AMENDED AND RESTATED CREDIT AGREEMENT

                          Dated as of November 20, 2003

                                      among

                             C&D TECHNOLOGIES, INC.
                                as the Borrower,

               THE SUBSIDIARIES OF THE BORROWER IDENTIFIED HEREIN,
                               as the Guarantors,

                             BANK OF AMERICA, N.A.,
           as Administrative Agent, Swing Line Lender and L/C Issuer,

                              JP MORGAN CHASE BANK,
                                  as Co-Agent,

                                       and

                         THE OTHER LENDERS PARTY HERETO


                                  Arranged By:

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







<PAGE>


                                TABLE OF CONTENTS


     ARTICLE I  DEFINITIONS AND ACCOUNTING TERMS...............................1
     1.01     Defined Terms....................................................1
     1.02     Other Interpretive Provisions...................................20
     1.03     Accounting Terms................................................20
     1.04     Rounding........................................................21
     1.05     References to Agreements and Laws...............................21
     1.06     Times of Day....................................................21
     1.07     Letter of Credit Amounts........................................21
     ARTICLE II  THE COMMITMENTS AND CREDIT EXTENSIONS........................21
     2.01     Revolving Loans.................................................21
     2.02     Borrowings, Conversions and Continuations of Loans..............22
     2.03     Letters of Credit...............................................23
     2.04     Swing Line Loans................................................30
     2.05     Prepayments.....................................................32
     2.06     Termination or Reduction of Aggregate Revolving Commitments.....33
     2.07     Repayment of Loans..............................................33
     2.08     Interest........................................................34
     2.09     Fees............................................................34
     2.10     Computation of Interest and Fees................................35
     2.11     Evidence of Debt................................................35
     2.12     Payments Generally..............................................35
     2.13     Sharing of Payments.............................................37
     ARTICLE III  TAXES, YIELD PROTECTION AND ILLEGALITY......................38
     3.01     Taxes...........................................................38
     3.02     Illegality......................................................39
     3.03     Inability to Determine Rates....................................39
     3.04     Increased Cost and Reduced Return; Capital Adequacy.............39
     3.05     Funding Losses..................................................40
     3.06     Matters Applicable to all Requests for Compensation.............40
     3.07     Survival........................................................41
     ARTICLE IV  GUARANTY.....................................................41
     4.01     The Guaranty....................................................41
     4.02     Obligations Unconditional.......................................41
     4.03     Reinstatement...................................................42
     4.04     Certain Additional Waivers......................................42
     4.05     Remedies........................................................42
     4.06     Rights of Contribution..........................................43
     4.07     Guarantee of Payment; Continuing Guarantee......................43
     ARTICLE V  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS.....................43
     5.01     Conditions of Initial Credit Extension..........................43
     5.02     Conditions to all Credit Extensions.............................45
     ARTICLE VI  REPRESENTATIONS AND WARRANTIES...............................45
     6.01     Existence, Qualification and Power..............................45
     6.02     Authorization; No Contravention.................................46

                                       i
<PAGE>

     6.03     Governmental Authorization; Other Consents......................46
     6.04     Binding Effect..................................................46
     6.05     Financial Statements; No Material Adverse Effect................46
     6.06     Litigation......................................................47
     6.07     No Default......................................................47
     6.08     Ownership of Property; Liens....................................47
     6.09     Environmental Compliance........................................47
     6.10     Insurance.......................................................48
     6.11     Taxes...........................................................48
     6.12     ERISA Compliance................................................48
     6.13     Subsidiaries....................................................49
     6.14     Margin Regulations; Investment Company Act;
              Public Utility Holding Company Act..............................49
     6.15     Disclosure......................................................49
     6.16     Compliance with Laws............................................50
     6.17     Intellectual Property; Licenses, Etc............................50
     6.18     Broker's Fees...................................................50
     6.19     Labor Matters...................................................50
     6.20     Tax Shelter Regulations.........................................50
     ARTICLE VII  AFFIRMATIVE COVENANTS.......................................51
     7.01     Financial Statements............................................51
     7.02     Certificates; Other Information.................................51
     7.03     Notices.........................................................53
     7.04     Payment of Obligations..........................................54
     7.05     Preservation of Existence, Etc..................................54
     7.06     Maintenance of Properties.......................................54
     7.07     Maintenance of Insurance........................................54
     7.08     Compliance with Laws............................................55
     7.09     Books and Records...............................................55
     7.10     Inspection Rights...............................................55
     7.11     Use of Proceeds.................................................55
     7.12     Additional Subsidiaries.........................................55
     7.13     ERISA Compliance................................................56
     7.14     Pledged Assets..................................................56
     ARTICLE VIII  NEGATIVE COVENANTS.........................................56
     8.01     Liens...........................................................56
     8.02     Investments.....................................................58
     8.03     Indebtedness....................................................59
     8.04     Fundamental Changes.............................................60
     8.05     Dispositions....................................................60
     8.06     Restricted Payments.............................................61
     8.07     Change in Nature of Business....................................61
     8.08     Transactions with Affiliates and Insiders.......................61
     8.09     Burdensome Agreements...........................................61
     8.10     [Reserved]......................................................62
     8.11     Financial Covenants.............................................62

                                       ii
<PAGE>

     8.12     Prepayment of Other Indebtedness, Etc...........................62
     8.13     Organization Documents; Fiscal Year; Legal Name,
              State of Formation and Form of Entity...........................62
     8.14     Ownership of Subsidiaries.......................................63
     8.15     Sale and Leaseback Transactions.................................63
     ARTICLE IX  EVENTS OF DEFAULT AND REMEDIES...............................63
     9.01     Events of Default...............................................63
     9.02     Remedies Upon Event of Default..................................65
     9.03     Application of Funds............................................66
     ARTICLE X  ADMINISTRATIVE AGENT..........................................67
     10.01    Appointment and Authorization of Administrative Agent...........67
     10.02    Delegation of Duties............................................67
     10.03    Liability of Administrative Agent...............................67
     10.04    Reliance by Administrative Agent................................68
     10.05    Notice of Default...............................................68
     10.06    Credit Decision; Disclosure of Information
              by Administrative Agent.........................................68
     10.07    Indemnification of Administrative Agent.........................69
     10.08    Administrative Agent in its Individual Capacity.................69
     10.09    Successor Administrative Agent..................................70
     10.10    Administrative Agent May File Proofs of Claim...................70
     10.11    Collateral and Guaranty Matters.................................71
     10.12    Other Agents; Arrangers and Managers............................71
     ARTICLE XI  MISCELLANEOUS................................................72
     11.01    Amendments, Etc.................................................72
     11.02    Notices and Other Communications; Facsimile Copies..............73
     11.03    No Waiver; Cumulative Remedies..................................74
     11.04    Attorney Costs, Expenses and Taxes..............................74
     11.05    Indemnification by the Borrower.................................75
     11.06    Payments Set Aside..............................................75
     11.07    Successors and Assigns..........................................76
     11.08    Confidentiality.................................................78
     11.09    Set-off.........................................................79
     11.10    Interest Rate Limitation........................................79
     11.11    Counterparts....................................................79
     11.12    Integration.....................................................79
     11.13    Survival of Representations and Warranties......................80
     11.14    Severability....................................................80
     11.15    Tax Forms.......................................................80
     11.16    Replacement of Lenders..........................................82
     11.17    Governing Law...................................................82
     11.18    Waiver of Right to Trial by Jury................................82



                                       iii
<PAGE>



SCHEDULES

         2.01     Commitments and Pro Rata Shares
         2.03     Existing Letters of Credit
         6.13     Subsidiaries
         8.01     Liens Existing on the Closing Date
         8.02     Investments Existing on the Closing Date
         8.03     Indebtedness Existing on the Closing Date
         11.02    Certain Addresses for Notices

EXHIBITS

         A        Form of Loan Notice
         B        Form of Swing Line Loan Notice
         C-1      Form of Revolving Note
         C-2      Form of Swing Line Note
         D        Form of Compliance Certificate
         E        Form of Assignment and Assumption
         F        Form of Joinder Agreement



                                       iv
<PAGE>




                      AMENDED AND RESTATED CREDIT AGREEMENT

     This AMENDED AND RESTATED  CREDIT  AGREEMENT is entered into as of November
20, 2003 among C&D TECHNOLOGIES,  INC., a Delaware corporation (the "Borrower"),
the  Guarantors  (defined  herein),  the  Lenders  (defined  herein) and BANK OF
AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

     Pursuant  to that  Amended  and  Restated  Credit  Agreement  (as  amended,
modified and supplemented, the "Existing Credit Agreement") dated as of March 1,
1999 among the Borrower,  the Subsidiaries of the Borrower  identified  therein,
the lenders  identified  therein and Bank of America,  N.A.,  as  administrative
agent,  the  lenders  party  thereto  agreed to provide  $220  million in credit
facilities  to  the  Borrower.  The  Borrower  has  requested  that  the  credit
facilities  provided  pursuant to the Existing  Credit  Agreement be amended and
restated on the terms and conditions  set forth herein.  The Lenders have agreed
to the  Borrower's  request  and  this  Agreement  is  given  in  amendment  to,
restatement of and substitution for the Existing Credit Agreement.

     In consideration of the mutual covenants and agreements  herein  contained,
the parties hereto covenant and agree as follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

     1.01 Defined Terms.

     As used in this Agreement,  the following terms shall have the meanings set
forth below:

     "Acquisition",  by any Person,  means the acquisition by such Person,  in a
single  transaction  or in a  series  of  related  transactions,  of  all or any
substantial  portion of the Property of another Person or at least a majority of
the Voting  Stock of another  Person,  in each case  whether or not  involving a
merger or consolidation  with such other Person and whether for cash,  property,
services, assumption of Indebtedness, securities or otherwise.

     "Administrative   Agent"   means  Bank  of  America  in  its   capacity  as
administrative  agent  under  any  of  the  Loan  Documents,  or  any  successor
administrative agent.

     "Administrative  Agent's Office" means the  Administrative  Agent's address
and,  as  appropriate,  account  as set forth on  Schedule  11.02 or such  other
address or account as the Administrative  Agent may from time to time notify the
Borrower and the Lenders.

     "Administrative  Questionnaire" means an Administrative  Questionnaire in a
form supplied by the Administrative Agent.

     "Affiliate"  means,  with  respect  to  any  Person,  another  Person  that
directly,  or  indirectly  through  one or more  intermediaries,  Controls or is
Controlled by or is under common  Control with the Person  specified.  "Control"
means the  possession,  directly or indirectly,  of the power to direct or cause
the  direction of the  management or policies of a Person,  whether  through the
ability to exercise  voting power, by contract or otherwise.  "Controlling"  and
"Controlled" have meanings correlative thereto.  Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 5% or more of
the  securities  having  ordinary  voting power for the  election of  directors,
managing general partners or the equivalent.


<PAGE>

     "Agent-Related  Persons" means the Administrative  Agent, together with its
Affiliates  (including,  in the case of Bank of America in its  capacity  as the
Administrative  Agent, the Arranger),  and the officers,  directors,  employees,
agents and attorneys-in-fact of such Persons and Affiliates.

     "Aggregate  Revolving  Commitments" means the Revolving  Commitments of all
the Lenders. The initial amount of the Aggregate Revolving Commitments in effect
on the Closing Date is ONE HUNDRED MILLION DOLLARS ($100,000,000). The amount of
the Aggregate Revolving Commitments may from time to time after the Closing Date
be increased pursuant to Section 2.01(c) and reduced pursuant to Section 2.06.

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

     "Applicable Rate" means the following percentages per annum, based upon the
Consolidated  Total  Leverage  Ratio as set forth in the most recent  Compliance
Certificate received by the Administrative Agent pursuant to Section 7.02(b):

<TABLE>
<CAPTION>

  Pricing          Consolidated Total                               Letter of Credit Fee
   Tier              Leverage Ratio            Commitment Fee       and Eurodollar Loans      Base Rate Loans
<S>                        <C>                      <C>                      <C>                   <C>
------------ ------------------------------- -------------------- ------------------------- ---------------------

------------ ------------------------------- -------------------- ------------------------- ---------------------
     I       Less than or equal to 1.0:1.0         0.250%                  1.00%                   0.00%
------------ ------------------------------- -------------------- ------------------------- ---------------------

    II       Less than or equal to 1.5:1.0         0.250%                  1.25%                   0.00%
                but greater than 1.0:1.0
------------ ------------------------------- -------------------- ------------------------- ---------------------

    III      Less than or equal to 2.0:1.0         0.300%                  1.50%                   0.00%
                but greater than 1.5:1.0
------------ ------------------------------- -------------------- ------------------------- ---------------------

    IV       Less than or equal to 2.5:1.0         0.375%                  1.75%                   0.25%
                but greater than 2.0:1.0
------------ ------------------------------- -------------------- ------------------------- ---------------------

     V            Greater than 2.5:1.0             0.500%                  2.00%                   0.50%
------------ ------------------------------- -------------------- ------------------------- ---------------------
</TABLE>

Any increase or decrease in the  Applicable  Rate resulting from a change in the
Consolidated  Total  Leverage  Ratio  shall  become  effective  as of the  first
Business  Day  immediately  following  the  date  a  Compliance  Certificate  is
delivered pursuant to Section 7.02(b);  provided,  however, that if a Compliance
Certificate  is not  delivered  when due in accordance  with such Section,  then
Pricing Tier V shall apply as of the first  Business Day after the date on which
such  Compliance  Certificate  was  required  to have been  delivered  and shall
continue to apply until the first  Business Day  immediately  following the date
such Compliance Certificate is actually delivered. The Applicable Rate in effect
from the Closing Date through the first Business Day  immediately  following the
date a Compliance  Certificate is delivered  pursuant to Section 7.02(b) for the
fiscal quarter  ending  October 31, 2003 shall be determined  based upon Pricing
Tier I.

     "Approved  Fund"  means any Fund that is  administered  or managed by (a) a
Lender,  (b) an  Affiliate  of a Lender or (c) an entity or an  Affiliate  of an
entity that administers or manages a Lender.

     "Arranger"  means Banc of America  Securities  LLC, in its capacity as sole
lead arranger and sole book manager.

     "Assignment   and   Assumption"   means  an   Assignment   and   Assumption
substantially in the form of Exhibit E.

                                       2
<PAGE>

     "Attorney Costs" means and includes all fees, expenses and disbursements of
any law firm or other external counsel.

     "Attributable  Indebtedness"  means,  on any date,  (a) in  respect  of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
(b) in respect of any Synthetic Lease,  the capitalized  amount of the remaining
lease  payments under the relevant lease that would appear on a balance sheet of
such Person  prepared as of such date in accordance with GAAP if such lease were
accounted  for  as a  capital  lease,  (c)  in  respect  of  any  Securitization
Transaction of any Person,  the outstanding  principal amount of such financing,
after taking into account reserve accounts and making  appropriate  adjustments,
determined by the Administrative  Agent in its reasonable  judgment,  and (d) in
the case of any Sale and Leaseback Transaction, the present value (discounted in
accordance  with GAAP at the debt rate implied in the  applicable  lease) of the
obligations of the lessee for rental payments during the term of such lease).

     "Audited Financial Statements" means the audited consolidated balance sheet
of the Borrower and its Subsidiaries for the fiscal year ended January 31, 2003,
and the related consolidated  statements of income or operations,  shareholders'
equity and cash flows of the Borrower and its Subsidiaries for such fiscal year,
including the notes thereto.

     "Availability Period" means, with respect to the Revolving Commitments, the
period from and  including  the Closing Date to the earliest of (a) the Maturity
Date,  (b) the  date  of  termination  of the  Aggregate  Revolving  Commitments
pursuant to Section 2.06,  and (c) the date of  termination of the commitment of
each  Lender to make Loans and of the  obligation  of the L/C Issuer to make L/C
Credit Extensions pursuant to Section 9.02.

     "Bank  of  America"  means  Bank  of  America,  N.A.  and  its  successors.

     "Base  Rate"  means for any day a  fluctuating  rate per annum equal to the
higher of (a) the Federal  Funds Rate plus 1/2 of 1% or (b) the rate of interest
in  effect  for  such day as  publicly  announced  from  time to time by Bank of
America as its "prime  rate." The "prime  rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors,  and is used as a reference point
for pricing some loans,  which may be priced at, above,  or below such announced
rate.  Any change in the "prime rate"  announced  by Bank of America  shall take
effect  at  the  opening  of  business  on  the  day  specified  in  the  public
announcement of such change.

     "Base Rate Loan" means a Loan that bears interest based on the Base Rate.

     "Borrower" has the meaning specified in the introductory paragraph hereto.

     "Borrowing" means a borrowing  consisting of simultaneous Loans of the same
Type and, in the case of Eurodollar Rate Loans,  having the same Interest Period
made by each of the Lenders pursuant to Section 2.01.

     "Business Day" means any day other than a Saturday,  Sunday or other day on
which commercial banks are authorized or required to close under the Laws of, or
are in fact  closed in, the state  where the  Administrative  Agent's  Office is
located and, if such day relates to any Eurodollar Rate Loan, means any such day
on which  dealings in Dollar  deposits are conducted by and between banks in the
London interbank eurodollar market.

                                       3
<PAGE>

     "Businesses"  means, at any time, a collective  reference to the businesses
operated by the Borrower and its Subsidiaries at such time.

     "Capital Stock" means (i) in the case of a corporation, capital stock, (ii)
in the case of an association or business entity, any and all shares, interests,
participations,  rights or other  equivalents  (however  designated)  of capital
stock,  (iii)  in the  case of a  partnership,  partnership  interests  (whether
general or limited), (iv) in the case of a limited liability company, membership
interests and (v) any other interest or  participation  that confers on a Person
the right to receive a share of the profits and losses of, or  distributions  of
assets of, the issuing Person.

     "Cash Collateralize" has the meaning specified in Section 2.03(g).

     "Cash Equivalents" means, as at any date, (a) securities issued or directly
and  fully  guaranteed  or  insured  by  the  United  States  or any  agency  or
instrumentality  thereof  (provided that the full faith and credit of the United
States is pledged in support thereof) having  maturities of not more than twelve
months from the date of acquisition,  (b) Dollar  denominated  time deposits and
certificates of deposit of (i) any Lender,  (ii) any domestic commercial bank of
recognized  standing  having  capital and surplus in excess of  $500,000,000  or
(iii) any bank whose short-term commercial paper rating from S&P is at least A-1
or the  equivalent  thereof or from  Moody's  is at least P-1 or the  equivalent
thereof (any such bank being an "Approved  Bank"),  in each case with maturities
of not more than 270 days from the date of acquisition, (c) commercial paper and
variable  or fixed  rate  notes  issued by any  Approved  Bank (or by the parent
company  thereof) or any variable  rate notes issued by, or  guaranteed  by, any
domestic  corporation rated A-1 (or the equivalent  thereof) or better by S&P or
P-1 (or the  equivalent  thereof) or better by Moody's and  maturing  within six
months of the date of acquisition, (d) repurchase agreements entered into by any
Person with a bank or trust company (including any of the Lenders) or recognized
securities  dealer  having  capital  and surplus in excess of  $500,000,000  for
direct  obligations  issued by or fully guaranteed by the United States in which
such Person shall have a perfected first priority  security interest (subject to
no other Liens) and having, on the date of purchase thereof, a fair market value
of at least 100% of the amount of the repurchase  obligations,  (e) Investments,
classified in accordance with GAAP as current assets, in money market investment
programs registered under the Investment Company Act of 1940, as amended,  which
are administered by reputable financial  institutions having capital of at least
$500,000,000  and the  portfolios  of which are  limited to  Investments  of the
character  described  in the  foregoing  subdivisions  (a) through  (d), and (f)
demand  deposits,  time  deposits  and  certificates  of deposit,  with a Dollar
equivalent not in excess of $30,000,000 in the aggregate,  denominated in any of
the British Pound, German Mark, Italian Lira, Spanish Peseta,  Euro, Irish Punt,
Dutch Guilder, Swiss Franc, French Franc, Canadian Dollar, Mexican Peso, Chinese
Renminbi,  Malaysian Ringgit,  Australian Dollar,  Singapore Dollar or Brazilian
Real of any commercial bank of recognized standing reasonably  acceptable to the
Administrative Agent.

     "Change of Control" means an event or series of events by which:

          (a) any "person" or "group" (as such terms are used in Sections  13(d)
     and  14(d) of the  Securities  Exchange  Act of  1934,  but  excluding  any
     employee benefit plan of such person or its subsidiaries, and any person or
     entity  acting in its  capacity as  trustee,  agent or other  fiduciary  or
     administrator of any such plan) becomes the "beneficial  owner" (as defined
     in Rules 13d-3 and 13d-5 under the Securities  Exchange Act of 1934, except
     that a person or group shall be deemed to have  "beneficial  ownership"  of
     all Capital  Stock that such person or group has the right to acquire (such
     right, an "option right"), whether such right is exercisable immediately or
     only after the passage of time),  directly or indirectly,  of forty percent
     (40%) of the Capital Stock of the Borrower  entitled to vote for members of
     the board of directors or  equivalent  governing  body of the Borrower on a
     fully diluted basis (and taking into account all such  securities that such
     person or group has the right to acquire pursuant to any option right); or

                                       4
<PAGE>

          (b) during  any period of 24  consecutive  months,  a majority  of the
     members of the board of directors or other equivalent governing body of the
     Borrower cease to be composed of  individuals  (i) who were members of that
     board or equivalent  governing  body on the first day of such period,  (ii)
     whose election or nomination to that board or equivalent governing body was
     approved by individuals referred to in clause (i) above constituting at the
     time of such  election or  nomination  at least a majority of that board or
     equivalent  governing  body or (iii) whose  election or  nomination to that
     board or  other  equivalent  governing  body was  approved  by  individuals
     referred to in clauses (i) and (ii) above  constituting at the time of such
     election  or  nomination  at least a majority  of that board or  equivalent
     governing  body  (excluding,  in the case of both  clause  (ii) and  clause
     (iii), any individual whose initial nomination for, or assumption of office
     as, a member of that board or equivalent  governing body occurs as a result
     of an actual or  threatened  solicitation  of proxies or  consents  for the
     election or removal of one or more  directors  by any person or group other
     than a  solicitation  for the  election of one or more  directors  by or on
     behalf of the board of directors).

     "Closing Date" means the date hereof.

     "Collateral" means a collective reference to all real and personal Property
with respect to which Liens in favor of the Administrative Agent for the benefit
of itself  and the  Lenders  are  purported  to be  granted  pursuant  to and in
accordance with the terms of the Collateral Documents.

     "Collateral Documents" means a collective reference to the Pledge Agreement
and such other  security  documents as may be executed and delivered by the Loan
Parties pursuant to the terms of Section 7.14.

     "Compliance  Certificate" means a certificate  substantially in the form of
Exhibit D.

     "Consolidated Capital Expenditures" means, for any period, for the Borrower
and its  Subsidiaries  on a consolidated  basis,  all capital  expenditures,  as
determined in accordance with GAAP; provided, however, that Consolidated Capital
Expenditures  shall not  include  (a)  expenditures  made with  proceeds  of any
Involuntary  Disposition  to the extent such  expenditures  are used to purchase
Property that is useful in the business of the Borrower and its  Subsidiaries or
(b) Permitted Acquisitions.

     "Consolidated  EBITDA"  means,  for any  period  for the  Borrower  and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus the following to the extent  deducted in  calculating  such
Consolidated Net Income: (a) Consolidated  Interest Charges for such period, (b)
the provision for federal,  state, local and foreign income taxes payable by the
Borrower and its  Subsidiaries  for such period,  (c) the amount of depreciation
and  amortization  expense for such period and (d) non-cash  charges incurred in
connection  with asset  impairment  and the  write-down of goodwill  relating to
plant closings and the  disposition  of assets,  all as determined in accordance
with GAAP.

     "Consolidated Fixed Charges" means, for any period for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (i) the cash
portion of Consolidated  Interest Charges for such period plus (ii) Consolidated
Scheduled  Funded Debt Payments for such period plus (iii)  Restricted  Payments
made during such period, all as determined in accordance with GAAP.

     "Consolidated  Fixed  Charges  Coverage  Ratio"  means,  as of any  date of
determination,  the ratio of (i) Consolidated  EBITDA for the period of the four
fiscal quarters most recently ended to (ii)  Consolidated  Fixed Charges for the
period of the four fiscal quarters most recently ended.

                                       5
<PAGE>

     "Consolidated   Funded  Indebtedness"  means  Funded  Indebtedness  of  the
Borrower and its  Subsidiaries on a consolidated  basis determined in accordance
with GAAP.

     "Consolidated  Interest Charges" means, for any period for the Borrower and
its  Subsidiaries on a consolidated  basis, all interest expense of the Borrower
and its  Subsidiaries  for  such  period  determined  in  accordance  with  GAAP
(including,  without limitation, the portion of rent expense of the Borrower and
its  Subsidiaries  with  respect to such  period  under  capital  leases that is
treated as interest in accordance with GAAP).

     "Consolidated  Net Income"  means,  for any period for the Borrower and its
Subsidiaries  on a  consolidated  basis,  the net income of the Borrower and its
Subsidiaries  for such  period  as  determined  in  accordance  with  GAAP,  but
excluding for purposes of the Consolidated  Fixed Charges Coverage Ratio and the
Consolidated Total Leverage Ratio any extraordinary  gains or losses (other than
any  extraordinary  loss related to the  write-down of goodwill) and related tax
effects thereon.

     "Consolidated   Net  Worth"  means,  as  of  any  date  of   determination,
consolidated  shareholders'  equity of the Borrower and its  Subsidiaries  as of
such date determined in accordance with GAAP.

     "Consolidated Scheduled Funded Debt Payments" means, for any period for the
Borrower and its Subsidiaries on a consolidated  basis, the sum of all scheduled
payments of principal on  Consolidated  Funded  Indebtedness,  as  determined in
accordance with GAAP. For purposes of this  definition,  "scheduled  payments of
principal"  (a) shall be  determined  without  giving effect to any reduction of
such  scheduled  payments  resulting  from the  application  of any voluntary or
mandatory  prepayments made during the applicable period, (b) shall be deemed to
include the  Attributable  Indebtedness in respect of capital leases,  Synthetic
Leases  and Sale and  Leaseback  Transactions  and (c)  shall  not  include  any
voluntary  prepayments  or mandatory  prepayments  required  pursuant to Section
2.05.

     "Consolidated Total Leverage Ratio" means, as of any date of determination,
the  ratio  of (a)  Consolidated  Funded  Indebtedness  as of  such  date to (b)
Consolidated  EBITDA for the period of the four fiscal  quarters  most  recently
ended.

     "Contractual  Obligation"  means,  as to any Person,  any  provision of any
security  issued  by  such  Person  or of any  agreement,  instrument  or  other
undertaking  to  which  such  Person  is a party  or by  which  it or any of its
Property is bound.

     "Control" has the meaning specified in the definition of "Affiliate."

     "Credit  Extension" means each of the following:  (a) a Borrowing and (b) a
L/C Credit Extension.

     "Debtor  Relief Laws" means the Bankruptcy  Code of the United States,  and
all other liquidation,  conservatorship,  bankruptcy, assignment for the benefit
of   creditors,    moratorium,    rearrangement,    receivership,    insolvency,
reorganization,  or similar  debtor  relief  Laws of the United  States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.

     "Default" means any event or condition that constitutes an Event of Default
or that, with the giving of any notice,  the passage of time, or both,  would be
an Event of Default.

     "Default  Rate" means an interest  rate equal to (a) the Base Rate plus (b)
the  Applicable  Rate,  if any,  applicable  to Base Rate  Loans plus (c) 2% per
annum;  provided,  however,  that with  respect to a Eurodollar  Rate Loan,  the
Default Rate shall be an interest rate equal to the interest rate (including any


                                       6
<PAGE>

Applicable  Rate)  otherwise  applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.

