EXHIBIT 10.2



                       AMENDED AND RESTATED LOAN AGREEMENT


     AMENDED AND RESTATED  LOAN  AGREEMENT,  dated as of August 13, 2002,  among
FURMANITE  LIMITED (formerly named FURMANITE PLC formerly named KANEB UK PLC), a
company  incorporated  under the laws of England  and Wales  (registered  number
2530049) (the "Borrower"),  FURMANITE  WORLDWIDE,  INC., a Delaware  corporation
("Holding"),  the financial  institutions from time to time party hereto (each a
"Bank" and  collectively,  the "Banks")  and BANK OF SCOTLAND,  as agent for the
Banks (in such capacity, the "Agent").


                              W I T N E S S E T H :

     WHEREAS, the Borrower,  Holding, the Original Banks and the Agent are party
to an Amended and Restated Loan Agreement dated as of May 3, 1991 (as amended by
amendments  thereto dated as of December 7, 1994,  July 15, 1996, June 27, 1997,
December  15,  1997,  December  22,  1997,  March 31,  1999,  November 10, 1999,
December  22,  2000,  June 26,  2001,  October 30, 2001 and March 18, 2002) (the
"Original Agreement");

     WHEREAS,  the Borrower  and Holding have asked that the Original  Agreement
(a) be  amended  (i) to  remove  the Term Loan  Commitment  (as  defined  in the
Original  Agreement)  and provide for a Revolving  Credit Loan  Commitment of no
more  than  $25,000,000,  (ii) to  extend  the  Commitment  Period  to the first
Business Day of January,  2009 and (iii) to make various other amendments to the
Original Agreement and, (b) as so amended, be restated in its entirety;

     WHEREAS, subject to the terms and conditions set forth below, the Agent and
the Banks  (including the Original Banks or their Bank Assignees) are willing to
so amend and restate the Original Agreement;

     NOW,  THEREFORE,  the parties  hereto  hereby agree that from and after the
Amendment  Effective Date, the Original Agreement is hereby amended and restated
to read in its entirety as set forth herein:

Section 1. DEFINITIONS.

     Terms used in this Agreement which are defined in Annex I hereto shall have
the meanings  specified in such Annex I (unless  otherwise  defined  herein) and
shall  include in the  singular  number the plural and in the plural  number the
singular. Unless otherwise specified, each reference in this Agreement or in any
other Loan Document to a Loan Document shall mean such Loan Document as the same
may from time to time be amended, restated,  supplemented or otherwise modified.
All  references  to Sections  in this  Agreement  or in Annex I hereto  shall be
deemed references to Sections in this Agreement unless otherwise  specified.  As
used in this Agreement and the other Loan Documents,  the terms  "including" and
"such as" are illustrative and not limitative.

Section 2. THE LOAN FACILITY.

     2.1 The Loans.

          (a) [intentionally deleted]

          (b) Subject to the terms and  conditions  set forth herein,  each Bank
     severally  agrees at any time and from time to time  during the  Commitment
     Period to make loans to the Borrower  (each a  "Revolving  Credit Loan" and
     collectively, the "Revolving Credit Loans") up to its Revolving Credit Loan
     Commitment;  provided  that,  on the date of the  making  of any  Revolving
     Credit Loan (and after giving  effect  thereto),  the  aggregate  principal
     amount  of  Revolving  Credit  Loans  outstanding  on such  date  (plus the
     aggregate  amount (or Dollar  Equivalent  thereof) of all LC Obligations on
     such date) shall not exceed the Total Revolving Credit Loan Commitment then
     in effect.  During the  Commitment  Period,  the  Borrower  may utilize the
     Revolving  Credit Loan  Commitments  by borrowing,  prepaying the Revolving
     Credit  Loans in whole or in part  without  premium or  penalty  (except as
     otherwise  provided by Section 3.11),  and  reborrowing,  all in accordance
     with the terms and conditions hereof.  Revolving Credit Loans shall be made
     from  each  Bank  pro  rata  on the  basis  of the  Revolving  Credit  Loan
     Commitment of such Bank. Except as otherwise  provided in this Agreement or
     the  Notes,  the  Borrower  promises  to pay to the Banks  all  outstanding
     Revolving  Credit Loans on January 1, 2009 together  with accrued  interest
     thereon  determined in accordance  with the terms of this  Agreement or the
     Notes and as shown in records made in accordance with manual, computerized,
     electronic  or other  record-keeping  systems used from time to time by the
     Banks.

          (c) [intentionally deleted]

          (d) [intentionally deleted]

          (e) The  amounts  payable by the  Borrower at any time  hereunder  and
     under the Notes to each Bank shall be a separate and  independent  debt and
     (subject  to the  provisions  of Section 9) each Bank shall be  entitled to
     protect and enforce its rights  arising out of this Agreement and its Notes
     (or either of them),  and it shall not be  necessary  for any other Bank or
     the  Agent to  consent  to, or be joined  as an  additional  party in,  any
     proceedings for such purposes,  it being understood (x) that no Bank (other
     than the Agent) may seek to realize  upon any  security or  Collateral  nor
     seek to enforce any Guarantee  Agreement or other Security  Document or the
     obligations of any Person under any of the other Loan Documents without the
     consent of the Required  Banks and (y) that such rights and remedies may be
     exercised  by the Agent for the benefit of the Banks upon the terms of such
     Loan  Documents  and this  Agreement and (z) the Banks shall be entitled to
     enforce their  respective  claims in respect of the Revolving  Credit Loans
     under   this   Agreement   or  the  Notes  and  any   defect,   defence  to
     enforceability,  limitation,  imperfection or invalidity of the Notes shall
     not impair or restrict the right of the Banks to enforce  their  respective
     claims in respect of the  Revolving  Credit  Loans under this  Agreement or
     affect  the  enforceability  of  this  Agreement  and the  Borrower  hereby
     irrevocably and  unconditionally  agrees to indemnify and keep  indemnified
     the Banks against any loss or liability arising from any defect, defence to
     enforceability,  limitation, imperfection or invalidity of the Notes or any
     unenforceability of this Agreement arising therefrom.

     2.2 Notice of Borrowing.

          (a) The Borrower shall give at least four Business Days' prior written
     notice (a "Notice of Borrowing") to the Agent of the date (which shall be a
     Business  Day during the  Commitment  Period)  of each  proposed  borrowing
     hereunder (the "Borrowing Date"). Such notice shall specify (subject to the
     provisions of this Agreement) (i) the Borrowing Date, (ii) the total amount
     of the  proposed  borrowing,  expressed  in  Dollars,  which  shall be in a
     minimum amount of $500,000 if a Base Rate (US) Loan and $500,000 if a Libor
     Loan (or,  if  greater,  in  integral  multiples  of $100,000 in each case)
     provided that the aggregate  principal  amount of such borrowing must equal
     or be less than the Unutilized  Revolving  Commitments (after giving effect
     to all other Notices of Borrowings for Revolving  Credit Loans and Issuance
     Requests pending at such time) at such time, (iii) [intentionally deleted],
     (iv) the Type of Loan which such  borrowing  will initially be, (v) whether
     such  Loan will be a Libor  Loan or a Base  Rate (US) Loan and,  if a Libor
     Loan, the requested Interest Period therefor, (vi) [intentionally deleted],
     and (vii) [intentionally deleted].  Notwithstanding the foregoing, however,
     Base Rate (US) Loans may be made upon two Business Days' telephone  notice,
     Closing  Office Time,  by the Borrower to the Agent  (confirmed  as soon as
     possible  thereafter in writing).  Unless  otherwise agreed to by the Agent
     and the  Borrower,  the Notice of Borrowing for all Loans after the Closing
     Date shall be substantially in the form of Exhibit A hereto.

          (b) The Borrower may not designate  more than one Interest  Period for
     Libor Loans or (unless  otherwise  consented to by the Agent) more than one
     Type of Loan in the same Notice of Borrowing.  Without the Agent's consent,
     no Libor Loan shall be made or maintained if the principal  amount  thereof
     is less than $500,000. Without the consent of the Agent, the Borrower shall
     not be  entitled  to  make  borrowings  under  the  Revolving  Credit  Loan
     Commitments more than twice in any calendar week.

          (c) On receipt of any Notice of  Borrowing,  the Agent shall  promptly
     notify  (in  writing  or  by  telephone,  confirmed  as  soon  as  possible
     thereafter in writing) each Bank of the proposed details of, and the amount
     of such Bank's share of, the Loan requested by such Notice of Borrowing.

          (d) Each  Loan  requested  in a Notice of  Borrowing  shall be made in
     Dollars.  If, with respect to any requested  Libor Loan, the Agent receives
     notice (a  "Supervening  Event  Notice")  from any Bank not later than 2:00
     p.m.,  Closing  Office Time, on the third  Business Day before the proposed
     Borrowing  Date for such Loan,  to the  effect  that (i) such Bank does not
     expect to be able to fund its share of such  Loan for the  Interest  Period
     applicable thereto by obtaining a matching deposit in the London inter-bank
     market at the  relevant  time or (ii) it would be  impossible,  unlawful or
     contrary to any  regulation,  interpretation,  order,  directive or request
     (whether  or not  having the force of law)  applicable  to such Bank of any
     court or governmental authority, or any fiscal,  monetary,  central bank or
     other authority  having  jurisdiction  over such Bank for such Bank to make
     the Libor Loan available to the Borrower,  the Agent shall promptly  notify
     the Borrower and the other Banks of receipt of any such  Supervening  Event
     Notice and the  requested  Loan  subject to such  Supervening  Event Notice
     shall instead be made as a Base Rate (US) Rate Loan.

          (e) Each Bank will make the amount of its Loan or Loans  available  to
     the Agent,  at the  Closing  Office or as the Agent may  otherwise  direct,
     before 10:00 a.m.,  Local Office Time, on the applicable  Borrowing Date in
     immediately available Dollars. Such proceeds shall be made available to the
     Borrower (subject to Section 2.2(f)) by the Agent, in the same currency and
     type of funds  received  by the Agent,  at the  Designated  Office  against
     delivery to the Agent at the Closing Office for the account of each Bank of
     such  instruments,  documents  and papers as are provided  for herein.  The
     Agent shall deliver the  instruments,  documents and papers  received by it
     for the account of each Bank to such Bank or upon its order.

          (f) Unless the Agent shall have  received  notice from a Bank prior to
     10:00 a.m.,  Closing  Office Time, on the Business Day prior to the date of
     any  borrowing  that such Bank will not make  available  to the Agent  such
     Bank's ratable portion of such borrowing as provided in Section 2.2(e), the
     Agent may  assume  that such Bank has made such  portion  available  to the
     Agent in the required  currency on the date of such borrowing in accordance
     with subsection (e) of this Section 2.2 and the Agent may (but shall not be
     obligated  to), in reliance  upon such  assumption,  make  available to the
     Borrower  on such date a  corresponding  amount.  If and to the extent such
     Bank shall not have so made such  ratable  portion  available to the Agent,
     such Bank and the Borrower  severally agree to repay to the Agent forthwith
     on demand such  corresponding  amount together with interest  thereon,  for
     each day from the date such amount is made  available to the Borrower until
     the date such amount is repaid to the Agent,  at the rate from time to time
     prevailing on the applicable Loan. If such Bank shall pay to the Agent such
     corresponding amount, such amount so paid shall constitute such Bank's Loan
     as part of such borrowing for purposes of this Agreement.

          (g) Except for the Loans to be made on the Closing  Date,  the failure
     of any  Bank to  make  the  Loan to be made by it as part of any  borrowing
     shall not relieve any other Bank of its  obligation,  if any,  hereunder to
     make its Loan on the date of such  borrowing.  No Bank shall be responsible
     for the failure of any other Bank to make the Loan to be made by such other
     Bank on the date of any borrowing.

     2.3 The Notes.

          (a) The  Borrower's  obligation  to pay the principal of, and interest
     on,  the  Revolving  Credit  Loans of each  Bank  shall be  evidenced  by a
     promissory  note  of  the  Borrower  payable  to the  order  of  such  Bank
     substantially  in the form of  Exhibit  B hereto  (as such note may be from
     time to time be amended,  supplemented,  restated or otherwise modified,  a
     "Revolving Credit Note".

          (b) The  Revolving  Credit  Notes are entitled to the benefits of this
     Agreement and shall be secured by the Security Documents.

          (c) The principal  amount of all  Revolving  Credit Loans of each Bank
     outstanding  from time to time,  and  interest  accrued  thereon,  shall be
     recorded on the records of such Bank and,  prior to any transfer of, or any
     action to collect,  its Revolving  Credit Note, the unpaid principal amount
     of the Revolving  Credit Loans  evidenced  thereby shall be endorsed on the
     reverse side of such Revolving Credit Note,  together with the date of such
     endorsement  and the date to which  interest has been paid;  any failure to
     make such endorsement and provide such other  information,  however,  shall
     not affect the  Borrower's  obligations  hereunder or under its Notes.  The
     Borrower's  obligation  to pay  principal  and  interest in respect of each
     Revolving  Credit Note shall be limited to the unpaid  principal  amount of
     the Revolving  Credit Loans evidenced  thereby and unpaid interest  accrued
     for the periods during which such Loans are outstanding.

          (d) [intentionally deleted]

     2.4 [intentionally deleted]

     2.5 Mandatory Prepayments of Revolving Credit Loans.

          (a) The Borrower  shall prepay the  Revolving  Credit Loans on any day
     and on the  effective  date of any  reduction or  termination  in the Total
     Revolving Credit Loan Commitment hereunder to the extent that the aggregate
     principal  amount of such Loans on such date shall  exceed the amount equal
     to (x) the amount of the Total  Revolving  Credit Loan Commitment in effect
     on such date less (y) the Dollar  Equivalent of the LC  Obligations at such
     time; if the Total Revolving  Credit Loan Commitment is terminated in full,
     then  the  Borrower  shall   immediately   prepay  in  full  the  aggregate
     outstanding  principal  amount of all Revolving  Credit  Loans.  Repayments
     pursuant  to this  Section  shall  first  be made  against  (to the  extent
     available)  outstanding Revolving Credit Loans which are Libor Loans having
     an Interest Period ending on the date of such repayment,  then to Base Rate
     (US) Loans, as directed by the Borrower by written (or telephonic, promptly
     confirmed  in  writing)  notice to the Agent  or,  in the  absence  of such
     direction, by the Agent.

          (b) The  then-unpaid  principal  amount of the Revolving  Credit Loans
     shall be payable in full on the first Business Day of January, 2009.

     2.6 [intentionally deleted]

     2.7 Voluntary  Repayment of Revolving Credit Loans. The Borrower shall have
the  right,  at any time and from time to time,  by four  Business  Days'  prior
written notice to the Agent (which notice the Agent shall  promptly  transmit to
the Banks in writing or by telephone,  confirmed as soon as possible  thereafter
in  writing)  to prepay the  Revolving  Credit  Loans,  in whole,  or in part in
integral multiples of $500,000 and without premium, provided that at the time of
any such  prepayment of the Revolving  Credit Loans in full,  the Borrower shall
pay all interest  accrued on the amount of such prepayment and all other amounts
owing  to the  Agent  and  the  Banks  in  respect  thereof  including,  without
limitation,  any compensation payable under Section 3.11 hereof.  Subject to the
terms and conditions of this  Agreement,  amounts prepaid under this Section 2.7
may be reborrowed.

     2.8 Reduction of Commitments.

          (a) The  Borrower  shall  have the  right at any time and from time to
     time upon at least four Business  Days' prior  written  notice to the Agent
     (which notice the Agent shall promptly  transmit to the Banks in writing or
     by  telephone,  confirmed  as soon as  possible  thereafter  in writing) to
     reduce  permanently  in  amounts  equal to  $500,000  (and if  greater,  in
     integral  multiples  thereof) or terminate the Total Revolving  Credit Loan
     Commitment  (but not in an amount in  excess  of the  Unutilized  Revolving
     Commitments at such time unless the provisions of Sections 2.5(a) and 2A.10
     are complied with  simultaneous  with such reduction or  termination).  Any
     reduction  of the  Total  Revolving  Credit  Loan  Commitment  shall  apply
     proportionately  to the Revolving  Credit Loan Commitment of each Bank. Any
     reduction or termination of a Commitment pursuant to this Section 2.8 shall
     be  accompanied  by the  payment  in  full  of any  Revolving  Credit  Loan
     Commitment commission then accrued hereunder.

          (b) [intentionally deleted]

     2.9 [intentionally deleted]


     SECTION 2A. LETTERS OF CREDIT.

          2A.1. Requests.

          (a) By  delivering  to the Issuer (with a copy to the Agent if Bank of
     Scotland should at any time not be the Issuer  hereunder) a written request
     (an "Issuance  Request") on or before 10:00 a.m.  Closing  Office Time on a
     Business  Day,  the  Borrower  may  request,  from time to time  during the
     Commitment  Period  and on not less  than  five  (unless  the Agent and the
     Issuer otherwise consent) nor more than ten Business Days' notice, that the
     Issuer issue an irrevocable  standby letter of credit in such form as shall
     be  acceptable  to the Issuer and the Borrower (a "Letter of  Credit"),  in
     support of such financial  obligations of Holding or its Subsidiaries which
     are  described  in such  Issuance  Request  and are  permitted  by  Section
     2A.1(c).  Each  Issuance  Request  shall  specify (i) the proposed  date of
     issuance (which shall be a Business Day during the Commitment Period), (ii)
     the Stated Amount of the Letter of Credit, (iii) the expiration date of the
     Letter of  Credit,  (iv) the name and  address  of the  beneficiary  of the
     Letter of Credit,  and (v) a precise  description of the documents and have
     attached  the  verbatim  text of any  certificate  to be  presented  by the
     beneficiary  of  such  Letter  of  Credit  which,   if  presented  by  such
     beneficiary  prior to the  expiration  date of the Letter of Credit,  would
     require  the Issuer to make  payment or accept  drafts  under the Letter of
     Credit.

          (b) Each  Letter  of  Credit  shall  by its  terms  (unless  otherwise
     consented to by the Issuer):

               (i) be issued  for the  account of the  Borrower,  and the Dollar
          Equivalent  of the Stated  Amount of such  Letter of Credit  shall not
          exceed the then  effective  Unutilized  Revolving  Commitments  (after
          giving effect to all Notice of Borrowings  for Revolving  Credit Loans
          and other Issuance Requests pending at such time);

               (ii) be stated to expire on a date (its "Stated  Expiry Date") no
          later than the  earlier of (x) one year from its date of  issuance  or
          (y) the last day of the  Commitment  Period;  and, if renewable by its
          terms,  shall not be  renewed so as to expire on a date later than the
          earlier  of (x) one year from the date of  renewal or (y) the last day
          of the Commitment Period;

               (iii)  on or  prior  to its  Stated  Expiry  Date  (A)  terminate
          immediately  upon notice to the Issuer  thereof  from the  beneficiary
          thereunder that all obligations  covered thereby have been terminated,
          paid,  or  otherwise  satisfied  in  full,  and  (B)  reduce  in  part
          immediately to the extent the beneficiary  thereunder has notified the
          Issuer  that  the  obligations  covered  thereby  have  been  paid  or
          otherwise satisfied in part; and

               (iv) be  denominated  only in  Dollars  and  any  other  currency
          mutually  agreed  to  (except  for the  Carlisle  LC,  which  shall be
          denominated in Sterling,  the Norwegian LC, which shall be denominated
          in NOK, and the Australian LC, which shall be denominated in AUD$).

          (c)  Letters  of Credit may be issued to  support  lease  obligations,
     statutory    obligations,    performance   and    return-of-money    bonds,
     self-insurance and other similar obligations of Holding or its Subsidiaries
     (including  obligations of Holding and its  Subsidiaries for the payment of
     borrowed  money) and to support the  purchase by the  Borrower of inventory
     and any other purposes mutually agreed to.

          (d) The Carlisle LC,  Norwegian  LC and  Australian  LC are Letters of
     Credit for all purposes of this Agreement. The parties hereto further agree
     that the Stated  Expiry Date of the  Carlisle LC may (if the Issuer and the
     Agent,  at the  Borrower's  request,  agree) be more than one year from its
     date of issuance or renewal so long as, by its terms, it does not expire on
     a date later than the last day of the Commitment Period.

          (e)  Notwithstanding  the provisions of Section  2A.1(c),  irrevocable
     letter of credit  No.  SLC 01/11  dated July 24,  2001 for  drawings  up to
     $138,000 issued by the Issuer in favor of American  Guarantee and Liability
     Insurance Company shall be a permitted Letter of Credit for all purposes of
     this Agreement  notwithstanding the fact that it has been issued to support
     obligations of XANSER.

     2A.2. Issuances and Extensions. Subject to the terms and conditions of this
Agreement  (including  without  limitation  Section  6A), the Issuer shall issue
Letters of Credit in accordance  with the Issuance  Requests made therefor.  The
Issuer will make each Letter of Credit  available to the beneficiary  thereof in
accordance with the Issuance Request therefor. The Issuer shall not be liable to
any Bank with respect to any Letter of Credit if, at the time of such  issuance,
it has not received from the Borrower,  the Agent (if different from the Issuer)
or any Bank notice that any of the conditions for the issuance of such Letter of
Credit has not been  satisfied.  No Letter of Credit shall be issued  unless the
terms and conditions thereof are satisfactory to the Issuer and the Borrower.

     2A.3. Fees and Expenses.

          (a)  The  Borrower  agrees  to pay to the  Agent  on the  date  of the
     issuance of each Letter of Credit for  distribution  to the Banks (based on
     the amounts that their respective Revolving Credit Loan Commitments bear to
     the Total Revolving Credit Loan Commitment), including the Issuer, a letter
     of  credit  fee with  respect  to such  Letter  of  Credit  equal to the LC
     Percentage per annum of the Dollar  Equivalent of the Stated Amount of such
     Letter of Credit.  For the purpose of determining the foregoing amount, the
     tenor of such Letter of Credit shall be deemed equal to the maximum  period
     that such  Letter of Credit may be  outstanding  (other  than by renewal or
     subsequent  renewal,  as the case may be,  thereof) in accordance  with its
     terms. Each such fee shall be payable by the Borrower  immediately prior to
     the  issuance of the Letter of Credit to which it  relates;  and payment of
     each such fee shall be made in Dollars,  computed at the Dollar  Equivalent
     of such fee on the date of the relevant Letter of Credit's issuance, except
     with respect to the  Carlisle  LC, which shall be paid in Sterling  (unless
     the Borrower and the Required Banks agree otherwise at the time of any such
     payment).  In  addition,  the  Borrower  shall at the same  time pay to the
     Issuer (for its own  account)  an  issuance  fee of $500 for each Letter of
     Credit  issued.  For purposes of this Section 2A.3, any renewal of a Letter
     of Credit  shall be treated as an  issuance  thereof.  Notwithstanding  the
     foregoing,  the letter of credit fee with respect to the Carlisle LC (other
     than the  aforesaid  $500  fee) may be paid by the  Borrower  quarterly  in
     advance, on the Closing Date and every three months thereafter,  and (if so
     paid)  shall  be based  on the  Stated  Amount  of the  Carlisle  LC on the
     quarterly date that such fee is required to be paid.]

          (b) The fees  referred to in Section  2A.3(a) shall be in addition to,
     and not in lieu of, fees  required to be paid by the  Borrower  pursuant to
     Section 4 hereof.

          (c) If any Regulatory  Change shall at any time (i) impose,  modify or
     deem applicable any reserve, special deposit or similar requirement against
     letters of credit  issued by the Issuer or  participated  in by any Bank or
     Bank  Assignee,  or (ii) subject  letters of credit issued by the Issuer or
     participations  therein held by any Bank or Bank Assignee to any assessment
     or other cost imposed by the Federal Deposit  Insurance  Corporation or any
     successor  thereto  or  (iii)  impose  on the  Issuer  or any  Bank or Bank
     Assignee any other or similar condition regarding any Letter of Credit, the
     commitment or obligation of the Issuer to issue Letters of Credit hereunder
     or any Bank's or Bank  Assignee's  participation  therein and the result of
     any  event  referred  to in clause  (i),  (ii) or (iii)  above  shall be to
     increase the cost to the Issuer or any Bank or Bank Assignee of agreeing to
     issue,  issuing or  maintaining  any Letter of Credit or its  participation
     therein by an amount which the Issuer or such Bank or Bank  Assignee  shall
     deem to be  material  (which  increase  in cost  shall be the result of the
     reasonable  allocation  by the Issuer or such Bank or Bank  Assignee of the
     aggregate of such cost increases  resulting from such events),  then and in
     each case upon  demand from time to time by the Issuer or such Bank or Bank
     Assignee  (furnished  to the  Borrower by the Agent),  the  Borrower  shall
     promptly  pay to the Agent (for the  account of such  Issuer,  Bank or Bank
     Assignee,  as the case may be) additional amounts in Dollars or Sterling as
     directed by the Agent which shall be sufficient  to  compensate  the Issuer
     (or such Bank or Bank  Assignee) for such  increased  cost from the date of
     such change,  together with interest on each such amount,  commencing three
     Business  Days from the date  demanded  by the Issuer (or such Bank or Bank
     Assignee), until payment in full thereof (after as well as before judgment)
     at a rate per  annum  equal to 1% plus (x) the Base  Rate (UK) from time to
     time in effect with respect to amounts  payable in Sterling or (y) the Base
     Rate (US) from time to time in effect  with  respect to amounts  payable in
     Dollars.  A  certificate  of the  Issuer  (or such  Bank or Bank  Assignee)
     submitted to the Borrower through the Agent as to any additional  amount or
     amounts (including  calculations  thereof,  in reasonable detail) shall, in
     the absence of manifest  error,  be conclusive and binding on the Borrower.
     In  determining  such amount or  amounts,  the Issuer (or such Bank or Bank
     Assignee)  shall  act in good  faith and may use any  reasonable  method of
     averaging and attribution as it shall deem applicable.

          (d) The  provisions of Section  2A.3(c) and the remaining  Sections of
     this  Section  2A shall  survive  until one year after the later of (x) any
     termination  of this Agreement and (y) the payment in full of the Notes and
     Loans.

     2A.4. Disbursements.

          (a) The Issuer will notify the Borrower and the Agent  promptly of the
     presentment of each demand for payment under any Letter of Credit  together
     with notice of the date (the  "Disbursement  Date") such  payment  shall be
     made.

          (b) Prior to 10:00 a.m., Local Office Time, on the Disbursement  Date,
     the Borrower will  reimburse  the Issuer by making  payment to the Agent at
     its Designated  Office for all amounts  disbursed or to be disbursed by the
     Issuer on that day (the  "Disbursement")  under such  Letter of Credit (the
     "Reimbursement  Obligation")  in the same currency in which the Issuer made
     or is to make disbursements  under such Letter of Credit. At the Borrower's
     option, but subject to the provisions of Sections 2 and 6A hereof, prior to
     10:00 a.m.  Closing Office Time on the Business Day before the Disbursement
     Date, the Borrower may request in accordance  with Section 2.2 (but without
     regard to the last sentence of Section 2.2(b) or the  requirement  that the
     borrowing be in a minimum amount of $500,000 or in an integral  multiple of
     $100,000  in excess of such  amount)  that  Revolving  Credit  Loans in the
     Dollar  Equivalent  of the  Reimbursement  Obligation  be made and that the
     proceeds of such Loans be used to so reimburse the Issuer.  The proceeds of
     any such Loans shall be applied to so reimburse  the Issuer.  To the extent
     the  Issuer is not  reimbursed  in full in  accordance  with the  foregoing
     provisions  of  this  Section  2A.4(b),  (x) the  Borrower's  Reimbursement
     Obligation  shall accrue interest  (after as well as before  judgment) at a
     rate per  annum  equal to 4% plus the Base  Rate  (US) from time to time in
     effect, payable on demand, and (y) the Issuer shall convert any such unpaid
     Reimbursement  Obligations  which are not  denominated  in  Dollars  into a
     Reimbursement Obligation payable in Dollars computed at the applicable Spot
     Rate in effect at the time of such  conversion.  The Issuer shall  promptly
     furnish notice (in writing or by telephone,  promptly confirmed in writing)
     to the  Borrower  and the Agent  (which  notice  the Agent  shall  promptly
     furnish to the Banks) of any such conversion.

     2A.5.  Reimbursement.  The Borrower's Reimbursement Obligation with respect
to each Disbursement  (including interest thereon),  and each Bank's obligations
under  Section 2A.8 with respect  thereto,  shall be absolute and  unconditional
under any and all circumstances and irrespective of any setoff, counterclaim, or
defense to payment  which the  Borrower may have or have had against the Issuer,
any beneficiary, any Bank, the Agent or any Bank Assignee, including any defense
based  upon the  failure  of any  Disbursement  to  conform  to the terms of the
applicable  Letter  of  Credit  or  any  application  or  misapplication  by the
beneficiary  of the proceeds of such  Disbursement,  or the legality,  validity,
form, regularity, or enforceability of such Letter of Credit; provided, however,
that nothing herein shall adversely affect the right of the Borrower to commence
any  proceeding  against the Issuer for any  wrongful  Disbursement  made by the
Issuer  under a Letter of Credit as a result of acts or  omissions  constituting
gross negligence or willful misconduct on the part of the Issuer.

     2A.6. Deemed Disbursements.

          (a) Upon the  occurrence  of any Event of Default  under  Section  9.7
     (with  respect to the  Borrower)  and, at the option of the Agent acting on
     instructions  of the Required  Banks,  upon the  occurrence  and during the
     continuance  of any  other  Event of  Default,  an  amount  equal to the LC
     Outstandings  shall,  without  demand  upon or notice to the  Borrower,  be
     deemed  to have been  paid or  disbursed  by the  Issuer  (each,  a "Deemed
     Disbursement")  under all  outstanding  Letters of Credit  (notwithstanding
     that such  amount  may not in fact have been so paid or  disbursed)  in the
     respective currencies in which such Letters of Credit are denominated. Upon
     notification  by the Agent to the  Borrower of its  obligations  under this
     Section 2A.6 (no such  notification  being required in the case of an Event
     of Default  under Section 9.7 with respect to the  Borrower),  the Borrower
     shall be  immediately  obligated to reimburse the  aggregate  amount of the
     Deemed  Disbursements  (in the same  currencies  as  comprising  the Deemed
     Disbursements)  by  paying  the full  amount  thereof  to the Agent for the
     account of the Issuer prior to 10:00 a.m.  Closing  Office Time on the date
     of such Deemed  Disbursement  and any amount not so reimbursed shall accrue
     interest (after as well as before judgment) at a rate per annum equal to 1%
     plus (x) the Base Rate (UK) from  time to time in effect  with  respect  to
     Deemed  Disbursements  payable in Sterling,  or (y) the Base Rate (US) from
     time to time in effect  with  respect  to Deemed  Disbursements  payable in
     Dollars,  in each case payable on demand. The Issuer shall convert any such
     Deemed  Disbursements  which are not  denominated  in Dollars into a Deemed
     Disbursement  payable in Dollars  computed at the  applicable  Spot Rate in
     effect at the time of such conversion.  All Deemed Disbursements reimbursed
     by the Borrower  pursuant to this Section 2A.6(a) shall be deposited into a
     single special depository account of the Borrower (the "Deemed Disbursement
     Account")  maintained by the Borrower  with,  and under the control of, the
     Agent (in New York or such other jurisdiction as the Agent and the Borrower
     agree to) and titled  appropriately  so as to  identify  the nature of such
     account.  The Borrower shall take all such action,  if any, as is necessary
     to assure that the Agent has a perfected first priority  security  interest
     in said  account to the  extent  that such a  security  interest  can be so
     granted and  perfected in the  jurisdiction  in which such account is held.
     All of the Borrower's right, title and interest in and to all monies at any
     time in the Deemed Disbursement Account (and all Disbursement  Earnings, if
     any, thereon) are hereby  irrevocably  pledged by the Borrower to the Agent
     for the  benefit of itself,  the Issuer and the Banks as security to secure
     the  prompt  payment  to the  Agent,  the  Issuer  and the Banks of all the
     Borrower's liabilities to the Agent, the Issuer and the Banks and to secure
     the  performance by the Borrower of its  obligations  under this Agreement;
     and such  amounts may be applied to such  liabilities  in such order as the
     Agent may direct  without  notice to, or the consent of the  Borrower.  The
     Borrower shall be entitled to receive  monies from the Deemed  Disbursement
     Account only as permitted  by Section  2A.6(b).  The Agent shall invest the
     monies in the Deemed  Disbursement  Account in such types of investments as
     are agreed to by the Borrower and the Agent.

          (b) If any such Letter of Credit shall  thereafter  terminate  without
     the Issuer being required to pay the full amount of the Deemed Disbursement
     with respect to such Letter of Credit to the beneficiary  thereunder,  then
     (unless  the Loans have  matured,  by  acceleration  or  otherwise,  or the
     Borrower has failed to pay any amount then due and payable by it under this
     Agreement)  the Agent will return to the  Borrower an amount  equal to that
     portion of the Deemed  Disbursement  with respect to such terminated Letter
     of  Credit  not  theretofore  applied  by the  Agent  to any  Reimbursement
     Obligation with respect to such Letter of Credit or applied by the Agent in
     payment of the Notes or any other  obligation  of the  Borrower  under this
     Agreement  or any of the Loan  Documents.  At such time when all  Events of
     Default  shall  have been cured or waived,  the Agent  shall  return to the
     Borrower  all amounts then on deposit in the Deemed  Disbursement  Account.
     Any amounts  required to be returned by the Agent  pursuant to this Section
     2A.6 shall be made in the same  currency in which such  deposit was made or
     as the Borrower and the Agent otherwise agree.

     2A.7.  Nature of Reimbursement  Obligations.  The Borrower shall assume all
risks  of the  acts,  omissions,  or  misuse  of any  Letter  of  Credit  by the
beneficiary  thereof.  Neither the Issuer (except to the extent of its own gross
negligence or willful  misconduct),  the Agent nor any Bank shall be responsible
for:

          (a) the form, validity,  sufficiency,  accuracy, genuineness, or legal
     effect of any Letter of Credit or of any draft,  demand or other  document,
     instrument or other paper  relating to, or presented  under,  any Letter of
     Credit,  or any  document  submitted  by any party in  connection  with the
     application  for and  issuance of a Letter of Credit,  even if it should in
     fact prove to be in any or all respects invalid, insufficient,  inaccurate,
     fraudulent, or forged;

          (b) the form, validity,  sufficiency,  accuracy, genuineness, or legal
     effect  of any  instrument  transferring  or  assigning  or  purporting  to
     transfer or assign a Letter of Credit or the rights or benefits  thereunder
     or proceeds  thereof in whole or in part,  which may prove to be invalid or
     ineffective for any reason;

          (c)  failure  of the  beneficiary  to  comply  fully  with  conditions
     required in order to demand payment under a Letter of Credit;

          (d) errors,  omissions,  interruptions,  or delays in  transmission or
     delivery of any messages, by mail, cable,  telegraph,  telex, telecopier or
     otherwise; or

          (e) any loss or delay in the transmission or otherwise of any document
     or draft required in order to make a Disbursement  under a Letter of Credit
     or of the proceeds thereof.

          None of the foregoing shall affect,  impair, or prevent the vesting of
     any of the  rights or powers  granted  the  Issuer,  the Agent or the Banks
     hereunder. In furtherance and extension and not in limitation or derogation
     of any of the  foregoing,  any  action  taken or omitted to be taken by the
     Issuer in good faith shall be binding  upon the  Borrower,  the Agent,  the
     Banks and each Bank Assignee  hereunder  and shall not put the Issuer,  the
     Agent or any Bank or Bank  Assignee  under any  resulting  liability to the
     Borrower nor put the Issuer under any  resulting  liability to the Agent or
     any Bank or Bank Assignee.  Nothing herein shall constitute a waiver by the
     Borrower  of any of its  rights  against  any  beneficiary  of a Letter  of
     Credit.

     2A.8 Other Banks' Participation. Effective upon the issuance of each Letter
of Credit and without further  action,  each Letter of Credit shall be deemed to
be issued (and to have been  issued,  if already  issued) on behalf of all Banks
(including the Issuer) pro rata based on their respective  Revolving Credit Loan
Commitments and each Bank shall be deemed to have irrevocably purchased from the
Issuer a  participation  in such Letter of Credit  equal to such Bank's pro rata
share  (based on their  respective  Revolving  Credit Loan  Commitments)  of the
Stated Amount.  Each Bank shall, to the extent of such pro rata share,  promptly
reimburse the Issuer (by payment to the Agent at its  Designated  Office for the
account  of the  Issuer)  for any  Reimbursement  Obligation  which has not been
promptly  reimbursed  by the Borrower in accordance  with Section  2A.4(b) (and,
after such reimbursement, shall be entitled to receive its pro rata share of any
payments  received by the Issuer or the Agent for the account of the Issuer with
respect to the  principal  of, and interest on such  Reimbursement  Obligation);
such reimbursements by the Banks shall be made in the same currency in which the
Issuer made or is to make  disbursements  under the applicable Letter of Credit.
Promptly after issuance of each Letter of Credit,  the Issuer (or the Agent upon
the request of the Issuer) shall in writing  notify the Agent and each Bank with
a Revolving  Credit Loan  Commitment of the initial Stated Amount of such Letter
of  Credit,  the date that it was issued and its  Stated  Expiry  Date,  but the
failure to give such a notice shall not affect the obligations of the Banks with
respect to such Letter of Credit.

