Schaller
Christopher L. Schaller


c.c. C. Suzanne Crawford




<PAGE>

                                                      EXHIBIT 10.22


                  TERMS OF EMPLOYMENT FOR JAY R. TAVORMINA
              =================================================



LINQ INDUSTRIAL FABRICS,INC,
2550 West Fifth North Street
SUMMERVILLE
SOUTH CAROLINA  29483-9699
803/875-8100
FAX 803/875-8111



March 5, 1997

Mr. Jay R. Tavormina
8642 West Fairway Woods Drive
North Charleston, South Carolina 29420
U.S.A.



Dear Jay:

This letter is to confirm the terms of your employment with LINQ
Industrial Fabrics,  Inc.  ("LINQ") effective January 1, 1997. I
would ask that if you are in agreement  with  such terms that you sign
and return to me a copy of this letter.

1. You will assume the  title of President and Chief Executive Officer of
LINQ.

2. Your responsibilities  will  include  full profit and loss and balance
sheet responsibility for the Polypropylene Sector; including strategic
planning for all the companies in the sector. The Polypropylene Sector
is  defined  to  include all of Consoltex's  polypropylene  activities
regardless of their geographic location.

3. You will report directly  to  the  Chairman  of  the  Board  and Chief
Executive Officer of Consoltex Group Inc.

4. You  acknowledge that on January 1, 1997 the composition of the  Board
of Directors of LINQ will be Richard H. Willett (Chairman) and Paul J.
Bamatter  and  that the composition of the Board going forward will be
as elected from time to time by the shareholder of LINQ.

5. Your base salary will be $230,000 and reviewed annually.

6. Your target bonus  will  be 40% of your base salary. Target bonus will
be based on four factors:

  a) Return on assets employed;
  b) Earnings before interest, taxes and amortization;
  c) Achievement of personal goals and objectives; and
  d) Polypropylene prices.





<PAGE>
					 - 2 -

As you know, 6(a) and (b) have  been  finalized,  6(c) will be
discussed in early March, 1997 and for 6(d) generally the concept
would  be that if the average  price paid by LINQ for polypropylene
resin in 1997 is  more  than $0.02/lb greater than or less than the
budgeted amount of $0.34.5/lb, there will be an adjustment.

7. Sometime during  1997,  you will be provided with enhanced medical and
dental coverage.

8. Sometime during 1997, a "Top  Hat"  retirement plan for key executives
will be developed, of which you will be a member.

9. Effective October 31, 1996, you will  be  entitled  to  the  use  of a
company car, the capital cost of which is set at $35,000.

10.Effective  January  1,  1997, you will be entitled to an allowance for
Club membership, not to exceed $5,000 annually.

11.You will be eligible to participate  in  the  long term incentive plan
which will be developed for Consoltex's top executives.

12.  Should LINQ terminate your employment without cause, you will be
entitled to receive a severance  payment  equal  to  one  year's base
salary.

13. You will be entitled to four weeks of vacation annually, to be taken
at a time mutually convenient to you and LINQ.


Yours very truly,


/s/Richard H. Willett
Richard H. Willett
Chairman of the Board of Directors



Read and agreed this 5{th} day of March, 1997.


/s/Jay R. Tavormina
Jay R. Tavormina

<PAGE>
                                             EXHIBIT 10.23


                  AMENDED AS OF FEBRUARY 4, 2000

                 EMPLOYMENT AGREEMENT

THIS AGREEMENT made as of November 16, 1996

BETWEEN:          THE BALSON-HERCULES GROUP LTD., a
                  Rhode-Island corporation
                  (the "Corporation")

AND:              WILLIAM J. MILOWITZ, executive residing in
                  West Orange New Jersey
                  (the "Executive")


 WHEREAS  Consoltex  Inc. and the Executive had entered into
an employment agreement  as  of  November  16,  1992 for the
benefit of the Corporation;

WHEREAS the said employment agreement expires on November
16, 1996.

 AND  WHEREAS  the Corporation desires to enter into  a  new
 employment agreement  with  the  Executive  to  obtain  the
 benefit  and  the  assurance  of the continued services and
 experience of the Executive, and  the  Executive desires to
 render such continued services.

 NOW,   THEREFORE,   THIS   AGREEMENT  WITNESSES   that   in
 consideration of the premises  and the mutual covenants and
 agreements  herein  set  out and other  good  and  valuable
 consideration, the receipt  and  sufficiency  of  which  is
 hereby  acknowledged, the parties hereto covenant and agree
 as follows:


 1.  EMPLOYMENT

      The   Corporation  hereby  employs  the  Executive  as
 President of the Corporation and the Executive accepts such
 employment, on a full time basis as provided in Section 2.