     "Defaulting  Lender"  means  any  Lender  that (a) has  failed  to fund any
portion of the Loans,  participations  in L/C Obligations or  participations  in
Swing Line Loans  required to be funded by it hereunder  within one Business Day
of the date required to be funded by it hereunder,  (b) has otherwise  failed to
pay over to the  Administrative  Agent or any  other  Lender  any  other  amount
required to be paid by it  hereunder  within one  Business  Day of the date when
due,  unless  the  subject  of a good  faith  dispute,  or (c) has  been  deemed
insolvent or become the subject of a bankruptcy or insolvency proceeding.

     "Disposition"  or "Dispose"  means the sale,  transfer,  license,  lease or
other disposition (including any Sale and Leaseback Transaction) of any Property
by  the  Borrower  or  any  Subsidiary  (including  the  Capital  Stock  of  any
Subsidiary), including any sale, assignment, transfer or other disposal, with or
without recourse,  of any notes or accounts  receivable or any rights and claims
associated therewith,  but excluding (a) the sale, lease,  license,  transfer or
other  disposition  of  inventory  in the  ordinary  course of  business  of the
Borrower and its Subsidiaries,  (b) the sale, lease, license,  transfer or other
disposition  of machinery  and equipment no longer used or useful in the conduct
of business of the Borrower and its Subsidiaries,  (c) any sale, lease, license,
transfer or other  disposition  of Property by the Borrower or any Subsidiary to
any  Loan  Party,  (d)  any  Involuntary  Disposition  by  the  Borrower  or any
Subsidiary,  (e) any sale,  lease,  license,  transfer or other  disposition  of
Property by any Foreign  Subsidiary to another  Foreign  Subsidiary  and (f) any
disposition of any "margin stock" within the meaning of Regulation U.

     "Dollar" and "$" mean lawful money of the United States.

     "Domestic Subsidiary" means any Subsidiary that is organized under the laws
of any political subdivision of the United States.

     "Eligible  Assignee" means (a) a Lender;  (b) an Affiliate of a Lender; (c)
an  Approved  Fund;  and (d) any other  Person  (other  than a  natural  person)
approved  by (i) the  Administrative  Agent,  the L/C  Issuer and the Swing Line
Lender, and (ii) unless an Event of Default has occurred and is continuing,  the
Borrower  (each such  approval  not to be  unreasonably  withheld  or  delayed);
provided that  notwithstanding  the  foregoing,  "Eligible  Assignee"  shall not
include the Borrower or any of the Borrower's Affiliates or Subsidiaries.

     "Environmental  Laws" means any and all federal,  state, local, foreign and
other applicable statutes,  laws,  regulations,  ordinances,  rules,  judgments,
orders, decrees, permits, concessions,  grants, franchises, licenses, agreements
or  governmental  restrictions  relating to pollution and the  protection of the
environment  or the release of any  materials  into the  environment,  including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

     "Environmental  Liability"  means any  liability,  contingent  or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties  or  indemnities),  of the  Borrower  or any  Subsidiary  directly  or
indirectly  resulting from or based upon (a) violation of any Environmental Law,
(b)  the  generation,  use,  handling,  transportation,  storage,  treatment  or
disposal of any Hazardous  Materials,  (c) exposure to any Hazardous  Materials,
(d) the  release or  threatened  release  of any  Hazardous  Materials  into the
environment  or (e) any  contract,  agreement  or other  consensual  arrangement
pursuant to which  liability  is assumed or imposed  with  respect to any of the
foregoing.

     "ERISA" means the Employee Retirement Income Security Act of 1974.

                                       7
<PAGE>

     "ERISA Affiliate" means any trade or business (whether or not incorporated)
under common  control with the Borrower  within the meaning of Section 414(b) or
(c) of the Internal  Revenue Code (and  Sections  414(m) and (o) of the Internal
Revenue Code for purposes of provisions  relating to Section 412 of the Internal
Revenue Code).

     "ERISA Event" means (a) a Reportable  Event with respect to a Pension Plan;
(b) a  withdrawal  by the  Borrower or any ERISA  Affiliate  from a Pension Plan
subject  to  Section  4063  of  ERISA  during  a plan  year  in  which  it was a
substantial  employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of  operations  that is treated as such a withdrawal  under  Section  4062(e) of
ERISA;  (c) a  complete  or  partial  withdrawal  by the  Borrower  or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in  reorganization;  (d) the  filing of a notice of  intent  to  terminate,  the
treatment of a Plan  amendment as a termination  under Sections 4041 or 4041A of
ERISA,  or the  commencement  of  proceedings by the PBGC to terminate a Pension
Plan or Multiemployer  Plan; (e) an event or condition which constitutes grounds
under  Section 4042 of ERISA for the  termination  of, or the  appointment  of a
trustee to  administer,  any  Pension  Plan or  Multiemployer  Plan;  or (f) the
imposition  of any  liability  under  Title  IV of  ERISA,  other  than for PBGC
premiums due but not delinquent  under Section 4007 of ERISA,  upon the Borrower
or any ERISA Affiliate.

     "Eurodollar  Base Rate" means,  for any Interest Period with respect to any
Eurodollar Rate Loan:

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

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

          (c) if the rates  referenced in the preceding  clauses (a) and (b) are
     not available,  the rate per annum  (rounded  upward to the next 1/100th of
     1%) determined by the Administrative Agent as the rate of interest at which
     deposits in Dollars for delivery on the first day of such  Interest  Period
     in same day funds in the  approximate  amount of the  Eurodollar  Rate Loan
     being  made,  continued  or  converted  by Bank of America  and with a term
     equivalent  to such  Interest  Period would be offered by Bank of America's
     London Branch to major banks in the London interbank  eurodollar  market at
     their request at  approximately  4:00 p.m.  (London time) two Business Days
     prior to the first day of such Interest Period.

     "Eurodollar  Rate"  means,  for any  Interest  Period  with  respect to any
Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent to
be equal to the quotient  obtained by dividing (a) the Eurodollar  Base Rate for
such  Eurodollar  Loan for such Interest  Period by (b) one minus the Eurodollar
Reserve Percentage for such Eurodollar Loan for such Interest Period.

     "Eurodollar  Rate Loan" means a Loan that bears interest at a rate based on
the Eurodollar Rate.



                                       8
<PAGE>

     "Eurodollar  Reserve  Percentage"  means,  for any day during any  Interest
Period,  the reserve  percentage  (expressed  as a decimal,  carried out to five
decimal places) in effect on such day,  whether or not applicable to any Lender,
under  regulations  issued  from  time to time  by the FRB for  determining  the
maximum  reserve  requirement  (including any emergency,  supplemental  or other
marginal reserve  requirement) with respect to Eurocurrency  funding  (currently
referred  to as  "Eurocurrency  liabilities").  The  Eurodollar  Rate  for  each
outstanding  Eurodollar  Rate Loan  shall be  adjusted  automatically  as of the
effective date of any change in the Eurodollar Reserve Percentage.

     "Event of Default" has the meaning specified in Section 9.01.

     "Existing  Credit  Agreement"  has the meaning set forth in the Recitals to
this Agreement.

     "Existing Letters of Credit" means the letters of credit outstanding on the
Closing Date and identified on Schedule 2.03.

     "Facilities"  means, at any time, a collective  reference to the facilities
and real properties owned, leased or operated by the Borrower or any Subsidiary.

     "Federal  Funds Rate"  means,  for any day, the rate per annum equal to the
weighted  average of the rates on  overnight  federal  funds  transactions  with
members of the Federal  Reserve System arranged by federal funds brokers on such
day,  as  published  by the  Federal  Reserve  Bank  on the  Business  Day  next
succeeding  such day;  provided  that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such  transactions  on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next  succeeding  Business  Day,
the Federal Funds Rate for such day shall be the average rate  (rounded  upward,
if necessary,  to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.

     "Fee Letter"  means the letter  agreement  dated as of  September  11, 2003
among the Borrower, the Administrative Agent and the Arranger.

     "Foreign Lender" has the meaning specified in Section 11.15(a)(i).

     "Foreign   Subsidiary"   means  any  Subsidiary  that  is  not  a  Domestic
Subsidiary.

     "FRB" means the Board of  Governors  of the Federal  Reserve  System of the
United States.

     "Fund" means any Person (other than a natural  person) that is (or will be)
engaged in making,  purchasing,  holding or otherwise  investing  in  commercial
loans and similar extensions of credit in the ordinary course of its business.

     "Funded Indebtedness" means, as to any Person at a particular time, without
duplication,  all of the following,  whether or not included as  indebtedness or
liabilities in accordance with GAAP:

          (a) all obligations  for borrowed money,  whether current or long-term
     (including the Obligations) and all obligations of such Person evidenced by
     bonds, debentures, notes, loan agreements or other similar instruments;

          (b) all purchase money indebtedness or transactions;

                                       9
<PAGE>

          (c) the principal portion of all obligations under conditional sale or
     other title  retention  agreements  relating to Property  purchased by such
     Person  (other than  customary  reservations  or  retentions of title under
     agreements with suppliers entered into in the ordinary course of business);

          (d) the maximum  amount  available to be drawn under letters of credit
     (including standby and commercial),  bankers' acceptances, bank guaranties,
     surety bonds and similar instruments;

          (e) all  obligations  in respect  of the  deferred  purchase  price of
     Property or services  (other than trade  accounts  payable in the  ordinary
     course of business);

          (f) Attributable  Indebtedness in respect of capital leases, Synthetic
     Leases, Sale and Leaseback Transactions and Securitization Transactions;

          (g) all  preferred  stock  or other  equity  interests  providing  for
     mandatory redemptions,  sinking fund or like payments prior to the Maturity
     Date;

          (h) all  Funded  Indebtedness  of others  secured by (or for which the
     holder of such Funded  Indebtedness  has an existing  right,  contingent or
     otherwise, to be secured by) any Lien on, or payable out of the proceeds of
     production from, Property owned or acquired by such Person,  whether or not
     the obligations secured thereby have been assumed;

          (i) all Guarantees  with respect to Funded  Indebtedness  of the types
     specified in clauses (a) through (h) above of another Person; and

          (j) all Funded  Indebtedness  of the types  referred to in clauses (a)
     through (i) above of any  partnership  or joint venture (other than a joint
     venture that is itself a corporation or limited liability company) in which
     such  Person is a general  partner or joint  venturer,  unless  such Funded
     Indebtedness is expressly made non-recourse to such Person.

     "GAAP" means generally accepted accounting  principles in the United States
set forth in the opinions and pronouncements of the Accounting  Principles Board
and the American  Institute of Certified  Public  Accountants and statements and
pronouncements of the Financial Accounting Standards Board, consistently applied
and as in effect from time to time.

     "Governmental Authority" means any nation or government, any state or other
political   subdivision   thereof,  any  agency,   authority,   instrumentality,
regulatory body, court,  administrative  tribunal,  central bank or other entity
exercising   executive,    legislative,    judicial,   taxing,   regulatory   or
administrative powers or functions of or pertaining to government.

     "Guarantee"  means,  as to any Person,  (a) any  obligation,  contingent or
otherwise,  of such  Person  guaranteeing  or  having  the  economic  effect  of
guaranteeing  any  Indebtedness  or other  obligation  payable or performable by
another  Person  (the  "primary  obligor")  in any manner,  whether  directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply  funds for the  purchase or payment of)
such  Indebtedness  or other  obligation,  (ii) to purchase  or lease  property,
securities  or services  for the  purpose of assuring  the obligee in respect of
such  Indebtedness  or other  obligation of the payment or  performance  of such
Indebtedness or other  obligation,  (iii) to maintain  working  capital,  equity
capital or any other  financial  statement  condition  or  liquidity or level of
income or cash flow of the primary  obligor so as to enable the primary  obligor
to pay such  Indebtedness  or other  obligation,  or (iv)  entered  into for the
purpose  of  assuring  in any  other  manner  the  obligee  in  respect  of such


                                       10
<PAGE>

Indebtedness  or other  obligation of the payment or  performance  thereof or to
protect such obligee  against loss in respect  thereof (in whole or in part), or
(b) any Lien on any assets of such Person  securing  any  Indebtedness  or other
obligation  of any  other  Person,  whether  or not such  Indebtedness  or other
obligation  is assumed by such  Person.  The  amount of any  Guarantee  shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary  obligation,  or portion thereof,  in respect of which such Guarantee is
made or, if not  stated or  determinable,  the  maximum  reasonably  anticipated
liability in respect  thereof as determined by the  guaranteeing  Person in good
faith. The term "Guarantee" as a verb has a corresponding meaning.

     "Guaranty"  means  the  Guaranty  made by the  Guarantors  in  favor of the
Administrative Agent and the Lenders pursuant to Article IV.

     "Guarantors" means each Person identified as a "Guarantor" on the signature
pages hereto and each other Person that joins as a Guarantor pursuant to Section
7.12, together with their successors and permitted assigns.

     "Hazardous  Materials"  means all  explosive or  radioactive  substances or
wastes  and all  hazardous  or toxic  substances,  wastes  or other  pollutants,
including petroleum or petroleum  distillates,  asbestos or  asbestos-containing
materials,  polychlorinated  biphenyls,  radon gas, infectious or medical wastes
and all other  substances  or wastes of any  nature  regulated  pursuant  to any
Environmental Law.

     "Honor Date" has the meaning set forth in Section 2.03(c)(i).

     "Immaterial  Subsidiary"  means  any  Subsidiary  that,  as of any  date of
determination, has total assets with an aggregate fair market value of less than
$100,000.

     "Indebtedness"  means,  as to any  Person  at a  particular  time,  without
duplication,  all of the following,  whether or not included as  indebtedness or
liabilities in accordance with GAAP:

          (a) all Funded Indebtedness;

          (b) the Swap Termination Value of any Swap Contract;

          (c) all  Guarantees  with respect to outstanding  Indebtedness  of the
     types specified in clauses (a) and (b) above of any other Person; and

          (d) all  Indebtedness  of the types referred to in clauses (a) through
     (c) above of any  partnership  or joint venture (other than a joint venture
     that is itself a corporation  or limited  liability  company) in which such
     Person is a general partner or joint venturer  unless such  Indebtedness is
     expressly made non-recourse to such Person.

     "Indemnified Liabilities" has the meaning set forth in Section 11.05.

     "Indemnitees" has the meaning set forth in Section 11.05.

     "Interest  Payment Date" means (a) as to any Eurodollar Rate Loan, the last
day of each  Interest  Period  applicable to such  Eurodollar  Rate Loan and the
Maturity Date; provided,  however,  that if any Interest Period for a Eurodollar
Rate Loan  exceeds  three  months,  the  respective  dates that fall every three
months  after the  beginning  of such  Interest  Period  shall also be  Interest
Payment  Dates;  and (b) as to any Base Rate Loan and any Swing Line  Loan,  the
last Business Day of each March,  June,  September and December and the Maturity
Date.

                                       11
<PAGE>

     "Interest  Period"  means,  as to each  Eurodollar  Rate  Loan,  the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar  Rate Loan and ending on the date one,  two,  three or
six months thereafter,  as selected by the Borrower in its Loan Notice; provided
that:

          (i) any Interest  Period that would otherwise end on a day that is not
     a Business Day shall be extended to the next succeeding Business Day unless
     such  Business  Day falls in  another  calendar  month,  in which case such
     Interest Period shall end on the next preceding Business Day;

          (ii) any  Interest  Period 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 the calendar  month at the end of such  Interest
     Period; and

          (iii) no Interest Period shall extend beyond the Maturity Date.

     "Interim Financial Statements" means the unaudited  consolidated  financial
statements  of the  Borrower  and its  Subsidiaries  dated July 31, 2003 and the
related  consolidated  statements of income or operations,  shareholders' equity
and cash flows for the fiscal quarter ended on that date.

     "Internal   Revenue  Code"  means  the  Internal   Revenue  Code  of  1986.

     "Investment" means, as to any Person, any direct or indirect acquisition or
investment  by such  Person,  whether  by  means  of (a) the  purchase  or other
acquisition of Capital Stock of another Person,  (b) a loan,  advance or capital
contribution  to,  Guarantee  or  assumption  of debt of, or  purchase  or other
acquisition  of any other debt or equity  participation  or interest in, another
Person,  including  any  partnership  or joint  venture  interest  in such other
Person, or (c) an Acquisition.  For purposes of covenant compliance,  the amount
of any Investment shall be the amount actually invested,  without adjustment for
subsequent increases or decreases in the value of such Investment.

     "Involuntary  Disposition"  means any loss of, damage to or destruction of,
or any  condemnation  or other  taking for public  use of, any  Property  of the
Borrower  or any  Subsidiary.  The  Shanghai  Disposition  shall  be  deemed  an
Involuntary Disposition for purposes of this Agreement.

     "IP Rights" has the meaning set forth in Section 6.17.

     "IRS" means the United States Internal Revenue Service.

     "ISP98" has the meaning set forth in Section 2.03(h).

     "Joinder Agreement" means a joinder agreement  substantially in the form of
Exhibit F executed and delivered by a Domestic Subsidiary in accordance with the
provisions of Section 7.12.

     "Laws" means, collectively, all international,  foreign, federal, state and
local statutes, treaties, rules, guidelines, regulations,  ordinances, codes and
administrative   or  judicial   precedents   or   authorities,   including   the
interpretation or administration  thereof by any Governmental  Authority charged
with  the  enforcement,   interpretation  or  administration  thereof,  and  all
applicable   administrative  orders,   directed  duties,   requests,   licenses,
authorizations and permits of, and agreements with, any Governmental  Authority,
in each case whether or not having the force of law.

                                       12
<PAGE>

     "L/C Advance" means, with respect to each Lender,  such Lender's funding of
its participation in any L/C Borrowing in accordance with its Pro Rata Share.

     "L/C Borrowing" means an extension of credit resulting from a drawing under
any  Letter of Credit  which  has not been  reimbursed  on the date when made or
refinanced as a Borrowing of Base Rate Loans.

     "L/C Credit  Extension"  means,  with respect to any Letter of Credit,  the
issuance  thereof or  extension  of the expiry date  thereof,  or the renewal or
increase of the amount thereof.

     "L/C Issuer"  means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

     "L/C  Obligations"  means, as at any date of  determination,  the aggregate
undrawn  amount of all  outstanding  Letters of Credit plus the aggregate of all
Unreimbursed  Amounts (to the extent not  refinanced by a borrowing of Base Rate
Loans), including all L/C Borrowings.  For all purposes of this Agreement, if on
any date of  determination  a Letter of Credit has  expired by its terms but any
amount may still be drawn  thereunder by reason of the operation of Rule 3.14 of
the ISP98,  such  Letter of Credit  shall be deemed to be  "outstanding"  in the
amount so remaining available to be drawn.

     "Lender" means each Person  identified as a "Lender" on the signature pages
hereto and its successors and assigns and, as the context requires, includes the
L/C Issuer and the Swing Line Lender.

     "Lending  Office"  means,  as to any Lender,  the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire,  or such
other  office or offices as a Lender may from time to time  notify the  Borrower
and the Administrative Agent.

     "Letter of Credit" means any standby letter of credit issued  hereunder and
shall include the Existing Letters of Credit.

     "Letter of Credit  Application"  means an application and agreement for the
issuance or amendment of a letter of credit in the form from time to time in use
by the L/C Issuer.

     "Letter of Credit  Expiration Date" means the day that is thirty days prior
to the Maturity  Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).

     "Letter  of Credit  Sublimit"  means an amount  equal to the  lesser of the
Aggregate Revolving  Commitments and $15,000,000.  The Letter of Credit Sublimit
is part of, and not in addition to, the Aggregate Revolving Commitments.

     "Lien" means any mortgage,  pledge,  hypothecation,  collateral assignment,
deposit  arrangement,   encumbrance,  lien  (statutory  or  other),  charge,  or
preference,  priority or other security interest or preferential  arrangement of
any kind or nature  whatsoever  (including any  conditional  sale or other title
retention  agreement,  and any  financing  lease having  substantially  the same
economic effect as any of the foregoing).

     "Loan"  means an  extension  of credit by a Lender  to the  Borrower  under
Article II in the form of a Revolving Loan or a Swing Line Loan.

     "Loan  Documents"  means this  Agreement,  each Note, each Letter of Credit
Application,  each Joinder Agreement, the Collateral Documents, each Request for
Credit  Extension,  each Compliance  Certificate,  the Fee Letter and each other


                                       13
<PAGE>

document,  instrument or agreement from time to time executed by the Borrower or
any Subsidiary or any  Responsible  Officer  thereof and delivered in connection
with this Agreement.

     "Loan Notice" means a notice of (a) a Borrowing of Revolving  Loans,  (b) a
conversion  of Loans  from  one  Type to the  other,  or (c) a  continuation  of
Eurodollar  Rate Loans, in each case pursuant to Section  2.02(a),  which, if in
writing, shall be substantially in the form of Exhibit A.

     "Loan Parties" means, collectively, the Borrower and each Guarantor.

     "Material  Adverse  Effect"  means a  material  adverse  effect  on (a) the
condition (financial or otherwise), operations, business, assets, liabilities or
prospects  of the  Borrower  and its  Subsidiaries  taken as a whole  that could
reasonably  be  expected  to  result  in a  Default  or (b) the  ability  of the
Administrative Agent and the Lenders to exercise their rights and remedies under
the Loan Documents in the event of a Default.

     "Maturity Date" means November 20, 2006.

     "Moody's" means Moody's Investors Service,  Inc. and any successor thereto.

     "Multiemployer  Plan" means any employee benefit plan of the type described
in Section  4001(a)(3)  of ERISA,  to which the Borrower or any ERISA  Affiliate
makes or is obligated to make  contributions,  or during the preceding five plan
years, has made or been obligated to make contributions.

     "Note" or "Notes"  means the  Revolving  Notes  and/or the Swing Line Note,
individually or collectively, as appropriate.

     "Obligations" means all advances to, and debts,  liabilities,  obligations,
covenants  and  duties of, any Loan Party  arising  under any Loan  Document  or
otherwise  with  respect  to any Loan or Letter  of  Credit,  whether  direct or
indirect (including those acquired by assumption),  absolute or contingent,  due
or to become due, now existing or hereafter  arising and including  interest and
fees that  accrue  after the  commencement  by or against  any Loan Party of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding,  regardless of whether such interest and fees are allowed  claims in
such  proceeding.  The  foregoing  shall also include any Swap  Contract and any
Treasury Management Agreement between any Loan Party and any Lender or Affiliate
of a Lender.

     "Organization  Documents"  means, (a) with respect to any corporation,  the
certificate  or  articles  of  incorporation  and the bylaws (or  equivalent  or
comparable  constitutive  documents with respect to any non-U.S.  jurisdiction);
(b) with respect to any limited liability  company,  the certificate or articles
of formation or organization  and operating  agreement;  and (c) with respect to
any  partnership,  joint venture,  trust or other form of business  entity,  the
partnership,  joint  venture  or other  applicable  agreement  of  formation  or
organization  and any  agreement,  instrument,  filing  or notice  with  respect
thereto  filed  in  connection  with  its  formation  or  organization  with the
applicable  Governmental  Authority  in the  jurisdiction  of its  formation  or
organization  and, if  applicable,  any  certificate or articles of formation or
organization of such entity.

     "Outstanding  Amount" means (i) with respect to any Loans on any date,  the
aggregate  outstanding  principal  amount  thereof  after  giving  effect to any
borrowings and  prepayments  or repayments of any Loans  occurring on such date;
and (ii) with respect to any L/C Obligations on any date, the amount of such L/C
Obligations  on such  date  after  giving  effect  to any L/C  Credit  Extension
occurring on such date and any other changes in the aggregate  amount of the L/C


                                       14
<PAGE>

Obligations  as of such date,  including  as a result of any  reimbursements  of
outstanding unpaid drawings under any Letters of Credit or any reductions in the
maximum  amount  available  for drawing under Letters of Credit taking effect on
such date.

     "Participant" has the meaning specified in Section 11.07(d).

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

     "Pension Plan" means any "employee  pension  benefit plan" (as such term is
defined in Section  3(2) of ERISA),  other than a  Multiemployer  Plan,  that is
subject to Title IV of ERISA and is sponsored or  maintained  by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate  contributes
or has an obligation  to  contribute,  or in the case of a multiple  employer or
other plan described in Section 4064(a) of ERISA, has made  contributions at any
time during the immediately preceding five plan years.

     "Permitted  Acquisitions" means Investments consisting of an Acquisition by
the Borrower or any Subsidiary,  provided that (i) the Property acquired (or the
Property of the Person  acquired) in such  Acquisition  is used or useful in the
same or a similar  line of business as the Borrower  and its  Subsidiaries  were
engaged in on the  Closing  Date (or any  reasonable  extensions  or  expansions
thereof), (ii) the Administrative Agent shall have received all items in respect
of the Capital  Stock or Property  acquired in such  Acquisition  required to be
delivered by the terms of Section 7.12 and/or Section 7.14, (iii) in the case of
an  Acquisition of the Capital Stock of another  Person,  the board of directors
(or other  comparable  governing  body) of such  other  Person  shall  have duly
approved  such  Acquisition,  (iv) the  Borrower  shall  have  delivered  to the
Administrative Agent a Pro Forma Compliance Certificate demonstrating that, upon
giving effect to such  Acquisition on a Pro Forma Basis,  the Loan Parties would
be in compliance  with the  financial  covenants set forth in Section 8.11 as of
the most recent fiscal  quarter for which the Borrower has  delivered  financial
statements  pursuant  to Section  7.01(a) or (b),  (v) the  representations  and
warranties  made by the Loan  Parties  in each Loan  Document  shall be true and
correct  in all  material  respects  at and as if  made  as of the  date of such
Acquisition   (after   giving  effect   thereto)   except  to  the  extent  such
representations and warranties expressly relate to an earlier date, (vi) if such
transaction  involves the purchase of an interest in a  partnership  between the
Borrower (or a Subsidiary) as a general partner and entities  unaffiliated  with
the Borrower or such Subsidiary as the other partners, such transaction shall be
effected by having such equity interest  acquired by a corporate holding company
directly or indirectly  wholly-owned  by the Borrower  newly formed for the sole
purpose of effecting such  transaction,  (vii) the aggregate cash  consideration
(including  any  assumption  of  Indebtedness)  paid  by  the  Borrower  or  any
Subsidiary for any Acquisition (or any series of related Acquisitions) shall not
exceed  $25,000,000 and (viii) the aggregate cash  consideration  (including any
assumption of Indebtedness)  paid by the Borrower or any Subsidiary for all such
Acquisitions  occurring in any fiscal year shall not exceed $50,000,000 plus the
unused  amount  available  for  Acquisitions  under this  clause  (viii) for the
immediately  preceding  fiscal year (excluding any carry forward  available from
any prior  fiscal  year and  provided  that with  respect  to any  fiscal  year,
Acquisitions  made during such fiscal year shall be deemed to be made first with
respect to the applicable  limitation for such fiscal year and then with respect
to any carry-forward from the immediately preceding fiscal year).

     "Permitted Investments" means, at any time, Investments by the Borrower and
its  Subsidiaries  permitted  to exist at such  time  pursuant  to the  terms of
Section 8.02.

     "Permitted  Liens" means, at any time,  Liens in respect of Property of the
Borrower and its  Subsidiaries  permitted to exist at such time  pursuant to the
terms of Section 8.01.

     "Person" means any natural person, corporation,  limited liability company,
trust, joint venture, association, company, partnership,  Governmental Authority
or other entity.

                                       15
<PAGE>

     "Plan"  means any  "employee  benefit  plan" (as such  term is  defined  in
Section 3(3) of ERISA)  established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Internal  Revenue Code or Title IV of
ERISA, any ERISA Affiliate.