     2A.9  Indemnification.  To the  extent  the  Issuer  is not  reimbursed  or
indemnified  by the  Borrower,  the Banks will  reimburse  and/or  indemnify the
Issuer,  in Dollars,  in proportion to their  respective  Revolving  Credit Loan
Commitments  (or  if the  Revolving  Credit  Loan  Commitments  are  terminated,
Revolving  Credit Loans  outstanding or their  participations  in the Letters of
Credit)  under  this  Agreement,  for  and  against  any  and  all  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or disbursements of any kind or nature  whatsoever which may be imposed
on, incurred or sustained by or asserted against the Issuer,  acting pursuant to
this  Section 2A or pursuant to any Letter of Credit,  in any way relating to or
arising out of any of the foregoing;  provided,  however,  that no Bank shall be
liable  for any  portion  of such  liabilities,  obligations,  losses,  damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Issuer's gross negligence or wilful misconduct.  The obligations of the
Banks under this  Section  2A.9 shall  survive the payment in full of the Loans,
the  expiration  and  termination  of all Letters of Credit,  the payment of all
Reimbursement Obligations and any termination of this Agreement.

     2A.10  Collateralization.  If,  at any time  (after  giving  effect  to the
provisions of Section  2.5(a),  if  applicable,  at such time) when no Revolving
Credit  Loans  are  outstanding,  the  aggregate  Dollar  Equivalent  of  the LC
Obligations  exceeds the amount of the Total  Revolving  Credit Loan  Commitment
then in effect,  the Borrower shall (if the Agent so requests) deposit in a cash
collateral  account with the Agent, on terms and conditions  satisfactory to the
Agent and as security for the  Obligations,  an amount in Dollars  (and,  to the
extent requested by the Agent when the Carlisle LC is outstanding,  in Sterling)
equal to the amount of such excess.


Section 3. INTEREST.

     3.1 Rate of Interest. The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Loan from time to time outstanding from the date
the proceeds thereof are made available to the Borrower until maturity  (whether
by  acceleration or otherwise) at the following  interest rates:  (i) each Libor
Loan, at a rate per annum for each Interest Period  applicable  thereto equal to
(x) LIBOR for such Interest Period plus (y) the Eurocurrency  Differential,  and
(ii) each Base Rate (US)  Loan,  at a rate per annum  equal to (x) the Base Rate
(US), such rate to change as and when such Base Rate (US) changes,  plus (y) the
Base Rate (US) Differential.

     3.2 Interest Payment Dates. Interest on and prior to maturity in respect of
each Loan shall be payable in arrears (i) if such Loan is (x) a Libor  Loan,  on
the last day of each Interest  Period  applicable  thereto and, if such Interest
Period is longer  than three  months,  at the end of each  three-month  interval
within such  Interest  Period or (y) a Base Rate (US) Loan, on the last Business
Day of each calendar quarter after the making thereof and on the last day of any
Interest  Period  applicable  thereto,  (ii) upon any prepayment or repayment of
such Loan in full (to the extent  accrued on the amount  prepaid or repaid)  and
(iii) at  maturity  (whether  by  acceleration  or  otherwise).  The Agent shall
endeavor to notify the Borrower prior to each such interest  payment date of the
amount to be paid by the  Borrower on such date,  but no failure by the Agent to
do so shall in any way affect the Borrower's obligations hereunder to timely pay
the full  amount of  interest  due when due;  however,  no such  amount  paid in
reliance on such a notice,  or paid in accordance with the Borrower's good faith
calculations  in the  absence  of such a notice,  shall  constitute  an Event of
Default under Section 9.1 unless the Borrower  shall fail to timely pay the full
amount of any further adjustment as may be appropriate pursuant to notice to the
Borrower from the Agent.

     3.3 Overdue  Payment of Principal and Interest.  Overdue  principal of, and
overdue  interest  in respect of,  each Loan shall bear  interest  for each day,
payable on demand,  at a rate per annum (the  "Past-Due  Rate")  equal to 2% per
annum in excess of the interest  rate  otherwise  applicable to such Loan (up to
the end of the then-current Interest Period therefor, or any subsequent interest
period therefor selected by the Agent, that is applicable to such Loan).

     3.4 Interest  Periods.  For purposes of this  Agreement the term  "Interest
Period" shall mean:

          (a) with respect to any Libor Loan:

               (i)  initially,   the  period  commencing  on  the  borrowing  or
          conversion  date,  as the case may be,  with  respect to such Loan and
          ending one, three, six or nine months  thereafter,  as selected by the
          Borrower in its Notice of  Borrowing or Notice of  Conversion,  as the
          case may be, given with respect thereto; and

               (ii)  thereafter,  each period  commencing on the last day of the
          next preceding Interest Period applicable to such Loan and ending one,
          three, six or nine months  thereafter,  as selected by the Borrower by
          irrevocable notice (each an "Interest Period Notice") to the Agent not
          later than 10:00 a.m.,  Closing Office Time,  four Business Days prior
          to the last day of the  then  current  Interest  Period  with  respect
          thereto;

          provided  that, all of the foregoing  provisions  relating to Interest
          Periods for Libor Loans are subject to the following:

                    (1) if any Interest Period  pertaining to a Libor Loan would
               otherwise  end on a day that is not a Business Day, such Interest
               Period  shall be extended  to the next  succeeding  Business  Day
               unless  the  result  of such  extension  would be to  carry  such
               Interest  Period into another  calendar month in which event such
               Interest Period shall end on the immediately  preceding  Business
               Day;

                    (2) any Interest Period that would  otherwise  extend beyond
               the date final payment is due on the Libor Loan shall end on such
               date of final payment;

                    (3) any  Interest  Period  pertaining  to a Libor  Loan that
               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;

                    (4) the Borrower shall select Interest  Periods so as not to
               require a payment  or  prepayment  of any  Libor  Loan  during an
               Interest Period for such Loan;

                    (5) in the absence of timely selection by the Borrower of an
               Interest  Period for a Libor Loan,  the Interest  Period shall be
               one month (subject to the other terms of this proviso); and

                    (6) the Borrower shall select  Interest  Periods in order to
               comply with the provisions of Section 2.2(b); and

          (b) with respect to any Base Rate (US) Loan, the period  commencing on
     the borrowing or conversion  date, as the case may be, with respect to such
     Loan and  ending on the first to occur of the  maturity  date  (whether  by
     acceleration or otherwise) of such Loan or the conversion date with respect
     to such Loan.

     3.5 Conversion.

          (a) The Borrower shall have the option to convert (i) at any time, all
     or a  portion  of  any  Base  Rate  (US)  Loan  into  a  Libor  Loan,  (ii)
     [intentionally  deleted],  (iii)  on the  last  day of an  Interest  Period
     applicable  thereto,  a  Libor  Loan  into a Base  Rate  (US)  Loan or (iv)
     [intentionally deleted];  provided, however, (x) without the consent of the
     Agent or the Required Banks, no portion of the outstanding principal amount
     of any Base Rate (US) Loan may be  converted  into a Libor Loan  during the
     continuance  of any  Default  or  Event of  Default  and (y) no Loan may be
     converted   under  this  Section   3.5(a)  unless  the  provisions  of  the
     next-to-last  sentence of Section  2.2(b) are  complied  with after  giving
     effect to such conversion.

          (b) The Borrower shall exercise the option granted pursuant to Section
     3.5(a) by giving,  no later than 10:00 a.m.,  Closing  Office Time,  on the
     fourth  Business  Day prior to the  proposed  conversion  date,  written or
     telephonic notice (confirmed in writing) thereof (a "Notice of Conversion")
     to the Agent (the details of which notice the Agent shall promptly  deliver
     in writing,  or by telephone,  promptly confirmed in writing to each Bank).
     Each  Notice  of  Conversion  shall  state (i) the  option to be  exercised
     pursuant to Section 3.5(a), the requested  conversion date which shall be a
     Business Day and which in the case of the  conversion of any Base Rate (US)
     Loan shall be deemed the last day of the Interest Period applicable thereto
     and (ii) in the  case of a  conversion  into a Libor  Loan,  the  requested
     Interest Period  therefor.  Unless otherwise agreed to by the Agent and the
     Borrower,  the Notice of Conversion  shall be  substantially in the form of
     Exhibit C hereto.

          (c) Any Libor Loan may be continued as such upon the expiration of the
     then current Interest Period with respect thereto by the Borrower giving an
     Interest  Period  Notice to the Agent,  in  accordance  with  Section  3.4,
     setting  forth the length of the next  Interest  Period to be applicable to
     such Loan,  provided  that no Libor Loan may be  continued as such (i) when
     any  Default or Event of Default has  occurred  and is  continuing  and the
     Agent or the Required Banks have determined that such a continuation is not
     appropriate,  (ii) if, after giving effect thereto, Section 2.2(b) would be
     contravened  or (iii)  after the date that is one month prior to the end of
     the Commitment  period (in the case of  continuations  of Revolving  Credit
     Loans) and provided,  further,  that if such  continuation is not permitted
     pursuant  to the  preceding  proviso  such  Loans  shall  be  automatically
     converted  to Base  Rate (US)  Loans on the last day of such then  expiring
     Interest Period.

     3.6  Automatic  Conversion.  If,  on or  prior to a  Eurocurrency  Interest
Determination Date for a Libor Loan (and no Notice of Conversion shall have been
received  with  respect to such Loan to be  effective  at the end of the current
Interest  Period  therefor),  the Agent shall have received a Supervening  Event
Notice or shall  itself  have  determined  that one of the events  described  in
Section  2.2(d)  has  occurred  which  would  make it  impossible,  unlawful  or
impracticable to continue such Loan for another Interest Period, the Agent shall
promptly notify (in writing or by telephone,  promptly confirmed in writing) the
Borrower  and the Banks  thereof  and such Loan shall at the end of the  current
Interest  Period  therefor be converted into a Base Rate (US) Loan (if permitted
by the other provisions of the Agreement).

     3.7 Capital Adequacy; Qualification Requirements.

          (a) If any Bank (such  term,  for  purposes  of this  Section  3.7, to
     include the Issuer) shall have determined that the applicability  after the
     date hereof of any law, rule,  regulation or guideline  adopted pursuant to
     or arising  out of the July 1988 report of the Basle  Committee  on Banking
     Regulations and Supervisory Practices entitled  "International  Convergence
     of Capital  Measurement and Capital  Standards",  or the adoption after the
     date  hereof of any other law,  rule,  regulation  or  guideline  regarding
     capital  adequacy,  or  any  change  in  any  of  the  foregoing  or in the
     enforcement or  interpretation or administration of any of the foregoing by
     any court or any governmental authority,  central bank or comparable agency
     charged with the enforcement or interpretation  or administration  thereof,
     or  compliance  by any  Bank (or any  lending  office  of any  Bank) or any
     holding company of any Bank with any request or directive regarding capital
     adequacy  (whether  or not having the force of law) of any such  authority,
     central bank or comparable agency, has or would have the effect of reducing
     the rate of return on such Bank's  capital or on the capital of such Bank's
     holding company, if any, as a consequence of its obligations hereunder to a
     level below that which such Bank or such Bank's holding  company could have
     achieved but for such applicability, adoption, change or compliance (taking
     into  consideration  such Bank's  policies  and the policies of such Bank's
     holding company with respect to capital  adequacy) by an amount  reasonably
     deemed by such Bank to be  material,  then,  upon demand by such Bank,  the
     Borrower shall pay to such Bank from time to time such additional amount or
     amounts as will  compensate  such Bank or such Bank's  holding  company (as
     determined by such Bank in good faith) for any such reduction suffered as a
     consequence of such Bank's obligations hereunder, together with interest on
     each such amount  (commencing  three  Business Days from the date demanded)
     until payment in full thereof at the Base Rate (US). A certificate  of such
     Bank submitted to the Borrower as to any such additional  amount or amounts
     (including calculations thereof in reasonable detail) shall, in the absence
     of  manifest  error,  be  conclusive  and  binding  on  the  Borrower.   In
     determining such amount or amounts, such Bank may use any reasonable method
     of averaging and attribution as it shall deem applicable.

          (b) If any Bank shall have  determined that the  applicability  of any
     Qualification  Requirement,  or any  Regulatory  Change  or  change  in any
     Qualification  Requirement  or in  the  enforcement  or  interpretation  or
     administration  of  any  Qualification   Requirement  by  any  Governmental
     Authority  charged with the enforcement or interpretation or administration
     thereof,  has or would  have the effect of  reducing  the rate of return on
     such Bank's  capital or on the capital of such Bank's holding  company,  if
     any, as a consequence  of its  obligations  hereunder to a level below that
     which such Bank or such Bank's holding  company could have achieved but for
     such applicability,  adoption, change or compliance by an amount reasonably
     deemed by such Bank to be  material,  then,  upon demand by such Bank,  the
     Borrower shall pay to such Bank from time to time such additional amount or
     amounts as will  compensate  such Bank or such Bank's  holding  company (as
     determined by such Bank in good faith) for any such reduction suffered as a
     consequence of such Bank's obligations hereunder, together with interest on
     each such amount  (commencing  three  Business Days from the date demanded)
     until payment in full thereof at the Base Rate (US). A certificate  of such
     Bank submitted to the Borrower as to any such additional  amount or amounts
     (including calculations thereof in reasonable detail) shall, in the absence
     of  manifest  error,  be  conclusive  and  binding  on  the  Borrower.   In
     determining such amount or amounts, such Bank may use any reasonable method
     of averaging and  attribution as it shall deem  applicable.  "Qualification
     Requirement" shall mean any legal requirement that solely by reason of (and
     without regard to any other  activities of such Bank in any jurisdiction in
     which Collateral is located) the entering into, performance and enforcement
     of this  Agreement  and the other Loan  Documents by such Bank  constitutes
     "doing business" by such Bank in any jurisdiction, imposes on such Bank any
     liability for taxes or other governmental charges,  requires  qualification
     by such Bank to do  business  in any  jurisdiction  or requires a "business
     activity," "doing business" or similar report or notice to be filed by such
     Bank in any jurisdiction.

          (c) No demand for compensation under this Section 3.7 shall be made by
     any Bank unless such Bank is making similar demands upon similarly situated
     borrowers.

     3.8 Determination of Rate of Borrowing

          (a) As soon as practicable  after 11:00 a.m.,  Closing Office Time, on
     each Eurocurrency  Interest  Determination Date for a Libor Loan, the Agent
     shall  determine  (which  determination  shall,  absent  manifest error, be
     final,  conclusive  and binding upon all parties) LIBOR to be applicable to
     such Libor Loan for the next succeeding  Interest Period therefor and shall
     promptly  give  notice  thereof in writing or by  telephone  (confirmed  in
     writing) to the Borrower and the Banks.

          (b)  Notwithstanding  the  foregoing,  in the event  that prior to the
     first day of any Interest Period for a Libor Loan:

               (i) the Agent shall have determined (which determination shall be
          conclusive  and  binding  upon  the  Borrower)   that,  by  reason  of
          circumstances  affecting the relevant market,  adequate and reasonable
          means do not  exist  for  ascertaining  the  LIBOR  for such  Interest
          Period, or

               (ii) the Agent shall have received notice from the Required Banks
          that LIBOR  determined  or to be determined  for such Interest  Period
          will not  adequately  and  fairly  reflect  the cost to such Banks (as
          conclusively  certified by such Banks) of making or maintaining  their
          affected Loans during such Interest Period,

     the Agent shall give written or telephonic  (promptly confirmed in writing)
     notice  thereof  to the  Borrower  and the  Banks  as  soon as  practicable
     thereafter.  If such  notice is given (x) any Libor Loans  requested  to be
     made on the first day of such  Interest  Period  shall be made as Base Rate
     (US) Loans, (y) any Loans that were to have been converted on the first day
     of such  Interest  Period to Libor Loans shall be converted to or continued
     as Base Rate (US)  Loans,  and (z) any  outstanding  Libor  Loans  shall be
     converted,  on the first  day of such  Interest  Period,  to Base Rate (US)
     Loans. No further Libor Loans shall be made or continued as such, nor shall
     the Borrower  have the right to convert Base Rate (US) Loans to Libor Loans
     until the circumstances causing such suspension no longer exists.

     3.9 Requirements of Law.

          (a) If any Bank shall have reasonably  determined (which determination
     shall be final and  conclusive and binding upon all parties) that by reason
     of (x) the  requirements  of  Regulation D of the Board of the Governors of
     the Federal  Reserve  System or (y) any  Regulatory  Change  after the date
     hereof or (z) other circumstances  affecting such Bank (such as for example
     but not limited to a change in official  reserve  requirements or increased
     capital reserves required or imposed by any regulatory  authority or entity
     (domestic or foreign) having jurisdiction over or with respect to such Bank
     or any  change  in the  basis  of  taxation  of  payments  to such  Bank of
     principal  or  interest  on any Libor Loan  (other  than  taxes  covered by
     Section  5.2 or taxes on such  Bank's  overall  income by the  jurisdiction
     where such Bank's  principal  or lending  office or offices are located) to
     the extent not  provided  for in clause (x)  above),  such Bank shall incur
     increased  costs  or  reductions  in the  amounts  received  or  receivable
     hereunder in respect of any Libor Loan,  then,  and in any such event,  the
     Bank so affected  shall  promptly  give  notice in writing or by  telephone
     (confirmed  in writing) to the Borrower  (with a copy to the Agent if given
     by a Bank  other  than the Agent) of such  determination.  Thereafter,  the
     Borrower  shall  pay to such  Bank,  upon  written  demand  therefor,  such
     additional  amounts (which may be in the form of an increased rate of, or a
     different  method of calculating,  interest if the Borrower and the Bank so
     agree) as shall be sufficient to  compensate  such Bank for such  increased
     cost or reduction in amounts  received or receivable,  provided that in the
     case of any such  determination  pursuant to clause (x) with respect to any
     Libor Loan,  the written notice from the Bank to the Borrower shall specify
     the additional  amount  required to be paid with respect to such Loan (with
     such  amount so stated to be final  with  respect to each  Interest  Period
     therefor  until  notice is received by the Borrower and the Agent from such
     Bank that the  condition  giving  rise to such  determination  is no longer
     applicable) and such additional  amount shall be paid at the same time, and
     together  with,  the  interest  otherwise  payable in respect of such Libor
     Loans for such affected Interest Periods. Each such notice or demand shall,
     absent  manifest error, be final and conclusive and binding upon all of the
     parties  hereto;  provided that before giving any such notice or making any
     such demand,  each Bank agrees to use reasonable  efforts  (consistent with
     its internal  policy and legal and regulatory  restrictions  and so long as
     such  efforts  would  not  be  disadvantageous  to it,  in  its  reasonable
     discretion,  in any legal,  economic or  regulatory  manner) to designate a
     different  lending office if the making of such designation would avoid the
     need for, or materially reduce the amount of, such increased cost.

          (b) In the case of any Bank affected by subsection 3.9(a),  other than
     clause (x)  thereof  (any such Bank,  together  with any Bank  affected  by
     subsection  3.10,  an  "Affected  Bank"),  the Borrower may (subject to the
     other  provisions  of this  Agreement)  exercise  any one of the  following
     options if the  exercise of such  option  shall  eliminate  the need to pay
     compensation to the Affected Bank pursuant to Section 3.9(a):

               (i) If such  determination  by the Affected  Bank relates only to
          Libor Loans then being requested by the Borrower  pursuant to a Notice
          of Borrowing or a Notice of Conversion, the Borrower may, prior to the
          date on which such Libor Loans are to be made or converted,  by giving
          notice in writing or by telephone  (confirmed in writing) to the Agent
          and the Banks,  withdraw  such Notice of  Borrowing  or such Notice of
          Conversion for all Banks.

               (ii) Upon written notice to the Agent and the Banks, the Borrower
          may  terminate the  obligation of the Banks to make or maintain  Loans
          as, or convert  Loans  into,  Libor  Loans  and,  in such  event,  the
          Borrower shall on the first day of the next occurring  Interest Period
          applicable  thereto  convert all Libor Loans into Base Rate (US) Loans
          in the manner  contemplated by Section 3.5 but without  satisfying the
          notice requirements therein.

               (iii) The  Borrower  may,  by  giving  notice  in  writing  or by
          telephone  (confirmed in writing) to the Affected  Bank, the Agent and
          the other Banks, require the Affected Bank to make the Libor Loan then
          being  requested as a Base Rate (US) Loan,  or to continue to maintain
          its  outstanding  Base Rate (US) Loan then the  subject of a Notice of
          Conversion as a Base Rate (US) Loan, as the case may be, or to convert
          each Libor Loan then  outstanding that is so affected into a Base Rate
          (US)  Loan on the  first  day of the next  occurring  Interest  Period
          applicable  thereto,  or within such earlier period, as is required by
          law, such notice to pertain only to the Loans of the Affected Bank and
          to have no effect  on the  obligations  of the other  Banks to make or
          maintain such Libor Loans or to convert Loans into such Libor Loans.

     3.10 Required Termination and Prepayment. In the event that at any time any
Affected Bank shall have reasonably  determined  (which  determination  shall be
final  and  conclusive  and  binding  upon  all  parties)  that  the  making  or
continuation  of any of its Libor Loans has become unlawful by compliance by the
Affected  Bank in good  faith  with  any  law,  governmental  rule,  regulation,
guideline  or order  (whether  or not having the force of law and whether or not
failure to comply therewith would be unlawful), the Affected Bank shall promptly
give notice in writing or by telephone  (confirmed  in writing) to the Agent and
the Borrower of such determination; provided that before giving any such notice,
each Bank agrees to use reasonable efforts  (consistent with its internal policy
and legal and regulatory  restrictions  and so long as such efforts would not be
disadvantageous to it, in its reasonable  discretion,  in any legal, economic or
regulatory manner) to designate a different lending office if the making of such
a  designation  would allow the Bank to continue to perform its  obligations  to
make  Libor  Loans   affected  by  such   determination.   Upon  receiving  such
notification,  the  Borrower  shall  (subject  to the other  provisions  of this
Agreement) forthwith take one of the actions specified in Section 3.9(b) (to the
extent required to cure such  condition).  If the Borrower has not exercised one
of the options  specified  in Section  3.9(b)  within the time  periods  therein
prescribed,  the Borrower shall be deemed to have exercised the option set forth
in  clause  (iii) of  Section  3.9(b)  (requiring  the  making,  continuance  or
conversion  into Base Rate (US)  Loans) and to have  given the notice  specified
therein. If any such conversion of a Libor Loan occurs on a day which is not the
last day of the then current Interest Period with respect thereto,  the Borrower
shall pay to the Affected Bank such amounts, if any, as may be required pursuant
to Section 3.11. If circumstances  subsequently change so that the Affected Bank
shall determine that it is no longer so affected, such Bank will promptly notify
the Borrower and the Agent, and upon receipt of such notice,  the obligations of
such Bank to make or  continue  such Libor  Loans or to convert  Loans into such
Libor Loans shall be reinstated.

     3.11  Compensation.  The Borrower shall  compensate each Bank, upon written
request  by such Bank  made  through  the Agent  (which  request  shall,  absent
manifest error,  be final and conclusive and binding upon all parties),  for all
reasonable losses, expenses and liabilities (including,  without limitation, any
interest  paid by such Bank to lenders of funds  borrowed by it to make or carry
its Libor Loans and any reasonable loss (including any loss of margin) sustained
by such Bank in connection with the liquidation or re-employment of such funds),
which such Bank may sustain: (i) if for any reason (other than a default by such
Bank) a  borrowing  or  conversion  of any  Libor  Loan does not occur on a date
specified  therefor in a Notice of Borrowing or a Notice of Conversion  (whether
or not withdrawn), (ii) if any prepayment, repayment or conversion of any of its
Libor Loans  occurs on a date which is not the last day of the  Interest  Period
applicable  thereto,  (iii) if any  prepayment  of any of its Libor Loans is not
made on any date specified in a notice of prepayment  given by the Borrower,  or
(iv) as a consequence of any default by the Borrower hereunder.


     Section 3A. CURRENCIES.

     3A.1 Amount of Currency to be Made Available.  Amounts to be made available
by each Bank in  response  to a Notice of  Borrowing,  Notice of  Conversion  or
conversion  pursuant to Section 3.5, 3.9 or 3.10 shall be made in Dollars and be
based upon such Bank's pro rata portion (based upon its applicable Commitment or
its portion of the Loan to be  converted,  as the case may be) of the  principal
amount of the relevant Loan.

     3A.2 Adjusting Payments. If on any given date the Banks are making Loans to
the Borrower in the same currency  that the Borrower is, on such date,  repaying
Loans to the Banks,  then,  for  administrative  convenience,  the Agent and the
Borrower  may by  mutual  consent  net out  the two  amounts  so that  only  the
difference (if any) need be actually  transferred.  For all other purposes,  the
two transactions  shall be deemed separate  borrowings and repayments  except as
specifically stated otherwise in this Agreement.

     3A.3  Locations of Payment.  On each date on which any amount is to be paid
by the Borrower to the Agent or any Bank hereunder, the Borrower shall make that
amount  available  to the Agent,  in Dollars  (except to the extent that another
currency is otherwise specified therefor elsewhere in this Agreement,  including
without  limitation  in Sections  2A.3(a) and  2A.4(b)),  to the account of such
office of the Agent or such Bank in the US or the UK or the  Cayman  Islands  as
the Agent may specify;  provided  that  payments in Sterling  shall  (unless the
Agent and Borrower  otherwise  agree) be made to the Agent's account at a branch
of the Agent in the UK.

     3A.4  Computations.  The principal amount of each Loan shall be recorded on
the books of the Agent,  and,  in the absence of manifest  error,  such  records
shall be rebuttable presumptive evidence thereof.

     3A.5 Necessary  Actions.  Without  limiting the obligations of the Borrower
hereunder   (including  its  obligation  to  make  payments  in  Sterling  where
specified),  the Agent is hereby authorized to convert funds received by it in a
particular  currency in which payment is due in such manner and on such terms as
the Agent may, in good faith, deem appropriate.

     3A.6 Excess Outstandings.  The Agent may, from time to time on the last day
of any Interest  Period,  but in any case not more than once a calendar  quarter
under this Section 3A.6,  calculate the aggregate amount of all Revolving Credit
Loans outstanding plus all LC Obligations (said aggregate amount, the "Aggregate
Outstanding  Amount").  If the Agent  determines  that due to a  fluctuation  in
exchange  rates,  the Dollar  Equivalent  of the  Aggregate  Outstanding  Amount
exceeds the Total Revolving Credit Loan Commitment, then the Agent may so notify
the Borrower and the Borrower  shall  promptly pay to the Agent on behalf of the
Banks the amount  which the Agent  specifies  is required to eliminate or reduce
any such excess;  any such payments  shall be treated as repayments of Revolving
Credit Loans to the extent Revolving Credit Loans are then  outstanding.  In the
event that there are no  Revolving  Credit  Loans  outstanding  to do so (or the
amount thereof is  insufficient),  the Borrower shall (if the Agent so requests)
deposit in a cash  collateral  account with the Agent,  on terms and  conditions
satisfactory  to the Agent and as  security  for the  Obligations,  an amount in
Dollars  (and,  to the extent  requested  by the Agent when the  Carlisle  LC is
outstanding, in Sterling) equal to the amount of such deficiency.


Section 4. COMMITMENT COMMISSION, ETC.

     4.1 Commitment Commission.  The Borrower agrees to pay to the Agent for the
account of each Bank a  Commitment  commission  with  respect  to its  Revolving
Credit Loan  Commitment  for the period  commencing on the  Amendment  Effective
Date, to and including the date on which the Revolving  Credit Loan  Commitments
of the Banks have been  permanently  terminated in full,  computed at a rate per
annum equal to the  Commitment  Fee  Percentage on the average daily  Unutilized
Revolving  Commitment of such Bank  (computed in Dollars)  during the period for
which payment is made. For the purposes of the preceding  sentence,  issuance of
Letters of Credit shall be deemed to be a utilization  of the Banks'  respective
Revolving  Credit Loan  Commitments in an amount equal to LC  Outstandings,  pro
rata as to each  Bank  based  on the  amount  that  its  Revolving  Credit  Loan
Commitment bears to the Total Revolving Credit Loan Commitment.  Such Commitment
commission  shall be payable  quarterly  in arrears on the last  Business Day of
each  calendar  quarter  and on the date upon which the  Revolving  Credit  Loan
Commitments shall be permanently terminated.  The Agent shall endeavor to notify
the Borrower prior to the end of each such calendar  quarter of the amount to be
paid by the Borrower at the end of such quarter,  but no failure by the Agent to
do so shall in any way affect the Borrower's obligations hereunder to timely pay
the full amount due when due; however, no such amount paid in reliance on such a
notice, or paid in accordance with the Borrower's good faith calculations in the
absence of such a notice, shall constitute an Event of Default under Section 9.1
unless the  Borrower  shall fail to timely  pay the full  amount of any  further
adjustment  as may be  appropriate  pursuant to notice to the Borrower  from the
Agent.

     4.2  Agent's  Fees.  The  Borrower  agrees  to pay to the Agent for its own
account (the "Agent's Fees") a non-refundable  annual  management fee of $30,000
per year,  commencing  on May 3, 2003 and  payable  on or before May 3rd of each
succeeding year  thereafter.  The Borrower's  obligations to pay these fees (and
those set forth in Section 4.3 below) are obligations of the Borrower under this
Agreement and are secured by the Security Documents and entitled to the benefits
of the Guarantee Agreements.

     4.3  Facility  Fee.  The  Borrower  agrees to pay to the Agent,  for and on
behalf of the Banks that are party to this  Agreement  on the  Closing  Date,  a
non-refundable  facility fee of $250,000,  $50,000 of which has been  previously
paid and the balance of which shall be payable on the Closing Date.

     4.4 Currency. Fees and commissions payable pursuant to this Section 4 shall
(unless specified otherwise elsewhere in this Agreement) be paid by the Borrower
in freely transferable Dollars.

     4.5 Accrued Commitment Commission; Accrued Interest.

          (a) Any Commitment  commission accrued but unpaid immediately prior to
     the Amendment  Effective  Date (based on the amount of the Total  Revolving
     Credit Loan Commitment  under the Original  Agreement) shall be paid on the
     first regularly scheduled date for the payment of Commitment commissions to
     occur after the Amendment Effective Date.

          (b) Any interest accrued but unpaid immediately prior to the Amendment
     Effective Date in respect of the promissory notes that were issued pursuant
     to the Original  Agreement  shall be paid on the first  regularly-scheduled
     date for the payment of interest  to occur  after the  Amendment  Effective
     Date.


Section 5. PAYMENTS, ETC.

     5.1 Currency, Payments on Non-Business Days; Calculations.

          (a)  Dollars  are the  currency  of account for each and every sum due
     from the Borrower  hereunder and under the other Loan  Documents;  provided
     that:

               (i) each payment in respect of costs and  expenses  shall be paid
          in the currency in which the same are invoiced; and

               (ii)  payments  required  to be made  in a  currency  other  than
          Dollars  shall  be made in such  currency  unless  the  Agent  and the
          Borrower  agree,  as to any  such  payment,  that it  shall be made in
          Dollars.

          (b)  Whenever  any  payment  to be  made  hereunder  or  otherwise  in
     connection  with any Loan shall be stated to be due on a day which is not a
     Business Day, the due date thereof shall be extended to the next succeeding
     Business Day and interest  shall be payable at the  applicable  rate during
     such extension. Interest hereunder (including, without limitation, interest
     on the Loans) and under the Loan Documents  (other than any interest on the
     Deemed Disbursement Account) and Commitment commissions shall be calculated
     on the basis of a 360 day year and the actual  number of days  elapsed;  if
     for any  reason a Loan is repaid  on the same day on which it is made,  one
     day's interest (subject to the other provisions of this Agreement) shall be
     paid on that Loan.

     5.2 Net Payments; Application.

          (a)  All  payments  hereunder  and  under  the  other  Loan  Documents
     (including,  without  limitation,  prepayments  and repayments  pursuant to
     Section 2) shall be made by the Borrower to the Agent or the Issuer, as the
     case  may  be,  in  immediately  available,  freely  transferable,   freely
     convertible  same  day  Dollars  (except  if  and to  the  extent  provided
     otherwise  by  this  Agreement)  at the  Closing  Office  (or as  otherwise
     provided  in  Section  3A.3)  without  setoff or  counterclaim  and in such
     amounts  as may be  necessary  in order that all such  payments  (after (i)
     withholding  for or on account  of any  present  or future  taxes,  levies,
     imposts,  duties or other similar  charges of whatsoever  nature imposed on
     the amounts described above by any government or any political  subdivision
     or taxing  authority  thereof,  other than any tax  (other  than such taxes
     referred to in clause (ii) below)  imposed on a Bank pursuant to the income
     tax laws of the jurisdiction  where such Bank's principal or lending office
     or offices are located (collectively, the "Taxes") and (ii) deduction of an
     amount equal to any taxes on or measured by the net income  payable to such
     Bank with respect to the amount by which the  payments  required to be made
     by this Section 5.2 exceed the amount otherwise  specified to be paid under
     this Agreement and the Notes) shall not be less than the amounts  otherwise
     specified to be paid under this  Agreement  and the Notes.  With respect to
     each such deduction or withholding,  the Borrower shall promptly (and in no
     event   later  than  30  days   thereafter)   furnish  to  the  Agent  such
     certificates,  receipts and other documents as may be required to establish
     any tax credit,  exemption or reduction in rate to which any Bank or holder
     of a Note may be  entitled.  Each  Bank,  other than a Bank  organized  and
     existing  under the laws of the United  States of America or any  political
     subdivision thereof, agrees to furnish the Borrower, as soon as practicable
     after any written request of the Borrower to such effect, any executed form
     reasonably  requested by the Borrower such as Internal Revenue Service Form
     W-8BEN or Form  W-8CI,  and any other  applicable  US or UK form as to such
     Bank's entitlement, if any, to exemption from, or a reduced rate of, or its
     subjection to US or UK withholding  tax on amounts  payable to it hereunder
     or under the Notes and each such Bank  undertakes  to use its best  efforts
     promptly to notify the Borrower of any material change in any  information,
     statement or form so furnished to the Borrower; provided, however, that any
     failure on the part of any Bank to furnish any such information, statements
     or forms  shall in no way  affect  the  terms of this  Agreement  or of the
     Notes.  Notwithstanding  the  foregoing,  in the  event  any Bank  fails to
     furnish any such information,  statements or forms, the Borrower shall only
     pay to such Bank such amounts under this Agreement and the Notes as are due
     without those additions  described in clauses (i) and (ii) above that would
     not have been  required  had such  information,  statements  or forms  been
     provided in a timely  fashion.  As promptly as  practicable  after any Bank
     becomes aware of the existence or occurrence of an event giving rise to the
     imposition of US or UK withholding tax upon amounts payable to it hereunder
     or under the Notes,  such Bank shall use its best  efforts to transfer  its
     Loans or Revolving  Credit Loan  Commitment to another  office of such Bank
     with a view to avoiding or mitigating the  consequences of such tax. If any
     Bank  determines that it is unable to effect such transfer on or before the
     thirtieth  day after the date such Bank becomes  aware of the  existence or
     occurrence  of  an  event  giving  rise  to  the  imposition  of  US  or UK
     withholding tax, such Bank shall promptly give notice of such determination
     to the Borrower. If the Borrower receives notice of such determination from
     such Bank, the Borrower may, by notice to such Bank, indicate its intention
     to  prepay  the  affected  Loan in full  (but  with all  premiums,  if any,
     provided for in this  Agreement  and with  interest  accrued to the date of
     prepayment  on such Loan and all other  amounts  then  payable to such Bank
     hereunder)  on the tenth  Business  Day  after  the date of such  notice of
     intention.  On or before the tenth day after  receipt of any such notice of
     intention,  such Bank may, by notice to the Borrower,  irrevocably elect to
     receive payments  hereunder reduced by the amount of such  withholding.  If
     such an election is so made,  the  Borrower (i) shall cease to be under any
     further  obligation  to pay any such  additional  amount in respect of such
     withholding  and (ii) shall  cease to be  entitled so to prepay the Loan by
     virtue of being  required  to make such  withholding.  Any Bank which is or
     becomes  subject to such  withholding tax agrees to use its best efforts to
     provide  the  Borrower  with an  affidavit,  within 30 days after such Bank
     files  its tax  return,  setting  forth  the  amount  of any tax  credit it
     received with respect thereto.

          (b) Unless otherwise  specifically provided herein, all payments under
     or pursuant to, or in  satisfaction  of any of the  Borrower's  obligations
     under this  Agreement  or under the Notes will be applied in the  following
     order of priority:  (i) to any amounts not otherwise listed in this Section
     5.2(b) then due and payable under this Agreement, the Notes or the Security
     Documents,  (ii) to any Commitment  commission or fees then due and payable
     pursuant to Section  4.1 of this  Agreement,  (iii) to any  interest on the
     Loans then due and payable,  (iv) to any  principal  amount then due on the
     Loans,  (v) to reduce the unpaid  principal  amount of the Revolving Credit
     Loans, and (vi) [intentionally omitted].