<PAGE>

2.    DUTIES OF EXECUTIVE

      2.1 During  the  Term of Employment (as defined below),
the Executive shall devote his full time and attention to and
use his best efforts in the performance of the duties of such
employment  and  to  advancing  the  best  interests  of  the
Corporation. He shall  carry  out  to the best of his ability
all lawful instructions relating to  the business and affairs
of the Corporation that may be given to him from time to time
by his immediate supervisor.

      2.2 The Executive's principal place of employment shall
be  at  the offices of the Corporation located  in  New  York
City,  New   York,   but  the  Executive  shall  travel  when
appropriate in the performance of his duties.


3.    TERM OF EMPLOYMENT

      Unless otherwise  earlier terminated pursuant to Section
11, the employment of the  Executive  hereunder shall be for a
fixed term (the "Term of Employment") commencing  on  the date
hereof  and  expiring  on  December  31, 2002 (the "EXPIRATION
DATE").                                  ====  /s/PJB


4.     COMPENSATION

     As   compensation   for  his  services   hereunder,   the
Corporation shall pay to the  Executive,  for each consecutive
month  during  the  Term of Employment an annual  salary  (the
"Salary") in the amount  of  $230,000 payable in equal monthly
                             ========/s/PJB
installments   of   $19,666.66,   in   accordance   with   the
                    ===========/s/PJB
Corporation's payroll procedure in  effect  on the date hereof
for the Executive.


 5. BONUSES

           During the Term of Employment, the  Executive shall
be entitled to receive a bonus in such an amount and at such a
time as shall be determined by applying such formula or method
of calculation as shall be substantially consistent  with  the
formula or method used by the parent company, Consoltex Inc..



   2

<PAGE>
6.    FRINGE BENEFITS

           During  the  Term  of  Employment,  the Corporation
shall  maintain  in  full  force and effect and the  Executive
shall have the right to participate in, and enjoy, all benefit
plans    including,    without   limitation,    medical    and
hospitalization   insurance,   and   other   fringe   benefits
maintained in effect  or  arranged  by the Corporation for its
employees  generally and for its executives  particularly  and
for which the Executive qualifies.


7.    BUSINESS EXPENSES

           During  the  Term of Employment, the Executive shall
be entitled to reimbursement  by the Corporation for reasonable
business expenses actually incurred  by  him  on  behalf of the
Corporation   in  the  course  and  within  the  scope  of  his
employment hereunder,  upon  presentation  by  the Executive of
vouchers  or  other  receipts  for  approval  by  his immediate
supervisor.


8.    AUTOMOBILE

During the Term of Employment, the Corporation shall  lease  an
automobile  for  the  exclusive  benefit of the Executive, at a
cost  not  to  exceed  $800.00  per month,  and  reimburse  the
Executive for insurance premiums  in respect of such automobile
if applicable.


9.    INSURANCE

9.1        The Corporation shall, at its expense, subscribe and
maintain insurance in respect of the life of the Executive in
the amount of $100,000; and

9.2        The   Corporation   hereby  acknowledges   that   it
subscribes  and  maintains  directors  and  officers  liability
insurance  and  that  it is consistent  with  Consoltex  Inc.'s
Corporate insurance policy.


10.   ANNUAL PAID VACATION

           The Executive  shall  be entitled to an aggregate of
 five (5) weeks paid vacation per annum.


3

<PAGE>
11.   EARLY TERMINATION

      Notwithstanding the provisions of Section 3, the Term of
      Employment:

      11.1 shall terminate automatically upon the death of the
      Executive;

      11.2 may be terminated immediately  by  the Corporation,
      prior to its expiration, by notice to such effect:

         (i) if the Executive shall become unable by reason of
         accident,  illness  or any other incapacity,  whether
         total or partial, to  render  his  services hereunder
         for ninety (90) consecutive days or  for an aggregate
         period of ninety (90) days in any twelve  (12)  month
         period during the Term of Employment;

         (ii) if the Executive shall, at any time, be
         convicted of any felony from which the Executive has
         no further right of appeal; or

         (iii) if in the reasonable determination of the Board
         of Directors of the Corporation, as evidenced by  its
         resolution  to  such effect, the Executive shall have
         committed, at any  time,  a material breach of any of
         his   obligations  resulting  from   his   employment
         hereunder, or