     "Pledge  Agreement" means the pledge agreement dated as of the Closing Date
executed in favor of the  Administrative  Agent by each of the Loan Parties,  as
amended, modified and supplemented from time to time.

     "Pro  Forma  Basis"  means,  for  purposes  of  calculating  the  financial
covenants in Section 8.11  (including for purposes of determining the Applicable
Rate), that any Transaction shall be deemed to have occurred as of the first day
of the  most  recent  four  fiscal  quarter  period  preceding  the date of such
Transaction for which the Borrower has delivered  financial  statements pursuant
to Section 7.01(a) or (b). In connection with the foregoing, (a) with respect to
any Disposition or Involuntary  Disposition,  (i) income statement and cash flow
statement  items  (whether  positive or negative)  attributable  to the Property
disposed  of shall be excluded  to the extent  relating to any period  occurring
prior to the date of such  Transaction  and (ii)  Indebtedness  which is retired
shall be  excluded  and  deemed to have been  retired as of the first day of the
applicable period and (b) with respect to any Acquisition,  (i) income statement
items  attributable to the Person or Property  acquired shall be included to the
extent relating to any period  applicable in such calculations to the extent (A)
such items are not  otherwise  included in such income  statement  items for the
Borrower and its  Subsidiaries in accordance with GAAP or in accordance with any
defined  terms set forth in  Section  1.1 and (B) such  items are  supported  by
financial  statements  or  other  information  reasonably  satisfactory  to  the
Administrative  Agent  and (ii) any  Indebtedness  incurred  or  assumed  by the
Borrower  or any  Subsidiary  (including  the Person or  Property  acquired)  in
connection with such  Transaction and any Indebtedness of the Person or Property
acquired which is not retired in connection  with such  Transaction (A) shall be
deemed to have been  incurred as of the first day of the  applicable  period and
(B) if such  Indebtedness  has a floating or formula rate, shall have an implied
rate of interest  for the  applicable  period for  purposes  of this  definition
determined  by utilizing the rate which is or would be in effect with respect to
such  Indebtedness  as at the relevant  date of  determination.  As used herein,
"Transaction" means (i) any Disposition, (ii) any Involuntary Disposition, (iii)
any  Acquisition,  (iv) any  Restricted  Payment and (v) the  incurrence  of any
Subordinated Indebtedness.

     "Pro Forma  Compliance  Certificate"  means a certificate  of a Responsible
Officer of the  Borrower  containing  reasonably  detailed  calculations  of the
financial  covenants  set forth in  Section  8.11 as of the most  recent  fiscal
quarter end for which the Borrower has delivered  financial  statements pursuant
to Section 7.01(a) or (b) after giving effect to the applicable transaction on a
Pro Forma Basis.

     "Pro Rata Share"  means,  as to each  Lender,  a fraction  (expressed  as a
percentage,  carried out to the ninth decimal place),  the numerator of which is
the  amount  of the  Revolving  Commitment  of such  Lender at such time and the
denominator  of which is the amount of the Aggregate  Revolving  Commitments  at
such time;  provided  that if the  commitment  of each Lender to make  Revolving
Loans and the  obligation of the L/C Issuer to make L/C Credit  Extensions  have
been terminated pursuant to Section 9.02, then the Pro Rata Share of each Lender
shall be determined based on the Pro Rata Share of such Lender immediately prior
to such  termination and after giving effect to any subsequent  assignments made
pursuant to the terms  hereof.  The initial Pro Rata Share of each Lender is set
forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.

     "Property" means any interest of any kind in any property or asset, whether
real, personal or mixed, or tangible or intangible.

                                       16
<PAGE>

     "Quoted Rate" means,  with respect to any Quoted Rate  Swingline  Loan, the
fixed or floating  percentage rate per annum, if any,  offered by the Swing Line
Lender and accepted by the Borrower in accordance  with the  provisions  hereof;
provided  that from the date that any Lender funds a  participation  interest in
such Quoted Rate Swingline  Loan, the Quoted Rate for such Quoted Rate Swingline
Loan shall be a rate equal to the Base Rate plus the Applicable Margin.

     "Quoted Rate Swing Line Loan" means any Swing Line Loan that bears interest
at the Quoted Rate.

     "Register" has the meaning set forth in Section 11.07(c).

     "Reportable  Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the thirty-day notice period has been waived.

     "Request  for Credit  Extension"  means (a) with  respect  to a  Borrowing,
conversion or continuation  of Loans, a Loan Notice,  (b) with respect to an L/C
Credit  Extension,  a Letter of Credit  Application,  and (c) with  respect to a
Swing Line Loan, a Swing Line Loan Notice.

     "Required  Lenders"  means,  at any time,  Lenders holding in the aggregate
more than fifty  percent (50%) of (a) the  Revolving  Commitments  or (b) if the
Revolving   Commitments  have  been  terminated,   the  outstanding  Loans,  L/C
Obligations,   Swing  Line  Loans  and  participations  therein.  The  Revolving
Commitment of any  Defaulting  Lender shall be excluded for purposes of making a
determination of Required Lenders.

     "Responsible Officer" means the chief executive officer,  president,  chief
financial  officer,  or  treasurer  of a  Loan  Party.  Any  document  delivered
hereunder  that is signed by a  Responsible  Officer  of a Loan  Party  shall be
conclusively  presumed  to have  been  authorized  by all  necessary  corporate,
partnership  and/or  other  action  on the  part of such  Loan  Party  and  such
Responsible  Officer shall be  conclusively  presumed to have acted on behalf of
such Loan Party.

     "Restricted  Payment" means any dividend or other distribution  (whether in
cash,  securities  or other  property)  with respect to any Capital Stock of the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property),  including  any sinking  fund or similar  deposit,  on account of the
purchase, redemption,  retirement,  acquisition,  cancellation or termination of
any such Capital  Stock or of any option,  warrant or other right to acquire any
such  Capital  Stock,  or any setting  aside of funds or Property for any of the
foregoing.

     "Revolving Commitment" means, as to each Lender, its obligation to (a) make
Revolving  Loans  to  the  Borrower  pursuant  to  Section  2.01,  (b)  purchase
participations in L/C Obligations, and (c) purchase participations in Swing Line
Loans,  in an  aggregate  principal  amount at any one time  outstanding  not to
exceed the amount set forth  opposite  such Lender's name on Schedule 2.01 or in
the  Assignment  and  Assumption  pursuant to which such Lender  becomes a party
hereto,  as  applicable,  as such  amount may be  adjusted  from time to time in
accordance with this Agreement.

     "Revolving Loan" has the meaning specified in Section 2.01(a).

     "Revolving Note" has the meaning specified in Section 2.11(a).

     "S&P"  means  Standard  &  Poor's  Ratings  Services,  a  division  of  The
McGraw-Hill Companies, Inc. and any successor thereto.

                                       17
<PAGE>

     "Sale and Leaseback Transaction" means, with respect to the Borrower or any
Subsidiary, any arrangement, directly or indirectly, with any Person whereby the
Borrower  or such  Subsidiary  shall  sell or  transfer  any  property,  real or
personal,  used or  useful  in its  business,  whether  now  owned or  hereafter
acquired,  and thereafter  rent or lease such property or other property that it
intends to use for  substantially  the same  purpose or purposes as the property
being sold or transferred.

     "SEC" means the Securities  and Exchange  Commission,  or any  Governmental
Authority succeeding to any of its principal functions.

     "Securitization  Transaction" means any financing  transaction or series of
financing transactions  (including factoring arrangements) pursuant to which the
Borrower or any Subsidiary may sell,  convey or otherwise  transfer,  or grant a
security interest in, accounts,  payments,  receivables,  rights to future lease
payments  or  residuals  or  similar  rights to  payment  to a  special  purpose
subsidiary or affiliate of any Person.

     "Shanghai" means Shanghai C&D Battery Company,  LTD, 100, Anjian Lu, Beicai
Chuansha, Pudong New Area, Shanghai, 201204.

     "Shanghai  Disposition"  means  any loss of, or any  condemnation  or other
taking for public use of, the Property currently occupied and owned by Shanghai.

     "Subordinated  Indebtedness"  means any Indebtedness of the Borrower or any
Subsidiary  that by its terms is expressly  subordinated to the Obligations in a
manner and to an extent satisfactory to the Required Lenders.

     "Subsidiary" of a Person means a corporation,  partnership,  joint venture,
limited  liability  company or other business  entity of which a majority of the
shares of Voting Stock are at the time beneficially  owned, or the management of
which is  otherwise  controlled,  directly,  or  indirectly  through one or more
intermediaries,  or  both,  by such  Person.  Unless  otherwise  specified,  all
references  herein  to a  "Subsidiary"  or to  "Subsidiaries"  shall  refer to a
Subsidiary or Subsidiaries of the Borrower.

     "Swap Contract" means (a) any and all rate swap transactions,  basis swaps,
credit  derivative  transactions,  forward rate  transactions,  commodity swaps,
commodity options, forward commodity contracts,  equity or equity index swaps or
options,  bond or bond price or bond index  swaps or options or forward  bond or
forward bond price or forward bond index  transactions,  interest  rate options,
forward foreign exchange  transactions,  cap transactions,  floor  transactions,
collar  transactions,  currency  swap  transactions,  cross-currency  rate  swap
transactions,   currency   options,   spot  contracts,   or  any  other  similar
transactions or any  combination of any of the foregoing  (including any options
to enter  into any of the  foregoing),  whether or not any such  transaction  is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related  confirmations,  which are subject to the terms and
conditions  of, or governed  by, any form of master  agreement  published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange  Master  Agreement,  or any other  master  agreement  (any such  master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.

     "Swap  Termination  Value"  means,  in  respect  of any  one or  more  Swap
Contracts,  after  taking into  account  the effect of any  legally  enforceable
netting agreement relating to such Swap Contracts,  (a) for any date on or after
the date such Swap  Contracts  have been  closed  out and  termination  value(s)
determined in accordance  therewith,  such termination  value(s) and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized


                                       18
<PAGE>

dealer in such Swap Contracts  (which may include a Lender or any Affiliate of a
Lender).

     "Swing Line  Lender"  means Bank of America in its  capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.

     "Swing Line Loan" has the meaning specified in Section 2.04(a).

     "Swing Line Loan Notice"  means a notice of a Borrowing of Swing Line Loans
pursuant to Section 2.04(b), which, if in writing, shall be substantially in the
form of Exhibit B.

     "Swing Line Note" has the meaning specified in Section 2.11(a).

     "Swing  Line  Sublimit"  means  an  amount  equal  to  the  lesser  of  (a)
$10,000,000 or (b) the Aggregate Revolving Commitments.  The Swing Line Sublimit
is part of, and not in addition to, the Aggregate Revolving Commitments.

     "Synthetic Lease" means any synthetic lease, tax retention operating lease,
off-balance  sheet  loan or  similar  off-balance  sheet  financing  arrangement
whereby the  arrangement  is  considered  borrowed  money  indebtedness  for tax
purposes but is classified as an operating lease or does not otherwise appear on
a balance sheet under GAAP.

     "Threshold Amount" means $2,500,000.

     "Total Revolving  Outstandings"  means the aggregate  Outstanding Amount of
all Revolving Loans, all Swing Line Loans and all L/C Obligations.

     "Treasury Management Agreements" means any and all agreements governing the
provision  of  treasury  or  cash  management   services,   including,   without
limitation,  deposit accounts,  funds transfer,  automated  clearinghouse,  zero
balance  accounts,   returned  check  concentration,   controlled  disbursement,
lockbox, account reconciliation and reporting and trade finance services.

     "Type" means,  with respect to any Loan,  its character as a Base Rate Loan
or a Eurodollar Rate Loan.

     "Unfunded  Pension  Liability" means the excess of a Pension Plan's benefit
liabilities  under Section  4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets,  all determined  using the interest rate applicable under
Internal Revenue Code Section  412(b)(5)(A)  and the other  assumptions used for
funding that Pension Plan  pursuant to Section 412 of the Internal  Revenue Code
for the applicable plan year.

     "United States" and "U.S." mean the United States of America.


     "Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).

     "Voting Stock" means,  with respect to any Person,  Capital Stock issued by
such   Person  the  holders  of  which  are   ordinarily,   in  the  absence  of
contingencies,  entitled  to vote for the  election  of  directors  (or  persons
performing similar  functions) of such Person,  even though the right so to vote
has been suspended by the happening of such a contingency.



                                       19
<PAGE>

     "Wholly Owned  Subsidiary"  means any Person 100% of whose Capital Stock is
at the time owned by the Borrower  directly or indirectly  through other Persons
100% of whose Capital Stock is at the time owned, directly or indirectly, by the
Borrower.

     1.02 Other Interpretive Provisions.

     With  reference  to this  Agreement  and each other Loan  Document,  unless
otherwise specified herein or in such other Loan Document:

          (a) The  meanings  of  defined  terms are  equally  applicable  to the
     singular and plural forms of the defined terms.

          (b) (i) The words  "herein,"  "hereto,"  "hereof" and  "hereunder" and
     words of similar  import when used in any Loan Document shall refer to such
     Loan Document as a whole and not to any particular provision thereof.

               (ii) Article, Section, Exhibit and Schedule references are to the
          Loan Document in which such reference appears.

               (iii)  The  term  "including"  is  by  way  of  example  and  not
          limitation.

               (iv)  The  term  "documents"  includes  any and all  instruments,
          documents,  agreements,   certificates,  notices,  reports,  financial
          statements and other writings, however evidenced,  whether in physical
          or electronic form.

          (c) In the  computation  of periods of time from a specified date to a
     later specified date, the word "from" means "from and including;" the words
     "to" and "until" each mean "to but excluding;" and the word "through" means
     "to and including."

          (d)  Section  headings  herein  and in the other  Loan  Documents  are
     included  for  convenience  of  reference  only and  shall not  affect  the
     interpretation of this Agreement or any other Loan Document.

          1.03 Accounting Terms.

     (a) Except as otherwise  specifically  prescribed  herein,  all  accounting
terms not  specifically  or  completely  defined  herein  shall be  construed in
conformity  with, and all financial data (including  financial  ratios and other
financial  calculations)  required to be  submitted  pursuant to this  Agreement
shall be prepared in conformity with, GAAP applied on a consistent  basis, as in
effect  from  time to time,  applied  in a manner  consistent  with that used in
preparing the most recent Audited Financial Statements;  provided, however, that
calculations  of  Attributable  Indebtedness  under any  Synthetic  Lease or the
implied interest  component of any Synthetic Lease shall be made by the Borrower
in accordance with accepted  financial practice and consistent with the terms of
such Synthetic Lease.

     (b) Together with each Compliance Certificate,  the Borrower will provide a
written summary of any changes in GAAP that materially impact the calculation of
the  financial   covenants  in  Section  8.11   contained  in  such   Compliance
Certificate.  If at any time any change in GAAP would affect the  computation of
any financial  ratio or requirement  set forth in any Loan Document,  and either
the Borrower or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrower  shall  negotiate in good faith to amend such ratio
or requirement  to preserve the original  intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders);  provided that, until


                                       20
<PAGE>

so  amended,  (i) such ratio or  requirement  shall  continue  to be computed in
accordance  with GAAP prior to such change  therein and (ii) the Borrower  shall
provide to the  Administrative  Agent and the Lenders  financial  statements and
other  documents  required  under  this  Agreement  or as  reasonably  requested
hereunder setting forth a reconciliation  between  calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

     (c)  Notwithstanding  the above,  the parties hereto  acknowledge and agree
that all calculations of the financial  covenants in Section 8.11 (including for
purposes of determining compliance with such financial covenants and determining
the Applicable Rate) shall be made on a Pro Forma Basis.

     1.04 Rounding.

     Any financial ratios required to be maintained by the Borrower  pursuant to
this Agreement shall be calculated by dividing the appropriate  component by the
other component, carrying the result to one place more than the number of places
by which such ratio is  expressed  herein and  rounding the result up or down to
the nearest number (with a rounding-up if there is no nearest number).

     1.05 References to Agreements and Laws.

     Unless otherwise  expressly provided herein, (a) references to Organization
Documents,  agreements  (including  the Loan  Documents)  and other  contractual
instruments shall be deemed to include all subsequent amendments,  restatements,
extensions,  supplements and other modifications thereto, but only to the extent
that  such   amendments,   restatements,   extensions,   supplements  and  other
modifications are not prohibited by any Loan Document; and (b) references to any
Law  shall  include  all  statutory  and  regulatory  provisions  consolidating,
amending, replacing, supplementing or interpreting such Law.

     1.06 Times of Day.

     Unless otherwise specified,  all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).

     1.07 Letter of Credit Amounts.

     Unless otherwise specified, all references herein to the amount of a Letter
of Credit at any time shall be deemed to mean the  maximum  face  amount of such
Letter of Credit after giving effect to all increases  thereof  contemplated  by
such Letter of Credit or the Letter of Credit Application  therefor,  whether or
not such maximum face amount is in effect at such time.

                                   ARTICLE II

                      THE COMMITMENTS AND CREDIT EXTENSIONS

     2.01 Revolving Loans.

     (a)  Subject to the terms and  conditions  set forth  herein,  each  Lender
severally  agrees to make  loans  (each such loan,  a  "Revolving  Loan") to the
Borrower  in  Dollars  from  time  to  time  on  any  Business  Day  during  the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of such Lender's Revolving Commitment;  provided, however, that after
giving  effect to any  Borrowing of  Revolving  Loans,  (i) the Total  Revolving
Outstandings shall not exceed the Aggregate  Revolving  Commitments and (ii) the
aggregate  Outstanding  Amount of the Revolving  Loans of any Lender,  plus such


                                       21
<PAGE>

Lender's Pro Rata Share of the Outstanding  Amount of all L/C Obligations,  plus
such Lender's Pro Rata Share of the  Outstanding  Amount of all Swing Line Loans
shall not exceed such Lender's Revolving  Commitment.  Within the limits of each
Lender's  Revolving  Commitment,  and subject to the other terms and  conditions
hereof,  the Borrower may borrow under this Section  2.01,  prepay under Section
2.05,  and reborrow  under this Section 2.01.  Revolving  Loans may be Base Rate
Loans or Eurodollar Rate Loans, as further provided herein,  provided,  however,
all Borrowings made on the Closing Date shall be made as Base Rate Loans.

     (b) The Borrower had a $20 million revolving loan (the "Existing  Revolving
Loan") outstanding under the Existing Credit Agreement  immediately prior to the
Closing  Date  bearing  interest  at the  "Eurodollar  Rate" (as  defined in the
Existing Credit  Agreement) for an "Interest Period" (as defined in the Existing
Credit  Agreement)  that  expires on January  12, 2004 (the  "Existing  Interest
Period").  The  parties  hereto  agree  that,  notwithstanding  anything in this
Agreement or any other Loan  Document to the  contrary,  on the Closing Date the
Existing  Revolving Loan (i) shall be rolled into,  and deemed made under,  this
Agreement  and (ii) shall  continue  to bear  interest  at the rate of  interest
applicable under the Existing Credit Agreement  immediately prior to the Closing
Date until the expiration of the Existing Interest Period.

     (c) The Borrower may at any time and from time to time,  upon prior written
notice by the  Borrower to the  Administrative  Agent,  increase  the  Aggregate
Revolving  Commitments  by up  to  THIRTY  MILLION  DOLLARS  ($30,000,000)  with
additional  Revolving  Commitments  from any  existing  Lender or new  Revolving
Commitments  from any other Person  selected by the Borrower and approved by the
Administrative Agent; provided that:

          (i) any such  increase  shall be in a minimum  principal  amount of $5
     million and in integral multiples of $5 million in excess thereof;

          (ii) no Default shall be continuing at the time of any such increase;

          (iii) no existing Lender shall be under any obligation to increase its
     Revolving  Commitment  and  any  such  decision  whether  to  increase  its
     Revolving   Commitment   shall  be  in  such  Lender's  sole  and  absolute
     discretion; and

          (iv) any new  Lender  shall  join this  Agreement  by  executing  such
     joinder documents reasonably required by the Administrative Agent.

     In  connection   with  any  such   increase  in  the  Aggregate   Revolving
     Commitments,  Schedule 2.01 shall be revised by the Administrative Agent to
     reflect the new Revolving Commitments and distributed to the Lenders.

     2.02 Borrowings, Conversions and Continuations of Loans.

     (a) Each  Borrowing,  each  conversion of Loans from one Type to the other,
and each continuation of Eurodollar Rate Loans shall be made upon the Borrower's
irrevocable notice to the Administrative Agent, which may be given by telephone.
Each such notice must be  received  by the  Administrative  Agent not later than
11:00 a.m. (i) three  Business Days prior to the requested date of any Borrowing
of,  conversion to or continuation of Eurodollar Rate Loans or of any conversion
of Eurodollar  Rate Loans to Base Rate Loans,  and (ii) on the requested date of
any  Borrowing  of Base Rate  Loans.  Each  telephonic  notice  by the  Borrower
pursuant to this Section  2.02(b) must be confirmed  promptly by delivery to the
Administrative  Agent of a written  Loan  Notice,  appropriately  completed  and
signed by a Responsible  Officer of the Borrower.  Each Borrowing of, conversion
to or continuation  of Eurodollar  Rate Loans shall be in a principal  amount of
$2,000,000 or a whole multiple of $50,000 in excess thereof.  Except as provided


                                       22
<PAGE>

in Sections  2.03(c) and 2.04(c),  each  Borrowing of or conversion to Base Rate
Loans shall be in a principal  amount of $500,000 or a whole multiple of $50,000
in excess  thereof.  Each Loan Notice  (whether  telephonic  or  written)  shall
specify (i) whether the  Borrower is  requesting a  Borrowing,  a conversion  of
Loans from one Type to the other,  or a continuation  of Eurodollar  Rate Loans,
(ii) the requested date of the  Borrowing,  conversion or  continuation,  as the
case may be (which shall be a Business Day), (iii) the principal amount of Loans
to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or
to which existing Loans are to be converted, and (v) if applicable, the duration
of the Interest Period with respect thereto.  If the Borrower fails to specify a
Type of Loan in a Loan Notice or if the Borrower  fails to give a timely  notice
requesting a conversion or continuation, then the applicable Loans shall be made
as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate
Loans  shall be  effective  as of the last day of the  Interest  Period  then in
effect with respect to the  applicable  Eurodollar  Rate Loans.  If the Borrower
requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans
in any such Loan  Notice,  but fails to specify an Interest  Period,  it will be
deemed to have specified an Interest Period of one month.

     (b)  Following  receipt of a Loan Notice,  the  Administrative  Agent shall
promptly  notify  each  Lender  of the  amount  of its  Pro  Rata  Share  of the
applicable  Loans,  and if no timely notice of a conversion or  continuation  is
provided by the Borrower,  the Administrative  Agent shall notify each Lender of
the details of any  automatic  conversion  to Base Rate Loans  described  in the
preceding  subsection.  In the case of a  Borrowing,  each Lender shall make the
amount  of  its  Loan  available  to the  Administrative  Agent  in  immediately
available funds at the Administrative Agent's Office not later than 1:00 p.m. on
the Business Day specified in the applicable Loan Notice.  Upon  satisfaction of
the  applicable  conditions set forth in Section 5.02 (and, if such Borrowing is
the initial Credit Extension, Section 5.01), the Administrative Agent shall make
all funds so received available to the Borrower in like funds as received by the
Administrative  Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire  transfer of
such  funds,  in each case in  accordance  with  instructions  provided  to (and
reasonably  acceptable to) the Administrative  Agent by the Borrower;  provided,
however,  that if, on the date a Borrowing of Revolving  Loans,  there are Swing
Line Loans or L/C  Borrowings  outstanding,  then the proceeds of such Borrowing
shall be  applied,  first,  to the  payment in full of any such L/C  Borrowings,
second,  to the payment in full of any such Swing Line Loans,  and third, to the
Borrower as provided above.

     (c) Except as otherwise  provided  herein,  a  Eurodollar  Rate Loan may be
continued  or  converted  only on the last day of the  Interest  Period for such
Eurodollar  Rate  Loan.  During  the  existence  of a  Default,  no Loans may be
requested  as,  converted to or continued as  Eurodollar  Rate Loans without the
consent of the Required Lenders, and the Required Lenders may demand that any or
all of the then  outstanding  Eurodollar Rate Loans be converted  immediately to
Base Rate Loans.

     (d) The  Administrative  Agent shall  promptly  notify the Borrower and the
Lenders of the interest rate  applicable to any Interest  Period for  Eurodollar
Rate Loans upon  determination  of such interest rate. The  determination of the
Eurodollar Rate by the  Administrative  Agent shall be conclusive in the absence
of  manifest  error.  At any time  that Base Rate  Loans  are  outstanding,  the
Administrative  Agent shall notify the Borrower and the Lenders of any change in
Bank of  America's  prime  rate  used in  determining  the  Base  Rate  promptly
following the public announcement of such change.

     (e) After giving effect to all  Borrowings,  all  conversions of Loans from
one Type to the other,  and all  continuations  of Loans as the same Type, there
shall not be more than ten Interest  Periods in effect with respect to Revolving
Loans.

     2.03 Letters of Credit.

                                       23
<PAGE>

         (a) The Letter of Credit Commitment.

          (i) Subject to the terms and conditions set forth herein,  (A) the L/C
     Issuer  agrees,  in reliance  upon the  agreements of the other Lenders set
     forth in this  Section  2.03,  (1) from  time to time on any  Business  Day
     during  the  period  from the  Closing  Date  until  the  Letter  of Credit
     Expiration  Date,  to issue Letters of Credit in Dollars for the account of
     the Borrower or any of its  Subsidiaries,  and to amend or renew Letters of
     Credit  previously  issued by it, in accordance  with subsection (b) below,
     and (2) to honor  drafts  under the Letters of Credit;  and (B) the Lenders
     severally  agree to participate in Letters of Credit issued for the account
     of the Borrower or any of its  Subsidiaries;  provided  that the L/C Issuer
     shall not be obligated to make any L/C Credit Extension with respect to any
     Letter of Credit,  and no Lender shall be obligated to  participate  in any
     Letter of Credit,  if as of the date of and after giving effect to such L/C
     Credit  Extension,  (x) the Total Revolving  Outstandings  would exceed the
     Aggregate Revolving  Commitments,  (y) the aggregate  Outstanding Amount of
     the Revolving Loans of any Lender, plus such Lender's Pro Rata Share of the
     Outstanding  Amount of all L/C  Obligations,  plus such  Lender's  Pro Rata
     Share of the  Outstanding  Amount of all Swing Line Loans would exceed such
     Lender's  Revolving  Commitment  or (z) the  Outstanding  Amount of the L/C
     Obligations  would  exceed  the  Letter  of  Credit  Sublimit.  Within  the
     foregoing  limits,  and  subject to the terms and  conditions  hereof,  the
     Borrower's  ability to obtain  Letters of Credit shall be fully  revolving,
     and  accordingly  the Borrower  may,  during the foregoing  period,  obtain
     Letters of Credit to replace  Letters of Credit  that have  expired or that
     have been drawn upon and reimbursed.  All Existing  Letters of Credit shall
     be deemed  to have  been  issued  pursuant  hereto,  and from and after the
     Closing Date shall be subject to and  governed by the terms and  conditions
     hereof.