          (c)  Bank of  Scotland  hereby  represents  that,  at the date of this
     Agreement, it

               (i) is  recognized  by the UK Board of  Inland  Revenue,  for the
          purposes of the Income and Corporation Taxes Act 1988 (as in effect on
          the date hereof),  as carrying on a bona fide banking  business in the
          UK by which all amounts  received or  receivable by it as a Bank under
          this Agreement will be taken into account as a trading receipt of such
          banking business for the purposes of UK Corporation Tax; or

               (ii) is resident in a jurisdiction  with which the UK has, at the
          date  of this  Agreement,  an  appropriate  "double  taxation  treaty"
          reducing the amount of UK tax on amounts  received or receivable by it
          as a Bank under this Agreement to zero, or exempting such amounts from
          such tax.

          (d) If (i) the  Borrower  makes any  payment to a Bank  under  Section
     5.2(a), (ii) there are no amounts then payable, but unpaid, by the Borrower
     under this Agreement or the other Loan  Documents,  and (iii) no Default or
     Event of Default has occurred  which has not been  remedied by the Borrower
     or waived by the Required  Banks,  such Bank shall negotiate with the Agent
     and the Borrower with a view to reimbursing the Borrower, following receipt
     by such  Bank  (and the  passage  of all  periods  for the audit of the tax
     records  of the  Bank  by the  Inland  Revenue  or  other  appropriate  tax
     authority  for the period in  question),  such  proportion of any available
     credit against,  or remission for, tax as such Bank in good faith certifies
     to be  attributable  to this  Agreement or the other Loan Documents and the
     proportion which will leave it (after  reimbursement to the Borrower) in no
     worse  position than it would have been in had the relative  withholding or
     deduction never been required. This Section shall not impose any obligation
     on any Bank:

               (1) to manage its tax or other affairs in any particular  manner;
          or

               (2) to claim any credit against, or remission for, tax payable on
          amounts  received  by it  under  this  Agreement  or  the  other  Loan
          Documents in priority to any other tax relief,  or  allowance  for tax
          borne by it, on such amounts; or

               (3) to disclose any information concerning its tax affairs to the
          Borrower or to any other Person.

     Any   reimbursement   to  the  Borrower   shall  be  made  promptly   after
     certification by a Bank of any amount due to the Borrower.

     5.3  Distribution  by Agent.  All  payments  received by the Agent from the
Borrower on account of principal and interest  under this Agreement or the Notes
or with respect to Commitment  commission  shall be promptly  distributed by the
Agent to the  Banks  (in the same  currency  and type of funds  received  by the
Agent) as follows: (a) [intentionally  deleted]; (b) if in respect of principal,
then on a pro rata basis to all Loans outstanding;  (c) [intentionally deleted];
(d) if in  respect  of  interest  due on the  Loans,  then to  each  Bank in the
proportion that the aggregate amount of such unpaid interest due on the Loans of
each such Bank bears to the aggregate  amount of such unpaid interest due on all
such Loans; (e) if in respect of Commitment  commission pursuant to Section 4.1,
to each Bank in the proportion that the Revolving Credit Loan Commitment of such
Bank bears to the Total Revolving  Credit Loan  Commitment;  (f)  [intentionally
deleted];  (g) if in respect of fees pursuant to Section 4.3, to each Bank party
to this  Agreement  on the  Amendment  Effective  Date in  proportion  that  the
Revolving  Credit Loan Commitments of such Banks on such date bears to the Total
Commitments  on such date;  (h) if in respect of a payment under Section  5.2(a)
hereof,  to each Bank in  accordance  with its  entitlement  thereto;  (i) if in
respect of payments made in Section 2A, as provided in Section 2A; and (j) if in
respect of  Sections  3.7-3.11,  as  provided  in such  sections.  Other than in
respect of amounts  received  directly  from the Borrower  for  repayment to the
Banks (which shall be paid in the currency received, unless otherwise separately
agreed  to in  writing  by the  Agent  and  such  Bank),  the  Agent  is  hereby
irrevocably  authorized  (but not  required)  by the  Borrower  and the Banks to
convert funds received in a particular currency to the currency in which payment
is due,  in such  manner  and on such  terms as the Agent may in good faith deem
appropriate.


Section 6. CONDITIONS PRECEDENT TO INITIAL LOANS.

     The Banks party to this  Agreement on the Closing Date (the  "Closing  Date
Banks")  shall not be obligated to make any Loans or issue any Letters of Credit
on the  Closing  Date  unless at the time of making  such Loan or  issuing  such
Letter  of  Credit  (unless  otherwise  specifically  indicated)  the  following
conditions  have been satisfied to the  satisfaction  of the Agent (or waived by
the Agent):

     6.1  Default,  etc. On the date of such Loan or the issuance of a Letter of
Credit (and after giving  effect to the Loans made and Letters of Credit  issued
on such  date),  there  shall  exist no  Default  or Event  of  Default  and all
representations and warranties made by the Credit Parties herein or in the other
Loan  Documents  or  otherwise  by the Credit  Parties in writing in  connection
herewith or therewith  shall be true and correct in all material  respects  with
the same effect as though such  representations and warranties have been made at
and as of such time.

     6.2 Notes. The Agent shall have received for each of the Closing Date Banks
the Revolving Credit Notes, each duly executed and completed by the Borrower.

     6.3 Release of Deficiency  Undertaking.  There shall have been delivered to
the  Borrower  a  release,  substantially  in the  form  of  Exhibit  D to  this
Agreement,  of the Deficiency Undertaking (as defined in the Original Agreement)
executed by XANSER (the "Release of Deficiency Undertaking").

     6.4  Supporting  Documents.  There shall have been  delivered  to the Agent
(with sufficient copies for each of the Closing Date Banks) such information and
copies  of  documents,   approvals  (if  any)  and  records   (certified   where
appropriate)  of corporate  and legal  proceedings  as the Agent or any Bank may
have  reasonably  requested  relating  to the  Credit  Parties'  entering  into,
issuance and  performance  of the Loan  Documents and the other  agreements  and
documents related thereto to which each is a party. Such documents shall, in any
event, include:

          (a) on or before  September 13, 2002,  certified copies of the Charter
     Documents  of  each of the  Credit  Parties  designated  by the  Agent  and
     certificates  of existence and good standing for each of the Credit Parties
     designated by the Agent which were not delivered on the Closing Date;

          (b) certificates of authorized  officers of each of the Credit Parties
     designated by the Agent,  certifying the corporate resolutions of each such
     entity  relating to the  entering  into and  performance  of the  aforesaid
     documents to which such entity is a party and the transactions contemplated
     thereby;

          (c) certificates of authorized  officers of each of the Credit Parties
     designated  by the Agent,  with  respect  to the  incumbency  and  specimen
     signatures of their respective  officers or  representatives  authorized to
     execute such documents and any other documents and papers,  and to take any
     other action, in connection therewith;

          (d)  a  certificate  of  an  authorized  officer  of  Holding  and  an
     authorized  officer of the  Borrower  certifying,  as of the Closing  Date,
     compliance  with the  conditions  of Section  6and also the  absence of any
     Material Adverse Changes of the type referred to in Section 6.17;

          (e)  a  certificate  of  an  authorized  officer  of  Holding  and  an
     authorized officer of the Borrower certifying, (as to Holding, the Borrower
     and each of their  Subsidiaries)  that the  representations  and warranties
     with  respect  to  Holding,  the  Borrower  and each of their  Subsidiaries
     contained  in Section 10 hereof are true and correct as of the Closing Date
     with the same effect as though such representations and warranties had been
     made at and as of such  time  and  certifying  (as to  such  entities)  the
     absence of any Material Adverse Changes; and

          (f) on or before  September 13, 2002, a  certificate  of an authorized
     officer of Holding and an authorized officer of the Borrower certifying, as
     of the date of such certificate,  compliance with the conditions of Section
     6 to be complied with on or before September 13, 2002.

     6.5 Security Documents.  There shall have been delivered to the Agent (with
sufficient copies for each of the Closing Date Banks):

          (a)  (i)  A fixed  and floating  charge, substantially in the  form of
          Exhibit E to this Agreement, executed by the Borrower (as the same may
          from time to time be amended,  supplemented or otherwise modified, the
          "Borrower  Security   Agreement"),   and  a  Mortgage  of  Securities,
          substantially in the form of Exhibit F to this Agreement,  executed by
          the  Borrower  (as  the  same  may  from  time  to  time  be  amended,
          supplemented or otherwise modified,  the "Borrower Pledge Agreement"),
          covering all real and personal property of the Borrower and all of the
          shares or other equity interests issued by each of the Subsidiaries of
          the Borrower (and the  Intercompany  Note to the extent payable to the
          Borrower),  together with (x) certificates  representing  such pledged
          shares,  (y) undated  stock powers for such  certificates  executed in
          blank  and  evidence  that  such  pledge  has been  noted on the stock
          records of the companies  whose shares have been pledged and (z) as to
          the Intercompany Note, endorsed in blank by the Borrower.

               (ii)  Guaranty  agreements  executed  by FAI  and  any  other  US
          Guarantor (as the same may from time to time be amended,  supplemented
          or otherwise modified, a "US Guaranty"),  substantially in the form of
          Exhibit G to this Agreement.

               (iii) Security agreements executed by Holding,  FAI and any other
          US  Guarantor  (as  the  same  may  from  time  to  time  be  amended,
          supplemented or otherwise modified, a "US Security  Agreement"),  each
          substantially in the form of Exhibit H to this Agreement, covering all
          personal property of Holding, FAI and any other US Guarantor.

               (iv)  Except  as  provided  below  in  this  Section  6.5(a)(iv),
          guaranty agreements and security agreements  substantially in the form
          of  Exhibits  I and J to this  Agreement  respectively  (or such other
          forms approved by the Agent as are  appropriate  in the  jurisdictions
          where the respective  Foreign  Guarantors are organized),  executed by
          each Foreign Guarantor (each such agreement, as the same may from time
          to time be amended,  supplemented  or otherwise  modified,  a "Foreign
          Guaranty" and a "Foreign  Security  Agreement",  respectively),  which
          Foreign Security Agreements shall cover all real and personal property
          of each of the Foreign  Subsidiaries.  Notwithstanding  the foregoing,
          each Foreign  Guarantor  that is an  Insignificant  Subsidiary  and is
          organized in a  jurisdiction  other than France or Australia may agree
          in its  Foreign  Guaranty  not to grant or  permit  to exist  any Lien
          whatsoever  in any assets  held by such  Person in lieu of such Person
          executing and delivering a Foreign Security Agreement. Notwithstanding
          the foregoing, each Foreign Guarantor that is organized under the laws
          of France  and  Australia  shall  execute  and  deliver to the Agent a
          Foreign  Guaranty  and a  Foreign  Security  Agreement  on  or  before
          September 13, 2002.

               (v) Negative pledge agreements in form and substance satisfactory
          to the Agent ("Foreign Negative Pledge  Agreements") from each Foreign
          Guarantor  that (x) is an  Insignificant  Subsidiary  and (y) with the
          Agent's  consent,  does not  execute  and  deliver a Foreign  Security
          Agreement  pursuant to Section  6.5(a)(iv)  hereof,  wherein each such
          Person  agrees  not to grant or permit to exist any Lien in any of its
          assets.  Notwithstanding the foregoing, each Foreign Guarantor that is
          an Insignificant  Subsidiary and is organized in a jurisdiction  other
          than  France or  Australia  may agree in its Foreign  Guaranty  not to
          grant or permit to exist any Lien  whatsoever  in any  assets  held by
          such Person in lieu of such Person  executing and delivering a Foreign
          Negative Pledge Agreement.

          (b)   (i)  Pledge agreements  executed  by  XANSER,  Holding,  FAI and
          any other US  Guarantors,  substantially  in the form of  Exhibit K to
          this Agreement (as the same may be amended,  supplemented or otherwise
          modified from time to time, a "US Pledge Agreement"),  covering all of
          the shares or other equity  interests  issued by Holding,  FAI and any
          other US Guarantors (and the  Intercompany  Note to the extent payable
          to any of such Persons),  together with (x) certificates  representing
          such pledged  shares,  (y) undated stock powers for such  certificates
          executed in blank and evidence  that such pledge has been noted on the
          stock records of the companies  whose shares have been pledged and (z)
          as to the Intercompany Note, endorsed in blank by such Persons.

               (ii) Pledge agreements in form and substance  satisfactory to the
          Agent,  executed by each Foreign Subsidiary which itself owns stock or
          other equity interests in another Subsidiary (each such agreement,  as
          the same may be amended,  supplemented or otherwise modified from time
          to time, a "Foreign Pledge Agreement"),  covering all of the shares or
          other  equity  interests  issued by the  Subsidiaries  of the  Foreign
          Subsidiaries  (and the Intercompany  Note to the extent payable to any
          of such Persons),  together with (x)  certificates  representing  such
          pledged shares (to the extent such  ownership  interest is represented
          by share certificates), (y) undated stock powers for such certificates
          executed in blank and evidence  that such pledge has been noted on the
          stock records of the companies  whose shares have been pledged and (z)
          as to the Intercompany Note, endorsed in blank by such Persons.

          (c)  Intellectual  property  mortgages  executed  by Holding  and FAI,
     substantially in the form of Exhibit L to this Agreement or such other form
     agreed to by the Agent (each,  as the same may be amended,  supplemented or
     otherwise  modified  from time to time, a "US IPM"),  covering (as to each)
     all patents,  trademarks,  copyrights,  trade  names,  and licenses of such
     Persons together with a favorable  opinion of patent and trademark  counsel
     satisfactory to the Agent with respect thereto.

          (d) Such  consents  of  third  parties  as the  Agent  may  reasonably
     request.

          (e)  (i)   (A)  A guaranty and a charge (as the same may from  time to
               time be amended,  supplemented or otherwise modified, a Guaranty"
               and a "UK Security Agreement",  respectively) executed by each UK
               Guarantor and  substantially  in the forms of Exhibits M and N to
               this Agreement,  guaranteeing  all of the Borrower's  obligations
               under this  Agreement and securing such  guarantee  with a charge
               (fixed and floating) on all of such UK  Guarantor's  present real
               property  and present and future  personal  property  (including,
               without limitation,  leases,  stock and other equity interests in
               its Subsidiaries, and intellectual property).

                    (B) A Mortgage of  Securities  substantially  in the form of
               Exhibit O to this Agreement (as the same may from time to time be
               amended,   supplemented  or  otherwise  modified,  a  "UK  Pledge
               Agreement") executed by each UK Guarantor.

               (ii) Duly  authenticated and executed existing share certificates
          in respect of the entire share capital of the Borrower and each Person
          that is a Subsidiary  of the Borrower,  together  with share  transfer
          forms duly executed in blank by the Borrower or the Loan Party that is
          the record holder thereof.

               (iii)  An  intellectual   property   mortgage  executed  by  FIL,
          substantially  in the form of the US IPM or such other form  agreed to
          by the Agent (as the same may be amended,  supplemented  or  otherwise
          modified  from time to time,  the "UK  IPM"),  covering  all  patents,
          trademarks,  copyrights,  trade  names,  and  licenses of such Persons
          together  with a  favorable  opinion of patent and  trademark  counsel
          satisfactory to the Agent with respect thereto; and

               (iv)  No  Dormant  Subsidiary  (for  as  long  as it  remains  an
          Insignificant  Subsidiary)  shall be  required  to execute a Guaranty,
          Security  Agreement or Pledge Agreement  pursuant to the provisions of
          this Section 6.5.

          (f)   (i) Evidence  of  all filings of financing statements  under the
          applicable  Uniform  Commercial  Code and  similar  notices  under the
          applicable  laws of other relevant  jurisdictions,  satisfactory  Lien
          search  requests on Form UCC-11 and analogous  forms,  confirming  the
          absence of any perfected Liens (except  Permitted  Liens) prior to the
          Banks' Liens  (except  those  consented to by the Agent) and all other
          actions  (except  those with  respect  to UK  documents  that,  in the
          opinion  of  Freshfields  Bruckhaus  Deringer  (as UK  counsel  to the
          Agent),  are  typically  made after the Closing Date and are listed on
          Schedule 6.5 to this  Agreement)  with respect to the Liens created by
          the Security Documents as are necessary or appropriate to perfect such
          Liens  (except  for  Liens  on UK  property  of  the  Borrower  and UK
          Guarantors  which are required to be perfected  after the Closing Date
          and  notifications  required to be placed on certificates of title for
          vehicles when the same is required to perfect Liens therein).

               (ii) A release, in form and substance  satisfactory to the Agent,
          of all Liens  (except  Permitted  Liens and other Liens  permitted  by
          Section  8.2  hereof)  in all  assets of the Loan  Parties,  including
          properly executed UCC-3  termination  statements and similar documents
          under the applicable laws of other relevant jurisdictions.

               (iii)  Evidence of the absence of any  perfected  Liens in the UK
          Guarantors' property prior to the Banks' Liens (except those consented
          to by the Agent and except  for  Permitted  Liens and the other  Liens
          referred to in Section  8.2(g)) and all other  actions with respect to
          the  Liens  created  by  each  UK  Security  Agreement  and  UK IPM as
          necessary or appropriate in the Agent's  opinion and that of its UK or
          US counsel to perfect  such Liens.  On or before  September  13, 2002,
          with respect to Foreign Guarantors  organized under the laws of France
          and Australia,  evidence of the absence of any perfected Liens in such
          Foreign  Guarantors'  property prior to the Banks' Liens (except those
          consented to by the Agent and except for Permitted Liens and the other
          Liens  referred  to in  Section  8.2(g))  and all other  actions  with
          respect to the Liens created by each such Foreign Guarantor's Security
          Agreement as necessary or appropriate in the Agent's  opinion and that
          of its foreign counsel to perfect such Liens.

               (iv) A Companies  Form G395  completed in respect of the Borrower
          Security Agreement and each UK Security Agreement shall have been duly
          executed and delivered to Freshfields Bruckhaus Deringer for filing.

               (iv)  All  security  given  by the  Borrower  and  the  other  UK
          Subsidiaries shall have been given in compliance with the requirements
          of sections  151-158  (inclusive) of the Companies Act 1985. The Agent
          and its counsel shall have been satisfied  that all such  requirements
          with respect to such security have been met.

          (g) a  Subordination  Agreement  executed by each of the Loan Parties,
     substantially  in the form of Exhibit T-2 to this  Agreement  or such other
     form agreed to by the Agent (each, as the same may be amended, supplemented
     or otherwise  modified  from time to time, an  "Intercompany  Subordination
     Agreement").

          (h)  Except to the extent  otherwise  consented  to by the Agent,  all
     Liens under all Security  Documents  shall be first priority Liens in favor
     of the Agent on behalf of the Banks.

     6.6 Stock Certificates.  On or before September 13, 2002, to the extent not
delivered  to the  Agent on the  Closing  Date,  certificates  representing  all
pledged  shares (to the extent such  ownership  interest is represented by share
certificates) and undated stock powers for such  certificates  executed in blank
and  evidence  that  such  pledge  has been  noted on the stock  records  of the
companies whose shares have been pledged.

     6.7 Approvals and Consents. All orders, permissions,  consents,  approvals,
licenses,  authorizations  and  validations  of,  and  filings,  recordings  and
registrations  with, and exemptions by, any Government  Authority,  or any other
Person,  required to authorize  or required in  connection  with the  execution,
delivery and  performance  of this  Agreement,  the other Loan Documents and the
transactions contemplated hereby and thereby by any Credit Party shall have been
obtained (and, if so requested,  furnished to the Agent,  with sufficient copies
for the Closing Date Banks).

     6.8 Solvency Certificates.  The Borrower shall have delivered, or caused to
be delivered, to the Agent (with sufficient copies for the Closing Date Banks) a
"solvency" letter as to each of Holding,  FAI and the Borrower,  satisfactory in
form and substance to the Agent,  from the chief financial  officer of each such
Credit Party.

     6.9  Reports.  The Closing  Date Banks  shall have  received  from  Persons
satisfactory to them:

          (a) all environmental  audits and reports (the "Audits") undertaken or
     received by any Credit  Party with respect to its  Properties,  in form and
     substance satisfactory to the Agent; and

          (b) an analysis  satisfactory to the Agent, of all litigation (if any)
     to which  any  Credit  Party or any of its  respective  assets  is party or
     subject, or by which any Credit Party is otherwise affected.

     6.10 Insurance.  There shall have been delivered to the Agent a certificate
of an authorized  officer of Holding and the Borrower stating that the insurance
maintained by each member of the Consolidated Group as of the Closing Date meets
the requirements of Section 7.4 as of the Closing Date.

     6.11 Tax Allocation Agreement.  A tax allocation agreement  satisfactory to
the Agent shall have been entered  into among the Credit  Parties and each other
entity  which will join in a  consolidated  tax return with the Credit  Parties,
which agreement will provide, inter alia, that Holding and its Subsidiaries will
be  entitled  to the  benefit  of the NOL to the  extent  they  are  capable  of
utilizing it and shall not be required to reimburse  XANSER or any  Affiliate of
XANSER for any such utilization.

     6.12 Legal  Opinions.  The Agent shall have  received  legal  opinions  (in
sufficient  counterparts  for  each of the  Closing  Date  Banks),  in form  and
substance satisfactory to the Agent, addressed to the Agent and the Closing Date
Banks and dated the Closing Date, of:

          (a) On or before  September  13,  2002,  US counsel to Holding and the
     Borrower, covering (x) the matters set forth in Exhibit P to this Agreement
     and (y) such other matters as the Agent or any Bank may reasonably request;

          (b) On or before  September  13,  2002,  UK counsel to Holding and the
     Borrower, covering (x) the matters set forth in Exhibit Q to this Agreement
     and (y) such other matters as the Agent or any Bank may reasonably request;

          (c) On or before  September  13,  2002,  counsel  for  Holding and the
     Borrower in Norway confirming that each Foreign  Guarantor  organized under
     the laws of Norway is  prohibited  by the laws of Norway  from  executing a
     Foreign Guaranty,  Foreign Security Agreement,  Foreign Pledge Agreement or
     Foreign Negative Pledge Agreement;

          (d) On or before  September  13,  2002,  counsel  for  Holding and the
     Borrower in Australia  and France (and such other local or foreign  counsel
     to  Holding  and the  Borrower  as  requested  by the  Agent or any  Bank),
     covering under the laws of such jurisdictions  (i.e., other than the US and
     the UK) (x) the  matters set forth in Exhibit R to this  Agreement  and (y)
     such other matters as the Agent or such Bank may reasonably request; and

          (e) On or before September 13, 2002,  Freshfields  Bruckhaus Deringer,
     UK counsel for the Agent,  and other special  local or foreign  counsel for
     the Agent, but solely if requested by the Agent or any Bank,  covering such
     matters  incident to the transactions  contemplated  hereby as the Agent or
     any Bank may reasonably request.

     6.13 Legal Fees and  Expenses.  On or before  September  13,  2002,  to the
extent  demand  therefor  shall have been made,  all  reasonable  legal fees and
expenses  (through  September  13, 2002) of the Agent's US, UK,  Australian  and
French  counsel and (if any) other local or special  counsel in connection  with
the transactions contemplated by this Agreement shall have been paid in full.

     6.14 Change in Law. On the date of such Loans or the issuance of any Letter
of Credit,  no change shall have  occurred in  applicable  law, or in applicable
regulations thereunder or in interpretations thereof by any Government Authority
or other  Person  which,  in the opinion of any Bank,  would make it illegal for
such Bank to make the Loan required to be made (or the Letter of Credit required
to be issued) on such date.

     6.15  All  Proceedings  to  be   Satisfactory.   All  material   corporate,
partnership  and legal  proceedings  and all material  instruments in connection
with the  transactions  contemplated  by this Agreement and the other  documents
referred to herein shall be satisfactory in form and substance to the Agent, and
the Agent shall have received  information and copies of all documents which the
Agent or such Bank may reasonably  have requested in connection  herewith,  such
documents  where  appropriate to be certified by proper  corporate  officials or
Government Authorities.

     6.16 No  Opposition.  No suit,  action or  proceeding  shall be  pending or
threatened  on the Closing Date before or by any  Government  Authority or other
Person  seeking to restrain or prohibit  the  consummation  of the  transactions
contemplated by this Agreement.

     6.17  Adverse  Change.  There shall have been,  in the  Agent's  reasonable
opinion,  no  Material  Adverse  Change with  respect to any Credit  Party since
December 31, 2001.

     6.18 Fees and Expenses.  The Agent's Fee referred to in Section 4.2 of this
Agreement  and the  Facility  Fee  referred to in Section 4.3 of this  Agreement
shall have been paid in full.

     6.19 [intentionally deleted]

     6.20 [intentionally deleted]

     All  documents  and papers  required by this Section 6 shall be in form and
substance  satisfactory  to the Banks and  delivered to the Agent at its Closing
Office or as the Agent may otherwise direct.


Section 6A. CONDITIONS PRECEDENT TO SUBSEQUENT LOANS AND LETTERS OF CREDIT.

     The Banks shall not be  obligated to make any Loans or issue any Letters of
Credit after the Closing Date unless,  at the time of the making of such Loan or
issuing such Letter of Credit  (except as  hereinafter  indicated) the following
conditions (unless waived in writing by the Required Banks) have been satisfied:

     6A.1 Certain Conditions.  At the time of the making of such Loan or issuing
such Letter of Credit,  and  immediately  after giving effect  thereto,  (a) all
deficiencies,  if any, with respect to conditions precedent to any prior Loan or
Letter of Credit shall have been corrected,  (b) all of the conditions specified
in  Section 6 shall be  satisfied  in full  (with any  reference  in any of such
Sections to the Loans made or Letters of Credit issued on the Closing Date to be
deemed a  reference  to the Loan or  Letters of Credit (as the case may be) then
requested  to be made),  (c) each of the  documents  specified in Sections 6 and
12.14 shall be in full force and effect and no Credit Party  thereto  shall have
failed to perform in any material respect any of its obligations thereunder, and
(d) no issuer thereof shall have  rescinded or qualified any of the  statements,
certificates, letters, reports or opinions referred to in Section 6.

     6A.2 Subsequent Opinions of Counsel. If reasonably  requested by the Agent,
the Agent  shall have  received  from any or all of the  counsel  referred to in
Section  6.12  or  other  counsel  satisfactory  to  the  Agent  such  favorable
supplemental  legal opinions  addressed to the Agent and the Banks and dated the
date of such Loan or Letter of Credit and covering  such matters  incidental  to
the  transactions  contemplated by this Agreement as the Agent shall  reasonably
request,  each of which opinions shall be in form and substance  satisfactory to
the Agent.

     6A.3 Officer's Certificate.

          (a) If  reasonably  requested  by the  Agent,  the  Agent  shall  have
     received a certificate  of authorized  officers of Holding and the Borrower
     certifying,  as of the date of the Loan then being made or Letter of Credit
     then being issued,  compliance with the provisions of Section 6.1 (with the
     reference  therein to Loan or Letter of Credit  being deemed a reference to
     the Loan  being made or Letter of Credit  being  issued on the date of said
     certificate)  and further to the effect that the  conditions  specified  in
     Section 6A.1 are  satisfied  at such time.  Any such  certificate  shall be
     given "to the best of such officers' knowledge, based upon due and adequate
     investigation" or as otherwise agreed by the Borrower and the Agent.

          (b) The making of each Loan and the  issuance of each Letter of Credit
     subsequent  to the  Closing  Date shall  constitute  a  representation  and
     warranty by Holding and the Borrower to the Agent that, at the time of said
     subsequent Loan or Letter of Credit (and after giving effect thereto),  (i)
     all  representations  and warranties  contained herein or in the other Loan
     Documents or otherwise  made by Holding or the Borrower or any other Credit
     Party in  connection  herewith  or  therewith  are true and  correct in all
     material respects with the same effect as though such  representations  and
     warranties were being made at and as of such time, (ii) no Default or Event
     of Default  exists and (iii) the  conditions  specified in Section 6A.1 are
     satisfied at such time.

     6A.4.  Fees and  Expenses.  To the extent demand  therefor  shall have been
made,  all  reasonable  legal  fees  and  expenses  (through  the  date  of  the
immediately  preceding  Loan and  Letter of  Credit)  of the  Agent's  US and UK
counsel  and  (if  any)  local  or  special   counsel  in  connection  with  the
transactions contemplated by this Agreement shall have been paid in full.

     All of the documents and papers  referred to in this Section 6A shall be in
form and substance satisfactory to the Agent and shall be delivered to the Agent
at its  Closing  Office (or if to another  Bank,  at its  address  listed on the
signature  pages hereof),  or at such other office as the Agent may from time to
time specify to the Borrower.


Section 7. AFFIRMATIVE COVENANTS.

     Holding and the Borrower  severally covenant and agree hereby that, so long
as this Agreement is in effect and while any Letter of Credit is outstanding and
until  the  Commitments  are  terminated  and all of the  Loans,  together  with
interest,  Commitment  commission and all other obligations  incurred  hereunder
(including  Deemed  Disbursements  and  Reimbursement  Obligations  and fees and
disbursements in connection therewith), are paid in full, such Loan Parties will
perform,  and will cause each of their respective  Subsidiaries to perform,  the
obligations set forth in this Section 7.

     7.1  Financial  Statements.  Holding and the  Borrower  will furnish to the
Agent and each Bank:

          (a)   (i) As  soon  as  practicable  and  in any event  within 45 days
          after  the  close of each of the  first  two  calendar  months of each
          fiscal quarter of Holding and its Subsidiaries, the monthly management
          reports prepared by Holding and its Subsidiaries,  which reports shall
          contain (among other things),  unaudited  consolidating  statements of
          income of Holding  and its  Subsidiaries  for the Fiscal Year to date,
          and such other material as the Agent shall reasonably request;

               (ii) As soon as practicable and in any event within 60 days after
          the close of each  fiscal  quarter  of  Holding  and its  Subsidiaries
          (within  105 days,  with  respect to the last  fiscal  quarter of each
          Fiscal  Year),  a certificate  of Holding's  chief  financial  officer
          stating  (x) that a review  of the  activities  of each  member of the
          Consolidated  Group during such fiscal quarter has been made under his
          supervision  with a view to  determining  whether each such Person has
          observed,  performed and fulfilled all of its  obligations  under this
          Agreement and the other Loan  Documents,  and (y) that, to the best of
          such officer's  knowledge,  and after due and adequate  investigation,
          there  exists  no Event of  Default  or  Default  or,  if any Event of
          Default or Default exists,  specifying the nature thereof,  the period
          of  existence  thereof and what action the  Borrower (or if other than
          the  Borrower,  the  affected  Person)  proposes to take with  respect
          thereto,  and  accompanied  by a  certificate,  in form and  substance
          satisfactory  to the Agent and the Required  Banks,  setting forth the
          Loan Parties' calculations with respect to its compliance with each of
          Sections 8.18 through 8.23;

               (iii) As soon as  practicable  and in any  event  within  60 days
          after the close of each fiscal  quarter of each Fiscal Year of Holding
          and its Subsidiaries (within 105 days, with respect to the last fiscal
          quarter  of each  Fiscal  Year),  as at the end of and for the  period
          commencing at the end of the previous  Fiscal Year, and (in each case)
          ending  with the end of such  fiscal  quarter,  as the case may be, an
          unaudited  consolidated  balance sheet of Holding and its Subsidiaries
          and a consolidated statement of income and a statement of cash flow of
          Holding and its  Subsidiaries,  such  statements to be  accompanied by
          consolidating  balance  sheets,  income  statements and other relevant
          consolidating  information  for Holding and its  Subsidiaries,  all in
          reasonable  detail and  certified  by the chief  financial  officer of
          Holding subject to year-end audit and adjustments and setting forth in
          comparative  form  the  corresponding  figures  as of one  year  prior
          thereto or for the appropriate  periods of the preceding  Fiscal Year,
          as the case may be.

          (b) As soon as practicable  and in any event within the earlier of (x)
     five days after Holding or the Borrower receives same or (y) 120 days after
     the close of each Fiscal Year of Holding  and its  Subsidiaries,  as at the
     end of and  for the  Fiscal  Year  just  closed,  as the  case  may  be,  a
     consolidated  balance  sheet  of  Holding  and  its  Subsidiaries,   and  a
     consolidated  statement  of income and change in  retained  earnings  and a
     statement of cash flow of Holding and its Subsidiaries,  such statements to
     be accompanied by consolidating balance sheets, income statements and other
     relevant  consolidating  information for Holding and its Subsidiaries,  for
     such Fiscal Year setting  forth the  corresponding  figures of the previous
     annual  audit  (to  the  extent  available)  in  comparative  form,  all in
     reasonable detail and certified by the Auditors, and accompanied by:

               (1) a  certificate,  in form and  substance  satisfactory  to the
          Agent and the Required  Banks,  of said  Auditors  that, in conducting
          their  audit  in  connection  with  such  Financial  Statements,  they
          obtained  no  knowledge  of the  existence  of any Event of Default or
          Default or, if in the opinion of such  Auditors,  any Event of Default
          or Default  exists,  specifying  the nature  thereof and the period of
          existence thereof; and

               (2) a  certificate,  in form and  substance  satisfactory  to the
          Agent and the Required  Banks,  of said  Auditors  with respect to the
          Loan Parties' compliance with each of Sections 8.18 through 8.23;

          (c) Promptly upon receipt  thereof,  copies of all detailed  financial
     reports and management  letters, if any, submitted to Holding or any of its
     Subsidiaries by their respective  Auditors,  in connection with each annual
     or interim audit of their respective books by such Auditors;

          (d) With reasonable promptness,  such other information respecting the
     business,  properties,  operations,  prospects or condition  (financial  or
     otherwise) of Holding or any of its  Subsidiaries  as the Agent or any Bank
     may from time to time reasonably request;

          (e) As soon as  possible  and in any  event (A)  within 30 days  after
     Holding or any of its ERISA  Affiliates  knows that any  Termination  Event
     described in clause (i) of the definition of Termination Event with respect
     to any Pension Plan has  occurred  and (B) within 10 days after  Holding or
     any of its ERISA  Affiliates  knows that any other  Termination  Event with
     respect  to any  Pension  Plan  has  occurred,  a  statement  of the  chief
     financial  officer of Holding or the Borrower  describing such  Termination
     Event  and the  action,  if any,  which  Holding  or such  ERISA  Affiliate
     proposes to take with respect thereto;

          (f) Promptly and in any event within ten Business  Days after  receipt
     thereof by Holding or any of its ERISA Affiliates from the PBGC,  copies of
     each notice  received by Holding or any such ERISA  Affiliate of the PBGC's
     intention to terminate  any Pension Plan or to have a trustee  appointed to
     administer any Pension Plan;

          (g) Promptly and in any event within 30 days after the filing  thereof
     with the Internal  Revenue  Service,  copies of each  Schedule B (Actuarial
     Information)  to the annual  report (Form 5500 Series) with respect to each
     Pension Plan;

          (h) Promptly and in any event within ten Business  Days after  receipt
     thereof by Holding or any of its ERISA Affiliates from a Multiemployer Plan
     sponsor,  a copy of each  notice  received  by  Holding or any of its ERISA
     Affiliates  concerning (x) the imposition or amount of withdrawal liability
     under  Subtitle  E of  Title  IV of  ERISA  or (y) any  determination  by a
     Multiemployer  Plan sponsor that such Multiemployer Plan is, or is expected
     to be, in "reorganization" (within the meaning of Section 4241 of ERISA) or
     "insolvent"  (within the meaning of Section 4245 of ERISA), or has incurred
     or is expected to incur an  "accumulated  funding  deficiency"  (within the
     meaning of Section 302 of ERISA or Section 412 of the Code);

          (i) No later than  February 15th of each Fiscal Year, an annual budget
     (in  form  and  detail  reasonably  satisfactory  to  the  Agent)  for  the
     Consolidated Group and its members, in each case commencing with the Fiscal
     Year in which such  February  15th  occurs,  setting  forth as to each such
     Fiscal Year,  (x) the projected  balance sheet as at the end of such Fiscal
     Year, (y) the projected statement of earnings for such Fiscal Year, and (z)
     the projected statement of cash flow for such Fiscal Year; and

          (j)  Promptly  and in any event  within five  Business  Days after the
     filing or distribution  thereof,  copies of all periodic and other reports,
     proxy  statements and other  materials  filed by XANSER or any other Credit
     Party with the SEC or with any national  securities exchange or distributed
     by XANSER or any other Credit Party to its security holders.

     7.2 Notice of Litigation. The Borrower will promptly give written notice to
the Agent of (i) any  action or  proceeding,  or to the extent any member of the
Consolidated  Group may have any notice thereof,  any claim which may reasonably
be  expected  to be  commenced  or  asserted,  against  Holding  or  any  of its
Subsidiaries  in which the amount involved is $500,000 (or its equivalent in any
currency) or more,  and (ii) any dispute which may exist between  Holding or any
of its Subsidiaries and any governmental regulatory body (including any audit by
the Internal  Revenue Service or the Inland Revenue) or any employees of Holding
or any Subsidiary of Holding,  which dispute may substantially affect the normal
business  operations  of  Holding  or any of such  Subsidiaries  or any of their
respective properties and assets.