         (iv)  provided  that  the  Corporation  continues  to
         compensate  the Executive until December 31, 1998, as
         provided by Sections  4,  6,  8  and 9, excluding any
         disability     insurance    coverage    ("Termination
         Payments").  Notwithstanding   the   foregoing,   the
         Corporation  shall  not  be  obligated  to  make  any
         Termination  Payments  following  the  termination of
         employment pursuant to this Section 11.2  (iv) unless
         the Executive has executed a general release  of  the
         Corporation  with  respect  to all matters other than
         the Corporation's obligation  to make the Termination
         Payments.
<PAGE>

      11.3  may be terminated immediately  by  the  Executive,
      prior to its expiration, by notice to such effect if the
      Corporation alters the nature of the responsibilities of
      the Executive  from  those in effect at the commencement
      of  his  employment hereunder  so  as  to  substantially
      reduce the  responsibilities  of the Executive hereunder
      or  if the Corporation reduces the  Executive's  salary,
      fringe  benefits, automobile lease or insurance coverage
      referred to in Sections 4, 5, 6, 8 and 9. If the Term of
      Employment  is  terminated  by the Executive pursuant to
      this Section 11.3, the Executive shall receive until the
      Expiration  Date  or his death,  whichever  shall  first
      occur,   as   full   and    final    compensation    and
      indemnification   for   such   earlier   termination  of
      employment,  the  salary,  fringe  benefits,  automobile
      lease and insurance coverage referred to in Sections  4,
      6, 8 and 9 excluding any disability insurance.


12.   NONCOMPETITION AND NONDISCLOSURE

      12.1 During the Term of Employment and while Termination
     Payments   are   being   made,  the  Executive  will  not
     participate  in, directly or  indirectly,  either  as  an
     employee or agent  of any person or entity or as a member
     of a partnership or  as  an  investor  in any entity, any
     business  that  is a converter of, or otherwise  markets,
     textiles of any type dealt with by the Corporation or any
     of its affiliates  as  of  the date of such expiration or
     termination. The Executive further  covenants  and agrees
     that  during the Term of Employment and while Termination
     Payments  are being made, the Executive will not recruit,
     hire, assist  others  in  recruiting  or  hiring, discuss
     employment   with,   or   refer   to   others  concerning
     employment,  any  person who is, or within  the  one-year
     period  immediately   prior   to   such   expiration   or
     termination was, an employee of the Corporation or any of
     its affiliates. If, in any judicial proceeding, the court
     shall  refuse  to  enforce  the restrictions contained in
     this Section because the duration  is  too  long,  it  is
     expressly  understood  and  agreed  between  the  parties
     hereto that for purposes of such proceeding such duration
     shall be deemed reduced to the extent necessary to permit
     enforcement  of  such  restrictions.  If, in any judicial
     proceeding,  the  court  shall  refuse  to  enforce   the
     restrictions  contained  in this Section because they are
     more extensive (whether as  to  geographic area, scope of
     business  or  otherwise) than necessary  to  protect  the
     business and goodwill  of  the  Corporation or any of its
     affiliates, it is expressly understood and agreed between
     the parties hereto that for purposes  of  such proceeding
     the  geographic  area,  scope  of the business  or  other
     aspect shall be deemed reduced to the extent necessary to
     permit enforcement of such restrictions.

<PAGE>

      12.2 The Executive agrees not to  disclose to any person
      or entity other that the Corporation  and  its officers,
      directors,  employees,  subsidiaries and affiliates  any
      proprietary   or   confidential   information   of   the
      Corporation or any of its affiliates known to or held by
      the Executive, including  without limitation advertising
      programs  or strategies, customer  lists  or  any  other
      information   constituting   a   trade   secret  of  the
      Corporation  or  any of its affiliates which  could,  if
      disclosed, injure  the competitive position or prospects
      of the Corporation or  any  of  its  affiliates. Nothing
      contained in this Agreement shall prohibit the Executive
      from disclosing any of the aforedescribed information to
      the  extent  required  by law or legal process  or  such
      information  becomes  generally   available  other  than
      through the breach of a confidentiality  obligation owed
      to the Corporation.


13.   U.S. CURRENCY

          All  dollar  amounts referred to herein  and  dollar
signs ($) used herein refer  to  and  mean  United  States  of
America dollars.


14.   SEVERABILITY

           The  provisions of this Agreement are severable and
if any provision  of  this  Agreement  is  found to be void or
unenforceable  by  a  court  of  competent  jurisdiction,  the
remaining provisions shall remain enforceable.