          (ii) The L/C Issuer shall be under no  obligation  to issue any Letter
     of Credit if:

               (A) any order,  judgment or decree of any Governmental  Authority
          or arbitrator shall by its terms purport to enjoin or restrain the L/C
          Issuer from issuing such Letter of Credit,  or any Law  applicable  to
          the L/C Issuer or any request or directive  (whether or not having the
          force of law) from any Governmental  Authority with  jurisdiction over
          the L/C Issuer shall prohibit,  or request that the L/C Issuer refrain
          from,  the  issuance of letters of credit  generally or such Letter of
          Credit in  particular or shall impose upon the L/C Issuer with respect
          to  such  Letter  of  Credit  any  restriction,   reserve  or  capital
          requirement  (for  which the L/C Issuer is not  otherwise  compensated
          hereunder) not in effect on the Closing Date, or shall impose upon the
          L/C  Issuer  any  unreimbursed  loss,  cost or  expense  which was not
          applicable  on the Closing Date and which the L/C Issuer in good faith
          deems material to it;

               (B)  subject to  Section  2.03(b)(iii),  the expiry  date of such
          requested  Letter of Credit would occur more than twelve  months after
          the date of issuance or last renewal, unless the Required Lenders have
          approved such expiry date;

               (C) the  expiry  date of such  requested  Letter of Credit  would
          occur  after the  Letter of Credit  Expiration  Date,  unless  all the
          Lenders have approved such expiry date;

               (D) the  issuance of such Letter of Credit  would  violate one or
          more policies of the L/C Issuer applicable to borrowers generally; or

               (E) such  Letter  of  Credit is in an  initial  amount  less than
          $500,000 or is to be denominated in a currency other than Dollars.

                                       24
<PAGE>

          (iii) The L/C Issuer shall be under no  obligation to amend any Letter
     of Credit if (A) the L/C Issuer  would have no  obligation  at such time to
     issue such Letter of Credit in its amended form under the terms hereof,  or
     (B) the  beneficiary  of such Letter of Credit does not accept the proposed
     amendment to such Letter of Credit.

          (iv) The L/C Issuer shall be under no obligation to issue or amend any
     Letter of Credit if the L/C Issuer has  received  written  notice  from any
     Lender,  the  Administrative  Agent or any Loan  Party,  on or prior to the
     Business Day prior to the  requested  date of issuance or amendment of such
     Letter of  Credit,  that one or more  applicable  conditions  contained  in
     Article V shall not then be satisfied.

          (b)  Procedures  for  Issuance  and  Amendment  of  Letters of Credit;
     Auto-Renewal Letters of Credit.

          (i) Each Letter of Credit shall be issued or amended,  as the case may
     be, upon the request of the  Borrower  delivered  to the L/C Issuer (with a
     copy to the  Administrative  Agent)  in the  form  of a  Letter  of  Credit
     Application, appropriately completed and signed by a Responsible Officer of
     the Borrower. Such Letter of Credit Application must be received by the L/C
     Issuer and the  Administrative  Agent not later  than  11:00 a.m.  at least
     three  Business  Days (or such  later  date and time as the L/C  Issuer may
     agree  in a  particular  instance  in its  sole  discretion)  prior  to the
     proposed  issuance  date or date of  amendment,  as the case may be. In the
     case of a request  for an  initial  issuance  of a Letter of  Credit,  such
     Letter of Credit Application shall specify in form and detail  satisfactory
     to the L/C Issuer:  (A) the proposed  issuance date of the requested Letter
     of Credit (which shall be a Business Day); (B) the amount thereof;  (C) the
     expiry date thereof;  (D) the name and address of the beneficiary  thereof;
     (E)  the  documents  to be  presented  by such  beneficiary  in case of any
     drawing thereunder; (F) the full text of any certificate to be presented by
     such  beneficiary  in case of any  drawing  thereunder;  and (G) such other
     matters  as the L/C  Issuer may  require.  In the case of a request  for an
     amendment  of any  outstanding  Letter  of  Credit,  such  Letter of Credit
     Application shall specify in form and detail satisfactory to the L/C Issuer
     (A) the Letter of Credit to be amended;  (B) the proposed date of amendment
     thereof  (which  shall be a Business  Day);  (C) the nature of the proposed
     amendment; and (D) such other matters as the L/C Issuer may require.

          (ii) Promptly after receipt of any Letter of Credit  Application,  the
     L/C Issuer will confirm with the  Administrative  Agent (by telephone or in
     writing) that the  Administrative  Agent has received a copy of such Letter
     of Credit  Application  from the Borrower  and, if not, the L/C Issuer will
     provide the Administrative  Agent with a copy thereof.  Upon receipt by the
     L/C Issuer of confirmation from the Administrative Agent that the requested
     issuance or amendment is permitted  in  accordance  with the terms  hereof,
     then,  subject to the terms and conditions hereof, the L/C Issuer shall, on
     the  requested  date,  issue a Letter  of  Credit  for the  account  of the
     Borrower  or enter into the  applicable  amendment,  as the case may be, in
     each case in accordance with the L/C Issuer's usual and customary  business
     practices.  Immediately  upon the  issuance of each Letter of Credit,  each
     Lender  shall be deemed  to,  and hereby  irrevocably  and  unconditionally
     agrees to, purchase from the L/C Issuer a risk participation in such Letter
     of Credit in an amount equal to the product of such Lender's Pro Rata Share
     times the amount of such Letter of Credit.

          (iii) If the Borrower so requests in any  applicable  Letter of Credit
     Application, the L/C Issuer may, in its sole and absolute discretion, agree
     to issue a Letter of Credit that has automatic renewal provisions (each, an
     "Auto-Renewal  Letter  of  Credit");  provided  that any such  Auto-Renewal
     Letter of Credit must permit the L/C Issuer to prevent any such  renewal at
     least  once  in each  twelve-month  period  (commencing  with  the  date of


                                       25
<PAGE>

     issuance  of  such  Letter  of  Credit)  by  giving  prior  notice  to  the
     beneficiary  thereof not later than a day (the "Nonrenewal Notice Date") in
     each such twelve-month  period to be agreed upon at the time such Letter of
     Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower
     shall not be required to make a specific  request to the L/C Issuer for any
     such renewal.  Once an Auto-Renewal  Letter of Credit has been issued,  the
     Lenders  shall be deemed to have  authorized  (but may not require) the L/C
     Issuer to permit  the  renewal  of such  Letter of Credit at any time to an
     expiry date not later than the Letter of Credit Expiration Date;  provided,
     however,  that the L/C Issuer  shall not permit any such renewal if (A) the
     L/C Issuer has determined  that it would have no obligation at such time to
     issue such Letter of Credit in its renewed  form under the terms hereof (by
     reason of the provisions of Section  2.03(a)(ii)  or otherwise),  or (B) it
     has received  notice (which may be by telephone or in writing) on or before
     the day that is five (5) Business  Days before the  Nonrenewal  Notice Date
     (1) from the  Administrative  Agent that the Required  Lenders have elected
     not to permit such renewal or (2) from the Administrative Agent, any Lender
     or the Borrower that one or more of the applicable  conditions specified in
     Section 5.02 is not then satisfied.

          (iv)  Promptly  after  its  delivery  of any  Letter  of Credit or any
     amendment to a Letter of Credit to an advising bank with respect thereto or
     to the  beneficiary  thereof,  the L/C  Issuer  will  also  deliver  to the
     Borrower  and the  Administrative  Agent a true and  complete  copy of such
     Letter of Credit or amendment.

     (c) Drawings and Reimbursements; Funding of Participations.

          (i) Upon receipt from the  beneficiary  of any Letter of Credit of any
     notice of drawing under such Letter of Credit,  the L/C Issuer shall notify
     the Borrower and the  Administrative  Agent  thereof.  Not later than 12:00
     noon on the date of any payment by the L/C Issuer  under a Letter of Credit
     (each such date, an "Honor  Date"),  the Borrower  shall  reimburse the L/C
     Issuer through the Administrative Agent in an amount equal to the amount of
     such drawing.  If the Borrower fails to so reimburse the L/C Issuer by such
     time, the  Administrative  Agent shall  promptly  notify each Lender of the
     Honor  Date,  the amount of the  unreimbursed  drawing  (the  "Unreimbursed
     Amount"),  and the amount of such Lender's Pro Rata Share thereof.  In such
     event,  the Borrower  shall be deemed to have requested a Borrowing of Base
     Rate  Loans to be  disbursed  on the Honor  Date in an amount  equal to the
     Unreimbursed Amount,  without regard to the minimum and multiples specified
     in Section 2.02 for the principal amount of Base Rate Loans, but subject to
     the amount of the unutilized portion of the Aggregate Revolving Commitments
     and the  conditions set forth in Section 5.02 (other than the delivery of a
     Loan  Notice).  Any notice  given by the L/C  Issuer or the  Administrative
     Agent  pursuant to this  Section  2.03(c)(i)  may be given by  telephone if
     immediately  confirmed  in  writing;  provided  that  the  lack  of such an
     immediate  confirmation  shall not  affect  the  conclusiveness  or binding
     effect of such notice.

          (ii) Each Lender  (including  the Lender  acting as L/C Issuer)  shall
     upon any notice pursuant to Section  2.03(c)(i) make funds available to the
     Administrative   Agent  for  the   account   of  the  L/C   Issuer  at  the
     Administrative  Agent's  Office in an amount equal to its Pro Rata Share of
     the  Unreimbursed  Amount  not later  than 2:00 p.m.  on the  Business  Day
     specified in such notice by the Administrative Agent, whereupon, subject to
     the  provisions  of Section  2.03(c)(iii),  each Lender that so makes funds
     available  shall be deemed to have made a Base Rate Loan to the Borrower in
     such amount. The Administrative  Agent shall remit the funds so received to
     the L/C Issuer.

                                       26
<PAGE>

          (iii)  With  respect  to any  Unreimbursed  Amount  that is not  fully
     refinanced  by a Borrowing of Base Rate Loans  because the  conditions  set
     forth in Section  5.02 cannot be  satisfied  or for any other  reason,  the
     Borrower  shall be  deemed  to have  incurred  from the L/C  Issuer  an L/C
     Borrowing  in  the  amount  of  the  Unreimbursed  Amount  that  is  not so
     refinanced,  which  L/C  Borrowing  shall  be due  and  payable  on  demand
     (together  with  interest)  and shall bear interest at the Default Rate. In
     such  event,  each  Lender's  payment to the  Administrative  Agent for the
     account of the L/C Issuer pursuant to Section  2.03(c)(ii)  shall be deemed
     payment in respect of its  participation  in such L/C  Borrowing  and shall
     constitute  an  L/C  Advance  from  such  Lender  in  satisfaction  of  its
     participation obligation under this Section 2.03.

          (iv)  Until  each  Lender  funds  its  Revolving  Loan or L/C  Advance
     pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount
     drawn under any Letter of Credit,  interest in respect of such Lender's Pro
     Rata  Share of such  amount  shall be  solely  for the  account  of the L/C
     Issuer.

          (v) Each Lender's  obligation to make Revolving  Loans or L/C Advances
     to reimburse the L/C Issuer for amounts  drawn under Letters of Credit,  as
     contemplated by this Section 2.03(c),  shall be absolute and  unconditional
     and shall not be affected by any  circumstance,  including (A) any set-off,
     counterclaim, recoupment, defense or other right which such Lender may have
     against the L/C  Issuer,  the  Borrower or any other  Person for any reason
     whatsoever;  (B) the  occurrence or  continuance  of a Default,  or (C) any
     other occurrence,  event or condition, whether or not similar to any of the
     foregoing;  provided,  however,  that  each  Lender's  obligation  to  make
     Revolving  Loans  pursuant  to  this  Section  2.03(c)  is  subject  to the
     conditions  set forth in Section 5.02 (other than  delivery by the Borrower
     of a Loan  Notice).  No such  making of an L/C  Advance  shall  relieve  or
     otherwise impair the obligation of the Borrower to reimburse the L/C Issuer
     for the amount of any  payment  made by the L/C Issuer  under any Letter of
     Credit, together with interest as provided herein.

          (vi) If any Lender fails to make available to the Administrative Agent
     for the  account of the L/C Issuer any amount  required  to be paid by such
     Lender pursuant to the foregoing  provisions of this Section 2.03(c) by the
     time specified in Section 2.03(c)(ii),  the L/C Issuer shall be entitled to
     recover from such Lender  (acting  through the  Administrative  Agent),  on
     demand, such amount with interest thereon for the period from the date such
     payment  is  required  to the date on which  such  payment  is  immediately
     available to the L/C Issuer at a rate per annum equal to the Federal  Funds
     Rate from time to time in effect. A certificate of the L/C Issuer submitted
     to any  Lender  (through  the  Administrative  Agent)  with  respect to any
     amounts  owing under this clause (vi) shall be conclusive  absent  manifest
     error.

     (d) Repayment of Participations.

          (i) At any time  after the L/C  Issuer  has made a  payment  under any
     Letter of Credit and has received from any Lender such Lender's L/C Advance
     in respect of such  payment in  accordance  with  Section  2.03(c),  if the
     Administrative Agent receives for the account of the L/C Issuer any payment
     in respect of the related  Unreimbursed Amount or interest thereon (whether
     directly  from  the  Borrower  or  otherwise,  including  proceeds  of Cash
     Collateral applied thereto by the Administrative Agent), the Administrative
     Agent  will   distribute   to  such  Lender  its  Pro  Rata  Share  thereof
     (appropriately  adjusted,  in the case of interest payments, to reflect the
     period of time during which such Lender's L/C Advance was  outstanding)  in
     the same funds as those received by the Administrative Agent.

                                       27
<PAGE>

          (ii) If any  payment  received  by the  Administrative  Agent  for the
     account of the L/C Issuer pursuant to Section  2.03(c)(i) is required to be
     returned  under  any  of  the  circumstances  described  in  Section  11.06
     (including pursuant to any settlement entered into by the L/C Issuer in its
     discretion),  each  Lender  shall pay to the  Administrative  Agent for the
     account  of the L/C  Issuer  its Pro Rata  Share  thereof  on demand of the
     Administrative Agent, plus interest thereon from the date of such demand to
     the date such amount is returned by such Lender,  at a rate per annum equal
     to the Federal Funds Rate from time to time in effect.

     (e) Obligations  Absolute.  The obligation of the Borrower to reimburse the
L/C Issuer for each  drawing  under each  Letter of Credit and to repay each L/C
Borrowing shall be absolute,  unconditional  and irrevocable,  and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

          (i) any lack of  validity or  enforceability  of this  Agreement,  any
     other Loan Document or any other agreement or instrument relating thereto;

          (ii) the  existence of any claim,  counterclaim,  set-off,  defense or
     other right that the Borrower may have at any time against any  beneficiary
     or any transferee of such Letter of Credit (or any Person for whom any such
     beneficiary or any such  transferee  may be acting),  the L/C Issuer or any
     other Person,  whether in connection with this Agreement,  the transactions
     contemplated  hereby  or by such  Letter  of  Credit  or any  agreement  or
     instrument relating thereto, or any unrelated transaction;

          (iii) any draft, demand, certificate or other document presented under
     such  Letter  of  Credit  proving  to be  forged,  fraudulent,  invalid  or
     insufficient  in any  respect  or any  statement  therein  being  untrue or
     inaccurate  in any  respect;  or any loss or delay in the  transmission  or
     otherwise  of any document  required in order to make a drawing  under such
     Letter of Credit;

          (iv) any payment by the L/C Issuer under such Letter of Credit against
     presentation  of a draft or certificate  that does not strictly comply with
     the terms of such Letter of Credit;  or any payment  made by the L/C Issuer
     under  such  Letter of Credit to any Person  purporting  to be a trustee in
     bankruptcy,  debtor-in-possession,  assignee for the benefit of  creditors,
     liquidator,  receiver  or  other  representative  of or  successor  to  any
     beneficiary  or any  transferee  of such  Letter of Credit,  including  any
     arising in connection with any proceeding under any Debtor Relief Law; or

          (v) any other  circumstance  or happening  whatsoever,  whether or not
     similar to any of the  foregoing,  including  any other  circumstance  that
     might otherwise  constitute a defense  available to, or a discharge of, the
     Borrower.

     The  Borrower  shall  promptly  examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance  with  the  Borrower's  instructions  or other  irregularity,  the
Borrower  will  immediately  notify  the  L/C  Issuer.  The  Borrower  shall  be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.

     (f) Role of L/C Issuer.  Each Lender and the Borrower agree that, in paying
any  drawing  under a  Letter  of  Credit,  the L/C  Issuer  shall  not have any
responsibility to obtain any document (other than any sight draft,  certificates
and  documents  expressly  required by such Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such  document or the authority of
the Person  executing or delivering any such  document.  None of the L/C Issuer,


                                       28
<PAGE>

any Agent-Related Person or any of the respective  correspondents,  participants
or  assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in  connection  herewith at the request or with the approval of
the Lenders or the Required  Lenders,  as  applicable;  (ii) any action taken or
omitted in the absence of gross negligence or willful  misconduct;  or (iii) the
due  execution,  effectiveness,  validity or  enforceability  of any document or
instrument related to any Letter of Credit or Letter of Credit Application.  The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit;  provided,  however,
that this assumption is not intended to, and shall not,  preclude the Borrower's
pursuing  such rights and  remedies as it may have  against the  beneficiary  or
transferee  at law or under any other  agreement.  None of the L/C  Issuer,  any
Agent-Related  Person or any of the respective  correspondents,  participants or
assignees  of the L/C  Issuer  shall be  liable  or  responsible  for any of the
matters  described  in clauses  (i) through  (v) of Section  2.03(e);  provided,
however,  that  anything in such  clauses to the contrary  notwithstanding,  the
Borrower  may have a claim  against  the L/C  Issuer,  and the L/C Issuer may be
liable to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to  consequential  or exemplary,  damages suffered by the Borrower which
the Borrower proves were caused by the L/C Issuer's willful  misconduct or gross
negligence or the L/C Issuer's willful failure to pay under any Letter of Credit
after  the  presentation  to  it  by  the  beneficiary  of  a  sight  draft  and
certificate(s)  strictly  complying with the terms and conditions of a Letter of
Credit.  In furtherance  and not in limitation of the foregoing,  the L/C Issuer
may  accept  documents  that  appear  on  their  face  to be in  order,  without
responsibility   for  further   investigation,   regardless  of  any  notice  or
information to the contrary, and the L/C Issuer shall not be responsible for the
validity  or  sufficiency  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.

     (g) Cash Collateral.  Upon the request of the Administrative  Agent, (i) if
the L/C Issuer has honored any full or partial  drawing request under any Letter
of Credit and such drawing has resulted in an L/C  Borrowing,  or (ii) if, as of
the Letter of Credit  Expiration  Date,  any Letter of Credit may for any reason
remain  outstanding  and  partially  or  wholly  undrawn,   the  Borrower  shall
immediately  Cash   Collateralize  the  then  Outstanding   Amount  of  all  L/C
Obligations (in an amount equal to such Outstanding  Amount determined as of the
date of such L/C Borrowing or the Letter of Credit  Expiration Date, as the case
may be). For purposes hereof,  "Cash  Collateralize" means to pledge and deposit
with or deliver to the  Administrative  Agent, for the benefit of the L/C Issuer
and the Lenders, as collateral for the L/C Obligations,  cash or deposit account
balances  pursuant to  documentation  in form and substance  satisfactory to the
Administrative Agent and the L/C Issuer (which documents are hereby consented to
by the  Lenders).  Derivatives  of such term have  corresponding  meanings.  The
Borrower hereby grants to the  Administrative  Agent, for the benefit of the L/C
Issuer  and the  Lenders,  a  security  interest  in all such  cash and  deposit
accounts  and all  balances  therein  and all  proceeds of the  foregoing.  Cash
collateral shall be maintained in blocked,  interest bearing deposit accounts at
Bank of America.

     (h)  Applicability of ISP98.  Unless otherwise  expressly agreed by the L/C
Issuer and the Borrower  when a Letter of Credit is issued  (including  any such
agreement  applicable  to an  Existing  Letter  of  Credit),  the  rules  of the
"International   Standby   Practices   1998"   published  by  the  Institute  of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit.

     (i) Letter of Credit  Fees.  The Borrower  shall pay to the  Administrative
Agent for the  account of each  Lender in  accordance  with its Pro Rata Share a
Letter of Credit  fee for each  Letter of Credit  equal to the  Applicable  Rate
times the daily  maximum  amount  available  to be drawn  under  such  Letter of
Credit.  Such Letter of Credit  fees shall be  computed on a quarterly  basis in
arrears.  Such  Letter  of Credit  fees  shall be due and  payable  on the first
Business  Day  after  the end of  each  March,  June,  September  and  December,
commencing  with the first such date to occur after the  issuance of such Letter
of Credit,  on the Letter of Credit Expiration Date and thereafter on demand. If
there is any change in the Applicable Rate during any quarter, the daily maximum


                                       29
<PAGE>

amount  of each  Letter  of  Credit  shall be  computed  and  multiplied  by the
Applicable  Rate  separately  for each  period  during  such  quarter  that such
Applicable Rate was in effect.

     (j) Documentary and Processing  Charges Payable to L/C Issuer. The Borrower
shall pay  directly  to the L/C Issuer for its own  account a fronting  fee with
respect to each Letter of Credit in the amounts  and at the times  specified  in
the Fee Letter.  In addition,  the Borrower shall pay directly to the L/C Issuer
for its own account the customary  issuance,  presentation,  amendment and other
processing  fees,  and other  standard  costs  and  charges,  of the L/C  Issuer
relating  to letters of credit as from time to time in  effect.  Such  customary
fees and  standard  costs and  charges  are due and  payable  on demand  and are
nonrefundable.

     (k)  Conflict  with  Letter  of  Credit  Application.  In the  event of any
conflict  between  the  terms  hereof  and the  terms of any  Letter  of  Credit
Application, the terms hereof shall control.

     2.04 Swing Line Loans.

     (a) The Swing Line.  Subject to the terms and  conditions set forth herein,
the Swing Line Lender agrees to make loans (each such loan, a "Swing Line Loan")
to the  Borrower  in Dollars  from time to time on any  Business  Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit,  notwithstanding the fact that such Swing
Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of
Revolving  Loans and L/C Obligations of the Swing Line Lender in its capacity as
a Lender of Revolving  Loans,  may exceed the amount of such Lender's  Revolving
Commitment;  provided, however, that after giving effect to any Swing Line Loan,
(i) the Total Revolving  Outstandings  shall not exceed the Aggregate  Revolving
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of
any Lender,  plus such Lender's Pro Rata Share of the Outstanding  Amount of all
L/C Obligations,  plus such Lender's Pro Rata Share of the Outstanding Amount of
all Swing Line Loans shall not exceed such Lender's Revolving Commitment. Within
the foregoing limits,  and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section  2.04,  prepay under  Section  2.05,  and
reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate Loan
or a Quoted Rate Swing Line Loan,  as the Borrower may elect.  Immediately  upon
the  making of a Swing  Line Loan,  each  Lender  shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk  participation in such Swing Line Loan in an amount equal to the product of
such Lender's Pro Rata Share times the amount of such Swing Line Loan.

     (b) Borrowing Procedures.  Each Borrowing of Swing Line Loans shall be made
upon  the  Borrower's  irrevocable  notice  to the  Swing  Line  Lender  and the
Administrative Agent, which may be given by telephone.  Each such notice must be
received  by the Swing Line Lender and the  Administrative  Agent not later than
1:00 p.m. on the requested  borrowing  date, and shall specify (i) the amount to
be borrowed,  which shall be a minimum  principal amount of $50,000,  or a whole
multiple of $50,000 in excess thereof,  (ii) the requested borrowing date, which
shall be a Business  Day, and (iii) whether such Swing Line Loan shall be a Base
Rate Loan or Quoted Rate Swing Line Loan.  Each such  telephonic  notice must be
confirmed  promptly by delivery to the Swing Line Lender and the  Administrative
Agent of a written Swing Line Loan Notice, appropriately completed and signed by
a Responsible Officer of the Borrower.  Promptly after receipt by the Swing Line
Lender of any  telephonic  Swing Line Loan  Notice,  the Swing Line  Lender will
confirm with the  Administrative  Agent (by  telephone  or in writing)  that the
Administrative  Agent has also received such Swing Line Loan Notice and, if not,
the Swing Line Lender will notify the  Administrative  Agent (by telephone or in
writing) of the  contents  thereof.  Unless the Swing Line  Lender has  received
notice (by telephone or in writing) from the Administrative  Agent (including at
the  request  of any  Lender)  prior to 2:00  p.m.  on the date of the  proposed
Borrowing  of Swing Line Loans (A)  directing  the Swing Line Lender not to make


                                       30
<PAGE>

such Swing Line Loan as a result of the  limitations set forth in the proviso to
the first sentence of Section 2.04(a), or (B) that one or more of the applicable
conditions  specified in Article V is not then satisfied,  then,  subject to the
terms and  conditions  hereof,  the Swing Line Lender will,  not later than 3:00
p.m. on the borrowing  date  specified in such Swing Line Loan Notice,  make the
amount of its Swing Line Loan  available to the  Borrower.  Notwithstanding  the
foregoing,  however,  in the event that an "auto  borrow" or "zero  balance"  or
similar  arrangement  shall  then be in place with the Swing  Line  Lender,  the
Borrower  shall request  Swing Line Loans  pursuant to such  alternative  notice
arrangements,  if any, provided thereunder or in connection therewith,  and each
Swing Line Loan advance shall be in such minimum  amounts,  if any,  provided by
such arrangement.

     (c) Refinancing of Swing Line Loans.

          (i) The  Swing  Line  Lender  at any  time in its  sole  and  absolute
     discretion may request, on behalf of the Borrower (which hereby irrevocably
     requests and authorizes the Swing Line Lender to so request on its behalf),
     that each Lender make a Base Rate Loan in an amount equal to such  Lender's
     Pro Rata Share of the amount of Swing  Line  Loans then  outstanding.  Such
     request shall be made in writing (which written  request shall be deemed to
     be  a  Loan  Notice  for  purposes  hereof)  and  in  accordance  with  the
     requirements  of Section 2.02,  without regard to the minimum and multiples
     specified  therein for the principal amount of Base Rate Loans, but subject
     to the unutilized  portion of the Aggregate  Revolving  Commitments and the
     conditions  set forth in Section 5.02.  The Swing Line Lender shall furnish
     the  Borrower  with a copy of the  applicable  Loan Notice  promptly  after
     delivering such notice to the Administrative  Agent. Each Lender shall make
     an amount equal to its Pro Rata Share of the amount  specified in such Loan
     Notice available to the Administrative Agent in immediately available funds
     for the  account of the Swing  Line  Lender at the  Administrative  Agent's
     Office not later than 1:00 p.m. on the day  specified  in such Loan Notice,
     whereupon, subject to Section 2.04(c)(ii),  each Lender that so makes funds
     available  shall be deemed to have made a Base Rate Loan to the Borrower in
     such amount. The Administrative  Agent shall remit the funds so received to
     the Swing Line Lender.

          (ii) If for any  reason any Swing Line Loan  cannot be  refinanced  by
     such a Borrowing of Revolving Loans in accordance with Section  2.04(c)(i),
     the request for Base Rate Loans  submitted  by the Swing Line Lender as set
     forth  herein shall be deemed to be a request by the Swing Line Lender that
     each of the Lenders fund its risk  participation in the relevant Swing Line
     Loan and each Lender's payment to the Administrative  Agent for the account
     of the Swing Line  Lender  pursuant to Section  2.04(c)(i)  shall be deemed
     payment in respect of such participation.

          (iii) If any  Lender  fails to make  available  to the  Administrative
     Agent for the  account of the Swing Line  Lender any amount  required to be
     paid by such Lender  pursuant to the  foregoing  provisions of this Section
     2.04(c) by the time specified in Section 2.04(c)(i),  the Swing Line Lender
     shall  be  entitled  to  recover  from  such  Lender  (acting  through  the
     Administrative Agent), on demand, such amount with interest thereon for the
     period  from the date such  payment is  required  to the date on which such
     payment is  immediately  available  to the Swing Line  Lender at a rate per
     annum  equal to the  Federal  Funds  Rate  from time to time in  effect.  A
     certificate of the Swing Line Lender  submitted to any Lender  (through the
     Administrative  Agent) with respect to any amounts  owing under this clause
     (iii) shall be conclusive absent manifest error.