     7.3  Payment  of  Charges.  Holding  and the  Borrower  will  duly  pay and
discharge,  and will cause each of their respective Subsidiaries to duly pay and
discharge (i) all taxes,  assessments and governmental charges or levies imposed
upon or against it or its property or assets, or upon any property leased by it,
prior to the date on which penalties  attach  thereto,  unless and to the extent
only that such taxes,  assessments and governmental  charges or levies are being
contested in good faith and by  appropriate  proceedings  and such Loan Party or
Subsidiary  has set  aside on its books  adequate  reserves  therefor,  (ii) all
lawful  claims,  whether for labor,  materials,  supplies,  services or anything
else,  which  might or  could,  if  unpaid,  become a lien or  charge  upon such
property or assets,  unless and to the extent only that the validity  thereof is
being contested in good faith and by appropriate proceedings,  and (iii) all its
trade bills when due in  accordance  with their  original  terms,  including any
applicable  grace  periods,  unless and to the extent only that such trade bills
are being contested in good faith and by appropriate proceedings.

     7.4. Insurance.

          (a) Holding and the Borrower  will keep,  and will cause each of their
     respective  Subsidiaries to keep, (i) all of its insurable property insured
     at all times with  financially  sound and  responsible  insurance  carriers
     against   loss  or  damage  by  fire  and  other  risks,   casualties   and
     contingencies as required by the Security  Documents and in such manner and
     to the extent  that like  properties  are  customarily  so insured by other
     corporations  engaged in the same or similar business  similarly  situated,
     and (ii)  adequate  insurance  at all  times  with  financially  sound  and
     responsible  insurance  carriers against  liability on account of damage to
     persons and  properties  and under all  applicable  workmen's  compensation
     laws, in such manner and to the extent that like properties are customarily
     so insured by other  corporations  engaged in the same or similar  business
     similarly situated; and

          (b) Holding and the Borrower will obtain, and will cause each of their
     respective  Subsidiaries to obtain,  adequate insurance covering such other
     risks as the Agent or the Required Banks may  reasonably  request within 30
     days of such request (to the extent such  insurance is generally  available
     in the industry and not  cost-prohibitive in industry terms); and keep, and
     cause each of their  respective  Subsidiaries  to keep,  such  insurance in
     effect to the extent requested by the Agent or the Required Banks.

     7.5  Maintenance  of Records.  Holding and the Borrower will keep, and will
cause  each of their  respective  Subsidiaries  to keep,  at all times  books of
record and account in which full,  true and correct  entries will be made of all
dealings or  transactions  in relation to its business and affairs,  and Holding
and  the  Borrower  will  provide,  and  will  cause  each of  their  respective
Subsidiaries  to provide,  adequate  protection  against  loss or damage to such
books of record and account.

     7.6.  Preservation  of Corporate  Existence.  Holding and the Borrower will
each  maintain and preserve its  corporate  existence  and right to carry on its
business and duly procure all necessary  renewals and  extensions  thereof,  and
maintain, preserve and renew all rights, powers, privileges and franchises which
in the  opinion  of the board of  directors  of such Loan Party  continue  to be
advantageous to it and cause each of their respective  Subsidiaries  (other than
Insignificant  Subsidiaries) to do so. Holding and the Borrower will each comply
in all material  respects with all applicable laws,  statutes and regulations of
the  US  and  the  UK  and  of  any  relevant  Government  Authority,  State  or
municipality,  and of any agency thereof  (including,  without  limitation,  all
Environmental  Laws),  in respect of the conduct of its  business,  and, in each
such  case,  cause  each of  their  respective  Subsidiaries  so to do.  Without
limiting the generality of the foregoing, Holding and the Borrower agree to (and
to  cause  each of  their  respective  Subsidiaries,  other  than  Insignificant
Subsidiaries,  to)  qualify  to do  business  as a foreign  corporation  in each
jurisdiction where the nature of its business and the operations conducted by it
therein  require it to be so  qualified.  Neither  Holding nor the Borrower will
take any  action  that will  cause the  dissolution  of any of their  respective
Subsidiaries, other than Insignificant Subsidiaries.

     7.7  Preservation  of Assets.  Holding and the Borrower will keep, and will
cause each of their  respective  Subsidiaries  so to keep,  its property in good
repair,  working  order and condition and from time to time make all needful and
proper repairs, renewals, replacements,  extensions,  additions, betterments and
improvements  thereto, so that the business carried on by it may be properly and
advantageously  conducted  at all  times in  accordance  with  prudent  business
management.

     7.8 Inspection of Books and Assets.

          (a) Holding and the Borrower will allow any representative, officer or
     accountant of any Bank or the Agent,  upon reasonable  notice, to visit and
     inspect any of its property, to examine its books of record and account and
     to discuss its affairs,  finances and accounts  with its  officers,  and at
     such  reasonable  time and during usual  business hours and as often as any
     Bank or the Agent may reasonably request and, in each such case, cause each
     of their respective Subsidiaries so to do.

          (b) Upon  reasonable  request by the Agent to Holding or the Borrower,
     which  request  shall not be  unreasonably  denied,  each Loan Party  will,
     subject to applicable legal  requirements  (including  without  limitation,
     applicable   securities  laws),  allow  any   representative,   officer  or
     accountant  of the Agent to discuss  the  Financial  Statements,  the other
     financial  information  from  time  to  time  delivered  hereunder  and the
     financial condition of members of the Consolidated Group with the Auditors.
     Any  such  discussions  will be  held at  times  and  locations  reasonably
     acceptable to each of the Agent, Holding, the Borrower and the Auditors. No
     such discussions will be held without the presence of an officer of Holding
     or the Borrower, unless Holding or the Borrower consent otherwise.

     7.9  Payment  of  Indebtedness.  Holding  and the  Borrower  will  duly and
punctually  pay, or cause to be paid,  the  principal of and the interest on all
Indebtedness for Borrowed Money  heretofore or hereafter  incurred or assumed by
Holding or the Borrower or their respective Subsidiaries, or in respect of which
any such Person shall otherwise be liable, when and as the same shall become due
and payable, unless such Indebtedness for Borrowed Money be renewed or extended,
and such Loan Party will not permit any act or  omission to occur or exist which
is or may be declared to be a default  under any  indenture  or other  agreement
securing,  relating to, or evidencing  such  Indebtedness  for Borrowed Money or
pursuant to which such  Indebtedness  for Borrowed  Money is incurred,  provided
that the failure of any Loan Party so to do shall not create an Event of Default
under  Section  9.4 hereof to the extent such  failure  does not give rise to an
Event of Default under Section 9.5 hereof.

     7.10 Further Assurances. Holding and the Borrower will (and will cause each
of their respective  Subsidiaries to) make, execute or endorse,  and acknowledge
and deliver or file, all such vouchers,  invoices,  notices,  and certifications
and additional agreements, undertakings, conveyances, transfers, assignments, or
further  assurances,  and take any and all such other action,  as the Agent may,
from time to time,  reasonably  deem necessary or proper in connection with this
Agreement,  the  obligations  of such Loan Party  hereunder  or under any of the
other Loan  Documents  to which  such Loan  Party is a party,  or for the better
assuring and confirming unto the Agent on behalf of the Banks all or any part of
the security for the Loans.

     7.11  Notice of Default.  Forthwith  upon (and,  in any event,  within five
Business Days of) any officer of Holding or the Borrower obtaining  knowledge of
the  existence of an Event of Default,  Holding or the Borrower  will deliver to
the  Agent a  certificate  signed  by an  officer  of  Holding  or the  Borrower
specifying the nature thereof,  the period of existence thereof, and what action
the affected Loan Party proposes to take with respect thereto.

     7.12 Reserves. Holding and the Borrower will set up, and will cause each of
their  respective  Subsidiaries  to set up,  on its  books  from  its  earnings,
reserves for bad debt in accordance with GAAP and in an aggregate  amount deemed
adequate in the judgment of Holding and the Borrower.

     7.13 Arms-length  Transactions.  Holding and the Borrower will conduct, and
cause each of their respective  Subsidiaries to conduct,  all transactions  with
any of their respective Affiliates on an arms-length basis.

     7.14  Solvency.  Holding and the Borrower  will  continue to be Solvent and
ensure that each of their respective  Significant  Subsidiaries will continue to
be Solvent.

     7.15  Cooperation.  At the  Agent's  request  and upon  reasonable  notice,
Holding and the Borrower will meet from time to time with (and provide financial
information to) other financial  institutions to which any of the Banks may wish
to grant participations in the Loans and with other potential Bank Assignees.

     7.16 Environmental Matters.

          (a) The Borrower will promptly notify the Agent (with a description in
     reasonable detail) of:

               (i) the receipt of any  Environmental  Claim by any member of the
          Consolidated Group;

               (ii) the discovery of any Contaminant or Release on, in, under or
          emanating  from any  Properties  or  operations  of any  member of the
          Consolidated Group;

               (iii) (x) the violation  of, or any condition  which might result
          in a  violation  of,  any  Environmental  Law or (y) any change in any
          Environmental Law or in the administration or interpretation  thereof,
          which in either  case might  subject  any  member of the  Consolidated
          Group to Environmental Costs;

               (iv)  the   commencement   of  any  judicial  or   administrative
          proceeding or investigation  alleging a violation of any Environmental
          Law by any member of the Consolidated Group; or

               (v) any material change in the  representations and warranties in
          Section  10.12 or any  material  change with  respect to any  material
          matter addressed in the Audits;

          (b)  Holding  and the  Borrower  will,  and will  cause  each of their
     respective  Subsidiaries  to, adopt and  maintain  prudent  practices  with
     respect to compliance with  Environmental  Laws,  including prudent air and
     water pollution control and solid and hazardous waste management  practices
     and  including  at a  minimum  such  practices  as (a) may be  required  or
     dictated by current and future Environmental Laws, and (b) are necessary to
     maintain  the value of the Agent's and the Banks'  Liens in the  Collateral
     free from all actual or threatened Environmental Claims.

          (c) The Borrower will promptly notify the Agent whenever the aggregate
     amount of

               (A) all Environmental Costs incurred on or after the Closing Date
          by any member of the Consolidated Group, plus

               (B) all  Environmental  Costs  required or due to be paid by such
          member of the  Consolidated  Group within the 18 months  following the
          date when such calculation is being made,

     when combined with

               (C) all Environmental  Costs incurred by all other members of the
          Consolidated  Group prior to such date but  subsequent  to the Closing
          Date, and

               (D) all  Environmental  Costs  required  or due to be paid within
          such 18-month period by the other members of the Consolidated Group,

     would exceed the sum of $2,000,000.

     7.17  Notification of Account Debtors.  Upon request of the Agent after and
during the  continuance  of an Event of Default,  each Loan Party will  promptly
notify (in manner, form and substance satisfactory to the Agent) all Persons who
are at any time obligated under receivables  payable to such Loan Party that the
Banks possess a security  interest in such  receivables and that all payments in
respect thereof are to be made to such account as the Agent directs.

     7.18 [intentionally deleted]

     7.19 [intentionally deleted]

     7.20  Subsidiary  Guarantees.  Whenever a Subsidiary  of Holding that is an
Insignificant  Subsidiary  or is not a Guarantor  on the Closing  Date becomes a
Significant Subsidiary, Holding and the Borrower shall (within 45 days after the
Borrower  or  Holding  first has  knowledge  that such  Subsidiary  has become a
Significant  Subsidiary but in any event, no later than 75 days after the end of
the fiscal  quarter in which such  Subsidiary  became a Significant  Subsidiary)
cause such Subsidiary to execute and deliver to the Agent a Guarantee  Agreement
and a security  agreement or charge  satisfactory  in form and  substance to the
Agent and to otherwise comply (within said 45-day period) with the provisions of
Section  6.5 as fully as if such  provisions  were set  forth at  length in this
paragraph  (without  regard to any reference in Section 6 as to such  provisions
being required to be satisfied no later than the Closing Date.

     7.21 Press Releases.  The Borrower shall obtain the consent of the Agent to
any press release or other  publicity  which makes  reference to the Loans or to
some or all of the Agent or the Banks  unless the  publicity is required by law,
in which case the Borrower  shall notify the Agent and the Banks thereof as soon
as practicable upon becoming aware of the requirement.

     7.22 [intentionally deleted]

     7.23 [intentionally deleted]

     7.24 [intentionally deleted]

     7.25 Tax Allocation  Agreement.  Promptly after any Person,  not a party to
the Tax  Allocation  Agreement on the Closing Date,  becomes  entitled to file a
consolidated  United States  federal  income tax return with Holding or FAI, the
Borrower will cause such Person to execute the Tax Allocation Agreement.

     7.26 [intentionally deleted]

     7.27 [intentionally deleted]

     7.28 [intentionally deleted]

     7.29 Subordination Agreements. No later than the Closing Date, XANSER shall
enter into the XANSER Subordination Agreement with respect to (x) all management
and similar  fees accrued or  otherwise  payable,  as of the Closing Date or any
time  thereafter,  to XANSER by Holding or any  Subsidiary of Holding,  together
with any interest that may be payable  thereon and (y) all other  obligations of
the Credit Parties to XANSER. The XANSER  Subordination  Agreement shall provide
that payments  thereunder  may be made so long as no Event of Default under this
Agreement or any other Loan Document has occurred.

     7.30 [intentionally deleted]


Section 8. NEGATIVE COVENANTS.

     Holding and the Borrower  severally covenant and agree that so long as this
Agreement is in effect and while any Letter of Credit is  outstanding  and until
the  Commitments  are terminated  and all of the Loans,  together with interest,
Commitment  commission and all other obligations  incurred hereunder  (including
Deemed Disbursements and Reimbursement Obligations and fees and disbursements in
connection  therewith),  are paid in full,  such Loan Parties will perform,  and
will cause each of their respective Subsidiaries to perform, the obligations set
forth in this Section 8 (unless it shall first have procured the written consent
of the Agent or the Required Banks to do otherwise).

     8.1 Engage in Same Type of Business.

          (a) Neither Holding nor the Borrower will enter into, or permit any of
     their  respective  Subsidiaries  to  enter  into,  any  business  which  is
     substantially different from the business in which it is presently engaged.

          (b) Holding, the Borrower and FOSI will not enter into any business or
     activity other than its ownership of the capital stock of its  Subsidiaries
     and, to the extent its board of directors directs, its participation in the
     management and business of its Subsidiaries.

          (c) FOSI will not enter into any  business or activity  other than its
     ownership of the capital stock of Foreign Subsidiaries.

     8.2 Liens. Neither Holding nor the Borrower will contract, create, incur or
assume (or, as to Liens  arising after the Closing Date which are not created or
assumed by Holding or one of its Subsidiaries,  suffer to exist for more than 45
days,  or if  earlier,  30 days after the date an  officer  of any Credit  Party
becomes  aware  thereof)  any Lien upon or with  respect  to, or by  transfer or
otherwise  subject to the prior  payment  of any  indebtedness  (other  than the
Loans), any of its property or assets,  whether now owned or hereafter acquired,
or permit any of their  respective  Subsidiaries  so to do; except (i) liens for
taxes,  assessments,  levies or  governmental  charges  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, and (ii) other liens,  charges,  and  encumbrances  incidental to the
conduct of its  business or the  ownership of its property and assets which were
not  incurred in  connection  with the  borrowing  of money or the  obtaining of
advances  or credit and which do not  materially  detract  from the value of its
property or assets or materially  impair the use thereof in the operation of its
business; and (iii) the following:

          (a) Liens in  connection  with  workmen's  compensation,  unemployment
     insurance or other social security obligations;

          (b) Deposits or pledges  securing the  performance  of bids,  tenders,
     contracts  (other  than  contracts  for  the  payment  of  money),  leases,
     statutory  obligations,  surety and appeal bonds and other  obligations  of
     like nature made in the ordinary course of business;

          (c) Mechanics', carriers',  warehousemen's,  workmen's, materialmen's,
     or other like Liens arising in the ordinary course of business with respect
     to  obligations  which  are not due or which are  being  contested  in good
     faith;

          (d) Liens  securing the  Borrower's  Obligations  to the Agent and the
     Banks in respect of the Loans, Letters of Credit,  Deemed Disbursements and
     Reimbursement Obligations;

          (e) Encumbrances consisting of zoning regulations,  easements,  rights
     of way, survey exceptions and other similar restrictions on the use of real
     property or minor  irregularities in titles thereto which do not materially
     impair use of such property by Holding or its Subsidiaries in the operation
     of the business of Holding or the Subsidiary owning the same;

          (f)  Liens to the  Agent  and the  Banks  securing  guarantees  by the
     Guarantors of the Obligations of the Borrower under this Agreement;

          (g) Liens  existing  on the  Closing  Date and  indicated  on Schedule
     8.2(g) to this  Agreement,  and Liens  existing on the Closing Date but not
     listed on said Schedule 8.2(g) because they are Liens solely on, and solely
     securing  the  purchase  price  or lease  obligations  for,  fax  machines,
     typewriters,  photocopiers  and  similar  office  equipment  none of  which
     obligations  is more than  $25,000  with respect to any one such machine or
     piece of equipment  and the aggregate of all such  obligations  is not more
     than $1,000,000;

          (h)  Liens  placed  upon  property  of a Loan  Party  at the  time  of
     acquisition  thereof by such Loan Party to secure up to 75% of the purchase
     price  thereof;  provided  that such  Lien  shall  not  encumber  any other
     property of any Loan Party and provided  further that the aggregate  amount
     of  indebtedness  secured  thereby  pursuant  to this  clause (h) shall not
     exceed $400,000 at one time outstanding;

          (i) Liens  placed  upon motor  vehicles of a Loan Party at the time of
     acquisition  thereof  by such  Loan  Party to  secure  the  purchase  price
     thereof;  provided that such Lien shall not encumber any other  property of
     any Loan Party; and

          (j)  Liens  existing  on the  Closing  Date  securing  the  Australian
     Facility.

     8.3 Other  Indebtedness.  Neither  Holding nor the Borrower will  contract,
create, incur or assume (or, as to Indebtedness for Borrowed Money arising after
the  Closing  Date  which is not  contracted,  created,  incurred  or assumed by
Holding or one of its  Subsidiaries,  suffer to exist for more than 30 days) any
Indebtedness for Borrowed Money or permit any of their  respective  Subsidiaries
so to do; except

          (i)  indebtedness  of the  Borrower  represented  by the Loans and the
     obligations of the Borrower in respect of the LC Outstandings;

          (ii) the Guarantee Agreements;

          (iii) the Australian  Facility,  the Carlisle Facility,  the Norwegian
     Facility and any other  indebtedness of Holding or any of its  Subsidiaries
     secured by a Letter of Credit;

          (iv) [intentionally deleted];

          (v) [intentionally deleted];

          (vi) [intentionally deleted];

          (vii) indebtedness permitted by the provisos to Section 8.5 hereof;

          (viii) trade  payables  incurred in the  ordinary  course of business,
     provided  that same are not more than 60 days past due (unless (A) they are
     being  contested  in good faith,  (B)  appropriate  reserves  are  provided
     therefor to the extent  required by GAAP,  and (C) the failure to make such
     payment  does  not give  rise to any  Lien in  excess  of  $100,000  or its
     equivalent in other currencies);

          (ix)  non-recourse  indebtedness  incurred  in  accordance  with,  and
     secured  solely by the Liens  permitted by,  clauses (h) and (i) of Section
     8.2(iii);

          (x) [intentionally deleted];

          (xi) unsecured indebtedness in addition to that permitted by the other
     clauses of this Section 8.3, but only if (A) the Dollar  Equivalent  of the
     aggregate  amount of such loans at any one time outstanding does not exceed
     $2,500,000,  (B) no such loan is  borrowed  from a Credit  Party other than
     XANSER and (C) any such loan  borrowed from XANSER is  subordinated  to any
     obligation  owed by Holding,  the Borrower or any other Credit Party to the
     Agent and the Banks;

          (xii) [intentionally deleted]; and

          (xiii) the right to  contribution  between  and among  Holding and its
     Subsidiaries  in the event any of them is required  to make  payment to the
     Agent or the Banks  under  this  Agreement  or their  respective  Guarantee
     Agreements.

     8.4 Advances from Customers. Neither Holding nor the Borrower will contract
for or accept, or permit any of their respective Subsidiaries so to do, advances
or  deposits  from  customers  other than in the  ordinary  course of  business;
provided  that the  aggregate  amount of  advances or deposits by members of the
Consolidated  Group  from  any  one  customer  (including  Persons  directly  or
indirectly  controlling,  controlled  by,  or under  common  control  with  such
customer)  shall  not  exceed  $500,000  (or  an  equivalent   amount  in  other
currencies, computed at the Spot Rate) in the aggregate at any one time.

     8.5 Advances and Loans. Neither Holding nor the Borrower will lend money or
credit,  or make  advances  to any  Person  or  permit  any of their  respective
Subsidiaries  so to  do,  except  the  sale  of  services  and  products  of the
Consolidated  Group on credit in the  ordinary  course of  business on terms not
more favorable than those used by other Persons  similarly  situated and engaged
in the same or similar business; provided however that notwithstanding any other
provisions in this  Agreement any Loan Party may lend money and make advances to
any other Loan Party if after giving effect thereto:

          (a) the  aggregate  principal  amount of all such  loans and  advances
     outstanding  at any one time by Holding or  Subsidiaries  of Holding  which
     have executed Security Agreements to Subsidiaries of Holding which have not
     executed Security Agreements does not exceed $2,500,000;

          (b) all such  loans  and  advances  are  evidenced  by a  subordinated
     promissory  note and the  schedule  attached  thereto  executed by the Loan
     Parties (as the same may from time to time with the consent of the Agent be
     amended,  supplemented or otherwise  modified,  the  "Intercompany  Note"),
     substantially in the form of Exhibit T-1 to this Agreement;

          (c) the  Intercompany  Note to the extent  payable to Holding  and any
     Subsidiary  of Holding  organized in the UK, the US, France or Australia is
     endorsed in blank,  pledged to the Banks pursuant to the Pledge  Agreements
     or other pledge  agreement in form and substance  satisfactory to the Agent
     and delivered to and held by the Agent;

          (d) all such  loans and  advances  are made and  accepted  solely  for
     ordinary business needs of such Loan Party;

          (e) all such  loans  and  advances  are made and  accepted  at  normal
     commercial rates of interest for such credits; and

          (f) the aggregate  principal  amount of all such loans and advances by
     Loan Parties not organized in the UK, the US, France or Australia  does not
     at any one time exceed  $250,000;  the foregoing amount is included in, and
     not additional to, that specified in clause (a) above.

     8.6 [intentionally deleted]

     8.7 Purchase or Sale  Agreements.  Neither  Holding nor the  Borrower  will
enter into or be a party to, or permit any of their  respective  Subsidiaries to
enter  into  or be a party  to (i)  any  contract  for  the  purchase  or use of
materials, supplies or other property or for the performance of services if such
contract  requires that payment for such materials,  supplies or other property,
or the use thereof,  or for such  services,  shall be made by such member of the
Consolidated  Group  regardless  of whether or not  delivery is capable of being
made of such  material,  supplies  or  other  property,  or  such  services  are
performed,  or (ii) any contract for the sale or use of  materials,  supplies or
other  property if such  contract  provides  that  payment to such member of the
Consolidated  Group for such  materials,  supplies or other  property or the use
thereof, shall be subordinated to or otherwise subjected to the prior payment of
any indebtedness (or any instrument  evidencing such indebtedness) owed or to be
owed to any Person.

     8.8  Consolidation  and Merger.  Neither Holding nor the Borrower will wind
up, liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation or permit any of their respective  Subsidiaries so to do (or agree
to do any of the foregoing at any future time) except that (i) any  wholly-owned
Subsidiary of the Borrower may merge into the Borrower if the Borrower  shall at
all times be the continuing  corporation,  (ii) any  wholly-owned  Subsidiary of
Furmanite  may  merge  into  Furmanite  if  Furmanite  shall at all times be the
continuing  corporation,  (iii)  any  Subsidiary  of a  Loan  Party  that  is an
Insignificant  Subsidiary  may  merge  into  any  other  Subsidiary  that  is an
Insignificant  Subsidiary,  (iv) any  Insignificant  Subsidiary may merge into a
Significant  Subsidiary  if (x) the  Significant  Subsidiary  is the  continuing
corporation  and (y) the merging  Insignificant  Subsidiary  has no  liabilities
(contingent  or  otherwise)  in excess of  $100,000  (in the  aggregate)  (or an
equivalent amount in other currencies,  computed at the Spot Rate) at the end of
its most recent  fiscal  quarter,  (v) any  wholly-owned  Subsidiary of FOSI may
merge into another  wholly-owned  Subsidiary of FOSI; provided that (in the case
of clauses (iii) and (iv)) no Subsidiary that is organized under the laws of the
UK or US may merge into any Subsidiary  that is not organized  under the laws of
the UK or the US, and provided  further  that (in the case of clauses  (iii) and
(v)) if the resulting  Subsidiary is a Significant  Subsidiary,  it shall timely
comply with the provisions of Section 7.20.

     8.9 Sale of Assets.

          (a) Neither  Holding nor the  Borrower  will  convey,  sell,  lease or
     otherwise  dispose  of (or agree to do any of the  foregoing  at any future
     time), or permit any of their respective  Subsidiaries so to do, (i) all or
     a  substantial  part of its property or assets or any part of such property
     or assets  essential  to the conduct of its business  substantially  as now
     conducted,  or (ii) any of its  assets,  except in the  ordinary  course of
     business,  (iii) the sale of obsolete equipment and obsolete inventory, and
     (iv) other equipment that is no longer necessary for the ordinary  business
     of  the  Consolidated   Group;   provided  however  that  Holding  and  its
     Subsidiaries may convey,  sell,  lease or otherwise  dispose of (any of the
     foregoing, for purposes of this Section, a "Transfer") any of its assets if

               (i) the Agent or the Required Banks shall have consented  thereto
          in writing, such consent not to be unreasonably withheld,

               (ii) such assets are  Transferred  for a price, in cash, at least
          equal to their fair market value (as  determined  in good faith by the
          board of directors of Holding or the Borrower (as the case may be) and
          (if any) of the selling Subsidiary), and

               (iii) [intentionally deleted]; and

          provided  further the consent of the Agent or the Required Banks shall
          not be required  pursuant to the foregoing proviso for the Transfer of
          any asset if (i) such asset (x) is obsolete and is no longer necessary
          for  the  ordinary   business  of  the  Consolidated   Group  and  the
          consideration  received from such Transfer (whether to the same Person
          or affiliated  group of Persons,  or in any one or more of a series of
          related  transactions)  is not greater than $100,000,  or (y) is being
          (and has been)  replaced  within 90 days of such Transfer by equipment
          of at least  comparable  value and  utility and on which the Agent (on
          behalf of the Banks) has a first priority  perfected Lien and no other
          Person (except as consented to by the Agent) has a Lien, and (ii) only
          as to situations  where clause (x) (and not clause (y)) is applicable,
          the book  value of the asset or assets  then being  Transferred,  when
          combined  with the  aggregate  book value at time of  Transfer  of all
          assets  Transferred by any member of the  Consolidated  Group from the
          Closing Date to the date of such Transfer, is less than the greater of
          (A) $250,000 (or an equivalent amount in other currencies, computed at
          the  Spot  Rate)  or  (B)  10%  of  the  Tangible  Net  Worth  of  the
          Consolidated Group at the date of the proposed Transfer.

          (b) Neither  Holding nor the Borrower will sell,  discount,  transfer,
     assign  or  otherwise  dispose  of any of its  accounts  receivable,  notes
     receivable, installment or conditional sales agreements or any other of its
     rights to  receive  income  or monies  howsoever  evidenced  or permit  any
     Subsidiary or Guarantor to do so except pursuant to the Security Documents;
     provided that nothing in this Section 8.9(b) shall prevent any Credit Party
     from  dealing  with its "bad debt" in the manner it has  customarily  dealt
     with same.

     8.10  Purchase  of Assets.  Except as  permitted  by Section  8.9,  neither
Holding nor the Borrower will  purchase,  lease or otherwise  acquire all or any
substantial part of the property or assets of any Person, or permit any of their
respective  Subsidiaries  so to do,  or  purchase,  lease or  otherwise  acquire
property or net assets in excess of $250,000 in the aggregate (other than in the
ordinary  course  of  business)  or an  equivalent  amount  in other  currencies
(computed at the Spot Rate), or permit any of their  respective  Subsidiaries so
to do.

     8.11 Related Transactions.

          (a) Neither  Holding nor the Borrower will enter into any  transaction
     with any other member of the  Consolidated  Group or with any  Affiliate of
     any member of the Consolidated  Group or an Associate of any such Affiliate
     or with which any officer or director of any Credit  Party or a  Subsidiary
     has a financial  interest on more  favorable  terms than if such Person was
     totally unrelated,  or permit any of their respective Subsidiaries to so do
     except such  commissions,  discounts and repayment terms in connection with
     the  furnishing of goods or services on a  Consolidated  Group basis as are
     reasonable and customary in commercial practice.

          (b) No Loan Party will make any payments,  directly or indirectly,  to
     XANSER or any officer or director of XANSER or any principal stockholder of
     XANSER,  except as permitted by the XANSER Management  Agreement or Section
     8.11(a) or 8.15.

     8.12 Subsidiaries.

          (a) Neither  Holding nor the Borrower  will without the prior  written
     consent of the Agent sell, assign,  transfer or otherwise dispose of, or in
     any way part with  control of, any shares of capital  stock of any of their
     respective Subsidiaries or any indebtedness or obligations of any character
     of any of their respective Subsidiaries,  or permit any of their respective
     Subsidiaries  so to do with  respect to any shares of capital  stock of any
     other member of the  Consolidated  Group or any indebtedness or obligations
     of any  character of any member of the  Consolidated  Group,  or issue,  or
     permit any member of the Consolidated Group to issue, any additional shares
     of capital stock.

          (b)  Neither  Holding  nor the  Borrower  will  organize or create (or
     permit the  organization  or  creation  of), by  investment  or purchase or
     otherwise,  any Subsidiary  without the prior written consent of the Agent,
     such consent not to be  unreasonably  withheld;  provided that if within 20
     days  after  the  Borrower  has  given  written  notice to the Agent of the
     proposed  organization or creation of a Subsidiary (or, if later, within 20
     days after the date on which the Agent shall have received such  additional
     information  related thereto as it shall have  requested),  the Agent shall
     not have  disapproved of such request or asked for  additional  information
     related  thereto,  such  consent of the Agent  shall be deemed to have been
     given.

     8.13 [intentionally deleted]

     8.14  Investments.  Neither  Holding  nor the  Borrower  will invest in (by
capital  contribution  or  otherwise),  or acquire for investment or purchase or
make any  commitment  to  purchase  the  obligations  or stock of, any Person or
permit any of their respective Subsidiaries so to do, except (i) the purchase of
marketable  direct or  guaranteed  obligations  of the national  governments  of
France, the Netherlands,  the UK and the US; (ii) stock or obligations issued to
a member of the  Consolidated  Group in settlement of claims  against  others by
reason of an event of bankruptcy or a composition or  readjustment  of debt or a
reorganization  of  any  debtor  of  the  Borrower  or  any  Subsidiary;   (iii)
certificates  of deposit and banker's  acceptances  of any of the Banks or their
branches; (iv) [intentionally deleted]; (v) Commercial Paper rated P-1 or A-1 by
Standard  &  Poors  ("S&P")  or  Moody's  Investors  Service  ("Moodys")  or the
equivalent rating by any other rating agency nationally  recognized in the US or
UK; and (vi) certificates of deposit and banker's acceptances of any bank with a
AA or better  rating  from Moodys or the  equivalent  rating by S&P or any other
rating agency nationally  recognized in the US or UK. As used in this Agreement,
"Commercial Paper" shall mean short-term  promissory notes due no later than 270
days from the date of issuance of each such note.

     8.15 Dividends, Distributions and Purchases of Capital Stock.

          (a) Except as set forth in Section  8.15(b),  Holding will not declare
     or pay any dividends (other than dividends payable in shares of its capital
     stock),  or return any capital to its  stockholders as such or authorize or
     make any other distribution, payment or delivery of property or cash to its
     stockholders  as such, or redeem,  retire,  purchase or otherwise  acquire,
     directly or indirectly,  for a  consideration  (otherwise  than in exchange
     for, or from the proceeds of the  substantially  concurrent  sale of, other
     shares of capital stock of Holding), any shares of any class of its capital
     stock  now  or  hereafter  outstanding,  or  redeem,  return,  purchase  or
     otherwise  acquire,  directly  or  indirectly,  for  a  consideration,  any
     subordinated debt or make any payments on account of the principal thereof,
     or set aside any funds for any of the foregoing purposes.

          (b) Holding  may pay  dividends  annually  to holders of its  ordinary
     shares (as such) in an  aggregate  amount per Fiscal  Year not in excess of
     50% of the Net Income (Adjusted) of the Consolidated Group, but only if (x)
     no Default or Event of Default  exists on the date of payment (after giving
     effect  thereto),  (y) such  distribution  is made no earlier than the date
     that the certified  Financial  Statements for such Fiscal Year, in form and
     substance  satisfactory  to the Agent  and the  Required  Banks,  have been
     delivered to the Banks pursuant to Section 7.1(b) and no later than 30 days
     after  such  date  and (z) the sum of such  dividends  paid  plus  fees and
     expenses paid under the XANSER Management Agreement plus any other payments
     of  indebtedness  or other  amounts  or  distributions  (including  but not
     limited to repayment of any indebtedness  owed by Holding to XANSER related
     to the XANSER  Management  Agreement) does not exceed $2,500,000 during any
     Fiscal Year or $210,000 during any calendar month.

          (c)  The  Borrower  may  pay  dividends  annually  to  holders  of its
     preference  shares (as such) in an aggregate  amount per Fiscal Year not in
     excess of $80,000 (or $20,000 in any fiscal  quarter) so long as no Default
     or Event of Default  exists on the date of  payment  (after  giving  effect
     thereto).

          (d)  Notwithstanding  anything to the contrary contained herein,  from
     time to time, in one or more series of  transactions,  a Loan Party may pay
     dividends to any other Loan Party and such dividends  shall  immediately be
     used by the recipients thereof to make additional capital  contributions to
     or otherwise acquire and be issued shares of the capital stock of that Loan
     Party. Such shares shall immediately be subject to the Pledge Agreements as
     set forth in Section 6.5.

     8.16  Leasebacks.  Neither  Holding nor the  Borrower  will enter into,  or
permit any of their respective  Subsidiaries to enter into, any arrangement with
any bank,  insurance  company  or other  lender or  investor  providing  for the
leasing to any member of the  Consolidated  Group of real  property (i) which at
the  time  has  been  or is to be  sold  or  transferred  by any  member  of the
Consolidated  Group to such  lender or  investor,  or (ii)  which has been or is
being acquired from another person by such lender or investor or on which one or
more  buildings or facilities  have been or are to be constructed by such lender
or  investor  for the  purpose  of  leasing  such  property  to a member  of the
Consolidated Group.

     8.17  Covenant  Election.  The  Borrower  shall  have a one  time  right to
irrevocably  instate the covenants set forth in Sections  8.18(b) and 8.22(b) in
lieu  of the  covenants  set  forth  in  Sections  8.18(a)  and  8.22(a)  as the
applicable  covenants  under  this  Agreement  (the  "Covenant  Election").  The
Borrower  shall  exercise the Covenant  Election by giving written notice to the
Agent at least four  Business  Days' prior to the end of a fiscal  quarter  (the
"Covenant  Election  Notice") and the Covenant Election shall be effective as of
the end of (and the covenants set forth in Sections 8.18(b) and 8.22(b) shall be
applicable  for) such fiscal  quarter and all fiscal  quarters  thereafter  (the
"Covenant  Election  Effective Date").  Prior to the Covenant Election Effective
Date,  the  covenants  set  forth  in  Sections  8.18(a)  and  8.22(a)  shall be
applicable.

     8.18 Fixed Charge Coverage Ratio.

          (a) Prior to the Covenant Election Effective Date:

               (i) neither Holding nor the Borrower will permit the Fixed Charge
          Coverage Ratio of the Consolidated  Group to be less than 1.0 to 1 for
          any 12-month period ending on September 30, 2002 or on the last day of
          any fiscal quarter  thereafter until and including  December 31, 2003;
          and

               (ii)  neither  Holding  nor the  Borrower  will  permit the Fixed
          Charge Coverage Ratio of the Consolidated Group to be less than 1.3 to
          1 for any 12-month  period ending on March 31, 2004 or on the last day
          of any fiscal quarter thereafter.

          (b) On or after the Covenant Election  Effective Date, neither Holding
     nor the  Borrower  will  permit  the  Fixed  Charge  Coverage  Ratio of the
     Consolidated  Group to be less than 1.3 to 1 for any 12-month period ending
     on or after the Covenant Election  Effective Date or on the last day of any
     fiscal quarter thereafter.