15.   NOTICES

          Any notice or communication provided  for under this
Agreement shall be in writing and be sufficiently given to the
party to whom it is addressed if it is delivered  or  sent  by
prepaid   registered  or  certified  mail  or  transmitted  by
telecopier  to  or for such party at the address or telecopier
number of such party  as  set out hereinafter or at such other
address  or  telecopier  number   as  such  party  shall  have
hereafter notified to the other party  hereto  in  the  manner
provided  for  in  this  Section.  Any notice or communication
addressed and delivered, mailed or telecopied,  as the case my
be,  as  aforesaid  shall  be deemed to have been sufficiently
given and received on the date  on  which  it was so delivered
or,  if  such  date  is not on a Business Day (as  hereinafter
defined), on the Business  Day next following such date, or on
the fifth (5th) Business Day  next  following  the date of its
mailing or on the first (1 st) Business Day next following the
date of its transmission, as the case, may be.


 If to the Corporation:

 Consoltex Inc.
 8555 Transcanada Highway
 St-Laurent, Quebec H4S 1 Z6
 Fax (514) 335-7018
 Attention: President, Performance Fabrics Sector

 and

 The Balson-Hercules Group Ltd.
 1040 Avenue of the Americas, 6th Floor
 New York, NY 10018
 Fax (212) 302-4386
 Attention: Chief Executive Officer

 If to the Executive:

 William J. Milowitz
 454-342 Prospect
 West Orange, New Jersey 07052

          For the purposes hereof, "Business Day" means a day
other than a Saturday, Sunday or any day on which the
principal banks located in New York, New York are not open for
business during normal banking hours.

16.   ARBITRATION

           Any  dispute  or  controversy arising under  or  in
connection with this Agreement shall be settled exclusively by
arbitration, conducted before  a panel of three arbitrators in
Providence, Rhode Island, in accordance  with  the  Commercial
Arbitration Rules of the American Arbitration Association then
in  effect,  and the award of such arbitrators shall be  final
and binding upon  the  parties hereto. Judgment may be entered
on the arbitrator's award  in  any  court having jurisdiction.
The provisions of this Section are not  intended  to  limit or
otherwise  adversely  affect  the right of the Corporation  to
seek  injunctive  relief  if  the  remedy   at   law  for  the
Executive's  failure  or  refusal  to  perform his obligations
resulting from his employment hereunder  shall  be inadequate.
The parties hereto irrevocably and unconditionally  submit  to
the jurisdiction of the courts of Rhode Island for the purpose
of confirming any arbitrator's award.


 17. GOVERNING LAW

           This  Agreement  shall be governed by and construed
in accordance with the laws of Rhode Island.


 18. SUCCESSORS AND ASSIGNS

      18.1 This Agreement shall inure to the benefit of and be
binding upon the parties hereto and the successors and assigns
of the Corporation only. The  Executive  shall  not  assign or
delegate  this  Agreement  or any of his rights or obligations
hereunder.

      18.2 The Executive hereby  consents to the assignment of
this Agreement by the Corporation to any person, provided that
such person is an affiliate or subsidiary  of  the Corporation
and   provided   that  the  Corporation  shall  remain  liable
hereunder, jointly and severally with the assignee.

      18.3 Should Balson-Hercules be dissolved, wound-up, merged
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or amalgamated into another Consoltex controlled legal entity,
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the new entity will be fully responsible for all the
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responsibilities that Balson-Hercules currently has. /s/PJB
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19. ENTIRE AGREEMENT

           This Agreement  embodies  the  entire  agreement and
understanding  among  the parties hereto on the subject  matter
hereof and supersedes all prior agreements between such parties
on the said subject matter.  Neither  this Agreement nor any of
the  terms  hereof  may  be  changed,  waived,   discharged  or
terminated otherwise than by an instrument in writing signed by
all the parties hereto. Any waiver of any term or  condition or
any breach of any covenant of this Agreement shall not  operate
as a waiver of any other such term or condition or breach,  nor
shall any failure to enforce any provision hereof operate as  a
waiver of such provision or of any other provision hereof.


           IN  WITNESS WHEREOF the parties hereto have executed
this Agreement as of the date first hereinbefore written.

THE BALSON-HERCULES GROUP LTD.

/s/Marcel Thibault
By: Marcel Thibault
Title: Chief Executive Officer

/s/Jean Talbot
By: Jean Talbot
Title: Vice-President, Fiance & Administration & Treasurer

/s/William J. Milowitz
William J. Milowitz

/s/Paul J. Bamatter - /s/PJB
Paul J. Bamatter - Feb. 4, 2000