          (iv) Each Lender's  obligation to make Revolving  Loans or to purchase
     and fund risk  participations  in Swing Line Loans pursuant to this Section
     2.04(c)  shall be absolute and  unconditional  and shall not be affected by
     any  circumstance,  including  (A) any set-off,  counterclaim,  recoupment,
     defense or other  right that such  Lender may have  against  the Swing Line


                                       31
<PAGE>

     Lender, the Borrower or any other Person for any reason whatsoever, (B) the
     occurrence or continuance of a Default, or (C) any other occurrence,  event
     or  condition,  whether or not similar to any of the  foregoing;  provided,
     however,  that each Lender's obligation to make Revolving Loans pursuant to
     this  Section  2.04(c) is subject  to the  conditions  set forth in Section
     5.02. No such purchase or funding of risk  participations  shall relieve or
     otherwise  impair the obligation of the Borrower to repay Swing Line Loans,
     together with interest as provided herein.

     (d) Repayment of Participations.

          (i) At any time  after any  Lender  has  purchased  and  funded a risk
     participation  in a Swing Line Loan, if the Swing Line Lender  receives any
     payment on account of such  Swing  Line Loan,  the Swing Line  Lender  will
     distribute to such Lender its Pro Rata Share of such payment (appropriately
     adjusted,  in the case of interest payments,  to reflect the period of time
     during which such Lender's risk participation was funded) in the same funds
     as those received by the Swing Line Lender.

          (ii) If any  payment  received  by the Swing Line Lender in respect of
     principal  or interest on any Swing Line Loan is required to be returned by
     the Swing Line Lender under any of the  circumstances  described in Section
     11.06 (including  pursuant to any settlement entered into by the Swing Line
     Lender in its  discretion),  each Lender shall pay to the Swing Line Lender
     its Pro Rata Share  thereof  on demand of the  Administrative  Agent,  plus
     interest  thereon  from the date of such  demand to the date such amount is
     returned,  at a rate  per  annum  equal  to the  Federal  Funds  Rate.  The
     Administrative  Agent will make such  demand  upon the request of the Swing
     Line Lender.

     (e) Interest for Account of Swing Line Lender.  The Swing Line Lender shall
be responsible  for invoicing the Borrower for interest on the Swing Line Loans.
Until each  Lender  funds its  Revolving  Loans that are Base Rate Loans or risk
participation  pursuant to this Section 2.04 to refinance such Lender's Pro Rata
Share of any Swing Line Loan,  interest  in respect of such Pro Rata Share shall
be solely for the account of the Swing Line Lender.

     (f)  Payments  Directly to Swing Line Lender.  The Borrower  shall make all
payments of principal  and interest in respect of the Swing Line Loans  directly
to the Swing Line Lender.

     2.05 Prepayments.

     (a) Voluntary Prepayments of Loans.

          (i) Revolving  Loans.  The Borrower may, upon notice from the Borrower
     to the  Administrative  Agent, at any time or from time to time voluntarily
     prepay  Revolving  Loans in whole or in part  without  premium or  penalty;
     provided that (i) such notice must be received by the Administrative  Agent
     not later  than  11:00 a.m.  (A) three  Business  Days prior to any date of
     prepayment of Eurodollar  Rate Loans,  and (B) on the date of prepayment of
     Base Rate Loans; (ii) any such prepayment of Eurodollar Rate Loans shall be
     in a  principal  amount of  $2,000,000  or a whole  multiple  of $50,000 in
     excess  thereof  (or, if less,  the entire  principal  amount  thereof then
     outstanding);  (iii) any such  prepayment  of Base Rate Loans shall be in a
     principal  amount of  $500,000  or a whole  multiple  of  $50,000 in excess
     thereof  (or,  if  less,   the  entire   principal   amount   thereof  then
     outstanding).  Each such notice  shall  specify the date and amount of such
     prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent
     will promptly notify each Lender of its receipt of each such notice, and of
     the  amount of such  Lender's  Pro Rata Share of such  prepayment.  If such
     notice is given by the Borrower,  the Borrower  shall make such  prepayment


                                       32
<PAGE>

     and the payment amount specified in such notice shall be due and payable on
     the date specified therein.  Any prepayment of a Eurodollar Rate Loan shall
     be  accompanied  by  all  accrued  interest  thereon,   together  with  any
     additional  amounts required pursuant to Section 3.05. Each such prepayment
     shall be  applied  to the Loans of the  Lenders  in  accordance  with their
     respective Pro Rata Shares.

          (ii) Swing Line Loans. The Borrower may, upon notice to the Swing Line
     Lender (with a copy to the Administrative  Agent), at any time or from time
     to time,  voluntarily  prepay  Swing Line Loans in whole or in part without
     premium or penalty;  provided  that (i) such notice must be received by the
     Swing Line Lender and the Administrative  Agent not later than 1:00 p.m. on
     the date of the  prepayment,  and (ii)  any such  prepayment  shall be in a
     minimum  principal  amount of  $50,000  or a whole  multiple  of $50,000 in
     excess  thereof  (or, if less,  the entire  principal  amount  thereof then
     outstanding).  Each such notice  shall  specify the date and amount of such
     prepayment.  If such notice is given by the  Borrower,  the Borrower  shall
     make such prepayment and the payment amount  specified in such notice shall
     be due and  payable  on the date  specified  therein.  Notwithstanding  the
     foregoing, however, in the event that an "auto borrow" or "zero balance" or
     similar  arrangement shall then be in place with the Swing Line Lender, the
     Borrower may make  voluntary  prepayments  on Swing Line Loans  pursuant to
     such alternative notice  arrangements and in such minimum amounts,  if any,
     provided thereunder or in connection therewith.

     (b) Mandatory  Prepayments of Loans.  If for any reason the Total Revolving
Outstandings  at any time exceed the  Aggregate  Revolving  Commitments  then in
effect,  the Borrower shall immediately  prepay Revolving Loans and/or the Swing
Line Loans and/or Cash  Collateralize the L/C Obligations in an aggregate amount
equal to such excess; provided, however, that the Borrower shall not be required
to Cash  Collateralize  the L/C  Obligations  pursuant to this  Section  2.05(b)
unless after the prepayment in full of the Revolving  Loans and Swing Line Loans
the Total Revolving Outstandings exceed the Aggregate Revolving Commitments then
in effect.

     2.06 Termination or Reduction of Aggregate Revolving Commitments.

     The  Borrower  may,  upon  notice from the  Borrower to the  Administrative
Agent,  terminate  the  Aggregate  Revolving  Commitments  or from  time to time
permanently  reduce the Aggregate  Revolving  Commitments  to an amount not less
than the  Outstanding  Amount  of  Revolving  Loans,  Swing  Line  Loans and L/C
Obligations;  provided  that  (i) any  such  notice  shall  be  received  by the
Administrative  Agent not later than 11:00 a.m.  five Business Days prior to the
date of termination or reduction and (ii) any such partial reduction shall be in
an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess
thereof.  The Administrative  Agent will promptly notify the Lenders of any such
notice of termination or reduction of the Aggregate Revolving  Commitments.  Any
reduction  of the  Aggregate  Revolving  Commitments  shall  be  applied  to the
Revolving  Commitment  of each  Lender  according  to its Pro  Rata  Share.  All
commitment  fees accrued  until the  effective  date of any  termination  of the
Aggregate  Revolving  Commitments  shall be paid on the  effective  date of such
termination.

     2.07 Repayment of Loans.

     (a) The  Borrower  shall  repay to the  Lenders  on the  Maturity  Date the
aggregate principal amount of all Revolving Loans outstanding on such date.

     (b) The Borrower shall repay each Swing Line Loan on the Maturity Date.

                                       33
<PAGE>

     2.08 Interest.

     (a) Subject to the provisions of subsection  (b) below,  (i) each Revolving
Loan that is a  Eurodollar  Rate Loan shall  bear  interest  on the  outstanding
principal  amount thereof for each Interest  Period at a rate per annum equal to
the sum of (A) the  Eurodollar  Rate  for  such  Interest  Period  plus  (B) the
Applicable Rate; (ii) each Revolving Loan that is a Base Rate Loan bear interest
on the  outstanding  principal  amount thereof from the applicable  borrowing or
conversion  date at a rate per annum equal to the Base Rate plus the  Applicable
Rate; (iii) each Swing Line Loan that is a Base Rate Loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the  Applicable  Rate;  and (iv) each
Swing Line Loan that is a Quoted Rate Swing Line Loan shall bear interest on the
outstanding  principal  amount thereof from the  applicable  borrowing date at a
rate per annum equal to the Quoted Rate applicable thereto.

     (b) Upon the occurrence and during the continuation of an Event of Default,
the  Borrower  shall pay  interest on the  principal  amount of all  outstanding
Obligations  at a fluctuating  interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

     (c)  Interest  on each Loan  shall be due and  payable  in  arrears on each
Interest  Payment  Date  applicable  thereto  and at such other  times as may be
specified herein, provided that interest at the Default Rate shall be payable on
demand. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment,  and before and after the  commencement of any
proceeding under any Debtor Relief Law.

     2.09 Fees.

     In addition to certain fees described in subsections (i) and (j) of Section
2.03:

          (a)  Commitment  Fee.  The  Borrower  shall pay to the  Administrative
     Agent,  for the  account  of each  Lender in  accordance  with its Pro Rata
     Share,  a commitment  fee equal to the product of (i) the  Applicable  Rate
     times  (ii) the  actual  daily  amount  by which  the  Aggregate  Revolving
     Commitments exceed the sum of (y) the Outstanding Amount of Revolving Loans
     and (z) the Outstanding Amount of L/C Obligations. The commitment fee shall
     accrue at all times during the Availability  Period,  including at any time
     during  which one or more of the  conditions  in Article V is not met,  and
     shall be due and payable  quarterly in arrears on the last  Business Day of
     each March,  June,  September and December,  commencing with the first such
     date to occur  after  the  Closing  Date,  and on the  Maturity  Date.  The
     commitment  fee shall be calculated  quarterly in arrears,  and if there is
     any change in the  Applicable  Rate during any  quarter,  the actual  daily
     amount shall be computed and multiplied by the Applicable  Rate  separately
     for each  period  during  such  quarter  that such  Applicable  Rate was in
     effect.  For  purposes  of  clarification,  Swing Line  Loans  shall not be
     considered  outstanding  for purposes of determining  the unused portion of
     the Aggregate Revolving Commitments.

          (b) Other Fees.

               (i) The Borrower shall pay to the Arranger and the Administrative
          Agent for their own respective accounts fees in the amounts and at the
          times  specified  in the Fee Letter.  Such fees shall be fully  earned
          when paid and shall be non-refundable for any reason whatsoever.

                                       34
<PAGE>

               (ii) The  Borrower  shall pay to the  Lenders  such fees as shall
          have been separately  agreed upon in writing in the amounts and at the
          times so  specified.  Such fees  shall be fully  earned  when paid and
          shall not be refundable for any reason whatsoever.

     2.10 Computation of Interest and Fees.

     All  computations  of  interest  for Base Rate  Loans when the Base Rate is
determined  by Bank of  America's  "prime  rate" shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed.  All other
computations  of fees and interest  shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest,  as applicable,
being paid than if  computed  on the basis of a 365-day  year).  Interest  shall
accrue on each Loan for the day on which the Loan is made,  and shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such portion
is paid,  provided  that any Loan  that is repaid on the same day on which it is
made shall, subject to Section 2.12(a), bear interest for one day.

     2.11 Evidence of Debt.

     (a) The Credit  Extensions made by each Lender shall be evidenced by one or
more  accounts or records  maintained  by such Lender and by the  Administrative
Agent in the ordinary course of business.  The accounts or records maintained by
the  Administrative  Agent and each Lender shall be conclusive  absent  manifest
error of the amount of the Credit Extensions made by the Lenders to the Borrower
and the interest and payments thereon.  Any failure to so record or any error in
doing so shall not,  however,  limit or otherwise  affect the  obligation of the
Borrower  hereunder to pay any amount owing with respect to the Obligations.  In
the event of any conflict  between the accounts  and records  maintained  by any
Lender and the  accounts and records of the  Administrative  Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest  error.  Upon the request of any Lender made  through
the Administrative  Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative  Agent) a promissory note, which shall evidence such
Lender's  Loans in addition to such  accounts or records.  Each such  promissory
note shall (i) in the case of Revolving  Loans, be in the form of Exhibit C-1 (a
"Revolving  Note"),  and (ii) in the case of Swing Line Loans, be in the form of
Exhibit C-2 (a "Swing Line Note").  Each Lender may attach schedules to its Note
and endorse thereon the date, Type (if  applicable),  amount and maturity of its
Loans and payments with respect thereto.

     (b) In addition to the accounts and records  referred to in subsection (a),
each Lender and the  Administrative  Agent shall maintain in accordance with its
usual  practice  accounts or records  evidencing the purchases and sales by such
Lender of participations in Letters of Credit and Swing Line Loans. In the event
of  any  conflict   between  the  accounts   and  records   maintained   by  the
Administrative  Agent and the  accounts  and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.

     2.12 Payments Generally.

     (a) All payments to be made by the Borrower shall be made without condition
or deduction for any  counterclaim,  defense,  recoupment  or setoff.  Except as
otherwise  expressly  provided  herein,  all payments by the Borrower  hereunder
shall be made to the  Administrative  Agent,  for the account of the  respective
Lenders to which such payment is owed, at the  Administrative  Agent's Office in
Dollars and in immediately  available funds not later than 2:00 p.m. on the date
specified  herein.  The  Administrative  Agent will promptly  distribute to each
Lender its Pro Rata Share (or other applicable share as provided herein) of such
payment in like funds as received  by wire  transfer  to such  Lender's  Lending


                                       35
<PAGE>

Office. All payments received by the Administrative  Agent after 2:00 p.m. shall
be  deemed  received  on the next  succeeding  Business  Day and any  applicable
interest or fee shall continue to accrue.

     (b) Subject to the  definition of "Interest  Period",  if any payment to be
made by the Borrower shall come due on a day other than a Business Day,  payment
shall be made on the next  following  Business  Day, and such  extension of time
shall be reflected in computing interest or fees, as the case may be.

     (c) If at any time insufficient  funds are received by and available to the
Administrative  Agent to pay fully all  amounts of  principal,  L/C  Borrowings,
interest  and fees then due  hereunder,  such funds  shall be applied (i) first,
toward costs and expenses  (including  Attorney Costs and amounts  payable under
Article III) incurred by the Administrative Agent and each Lender, ratably among
the  parties  entitled  thereto  in  accordance  with the  amounts  of costs and
expenses then due to such parties, (ii) second, toward repayment of interest and
fees  then  due  hereunder,  ratably  among  the  parties  entitled  thereto  in
accordance  with the amounts of interest and fees then due to such parties,  and
(iii)  third,  toward  repayment  of  principal  and  L/C  Borrowings  then  due
hereunder,  ratably among the parties  entitled  thereto in accordance  with the
amounts of principal and L/C Borrowings then due to such parties.

     (d) Unless the  Borrower  or any Lender  has  notified  the  Administrative
Agent,  prior  to the  date  any  payment  is  required  to be made by it to the
Administrative  Agent hereunder,  that the Borrower or such Lender,  as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such  Lender,  as the case may be, has timely made such  payment and
may (but shall not be so required  to), in reliance  thereon,  make  available a
corresponding  amount to the Person entitled thereto.  If and to the extent that
such  payment was not in fact made to the  Administrative  Agent in  immediately
available funds, then:

          (i) if the  Borrower  failed to make such  payment,  each Lender shall
     forthwith on demand repay to the  Administrative  Agent the portion of such
     assumed  payment  that was made  available  to such  Lender in  immediately
     available funds, together with interest thereon in respect of each day from
     and including the date such amount was made available by the Administrative
     Agent  to  such   Lender  to  the  date  such   amount  is  repaid  to  the
     Administrative  Agent in immediately  available  funds at the Federal Funds
     Rate from time to time in effect; and

          (ii) if any Lender  failed to make such  payment,  such  Lender  shall
     forthwith on demand pay to the  Administrative  Agent the amount thereof in
     immediately  available funds, together with interest thereon for the period
     from the date such amount was made available by the Administrative Agent to
     the  Borrower to the date such amount is  recovered  by the  Administrative
     Agent (the "Compensation  Period") at a rate per annum equal to the Federal
     Funds Rate from time to time in effect.  If such Lender pays such amount to
     the  Administrative  Agent, then such amount shall constitute such Lender's
     Loan included in the applicable Borrowing as of the date of such Borrowing.
     If such Lender does not pay such amount  forthwith upon the  Administrative
     Agent's  demand  therefor,  the  Administrative  Agent  may  make a  demand
     therefor upon the Borrower,  and the Borrower  shall pay such amount to the
     Administrative  Agent,  together with interest thereon for the Compensation
     Period at a rate per annum equal to the rate of interest  applicable to the
     applicable Borrowing.  Nothing herein shall be deemed to relieve any Lender
     from its obligation to fulfill its Revolving Commitment or to prejudice any
     rights which the Administrative  Agent or the Borrower may have against any
     Lender as a result of any default by such Lender hereunder.

     A notice of the  Administrative  Agent to any Lender or the  Borrower  with
respect  to any amount  owing  under this  subsection  (d) shall be  conclusive,
absent manifest error.

                                       36
<PAGE>

          (e) If any Lender makes  available to the  Administrative  Agent funds
     for  any  Loan  to be made by such  Lender  as  provided  in the  foregoing
     provisions of this Article II, and such funds are not made available to the
     Borrower  by  the  Administrative  Agent  because  the  conditions  to  the
     applicable  Credit  Extension  set forth in Article V are not  satisfied or
     waived in accordance with the terms hereof, the Administrative  Agent shall
     return  such funds (in like  funds as  received  from such  Lender) to such
     Lender, without interest.

          (f) The obligations of the Lenders hereunder to make Loans and to fund
     participations  in Letters of Credit and Swing Line Loans are  several  and
     not joint.  The  failure of any Lender to make any Loan or to fund any such
     participation  on any date required  hereunder  shall not relieve any other
     Lender of its corresponding obligation to do so on such date, and no Lender
     shall be  responsible  for the  failure of any other  Lender to so make its
     Loan or purchase its participation.

          (g) Nothing  herein  shall be deemed to obligate  any Lender to obtain
     the funds for any Loan in any particular place or manner or to constitute a
     representation  by any Lender that it has obtained or will obtain the funds
     for any Loan in any particular place or manner.

          2.13 Sharing of Payments.

          If,  other than as expressly  provided  elsewhere  herein,  any Lender
     shall obtain on account of the Loans made by it, or the  participations  in
     L/C  Obligations  or in Swing Line Loans held by it (but not  including any
     amounts applied by the Swing Line Lender to outstanding  Swing Line Loans),
     any payment (whether  voluntary,  involuntary,  through the exercise of any
     right of set-off,  or  otherwise)  in excess of its ratable share (or other
     share contemplated  hereunder)  thereof,  such Lender shall immediately (a)
     notify the  Administrative  Agent of such fact,  and (b) purchase  from the
     other  Lenders  such  participations  in the Loans made by them and/or such
     subparticipations  in the  participations  in L/C Obligations or Swing Line
     Loans held by them, as the case may be, as shall be necessary to cause such
     purchasing  Lender to share the excess  payment in respect of such Loans or
     such  participations,  as the case  may be,  pro  rata  with  each of them;
     provided,  however,  that if all or any portion of such  excess  payment is
     thereafter   recovered  from  the  purchasing   Lender  under  any  of  the
     circumstances  described  in  Section  11.06  (including  pursuant  to  any
     settlement  entered into by the purchasing Lender in its discretion),  such
     purchase  shall to that extent be  rescinded  and each other  Lender  shall
     repay to the purchasing  Lender the purchase price paid therefor,  together
     with an amount equal to such paying  Lender's  ratable share  (according to
     the proportion of (i) the amount of such paying Lender's required repayment
     to (ii) the total amount so recovered  from the  purchasing  Lender) of any
     interest  or other  amount  paid or  payable  by the  purchasing  Lender in
     respect of the total amount so recovered, without further interest thereon.
     The  Borrower  agrees that any Lender so  purchasing a  participation  from
     another  Lender may, to the fullest extent  permitted by law,  exercise all
     its rights of  payment  (including  the right of  set-off,  but  subject to
     Section  11.09)  with  respect  to such  participation  as fully as if such
     Lender  were the  direct  creditor  of the  Borrower  in the amount of such
     participation.  The Administrative  Agent will keep records (which shall be
     conclusive and binding in the absence of manifest error) of  participations
     purchased  under this  Section  and will in each case  notify  the  Lenders
     following any such  purchases or  repayments.  Each Lender that purchases a
     participation  pursuant to this Section  shall from and after such purchase
     have the right to give all notices, requests, demands, directions and other
     communications  under this  Agreement  with  respect to the  portion of the
     Obligations  purchased to the same extent as though the  purchasing  Lender
     were the original owner of the Obligations purchased.

                                       37
<PAGE>


                                   ARTICLE III

                     TAXES, YIELD PROTECTION AND ILLEGALITY

     3.01 Taxes.

     (a) Any and all  payments  by any Loan  Party to or for the  account of the
Administrative  Agent or any Lender under any Loan  Document  shall be made free
and clear of and  without  deduction  for any and all  present or future  taxes,
duties, levies, imposts, deductions,  assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative  Agent and each  Lender,  taxes  imposed  on or  measured  by its
overall net income,  and  franchise  taxes  imposed on it (in lieu of net income
taxes),  by the  jurisdiction (or any political  subdivision  thereof) under the
Laws of which the  Administrative  Agent or such Lender,  as the case may be, is
organized or maintains a lending office (all such  non-excluded  taxes,  duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and liabilities  being  hereinafter  referred to as "Taxes").  If any Loan Party
shall be  required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the  Administrative  Agent or any Lender, (i)
the sum  payable  shall be  increased  as  necessary  so that  after  making all
required deductions  (including deductions applicable to additional sums payable
under this Section),  each of the Administrative  Agent and such Lender receives
an amount equal to the sum it would have  received had no such  deductions  been
made,  (ii) such Loan Party  shall make such  deductions,  (iii) such Loan Party
shall pay the full amount deducted to the relevant  taxation  authority or other
authority in accordance with applicable  Laws, and (iv) within thirty days after
the date of such payment,  such Loan Party shall  furnish to the  Administrative
Agent (which shall  forward the same to such Lender) the original or a certified
copy of a receipt  evidencing  payment  thereof or if no  receipt is  available,
other evidence of payment reasonably satisfactory to the Administrative Agent.

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

     (c) If the  Borrower  shall be required to deduct or pay any Taxes or Other
Taxes from or in  respect  of any sum  payable  under any Loan  Document  to the
Administrative  Agent  or  any  Lender,  the  Borrower  shall  also  pay  to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such  additional  amount that the  Administrative  Agent or such Lender
specifies is necessary to preserve the after-tax  yield (after  factoring in all
taxes,  including  taxes  imposed  on  or  measured  by  net  income)  that  the
Administrative  Agent or such Lender would have  received if such Taxes or Other
Taxes had not been imposed.

     (d) The Borrower  agrees to  indemnify  the  Administrative  Agent and each
Lender for (i) the full amount of Taxes and Other Taxes  (including any Taxes or
Other Taxes  imposed or asserted by any  jurisdiction  on amounts  payable under
this Section)  paid by the  Administrative  Agent and such Lender,  (ii) amounts
payable under Section  3.01(c) and (iii) any liability  (including  additions to
tax,  penalties,  interest  and  expenses)  arising  therefrom  or with  respect
thereto, in each case whether or not such Taxes or Other Taxes were correctly or
legally  imposed or asserted by the  relevant  Governmental  Authority.  Payment
under this  subsection  (d) shall be made within  thirty days after the date the
Lender or the Administrative Agent makes a demand therefor.

     (e) If any Loan  Party is  required  to pay any amount to any Lender or the
Administrative  Agent pursuant to this Section 3.01,  then such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change


                                       38
<PAGE>

the  jurisdiction  of its Lending Office so as to eliminate any such  additional
payment which may thereafter  accrue, if such change in the reasonable  judgment
of such Lender is not otherwise disadvantageous to such Lender.

     3.02 Illegality.

     If any Lender  determines  that any Law has made it  unlawful,  or that any
Governmental  Authority has asserted that it is unlawful,  for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge  interest  rates based upon the  Eurodollar  Rate,  then, on
notice thereof by such Lender to the Borrower through the Administrative  Agent,
any  obligation of such Lender to make or continue  Eurodollar  Rate Loans or to
convert Base Rate Loans to Eurodollar  Rate Loans shall be suspended  until such
Lender notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such  determination no longer exist. Upon receipt of such notice,
the  Borrower  shall,  upon  demand  from  such  Lender  (with  a  copy  to  the
Administrative  Agent), convert all Eurodollar Rate Loans of such Lender to Base
Rate Loans,  either on the last day of the  Interest  Period  therefor,  if such
Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day,
or  immediately,  if such Lender may not  lawfully  continue  to  maintain  such
Eurodollar  Rate Loans.  Upon any such  conversion,  the Borrower shall also pay
accrued  interest on the amount so converted and all amounts payable pursuant to
Section 3.05. Each Lender agrees to designate a different Lending Office if such
designation  will avoid the need for such notice and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such Lender.

     3.03 Inability to Determine Rates.

     If the  Administrative  Agent  determines  that for any reason adequate and
reasonable  means do not exist for  determining the Eurodollar Base Rate for any
requested  Interest  Period with respect to a proposed  Eurodollar Rate Loan, or
that the Eurodollar Base Rate for any requested  Interest Period with respect to
a proposed  Eurodollar Rate Loan does not adequately and fairly reflect the cost
to the Lenders of funding  such Loan,  the  Administrative  Agent will  promptly
notify the Borrower and all Lenders.  Thereafter,  the obligation of the Lenders
to make  or  maintain  Eurodollar  Rate  Loans  shall  be  suspended  until  the
Administrative  Agent  revokes  such notice.  Upon  receipt of such notice,  the
Borrower may revoke any pending  request for a Borrowing  of,  conversion  to or
continuation  of Eurodollar  Rate Loans or, failing that, will be deemed to have
converted  such request into a request for a Borrowing of Base Rate Loans in the
amount specified therein, and all outstanding  Eurodollar Rate Loans will, as of
the last day of each Interest Period  applicable  thereto,  be converted to Base
Rate Loans.

     3.04 Increased Cost and Reduced Return; Capital Adequacy.

     (a) If any Lender determines that as a result of the introduction of or any
change  in or in the  interpretation  of any Law,  or such  Lender's  compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans or (as the case may
be) issuing or participating in Letters of Credit,  or a reduction in the amount
received or receivable  by such Lender in  connection  with any of the foregoing
(excluding  for  purposes of this  subsection  (a) any such  increased  costs or
reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section
3.01 shall  govern),  (ii)  changes in the basis of  taxation of the overall net
income or overall gross income by the United States or any foreign  jurisdiction
or any  political  subdivision  of either  thereof  under the Laws of which such
Lender is organized or has its Lending  Office,  and (iii) reserve  requirements
utilized,  as to Eurodollar Rate Loans, in the  determination  of the Eurodollar
Rate),  then from time to time upon demand of such  Lender  (with a copy of such
demand to the Administrative  Agent), the Borrower shall pay to such Lender such
additional  amounts as will  compensate  such Lender for such  increased cost or
reduction.

                                       39
<PAGE>

     (b) If any Lender determines that as a result of the introduction of or any
change in or in the  interpretation of any Law regarding  capital  adequacy,  or
compliance by such Lender (or its Lending Office)  therewith,  has the effect of
reducing  the rate of return on the  capital of such  Lender or any  corporation
controlling such Lender as a consequence of such Lender's obligations  hereunder
(taking into  consideration  such Lender's or such  corporation's  policies with
respect to capital  adequacy  and such  Lender's or such  corporation's  desired
return on  capital),  then from time to time upon demand of such Lender  (with a
copy of such demand to the Administrative Agent), the Borrower shall pay to such
Lender  such  additional   amounts  as  will  compensate  such  Lender  or  such
corporation for such reduction.