     8.19  Tangible  Assets.  The  aggregate  amount of  Tangible  Assets of all
members of the  Consolidated  Group that are organized in the UK, the US, France
or Australia  (and any other  jurisdiction  agreed to in writing by the Agent in
its sole  discretion)  will be equal to or greater than 82% of the  consolidated
Tangible Assets of the Consolidated  Group. The aggregate gross revenues for the
most recent fiscal  quarter for all members of the  Consolidated  Group that are
organized  in the UK, the US,  France or Australia  (and any other  jurisdiction
agreed to in writing by the Agent in its sole discretion) will constitute 82% or
more of the  consolidated  gross  revenues  of the  Consolidated  Group for such
fiscal quarter.

     8.20 [intentionally deleted]

     8.21 [intentionally deleted]

     8.22 Total Debt: EBITDA.

          (a) Prior to the Covenant Election Effective Date:

               (i) for fiscal  quarters  ending on or before  December 31, 2002,
          neither  Holding nor the  Borrower  will permit the ratio of (x) Total
          Debt of the Consolidated Group at the end of any fiscal quarter to (y)
          EBITDA of the  Consolidated  Group for the four fiscal quarters ending
          on the date of such fiscal quarter to exceed 4.5 to 1; and

               (ii) for fiscal quarters ending after December 31, 2002 and on or
          before December 31, 2003, neither Holding nor the Borrower will permit
          the ratio of (x) Total  Debt of the  Consolidated  Group at the end of
          any fiscal  quarter to (y)  EBITDA of the  Consolidated  Group for the
          four  fiscal  quarters  ending on the date of such  fiscal  quarter to
          exceed 4.0 to 1; and

               (iii) for fiscal quarters ending after December 31, 2003, neither
          Holding  nor the  Borrower  will permit the ratio of (x) Total Debt of
          the Consolidated  Group at the end of any fiscal quarter to (y) EBITDA
          of the  Consolidated  Group for the four fiscal quarters ending on the
          date of such fiscal quarter to exceed 3.0 to 1.

          (b) For  fiscal  quarters  ending  on or after the  Covenant  Election
     Effective  Date,  neither Holding nor the Borrower will permit the ratio of
     (x) Total Debt of the  Consolidated  Group at the end of any fiscal quarter
     to (y) EBITDA of the Consolidated Group for the four fiscal quarters ending
     on the date of such fiscal quarter to exceed 3.0 to 1.

          (c) In  determining  Total Debt for purposes of this Section 8.22, the
     amount of "cash and  equivalents"  on the Borrower's  and its  Subsidiaries
     consolidated  balance sheet at the end of the relevant fiscal quarter shall
     first be deducted.

     8.23 Capital Expenditures.

          (a) for the fiscal quarter ending September 30, 2002,  neither Holding
     nor the  Borrower  will make capital  expenditures,  or permit any of their
     respective  Subsidiaries so to do, unless, after giving effect thereto, the
     aggregate amount of all such capital  expenditures made by the Consolidated
     Group  in such  fiscal  quarter  would  not  exceed  40% of  EBITDA  of the
     Consolidated Group for such fiscal quarter; and

          (b) for the two fiscal quarters  ending on December 31, 2002,  neither
     Holding nor the Borrower will make capital  expenditures,  or permit any of
     their  respective  Subsidiaries  so to  do,  unless,  after  giving  effect
     thereto,  the aggregate amount of all such capital expenditures made by the
     Consolidated  Group in such two  fiscal  quarters  would not  exceed 40% of
     EBITDA of the Consolidated Group for such two fiscal quarters; and

          (c) for the three fiscal  quarters  ending on March 31, 2003,  neither
     Holding nor the Borrower will make capital  expenditures,  or permit any of
     their  respective  Subsidiaries  so to  do,  unless,  after  giving  effect
     thereto,  the aggregate amount of all such capital expenditures made by the
     Consolidated  Group in such three fiscal  quarters  would not exceed 40% of
     EBITDA of the Consolidated Group for such three fiscal quarters; and

          (d) for  fiscal  quarters  ending on or after June 30,  2003,  neither
     Holding nor the Borrower will make capital  expenditures,  or permit any of
     their  respective  Subsidiaries  so to  do,  unless,  after  giving  effect
     thereto,  the aggregate amount of all such capital expenditures made by the
     Consolidated  Group in the four fiscal  quarters ending on the date of such
     fiscal quarter would not exceed 40% of EBITDA of the Consolidated Group for
     such four fiscal quarters.

          For  purposes of this  Section  8.23,  an amount  equal to the present
     value of any  Capitalized  Lease  Obligations  entered into by a Loan Party
     after June 30, 2002 shall be deemed to be a capital  expenditure during the
     fiscal quarter in which such  Capitalized  Lease  Obligations  were entered
     into.

     8.24 Accounting Changes.

          (a) Neither  Holding nor the Borrower  will make, or permit any of its
     Subsidiaries  to make, any significant  change in accounting  treatment and
     reporting practices except as permitted or required by GAAP.

          (b) Neither  Holding nor the  Borrower  will change its fiscal year or
     permit any of their respective Subsidiaries to change its fiscal year.

     8.25 Employee  Benefit Plans. (i) Neither Holding nor the Borrower will not
adopt, or permit any of its Subsidiaries to adopt, any Pension Plan or any other
Plan  subject to Section  302 of ERISA or Section  412 of the Code,  without the
Agent's  consent,  (ii) become  obligated,  or permit any of its Subsidiaries to
become obligated,  to contribute to any Multiemployer Plan subject to Subtitle E
of Part IV of ERISA,  without the Agent's consent, or (iii) allow, or permit any
of its  Subsidiaries  to allow,  any Plan to fail to comply with the  applicable
provisions  of ERISA and the Code in any  respect  which  would  have a Material
Adverse Effect on the Borrower, or on the Borrower and its Subsidiaries taken as
a whole.

     8.26 Compliance with ERISA.  (i) Holding will not terminate,  or permit any
of its  Subsidiaries  to  terminate,  any  Pension  Plan so as to  result in any
material  (in the  opinion  of the Agent or the  Required  Banks)  liability  of
Holding or any of its  Subsidiaries  to the PBGC,  (ii) permit to exist for more
than 30 days the occurrence of any Reportable  Event (as defined in Section 4043
of ERISA),  or any other event or condition,  which  presents a material (in the
opinion of the Agent or the Required  Banks) risk of such a  termination  by the
PBGC of any Pension Plan, (iii) [intentionally  deleted],  (iv) allow, or permit
any of its  Subsidiaries  to allow,  any Plan to incur an  "accumulated  funding
deficiency"  (within  the  meaning of Section 302 of ERISA or Section 412 of the
Code) for more than 30 days, whether or not waived, (v) engage, or permit any of
its Subsidiaries or any Plan to engage, in any "prohibited  transaction" (within
the meaning of Section 406 of ERISA or Section  4975 of the Code)  resulting  in
any material (in the opinion of the Agent or the Required  Banks and  considered
by itself or together with all other such  liabilities  of Holding and all ERISA
Affiliates)  liability to Holding or any ERISA Affiliate,  (vi) allow, or permit
any of its Subsidiaries to allow, any Plan to fail to comply with the applicable
provisions of ERISA and the Code in any material  respect for more than 30 days,
(vii) fail,  or permit any of its  Subsidiaries  to fail,  to make any  required
contribution to any  Multiemployer  Plan, unless and to the extent only that the
validity thereof is being contested in good faith and by appropriate  procedures
and such Loan Party or Subsidiary has set aside on its books  adequate  reserves
therefor in accordance with GAAP, or (viii) completely or partially withdraw, or
permit any of its  Subsidiaries  to  completely  or partially  withdraw,  from a
Multiemployer  Plan, if such complete or partial  withdrawal  will result in any
material  (in  the  opinion  of the  Agent  or the  Required  Banks)  withdrawal
liability under Title IV of ERISA.

     8.27 Other  Agreements.  Without  the prior  written  consent of the Agent,
neither  Holding  nor the  Borrower  will (or  permit  any of  their  respective
Subsidiaries  to) amend,  modify or terminate  the Tax  Allocation  Agreement or
waive any right thereunder or fail to duly enforce the Tax Allocation Agreement.

     8.28 Dormant Subsidiaries.

          (a) No Dormant Subsidiary will engage in any business or activity.

          (b) No Dormant  Subsidiary will contract,  create,  incur or suffer to
     exist any Indebtedness for Borrowed Money.

          (c) Neither  Holding nor any  Subsidiary of Holding will make any loan
     to any Dormant Subsidiary.

          (d) No Subsidiary will merge into any Dormant Subsidiary.

          (e) No Loan Party shall convey,  sell, lease or otherwise transfer any
     asset to any Dormant Subsidiary.


Section 9. EVENTS OF DEFAULT.

     Upon the  occurrence  of any of the  following  specified  events  (each an
"Event of Default"):

     9.1  Principal  and  Interest.  The Borrower  shall  default in the due and
punctual  payment of (i) any  principal due on any Loan; or (ii) any interest on
any Loan or Note or in the due and punctual payment of Commitment  commission or
other  amounts  due  hereunder;  or (iii)  any  repayment  of any  Reimbursement
Obligation or Deemed Disbursement or any interest payable thereon; provided that
failure to duly and punctually make an interest payment shall not be an Event of
Default under this Section 9.1 if such interest payment is paid within five days
after  the  date it is due and the  Borrower  has not  been  late in  making  an
interest  payment  on any of the Notes or in respect of the Loans more than once
in the preceding 12 months; or

     9.2  Representations  and  Warranties.  Any  representation,   warranty  or
statement  made by any Credit  Party in any Loan  Document  to which such Credit
Party is a party or otherwise in writing by such Person in  connection  with any
of the foregoing, or in any certificate or statement furnished pursuant to or in
connection  with any of the foregoing,  shall be breached in a manner that could
reasonably  be  expected  to have an adverse  effect on the  validity,  payment,
performance  or  enforceability  of the Loan  Agreement on any of the other Loan
Documents or any  obligation of a Credit Party  hereunder or thereunder or shall
prove to be untrue in any material  and adverse  respect on the date as of which
made; or

     9.3  Negative  Covenants.  Any  Loan  Party  or  any  of  their  respective
Subsidiaries  shall  default in the due  performance  or observance of any term,
covenant  or  agreement  on its part to be  performed  or  observed  pursuant to
Section 7.20 or Section 8; or

     9.4  Other  Covenants.   Any  Credit  Party  or  any  of  their  respective
Subsidiaries  shall  default in the due  performance  or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to any of
the provisions of this Agreement  (other than those referred to in Sections 9.1,
9.2 or 9.3) and such  default  (which  shall be capable of cure) shall  continue
unremedied  for a period of 30 days  after the  earlier of the date on which the
Agent gives the Borrower notice of such default or on the date an officer of any
Credit  Party  (other than a  Subsidiary  that is an  Insignificant  Subsidiary)
becomes aware thereof; or

     9.5 Other  Obligations.  Any indebtedness of any member of the Consolidated
Group (i) shall be duly  declared to be or shall become due and payable prior to
the stated  maturity  thereof,  or (ii) in respect of  indebtedness in excess of
$500,000 (or the equivalent  amount in any other currency,  computed at the Spot
Rate) in an aggregate  principal amount,  shall not be paid as and when the same
becomes due and payable  including any applicable  grace period,  or there shall
occur and be continuing  any event which  constitutes  an event of default under
any  instrument,   agreement  or  evidence  of  indebtedness   relating  to  any
indebtedness of any member of the  Consolidated  Group in excess of $500,000 (or
the  equivalent  amount in any other  currency,  computed  at the Spot  Rate) in
aggregate  principal  amount,  the  effect of which is to permit  the  holder or
holders of such instrument, agreement or evidence of indebtedness, or a trustee,
agent or other  representative on behalf of such holder or holders, to cause the
indebtedness evidenced thereby to become due prior to its stated maturity; or

     9.6 Ownership.

          (a)  XANSER  shall at any time own less than  100% of the  outstanding
     capital stock of Holding;  or any stock issued by Holding or any Subsidiary
     of Holding  shall be the  subject of a Lien  (other than Liens to the Agent
     and the Banks hereunder); or

          (b) A change  has  occurred  in the stock  ownership  of XANSER  under
     Section  382 of the Code  that,  in the  reasonable  judgment  of the Agent
     exercised in good faith,  limits (or in the future could limit) utilization
     of the NOL by the US  Guarantors  in a  manner  having a  Material  Adverse
     Effect with respect to the US Guarantors; or

     9.7  Insolvency.  Any Credit Party  (references  to "Credit  Party" in this
Section  9.7,  however,  not to  include  any  Insignificant  Subsidiary)  shall
dissolve or suspend or discontinue its business, or shall make an assignment for
the benefit of creditors or a  composition  with  creditors,  shall be unable or
admit in writing its  inability  to pay its debts as they  mature,  shall file a
petition in  bankruptcy,  shall be  adjudicated  insolvent  or  bankrupt,  shall
petition  or apply to any  tribunal  for the  appointment  of (or there shall be
appointed  pursuant to any contract) any  administrator,  receiver,  liquidator,
administrative  receiver or trustee of or for it or any substantial  part of its
property or assets,  shall  commence  any  proceedings  relating to it under any
bankruptcy,  reorganization,  arrangement,  readjustment of debt,  receivership,
dissolution or liquidation  law or statute of any  jurisdiction,  whether now or
hereafter in effect;  or there shall be  commenced  against any Credit Party any
such proceeding which shall remain  undismissed for a period of 90 days or more,
or any order,  judgment or decree  approving the petition in any such proceeding
shall  be  entered;  or any  Credit  Party  shall by any act or  failure  to act
indicate its consent to, approval of or acquiescence  in, any such proceeding or
in the appointment of any administrator,  receiver,  liquidator,  administrative
receiver  or trustee of or for it or any  substantial  part of its  property  or
assets,  or shall  suffer  any such  appointment  to  continue  undischarged  or
unstayed  for a period of 90 days or more;  or any Credit  Party  shall take any
action  for the  purpose  of  effecting  any of the  foregoing;  or any court of
competent  jurisdiction  shall  assume  jurisdiction  with  respect  to any such
proceeding  or a receiver  or trustee or other  officer or  representative  of a
court or of creditors, or any court, governmental officer or agency, shall under
color of legal  authority,  take and hold possession of any substantial  part of
the  property or assets of any Credit Party or there shall happen or exist under
the laws of any applicable  jurisdiction,  with respect to any Credit Party, any
event  analogous  to and  having a  substantially  similar  effect to any of the
foregoing events; or

     9.8  Guarantee  Agreements.  The  breach  by any  Guarantor  of any term or
provision of the  Guarantee  Agreement to which it is a party,  which default in
the reasonable  judgment of the Agent or the Required  Banks  (exercised in good
faith) is material;  or any Guarantee Agreement is at any time not in full force
and effect;  or any  "Default"  or "Event of Default" (as defined in a Guarantee
Agreement)  shall exist under such Guarantee  Agreement;  or any Guarantor shall
assert that it is not liable as a guarantor under its Guarantee Agreement; or

     9.9  Security  Documents.  The  breach by any  Credit  Party of any term or
provision  of any  Security  Document or  Subordination  Agreement to which such
Person is a party, which default could reasonably be expected to have an adverse
effect on the validity, payment, performance or enforceability of this Agreement
or any of the other Security  Documents or Loan Documents or any obligation of a
Loan party  hereunder or  thereunder,  or if any such Security  Document or Loan
Document is at any time not in full force and effect; or any "Default" or "Event
of Default" (as defined in any such  Security  Document)  shall exist under such
Security Document;  or any Security Document shall fail to grant to the Agent on
behalf of the Banks  the Lien and  security  interest  purported  to be  created
thereby  (provided that if any Security  Document fails to so grant such Lien or
security  interest  solely as a result of a change  of law and such  failure  is
capable of remedy, then such failure shall not be considered an Event of Default
under  this  Section  9.9 for a period of 10 days if such  failure  is  remedied
within that  period)  unless  such  failure  results  solely from the failure or
refusal  of the  Agent to take  some  action  which is in the sole and  absolute
control  and  discretion  of the  Agent  (for  example,  to file a  continuation
statement)  and such  failure  or refusal  continues  after  reasonable  written
request by Holding or the Borrower; or

     9.10 Section 6  Conditions.  Any of the  conditions  set forth in Section 6
shall not have been complied with on or before September 13, 2002; or

     9.11 Judgments.

          (a) Any final  non-appealable  judgment  for the  payment  of money in
     excess of $1,250,000 (or the equivalent  thereof in any currency,  computed
     at the Spot  Rate),  excluding  any  amounts  payable  or  reimbursable  by
     financially sound insurance  companies or by third parties whose Commercial
     Paper is rated P-1 or A-1 by S&P or Moodys (or the equivalent rating by any
     other rating agency  nationally  recognized in the US or the UK),  shall be
     rendered against any member of the Consolidated Group; or

          (b) Final  judgment  for the payment of money in excess of  $1,250,000
     (or the  equivalent  thereof in any  currency,  computed  at the Spot Rate)
     shall be rendered  against any member of the  Consolidated  Group,  and the
     same  shall  remain  undischarged  for a  period  of 30 days  during  which
     execution shall not be effectively stayed or contested in good faith;

     then, and in any such event,  and at any time  thereafter,  if any Event of
     Default shall then be continuing the Agent may (and shall, if instructed in
     writing by the  Required  Banks) by  written  notice to the  Borrower:  (i)
     declare the principal of and accrued interest on the Loans to be, whereupon
     the same shall  forthwith  become,  due and  payable  without  presentment,
     demand, protest or other notice of any kind, all of which are hereby waived
     by the  Borrower and Holding;  and/or (ii) declare the  commitments  of the
     Banks to make the Loans hereunder terminated, whereupon such commitments of
     the Banks shall forthwith terminate immediately; provided that if any Event
     of  Default  described  in  Section  9.7 shall  occur  with  respect to the
     Borrower,  the result which would  otherwise  occur only upon the giving of
     written notice by the Agent or the Required Banks to the Borrower as herein
     described shall occur automatically, without the giving of any such notice.


Section 9A. GUARANTY.

     In order to induce the Banks and the Agent to enter into this Agreement and
to extend  credit  hereunder  and in  recognition  of the direct  benefits to be
received  by Holding  from the  proceeds of the Loans,  Holding  agrees with the
Banks and the Agent as follows.

     9A.1.  The  Guaranty.   Holding  hereby   unconditionally  and  irrevocably
guarantees  as  primary  obligor  and not  merely as surety  the full and prompt
payment when due (whether upon maturity,  by  acceleration  or otherwise) of any
and all Obligations of the Borrower  (including  without limitation all interest
which may be payable  thereon prior to or during the pendency of any  insolvency
or  similar  proceeding  with  respect to the  Borrower).  If any or all of such
Obligations become due and payable hereunder,  Holding unconditionally  promises
to pay such  indebtedness  to the  Agent on behalf of the  Banks,  or order,  on
demand, together with any and all expenses which may be incurred by the Banks or
the Agent in collecting any of the  indebtedness.  If the Agent or the Banks are
prevented by law from  accelerating  any of the  indebtedness in accordance with
the terms of any  agreement or  instrument  governing  same,  the Agent shall be
entitled to receive hereunder from Holding, upon demand therefor,  the sum which
would  have  otherwise  been  due  had  such  acceleration  occurred.  The  word
"indebtedness"  is used in this Section 9A in its most  comprehensive  sense and
includes  any  and all  advances,  debts,  obligations  and  liabilities  of the
Borrower  arising in connection with the  Obligations,  in each case heretofore,
now  or  hereafter   made,   incurred  or  created,   whether   voluntarily   or
involuntarily, absolute or contingent, liquidated or unliquidated, determined or
undetermined,  whether or not such indebtedness is from time to time reduced, or
extinguished and thereafter  increased or incurred,  whether the Borrower may be
liable  individually  or jointly with others,  whether or not recovery upon such
indebtedness  may be or hereafter  become barred by any statute of  limitations,
and  whether  or not such  indebtedness  may be or  hereafter  become  otherwise
unenforceable.  Without  limiting  the  generality  of  the  foregoing,  Holding
acknowledges  that this  guaranty is a guaranty  of  payment,  not a guaranty of
collection.

     9A.2  Bankruptcy.  Additionally,  Holding  unconditionally  and irrevocably
guarantees the payment of any and all Obligations, whether or not due or payable
by the  Borrower,  upon the  occurrence in respect of the Borrower of any of the
events  specified in Section 9 hereof and  unconditionally  promises to pay such
indebtedness  to the Agent on behalf of the Banks,  or order,  on demand without
setoff or counterclaim.

     9A.3 Nature of Liability.  The liability of Holding  hereunder is exclusive
and  independent  of any security or other guaranty of the  indebtedness  of the
Borrower whether executed by Holding or by any other party, and the liability of
Holding  hereunder  shall not be affected or impaired by (a) any direction as to
application  of payment by the Borrower or by any other party,  or (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor or
of any other party as to the indebtedness of the Borrower, or (c) any payment on
or in  reduction  of  any  such  other  guaranty  or  undertaking,  or  (d)  any
dissolution or termination of the Borrower, or (e) any payment made to the Agent
or to any or all Banks on the indebtedness  which such Agent,  Bank or Banks are
required to repay to the Borrower  pursuant to a court order in any  bankruptcy,
reorganization,  arrangement,  moratorium or other debtor relief proceeding, and
Holding  waives any right to the  deferral or  modification  of its  obligations
hereunder by reason of any such proceeding.

     9A.4 Independent Obligation.

          (a) The  obligations  of  Holding  hereunder  are  independent  of the
     obligations of any other guarantor or the Borrower, and any security for or
     other guarantee of the indebtedness of the Borrower,  and a separate action
     or actions may be brought and  prosecuted  against  Holding  whether or not
     action is  brought  against  any other  guarantor  or the  Borrower  or any
     security  held by the Agent and  without  pursuing  any other  remedy,  and
     whether or not any other  guarantor  or the  Borrower be joined in any such
     action or actions.  Holding waives, to the fullest extent permitted by law,
     the benefit of any statute of limitations affecting its liability hereunder
     or  the  enforcement   thereof.  Any  payment  by  the  Borrower  or  other
     circumstance  which  operates to toll any statute of  limitations as to the
     Borrower  shall operate to toll the statute of  limitations  as to Holding.
     The Agent's and Banks'  rights  under this Section 9A will not be exhausted
     by any  action  or  inaction  by the  Agent or the  Banks  until all of the
     indebtedness has been indefeasibly paid in full.

          (b) The liability of Holding  hereunder is not affected or impaired by
     any  direction  or  application  of payment by the Borrower or by any other
     party,  or by any other  guarantee or  undertaking  of Holding or any other
     party as to the  indebtedness  of the  Borrower,  by any  payment on, or in
     reduction of, any such other guarantee or undertaking,  by the termination,
     revocation  or  release  of  any  obligations  hereunder  or of  any  other
     guarantor,  or by any  payment  made  to the  Agent  or  the  Banks  on the
     indebtedness  which  the Agent or the Banks  repay to the  Borrower  or any
     other  guarantor or other  person or entity  pursuant to court order in any
     bankruptcy, reorganization,  arrangement, moratorium or other debtor relief
     proceeding,  or any other fact or circumstance which would otherwise excuse
     the  obligation of a guarantor or surety,  and Holding  waives any right to
     the deferral or modification of Holding's  obligations  hereunder by reason
     of any  such  proceeding,  fact or  circumstance.  This  Section  9A  shall
     continue to be effective in accordance with its terms, or be reinstated, as
     the case may be, if at any time payment,  or any part  thereof,  of or with
     respect  to any of the  indebtedness  is  rescinded  or must  otherwise  be
     restored  or  returned  by  the  Agent  or  a  Bank  upon  the  insolvency,
     bankruptcy,  dissolution,  liquidation or reorganization of the Borrower or
     any other payor  thereof,  or upon or as a result of the  appointment  of a
     receiver,  intervenor or conservator of, or trustee or similar officer for,
     the  Borrower or any other  payor  thereof or any  substantial  part of its
     property, or otherwise, all as though such payments had not been made.

     9A.5  Authorization.  Holding  authorizes  the Agent and the Required Banks
without  notice or demand,  and  without  affecting  or  impairing  its or their
liability  hereunder,  from  time  to  time to (a)  renew,  compromise,  extend,
increase,  accelerate or otherwise  change the time for payment of, or otherwise
change the terms,  of the  Obligations  of the  Borrower or any part  thereof in
accordance with this  Agreement,  including any increase or decrease of the rate
of interest thereon, (b) take and hold security from the Borrower, any guarantor
or any other party for the  payment of this  guaranty  or the  indebtedness  and
exchange,  enforce,  waive and release any such security or accept additional or
substituted security,  (c) apply such security and direct the order or manner of
sale thereof as the Agent in its discretion  (subject to the other provisions of
this Agreement) may determine and (d) release, add or substitute any one or more
endorsers,  guarantors  or  other  obligors.  Any  modifications,  renewals  and
extensions of the indebtedness may be made at any time by the Agent on behalf of
the Banks, before or after any termination of this Agreement,  and Holding shall
be fully liable for any such modifications, renewals or extensions. The Agent on
behalf  of the Banks may take any of the  foregoing  actions  upon any terms and
conditions as the Agent may elect, without giving notice to Holding or obtaining
the consent of Holding and without  affecting  the  liability  of Holding to the
Agent or the Banks.

     9A.6  Reliance.  It is not  necessary for the Banks or the Agent to inquire
into the capacity or powers of the Borrower or the officers, directors, partners
or agents acting or purporting to act on its behalf,  and any indebtedness  made
or created in reliance  upon the  professed  exercise  of such  powers  shall be
guaranteed  hereunder.  Holding  assumes full  responsibility  for keeping fully
informed of the financial  condition of the Borrower and all other circumstances
affecting the Borrower's ability to perform its obligations to the Agent and the
Banks,  and  agrees  that  neither  the Agent nor any Bank will have any duty to
report to Holding any information which the Agent or any Bank receives about the
Borrower's  financial  condition or any circumstances  bearing on its ability to
perform,  and  expressly  waives any right to receive such  information  and any
defense based upon failure to receive such information.

     9A.7 Subordination.

          (a) Any indebtedness of the Borrower now or hereafter held by Holding,
     whether in  connection  with this  Section 9A or other  provisions  of this
     Agreement,  or whether  completely  independent  of this  Agreement and the
     indebtedness, is hereby subordinated to the indebtedness of the Borrower to
     the Banks;  provided that so long as no Default or Event of Default  exists
     (both  before  and after  giving  effect to any  payment  of  principal  or
     interest  proposed  to be  made  on such  subordinated  indebtedness),  the
     Borrower  may pay to Holding  regularly-scheduled  interest  and  principal
     payments   required   by  its  terms  to  be  made  on  such   subordinated
     indebtedness.  Holding hereby  covenants with the Agent and the Banks that,
     except as the Agent may otherwise agree,  Holding shall not be entitled to,
     and shall not, demand or receive any payment in respect of any indebtedness
     of the  Borrower to Holding  (whether  of  principal,  interest  thereon or
     otherwise)  or  demand  the  creation,  or  receive  the  benefit,  of  any
     encumbrance  or other Lien over or any guarantee or indemnity in respect of
     any  indebtedness  of the  Borrower to Holding or commence  any  proceeding
     against the Borrower or take any action in respect of any  indebtedness  of
     the Borrower to Holding (including, without limitation, the exercise of any
     right of set-off, counterclaim or lien, or any right to declare any default
     or "event of default"  or any action or steps with a view to (or  otherwise
     in  connection   with)  the   winding-up,   dissolution,   receivership  or
     administration  of the  Borrower).  Prior to the transfer by Holding of any
     note or negotiable  instrument  evidencing any indebtedness of the Borrower
     to Holding,  Holding shall mark such note or negotiable  instrument  with a
     legend that the same is subject to this subordination.

          (b) Holding  hereby  covenants with the Agent and the Banks and agrees
     and declares that:

               (i) in the event of Holding  receiving  any  payment or any other
          benefit in breach of Section  9A.7(a),  Holding shall forthwith notify
          the Agent of the receipt and, pay to the Agent on behalf of the Banks,
          all sums which shall have been received by it in  consequence  of such
          breach and until such  payment  to the Agent,  Holding  shall hold the
          payment or other benefit so received by it in trust for the Banks;

               (ii) in the event of any indebtedness being discharged by set-off
          in breach of Section  9A.7(a),  it shall forthwith notify the Agent of
          the  discharge  and pay to the  Agent on behalf of the Banks an amount
          equal to the amount of the discharge; and

               (iii) it shall forthwith pay to the Agent on behalf of the Banks,
          and it shall hold in trust for the Banks  pending  such  payment,  any
          amount  or other  distribution  of  assets  of any  kind or  character
          received by it (whether in cash, property, securities or otherwise) on
          a  winding-up,  dissolution,  receivership  or  administration  of the
          Borrower.

          (c) Holding hereby agrees with the Agent and the Banks that it will at
     its own  expense  do all such  things  as the Agent  may  require  as being
     necessary or desirable to transfer to the Agent all payments or benefits to
     be made pursuant to Section 9A.7(b) including endorsements and execution of
     formal  transfers,  and will pay any costs and stamp  duties in  connection
     therewith.

          (d) If,  for any  reason,  a trust in favor of the  Banks  under  this
     Section 9A.7 is invalid or  unenforceable,  Holding shall from time to time
     promptly  pay and  deliver  to the  Agent on  behalf of the Banks an amount
     equal to the amount of any payment or benefit which it would otherwise have
     been obliged to hold in trust for the Banks.

     9A.8 Waivers of Defenses. Holding waives: (a) all statutes of limitation as
to the  indebtedness,  this  Agreement  or  otherwise as a defense to any action
brought  against  Holding  by the  Agent  or any  Bank,  to the  fullest  extent
permitted  by law;  (b) any  defense  based  upon any  legal  disability  of the
Borrower or any  discharge or limitation of the liability of the Borrower to the
Agent or the Banks,  whether  consensual  or arising by  operation of law or any
bankruptcy,  insolvency,  or debtor-relief  proceeding, or from any other cause;
(c) presentment,  demand,  protest and notice of any kind; (d) any defense based
upon or arising out of any defense which the Borrower may have to the payment or
performance  of any part of the  indebtedness;  (e) any  defense  based upon any
disbursements  by  the  Agent  or the  Banks  to the  Borrower  pursuant  to any
agreements or instruments  governing the indebtedness  whether same be deemed an
additional  advance or be deemed to be paid out of any special interest or other
fund accounts,  as constituting  unauthorized  payments hereunder or amounts not
guaranteed  by this  Section 9A; (f) all rights to  participate  in any security
held by the  Agent  or the  Banks  for the  indebtedness;  (g)  irregularity  or
unenforceability  of any agreement or instrument  representing  or governing the
indebtedness;  (h) any request that the Agent or a Bank be diligent or prompt in
making demands  hereunder or under any agreement or instrument  representing  or
governing the  indebtedness;  and (i) any other defense (except the defense that
the indebtedness  has been  indefeasibly  paid in full) which,  under applicable
law,  would  release  the  obligation  of  a  guarantor  or  surety,  until  the
indebtedness has been indefeasibly paid in full.

     9A.9 Waiver of Subrogation.  Holding hereby irrevocably waives any claim or
other rights which it may now have or hereafter  acquire against the Borrower or
any other  guarantor  that arise from the  existence,  payment,  performance  or
enforcement  of  Holding's  obligations  under this  Agreement or any other Loan
Document,   including   (without   limitation)   any   right   of   subrogation,
reimbursement,   exoneration,   contribution,   indemnification,  any  right  to
participate  in any claim or remedy  of the  Banks  and the  Agent  against  the
Borrower or any other  guarantor or any  collateral  which the Agent or any Bank
now has or hereafter acquires, whether or not such claim, remedy or right arises
in  equity,  or  under  contract,  statute  or  common  law  including  (without
limitation)  the  right  to take or  receive  from  the  Borrower,  directly  or
indirectly,  in cash or other  property  or by set-off  or in any other  manner,
payment or  security  on account  of such claim or other  rights.  If any amount
shall  be paid  to  Holding  in  violation  of the  preceding  sentence  and the
Obligations  shall not have been paid in full,  such  amount  shall be deemed to
have been paid to Holding  for the benefit of, and held in trust for the benefit
of, the Banks and the Agent and shall  forthwith  be paid to the Agent on behalf
of the Banks to be credited and applied upon the Obligations, whether matured or
unmatured, in accordance with the terms of this Agreement.  Holding acknowledges
that  it  will  receive   direct  and  indirect   benefits  from  the  financing
arrangements  contemplated  by this  Agreement  and that the waiver set forth in
this Section 9A.9 is knowingly made in contemplation of such benefits.

     9A.10 [intentionally deleted]

     9A.11 Costs and Expenses.  In addition to the amounts guaranteed hereunder,
Holding agrees to pay the Agent's and the Banks' reasonable  out-of-pocket costs
and  expenses,  including  but not  limited  to legal  fees  and  disbursements,
incurred  in any effort to collect or enforce  any of the  indebtedness  or this
Section 9A, whether or not any lawsuit is filed.  Until paid to the Agent or the
Banks, such sums will bear interest at the highest rate of interest borne by any
of the Loans plus 2%; provided that if such interest  exceeds the maximum amount
permitted to be paid under  applicable  law, then such interest shall be reduced
to such maximum  permitted amount.  Interest accrued hereunder  pursuant to this
paragraph shall be payable on demand and shall be calculated on the basis of the
actual number of days elapsed and a 360-day year.


Section 10. REPRESENTATIONS AND WARRANTIES.

     In order to induce the Agent and the Banks to enter into this Agreement and
to make the Loans and issue the Letters of Credit  provided for herein,  each of
Holding and the Borrower  makes the  following  representations,  covenants  and
warranties,  which  representations,  covenants and warranties shall survive the
execution and delivery of this Agreement and the other documents and instruments
referred to herein:

     10.1 Status; Validity.

          (a) Each  member of the  Consolidated  Group is a duly  organized  and
     validly  existing  corporation  in  good  standing  under  the  laws of the
     jurisdiction of its incorporation and has the corporate power and authority
     to own or hold  under  lease its  property  and  assets,  to  transact  the
     business in which it is engaged,  to enter into and perform this  Agreement
     and the other Loan Documents to which it is party, and, as to the Borrower,
     to  borrow  hereunder.  Each  member  of the  Consolidated  Group  is  duly
     qualified  or licensed  as a foreign  corporation  in good  standing in (or
     taken  such  comparable  action  as is  required  under  the  laws of) each
     jurisdiction  where  failure  to so qualify  would have a Material  Adverse
     Effect on FAI, FOSI, Holding, the Borrower,  or any Significant  Subsidiary
     of the Consolidated  Group. A true and complete list of all Subsidiaries of
     XANSER, Holding, FAI, FOSI and the Borrower as of the Closing Date, showing
     the percentage  ownership  interest of XANSER,  Holding,  FAI, FOSI and the
     Borrower, is set forth in Schedule 10.5 to this Agreement. All Subsidiaries
     of Holding  that are  Insignificant  Subsidiaries  on the Closing  Date are
     denoted with an asterisk on said schedule.

          (b) The execution,  delivery and  performance by the Credit Parties of
     this  Agreement,  the other Loan Documents to which each is party,  and the
     other  documents,  agreements or instruments  provided for therein to which
     each is party, the consummation of the transactions contemplated thereunder
     and the use of the proceeds of the Loans (and of any loans  represented  by
     the Intercompany Note) have been duly authorized by all necessary corporate
     and stockholder  action.  This Agreement,  the other Loan Documents and the
     other  documents,  agreements or instruments  provided for therein to which
     each is party are the legal,  valid and binding  obligations  of the Credit
     Parties party  thereto,  enforceable  in accordance  with their  respective
     terms subject, as to enforceability, to applicable bankruptcy,  insolvency,
     reorganization  and similar laws  affecting the  enforcement  of creditors'
     rights generally and to general principles of equity (regardless of whether
     such enforcement is considered in a proceeding in equity or at law).

     10.2 Compliance with Other Instruments. No member of the Consolidated Group
is in material default under any Material  Agreement to which it is a party, and
neither the  execution,  delivery or performance of this Agreement and the other
Loan  Documents,  nor the  consummation  of the  transactions  herein or therein
contemplated,  nor compliance  with the terms and provisions  hereof or thereof,
will  contravene  any  provision of law,  statute,  rule or  regulation to which
XANSER or any  member of the  Consolidated  Group is  subject  or any  judgment,
decree,  franchise,  order or permit  applicable  to XANSER or any member of the
Consolidated  Group or will conflict or will be inconsistent with or will result
in any breach of, any of the terms,  covenants,  conditions or provisions of, or
constitute a default  under,  or, except as provided by the Security  Documents,
result in the creation or imposition of (or the  obligation to create or impose)
any Lien upon any of the  property  or assets of any member of the  Consolidated
Group  pursuant  to the  terms  of any  indenture,  mortgage,  deed of  trust or
Material  Agreement to which XANSER or any member of the Consolidated Group is a
signatory or by which XANSER or any member of the Consolidated Group is bound or
to which  XANSER or any  member of the  Consolidated  Group  may be  subject  or
violate any provision of the  certificate  of any Charter  Document of XANSER or
any member of the Consolidated Group.