     3.05 Funding Losses.

     Upon demand of any Lender  (with a copy to the  Administrative  Agent) from
time to time, the Borrower shall  promptly  compensate  such Lender for and hold
such Lender harmless from any loss,  cost or expense  incurred by it as a result
of:

          (a) any  continuation,  conversion,  payment or prepayment of any Loan
     other  than a Base  Rate  Loan on a day  other  than  the  last  day of the
     Interest Period for such Loan (whether voluntary,  mandatory, automatic, by
     reason of acceleration, or otherwise);

          (b) any failure by the  Borrower  (for a reason other than the failure
     of such Lender to make a Loan) to prepay,  borrow,  continue or convert any
     Loan other than a prepayment or borrowing of, or conversion to, a Base Rate
     Loan on the date or in the amount notified by the Borrower; or

          (c) any  assignment of a Eurodollar  Rate Loan on a day other than the
     last day of the  Interest  Period  therefor as a result of a request by the
     Borrower pursuant to Section 11.16;

          including  any loss of  anticipated  profits  and any loss or  expense
     arising from the  liquidation  or  reemployment  of funds obtained by it to
     maintain  such Loan or from fees  payable to terminate  the  deposits  from
     which such funds were  obtained.  The Borrower shall also pay any customary
     administrative   fees  charged  by  such  Lender  in  connection  with  the
     foregoing.

     For purposes of calculating  amounts payable by the Borrower to the Lenders
under  this  Section  3.05,  each  Lender  shall be deemed to have  funded  each
Eurodollar  Rate Loan made by it at the Eurodollar Base Rate used in determining
the Eurodollar  Rate for such Loan by a matching  deposit or other  borrowing in
the  London  interbank  eurodollar  market  for a  comparable  amount  and for a
comparable  period,  whether  or not such  Eurodollar  Rate  Loan was in fact so
funded.

     3.06 Matters Applicable to all Requests for Compensation.

     (a) A  certificate  of the  Administrative  Agent  or any  Lender  claiming
compensation  under this Article III and setting forth the additional  amount or
amounts  to be paid to it  hereunder  shall  be  conclusive  in the  absence  of
manifest error. In determining  such amount,  the  Administrative  Agent or such
Lender may use any reasonable averaging and attribution methods.

     (b) Upon any Lender's making a claim for compensation under Section 3.01 or
3.04, the Borrower may replace such Lender in accordance with Section 11.16.

                                       40
<PAGE>

     3.07 Survival.

     All of the  Borrower's  obligations  under this  Article III shall  survive
termination of the Aggregate  Revolving  Commitments  and repayment of all other
Obligations hereunder.

                                   ARTICLE IV

                                    GUARANTY

     4.01 The Guaranty.

     Each of the  Guarantors  hereby  jointly and  severally  guarantees to each
Lender,  each Affiliate of a Lender that enters into a Swap Contract or Treasury
Management  Agreement,  and the Administrative Agent as hereinafter provided, as
primary obligor and not as surety, the prompt payment of the Obligations in full
when  due  (whether  at  stated  maturity,   as  a  mandatory   prepayment,   by
acceleration,  as a mandatory cash  collateralization  or otherwise) strictly in
accordance with the terms thereof.  The Guarantors  hereby further agree that if
any of the  Obligations  are not  paid in  full  when  due  (whether  at  stated
maturity,  as a mandatory  prepayment,  by  acceleration,  as a  mandatory  cash
collateralization  or otherwise),  the Guarantors  will,  jointly and severally,
promptly pay the same, without any demand or notice whatsoever,  and that in the
case of any  extension of time of payment or renewal of any of the  Obligations,
the same will be promptly  paid in full when due (whether at extended  maturity,
as   a   mandatory   prepayment,   by   acceleration,   as  a   mandatory   cash
collateralization  or otherwise) in accordance  with the terms of such extension
or renewal.

     Notwithstanding  any provision to the contrary  contained  herein or in any
other of the Loan Documents,  Swap Contracts or Treasury Management  Agreements,
the  obligations  of each  Guarantor  under  this  Agreement  and the other Loan
Documents  shall be limited to an aggregate  amount equal to the largest  amount
that would not render such  obligations  subject to  avoidance  under the Debtor
Relief Laws or any comparable provisions of any applicable state law.

     4.02 Obligations Unconditional.

     The obligations of the Guarantors under Section 4.01 are joint and several,
absolute, irrevocable and unconditional, irrespective of the value, genuineness,
validity,  regularity  or  enforceability  of any of the  Loan  Documents,  Swap
Contracts  or  Treasury  Management  Agreements,   or  any  other  agreement  or
instrument  referred to therein,  or any  substitution,  release,  impairment or
exchange of any other guarantee of or security for any of the Obligations,  and,
to the fullest extent  permitted by applicable  law,  irrespective  of any other
circumstance  whatsoever  which might otherwise  constitute a legal or equitable
discharge  or  defense  of a surety or  guarantor,  it being the  intent of this
Section 4.02 that the obligations of the Guarantors hereunder shall be absolute,
irrevocable and unconditional  under any and all  circumstances.  Each Guarantor
agrees  that  such  Guarantor  shall  have no right of  subrogation,  indemnity,
reimbursement  or  contribution  against the Borrower or any other Guarantor for
amounts paid under this Article IV until such time as the Obligations  have been
paid in full and the Aggregate Revolving Commitments have expired or terminated.
Without  limiting the  generality  of the  foregoing,  it is agreed that, to the
fullest  extent  permitted  by  law,  the  occurrence  of any one or more of the
following  shall not alter or impair the liability of any  Guarantor  hereunder,
which shall remain absolute, irrevocable and unconditional as described above:

          (a) at any time or from time to time, without notice to any Guarantor,
     the time for any  performance of or compliance  with any of the Obligations
     shall be extended, or such performance or compliance shall be waived;

                                       41
<PAGE>

          (b) any of the acts  mentioned in any of the  provisions of any of the
     Loan Documents,  any Swap Contract or Treasury Management Agreement between
     any Loan Party and any Lender,  or any Affiliate of a Lender,  or any other
     agreement  or  instrument  referred to in the Loan  Documents  or such Swap
     Contracts or Treasury Management Agreements shall be done or omitted;

          (c) the maturity of any of the Obligations  shall be  accelerated,  or
     any of the Obligations or any of the Loan Documents or any Swap Contract or
     Treasury Management  Agreement between any Loan Party and any Lender or any
     Affiliate  of a Lender shall be  modified,  supplemented  or amended in any
     respect, or any right under any of the Loan Documents, any Swap Contract or
     Treasury Management Agreement between any Loan Party and any Lender, or any
     Affiliate of a Lender, or any other agreement or instrument  referred to in
     the Loan Documents or such Swap Contracts or Treasury Management Agreements
     shall be waived or any other  guarantee  of any of the  Obligations  or any
     security  therefor shall be released,  impaired or exchanged in whole or in
     part or otherwise dealt with;

          (d) any Lien granted to, or in favor of, the  Administrative  Agent or
     any Lender or Lenders as security for any of the Obligations  shall fail to
     attach or be perfected; or

          (e) any of the Obligations  shall be determined to be void or voidable
     (including,  without  limitation,  for the  benefit of any  creditor of any
     Guarantor) or shall be subordinated to the claims of any Person (including,
     without limitation, any creditor of any Guarantor).

     With respect to its obligations hereunder,  each Guarantor hereby expressly
waives acceptance,  diligence,  presentment,  demand of payment, protest and all
notices  whatsoever,  and any requirement that the  Administrative  Agent or any
Lender  exhaust any right,  power or remedy or proceed  against any Person under
any of the Loan Documents,  any Swap Contract or Treasury  Management  Agreement
between  any Loan Party and any Lender,  or any  Affiliate  of a Lender,  or any
other  agreement or  instrument  referred to in the Loan  Documents or such Swap
Contracts or Treasury Management  Agreements,  or against any other Person under
any other guarantee of, or security for, any of the Obligations.

     4.03 Reinstatement.

     The  obligations  of  the  Guarantors   under  this  Article  IV  shall  be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Obligations is rescinded or must be
otherwise restored by any holder of any of the Obligations,  whether as a result
of any  proceedings  in bankruptcy  or  reorganization  or  otherwise,  and each
Guarantor agrees that it will indemnify the Administrative Agent and each Lender
on demand for all reasonable costs and expenses (including,  without limitation,
fees and  expenses of  counsel)  incurred  by the  Administrative  Agent or such
Lender in connection  with such  rescission or  restoration,  including any such
costs and expenses  incurred in defending  against any claim  alleging that such
payment  constituted a preference,  fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.

     4.04 Certain Additional Waivers.

     Each Guarantor  agrees that such Guarantor  shall have no right of recourse
to  security  for the  Obligations,  except  through  the  exercise of rights of
subrogation  pursuant  to Section  4.02 and  through  the  exercise of rights of
contribution pursuant to Section 4.06.

     4.05 Remedies.

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<PAGE>

     The  Guarantors  agree that,  to the fullest  extent  permitted  by law, as
between the Guarantors,  on the one hand, and the  Administrative  Agent and the
Lenders,  on the other hand, the Obligations may be declared to be forthwith due
and  payable as  provided  in Section  9.02 (and shall be deemed to have  become
automatically  due and payable in the  circumstances  provided  in said  Section
9.02) for purposes of Section 4.01 notwithstanding any stay, injunction or other
prohibition  preventing such  declaration  (or preventing the  Obligations  from
becoming automatically due and payable) as against any other Person and that, in
the event of such  declaration (or the  Obligations  being deemed to have become
automatically due and payable),  the Obligations (whether or not due and payable
by any other Person) shall  forthwith  become due and payable by the  Guarantors
for purposes of Section 4.01.  The Guarantors  acknowledge  and agree that their
obligations hereunder are secured in accordance with the terms of the Collateral
Documents  and that the  Lenders  may  exercise  their  remedies  thereunder  in
accordance with the terms thereof.

     4.06 Rights of Contribution.

     The Guarantors  agree among  themselves  that, in connection  with payments
made hereunder,  each Guarantor shall have contribution rights against the other
Guarantors as permitted under applicable law. Such contribution  rights shall be
subordinate  and  subject  in  right  of  payment  to the  obligations  of  such
Guarantors  under the Loan Documents and no Guarantor shall exercise such rights
of contribution until all Obligations have been paid in full and the Commitments
have terminated.

     4.07 Guarantee of Payment; Continuing Guarantee.

     The  guarantee  in this  Article  IV is a guaranty  of  payment  and not of
collection,  is a  continuing  guarantee,  and  shall  apply to all  Obligations
whenever arising.

                                    ARTICLE V

                    CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     5.01 Conditions of Initial Credit Extension.

     The  obligation  of  each  Lender  to make  its  initial  Credit  Extension
hereunder is subject to satisfaction of the following conditions precedent:

          (a) Loan Documents.  Receipt by the  Administrative  Agent of executed
     counterparts of this Agreement and the other Loan Documents,  each properly
     executed by a  Responsible  Officer of the  signing  Loan Party and, in the
     case of this Agreement, by each Lender.

          (b)  Organization   Documents,   Resolutions,   Etc.  Receipt  by  the
     Administrative Agent of the following,  each of which shall be originals or
     facsimiles  (followed  promptly  by  originals)  and in form and  substance
     satisfactory to the Administrative Agent and its legal counsel:

               (i)  copies of the  Organization  Documents  of each  Loan  Party
          certified  to  be  true  and  complete  as of a  recent  date  by  the
          appropriate  Governmental Authority of the state or other jurisdiction
          of its incorporation or organization,  where applicable, and certified
          by a secretary  or  assistant  secretary of such Loan Party to be true
          and correct as of the Closing Date;

               (ii) such certificates of resolutions or other action, incumbency
          certificates and/or other certificates of Responsible Officers of each
          Loan Party as the  Administrative  Agent may  require  evidencing  the
          identity,  authority and capacity of each Responsible  Officer thereof


                                       43
<PAGE>

          authorized  to act as a Responsible  Officer in  connection  with this
          Agreement  and the other Loan  Documents to which such Loan Party is a
          party; and

               (iii) such  documents and  certifications  as the  Administrative
          Agent may reasonably  require to evidence that each Loan Party is duly
          organized or formed,  and is validly  existing,  in good  standing and
          qualified  to  engage in  business  in its  state of  organization  or
          formation,  except  to the  extent  that  failure  to do so could  not
          reasonably be expected to have a Material Adverse Effect.

     (c) Opinion of Counsel.  Receipt by the  Administrative  Agent of favorable
opinions of counsel to the Loan Parties,  addressed to the Administrative  Agent
and  each  Lender,  dated as of the  Closing  Date,  and in form  and  substance
satisfactory to the Administrative Agent.

     (d) Perfection and Priority of Liens.  Receipt by the Administrative  Agent
of all  certificates  evidencing any  certificated  Capital Stock pledged to the
Administrative  Agent  pursuant  to the  Pledge  Agreement,  together  with duly
executed in blank, undated stock powers attached thereto.

     (e) Financial Statements. The Administrative Agent shall have received:

          (i) the Audited Financial Statements;

          (ii) the Interim Financial Statements;

          (iii)  such  other  information  as  the   Administrative   Agent  may
     reasonably request.

     (f) No Material  Adverse  Change.  There shall not have occurred a material
adverse  change  since  January 31, 2003 in the  business,  assets,  liabilities
(actual or  contingent),  operations,  financial  condition  or prospects of the
Borrower, together with its Subsidiaries, taken as a whole.

     (g)  Closing  Certificate.   Receipt  by  the  Administrative  Agent  of  a
certificate signed by a Responsible  Officer of the Borrower certifying that the
conditions  specified in Section 5.01(f) and Sections 5.02(a),  (b) and (c) have
been satisfied.

     (h) Fees. Receipt by the  Administrative  Agent and the Lenders of any fees
required to be paid on or before the Closing Date.

     (i) Attorney Costs. Unless waived by the Administrative Agent, the Borrower
shall have paid all  Attorney  Costs of the  Administrative  Agent to the extent
invoiced  prior to or on the  Closing  Date,  plus such  additional  amounts  of
Attorney Costs as shall  constitute  its  reasonable  estimate of Attorney Costs
incurred or to be incurred by it through the closing proceedings  (provided that
such estimate shall not thereafter preclude a final settling of accounts between
the Borrower and the Administrative Agent).

     (j) Other.  Receipt  by the  Administrative  Agent and the  Lenders of such
other documents, instruments, agreements and information as reasonably requested
by the  Administrative  Agent or any  Lender,  including,  but not  limited  to,
information regarding litigation,  tax, accounting,  labor,  insurance,  pension
liabilities (actual or contingent),  real estate leases,  environmental matters,
material contracts, debt agreements, property ownership, contingent liabilities,


                                       44
<PAGE>

employment agreements, non-compete agreements and management of the Borrower and
its Subsidiaries.

     5.02 Conditions to all Credit Extensions.

     The obligation of each Lender to honor any Request for Credit  Extension is
subject to the following conditions precedent:

          (a) The representations and warranties of each Loan Party contained in
     Article  VI or any  other  Loan  Document,  or which are  contained  in any
     document  furnished  at  any  time  under  or  in  connection  herewith  or
     therewith,  shall be true and correct in all material respects on and as of
     the  date  of  such  Credit  Extension,  except  to the  extent  that  such
     representations  and warranties  specifically  refer to an earlier date, in
     which case they  shall be true and  correct as of such  earlier  date,  and
     except that for  purposes of this Section  5.02,  the  representations  and
     warranties  contained in  subsections  (a) and (b) of Section 6.05 shall be
     deemed to refer to the most recent statements furnished pursuant to clauses
     (a) and (b), respectively, of Section 7.01.

          (b) No Default shall exist,  or would result from such proposed Credit
     Extension.

          (c) There shall not have been  commenced  against the  Borrower or any
     Subsidiary an involuntary case under any applicable  Debtor Relief Law, now
     or hereafter  in effect,  or any case,  proceeding  or other action for the
     appointment  of  a  receiver,  liquidator,  assignee,  custodian,  trustee,
     sequestrator  (or similar  official) of such Person or for any  substantial
     part of its Property or for the winding up or  liquidation  of its affairs,
     and such involuntary  case or other case,  proceeding or other action shall
     remain undismissed.

          (d) The Administrative Agent and, if applicable, the L/C Issuer or the
     Swing Line Lender  shall have  received a Request for Credit  Extension  in
     accordance with the requirements hereof.

     Each Request for Credit Extension submitted by the Borrower shall be deemed
to be a  representation  and warranty that the conditions  specified in Sections
5.02(a), (b) and (c) have been satisfied on and as of the date of the applicable
Credit Extension.

                                   ARTICLE VI

                         REPRESENTATIONS AND WARRANTIES

     The Loan Parties represent and warrant to the Administrative  Agent and the
Lenders that:

     6.01 Existence, Qualification and Power.

     Each Loan Party (a) is a  corporation,  partnership  or  limited  liability
company duly  organized or formed,  validly  existing and in good standing under
the Laws of the jurisdiction of its  incorporation or organization,  (b) has all
requisite  power  and  authority  and  all  requisite   governmental   licenses,
authorizations,  consents  and  approvals to (i) own its assets and carry on its
business and (ii) execute,  deliver and perform its  obligations  under the Loan
Documents to which it is a party,  and (c) is duly qualified and is licensed and
in good standing under the Laws of each jurisdiction where its ownership,  lease
or  operation  of  properties  or the  conduct  of its  business  requires  such
qualification  or license;  except in each case  referred to in clause (b)(i) or
(c), to the extent  that  failure to do so could not  reasonably  be expected to
have a Material Adverse Effect.

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<PAGE>

     6.02 Authorization; No Contravention.

     The  execution,  delivery and  performance  by each Loan Party of each Loan
Document  to which  such  Person  is party  have  been  duly  authorized  by all
necessary  corporate or other  organizational  action, and do not (a) contravene
the terms of any of such Person's Organization  Documents;  (b) conflict with or
result in any breach or contravention of, or the creation of any Lien under, (i)
any  Contractual  Obligation  to which such Person is a party or (ii) any order,
injunction,  writ or decree of any Governmental  Authority or any arbitral award
to which  such  Person  or its  Property  is  subject;  or (c)  violate  any Law
(including, without limitation, Regulation U or Regulation X issued by the FRB).

     6.03 Governmental Authorization; Other Consents.

     No  approval,  consent,  exemption,  authorization,  or other action by, or
notice to, or filing  with,  any  Governmental  Authority or any other Person is
necessary or required in connection with the execution,  delivery or performance
by, or enforcement  against,  any Loan Party of this Agreement or any other Loan
Document,  other than (i) those that have already been  obtained and are in full
force and effect and (ii) filings to perfect the Liens created by the Collateral
Documents.

     6.04 Binding Effect.

     Each of this  Agreement and each other Loan Document has been duly executed
and delivered by each Loan Party that is party  thereto.  Each of this Agreement
and each other Loan Document  constitutes a legal,  valid and binding obligation
of each Loan Party that is party  thereto,  enforceable  against  each such Loan
Party in accordance with its terms,  except as enforceability  may be limited by
applicable   Debtor  Relief  Laws  or  by  equitable   principles   relating  to
enforceability.

     6.05 Financial Statements; No Material Adverse Effect.

     (a) The Audited  Financial  Statements (i) were prepared in accordance with
GAAP  consistently  applied  throughout  the period covered  thereby,  except as
otherwise expressly noted therein;  (ii) fairly present in all material respects
the  financial  condition of the Borrower  and its  Subsidiaries  as of the date
thereof  and their  results  of  operations  for the period  covered  thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except  as  otherwise  expressly  noted  therein;  and (iii)  show all  material
indebtedness and other  liabilities,  direct or contingent,  of the Borrower and
its  Subsidiaries  as of the date  thereof,  including  liabilities  for  taxes,
commitments and Indebtedness.

     (b) The Interim  Financial  Statements (i) were prepared in accordance with
GAAP  consistently  applied  throughout  the period covered  thereby,  except as
otherwise expressly noted therein;  (ii) fairly present in all material respects
the  financial  condition of the Borrower  and its  Subsidiaries  as of the date
thereof and their results of operations for the period covered thereby, subject,
in the case of clauses (i) and (ii),  to the absence of footnotes  and to normal
year-end audit adjustments;  and (iii) show all material  indebtedness and other
liabilities,  direct or contingent,  of the Borrower and its  Subsidiaries as of
the date thereof,  including  liabilities  for taxes,  material  commitments and
Indebtedness.

     (c) From January 31, 2003 to and including the Closing Date, there has been
no Disposition by the Borrower or any Subsidiary, or any Involuntary Disposition
(other than the Shanghai  Disposition),  of any material part of the business or
Property of the Borrower and its Subsidiaries, taken as a whole, and no purchase
or other  acquisition by any of them of any business or property  (including any
Capital  Stock of any other  Person)  material in  relation to the  consolidated
financial  condition of the Borrower and its Subsidiaries,  taken as a whole, in


                                       46
<PAGE>

each case,  which is not reflected in the foregoing  financial  statements or in
the notes thereto and has not otherwise been disclosed in writing to the Lenders
on or prior to the Closing Date.

     (d) The financial  statements delivered pursuant to Section 7.01(a) and (b)
have been prepared in accordance with GAAP (except as may otherwise be permitted
under Section 7.01(a) and (b)) and present fairly (on the basis disclosed in the
footnotes  to  such  financial   statements)   in  all  material   respects  the
consolidated  financial  condition,  results of operations and cash flows of the
Borrower  and its  Subsidiaries  as of the  dates  thereof  and for the  periods
covered thereby.

     (e) Since January 31, 2003 there has been no event or circumstance that has
had or could reasonably be expected to have a Material Adverse Effect.

     6.06 Litigation.

     There are no actions, suits, proceedings, claims or disputes pending or, to
the  knowledge  of the  Loan  Parties  after  due  and  diligent  investigation,
threatened or  contemplated,  at law, in equity,  in  arbitration  or before any
Governmental Authority, by or against the Borrower or any of its Subsidiaries or
against  any of their  properties  or  revenues  that (a)  purport  to affect or
pertain to this  Agreement  or any other  Loan  Document,  or (b) is  reasonably
likely to be determined adversely and, if determined adversely, could reasonably
be expected to have a Material Adverse Effect.

     6.07 No Default.

     (a) Neither the Borrower  nor any  Subsidiary  is in default  under or with
respect to any Contractual  Obligation that could reasonably be expected to have
a Material Adverse Effect.

     (b) No Default has occurred and is continuing.

     6.08 Ownership of Property; Liens.

     Each of the Borrower and its  Subsidiaries  has good record and  marketable
title in fee  simple to, or valid  leasehold  interests  in,  all real  property
necessary  or used in the  ordinary  conduct  of its  business,  except for such
defects in title as could not,  individually or in the aggregate,  reasonably be
expected to have a Material Adverse Effect. The Property of the Borrower and its
Subsidiaries is subject to no Liens, other than Permitted Liens.

     6.09 Environmental Compliance.

     Except as could not  reasonably  be  expected  to have a  Material  Adverse
Effect:

          (a) Each of the Facilities and all operations at the Facilities are in
     compliance  with  all  applicable  Environmental  Laws,  and  there  is  no
     violation of any  Environmental  Law with respect to the  Facilities or the
     Businesses,  and there are no conditions  relating to the Facilities or the
     Businesses   that  could  give  rise  to  liability  under  any  applicable
     Environmental Laws.

          (b) None of the Facilities contains, or has previously contained,  any
     Hazardous   Materials  at,  on  or  under  the  Facilities  in  amounts  or
     concentrations that constitute or constituted a violation of, or could give
     rise to liability under, Environmental Laws.

          (c) Neither the Borrower nor any  Subsidiary  has received any written
     or verbal notice of, or inquiry from any Governmental  Authority regarding,
     any violation,  alleged violation,  non-compliance,  liability or potential


                                       47
<PAGE>

     liability regarding  environmental matters or compliance with Environmental
     Laws with regard to any of the Facilities or the  Businesses,  nor does any
     Responsible  Officer of any Loan Party have  knowledge or reason to believe
     that any such notice will be received or is being threatened.

          (d) Hazardous  Materials have not been transported or disposed of from
     the  Facilities,  or  generated,  treated,  stored or disposed of at, on or
     under any of the  Facilities or any other  location,  in each case by or on
     behalf the Borrower or any  Subsidiary in violation of, or in a manner that
     would be reasonably  likely to give rise to liability under, any applicable
     Environmental Law.

          (e) No judicial proceeding or governmental or administrative action is
     pending  or,  to the  knowledge  of the  Responsible  Officers  of the Loan
     Parties,  threatened,  under any Environmental Law to which the Borrower or
     any  Subsidiary  is or will be named as a party,  nor are there any consent
     decrees or other decrees,  consent orders,  administrative  orders or other
     orders, or other administrative or judicial requirements  outstanding under
     any  Environmental  Law with respect to the Borrower,  any Subsidiary,  the
     Facilities or the Businesses.

          (f)  There has been no  release  or threat  of  release  of  Hazardous
     Materials  at or from the  Facilities,  or  arising  from or related to the
     operations (including, without limitation, disposal) of the Borrower or any
     Subsidiary  in  connection  with the  Facilities or otherwise in connection
     with the  Businesses,  in  violation  of or in amounts or in a manner  that
     could give rise to liability under Environmental Laws.

     6.10 Insurance.

     The  properties  of the  Borrower  and its  Subsidiaries  are insured  with
financially  sound and  reputable  insurance  companies  not  Affiliates  of the
Borrower,  in such amounts, with such deductibles and covering such risks as are
customarily  carried  by  companies  engaged in  similar  businesses  and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.

     6.11 Taxes.

     The Borrower and its Subsidiaries  have filed all federal,  state and other
material  tax  returns  and  reports  required  to be  filed,  and have paid all
federal,   state  and  other  material  taxes,   assessments,   fees  and  other
governmental charges levied or imposed upon them or their properties,  income or
assets otherwise due and payable, except those which are being contested in good
faith by  appropriate  proceedings  diligently  conducted and for which adequate
reserves have been provided in  accordance  with GAAP.  There is no proposed tax
assessment  against the Borrower or any Subsidiary  that would,  if made, have a
Material Adverse Effect.

     6.12 ERISA Compliance.

     (a) Except as could not  reasonably be expected to have a Material  Adverse
Effect,  (i)  each  Plan is in  compliance  in all  material  respects  with the
applicable  provisions of ERISA,  the Internal Revenue Code and other federal or
state Laws and (ii) each Plan that is intended to qualify under  Section  401(a)
of the Internal Revenue Code has received a favorable  determination letter from
the IRS or an application  for such a letter is currently being processed by the
IRS with respect thereto and, to the best knowledge of the Loan Parties, nothing
has occurred which would prevent, or cause the loss of, such qualification. Each
Loan Party and each ERISA Affiliate have made all required contributions to each
Plan subject to Section 412 of the Internal Revenue Code, and no application for
a funding waiver or an extension of any amortization  period pursuant to Section


                                       48
<PAGE>

412 of the Internal Revenue Code has been made with respect to any Plan.

     (b) There are no pending  or, to the best  knowledge  of the Loan  Parties,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse  Effect.  There has been no prohibited  transaction  or violation of the
fiduciary  responsibility  rules with  respect to any Plan that has  resulted or
could reasonably be expected to result in a Material Adverse Effect.

     (c) (i) No ERISA  Event has  occurred  or is  reasonably  expected to occur
which  would  lead to  liability  in excess of the  Threshold  Amount;  (ii) the
aggregate  Unfunded  Pension  Liability  for all Pension  Plans is less than the
Threshold  Amount;  (iii) no Loan Party or any ERISA Affiliate has incurred,  or
reasonably expects to incur, any material liability under Title IV of ERISA with
respect to any Pension Plan (other than  premiums due and not  delinquent  under
Section 4007 of ERISA);  (iv) no Loan Party or any ERISA Affiliate has incurred,
or  reasonably  expects  to  incur,  any  material  liability  (and no event has
occurred  which,  with the giving of notice under  Section 4219 of ERISA,  would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer  Plan; and (v) no Loan Party or any ERISA Affiliate has engaged in
a transaction that could be subject to Section 4069 or 4212(c) of ERISA.

     6.13 Subsidiaries.

     Set  forth on  Schedule  6.13 is a  complete  and  accurate  list as of the
Closing Date of each  Subsidiary,  together with the  percentage of  outstanding
shares of each class  owned  (directly  or  indirectly)  by the  Borrower or any
Subsidiary.  The outstanding Capital Stock of each Subsidiary is validly issued,
fully paid and non-assessable.

     6.14 Margin  Regulations;  Investment  Company Act;  Public Utility Holding
Company Act.

     (a) The Borrower is not engaged and will not engage,  principally or as one
of its important  activities,  in the business of purchasing or carrying  margin
stock  (within  the meaning of  Regulation  U issued by the FRB),  or  extending
credit for the purpose of purchasing or carrying margin stock.

     (b) None of the  transactions  contemplated  by this Agreement  (including,
without limitation,  the Letters of Credit and the direct or indirect use of the
proceeds of the Loans) will violate or result in a violation  of the  Securities
Act of 1933  or the  Securities  Exchange  Act of  1934  or  regulations  issued
pursuant thereto, or Regulation T, U or X of the FRB. If requested by any Lender
or the  Administrative  Agent,  the Borrower will furnish to the  Administrative
Agent and each Lender a statement  to the effect of the  foregoing  sentences in
conformity  with the  requirements of FR Form U-1 referred to in Regulation U of
the FRB.

     (c) None of the  Borrower,  any  Person  Controlling  the  Borrower  or any
Subsidiary (i) is a "holding  company," or a "subsidiary  company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary  company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of  1935,  or (ii) is or is  required  to be  registered  as an  "investment
company" under the Investment Company Act of 1940.

     6.15 Disclosure.

     No report, financial statement,  certificate or other information furnished
(whether  in  writing  or  orally)  by or on  behalf  of any  Loan  Party to the


                                       49
<PAGE>

Administrative   Agent  or  any  Lender  in  connection  with  the  transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
(as modified or  supplemented  by other  information so furnished)  contains any
material  misstatement  of fact or omits to state any material fact necessary to
make the statements  therein, in the light of the circumstances under which they
were made, not misleading;  provided that,  with respect to projected  financial
information,  the Loan Parties represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time.

     6.16 Compliance with Laws.

     Each  of the  Borrower  and  each  Subsidiary  is in  compliance  with  the
requirements  of all  Laws  and  all  orders,  writs,  injunctions  and  decrees
applicable  to it or to its  properties,  except in such  instances in which (a)
such requirement of Law or order, writ,  injunction or decree is being contested
in good faith by appropriate proceedings diligently conducted or (b) the failure
to comply  therewith could not reasonably be expected to have a Material Adverse
Effect.

     6.17 Intellectual Property; Licenses, Etc.

     The Borrower and its  Subsidiaries  own, or possess the legal right to use,
all of the trademarks,  service marks, trade names, copyrights,  patents, patent
rights,   franchises,   licenses   and  other   intellectual   property   rights
(collectively,  "IP Rights") that are reasonably  necessary for the operation of
their respective businesses. Except for such claims and infringements that could
not reasonably be expected to have a Material Adverse Effect,  no claim has been
asserted and is pending by any Person  challenging or questioning the use of any
IP Rights or the validity or effectiveness  of any IP Rights,  nor does any Loan
Party know of any such  claim.  Except for such  claims and  infringements  that
could not  reasonably  be expected  to have a Material  Adverse  Effect,  to the
knowledge of the Responsible Officers of the Loan Parties, (i) the use of any IP
Rights by the Borrower or any Subsidiary or the granting of a right or a license
in  respect  of any IP  Rights  from the  Borrower  or any  Subsidiary  does not
infringe on the rights of any Person and (ii) there is no infringement on the IP
Rights of the Borrower or any Subsidiary.

     6.18 Broker's Fees.

     Neither the Borrower nor any Subsidiary has any obligation to any Person in
respect of any finder's,  broker's,  investment  banking or other similar fee in
connection with any of the transactions contemplated under the Loan Documents.

     6.19 Labor Matters.

     There  are no  collective  bargaining  agreements  or  Multiemployer  Plans
covering the employees of the Borrower or any  Subsidiary as of the Closing Date
and neither the Borrower nor any Subsidiary has suffered any strikes,  walkouts,
work stoppages or other material labor difficulty within the last five years.

     6.20 Tax Shelter Regulations.

     The Borrower  does not intend to treat the Loans  and/or  Letters of Credit
and related transactions as being a "reportable transaction" (within the meaning
of Treasury  Regulation Section 1.6011-4).  In the event the Borrower determines
to take any action inconsistent with such intention, it will promptly notify the
Administrative  Agent  thereof.  If the Borrower so notifies the  Administrative
Agent, the Borrower  acknowledges  that one or more of the Lenders may treat its
Loans and/or its  interest in Swing Line Loans and/or  Letters of Credit as part
of a transaction that is subject to Treasury Regulation Section 301.6112-1,  and
such Lender or Lenders, as applicable, will maintain the lists and other records
required by such Treasury Regulation.

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<PAGE>

                                   ARTICLE VII

                              AFFIRMATIVE COVENANTS

     So long as any Lender shall have any Revolving  Commitment  hereunder,  any
Loan or other  Obligation  hereunder shall remain unpaid or unsatisfied,  or any
Letter of Credit shall  remain  outstanding,  the Loan  Parties  shall and shall
cause each Subsidiary to:

     7.01 Financial Statements.

     Deliver to the  Administrative  Agent and each  Lender,  in form and detail
satisfactory to the Administrative Agent and the Required Lenders:

          (a) as soon as  available,  but in any event within  ninety-five  (95)
     days after the end of each  fiscal  year of the  Borrower,  a  consolidated
     balance  sheet of the Borrower and its  Subsidiaries  as at the end of such
     fiscal  year,  and  the  related  consolidated   statements  of  income  or
     operations, retained earnings, shareholders' equity and cash flows for such
     fiscal year,  setting forth in each case in comparative form the figures as
     of the end of and for the previous  fiscal year,  all in reasonable  detail
     and prepared in accordance  with GAAP,  audited and accompanied by a report
     and opinion of PricewaterhouseCoopers or other independent certified public
     accountants of nationally  recognized standing reasonably acceptable to the
     Required Lenders,  which report and opinion shall be prepared in accordance
     with generally  accepted auditing standards and shall not be subject to any
     "going concern" or like  qualification or exception or any qualification or
     exception as to the scope of such audit; and

          (b) as soon as  available,  but in any event  within  fifty  (50) days
     after the end of each of the first  three  fiscal  quarters  of each fiscal
     year of the Borrower,  a consolidated balance sheet of the Borrower and its
     Subsidiaries  as at  the  end of  such  fiscal  quarter,  and  the  related
     consolidated  statements  of  income  or  operations,   retained  earnings,
     shareholders'  equity and cash flows for such  fiscal  quarter  and for the
     portion of the  Borrower's  fiscal year then ended,  setting  forth in each
     case  in  comparative  form  the  figures  as of the  end of  and  for  the
     corresponding   fiscal  quarter  of  the  previous   fiscal  year  and  the
     corresponding portion of the previous fiscal year, all in reasonable detail
     and certified by a Responsible Officer of the Borrower as fairly presenting
     in all material  respects the financial  condition,  results of operations,
     shareholders' equity and cash flows of the Borrower and its Subsidiaries in
     accordance with GAAP, subject only to normal year-end audit adjustments and
     the absence of footnotes.

          As to any  information  contained in materials  furnished  pursuant to
     Section 7.02(d),  the Borrower shall not be separately  required to furnish
     such information under clause (a) or (b) above, but the foregoing shall not
     be in  derogation  of  the  obligation  of  the  Borrower  to  furnish  the
     information and materials described in subsections (a) and (b) above at the
     times specified therein.

          7.02 Certificates; Other Information.

          Deliver  to the  Administrative  Agent  and each  Lender,  in form and
     detail satisfactory to the Administrative Agent and the Required Lenders:

               (a)  concurrently  with the delivery of the financial  statements
          referred  to in Section  7.01(a),  a  certificate  of its  independent
          certified public accountants  certifying such financial statements and
          stating that in making the examination necessary therefor no knowledge


                                       51
<PAGE>

          was  obtained  of any  Default  under any of the  financial  covenants
          contained in Section 8.11 or, if any such Default shall exist, stating
          the nature and status of such event;

               (b)  concurrently  with the delivery of the financial  statements
          referred to in Sections  7.01(a) and (b), a duly completed  Compliance
          Certificate signed by a Responsible Officer of the Borrower;

               (c)  within  forty-five  (45) days  after the end of each  fiscal
          year,  the annual  business  plan and budget of the  Borrower  and its
          Subsidiaries  containing,  among  other  things,  projected  financial
          statements for each quarter of the next fiscal year;

               (d) copies of any final (as  distinguished  from a preliminary or
          discussion  draft)  detailed  audit  reports,  management  letters  or
          recommendations  submitted  to the  board of  directors  (or the audit
          committee of the board of  directors)  of the Borrower by  independent
          accountants  in connection  with the accounts or books of the Borrower
          or any Subsidiary, or any audit of any of them;

               (e) promptly after the same are available,  copies of each annual
          report,  proxy or financial statement or other report or communication
          sent to the  stockholders  of the Borrower,  and copies of all annual,
          regular,  periodic  and special  reports and  registration  statements
          which the  Borrower may file or be required to file with the SEC under
          Section  13 or 15(d) of the  Securities  Exchange  Act of 1934 or to a
          holder of any  Indebtedness  owed by the Borrower or any Subsidiary in
          its  capacity  as such a  holder  and  not  otherwise  required  to be
          delivered to the Administrative Agent pursuant hereto;

               (f) promptly, such additional information regarding the business,
          financial or corporate  affairs of the Borrower or any Subsidiary,  or
          compliance with the terms of the Loan Documents, as the Administrative
          Agent or any Lender may from time to time reasonably request; and

               (g) promptly  after the Borrower has notified the  Administrative
          Agent of any  intention  by the  Borrower  to treat the  Loans  and/or
          Letters  of Credit and  related  transactions  as being a  "reportable
          transaction"  (within  the  meaning  of  Treasury  Regulation  Section
          1.6011-4),  a duly  completed  copy of IRS Form 8886 or any  successor
          form.

     Documents  required to be delivered  pursuant to Section  7.01(a) or (b) or
Section  7.02(f) may (to the extent any such documents are included in materials
otherwise filed with the SEC) be delivered  electronically  and if so delivered,
shall be  deemed to have been  delivered  on the date (i) on which the  Borrower
posts such  documents,  or provides a link thereto on the Borrower's  website on
the Internet at the website  address listed on Schedule  11.02; or (ii) on which
such documents are posted on the Borrower's behalf on  IntraLinks/IntraAgency or
another relevant  website,  if any, to which each Lender and the  Administrative
Agent  have  access  (whether  a  commercial,  third-party  website  or  whether
sponsored by the  Administrative  Agent);  provided that: (i) the Borrower shall
deliver paper copies of such documents to the Administrative Agent or any Lender
that requests the Borrower to deliver such paper copies until a written  request
to cease  delivering paper copies is given by the  Administrative  Agent or such
Lender  and (ii)  the  Borrower  shall  notify  (which  may be by  facsimile  or
electronic mail) the Administrative  Agent and each Lender of the posting of any
such  documents  and  provide to the  Administrative  Agent by  electronic  mail
electronic  versions  (i.e.,  soft  copies) of such  documents.  Notwithstanding
anything  contained  herein, in every instance the Borrower shall be required to
provide paper copies of the Compliance  Certificates required by Section 7.02(b)
to the Administrative Agent and each of the Lenders.  Except for such Compliance
Certificates,  the Administrative  Agent shall have no obligation to request the


                                       52
<PAGE>

delivery or to maintain  copies of the documents  referred to above,  and in any
event shall have no  responsibility  to monitor  compliance by the Borrower with
any such request for delivery,  and each Lender shall be solely  responsible for
requesting delivery to it or maintaining its copies of such documents.

     7.03 Notices.

     (a)  Promptly  (and in any event  within  two  Business  Days)  notify  the
Administrative Agent and each Lender of the occurrence of any Default.

     (b)  Promptly  notify  the  Administrative  Agent  and each  Lender  of the
commencement  of, or any material  development  in, any litigation or proceeding
affecting the Borrower or any Subsidiary,  including  pursuant to any applicable
Environmental  Laws,  if either (i) the claim in such  litigation  or proceeding
requests  damages or other  amounts in excess of  $5,000,000  (to the extent not
covered  by  independent  third-party  insurance  as to which  the  insurer  has
acknowledged  in writing  its  obligation  to cover) or (i) such  litigation  or
proceeding, if adversely determined, could reasonably be expected to result in a
Material Adverse Effect;

     (c) Promptly notify the Administrative  Agent and each Lender of any matter
that has  resulted  or could  reasonably  be  expected  to result in a  Material
Adverse Effect, including to the same extent the following has resulted or could
reasonably  be expected to result in a Material  Adverse  Effect:  (i) breach or
non-performance  of, or any  default  under,  a  Contractual  Obligation  of the
Borrower or any  Subsidiary;  or (ii) any  dispute,  litigation,  investigation,
proceeding  or  suspension  between  the  Borrower  or any  Subsidiary  and  any
Governmental Authority.

     (d)  Promptly  notify  the  Administrative  Agent  and each  Lender  of the
occurrence  of any ERISA Event which  would lead to  liability  in excess of the
Threshold Amount.

     (e)  Promptly  notify  the  Administrative  Agent  and each  Lender  of any
material change in accounting  policies or financial  reporting practices by the
Borrower or any Subsidiary.

     (f)  Upon  the  reasonable  written  request  of the  Administrative  Agent
following the  occurrence  of any event or the discovery of any condition  which
the  Administrative  Agent or the Required Lenders reasonably believe has caused
(or could be reasonably  expected to cause) the  representations  and warranties
set forth in Section 6.09 to be untrue in any material respect, furnish or cause
to be furnished to the  Administrative  Agent, at the Loan Parties'  expense,  a
report of an  environmental  assessment  of  reasonable  scope,  form and depth,
(including,  where  appropriate,  invasive  soil or  groundwater  sampling) by a
consultant  reasonably  acceptable to the Administrative  Agent as to the nature
and extent of the  presence of any  Materials  of  Environmental  Concern on any
Facilities and as to the  compliance by the Borrower or any of its  Subsidiaries
with Environmental Laws at such Facilities.  If the Loan Parties fail to deliver
such an environmental report within seventy-five (75) days after receipt of such
written request then the Administrative Agent may arrange for same, and the Loan
Parties hereby grant to the Administrative Agent and its representatives  access
to the Facilities to reasonably undertake such an assessment  (including,  where
appropriate,  invasive soil or groundwater sampling). The reasonable cost of any
assessment  arranged for by the Administrative  Agent pursuant to this provision
will be  payable  by the Loan  Parties  on demand  and added to the  obligations
secured by the Collateral Documents.

     Each  notice  pursuant  to this  Section  7.03  shall be  accompanied  by a
statement of a Responsible  Officer of the Borrower setting forth details of the
occurrence  referred to therein and stating  what action the  Borrower has taken
and  proposes to take with  respect  thereto.  Each  notice  pursuant to Section



                                       53
<PAGE>



7.03(a)  shall  describe  with  particularity  any  and all  provisions  of this
Agreement and any other Loan Document that have been breached.

     7.04 Payment of Obligations.

     Pay and  discharge,  as the same  shall  become  due and  payable,  all its
obligations and liabilities, including (a) all tax liabilities,  assessments and
governmental  charges or levies upon it or its properties or assets,  unless the
same are being  contested in good faith by  appropriate  proceedings  diligently
conducted and adequate  reserves in accordance with GAAP are being maintained by
the Borrower or such  Subsidiary;  and (b) all lawful claims  which,  if unpaid,
would by law become a Lien upon its Property unless the same are being contested
in good faith by  appropriate  proceedings  diligently  conducted  and  adequate
reserves in  accordance  with GAAP are being  maintained by the Borrower or such
Subsidiary.

     7.05 Preservation of Existence, Etc.

     (a)  Preserve,  renew  and  maintain  in full  force and  effect  its legal
existence  under the Laws of the  jurisdiction of its  organization  except in a
transaction permitted by Section 8.04 or 8.05.

     (b) Preserve, renew and maintain in full force and effect its good standing
under the Laws of the jurisdiction of its organization, except to the extent the
failure to do so could not  reasonably  be expected  to have a Material  Adverse
Effect.

     (c) Take all reasonable action to maintain all rights, privileges, permits,
licenses and  franchises  necessary  or  desirable in the normal  conduct of its
business,  except to the extent the  failure  to do so could not  reasonably  be
expected to have a Material Adverse Effect.

     (d) Preserve or renew all of its material registered  patents,  copyrights,
trademarks,  trade names and service marks,  except to the extent the failure to
do so could not reasonably be expected to have a Material Adverse Effect.

     7.06 Maintenance of Properties.

     (a)  Maintain,  preserve  and protect all of its  material  properties  and
equipment  necessary in the  operation of its business in good working order and
condition, ordinary wear and tear and Involuntary Dispositions excepted.

     (b) Make all  necessary  repairs  thereto  and  renewals  and  replacements
thereof,  except to the extent  the  failure  to do so could not  reasonably  be
expected to have a Material Adverse Effect.

     (c) Use the standard of care typical in the industry in the  operation  and
maintenance of its facilities.

     7.07 Maintenance of Insurance.

     Maintain   in  full  force  and  effect   insurance   (including   worker's
compensation  insurance,  liability  insurance,  casualty insurance and business
interruption insurance) with financially sound and reputable insurance companies
not  Affiliates of the  Borrower,  in such amounts,  with such  deductibles  and
covering such risks as are customarily  carried by companies  engaged in similar
businesses and owning similar properties in localities where the Borrower or the
applicable Subsidiary operates.

                                       54
<PAGE>

     7.08 Compliance with Laws.

     Comply with the requirements of all Laws and all orders, writs, injunctions
and decrees  applicable  to it or to its  business or  Property,  except in such
instances in which (a) such  requirement  of Law or order,  writ,  injunction or
decree is being  contested in good faith by appropriate  proceedings  diligently
conducted;  or (b) the  failure  to comply  therewith  could not  reasonably  be
expected to have a Material Adverse Effect.

     7.09 Books and Records.

     (a) Maintain  proper books of record and account,  in which full,  true and
correct  entries in conformity with GAAP  consistently  applied shall be made of
all financial  transactions and matters involving the assets and business of the
Borrower or such Subsidiary, as the case may be.

     (b) Maintain such books of record and account in material  conformity  with
all applicable  requirements of any  Governmental  Authority  having  regulatory
jurisdiction over the Borrower or such Subsidiary, as the case may be.

     7.10 Inspection Rights.

     Permit  representatives  and independent  contractors of the Administrative
Agent and each Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants,  all at the expense of the Lenders
and at such reasonable times during normal business hours and as often as may be
reasonably  desired,  upon reasonable advance notice to the Borrower;  provided,
however,  that when an Event of Default exists the  Administrative  Agent or any
Lender (or any of their respective  representatives or independent  contractors)
may do any of the  foregoing  at the expense of the  Borrower at any time during
normal business hours and upon reasonable advance notice to the Borrower.

     7.11 Use of Proceeds.

     Use the proceeds of the Credit  Extensions (a) to finance working  capital,
capital  expenditures and other general corporate  purposes and (b) to refinance
Indebtedness  of the Borrower  and its  Subsidiaries  under the Existing  Credit
Agreement,  provided  that in no event  shall any of the  proceeds of the Credit
Extensions be used in contravention of any Law or of any Loan Document.

     7.12 Additional Subsidiaries.

     Within  thirty  (30)  days  after  the  acquisition  or  formation  of  any
Subsidiary:

          (a) notify the Administrative Agent thereof in writing,  together with
     the (i)  jurisdiction of formation,  (ii) number of shares of each class of
     Capital  Stock  outstanding,  (iii) number and  percentage  of  outstanding
     shares of each class owned  (directly or indirectly) by the Borrower or any
     Subsidiary  and (iv) number and effect,  if exercised,  of all  outstanding
     options,  warrants,  rights of conversion or purchase and all other similar
     rights with respect thereto; and

          (b) if such Subsidiary is a Domestic Subsidiary,  cause such Person to
     (i) become a Guarantor by executing and  delivering  to the  Administrative
     Agent a Joinder  Agreement  or such other  document  as the  Administrative
     Agent shall deem  appropriate  for such  purpose,  and (ii)  deliver to the
     Administrative Agent documents of the types referred to in Sections 5.01(b)


                                       55
<PAGE>

     and (d) and  favorable  opinions  of counsel to such  Person  (which  shall
     cover,  among other things,  the  legality,  validity,  binding  effect and
     enforceability  of the  documentation  referred to in clause  (a)),  all in
     form,  content  and scope  reasonably  satisfactory  to the  Administrative
     Agent.

     7.13 ERISA Compliance.

     Do, and cause each of its ERISA  Affiliates  to do, each of the  following:
(a)  maintain  each  Plan  in  compliance  in all  material  respects  with  the
applicable  provisions of ERISA,  the Internal Revenue Code and other federal or
state law; (b) cause each Plan that is  qualified  under  Section  401(a) of the
Internal Revenue Code to maintain such qualification;  and (c) make all required
contributions to any Plan subject to Section 412 of the Internal Revenue Code.

     7.14 Pledged Assets.

     Cause  the  following  to be  subject  at all  times  to a first  priority,
perfected Lien in favor of the  Administrative  Agent, for the benefit of itself
and  the  Lenders,  pursuant  to the  terms  and  conditions  of the  Collateral
Documents or such other  security  documents as the  Administrative  Agent shall
reasonably request: (a) 100% of the issued and outstanding Capital Stock of each
Domestic  Subsidiary  (other  than any  Immaterial  Subsidiary);  (b)  shares of
Capital Stock representing 65% of the total combined voting power of all classes
of Capital  Stock  entitled to vote of each Foreign  Subsidiary  (other than any
Immaterial  Subsidiary)  directly  owned by any  Loan  Party  (or  such  greater
percentage if, due to a change in an applicable  Law after the date hereof,  the
greater  percentage  could not  reasonably  be expected  to cause  either (i) an
inclusion  in the gross  income of any Loan Party under  Internal  Revenue  Code
Section  951(a)(1)(B) or (ii) any other material  adverse tax consequence to the
Loan  Parties  or a  Foreign  Subsidiary);  and  (c)  100%  of  all  issued  and
outstanding  shares of Capital  Stock of any class of stock that is not entitled
to vote (within the meaning of U.S. Treasury  Regulation Section  1.956-2(c)(2))
of each Foreign Subsidiary (other than any Immaterial Subsidiary) directly owned
by any Loan Party.


                                  ARTICLE VIII

                               NEGATIVE COVENANTS

     So long as any Lender shall have any Revolving  Commitment  hereunder,  any
Loan or other  Obligation  hereunder shall remain unpaid or unsatisfied,  or any
Letter of Credit shall  remain  outstanding,  no Loan Party shall,  nor shall it
permit any Subsidiary to, directly or indirectly:

     8.01 Liens.

     Create,  incur, assume or suffer to exist any Lien upon any of its Property
(other than any "margin  stock" within the meaning of Regulation U), whether now
owned or hereafter acquired, other than the following:

          (a) Liens pursuant to any Loan Document;

          (b) Liens  existing on the date hereof and listed on Schedule 8.01 and
     any renewals or  extensions  thereof,  provided  that the Property  covered
     thereby is not  increased  and any renewal or extension of the  obligations
     secured or benefited thereby is permitted by Section 8.03(b);

          (c)  Liens  (other  than  Liens   imposed   under  ERISA)  for  taxes,
     assessments  or  governmental  charges  or levies  not yet due or which are
     being  contested in good faith and by  appropriate  proceedings  diligently


                                       56
<PAGE>

     conducted,  if adequate reserves with respect thereto are maintained on the
     books of the applicable Person in accordance with GAAP;

          (d) statutory Liens of landlords and Liens of carriers,  warehousemen,
     mechanics,  materialmen  and  suppliers  and other Liens  imposed by law or
     pursuant to customary  reservations  or  retentions of title arising in the
     ordinary  course of business,  provided that such Liens secure only amounts
     not yet due and  payable or, if due and  payable,  are unfiled and no other
     action has been taken to enforce  the same or are being  contested  in good
     faith by appropriate  proceedings for which adequate reserves determined in
     accordance with GAAP have been established;

          (e)  pledges  or  deposits  in the  ordinary  course  of  business  in
     connection  with  workers'  compensation,  unemployment  or other  types of
     insurance  and  other  social  security  legislation,  other  than any Lien
     imposed by ERISA;

          (f)  deposits  to secure the  performance  of bids,  trade  contracts,
     licenses  and leases  (other  than  Indebtedness),  statutory  obligations,
     surety  bonds  (other  than bonds  related  to  judgments  or  litigation),
     performance  bonds and other  obligations of a like nature  incurred in the
     ordinary course of business;

          (g)   easements,   rights-of-way,   restrictions   and  other  similar
     encumbrances  affecting  real property  which,  in the  aggregate,  are not
     substantial in amount, and which do not in any case materially detract from
     the value of the property subject thereto or materially  interfere with the
     ordinary conduct of the business of the applicable Person;

          (h) Liens  securing  judgments  for the payment of money (or appeal or
     other surety bonds relating to such  judgments) not in excess of $1,000,000
     (except to the extent  covered by independent  third-party  insurance as to
     which the insurer has  acknowledged  in writing its  obligation  to cover),
     unless any such  judgment  remains  undischarged  for a period of more than
     sixty (60)  consecutive  days during  which  execution  is not  effectively
     stayed;

          (i) Liens  securing  Indebtedness  permitted  under  Section  8.03(c);
     provided that (i) such Liens do not at any time encumber any Property other
     than the  Property  financed by such  Indebtedness,  (ii) the  Indebtedness
     secured thereby does not exceed the cost or fair market value, whichever is
     lower,  of the Property being acquired on the date of acquisition and (iii)
     such Liens attach to such Property  concurrently with or within ninety days
     after the acquisition thereof;

          (j) leases, licenses or subleases granted to others not interfering in
     any material respect with the business of the Borrower or any Subsidiary;

          (k) any interest of title of a lessor  under,  and Liens  arising from
     UCC  financing   statements  (or  equivalent   filings,   registrations  or
     agreements in foreign jurisdictions)  relating to, leases permitted by this
     Agreement;

          (l) Liens deemed to exist in connection with Investments in repurchase
     agreements permitted under Section 8.02;

          (m) normal and  customary  rights of setoff  upon  deposits of cash in
     favor of banks or other depository institutions;

          (n) Liens of a collection  bank  arising  under  Section  4-210 of the
     Uniform Commercial Code on items in the course of collection;

                                       57
<PAGE>

          (o)  Liens  of  sellers  of  goods  to  the  Borrower  and  any of its
     Subsidiaries  arising  under  Article 2 of the Uniform  Commercial  Code or
     similar  provisions of applicable  law in the ordinary  course of business,
     covering  only the goods sold and securing only the unpaid  purchase  price
     for such goods and related expenses; and

          (p)  Liens  on  the   Property   of  Foreign   Subsidiaries   securing
     Indebtedness of Foreign  Subsidiaries  under the working capital facilities
     referenced in Section 8.03(i).