     10.3 Litigation.  There are no actions, suits or proceedings pending or, to
the best of  knowledge  of  Holding  or the  Borrower,  threatened,  against  or
affecting  any member of the  Consolidated  Group before any court or before any
governmental or administrative body or agency,  which, if adversely  determined,
would  have  a  Material  Adverse  Effect  on  FAI,  the  Borrower,  or  on  the
Consolidated  Group.  The  litigation  schedule  delivered  on the Closing  Date
pursuant  to  Section  6.9(b) is a true and  correct  list and  analysis  of all
actions, suits and proceedings pending (and, to the best of knowledge of Holding
and the  Borrower,  threatened)  on that date against any Credit Party or any of
their respective assets or by which any Credit Party is otherwise affected.

     10.4 Compliance with Law. Except for matters which will not cause or result
in a Material Adverse Change in FAI, the Borrower, or in the Consolidated Group:
(a) all business and  operations of each member of the  Consolidated  Group have
been and are being conducted in accordance with all applicable  laws,  rules and
regulations of all Federal, state, local and other governmental authorities; (b)
each member of the  Consolidated  Group has obtained  all permits,  licenses and
authorizations,  or consents which are otherwise  necessary,  for such Person to
conduct its business; and (c) no member of the Consolidated Group is a party to,
has been  threatened  with,  and there are no facts  existing as a basis for any
governmental or other proceeding which might result in a suspension,  limitation
or revocation of any such permit, license or authorization.

     10.5 Capitalization of Borrower.

          (a) On and after the  Closing  Date:  (i) XANSER  will own 100% of the
     issued and outstanding capital stock of Holding; (ii) Holding will own 100%
     of the issued and outstanding  capital stock of FAI and FOSI; (iii) Holding
     will own all of the issued and  outstanding  capital  stock of the Borrower
     other than 169,425  preference  shares;  and (iv) Holding will at all times
     control the Borrower.

          (b) Schedule 10.5 hereto is a true, correct and complete listing as of
     the  Closing  Date (as to each  member of the  Consolidated  Group) of such
     Person's authorized capital stock, the par value of same, and the number of
     such  shares  issued  and  outstanding.  All of the  shares  listed on said
     schedule as outstanding  have been duly and validly issued,  are fully paid
     and  nonassessable,  are  outstanding  as of the  Closing  Date,  are owned
     beneficially  and of record as  indicated on said  schedule,  and are owned
     free and clear of all Liens  other than Liens in favor of the Agent and the
     Banks  pursuant to the Security  Documents.  Where a Subsidiary is not 100%
     owned by a member of the  Consolidated  Group,  the  percentage  of capital
     stock owned by each  shareholder  of such  Subsidiary is also shown on such
     schedules.

          (c) No member of the Consolidated Group has outstanding on the Closing
     Date any option,  warrant,  bonds,  debentures or other right, put, call or
     commitment to issue, or any obligation or commitment to purchase any of its
     authorized   capital  stock,   or  any  securities   convertible   into  or
     exchangeable for any of its authorized capital stock.

          (d) As of the Closing Date, FAI has no Subsidiaries.

     10.6  Governmental  Approvals.  Except for those listed in Schedule 10.6 to
this  Agreement,  each of which has been duly  obtained and is in full force and
effect,  no  order,  permission,   consent,  approval,  license,  authorization,
registration  or validation  of, or filing with, or exemption by, any Government
Authority,  or any stock  exchange  or other  governmental  or  non-governmental
regulatory authority (US or UK or otherwise) or any other Person, is required to
authorize,  or is  required  in  connection  with the  execution,  delivery  and
performance of this Agreement,  the other Loan Documents by XANSER or any member
of the  Consolidated  Group,  or the  taking of any  action  hereby  or  thereby
contemplated.

     10.7 Federal Reserve Margin Regulations; Proceeds.

          (a) No Credit Party is engaged principally, or as one of its important
     activities,  in the  business  of  extending  credit  for  the  purpose  of
     purchasing or carrying any margin stock (within the meaning of Regulation U
     of the Board of Governors of the Federal  Reserve  System).  No part of the
     proceeds  of the Loans or any  obligations  in  connection  with  which any
     Letter  of  Credit is  issued  will be used to  purchase  or carry any such
     margin stock or to extend credit to others for the purpose of purchasing or
     carrying any such margin stock.

          (b) The  proceeds of the  Revolving  Credit Loans shall be used solely
     for  general  corporate   purposes,   including   acquisition  and  capital
     expenditure needs, of the Borrower.

     10.8 Taxes.

          (a) All material tax returns of any nature  whatsoever,  including but
     not limited to, all US and UK income,  payroll,  stock transfer, and excise
     tax returns and all  appropriate  state and local  income,  sales,  excise,
     payroll,  franchise  and  real  and  personal  property  tax  returns,  and
     corresponding  returns  under  the  laws  of any  jurisdiction,  which  are
     required to be filed by any member of the  Consolidated  Group have been or
     will be filed by the due date or extended due date of such returns.

          (b) Except for amounts which in the  aggregate do not exceed  $250,000
     (or the equivalent thereof in other currencies),  all tax amounts and other
     related liabilities (including interest and penalties) due and payable with
     respect to any member of the Consolidated Group have been paid.

     10.9  Investment  Company Act. No Credit Party nor the entering into of the
Loan Documents is subject to any of the provisions of the Investment Company Act
of 1940, as amended.

     10.10 Properties of the Borrower.

          (a) No member of the  Consolidated  Group owns any real property other
     than the Sites (UK) which are owned by FIL. Except as set forth in Schedule
     10.10 hereto, there are no patents,  trademarks or copyrights, or any trade
     names  (except  the  trade  name   "Furmanite"),   of  any  member  of  the
     Consolidated   Group  that  are  material  to  such  Person's  business  or
     operations.  The only  members  of the  Consolidated  Group  which  own any
     patents,  trademarks,  copyrights or trade names,  including the trade name
     "Furmanite",  are Holding,  FAI and FIL.  Schedule  10.10 to this Agreement
     sets forth all jurisdictions (and the offices therein) where the trade name
     "Furmanite" has been registered or application  therefor made. All Material
     Agreements or similar  commitments of members of the Consolidated Group are
     in full force,  none of the  parties  thereunder  are in  material  default
     thereunder  and no written  notice of default  has been given or  received.
     Each member of the  Consolidated  Group has full, valid and existing right,
     title and interest (in fee simple where  applicable) to all of its material
     real and personal property and all tangible and intangible  rights, and the
     ownership  rights  of  such  Person  in and to all  of  such  tangible  and
     intangible rights are subject to no material liens,  encumbrances,  pledges
     or burdens  other than those listed on Schedule  8.2(g) to this  Agreement,
     which security interests shall be terminated on and as of the Closing Date.

          (b) Neither  Holding,  FAI nor any US Subsidiary of either owns or has
     any rights to any property  located in the UK or otherwise  outside the US.
     Neither the Borrower nor any UK  Subsidiary of the Borrower owns or has any
     rights  to any  property  located  in the US or  otherwise  outside  the UK
     (except for  equipment of the Borrower  with an aggregate net book value of
     less than  $750,000  as to  which,  whenever  such  property  is  outside a
     jurisdiction  where the Banks have a first  priority  security  interest in
     same,  the Borrower will take such actions and sign and file such financing
     statements or other documents as shall be necessary to create (or maintain)
     for the Banks such first priority perfected security interest).

     10.11 Financial Condition.

          (a) There are no material  liabilities  or any material  unrealized or
     anticipated losses from unfavorable  commitments which are not disclosed in
     the Financial Statements referred to in Section 10.11(b).

          (b) The audited  consolidated  Financial Statements of FAI, and of the
     Borrower and its Subsidiaries, and of Holding and its Subsidiaries, for the
     fiscal year ended  December  31, 2001 have been  delivered to the Banks and
     have been prepared in accordance with GAAP and fairly present the financial
     condition and the results of operations of FAI, and of the Borrower and its
     Subsidiaries,  of  Holding  and  its  Subsidiaries,  respectively,  for the
     periods covered thereby.

          (c) There has been no Material  Adverse Change in FAI, the Borrower or
     any Significant  Subsidiary,  or the Consolidated Group, since December 31,
     2001.

          (d) At the time of,  and after  giving  effect  to, the making of each
     Loan and the  issuance  of each  Letter of  Credit,  each  Credit  Party is
     Solvent,  and (y)  possesses,  in the opinion of Holding and the  Borrower,
     sufficient  capital  to  conduct  the  business  in which it is  engaged or
     presently proposes to engage.

     10.12 Environmental Matters. Except as disclosed in the Audits:

          (a) To the best of knowledge of Holding and the Borrower,  each member
     of the Consolidated  Group (and any predecessor in interest of any of them)
     has  been  and   continues  to  be  in  compliance   with  all   applicable
     Environmental Laws;

          (b) Each member of the  Consolidated  Group has  obtained all material
     permits and approvals  required  under  Environmental  Laws,  including all
     material  environmental,  health and safety permits,  licenses,  approvals,
     authorization, variances, agreements, and waivers of Government Authorities
     ("Permits")  necessary for the conduct of its business and the operation of
     its  facilities,  and all such Permits are in good standing and each member
     of the  Consolidated  Group is in  compliance  with all material  terms and
     conditions of such Permits;

          (c) No member of the  Consolidated  Group nor any of their  respective
     Properties or operations is subject to any  outstanding  written order from
     or agreement with any Government Authority or other Person or is subject to
     any  judicial  or docketed  administrative  proceeding  respecting  any (x)
     Environmental  Law,  (y)  Remedial  Action  or (z)  Environmental  Claim or
     Environmental Costs;

          (d) To the best of knowledge of Holding and the Borrower, there are no
     conditions or circumstances now or formerly associated with any Property or
     operations by any member of the  Consolidated  Group (or any predecessor in
     interest of any of them) which may prevent or interfere with  compliance by
     such member of the  Consolidated  Group with all  applicable  Environmental
     Laws  or  form  the  basis  of any  Environmental  Claim  or  give  rise to
     Environmental Costs;

          (e) No Environmental Claim (including,  without limitation, in respect
     of any alleged violation of any  Environmental  Laws) is pending or (to the
     best of knowledge of Holding and the Borrower)  threatened  against, or has
     been received by, any member of the Consolidated Group;

          (f) No  Environmental  Lien and no unrecorded  Environmental  Lien has
     attached to any  Property of any member of the  Consolidated  Group and, to
     the best of knowledge of Holding and the Borrower, no action has been taken
     by any Person which could  subject any such  Property to any  Environmental
     Lien;

          (g) The Audits listed in Schedule 10.12 to this  Agreement  constitute
     the only  environmental  audits or reports  undertaken  or  received by any
     member  of the  Consolidated  Group on or prior to the  Closing  Date  with
     respect to Properties of members of the Consolidated Group;

          (h) To the best of  knowledge  of Holding  and the  Borrower,  neither
     Holding nor any US Subsidiary  (nor any  predecessor  in interest of any of
     them) has transported or arranged for the transportation of any Contaminant
     to any location which is (i) listed on the National  Priorities  List under
     the Comprehensive Environmental Response, Compensation and Liability Act of
     1980,  as  amended,  (ii) listed for  possible  inclusion  on the  National
     Priorities List by the United States  Environmental  Protection  Agency, or
     (iii) listed on any similar  state list or (iv) to the best of knowledge of
     Holding  and  the  Borrower,   the  subject  of  federal,  state  or  local
     enforcement actions or other investigations which may lead to Environmental
     Claims  against any member of the  Consolidated  Group or the imposition of
     Environmental Costs on any member of the Consolidated Group; and

          (i) To the best of knowledge of Holding and the Borrower, no member of
     the  Consolidated  Group is  required  to place any  notice of  restriction
     relating to the presence of any Contaminant on, in, under or emanating from
     any property, in any deed to such Property.

     10.13  Disclosure.  Neither this  Agreement  nor any Loan  Document nor any
statement, list, certificate or other document or information, nor any Schedules
to this  Agreement,  delivered  or to be  delivered  to the  Agent or the  Banks
contains or will  contain any untrue  statement  of a material  fact or omits or
will omit to state a material fact necessary to make statements contained herein
or  therein,  in  light  of the  circumstances  in  which  they  are  made,  not
misleading.

     10.14 Compliance with ERISA. Holding and each ERISA Affiliate and each Plan
and the  trusts  maintained  pursuant  to such  plans are in  compliance  in all
material  respects  with the  presently  applicable  provisions  of Sections 401
through  and  including  417 of the Code,  and of ERISA  and (i) no event  which
constitutes a Reportable Event as defined in Section 4043 of ERISA (other than a
Reportable Event described in paragraph (b)(2),  (3), (7), (8) or (9) of Section
4043 of ERISA as to which the 30-day notice requirement of C.F.R.? 2615.3(a) has
been waived by the  Department  of Labor) has  occurred and is  continuing  with
respect to any Plan which is or was  covered by Title IV of ERISA,  (ii) no Plan
which is subject to Part 3 of  Subtitle B of Title 1 of ERISA has  incurred  any
"accumulated  funding deficiency" (within the meaning of Section 302 of ERISA or
Section 412 of the Code) whether or not waived,  and (iii) no written  notice of
liability has been received with respect to any member of the Consolidated Group
for any "prohibited transaction" (within the meaning of Section 4975 of the Code
or Section 406 of ERISA), nor has any such prohibited  transaction  resulting in
liability to any member of the Consolidated Group occurred.

     No member of the Consolidated Group or any ERISA Affiliate (i) has incurred
any  liability to the PBGC (or any successor  thereto  under  ERISA),  or to any
trustee of a trust  established  under Section 4049 of ERISA, in connection with
any Plan (other than liability for premiums  under Section 4007 or ERISA),  (ii)
has incurred any withdrawal  liability  under Subtitle E of Title IV of ERISA in
connection  with  any  Plan  which  is  a  Multiemployer  Plan,  nor  (iii)  has
contributed or has been obligated to contribute on or after  September 26, 1980,
to any "multiemployer plan" (within the meaning of Section 3(37) of ERISA) which
is subject to Title IV of ERISA.

     The  consummation  of the  transactions  contemplated by this Agreement (i)
will not give rise to any liability on behalf of Holding or its ERISA Affiliates
under Title IV of ERISA to the PBGC (other than  ordinary and usual PBGC premium
liability),  to the trustee of a trust  established  pursuant to Section 4049 of
ERISA, or to any Multiemployer  Plan, and (ii) will not constitute a "prohibited
transaction" under Section 406 of ERISA or Section 4975 of the Code.

     10.15 The Security Documents.

          (a) Each  Security  Document  when  delivered  will  grant a  security
     interest or lien in the properties or rights intended to be covered thereby
     (the  "Collateral")  which  (i) will  constitute  a valid  and  enforceable
     security interest under (A) the Uniform Commercial Code of the State (x) in
     which the  Collateral is located and (y) by which any Security  Document is
     governed  (as  applicable,  the  "UCC"),  or (B) as to  Security  Documents
     governed by English law, the applicable  provisions of English law (the "UK
     Statutes");  (ii)  will be  entitled  to all of the  rights,  benefits  and
     priorities  provided by (A) the UCC or (B) as to those  Security  Documents
     governed by English  law,  the UK  Statutes;  and (iii) when such  Security
     Documents  or  financing  statements  with  respect  thereto  are filed and
     recorded  as  required  by the  UCC  (or,  in the  case of  those  Security
     Documents  governed  by  English  law,  duly  registered  pursuant  to  the
     Companies Act 1985, the Land Registration Act 1925 and the Land Charges Act
     (1972),  as  appropriate),  will be superior and prior to the rights of all
     third  Persons now existing or hereafter  arising under the laws of the US,
     the UK and any subdivision of either (based on the laws in effect,  and any
     laws  already  passed  but not yet in  effect,  on the date on  which  such
     representation  is being made)  whether by way of mortgage,  pledge,  lien,
     security interest,  encumbrance or otherwise except for Permitted Liens and
     the other  Liens  referred  to in  Section  8.2(g).  All such  action as is
     necessary  in law has been taken,  or prior to the  Closing  Date will have
     been taken (except as otherwise  contemplated  by Section 7.20 hereof),  to
     establish  and perfect the security  interest of the Agent and the Banks in
     the Collateral and to entitle the Banks or the Agent on behalf of the Banks
     to  exercise  the  rights and  remedies  provided  in each of the  Security
     Documents  and the UCC or the UK Statutes,  as  applicable,  and (except as
     specified  in the first  parenthetical  of clause  (iii)  above) no filing,
     recording,  registration or giving of notice or other action is required in
     connection  therewith  except  such as has been  made or given or will have
     been made or given prior to such date (except as otherwise  contemplated by
     Section 7.20 hereof).  All filing and other fees and all mortgage recording
     or other tax payable with  respect to the  recording of any of the Security
     Documents  and UCC  financing  statements  (and any analogous UK documents)
     have been paid or provided for or will have been so paid or provided for on
     or prior to the Closing Date.

          (b) The  Security  Documents,  whether  made  before,  on or after the
     Amendment Effective Date secure or guarantee, as the case may be, all Loans
     whether  made  before,  on  or  after  the  Amendment  Effective  Date.  No
     amendments need to be made in any of the Security  Documents,  nor does any
     action need to be taken,  to  effectuate  the  provisions  of the preceding
     sentence other than amendments  being made (if any), and action being taken
     (if any),  on the  Amendment  Effective  Date  pursuant to  Sections  12.14
     hereof.

     10.16 [intentionally deleted]

     10.17 [intentionally deleted]

     10.18  Qualification.  Solely by reason of (and without regard to any other
activities of the Agent or any Bank in any State in which Collateral is located)
the entering into, performance and enforcement of this Agreement, the Loans, the
Security  Documents  and the other Loan  Documents by the Agent or any Bank will
not constitute  doing business by the Agent or any Bank in Virginia or result in
any liability of the Agent or such Bank for taxes or other governmental charges;
and  qualification by the Agent or any Bank to do business in such  jurisdiction
is not  necessary  in  connection  with,  and the failure to so qualify will not
affect,  the enforcement of, or exercise of any rights or remedies under, any of
such documents.

     10.19  NOL's.  Future  taxable  income  of FAI  will  qualify  in full  for
reduction  by the current  tax losses and NOL's of XANSER and its  subsidiaries,
without limitation.

     10.20 [intentionally deleted]

     10.21 [intentionally deleted]

     10.22 Dormant  Subsidiaries.  No Dormant  Subsidiary  (a) is engaged in any
business or activity, (b) has any assets in excess of $25,000 (or its equivalent
in the applicable currency),  (c) has any liabilities  (contingent or otherwise)
in excess of $25,000 (or its equivalent in the applicable currency),  or (d) has
any  Subsidiary.  Neither  Holding nor the Borrower nor any of their  respective
Subsidiaries is a Dormant Subsidiary as of the Closing Date.


Section 11. AGENT.

     11.1 Appointment.  The Banks hereby irrevocably appoint Bank of Scotland to
act as  Agent  hereunder  and as Agent  or  "Assignee"  or  "Secured  Party"  or
"Mortgagee"  or "Security  Trustee" (or in any similar  capacity,  regardless of
designation) under the Security Documents (in such capacity, the "Agent").  Each
Bank hereby irrevocably  authorizes,  and each holder of any Note that is issued
in  connection  with any Loan by the  acceptance  of such  Note  shall be deemed
irrevocably to authorize,  the Agent to take such action on its behalf under the
provisions of this Agreement,  the Notes, the Security Documents, the other Loan
Documents and any other  instruments  and agreements  referred to therein and to
exercise such powers thereunder as are specifically  delegated to or required of
it by the terms  thereof  and such  other  powers as are  reasonably  incidental
thereto. The Agent may perform any of its duties under any of the Loan Documents
by or through its agents or employees.

     11.2 Nature of Duties.  The Agent shall have no duties or  responsibilities
except those  expressly set forth in the Loan  Documents.  Neither the Agent nor
any of its officers, directors,  employees or agents shall be liable to any Bank
for any action  taken or omitted  by it under any of the Loan  Documents,  or in
connection therewith,  unless caused by its or their gross negligence or willful
misconduct.  Nothing in the Loan Documents, expressed or implied, is intended to
or shall be so construed as to impose upon the Agent any  obligations in respect
of the Loan Documents  except as expressly set forth therein.  The duties of the
Agent under the Loan Documents shall be mechanical and  administrative in nature
and the Agent shall not have by reason of its duties under the Loan  Documents a
fiduciary or trustee  relationship  in respect of any Bank.  The Agent agrees to
deliver  promptly  to each Bank  copies of notices  received  by it  pursuant to
Sections 7.2, 7.11 and 7.16 of this Agreement.

     11.3 Lack of  Reliance.  Independently  and without  reliance on the Agent,
each Bank to the extent it deems appropriate has made and shall continue to make
(i) its own independent  investigation of the financial condition and affairs of
the Credit  Parties in  connection  with the making and the  continuance  of the
Loans and its  Commitment  hereunder  and the issuance and renewal of Letters of
Credit  hereunder  and the  taking  or not  taking of any  action in  connection
herewith,  (ii) its own appraisal of the credit worthiness of the Credit Parties
and (iii) its own  independent  investigation  and appraisal of the  Collateral;
and, except as expressly provided in the Loan Documents, the Agent shall have no
duty or  responsibility,  either initially or on a continuing  basis, to provide
any Bank with any credit or other  information  with  respect  thereto,  whether
coming  into  its  possession  before  the date  hereof  or at any time or times
thereafter.  The Agent shall not be  responsible  to any Bank for any  recitals,
statements,  representations or warranties herein or in any certificate or other
document delivered in connection  herewith or for the authorization,  execution,
effectiveness,     genuineness,    validity,     enforceability,     perfection,
collectibility,  or  sufficiency  of any of the Loan  Documents,  the  financial
condition of the Credit Parties or the condition of any of the Collateral, or be
required to make any inquiry  concerning either the performance or observance of
any of the terms,  provisions or conditions  of any of the Loan  Documents,  the
financial condition of the Credit Parties or the existence or possible existence
of any Event of Default or Default.

     11.4 Certain Rights.  If the Agent requests  instructions from the Banks or
the Required Banks with respect to any interpretation,  act or action (including
failure  to act in  connection  with this  Agreement  or any of the  other  Loan
Documents)  the Agent shall be entitled to refrain  from such act or taking such
actions unless and until it shall have received  instructions  from the Banks or
the Required  Banks, as the case may be; and the Agent shall not incur liability
to any Person by so refraining.  Without  limiting the foregoing,  no Bank shall
have any right of action  whatsoever  against the Agent as a result of the Agent
acting or  refraining  from  acting  hereunder  or under  any of the other  Loan
Documents in  accordance  with the  instructions  of the  Required  Banks (as to
matters  requiring  the consent of the  Required  Banks) or all the Banks (as to
matters  requiring  the  consent  of all the  Banks).  The Agent  shall be fully
justified  in failing or  refusing  to take any action  under any Loan  Document
unless, if it requests, it shall first be indemnified to its satisfaction by the
Banks  against any and all  liability and expense which may be incurred by it by
reason of taking, continuing to take or not taking any such action.

     11.5 Reliance. The Agent shall be entitled to rely upon any written notice,
or any  telephone  message  believed  by it to be genuine or correct and to have
been signed,  sent or made by the proper Person,  and, with respect to all legal
matters pertaining to the Loan Documents and its duties thereunder,  upon advice
of counsel selected by it.

     11.6  Indemnification.  To  the  extent  the  Agent  is not  reimbursed  or
indemnified by the Borrower, the Banks will reimburse and/or indemnify the Agent
in Dollars,  in proportion to their respective  Commitments (or if the Revolving
Credit  Loan  Commitments  are  terminated,  the  principal  amount of Loans and
Letters of Credit outstanding) under this Agreement, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or disbursements of any kind or nature  whatsoever which may be
imposed on,  incurred or  sustained  by or  asserted  against the Agent,  acting
pursuant hereto or any of the other Loan Documents in its capacity  provided for
in this Section 11, in any way relating to or arising out of this Agreement, the
Original Agreement or any of the other Loan Documents,  provided,  however, that
no Bank  shall be  liable  for any  portion  of such  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements  resulting from the Agent's gross negligence or wilful misconduct.
The obligations of the Banks under this Section 11.6 shall survive the repayment
of the Loans and the termination of this Agreement and the other Loan Documents.

     11.7  Agent,  Individually.  With  respect  to its  Commitments  under this
Agreement,  the Loans made by it and any Note issued to or held by it, the Agent
shall have and may exercise the same rights and powers  hereunder and is subject
to the same  obligations  and  liabilities as and to the extent set forth herein
for any other Bank or holder of a Note.  The terms  "Bank" or "holders of Notes"
or any similar terms shall, unless the context clearly otherwise indicates,  not
exclude the Agent in its individual  capacity as a Bank or holder of a Note. The
Agent may accept deposits from, lend money to, and generally  engage in any kind
of banking,  trust or other business with the Credit Parties and Subsidiaries as
if  it  were  not  acting  pursuant  hereto,  and  may  accept  fees  and  other
consideration from the Credit Parties and Subsidiaries for services as the Agent
in connection  with this Agreement and the other Loan Documents and for services
otherwise than as the Agent without having to account for the same to the Banks.

     11.8  Holders of Notes.  The Agent may deem and treat the payee of any Note
as the owner thereof for all purposes  hereof unless and until a written  notice
of the assignment or transfer thereof shall have been received by the Agent. Any
request,  authority  or consent of any  Person,  who at the time of making  such
request or of giving such  authority or consent is the payee of any Note,  shall
be conclusive  and binding on any  subsequent  holder,  transferee,  assignee or
payee of such Note or of any Note or Notes issued in exchange therefor.

     11.9 Resignation.  The Agent may resign at any time from the performance of
all its  functions and duties  hereunder  and under the other Loan  Documents by
giving  30 days  prior  written  notice  to the  Borrower  and each  Bank.  Such
resignation  shall take effect upon the expiration of such 30 day period or upon
the earlier appointment of a successor. In case of the resignation of the Agent,
the Required Banks may appoint a successor by a written instrument signed by the
Required  Banks.  Any  successor  shall  execute  and  deliver  to the  Agent an
instrument  accepting such  appointment,  and thereupon such successor,  without
further act,  shall  become  vested with all the  estates,  properties,  rights,
powers,  duties and  trusts of the Agent  hereunder  and with like  effect as if
originally  named  as  "Agent"  herein  and  therein,   and  upon  request,  the
predecessor Agent shall take all actions and execute all documents  necessary to
give  effect to the  foregoing.  In the event the  Agent's  resignation  becomes
effective  at a time  when no  successor  has been  named,  all  notices,  other
communications  and payments  hereunder  required to be given by or to the Agent
shall be sufficiently given if given by the Required Banks (or all Banks, if the
consent of all Banks is required  therefor  hereunder)  or to each Bank,  as the
case may be. In such event, all powers  specifically  delegated to the Agent may
be exercised by the Required  Banks and the Required  Banks shall be entitled to
all rights of the Agent hereunder.

     11.10  Reimbursement.  Without limiting the provisions of Section 11.6, the
Banks and the Agent  hereby  agree that the Agent shall not be obligated to make
available  to any Person any sum which the Agent is expecting to receive for the
account of that Person until the Agent has determined  that it has received that
sum. The Agent may,  however,  disburse funds prior to determining that the sums
which the Agent expects to receive have been finally and unconditionally paid to
the Agent,  if the Agent  wishes to do so. If and to the  extent  that the Agent
does disburse  funds and it later  becomes  apparent that the Agent did not then
receive a payment in an amount  equal to the sum paid out,  then any Bank (as to
clauses  (a) and (b)  below) and any Person (as to clause (a) below) to whom the
Agent made the funds available shall, on demand from the Agent:

               (a) upon the Agent's request, refund to the Agent the sum paid to
          that Person; and

               (b) reimburse the Agent for the  additional  amount  certified by
          the  Agent as being  necessary  to  indemnify  the Agent  against  any
          funding  or other  cost,  loss,  expense  or  liability  sustained  or
          incurred  by the  Agent  as a  result  of  paying  out the sum  before
          receiving  it;  provided,  however,  that  if  such  funds  were  made
          available  to any Bank,  such  additional  amount  shall be limited to
          interest  on the sum to be  repaid,  for each  day from the date  such
          amount was disbursed  until the date repaid to the Agent,  at (for the
          first three days) the customary  rate set by the Agent for  correction
          of errors among banks,  and  thereafter  at the Base Rate (US) (or, if
          greater and in respect of a Loan made to the  Borrower,  the rate from
          time to time  prevailing  on such  Loan).  In the event of any  direct
          conflict  between this  Section  11.10 and the  provisions  of Section
          2.2(f)  as  to  amounts  payable  by  a  Bank  to  the  Agent  in  the
          circumstances discussed, this Section 11.10 shall control.


Section 12. MISCELLANEOUS.

     12.1 Calculations and Financial Data.

          (a)   Calculations    hereunder   (including,    without   limitation,
     calculations used in determining, or in any certificate of any Credit Party
     reflecting,  compliance  by any Credit  Party with the  provisions  of this
     Agreement)  shall be made  and  financial  data  required  hereby  shall be
     prepared both as to  classification of items and as to amount in accordance
     with GAAP consistent with the Financial Statements of such Credit Party for
     its Fiscal Year ended  December  31, 2001 that were  delivered to the Banks
     pursuant  to Section  7.1(b);  provided  that for  purposes of Section 8 no
     effect shall be given to any change in GAAP from those in effect on January
     1, 2002.

          (b) In making any  computations  required  for  purposes  of Section 8
     hereunder  to be in  Dollars in  respect  of or  relating  to any fiscal or
     calendar  period,  translations  from other currencies shall be computed in
     accordance  with  GAAP.  In the  case of any  disputes  between  any of the
     parties hereto as to the accuracy of any  computation  under this Agreement
     relating to currency translations or the Spot Rate, the calculations of the
     Agent (absent manifest error) shall be conclusive.

     12.2 Amendment and Waiver.

          (a) Except as  otherwise  provided,  no  provision  of any of the Loan
     Documents may be changed, waived, discharged or terminated orally, but only
     by an instrument in writing  signed by the Required  Banks (or the Agent on
     their behalf) and the Borrower,  except that waivers of provisions relating
     to a Credit  Party's  performance  or  non-performance  of its  obligations
     hereunder  or  thereunder  need not be signed by such  Credit  Party or any
     other Credit Party;  provided  however that (i) the written  consent of the
     Issuer  shall also be required to change,  waive,  discharge  or  terminate
     provisions of Section 2A, (ii) the written  consent of the Agent shall also
     be required to change, waive,  discharge or terminate provisions of Section
     4.2 or 11, and (iii) the written  consent of Holding shall also be required
     to change,  waive,  discharge  or terminate  provisions  of Section 9A; and
     provided further that without the consent of all of the Banks (or the Agent
     on their behalf) no change,  waiver,  discharge or termination  may be made
     that  would  increase  the amount of any Bank's  Commitment;  decrease  the
     principal of any Loan or Reimbursement  Obligation other than in accordance
     with  the  provisions  of this  Agreement  and the  other  Loan  Documents;
     decrease  the  interest  rate  payable  on any Loan;  decrease  the rate of
     Commitment  commission  payable  pursuant to Section 4.1;  extend the final
     maturity date of any Loan;  extend the  termination  date of the Commitment
     Period;  change the  definition of "Required  Banks" or modify this Section
     12.2. Any such change, waiver,  discharge or termination shall be effective
     only in the specific  instance and for the specific purposes for which made
     or given.

          (b) THIS WRITTEN  AGREEMENT (AND THE OTHER LOAN DOCUMENTS)  REPRESENTS
     THE FINAL  AGREEMENT  AMONG THE PARTIES  HERETO WITH RESPECT TO THE MATTERS
     COVERED  HEREBY AND  THEREBY  AND MAY NOT BE  CONTRADICTED  BY  EVIDENCE OF
     PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

          (c) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     12.3 Expenses.

          (a)  Whether  or not the  transactions  hereby  contemplated  shall be
     consummated, the Borrower shall upon demand of the Agent pay all reasonable
     out-of-pocket  costs and expenses of (w) [intentionally  deleted],  (x) the
     Agent incurred in connection  with the  preparation,  execution,  delivery,
     administration, filing and recording of, and (y) of the Agent and the Banks
     incurred  in  connection  with  the  amendment  (including  any  waiver  or
     consent),  modification,  and  enforcement of or preservation of any rights
     under, this Agreement,  the Loan Documents, the making and repayment of the
     Loans,  the issuance of Letters of Credit and the maintenance and operation
     of the Other Accounts, and the payment of all interest and fees, including,
     without  limitation,  (A) the  reasonable  fees and  expenses  of  Cowles &
     Thompson,  counsel for the Agent and Bank of  Scotland,  and any special or
     local counsel (including  Freshfields  Bruckhaus  Deringer) retained by the
     Agent or Bank of  Scotland  or the  Required  Banks,  and with  respect  to
     enforcement,  the reasonable  fees and expenses of counsel for the Agent or
     any  Bank,  (B)  the  reasonable  fees  and  expenses  of  consultants  and
     appraisers  retained  by the  Agent in  connection  with  the  transactions
     contemplated  hereunder,   and  (C)  printing,   travel,  title  insurance,
     recording, filing, communication and signing taxes and costs.

          (b) The  Borrower  agrees to pay,  and to save the Agent and the Banks
     harmless  from (x) all present and future  stamp,  filing and other similar
     taxes, fees or charges  (including  interest and penalties,  if any), which
     may be payable in connection with the Loan Documents or the issuance of any
     Notes or of Letters of Credit or any  modification of any of the foregoing,
     and (y) all finder's  and broker's  fees (other than any that may have been
     contracted  for  by  the  Agent  or  the  Banks)  in  connection  with  the
     transactions contemplated by this Agreement and the other Loan Documents.

          (c) Without  limiting any of the rights or obligations as set forth in
     this  Agreement on the part of the Agent or any of the Banks,  the Borrower
     agrees to  indemnify,  pay and hold  harmless the Issuer,  the Agent,  each
     Bank,  any Bank  Assignee  and each  holder of a Note and their  respective
     present and future officers, directors, employees and agents (collectively,
     the "Indemnified Parties") from and against all liability,  losses, damages
     and  expenses  (including,  without  limitation,  legal fees and  expenses)
     arising  out of, or in any way  connected  with,  or as a result of (i) the
     execution and delivery of this  Agreement  and the other Loan  Documents or
     the  documents  or  transactions  contemplated  hereby  and  thereby or the
     performance  by  the  parties   hereto  or  thereto  of  their   respective
     obligations  hereunder  and  thereunder  or relating  thereto;  or (ii) any
     claim, action, suit,  investigation or proceeding (in each case, regardless
     of  whether  or not the  Indemnified  Party is a party  thereto  or  target
     thereof) in any way relating to Holding,  the Borrower,  XANSER, any member
     of the  Consolidated  Group or any  Affiliate of any of the  foregoing;  or
     (iii)  any  violation  by any  member  of the  Consolidated  Group  (or any
     predecessor  in  interest  of any of them) of any  Environmental  Law,  any
     Environmental  Claim  or  Environmental  Cost  or  the  imposition  of  any
     Environmental  Lien,  or any breach of any  representation  or warranty set
     forth in Section  10.12;  provided that the Borrower shall not be liable to
     any  Indemnified  Party for any portion of such  liabilities,  liabilities,
     losses,  damages and expenses  sustained or incurred as a direct  result of
     the gross negligence or willful  misconduct of the Issuer, the Agent or any
     Bank if such gross  negligence or willful  misconduct is determined to have
     occurred by a final and  non-appealable  decision  of a court of  competent
     jurisdiction.

          (d) All  obligations  provided  for in this Section 12.3 and any other
     Section of this Agreement  shall survive any termination of this Agreement,
     the expiration and termination of all Letters of Credit, the payment of all
     Deemed Disbursements and Reimbursement  Obligations and the payment in full
     of the Loans.

     12.4 Benefits of Agreement; Descriptive Headings.

          (a) This  Agreement  shall be binding upon and inure to the benefit of
     and be enforceable by the parties  hereto and their  respective  successors
     and assigns, and, in particular,  shall inure to the benefit of the holders
     from time to time of the Notes;  provided,  however, that no Loan Party may
     assign or transfer any of its rights or obligations  hereunder  without the
     prior  written  consent  of the Agent and the Banks and any such  purported
     assignment or transfer shall be void. In furtherance of the foregoing, each
     Bank shall be  entitled at any time to grant  participations  in or assign,
     sell  or  otherwise  transfer  the  whole  or any  part of its  rights  and
     obligations under this Agreement, the Loan Documents or any Loan or Note or
     Letter of Credit to any  Person  subject  to  obtaining  the prior  written
     consent of the Borrower (but no other Credit Party), such consent not to be
     unreasonably  withheld.  No such participation,  assignment,  sale or other
     transfer  pursuant to this Section  12.4(a) shall relieve any Bank from its
     obligations  hereunder and the Borrower and the Guarantors need deal solely
     with the Agent with respect to waivers,  modifications and consents to this
     Agreement, the Loan Documents or the Notes. Any such participant, assignee,
     purchaser  or  transferee  is  referred  to in  this  Agreement  as a "Bank
     Assignee".  The Borrower  agrees that the provisions of Sections 2A.3, 3.7,
     3.9,  3.10,  3.11,  5.2 and 12.3  shall  run to the  benefit  of each  Bank
     Assignee  and its  participations  or  interests  herein,  and any Bank may
     enforce  such  provisions  on behalf of any such Bank  Assignee;  provided,
     however, that if any Bank or any Bank Assignee assigns, sells, or otherwise
     transfers or grants  participations in or otherwise  disposes of all or any
     part of the  Borrower's  indebtedness  under  this  Agreement  to any party
     pursuant to this  Section  12.4(a),  then the amounts  that the Borrower is
     required to pay pursuant to this Agreement (including,  without limitation,
     additional  amounts  made  pursuant  to  Section  5.2) shall not exceed the
     amounts  that the  Borrower  would have been  required  to pay to such Bank
     pursuant to this  Agreement had such Bank not made such  assignment,  sale,
     transfer,  grant,  participation  or other  disposition  of the  Borrower's
     indebtedness under this Agreement.  The Borrower hereby further agrees that
     any such Bank Assignee may, to the fullest  extent  permitted by applicable
     law, exercise the right of setoff with respect to such  participation  (and
     in an amount up to the  amount of such  participation)  as fully as if such
     Bank   Assignee  were  the  direct   creditor  of  the  Borrower.   Upon  a
     participation,   assignment,  sale  or  transfer  in  accordance  with  the
     foregoing,  the Borrower  shall execute such  documents and do such acts as
     any Bank may reasonably  request to effect such  assignment,  provided that
     such documents and acts are consistent with the terms and conditions of the
     Loan Documents.  Any Bank may furnish any information concerning any Credit
     Party or Subsidiary in its  possession  from time to time to Bank Assignees
     (including prospective Bank Assignees). Each Bank shall notify the Borrower
     of any participation,  assignment,  sale or transfer granted by it pursuant
     to this Section 12.4(a).  The Borrower shall not be responsible for any due
     diligence costs or legal expenses of any party  (including the Agent or the
     Bank Assignee) in connection  with their entering into such  participation,
     assignment, sale or transfer.

          (b)  The  descriptive  headings  of the  various  provisions  of  this
     Agreement are inserted for  convenience  of reference only and shall not be
     deemed to affect  the  meaning  or  construction  of any of the  provisions
     hereof.

          (c)  Notwithstanding  anything to the contrary  contained herein or in
     any of the Loan  Documents,  the  exhibits to this  Agreement  shall not be
     required  to be  attached  to the  execution  or any  other  copy  of  this
     Agreement, and any references in this Agreement or the other Loan Documents
     to such  exhibits as "Exhibits  hereto" or "Exhibits to this  Agreement" or
     words of  similar  effect  shall be  deemed  to refer to such  document  as
     executed by the parties  thereto and delivered on the Closing Date (or such
     other date on which they were executed and delivered).

     12.5  Notices,  Requests,  Demands,  etc.  Except  as  otherwise  expressly
provided herein, all notices,  requests,  demands or other  communications to or
upon the  respective  parties  hereto shall be deemed to have been duly given or
made when  delivered  (if sent by  Federal  Express or other  similar  overnight
delivery  service),  or 3 days after mailing (when mailed,  postage prepaid,  by
registered or certified  mail,  return  receipt  requested),  or (in the case of
telex,  telegraphic,  telecopier or cable  notice) when  delivered to the telex,
telegraph,  telecopier or cable company,  or (in the case of telex or telecopier
notice sent over a telex or telecopier owned or operated by a party hereto) when
sent; in each case, addressed as follows, except that notices and communications
to the Agent pursuant to Sections 2 and 9 shall not be effective  until received
by the Agent: (i) if to the Agent, at the Closing Office,  (ii) if to a Bank, at
the address  specified with its signature  below, and (iii) if to any Loan Party
party hereto,  at its address  specified  with its signature  below  (Attention:
President),  or to  such  other  addresses  as  any of the  parties  hereto  may
hereafter specify to the others in writing,  provided that  communications  with
respect to a change of address  shall be deemed to be  effective  when  actually
received.  Notices and communications sent to the Borrower at the address listed
for Holding on the signature page hereof shall be deemed  satisfactorily sent to
the  Borrower  for  purposes of clause  (iii)  above.  Without  prejudice to the
foregoing,  each Loan Party (other than a Loan Party incorporated in England and
Wales) (i) irrevocably appoints the Borrower as its agent for service of process
in relation to any proceedings before English courts in connection with any Loan
Document and (ii) agrees that failure by a process  agent to notify the relevant
Loan Party of the process will not invalidate the proceedings concerned.

     12.6  Governing  Law.  THIS  AGREEMENT  AND THE  LOANS AND THE  RIGHTS  AND
OBLIGATIONS  OF THE PARTIES  HEREUNDER  SHALL BE GOVERNED BY AND  CONSTRUED  AND
INTERPRETED  IN  ACCORDANCE  WITH THE LAWS OF ENGLAND  APPLICABLE  TO  CONTRACTS
EXECUTED WHOLLY WITHIN ENGLAND  (REGARDLESS OF THE PLACE WHERE THIS AGREEMENT IS
EXECUTED).  IF FOR ANY REASON ANY COURT SHALL RULE THAT THIS  AGREEMENT  AND THE
LOANS AND THE RIGHTS AND  OBLIGATIONS OF THE PARTIES  HEREUNDER ARE NOT GOVERNED
BY THE  LAWS OF  ENGLAND,  THIS  AGREEMENT  AND THE  LOANS  AND THE  RIGHTS  AND
OBLIGATIONS  OF THE PARTIES  HEREUNDER  SHALL BE GOVERNED BY AND  CONSTRUED  AND
INTERPRETED IN ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK  APPLICABLE TO
CONTRACTS  EXECUTED WHOLLY WITHIN THE STATE OF NEW YORK (REGARDLESS OF THE PLACE
WHERE THIS AGREEMENT IS EXECUTED).

     12.7  Counterparts.  This  Agreement  may  be  executed  in any  number  of
counterparts,  and by the  different  parties  hereto  on the  same or  separate
counterparts,  each of which shall be deemed to be an original  and all of which
taken together shall  constitute  one and the same  agreement.  Complete sets of
counterparts of this Agreement shall be lodged with the Borrower and the Agent.

     12.8  Waiver.  No  failure or delay on the part of the Agent or any Bank in
exercising any right,  power or privilege under this Agreement or any other Loan
Document, and no course of dealing between any Credit Party and the Agent or any
Bank shall operate as a waiver thereof; nor shall any single or partial exercise
of any  right,  power or  privilege  hereunder  preclude  any  other or  further
exercise  thereof or the exercise of any other right,  power or  privilege.  The
rights and remedies herein  expressly  provided are cumulative and not exclusive
of any  rights or  remedies  which the Agent or any Bank  would  otherwise  have
pursuant to such  documents  or at law or equity.  No notice to or demand on any
Credit  Party in any case shall  entitle  such Credit  Party or any other Credit
Party to any other or further notice or demand in similar or other circumstances
or  constitute  a waiver  of the  right of the Agent or any Bank to any other or
further action in any circumstances without notice or demand.

     12.9 Pro Rata Sharing.

          (a) Any  Recoveries  (after  deduction and payment of all expenses and
     costs  permitted by this  Agreement,  the Security  Documents or applicable
     law),  shall be applied  against the Loans or against unpaid  Reimbursement
     Obligations  (and, if no Loans or Reimbursement  Obligations  shall then be
     outstanding,  shall be held in trust by the Agent on behalf of the Borrower
     to the  extent of the  amount of the LC  Outstandings  from time to time in
     existence until satisfaction in full of all amounts due thereunder).

          (b) The Banks agree among  themselves  that,  with respect to all sums
     received  by the Banks  applicable  to the payment of the  principal  of or
     interest on the Loans or in respect of amounts paid by the Issuer  pursuant
     to, or in  connection  with,  Letters of Credit  (in each  case,  except as
     otherwise  provided in Section 5.2 or 5.3),  equitable  adjustment  will be
     made  between the Banks so that,  in effect,  all such sums shall be shared
     ratably by each of the Banks (in accordance with the outstanding  principal
     amounts of their  respective Loans or  participations  in issued Letters of
     Credit,  as the case may be) whether  received  by  voluntary  payment,  by
     realization  upon  security,  by the  exercise  of the right of  set-off or
     banker's lien, by counterclaim or cross-action or by the enforcement of any
     or all of the Notes or  otherwise.  If any Bank receives any payment on its
     Loans or in  respect  of  amounts  paid by the  Issuer  pursuant  to, or in
     connection  with,  Letters  of Credit of a sum or sums in excess of its pro
     rata  portion  (except as otherwise  provided in Section 5.2 or 5.3),  then
     such Bank  receiving  such excess  payment shall purchase for cash from the
     other Banks an interest  in their  Loans (or  participations  in Letters of
     Credit,  if  applicable)  in such  amount  as  shall  result  in a  ratable
     participation  by all of the Banks in the  amount of the  aggregate  unpaid
     amount  of  Loans  (Letters  of  Credit,  to the  extent  applicable)  then
     outstanding;  provided,  however, that if all or any portion of such excess
     payment  is  thereafter  recovered  by such  Bank,  the  purchase  shall be
     rescinded and the purchase  price  restored to the extent of such recovery,
     but without  interest.  Each Loan Party party hereto hereby agrees that any
     Bank so  purchasing a  participation  from  another  Bank  pursuant to this
     Section 12.9(b) or purchasing a participation pursuant to Section 2A.8 may,
     to the fullest extent permitted by law,  exercise all its rights of payment
     (including the right of setoff) with respect to such participation as fully
     as if such Bank were the direct  creditor  of such Loan Party in the amount
     of such participation.

     12.10  JURISDICTION.  THE  PARTIES  HERETO  AGREE THAT ANY LEGAL  ACTION OR
PROCEEDING  AGAINST ANY OTHER PARTY HERETO WITH RESPECT TO THIS  AGREEMENT,  THE
LOANS OR ANY OF THE LOAN  DOCUMENTS OR THE  DOCUMENTS  DELIVERED  IN  CONNECTION
THEREWITH  MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK  LOCATED IN NEW
YORK CITY OR OF THE UNITED  STATES OF AMERICA FOR THE  SOUTHERN  DISTRICT OF NEW
YORK OR ANY COURT IN  ENGLAND AS SUCH PARTY MAY ELECT,  AND,  BY  EXECUTION  AND
DELIVERY HEREOF,  EACH OF THE PARTIES HERETO ACCEPTS AND CONSENTS FOR ITSELF AND
IN RESPECT TO ITS PROPERTY,  GENERALLY AND UNCONDITIONALLY,  THE JURISDICTION OF
THE AFORESAID  COURTS.  EACH OF THE PARTIES HERETO AGREE THAT SUCH  JURISDICTION
SHALL BE  EXCLUSIVE,  UNLESS  WAIVED BY THE AGENT OR THE BANKS (WITH  RESPECT TO
ACTIONS OR PROCEEDINGS  BROUGHT BY A LOAN PARTY PARTY HERETO) OR BY THE BORROWER
OR HOLDING  (WITH  RESPECT TO ACTIONS OR  PROCEEDINGS  BROUGHT BY THE AGENT OR A
BANK) IN WRITING,  AND WITH  RESPECT TO ANY  QUESTIONS  RELATING TO USURY EXCEPT
THAT  WITHOUT  SUCH  WRITTEN  CONSENT THE AGENT AND BANKS MAY BRING  ACTIONS AND
PROCEEDINGS IN ANY OTHER JURISDICTION WHERE THE BORROWER OR HOLDING HAS PROPERTY
OR DOES  BUSINESS.  EACH OF THE PARTIES  HERETO AGREES THAT SECTIONS  5-1401 AND
5-1402 OF THE  GENERAL  OBLIGATIONS  LAW OF THE STATE OF NEW YORK SHALL APPLY TO
THE LOAN  DOCUMENTS  AND WAIVES  ANY RIGHT TO STAY OR TO  DISMISS  ANY ACTION OR
PROCEEDING  BROUGHT BEFORE SAID NEW YORK OR US OR ENGLISH COURTS ON THE BASIS OF
FORUM NON CONVENIENS.  IN FURTHERANCE OF THE FOREGOING,  EACH OF HOLDING AND THE
BORROWER  HEREBY  IRREVOCABLY  DESIGNATES AND APPOINTS CT CORPORATION  SYSTEM AT
1633 BROADWAY,  NEW YORK, NEW YORK 10019, AS ITS AGENT TO RECEIVE SERVICE OF ALL
PROCESS  BROUGHT  AGAINST SUCH LOAN PARTY WITH RESPECT TO ANY SUCH PROCEEDING IN
ANY SUCH COURT IN NEW YORK, SUCH SERVICE BEING HEREBY  ACKNOWLEDGED BY SUCH LOAN
PARTY TO BE EFFECTIVE AND BINDING  SERVICE IN EVERY RESPECT.  COPIES OF ANY SUCH
PROCESS SO SERVED  SHALL ALSO BE SENT BY  REGISTERED  MAIL TO SUCH LOAN PARTY AT
ITS ADDRESS SET FORTH NEXT TO ITS  SIGNATURE  BELOW AND TO ITS AGENT FOR SERVICE
IN THE UK UNDER SECTION 12.5, BUT THE FAILURE OF SUCH LOAN PARTY TO RECEIVE SUCH
COPIES  SHALL NOT AFFECT IN ANY WAY THE  SERVICE OF SUCH  PROCESS AS  AFORESAID.
EACH SUCH LOAN PARTY  SHALL  FURNISH  TO THE AGENT A CONSENT  OF CT  CORPORATION
SYSTEM AGREEING TO ACT HEREUNDER PRIOR TO THE CLOSING DATE. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE AGENT OR THE BANKS TO SERVE  PROCESS IN ANY OTHER MANNER
PERMITTED  BY LAW.  IF FOR ANY  REASON CT  CORPORATION  SYSTEM  SHALL  RESIGN OR
OTHERWISE CEASE TO ACT AS AGENT, EACH SUCH LOAN PARTY HEREBY  IRREVOCABLY AGREES
TO (I) IMMEDIATELY  DESIGNATE AND APPOINT A NEW AGENT ACCEPTABLE TO THE AGENT TO
SERVE IN SUCH CAPACITY AND, IN SUCH EVENT,  SUCH NEW AGENT SHALL BE DEEMED TO BE
SUBSTITUTED  FOR CT CORPORATION  SYSTEM,  INC. FOR ALL PURPOSES  HEREOF AND (II)
PROMPTLY  DELIVER  TO THE  AGENT  THE  WRITTEN  CONSENT  (IN FORM AND  SUBSTANCE
SATISFACTORY TO THE AGENT) OF SUCH NEW AGENT AGREEING TO SERVE IN SUCH CAPACITY.

     12.11  Severability.  If any provision of this  Agreement  shall be held or
deemed to be or shall, in fact, be illegal,  inoperative or  unenforceable,  the
same shall not affect any other  provision  or  provisions  herein  contained or
render the same invalid, inoperative or unenforceable to any extent whatever.

     12.12 Right of Set-off.  In addition to any rights now or hereafter granted
under  applicable  law or  otherwise  and not by way of  limitation  of any such
rights,  upon the  occurrence of an Event of Default each of the Banks is hereby
authorized at any time or from time to time, without notice to any Loan Party or
to any other Person,  any such notice being hereby expressly  waived, to set-off
and to appropriate and apply any and all deposits  (general or special,  time or
demand,  provisional  or final) and any other  indebtedness  at any time held or
owing by such Bank to or for the credit or the account of any Loan Party against
and on  account of the  obligations  and  liabilities  of such Loan Party now or
hereafter  existing under any of the Loan Documents  irrespective  of whether or
not any demand shall have been made  thereunder  and although said  obligations,
liabilities  or claims,  or any of them,  shall be contingent or unmatured.  The
Bank or Banks  exercising  any rights  granted  under this  Section  12.12 shall
thereafter notify the affected Loan Party and the Agent of such action; provided
that the  failure to give such  notice  shall not affect  the  validity  of such
set-off and application.

     12.13 No Third  Party  Beneficiaries.  This  Agreement  is  solely  for the
benefit of the Agent,  the Banks,  Holding,  the Borrower,  and their respective
successors and assigns (except as otherwise expressly provided herein),  nothing
contained  herein  shall be deemed to confer upon anyone other than the Borrower
and their respective successors and assigns any right to insist on or to enforce
the performance or observance of any of the obligations  contained  herein and a
Person who is not a party to this Agreement or a Loan Party,  Bank, the Agent or
a Bank Assignee and their respective  successors and assigns has no rights under
the  Contracts  (Rights  of Third  Parties)  Act 1999 to  enforce  or enjoy  the
benefits of any terms of this  Agreement.  All conditions to the  obligations of
the Banks to make the Loans and issue  Letters of Credit  hereunder  are imposed
solely  and  exclusively  for the  benefit  of the Banks  and  their  respective
successors  and  assigns  and no other  Person  shall have  standing  to require
satisfaction  of such  conditions  in  accordance  with their terms and no other
Person  shall  under  any  circumstances  be deemed  to be  beneficiary  of such
conditions.

     12.14  Effectiveness.  This Agreement shall become effective when and as of
the date (the "Amendment  Effective Date") that each of the following conditions
have been satisfied to the satisfaction of the Agent (or waived by the Agent):

          (a) The  Borrower,  Holding,  and the Banks shall have executed a copy
     hereof (whether the same or different  counterparts) and delivered the same
     to the Agent at 565 Fifth  Avenue,  New York,  New York  10017  (Attention:
     James  Halley) or, in the case of the Banks,  shall have given to the Agent
     written  notice  (actually  received)  that the same has been signed and is
     being sent to the Agent.  Complete sets of  counterparts  of this Agreement
     shall be lodged  with the  Borrower  and the Agent.  Telecopied  signatures
     hereto and to the Confirming Consents shall be of the same force and effect
     as an original of a manually signed copy.

          (b) Each  Credit  Party  shall  have  executed a  confirming  consent,
     substantially in the form of Exhibit U hereto or otherwise  satisfactory to
     the Agent (each,  a  "Confirming  Consent")  and  delivered the same to the
     Agent.

          (c)  Each  of the  Banks  shall  have  returned  to the  Borrower  the
     promissory  notes  that  were  issued  to  them  pursuant  to the  Original
     Agreement  and  received in exchange  therefor an  appropriately  completed
     Revolving  Credit  Note,  each dated the  Closing  Date (or such other date
     agreed to by the Agent and the Borrower) and duly executed by the Borrower.

          (d) To the extent  that the  relative  proportions  of the  respective
     Loans of each Bank after giving  effect to this Section 12.14 are different
     from those  determined based on the amounts of the Commitments set forth in
     Schedule 2.1 hereto, the Banks shall make such appropriate adjustment among
     themselves  so that,  after  giving  effect  thereto,  the amounts of their
     respective Loans reflect the relative  proportions  based on such schedule.
     To the extent  necessary to effectuate  the  foregoing,  each Bank shall be
     deemed to have  purchased or sold,  as the case may be, such portion of the
     principal amount of the relevant Loans whose amounts are so adjusted.

     12.15 Survival. Each of the representations,  warranties, terms, covenants,
agreements and conditions contained in the Original Agreement shall specifically
survive  the  execution  and  delivery  of this  Agreement  and the  other  Loan
Documents,  the  making of the Loans and  issuance  of Letters of Credit and the
Amendment  Effective  Date  and  shall,  unless  otherwise  expressly  provided,
continue in full force and effect until the Commitments have been terminated and
the Loans together with interest thereon, the Commitment  commissions,  the fees
and  compensation  of the  Agent,  and  all  other  sums  payable  hereunder  or
thereunder (including, without limitation,  Reimbursement Obligations) have been
indefeasibly paid in full.

     12.16 Domicile of Loans. Any Bank may make, maintain or transfer any of its
Loans hereunder to, or for the account of, any branch office and (subject to the
prior consent of the Borrower,  such consent not to be unreasonably withheld) to
any subsidiary or affiliate of such Bank.

     12.17 Currency.

          (a) If, for the  purpose of  obtaining  judgment  in any court,  it is
     necessary to convert a sum due hereunder  (the "First  Currency")  into any
     other currency (the "Other  Currency"),  the rate of exchange used shall be
     that with which in accordance with normal banking procedures the Agent (or,
     if received by a Bank other than the Agent,  that Bank) could  purchase the
     First  Currency with the Other  Currency on the Business Day preceding that
     on which  final  judgment is given.  The  obligation  of a Credit  Party in
     respect  of  any  sum  due  from  it to  the  Agent  or a  Bank  hereunder,
     notwithstanding  judgment in such Other Currency,  shall be discharged only
     to the extent that on the  Business Day  following  receipt by the Agent or
     such Bank of any sum adjudged to be so due in the Other Currency, the Agent
     or such Bank (as the case may be) may in  accordance  with  normal  banking
     procedures  purchase the First  Currency  with the Other  Currency;  if the
     First  Currency so purchased  shall be less than the sum  originally due to
     the Agent or the Bank in the  First  Currency,  the  Borrower  and  Holding
     jointly and severally agree, as a separate  obligation and  notwithstanding
     any such judgment, to indemnify the Agent or such Bank (as the case may be)
     against such loss.

          (b)  Each  reference  in  this  Agreement  to  Dollars  or  any  other
     applicable  currency is of the essence.  To the fullest extent permitted by
     applicable  law, the  obligation  of Holding and the Borrower in respect of
     any amount due under this Agreement shall,  notwithstanding  any payment in
     any other  currency  (whether  pursuant  to a judgment  or  otherwise),  be
     discharged  only to the  extent of the  amount  in  Dollars  or such  other
     applicable  currency that the Person  entitled to receive such payment may,
     in accordance with normal banking procedures, purchase with the sum paid in
     such  other  currency  (after any  premium  and costs of  exchange)  on the
     Business  Day  following  receipt by such  Person of such  payment.  If the
     amount  in  Dollars  or  such  other  applicable  currency  that  may be so
     purchased  for any reason  falls short of the amount  originally  due,  the
     Borrower  shall pay such  additional  amounts,  in  Dollars  or such  other
     applicable currency,  as the case may be, as may be necessary to compensate
     for  such  shortfall.  Any  obligation  of  the  Borrower  or  Holding  not
     discharged  by such  payment  shall be due as a  separate  and  independent
     obligation and, until discharged as provided herein, shall continue in full
     force and effect.

     12.18 Waiver of Jury Trial.  EACH OF THE BORROWER,  HOLDING,  THE AGENT AND
THE BANKS HEREBY  KNOWINGLY,  VOLUNTARILY  AND  INTENTIONALLY  WAIVE ANY AND ALL
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY  LITIGATION  BASED ON,
OR ARISING OUT OF, UNDER,  OR IN CONNECTION  WITH,  THIS  AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,  STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ACTIONS OF ANY CREDIT PARTY, THE AGENT OR THE BANKS. THIS
PROVISION IS A MATERIAL  INDUCEMENT  FOR THE AGENT AND THE BANKS  ENTERING  INTO
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

     12.19.  Securities  Act.  Each Bank agrees that it will not transfer any of
its  Notes  in a  manner  that  would  subject  such  Note  or  transfer  to the
registration requirements of the Securities Act of 1933.


                     [rest of page intentionally left blank]


<PAGE>
     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed and delivered by their  respective duly authorized  officers as of
the date first above written.


                                    FURMANITE LIMITED

                                    By:        //s//
                                    Name: Howard C. Wadsworth
                                    Title:   Director

                                    Furman House
                                    Shap Road
                                    Kendal
                                    Cumbria LA9 6RU
                                    England
                                    Telecopier No.:  011-44-539-729-359


                                    FUMANITE WORLDWIDE, INC.

                                    By:        //s//
                                    Name: Howard C. Wadsworth
                                    Title:  Vice President

                                    2435 N. Central Expressway
                                    Richardson, Texas  75080
                                    Telecopier No.:  214-699-4025


                                     BANK OF SCOTLAND, individually and as agent

                                     By:       //s//
                                     Name:   Joseph Fratus
                                     Title:  First Vice President

                                     565 Fifth Avenue
                                     New York, New York 10017
                                     Telecopier No.:  212-682-5720





<PAGE>
                                  Schedule 2.1


                    Commitments (on Amendment Effective Date)

                                            Revolving Credit
Bank                                        Loan Commitment*
--------------------------------            -----------------
Bank of Scotland                               $25,000,000
                                               -----------
Total                                          $25,000,000





*Subject to reduction pursuant to Section 2.8.


<PAGE>
                                     ANNEX I

                                   DEFINITIONS


     As used in the  Loan  Agreement  to  which  this  Annex I is  annexed,  the
following terms shall have the meanings herein  specified or as specified in the
Section of such Loan Agreement or in such other document herein referenced:

     "Affected Bank" - Section 3.9(b).

     "Affiliate",  as to any  Person,  shall mean any other  Person  directly or
indirectly controlling, controlled by or under common control with, such Person.
Unless otherwise indicated,  references to "Affiliate" shall refer to Affiliates
of the Loan Parties.  Without  limiting the  generality of the  foregoing,  each
Credit Party shall be considered an Affiliate of each other Credit Party.

     "Agent" - introductory paragraph.

     "Agent's Fees" - Section 4.2.

     "Aggregate Outstanding Amount" -- Section 3A.6.

     "Agreement"  or "Loan  Agreement"  shall mean this Loan Agreement as it may
from time to time be amended,  extended,  restated,  supplemented  or  otherwise
modified.

     "Amendment Effective Date" - Section 12.14.

     "applicable currency" means, as to any particular payment,  Loan, Letter of
Credit or other Obligation, the currency in which it is payable or denominated.

     "Associate", when used to indicate a relationship with a Person, shall mean
(i) another Person (other than a member of the Consolidated Group) of which such
Person is an officer or partner or is,  directly or  indirectly,  the beneficial
owner of 10 percent or more of any class of equity securities, (ii) any trust or
other estate in which such Person has a substantial beneficial interest or at to
which such Person or an immediate member of his family serves as trustee or in a
similar  capacity,  and (iii)  any  relative  or  spouse  of such  Person or any
relative of such spouse.

     "AUD$" shall mean lawful currency of Australia.

     "Australian  Facility"  shall mean that certain loan agreement  dated as of
June 30, 1997 between BOS Australia.  and Furmanite Australia Pty Ltd (fka Denon
Pty Ltd), the note issued pursuant to the loan agreement and the instruments and
documents delivered under the loan agreement.

     "Australian LC" shall mean  collectively  (a) Irrevocable  Letter of Credit
No. SLC 97/03 dated June 30, 1997 in the amount of  AUD$1,100,000  issued by the
Issuer to secure the Australian  Facility and (b)  Irrevocable  Letter of Credit
No. SLC 01/01 dated January 16, 2001 in the amount of AUD$123,152  issued by the
Issuer in favor of Clough Engineering Ltd.

     "Auditors" shall mean, as to each Credit Party, such independent  certified
public or chartered  accountants  of  recognized  standing  selected by a Credit
Party (as to itself),  and  satisfactory  to the Agent.  (The  certified  public
accountants for XANSER shall be deemed  satisfactory to the Agent so long as the
securities of XANSER are registered under the Securities Act of 1933).

     "Audits" - Section 6.9

     "Bank Assignee" - Section 12.4.

     "Banks" - introductory paragraph.

     "Base Rate (UK)" shall mean,  for any day,  the basic  lending  rate of the
Agent,  in  effect  from  time to time at the  principal  office of the Agent in
London,  England,  on which the Agent's lending and deposit rates at such office
are founded.  Any change in the interest  rate  resulting  from a change in such
Base Rate (UK) shall be  effective  as of the  opening of business on the day on
which such  change  becomes  effective;  it is  understood  and agreed  that the
foregoing  rate  and the Base  Rate  (UK) are  reference  rates  only and do not
necessarily represent the lowest or best rate actually charged to any customer.

     "Base Rate (US)" shall mean, for any day, the higher of (x) the fluctuating
interest  rate per annum,  as in effect  from time to time,  established  by the
Agent in New York from time to time as the Agent's base, prime or reference rate
for  U.S.  domestic  commercial  loans  in  Dollars,  or (y) the  Federal  Funds
Effective  Rate in effect on such day plus 1/2%. Any change in the interest rate
resulting  from a change in such Base Rate  (US)  shall be  effective  as of the
opening of  business on the day on which such change  becomes  effective;  it is
understood  and agreed that all the  aforesaid  rates and the Base Rate (US) are
reference  rates only and do not  necessarily  represent the lowest or best rate
actually charged to any customer.

     "Base Rate (US) Differential" shall mean:

          (a) Prior to the Covenant Election Effective Date:

               (i) 1.25% if the Total Debt/EBITDA  ratio calculated  pursuant to
          Section  8.22 is equal to or greater  than  3.0:1 for two  consecutive
          fiscal quarters;

               (ii) 0.75% if the Total Debt/EBITDA ratio calculated  pursuant to
          Section 8.22 is equal to or greater than 2.5:1 and less than 3.0:1 for
          two consecutive fiscal quarters;

               (iii) 0.50% if the Total Debt/EBITDA ratio calculated pursuant to
          Section 8.22 is equal to or greater than 2.0:1 and less than 2.5:1 for
          two consecutive fiscal quarters; and

               (iv) 0.00% if the Total Debt/EBITDA ratio calculated  pursuant to
          Section 8.22 is less than 2.0:1 for two consecutive fiscal quarters.

          (b) On or after the Covenant Election Effective Date:

               (i) 0.75% if the Total Debt/EBITDA  ratio calculated  pursuant to
          Section  8.22 is equal to or greater  than  3.0:1 for two  consecutive
          fiscal quarters;

               (ii) 0.25% if the Total Debt/EBITDA ratio calculated  pursuant to
          Section 8.22 is equal to or greater than 2.5:1 and less than 3.0:1 for
          two consecutive fiscal quarters;

               (iii) 0.00% if the Total Debt/EBITDA ratio calculated pursuant to
          Section 8.22 is equal to or greater than 2.0:1 and less than 2.5:1 for
          two consecutive fiscal quarters; and

               (iv) 0.00% if the Total Debt/EBITDA ratio calculated  pursuant to
          Section 8.22 is less than 2.0:1 for two consecutive fiscal quarters.

     "Base Rate (US) Loans" shall mean a Loan made in Dollars  during any period
that it bears interest determined by reference to the Base Rate (US).

     "Borrower" - introductory paragraph.

     "Borrower Security Agreement" - Section 6.5(a).

     "Borrower Pledge Agreement" - Section 6.5(a).

     "Borrowing Date" - Section 2.2(a).

     "BOS"  shall mean Bank of Scotland  in its  capacity as a Bank,  and not as
Agent or Issuer, hereunder.

     "BOS Australia" shall mean BOS International (Australia) Limited.

     "Business Day" means

          (a) any day which is neither a Saturday or Sunday nor a legal  holiday
     or any other day on which banks are  authorized or required to be closed in
     New  York,  New York and  which is also a day on which  banks  and  foreign
     exchange markets are open for business in London; and

          (b) relative to the date of

               (i) making or continuing  any Loans as, or  converting  any Loans
          from or into, Libor Loans,

               (ii) making any payment or prepayment of principal of, or payment
          of interest on, any portion of the principal  amount of any Loan being
          maintained as a Libor Loan, or

               (iii) the Borrower's giving any notice (or the number of Business
          Days to elapse prior to the effectiveness  thereof) in connection with
          any matter referred to in clause (b)(i) or (b)(ii) above,

          which is a Business Day pursuant to clause (a) above and which also is
          a day on which  dealings  in  Dollars  are  carried  on in the  London
          interbank Eurocurrency market.

     "Capital   Expenditures"   shall  mean   expenditures   for   acquisitions,
construction or improvement of fixed assets.

     "Capitalized  Lease  Obligations"  shall mean all rental obligations which,
under GAAP, are or would be required to be capitalized on the books of a Person,
in each case taken at the amount thereof  accounted for as indebtedness  (net of
interest expense) in accordance with such principles.

     "Carlisle"  shall  mean the  Carlisle  branch of the UK Bank or such  other
branch or Bank as is satisfactory to the Agent.

     "Carlisle  Facility"  shall  mean  loans,  overdrafts  or  other  financial
accommodations  (including  letters of credit,  guarantees and  performance  and
other bonds) made by Carlisle to (or for the account of) the Borrower or, at the
request of the Borrower,  to (or for the account of) one or more Subsidiaries of
the Borrower, which in each case are supported by the Carlisle LC.

     "Carlisle LC" shall mean  Irrevocable  Letter of Credit No. SLC 91/03 dated
May 17, 1992 in the amount of 1,600,000  Sterling issued by the Issuer to secure
the Carlisle Facility.

     "Charter  Document"  shall  mean (i) with  respect  to a  corporation:  its
certificate  or  articles of  incorporation  or  association  and its by-laws or
comparable documents under non-US laws; (ii) with respect to a partnership:  its
partnership  agreement and  certificate of  partnership or comparable  documents
under  non-US  laws;  (iii) with  respect  to a trust,  its trust  agreement  or
declaration  of trust or comparable  documents  under non-US laws; and (iv) with
respect to a limited liability company, its certificate of formation and limited
liability company agreement or analogous documents or comparable documents under
non-US laws.

     "Christiania" shall mean Christiania Bank og Kreditkasee ASA.

     "Closing Date" shall mean the date of this Agreement.

     "Closing Date Banks" - Section 6 (introductory paragraph).

     "Closing  Office"  shall mean the office of the Agent at 565 Fifth  Avenue,
New York,  New York or such other office as may be  designated in writing to the
Borrower by the Agent.

     "Closing  Office  Time"  shall mean the local time in effect at the Closing
Office.

     "Code"  shall mean the Internal  Revenue  Code of 1986,  as the same may be
amended from time to time.

     "Collateral" - Section 10.15.

     "Commercial Paper" - Section 8.14.

     "Commitment" shall mean each Revolving Credit Loan Commitment.

     "Commitment Fee Percentage" shall mean:

          (a) Prior to the Covenant Election Effective Date:

               (i) 0.625% if the Total Debt/EBITDA ratio calculated  pursuant to
          Section  8.22 is equal to or greater  than  3.0:1 for two  consecutive
          fiscal quarters;

               (ii) 0.500% if the Total Debt/EBITDA ratio calculated pursuant to
          Section 8.22 is equal to or greater than 2.5:1 and less than 3.0:1 for
          two consecutive fiscal quarters;

               (iii) 0.375% if the Total Debt/EBITDA  ratio calculated  pursuant
          to Section  8.22 is equal to or greater than 2.0:1 and less than 2.5:1
          for two consecutive fiscal quarters; and

               (iv) 0.375% if the Total Debt/EBITDA ratio calculated pursuant to
          Section 8.22 is less than 2.0:1 for two consecutive fiscal quarters.

          (b) On or after the Covenant Election Effective Date:

               (i) 0.50% if the Total Debt/EBITDA  ratio calculated  pursuant to
          Section  8.22 is equal to or greater  than  3.0:1 for two  consecutive
          fiscal quarters;

               (ii) 0.375% if the Total Debt/EBITDA ratio calculated pursuant to
          Section 8.22 is equal to or greater than 2.5:1 and less than 3.0:1 for
          two consecutive fiscal quarters;

               (iii) 0.25% if the Total Debt/EBITDA ratio calculated pursuant to
          Section 8.22 is equal to or greater than 2.0:1 and less than 2.5:1 for
          two consecutive fiscal quarters; and

               (iv) 0.25% if the Total Debt/EBITDA ratio calculated  pursuant to
          Section 8.22 is less than 2.0:1 for two consecutive fiscal quarters.

     "Commitment  Period"  shall mean the period  from the  Closing  Date to and
including the first  Business Day of January,  2009, or such earlier date as the
Revolving  Credit  Loan  Commitments  shall  terminate  as  provided in the Loan
Agreement  or such  later date as may  hereafter  be agreed to by the Banks with
Revolving Credit Loan Commitments (by 100% vote) in writing.

     "Confirming Consent" - Section 12.14.

     "Consolidated Group" shall mean, collectively,  Holding, FAI, the Borrower,
FOSI and their respective Subsidiaries, on a consolidated basis.

     "Contaminant"  means any waste,  pollutant,  chemical,  hazardous material,
hazardous substance, toxic substance,  hazardous waste, special waste, petroleum
or  petroleum-derived  substance  or  waste,  or any  constituent  of  any  such
pollutant material, substance or waste, including, without limitation, asbestos,
radiation and any pollutant,  material,  substance or waste  regulated under any
Environmental Law.

     "Control"  (including the terms  "controlling,"  "controlled by" and "under
common  control  with") shall mean the  possession,  direct or indirect,  or the
power to direct or cause the  direction  of the  management  and  policies  of a
person,  whether  through the ownership of voting  securities,  by contract,  or
otherwise.

     "Conversion  Date"  shall  mean the  Business  Day on which a Loan is to be
converted pursuant to Section 3.5, 3.6, 3.9 or 3.10.

     "Covenant Election" - Section 8.17.

     "Covenant Election Notice" - Section 8.17.

     "Covenant Election Effective Date" - Section 8.17.

     "Credit Parties" shall mean, individually and collectively, each Loan Party
and its parent, whether or not a Loan Party.

     "Deemed Disbursement" - Section 2A.6.

     "Deemed Disbursement Account" -- Section 2A.6(a).

     "Default" shall mean any event which with notice or lapse of time, or both,
would become an Event of Default.

     "Designated Office" shall mean the Closing Office or, at the Agent's option
(with  respect to Sterling)  such office of the Agent in the US or the UK or the
Cayman Islands as the Agent shall from time to time specify.

     "Determination  Date"  shall mean the last  Business  Day of each  calendar
quarter.

     "Disbursement" - Section 2A.4.

     "Disbursement Date" - Section 2A.4.

     "Disbursement   Earnings"   shall  mean  the  amount  (if  any)  earned  by
investments (if any) made by the Issuer with amounts in the Deemed  Disbursement
Account.

     "Dollar  Equivalent"  shall mean (x) in respect of any currency  other than
Dollars,  the amount  determined by converting the currency in question,  at the
Spot Rate, to Dollars and (y) in respect of Dollars, the amount thereof.

     "Dollars",  "U.S. $", "$" and "U.S. dollars" shall mean the lawful currency
of the United States of America.

     "Dormant Subsidiaries" shall mean Subsidiaries of FAI, the Borrower or FOSI
(a) that meet the criteria of Section 10.22 of the Agreement and (b) as to which
the Agent and the Borrower  agree in writing shall be a Dormant  Subsidiary  for
purposes hereof, but only while the  representations  contained in Section 10.22
of the Agreement are accurate with respect to such Subsidiary.

     "EBIT" for any Person for any period shall mean the consolidated Net Income
of such Person and its consolidated  Subsidiaries for such period,  before Total
Interest  Expense  and  provision  for taxes and  without  giving  effect to any
extraordinary  gains  and  gains  from  sales of  assets  (other  than  sales of
inventory in the ordinary  course of  business),  for such period  (taken as one
accounting period).

     "EBITDA"  for any Person for any period  shall mean the EBIT of such Person
and its  consolidated  Subsidiaries for such period plus (to the extent deducted
in computing EBIT for such period) depreciation, amortization and other non-cash
items.

     "Environmental  Claim"  shall  mean  any  notice,  complaint,  request  for
information, claim, demand or similar communication (whether written or oral) by
any  Person  (including,   without  limitation,   the  environmental  protection
authorities  of the  jurisdiction  in which any Property is located or any other
national or local regulatory or administrative body), whether based in contract,
tort, implied or express warranty,  strict liability,  criminal or civil statute
(including  any  Environmental  Law,  permit,  order,  approval,  authorization,
license,  variance or agreement with any Person),  arising from or in respect of
(i) the presence of any Contaminant or any other environmental, health or safety
conditions  or a Release or threatened  Release on, in, under or emanating  from
any  Property or  resulting  from any past,  present or future  operation of any
member of the Consolidated Group (or any predecessor in interest of any of them)
of any  other  Person  in  connection  with the  business  of any  member of the
Consolidated  Group (or any  predecessor  in interest of any of them),  (ii) any
Release for which any member of the Consolidated Group is otherwise  responsible
under the Environmental Laws, (iii) any other circumstance  (including,  without
limitation,  any off-site  transportation of a Contaminant) forming the basis of
any violation or alleged  violation of, or liability or alleged liability under,
any  Environmental  Law  by  any  member  of  the  Consolidated  Group  (or  any
predecessor in interest of any of them), (iv) any Remedial Action required to be
taken by any member of the Consolidated  Group under the Environmental  Laws, or
(v) any harm, injury or damage to real or personal property,  natural resources,
the  environment  or  any  Person  alleged  to  have  resulted  from  any of the
foregoing.

     "Environmental Costs" shall mean all expenditures made by, all costs, fees,
disbursements  and  expenses  (including,  without  limitation,  any expenses of
engineers, experts, consultants, attorneys, contractors, surveyors, laboratories
and like Persons and costs of investigation  and feasibility  studies)  incurred
by, and all liabilities,  obligations and  responsibilities  assumed or incurred
by, any member of the Consolidated Group for or in respect of (i) any judgments,
fines, penalties,  obligations,  interest, losses, claims, amounts, impositions,
damages,  punitive damages,  consequential  damages,  treble damages or remedial
action  paid or taken or  agreed to be paid or taken  by,  due from or  assessed
against  any member of the  Consolidated  Group in respect of any  Environmental
Claim and (ii) all Remedial Action (including,  without limitation, any off-site
transportation of a Contaminant) taken by any member of the Consolidated  Group,
whether pursuant to any Environmental Claim or otherwise.

     "Environmental   Laws"  means  all  laws,  rules,   regulations,   by-laws,
directives,   codes,   orders,   decrees,   judgments  or  injunctions   issued,
promulgated, approved or entered thereunder by any Government Authority relating
to pollution or protection of the environment or occupational health and safety,
including, without limitation, laws relating to emissions,  discharges, releases
or threatened releases of any waste,  pollutant,  chemical,  hazardous material,
hazardous substance, toxic substance,  hazardous waste, special waste, petroleum
or  petroleum-derived  substance  or  waste,  or any  constituent  of  any  such
pollutant material, substance or waste, into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata) or otherwise relating to the manufacture, processing, distribution, use,
treatment,  storage,  disposal,  transport or handling of any waste,  pollutant,
chemical,  hazardous material,  hazardous substance, toxic substance,  hazardous
waste, special waste, petroleum or petroleum-derived substance or waste.

     "Environmental Lien" means any Lien in favor of any Governmental  Authority
for Environmental Costs.

     "Equity Interests" means partnership  interests,  limited liability company
interests, shares of stock and other equity interests in or issued by a Person.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended from time to time.

     "ERISA Affiliate" shall mean any Person which is from time to time a member
of a controlled  group or a group under common  control with Holding  within the
meaning  of  Sections  414(b),  414(c),  414(m) or 414(o) of the Code or Section
4001(a)(14) of ERISA.

     "Eurocurrency Differential" shall mean:

          (a) Prior to the Covenant Election Effective Date:

               (i) 2.50% if the Total Debt/EBITDA  ratio calculated  pursuant to
          Section  8.22 is equal to or greater  than  3.0:1 for two  consecutive
          fiscal quarters;

               (ii) 2.00% if the Total Debt/EBITDA ratio calculated  pursuant to
          Section 8.22 is equal to or greater than 2.5:1 and less than 3.0:1 for
          two consecutive fiscal quarters;

               (iii) 1.75% if the Total Debt/EBITDA ratio calculated pursuant to
          Section 8.22 is equal to or greater than 2.0:1 and less than 2.5:1 for
          two consecutive fiscal quarters;

               (iv) 1.50% if the Total Debt/EBITDA ratio calculated  pursuant to
          Section 8.22 is less than 2.0:1 for two consecutive fiscal quarters.

          (b) On or after the Covenant Election Effective Date:

               (i) 2.00% if the Total Debt/EBITDA  ratio calculated  pursuant to
          Section  8.22 is equal to or greater  than  3.0:1 for two  consecutive
          fiscal quarters;

               (ii) 1.50% if the Total Debt/EBITDA ratio calculated  pursuant to
          Section 8.22 is equal to or greater than 2.5:1 and less than 3.0:1 for
          two consecutive fiscal quarters;

               (iii) 1.25% if the Total Debt/EBITDA ratio calculated pursuant to
          Section 8.22 is equal to or greater than 2.0:1 and less than 2.5:1 for
          two consecutive fiscal quarters;

               (iv) 1.00% if the Total Debt/EBITDA ratio calculated  pursuant to
          Section 8.22 is less than 2.0:1 for two consecutive fiscal quarters.

     "Eurocurrency  Interest Determination Date" shall mean the date as of which
LIBOR is  determined  for a Libor Loan which shall be two Business Days prior to
the commencement of each Interest Period.

     "Event of  Default"  shall mean each of the  Events of  Default  defined in
Section 9.

     "FAI" shall mean Furmanite America Inc., a Virginia corporation.

     "Federal Funds Effective  Rate" shall mean the rate of interest  charged by
banks with excess reserves at a Federal  Reserve  district bank to banks needing
overnight loans to meet reserve requirements.

     "FIL" shall mean Furmanite  International  Limited,  an English  registered
company and a Subsidiary of Furmanite.

     "Financial  Statements"  shall  mean,  with  respect  to  any  Person,  the
statement of financial  position  (balance sheet) and the statement of earnings,
cash flow and stockholders' (or partners') equity of such Person.

     "First Currency" - Section 12.17(a).

     "Fiscal Year" shall mean each January 1 - December 31 period.

     "Fixed Charge  Coverage  Ratio" shall mean, for the period in question,  in
respect of any Person,  the ratio for such Person and its  Subsidiaries,  of (A)
EBITDA for such Person and its  Subsidiaries to (B) their Fixed Charges for such
period.

     "Fixed Charges" shall mean, in respect of any Person for any period,  as of
any date of calculation, an amount equal to the sum (without duplication) of

          (i) all Total Interest  Expenses for such Person and its  Subsidiaries
     during such period, plus

          (ii) all payments,  distributions  or dividends made by such Person to
     XANSER,  including  but not  limited to those  described  in proviso (z) to
     Section 8.15(b), plus

          (iii) the principal due on all Indebtedness for Borrowed Money of such
     Person and its Subsidiaries during such period, plus

          (iv) all rents and other amounts allocable to principal that accrue or
     have  accrued  during  such  period  with  respect  to  Capitalized   Lease
     Obligations of such Person and its Subsidiaries.

     "Foreign Guarantor" shall mean a Subsidiary of Holding organized other than
in the US or the UK.

     "Foreign Guaranty" - Section 6.5(a).

     "Foreign Negative Pledge Agreements" - Section 6.5(a).

     "Foreign Pledge Agreement" - Section 6.5(b).

     "Foreign Security Agreement" - Section 6.5(a)

     "Foreign  Subsidiary"  shall mean a Subsidiary of Holding  organized  other
than in the US or the UK.

     "FOSI" shall mean Furmanite Offshore Services Inc., a Delaware corporation.

     "Furmanite"  shall mean Furmanite  1986, a company  incorporated  under the
laws of England and Wales  (registered  number 2004499) formerly named Furmanite
1986 Limited formerly named Furmanite PLC.

     "GAAP"  shall  mean:  (i) with  respect to US Persons,  generally  accepted
accounting  principles  (as  promulgated  in the US by the Financial  Accounting
Standards  Board or any successor  entity) ("US GAAP"),  (ii) with respect to UK
Persons,  accounting  principles and practices generally accepted in the UK ("UK
GAAP"), (iii) with respect to Persons whose accounting  principles and practices
are  governed  by  those of  another  country,  the  accounting  principles  and
practices  generally accepted in such country and (iv) with respect to Financial
Statements or  components  thereof  determined  on an aggregate or  consolidated
basis  involving  one or more US Persons and one or more UK Persons and (if any)
any such other Persons, in accordance with their respective GAAP's but utilizing
US GAAP in connection with any such consolidation or combination.

     "Government  Authority"  shall mean any  nation or  government  (US,  UK or
otherwise), any state or political subdivision thereof and any entity exercising
executive,  legislative,  judicial, regulatory or administrative functions of or
pertaining to government.

     "Guarantee"  or  "Guaranty"  shall  mean  by any  Person,  any  obligation,
contingent or otherwise,  of such Person directly or indirectly guaranteeing any
Indebtedness  for Borrowed  Money or other  obligation  of any other Person and,
without  limiting the generality of the  foregoing,  any  obligation,  direct or
indirect,  contingent  or  otherwise,  of such Person (i) to purchase or pay (or
advance or supply  funds for the purchase or payment of) such  Indebtedness  for
Borrowed  Money or other  obligation  (whether  arising by virtue of partnership
arrangements,  by agreement to keep-well,  to purchase assets, goods, securities
or services,  to take-or-pay,  or to maintain financial statement  conditions or
otherwise)  or (ii) entered into for the purpose of assuring in any other manner
the obligee of such  Indebtedness  for Borrowed Money or other obligation of the
payment  thereof or to protect such obligee  against loss in respect thereof (in
whole or in  part),  provided  that  the  term  "Guarantee"  shall  not  include
endorsements for collection or deposits in the ordinary course of business.  The
term "Guarantee" used as a verb has a corresponding meaning.

     "Guarantee  Agreements" "Guaranty Agreements" shall mean,  individually and
collectively,  each US Guaranty,  the obligations of Holding under Section 9A of
the Agreement, each Foreign Guaranty and each UK Guaranty.

     "Guarantors"  shall mean,  individually  and  collectively,  each of the US
Guarantors, each of the UK Guarantors and each of the Foreign Guarantors.

     "Goodwill"  shall mean,  with respect to the balance sheet of any Person as
at the date at which the amount  thereof shall be  determined,  the aggregate of
all amounts  appearing  on the asset side of such  balance  sheet for  goodwill,
patents,  patent  rights,  trademarks,  trade  names,  copyrights,   franchises,
treasury stock,  organizational  expenses,  and other similar items, if any, all
determined in accordance with GAAP.

     "Holding" - introductory paragraph.

     "Indebtedness  for  Borrowed  Money"  shall  mean (i) all  indebtedness  of
(including, without limitation, all indebtedness assumed by) a Person in respect
of money  borrowed  (including,  without  limitation,  the unpaid  amount of the
purchase  price of any property,  incurred for such purpose in lieu of borrowing
money or using  available  funds to pay said  amount,  and not  constituting  an
account payable or expense accrual incurred or assumed in the ordinary course of
business),  or  evidenced by a promissory  note,  bond,  debenture or other like
obligation to pay money, and including  indebtedness under banker's  acceptances
and with respect to letters of credit,  and (ii) all  obligations of (including,
without  limitation,  all  obligations  assumed by) a Person (x)  constituting a
Capitalized  Lease Obligation of such Person, or (y) constituting a Guarantee by
such Person.

     "Indemnified Party" - Section 12.3.

     "Inland Revenue" shall mean the UK Inland Revenue.

     "Insignificant  Subsidiary" shall mean a Subsidiary of FAI, the Borrower or
FOSI whose (i) assets constitute less than 10% of the assets of the Consolidated
Group  and  (ii)  whose  gross  revenues  for the  most  recent  fiscal  quarter
constitute less than 10% of the consolidated  gross revenues of the Consolidated
Group,  but only while the foregoing  criteria are accurate with respect to such
Subsidiary.  Notwithstanding the foregoing, no Subsidiary that is deemed to be a
Significant  Subsidiary  pursuant to any provision of the Loan  Agreement or any
other Loan Document shall be an Insignificant Subsidiary during the time that it
is so deemed to be a Significant Subsidiary.

     "Intercompany Note" - Section 8.5.

     "Intercompany Subordination Agreement" - Section 6.5.

     "Interest Period" - Section 3.4.

     "Interest Period Notice" - Section 3.4.

     "Issuance Request" - Section 2A.1.

     "Issuer"  shall mean Bank of Scotland in its  capacity as a Bank  hereunder
and not in its capacity as Agent. References to the Bank in this Agreement (when
used to refer to Bank of Scotland) shall (without duplication) include such Bank
as Issuer.

     "LC Obligations"  shall mean the aggregate amount (without  duplication) of
all LC Outstandings, Deemed Disbursements and Reimbursement Obligations.

     "LC  Outstandings"  shall mean the  aggregate  Stated  Amount (as it may be
reduced  from  time to time) of all  Letters  of  Credit  issued  hereunder  and
outstanding at any point in time.

     "LC   Percentage"   shall  mean  with  respect  to  the  Carlisle  LC,  the
Eurocurrency  Differential minus 0.25%, and with respect to all other Letters of
Credit, the Eurocurrency Differential.

     "Letter of Credit" shall mean a letter of credit issued pursuant to Section
2A.2.

     "LIBOR"  shall  mean,  for each  Interest  Period,  the per  annum  rate of
interest  at  which  deposits  (in the  currency  in  which  the  Libor  Loan is
denominated)  in the amount of the  outstanding  principal  balance of the Libor
Loan are or would be offered for such  Interest  Period in the London  interbank
market at 11:00 A.M.  London time two  Business  Days prior to the start of such
Interest Period by the Agent to prime banks and, in case of variations in rates,
the arithmetic average thereof rounded upward if necessary to the nearest 1/16th
of 1% calculated by the Agent.

     "Libor  Loan" shall mean a Loan  during any period  that it bears  interest
determined by reference to LIBOR.

     "Lien"  shall mean any  mortgage,  deed of trust,  security  deed,  pledge,
security interest, assignment,  encumbrance, lien or other charge of any kind or
any other  agreement or  arrangement  having the effect of  conferring  security
(including any agreement to give any of the  foregoing,  any lease in the nature
thereof, and any conditional sale or other title retention agreement),  any lien
arising  by  operation  of law,  and the  filing  of or  agreement  to give  any
financing  statement under the Uniform  Commercial Code of any  jurisdiction (or
any similar UK law).

     "Loan(s)" shall mean, individually and collectively,  each Revolving Credit
Loan.

     "Loan  Agreement"  shall mean this Agreement as it may from time to time be
amended, extended, restated, supplemented or otherwise modified.

     "Loan Documents" shall mean, individually and collectively, this Agreement,
the  Notes,  the  Intercompany  Note,  the  Security  Documents,  the  Guarantee
Agreements,  the Letters of Credit,  the XANSER  Subordination  Agreement,  each
Intercompany  Subordination  Agreement and all other  instruments and agreements
executed  in  connection  herewith  and  therewith,  in each  case  as  amended,
supplemented  or  otherwise  modified  from time to time.  Without  limiting the
generality  of the  foregoing,  each  amendment to the Loan  Agreement or to any
other Loan  Document,  each waiver of any  provision of the Loan  Agreement  any
other Loan Document,  and each  instrument and agreement  executed in connection
herewith or therewith  shall be deemed to be a Loan Document for all purposes of
this Agreement and the other Loan Documents.  Without limiting the generality of
the  foregoing,  each  of  the  following  UK  Security  Agreements,  UK  Pledge
Agreements, UK Guaranties and UK IPMs shall be deemed to each be a Loan Document
for all purposes of this Agreement and the other Loan Documents:

          1. Fixed and  Floating  Charge dated May 17, 1991 between the Borrower
     and the Agent;

          2. Mortgage of Securities  dated May 17, 1991 between the Borrower and
     the Agent;

          3. Guarantee dated September 9, 1991 between Furmanite,  FIL, other UK
     Guarantors and the Agent;

          4. Fixed and Floating Charge dated September 9, 1991 between Furmanite
     and the Agent;

          5. Mortgage of Securities  dated  September 9, 1991 between  Furmanite
     and the Agent;

          6. Guarantee  dated September 9, 1991 between FIL, other UK Guarantors
     and the Agent;

          7. Fixed and Floating  Charge dated  September 9, 1991 between FIL and
     the Agent; and

          8. Intellectual  Property Mortgage Assignment dated September 12, 1991
     between FIL and the Agent.

     "Loan Parties" shall mean, individually and collectively, Holding, FAI, the
Borrower, FOSI and each of their respective Subsidiaries.

     "Local Office Time", when referring to the time of day when funds are to be
made available to the Agent or the Borrower,  shall mean the applicable  time in
the city where such funds are to be made available.

     "Material  Adverse  Change" in  respect  of a Person  shall mean a material
adverse  change  in (i)  the  business,  properties,  operations,  prospects  or
condition  (financial  or  otherwise) of such Person or (ii) if such Person is a
Credit Party, the ability of such person to perform, or of the Agent or any Bank
to enforce, the Obligations.

     "Material  Adverse Effect" in respect of a Person shall mean an effect that
would result in a Material Adverse Change.

     "Material  Agreement"  shall mean all  outstanding  contracts,  agreements,
leases and other  understandings  to which any Loan  Party is a party,  or by or
under which a Loan Party or any Subsidiary has any rights or obligations,  which
(i)  involve  the  payment to or by any member of the  Consolidated  Group of an
aggregate of $250,000 (or the equivalent thereof in any other currency, computed
at the  Spot  Rate) or more or (ii) is  otherwise  material  to a member  of the
Consolidated Group.

     "Moodys" - Section 8.14.

     "Multiemployer  Plan"  shall  mean any  employee  benefit  plan  which is a
"multiemployer  plan" within the meaning of Section  3(37) of ERISA and to which
the  Borrower  or any  ERISA  Affiliate  contributes  or has been  obligated  to
contribute.

     "Net  Income" as to any Person for any period  shall mean the  consolidated
net income of such Person and its  Subsidiaries  for such period,  determined in
accordance with GAAP.

     "Net Income  (Adjusted)" as to any Person for any period shall mean the Net
Income of such  Person for such  period  less all  extraordinary  gains plus all
extraordinary losses included in such Net Income.

     "NOK" shall mean lawful currency of Norway.

     "NOL" shall mean the net operating loss  carryforwards  available to XANSER
for U.S. federal income tax purposes.

     "Norwegian   Holding"  shall  mean  Furmanite  Holding  AS,  a  corporation
organized under the laws of Norway.

     "Norwegian  Facility"  shall mean that certain loan  agreement  dated as of
August 10, 1998 between  Christiania.  and  Norwegian  Holding,  the note issued
pursuant to the loan agreement and the instruments and documents delivered under
the loan agreement.

     "Norwegian LC" shall mean Irrevocable  Letter of Credit No. SLC 98/03 dated
October 22, 1998 in the amount of  NOK10,225,000  issued by the Issuer to secure
the Norwegian Facility.

     "Note" shall mean a Revolving  Credit Note and the term "Notes"  shall mean
Revolving Credit Notes.

     "Notice" shall mean a Notice of Borrowing or a Notice of Conversion, as the
context may indicate.

     "Notice of Borrowing" - Section 2.2(a).

     "Notice of Conversion" - Section 3.5(b).

     "Obligations"  shall mean all  obligations  of the Borrower with respect to
the repayment or performance of any obligations  (monetary or otherwise) arising
under or in connection with this Agreement and each other Loan Document.

     "Original Agreement" - Recitals.

     "Original Banks" shall mean BOS and GiroCredit Bank.

     "Other Currency" - Section 12.17(a).

     "Other Accounts" shall mean the Deemed Disbursement Account.

     "Past-Due Rate" - Section 3.3.

     "PBGC"  shall mean the Pension  Benefit  Guaranty  Corporation  established
pursuant to Section 4002 of ERISA.

     "Pension  Plan" shall mean any  employee  pension  benefit  plan subject to
Title IV of ERISA and  maintained by the Borrower or any ERISA  Affiliate or any
such plan to which the Borrower or any ERISA  Affiliate is or has been  required
to  contribute  on behalf of any of its  employees,  other than a  Multiemployer
Plan.

     "Permits" - Section 10.12.

     "Permitted  Liens"  shall mean (x) the  specific  Liens  listed on Schedule
8.2(g) to this Agreement but not any that the Agent requires to be terminated on
or prior to the Closing  Date and (y) Liens  permitted by clauses (h) and (i) of
Section 8.2 that are incurred after the Closing Date.

     "Person" shall mean and include an individual, a partnership, a corporation
(including a business trust), a joint stock company,  a trust, an unincorporated
association,  a joint  venture or other entity or a  government  or an agency or
political subdivision thereof.

     "Plan"  shall mean any  "employee  benefit  plan"  (within  the  meaning of
Section 3(3) of ERISA)  maintained by Holding or any ERISA Affiliate or any such
plan to  which  Holding  or any  ERISA  Affiliate  is or has  been  required  to
contribute on behalf of any of its employees, other than a Multiemployer Plan.

     "Pledge  Agreements"  shall mean,  individually and  collectively,  each US
Pledge Agreement, each UK Pledge Agreement and each Foreign Pledge Agreement.

     "Property"  shall mean any  property  owned,  leased,  controlled,  used or
operated in the past, present or future by any member of the Consolidated Group.

     "Qualification Requirement" - Section 3.7(b).

     "Recoveries"   shall  mean  any  funds,  or  substitution  or  receipts  or
collateral,  received by the Banks or the Agent (a) from the sale, collection or
other disposition  pursuant to the Security Documents of the Collateral,  or (b)
from any distribution to any of the Banks or the Agent, or abandonment to any of
them, or  substitute  Lien or payment given to any of them pursuant to events or
proceedings  of the nature  referred  to in  Section  9.7 of the  Agreement,  or
otherwise, and which distribution or abandonment pertains to the Collateral.

     "Regulatory  Change"  means,  relative  to any  Issuer,  any  Bank  or Bank
Assignee,  any change after the Closing  Date in any (or the adoption  after the
Closing Date of any new):

          (a)  United  States  Federal,  state  or  local  law  or  foreign  law
     applicable to the Issuer, any Bank or Bank Assignee; or

          (b) regulation, interpretation,  directive, or request (whether or not
     having  the  force of law)  applying  to the  Issuer  or such  Bank or Bank
     Assignee  of  any  court  or  governmental   authority   charged  with  the
     interpretation or administration of any law referred to in clause (a) or of
     any fiscal,  monetary,  central bank or other authority having jurisdiction
     over the Issuer or such Bank or Bank Assignee.

     "Reimbursement Obligation" - Section 2A.4.

     "Release"  shall  mean any  release,  spill,  emission,  leaking,  pumping,
injection, deposit, disposal, discharge, dispersal, pouring, emptying, escaping,
dumping,  discarding,  leaching or migration of a Contaminant into the indoor or
outdoor environment or into or out of any property, including without limitation
the movement of Contaminants  through,  on or in the air, soil, surface water or
groundwater or the  abandonment  or discarding of barrels,  containers and other
closed receptacles containing any Contaminant.

     "Release of Deficiency Undertaking" - Section 6.3.

     "Remedial  Action"  shall mean all actions taken or required to be taken to
(i) clean up,  remove,  treat or in any other way  address  Contaminants  in the
indoor or  outdoor  environment,  (ii)  prevent a Release or  condition  that is
reasonably  likely to  result  in a  Release  or  minimize  further  release  of
Contaminants so they do not migrate or endanger or threaten to endanger  present
or future public health or welfare or the indoor or outdoor  environment,  (iii)
perform pre-remedial studies and investigations and post-remedial monitoring and
care, or (iv) cure any other violation of any Environmental Laws.

     "Reportable  Event" shall mean a Reportable Event described in Section 4043
of ERISA and the regulations issued thereunder.

     "Required  Banks" as of a  particular  date shall mean (a) while any of the
Commitments  are in effect,  one or more  Banks  (two or more,  at any time when
there  are  more  than  two  Banks  party to the  Agreement)  whose  Commitments
aggregate  at least 60% of the Total  Commitments  or (b) if at the time none of
the  Commitments  are in effect,  one (two, at any time when there are more than
two Banks  party to the  Agreement)  or more  Banks (or other  holders of Notes)
holding at least 60% of the aggregate  unpaid  principal amount of all Loans, LC
Outstandings and Reimbursement Obligations at the particular time outstanding.

     "Revolving Credit Loan" - Section 2.1(b).

     "Revolving  Credit Loan  Commitment"  shall mean, for each Bank, the amount
set forth opposite its name on Schedule 2.1 to this Agreement  under the heading
"Revolving Credit Loan Commitment", as the same from time to time may be reduced
or  terminated  pursuant to Section 2.8,  Section 9 or any other  section of the
Agreement.

     "Revolving Credit Note" - Section 2.3(a).

     "Satisfactory Subordination Agreement" shall mean a subordination agreement
in form and substance  satisfactory to the Agent which  subordinates (in manner,
form and scope  satisfactory  to the Agent) the  obligations  specified  therein
(i.e.,  to a Person other than the Agent or the Banks) to all obligations of the
member of the Consolidated Group executing same to the Agent and the Banks.

     "S&P" - Section 8.14.

     "SEC" shall mean the US Securities and Exchange Commission or any successor
entity.

     "Security  Agreements" shall mean,  individually and collectively,  each UK
Security Agreement, the Borrower Security Agreement, each US Security Agreement,
each US IPM, each UK IPM and each Foreign Security Agreement.

     "Security  Documents" shall be the collective  reference to (i) each of the
agreements  referred to in Section 6 and (if, as and when  executed) in Sections
7.20 and 12.14  pursuant  to which  Collateral  is intended to be granted to the
Agent on behalf of the Banks,  (ii) the  sections of the  Agreement  pursuant to
which the Other Accounts are established,  (iii)  [intentionally  deleted],  and
(iv) all amendments,  supplements or other  modifications to such agreements and
sections or replacements thereof. The term "Security Documents" includes without
limitation  the Security  Agreements,  the Pledge  Agreements  and the Guarantee
Agreements.  However,  as to a Credit Party, the term "Security  Document" shall
not include  any such  document  as to which the Credit  Party party  thereto is
released  from all its  obligations  thereunder  by the  Agent  or the  Banks in
accordance  with the  terms  hereof or  thereof  and  shall  not  thereafter  be
considered a "Security Document" as to such Credit Party.

     "Significant  Subsidiary" shall mean all members of the Consolidated  Group
that are  organized in the UK, the US,  France or Australia and any other member
of the Consolidated  Group whose (i) assets constitute 10% or more of the assets
of the Consolidated  Group taken as a whole or (ii) whose gross revenues for the
most recent fiscal  quarter  constitute  10% or more of the  consolidated  gross
revenues of the Consolidated Group.

     "Site (UK)" shall mean the following  real property  located in the UK: (a)
Furman House, Shap Road, Kendal, Cumbria,  England; (b) Parkhill Road, Kingstown
Industrial Estate, Carlisle, Cumbria, England; and (c) Owens Road, Skippers Lane
Industrial Estate, South Bank, Middlesbrough, Cleveland, England.

     "Solvent"  shall mean,  with respect to any Person,  that the fair saleable
value of the  tangible  and  intangible  property  (including  goodwill) of such
Person  is,  on the date of  determination,  greater  than the  total  amount of
liabilities of such Person as of such date (including contingent  liabilities of
such  Person to the extent  such  Person  considers  it  probable  that it shall
actually be liable  thereon) and that,  as of such date,  such Person is able to
pay all Indebtedness for Borrowed Money of such Person as such  Indebtedness for
Borrowed Money  matures.  When used in respect of the Borrower and other Persons
organized in the UK, "Solvent" shall also mean that such Person is not unable to
pay its debts within the meaning of section 123 of the  Insolvency  Act 1986 and
the comparable provisions of any successor statute.

     "Spot Rate" shall mean, for any day, the rate of exchange for two (four, as
used in Section 3A.1) Business Days' forward  delivery quoted by the Agent's New
York office in New York City for the purchase of one currency  with another (or,
if the Agent is not then  quoting  such a rate,  such rate shown on page WRLD of
the Reuters  screen) in New York City at 11:00 A.M.  (New York time) on such day
or, if such day is not a Business Day, on either the next  preceding or the next
succeeding Business Day, at the election of the Agent.

     "Stated Amount" shall mean, as to each Letter of Credit, the maximum amount
payable thereunder to the beneficiary thereof upon compliance with the terms and
conditions stated therein, as such amount may be reduced from time to time.

     "Stated Expiry Date" - Section 2A.1(b).

     "Sterling" means the lawful currency of the United Kingdom.

     "Subordination  Agreements" shall mean, individually and collectively,  the
XANSER Subordination Agreement, each Intercompany  Subordination Agreement, each
Satisfactory  Subordination  Agreement and each subordination agreement executed
in connection  with loans permitted by clause (xi) of Section 8.3 and by Section
8.5  and  each  other  subordination  agreement  as  well  as the  subordination
provisions  contained in any note or other  agreement  pursuant to which (in any
such case) any obligation of any Credit Party or any obligation running in favor
of such Credit Party is  subordinated  to any  obligation  owed by Holding,  the
Borrower or any other Credit Party to the Agent and the Banks.

     "Subsidiary"  of  any  Person  shall  mean  any  other  firm,  corporation,
partnership,  trust or other unincorporated organization or association or other
enterprise,  50% or more of the indicia of equity rights (whether  capital stock
or otherwise)  of which is at the time owned,  directly or  indirectly,  by such
Person and/or by one or more of such Person's Subsidiaries.

     "Supervening Event Notice" - Section 2.2(d).

     "Tangible  Assets"  of a Person  shall  mean,  as at any date at which  the
amount  thereof  shall be  determined,  all the assets of such  Person  less the
amount  of any  write-up  in the book  value of any  assets  resulting  from the
revaluation  thereof,  less the aggregate of all amounts  appearing on the asset
side of the balance  sheet for goodwill,  patents,  patent  rights,  trademarks,
trade names, copyrights,  franchises,  treasury stock,  organizational expenses,
prepaid  expenses and other similar items,  if any, all determined in accordance
with GAAP.

     "Tangible  Net Worth" of a Person  shall mean,  as at any date at which the
amount thereof shall be determined,  the amount by which the total shareholders'
or  partners'  equity of such  Person  exceeds  the sum of (x) the amount of any
write-up in the book value of any assets resulting from the revaluation thereof,
or any write-up in excess of the cost of assets acquired,  and (y) Goodwill,  if
any, all determined in accordance with GAAP.

     "Tax Allocation Agreement" shall mean the tax allocation agreement referred
to in  Section  6.11,  as said  agreement  may  from  time  to time be  amended,
supplemented or otherwise modified with the consent of the Required Banks.

     "Taxes" - Section 5.2.

     "Termination  Event" shall mean (i) a Reportable Event described in Section
4043 of ERISA and the  regulations  issued  thereunder  (other than a Reportable
Event not  subject to the  provision  for  30-day  notice to the PBGC under such
regulations),  or  (ii)  the  withdrawal  of the  Borrower  or any of its  ERISA
Affiliates 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 (iii) 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) receipt by the
Borrower or any ERISA  Affiliate of notice of the PBGC's  intention to terminate
any Pension Plan or to have a trustee  appointed to administer  any Pension Plan
or (v) the PBGC,  or (vi) any other event or  condition  which might  constitute
grounds under Section 4042 of ERISA for the  termination  of, or the appointment
of a trustee to administer, any Pension Plan.

     "Total  Commitments" shall mean the aggregate of the Total Revolving Credit
Loan Commitment.

     "Total Debt" shall mean all Indebtedness for Borrowed Money  (regardless of
the maturity date  thereof)  other than  indebtedness  owed by any member of the
Consolidated Group to another member of the Consolidated Group.

     "Total  Interest  Expense"  shall  mean,  in  respect of any Person for any
period, as of any date of calculation, the total interest expense of such Person
and its Subsidiaries for such period determined in accordance with GAAP.

     "Total Revolving  Credit Loan Commitment"  shall mean, on any date, the sum
of the Revolving  Credit Loan  Commitments  of all the Banks,  as in effect from
time to time.

     "Transfer" - Section 8.9.

     "Type" shall mean either a Base Rate (US) Loan or a Libor Loan.

     "UCC" - Section 10.15.

     "UK" shall mean the United Kingdom.

     "UK Bank" shall mean The Governor and Company of the Bank of Scotland.

     "UK  Guarantors"  shall mean each  Subsidiary  of Holding  (other  than the
Borrower) organized in the UK.

     "UK Guaranty" - Section 6.5(e).

     "UK IPM" - Section 6.5(e).

     "UK Pledge Agreement" - Section 6.5(e).

     "UK Security Agreement" - Section 6.5(e).

     "UK Statutes" - Section 10.15.

     "UK  Subsidiaries"  shall mean  Subsidiaries of Holding organized under the
laws of the UK.

     "Unutilized Revolving Commitments" shall mean the amount by which the Total
Revolving  Credit  Loan  Commitment  at any  time  exceeds  the  sum of (x)  the
aggregate  principal  amount of Revolving Credit Loans then outstanding plus (y)
the Dollar Equivalent of LC Obligations.

     "US" shall mean the United States.

     "US Guarantors" shall mean Holding and each Subsidiary of Holding organized
under the laws of the US.

     "US Guaranty" - Section 6.5(a).

     "US IPM" - Section 6.5(c).

     "US Pledge Agreement" - Section 6.5(b).

     "US Security Agreement" - Section 6.5(a).

     "US  Subsidiaries"  shall mean  Subsidiaries of Holding organized under the
laws of the US.

     "Written" or "in writing" shall mean any form of written communication or a
communication by means of telex, telecopier device, telegraph or cable.

     "XANSER" shall mean Xanser Corporation,  a Delaware  corporation,  formerly
known as Kaneb Services, Inc.

     "XANSER  Management  Agreement"  shall mean that the Agreement  dated as of
August 1, 1991 with an effective  date of March 1, 1991 between Kaneb  Services,
Inc. and Kaneb UK PLC with respect to certain  services to be provided by XANSER
to the Borrower and XANSER's compensation therefor.

     "XANSER  Subordination  Agreement"  shall  mean a  subordination  agreement
substantially  in the form of Exhibit S to the Loan  Agreement  and  relating to
(among other items) the XANSER Management Agreement,  as such agreement may from
time to time be amended, supplemented or otherwise modified.