     8.02 Investments.

     Make any Investments, except:

          (a) cash or Cash Equivalents;

          (b)  accounts  receivable  created,  acquired or made and trade credit
     extended in the ordinary course of business and payable or dischargeable in
     accordance with customary trade terms;

          (c) Investments consisting of stock, obligations,  securities or other
     property  received in  settlement  of accounts  receivable  (created in the
     ordinary course of business) from bankrupt obligors;

          (d)  Investments  existing  as of the  Closing  Date and set  forth in
     Schedule 8.02;

          (e) Guarantees permitted by Section 8.03;

          (f) Permitted Acquisitions;

          (g) Investments  received as consideration for Dispositions  permitted
     under Section 8.05;

          (h)  loans  and  advances  to  employees,  directors  or  officers  in
     connection  with the  award  of  convertible  bonds or stock  under a stock
     incentive plan, stock option plan or other  equity-based  compensation plan
     or arrangement in the aggregate not to exceed $1,000,000 (calculated on the
     exercise  price  for  any  such  shares)  in  the  aggregate  at  any  time
     outstanding;

          (i) loans and advances to employees, directors, officers or agents for
     travel or other business expenses in the ordinary course of business;

          (j) loans and advances to employees, directors, officers or agents not
     to exceed $500,000 in the aggregate at any time outstanding;

          (k) advances or loans to customers,  manufacturer  representatives and
     suppliers  that do not exceed  $1,000,000  in the aggregate at any one time
     outstanding;

          (l) Investments made prior to the Closing Date in any Subsidiary;

          (m)   Investments  by  any  Foreign   Subsidiary  in  another  Foreign
     Subsidiary;

          (n)  Investments  in any Person  that is a Loan Party  prior to giving
     effect to such Investment;

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          (o)  Investments  in Shanghai  in an amount not to exceed  $10,000,000
     after the Closing Date; and

          (p)  Investments  not permitted in the foregoing  clauses in an amount
     not to exceed $30,000,000 in the aggregate at any time outstanding.

     8.03 Indebtedness.

     Create, incur, assume or suffer to exist any Indebtedness, except:

          (a) Indebtedness under the Loan Documents;

          (b)  Indebtedness  of the Borrower and its  Subsidiaries  set forth in
     Schedule 8.03 (and renewals,  refinancings and extensions  thereof on terms
     and conditions not materially less favorable to the applicable debtor(s));

          (c) purchase money Indebtedness  (including  obligations in respect of
     Capital Leases or Synthetic Leases)  hereafter  incurred by the Borrower or
     any of its  Subsidiaries to finance the purchase of fixed assets,  provided
     that (i) such  Indebtedness  when  incurred  shall not exceed the  purchase
     price  of the  asset(s)  financed,  (ii)  no  such  Indebtedness  shall  be
     refinanced  for a  principal  amount  in excess  of the  principal  balance
     outstanding  thereon  at the time of such  refinancing  and (iii) the total
     amount of all such  Indebtedness at any time outstanding  together with any
     Indebtedness  incurred  and  outstanding  pursuant  to Section  8.03(g) and
     Section 8.03(k) shall not exceed $25,000,000;

          (d)  obligations  (contingent  or  otherwise)  of the  Borrower or any
     Subsidiary  existing or arising under any Swap Contract,  provided that (i)
     such  obligations are (or were) entered into by such Person in the ordinary
     course of business for the purpose of directly  mitigating risks associated
     with  liabilities,  commitments,  investments,  assets, or property held or
     reasonably  anticipated  by  such  Person,  or  changes  in  the  value  of
     securities  issued by such Person,  and not for purposes of  speculation or
     taking a "market  view;" and (ii) such Swap  Contract  does not contain any
     provision  exonerating the non-defaulting party from its obligation to make
     payments on outstanding transactions to the defaulting party;

          (e) intercompany Indebtedness permitted under Section 8.02;

          (f)  Guarantees  with  respect to  Indebtedness  permitted  under this
     Section 8.03;

          (g)   Subordinated   Indebtedness   incurred   to  finance   Permitted
     Acquisitions,  provided  that (i) the Borrower  shall have  delivered a Pro
     Forma  Compliance  Certificate to the  Administrative  Agent  demonstrating
     that,  upon giving  effect on a Pro Forma Basis to the  incurrence  of such
     Subordinated Indebtedness, the Loan Parties would be in compliance with the
     financial  covenants set forth in Section 8.11 as of the most recent fiscal
     quarter  end for which the  Borrower  has  delivered  financial  statements
     pursuant  to  Section  7.01(a)  or  (b),  (ii)  the  total  amount  of such
     Subordinated  Indebtedness  at  any  time  outstanding  together  with  any
     Indebtedness  incurred  and  outstanding  pursuant  to Section  8.03(c) and
     Section 8.03(k) shall not exceed $25,000,000 and (iii) no Default exists or
     would exist after  giving  effect to the  incurrence  of such  Subordinated
     Indebtedness;

          (h)  Indebtedness  of  Shanghai  not  to  exceed  $12,000,000  in  the
     aggregate at any time outstanding;

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          (i)  Indebtedness  of  Foreign   Subsidiaries  under  working  capital
     facilities  in an amount not to exceed  $5,000,000  in the aggregate at any
     time outstanding;

          (j) Indebtedness of C&D Holdings  Limited,  a company formed under the
     laws of the United Kingdom, of up to Twenty Million British Pounds Sterling
     ((pound)20,000,000) under an unsecured revolving credit facility;

          (k) other  unsecured  Indebtedness,  provided that the total amount of
     such  Indebtedness at any time  outstanding  together with any Indebtedness
     incurred and  outstanding  pursuant to Section  8.03(c) and Section 8.03(g)
     shall not exceed $25,000,000; and

          (l)  Attributable  Indebtedness  in  respect  of  Sale  and  Leaseback
     Transactions in an amount not to exceed $15,000,000 in the aggregate at any
     time outstanding.

     8.04 Fundamental Changes.

     Merge,  dissolve,  liquidate,  consolidate with or into another Person,  or
Dispose of (whether in one  transaction or in a series of  transactions)  all or
substantially all of its assets (whether now owned or hereafter  acquired) to or
in favor of any Person; provided that,  notwithstanding the foregoing provisions
of this Section 8.04 but subject to the terms of Sections 7.12 and 7.14, (a) the
Borrower  may  merge or  consolidate  with  any  Subsidiary,  provided  that the
Borrower  shall be the continuing or surviving  corporation,  (b) any Subsidiary
may merge or  consolidate  with any  other  Subsidiary,  provided  that (i) if a
Guarantor  is a party  thereto,  then a  Guarantor  shall be the  continuing  or
surviving  corporation  and (ii) if a  Guarantor  is not a party  thereto  and a
Domestic Subsidiary is a party thereto,  then a Domestic Subsidiary shall be the
continuing  or  surviving  corporation,  (c) any  Subsidiary  may merge with any
Person that is not a Loan Party in connection with a Disposition permitted under
Section 8.05,  (d) the Borrower or any Subsidiary may merge with any Person that
is not a Loan Party in connection with a Permitted Acquisition provided that, if
such transaction involves the Borrower,  the Borrower shall be the continuing or
surviving  corporation,  and (e)  any  Wholly  Owned  Subsidiary  may  dissolve,
liquidate  or wind up its affairs at any time  provided  that such  dissolution,
liquidation  or winding  up, as  applicable,  could not have a Material  Adverse
Effect.

     8.05 Dispositions.

     Make any Disposition unless:

          (a) if such  transaction  is a Sale and  Leaseback  Transaction,  such
     transaction is not prohibited by the terms of Section 8.15;

          (b) such transaction does not involve the sale or other disposition of
     a minority equity interest in any Subsidiary;

          (c) such transaction  does not involve a sale or other  disposition of
     receivables  other  than  receivables  owned  by or  attributable  to other
     Property   concurrently  being  disposed  of  in  a  transaction  otherwise
     permitted under this Section 8.05;

          (d) the  consideration  paid in connection  therewith shall be cash or
     Cash Equivalents,  shall be received  contemporaneous with the consummation
     of such Disposition and shall be in an amount not less than the fair market
     value of the Property disposed of; and

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<PAGE>

          (e) with  respect  to all  Dispositions  in any fiscal  year,  (i) the
     aggregate net book value of all of the assets sold or otherwise disposed of
     by the Borrower and its Subsidiaries shall not exceed fifteen percent (15%)
     of  consolidated  assets  for  the  Borrower  and  its  Subsidiaries  on  a
     consolidated  basis determined in accordance with GAAP as of the end of the
     immediately  preceding  fiscal  year  and (ii)  all of the  assets  sold or
     otherwise  disposed of by the  Borrower and its  Subsidiaries  shall not be
     assets that  generated  more than ten  percent  (10%) of  Consolidated  Net
     Income for the immediately preceding fiscal year.

     8.06 Restricted Payments.

     Declare or make,  directly or indirectly,  any Restricted Payment, or incur
any obligation (contingent or otherwise) to do so, except that:

          (a) each Subsidiary may declare and make Restricted Payments (directly
     or indirectly) to any Loan Party;

          (b) the Borrower  and each  Subsidiary  may declare and make  dividend
     payments or other distributions  payable solely in the Capital Stock of the
     Person making such dividend or distribution; and

          (c) the Borrower may make any other Restricted Payments, provided that
     (i) no Default exists or would exist after giving effect to such Restricted
     Payment and (ii) upon giving effect on a Pro Forma Basis to such Restricted
     Payment,  the Loan  Parties  would  be in  compliance  with  the  financial
     covenants  set forth in Section 8.11 as of the most recent  fiscal  quarter
     end for which the Borrower has delivered  financial  statements pursuant to
     Section 7.01(a) or (b).

     8.07 Change in Nature of Business.

     Engage in any material line of business substantially  different from those
lines of business  conducted by the Borrower and its Subsidiaries on the Closing
Date or any business substantially related or incidental thereto.

     8.08 Transactions with Affiliates and Insiders.

     Enter  into or permit to exist any  transaction  or series of  transactions
with  any  officer,  director  or  Affiliate  of  such  Person  other  than  (a)
transactions  between Loan  Parties,  (b)  intercompany  transactions  expressly
permitted by Section 8.02,  Section 8.03,  Section 8.04, Section 8.05 or Section
8.06, (d) reasonable  compensation and reimbursement of expenses of officers and
directors and (e) except as otherwise  specifically  limited in this  Agreement,
other  transactions  which  are  entered  into in the  ordinary  course  of such
Person's  business on terms and  conditions  substantially  as favorable to such
Person as would be obtainable by it in a comparable arms-length transaction with
a Person other than an officer, director or Affiliate.

     8.09 Burdensome Agreements.

     Enter into or permit to exist any Contractual  Obligation that encumbers or
restricts the ability of the Borrower or any  Subsidiary to (a) pay dividends or
make any other  distributions  to any Loan  Party on its  Capital  Stock or with
respect to any other interest or participation  in, or measured by, its profits,
(b) pay any  Indebtedness or other  obligation owed to any Loan Party,  (c) make
loans or  advances  to any Loan Party,  (d) sell,  lease or transfer  any of its
Property to any Loan Party,  (e) grant any Lien on any of its Property to secure
the  Obligations  pursuant to the Loan Documents or any renewals,  refinancings,
exchanges,  refundings or extension  thereof or (f) act as a Loan Party pursuant


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to the Loan Documents or any renewals,  refinancings,  exchanges,  refundings or
extension  thereof,  except (in  respect of any of the  matters  referred  to in
clauses (a)-(e) above) for (i) this Agreement and the other Loan Documents, (ii)
any document or instrument governing  Indebtedness  incurred pursuant to Section
8.03(c),  provided that any such restriction  contained  therein relates only to
the asset or assets acquired in connection  therewith,  (iii) any Permitted Lien
or any document or instrument  governing any Permitted  Lien,  provided that any
such restriction  contained  therein relates only to the asset or assets subject
to such Permitted Lien, (iv) customary  restrictions and conditions contained in
any agreement  relating to the sale of any Property permitted under Section 8.05
pending  the  consummation  of such  sale  and (v) any  document  or  instrument
governing Subordinated Indebtedness.

     8.10 [Reserved].

     8.11 Financial Covenants.

     (a)  Consolidated  Total  Leverage  Ratio.  Permit the  Consolidated  Total
Leverage Ratio as of the end of any fiscal quarter of the Borrower to be greater
than 3.0:1.0.

     (b) Consolidated Net Worth. Permit Consolidated Net Worth at any time to be
less than the sum of an amount equal to  $221,500,000  increased on a cumulative
basis as of the end of each fiscal quarter of the Borrower,  commencing with the
fiscal quarter ending October 31, 2003 by an amount equal to 50% of Consolidated
Net Income (to the extent  positive) for the fiscal quarter then ended plus 100%
of the proceeds of all equity  issuances after the Closing Date minus 50% of any
charges  incurred  after  the  Closing  Date  for the  write  down  of  goodwill
associated with the Power Electronics division.

     (c)  Consolidated  Fixed Charges  Coverage Ratio.  Permit the  Consolidated
Fixed Charges Coverage Ratio as of the end of any fiscal quarter of the Borrower
to be less than 2.0:1.0.

     8.12 Prepayment of Other Indebtedness, Etc.

     (a) Amend or modify any of the terms of any Indebtedness of the Borrower or
any Subsidiary  (other than  Indebtedness  arising under the Loan  Documents) if
such amendment or modification would add or change any terms in a manner adverse
to the Borrower or any Subsidiary  (including any amendment or modification that
would  shorten  the final  maturity  or average  life to maturity or require any
payment to be made sooner than  originally  scheduled  or increase  the interest
rate applicable thereto).

     (b) Amend or modify any of the subordination provisions of any Subordinated
Indebtedness.

     (c) Make (or give  any  notice  with  respect  thereto)  any  voluntary  or
optional  payment  or  prepayment  or  redemption  or  acquisition  for value of
(including,  without  limitation,  by way of depositing money or securities with
the trustee with respect thereto before due for the purpose of paying when due),
refund,  refinance  or exchange  of such  Indebtedness  other than  Indebtedness
arising under the Loan Documents.

     8.13  Organization  Documents;  Fiscal Year; Legal Name, State of Formation
and Form of Entity.

     (a) Amend, modify or change its Organization  Documents in a manner adverse
to the Lenders.

     (b)  Change  its  fiscal  year  without  the prior  written  consent of the
Required Lenders (which consent shall not be unreasonably withheld or delayed).

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<PAGE>

     (c)  Without  providing  thirty  (30)  days  prior  written  notice  to the
Administrative   Agent,   change  its  name,  state  of  formation  or  form  of
organization.

     8.14 Ownership of Subsidiaries.

     Notwithstanding any other provisions of this Agreement to the contrary, (i)
permit any Person  (other than the Borrower or any Wholly Owned  Subsidiary)  to
own any  Capital  Stock of any  Subsidiary,  except to qualify  directors  where
required by applicable  law or to satisfy other  requirements  of applicable law
with respect to the  ownership of Capital  Stock of Foreign  Subsidiaries,  (ii)
permit any  Subsidiary  to issue or have  outstanding  any  shares of  preferred
Capital Stock or (iii) create,  incur, assume or suffer to exist any Lien on any
Capital Stock of any Subsidiary, except for Permitted Liens.

     8.15 Sale and Leaseback Transactions.

     Enter  into any Sale and  Leaseback  Transaction  unless  the  Attributable
Indebtedness  in respect of such Sale and Leaseback  Transaction is permitted by
Section 8.03(l).


                                   ARTICLE IX

                         EVENTS OF DEFAULT AND REMEDIES

     9.01 Events of Default.

     Any of the following shall constitute an Event of Default:

          (a) Non-Payment. The Borrower or any other Loan Party fails to pay (i)
     when and as  required to be paid  herein,  any amount of  principal  of any
     Loan,  or (ii) within  three days after the same becomes due, any amount of
     principal of any L/C  Obligation  or any interest on any Loan or on any L/C
     Obligation,  or any  commitment  fee or other fee due  hereunder,  or (iii)
     within  five days after the same  becomes  due,  any other  amount  payable
     hereunder or under any other Loan Document; or

          (b) Specific Covenants.

               (i) Any Loan Party fails to perform or observe any term, covenant
          or agreement  contained in any of Section 7.01,  7.02,  7.03,  7.10 or
          7.12 and such  failure  continues  for ten days after the earlier of a
          Responsible  Officer  obtaining  actual  knowledge  thereof  or notice
          thereof is given to the Borrower by the Administrative Agent; or

               (ii) Any Loan  Party  fails  to  perform  or  observe  any  term,
          covenant or  agreement  contained in any of Section  7.05(a),  7.11 or
          Article VIII; or

          (c) Other  Defaults.  Any Loan Party  fails to perform or observe  any
     other  covenant or agreement (not specified in subsection (a) or (b) above)
     contained in any Loan  Document on its part to be performed or observed and
     such  failure  continues  for  thirty  days  after  the  earlier  of  (i) a
     Responsible Person of any Loan Party becoming aware of such failure or (ii)
     notice thereof to any Loan Party by the Administrative Agent; or

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<PAGE>

          (d)  Representations  and Warranties.  Any  representation,  warranty,
     certification  or  statement of fact made or deemed made by or on behalf of
     the Borrower or any other Loan Party herein, in any other Loan Document, or
     in any document  delivered  in  connection  herewith or therewith  shall be
     incorrect or misleading in any material respect when made or deemed made or
     delivered; or

          (e)  Cross-Default.  (i) The Borrower or any Subsidiary  fails to make
     any payment when due (whether by scheduled maturity,  required  prepayment,
     acceleration,  demand,  or  otherwise)  in respect of any  Indebtedness  or
     Guarantee (other than  Indebtedness  hereunder and Indebtedness  under Swap
     Contracts)  having  an  aggregate   principal  amount  (including   undrawn
     committed or available amounts and including amounts owing to all creditors
     under any  combined  or  syndicated  credit  arrangement)  of more than the
     Threshold  Amount;  (ii) the Borrower or any Subsidiary fails to observe or
     perform any other agreement or condition  relating to any such Indebtedness
     or  Guarantee  or contained  in any  instrument  or  agreement  evidencing,
     securing or relating  thereto,  or any other  event  occurs,  the effect of
     which  default  or other  event is to  cause,  or to permit  the  holder or
     holders of such  Indebtedness or the beneficiary or  beneficiaries  of such
     Guarantee  (or a trustee  or agent on behalf of such  holder or  holders or
     beneficiary  or  beneficiaries)  to  cause,  with the  giving  of notice if
     required,  such  Indebtedness  to be  demanded  or to  become  due or to be
     repurchased, prepaid, defeased or redeemed (automatically or otherwise), or
     an offer to repurchase,  prepay,  defease or redeem such Indebtedness to be
     made, prior to its stated maturity,  or such Guarantee to become payable or
     cash  collateral in respect  thereof to be demanded;  or (iii) there occurs
     under any Swap Contract an Early  Termination Date (as defined in such Swap
     Contract)  resulting from (A) any event of default under such Swap Contract
     as to which the  Borrower or any  Subsidiary  is the  Defaulting  Party (as
     defined in such Swap Contract) or (B) any Termination Event (as so defined)
     under such Swap  Contract as to which the Borrower or any  Subsidiary is an
     Affected Party (as so defined) and, in either event,  the Swap  Termination
     Value  owed by the  Borrower  or such  Subsidiary  as a result  thereof  is
     greater than the Threshold Amount; or

          (f)  Insolvency  Proceedings,  Etc.  Any  Loan  Party  or  any  of its
     Subsidiaries  institutes or consents to the  institution  of any proceeding
     under any Debtor  Relief  Law,  or makes an  assignment  for the benefit of
     creditors;  or applies for or consents to the  appointment of any receiver,
     trustee,  custodian,  conservator,  liquidator,  rehabilitator  or  similar
     officer  for it or for all or any  material  part of its  Property;  or any
     receiver, trustee,  custodian,  conservator,  liquidator,  rehabilitator or
     similar  officer is appointed  without the  application  or consent of such
     Person and the  appointment  continues  undischarged  or unstayed for sixty
     calendar  days; or any  proceeding  under any Debtor Relief Law relating to
     any  such  Person  or to all or  any  material  part  of  its  Property  is
     instituted without the consent of such Person and continues  undismissed or
     unstayed for sixty  calendar days, or an order for relief is entered in any
     such proceeding; or

          (g)  Inability  to Pay  Debts;  Attachment.  (i) The  Borrower  or any
     Subsidiary  becomes  unable or admits in  writing  its  inability  or fails
     generally  to pay its debts as they become due, or (ii) any writ or warrant
     of attachment or execution or similar  process is issued or levied  against
     all or any  material  part of the  Property  of any such  Person and is not
     released,  vacated or fully  bonded  within  thirty days after its issue or
     levy; or

          (h) Judgments. There is entered against the Borrower or any Subsidiary
     (i) one or more final  judgments  or orders for the  payment of money in an
     aggregate  amount exceeding the Threshold Amount (to the extent not covered
     by  independent   third-party   insurance  as  to  which  the  insurer  has
     acknowledged  in writing its obligation to cover),  or (ii) any one or more
     non-monetary  final judgments that have, or could reasonably be expected to
     have,  individually or in the aggregate,  a Material Adverse Effect and, in


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     either case, (A) enforcement proceedings are commenced by any creditor upon
     such judgment or order, or (B) there is a period of forty-five  consecutive
     days during which a stay of enforcement  of such  judgment,  by reason of a
     pending appeal or otherwise, is not in effect; or

          (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
     Multiemployer  Plan which has resulted or could  reasonably  be expected to
     result in liability of the Borrower  under Title IV of ERISA to the Pension
     Plan,  Multiemployer  Plan or the PBGC in an aggregate  amount in excess of
     the Threshold  Amount, or (ii) the Borrower or any ERISA Affiliate fails to
     pay when due,  after the  expiration of any  applicable  grace period,  any
     installment payment with respect to its withdrawal  liability under Section
     4201 of ERISA under a Multiemployer  Plan in an aggregate  amount in excess
     of the Threshold Amount; or

          (j) Invalidity of Loan Documents. Any Loan Document, at any time after
     its  execution  and  delivery  and for any reason  other than as  expressly
     permitted hereunder or satisfaction in full of all the Obligations,  ceases
     to be in full force and effect or ceases to give the Administrative  Agent,
     for the benefit of itself and the Lenders,  any material  part of the Liens
     purported  to be created  thereby;  or any Loan  Party or any other  Person
     contests in any manner the validity or enforceability of any Loan Document;
     or any Loan Party denies that it has any or further liability or obligation
     under any Loan  Document,  or purports to revoke,  terminate or rescind any
     Loan Document; or

          (k) Change of Control. There occurs any Change of Control.

     9.02 Remedies Upon Event of Default.

     If any Event of Default occurs and is continuing,  the Administrative Agent
shall,  at the request of, or may,  with the consent of, the  Required  Lenders,
take any or all of the following actions:

          (a)  declare  the  commitment  of each  Lender  to make  Loans and any
     obligation  of  the  L/C  Issuer  to  make  L/C  Credit  Extensions  to  be
     terminated, whereupon such commitments and obligation shall be terminated;

          (b) declare the unpaid principal amount of all outstanding  Loans, all
     interest accrued and unpaid thereon, and all other amounts owing or payable
     hereunder  or under any  other  Loan  Document  to be  immediately  due and
     payable, without presentment,  demand, protest or other notice of any kind,
     all of which are hereby expressly waived by the Borrower;

          (c) require that the Borrower Cash  Collateralize  the L/C Obligations
     (in an amount equal to the then Outstanding Amount thereof); and

          (d)  exercise  on behalf of itself  and the  Lenders  all  rights  and
     remedies  available  to it and the  Lenders  under  the Loan  Documents  or
     applicable law;

     provided, however, that upon the occurrence of an actual or deemed entry of
an order for relief with respect to the Borrower  under the  Bankruptcy  Code of
the  United  States,  the  obligation  of  each  Lender  to make  Loans  and any
obligation of the L/C Issuer to make L/C Credit  Extensions shall  automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically  become due and payable,  and
the  obligation of the Borrower to Cash  Collateralize  the L/C  Obligations  as
aforesaid shall automatically become effective,  in each case without any act of
the Administrative Agent or any Lender.

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<PAGE>

     9.03 Application of Funds.

     After the  exercise of remedies  provided for in Section 9.02 (or after the
Loans  have  automatically  become  immediately  due  and  payable  and  the L/C
Obligations have  automatically  been required to be Cash  Collateralized as set
forth in the proviso to Section  9.02),  any amounts  received on account of the
Obligations shall be applied by the Administrative Agent in the following order:

          First,  to payment of that  portion  of the  Obligations  constituting
     fees, indemnities, expenses and other amounts (including Attorney Costs and
     amounts payable under Article III) payable to the  Administrative  Agent in
     its capacity as such;

          Second,  to payment of that  portion of the  Obligations  constituting
     fees,  indemnities  and other amounts  (other than  principal and interest)
     payable to the Lenders (including  Attorney Costs and amounts payable under
     Article III),  ratably among them in proportion to the amounts described in
     this clause Second payable to them;

          Third,  to payment of that  portion  of the  Obligations  constituting
     accrued and unpaid interest on the Loans and L/C Borrowings, fees, premiums
     and scheduled  periodic  payments,  and any interest accrued  thereon,  due
     under any Swap  Contract  between  any Loan  Party and any  Lender,  or any
     Affiliate  of a Lender,  to the extent such Swap  Contract is  permitted by
     Section  8.03(d),  ratably among the Lenders (and, in the case of such Swap
     Contracts,  Affiliates of Lenders) in proportion to the respective  amounts
     described in this clause Third held by them;

          Fourth,  to payment of that  portion of the  Obligations  constituting
     unpaid principal of the Loans and L/C Borrowings,  breakage, termination or
     other  payments,  and any  interest  accrued  thereon,  due  under any Swap
     Contract  between  any Loan Party and any  Lender,  or any  Affiliate  of a
     Lender,  to the extent such Swap Contract is permitted by Section  8.03(d),
     and amounts due under any Treasury  Management  Agreement  between any Loan
     Party  and  any  Lender,  or  any  Affiliate  of  a  Lender,  and  to  Cash
     Collateralize  that portion of L/C  Obligations  comprised of the aggregate
     undrawn amount of Letters of Credit, ratably among the Lenders (and, in the
     case of such Swap Contracts and Treasury Management Agreements,  Affiliates
     of Lenders) in  proportion  to the  respective  amounts  described  in this
     clause Fourth held by them; and

          Last,  the balance,  if any,  after all of the  Obligations  have been
     indefeasibly paid in full, to the Borrower or as otherwise required by Law.

     Subject  to  Section  2.03(c),  amounts  used  to  Cash  Collateralize  the
aggregate  undrawn  amount of Letters of Credit  pursuant to clause Fourth above
shall be applied to satisfy drawings under such Letters of Credit as they occur.
If any amount remains on deposit as Cash Collateral  after all Letters of Credit
have either been fully drawn or expired,  such remaining amount shall be applied
to the other Obligations, if any, in the order set forth above.

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                                    ARTICLE X

                              ADMINISTRATIVE AGENT

     10.01 Appointment and Authorization of Administrative Agent.

     (a) Each Lender hereby irrevocably appoints,  designates and authorizes the
Administrative  Agent to take such action on its behalf under the  provisions of
this  Agreement  and each other Loan  Document  and to exercise  such powers and
perform  such  duties  as are  expressly  delegated  to it by the  terms of this
Agreement  or  any  other  Loan  Document,  together  with  such  powers  as are
reasonably  incidental  thereto.  Notwithstanding  any provision to the contrary
contained  elsewhere  herein or in any other Loan Document,  the  Administrative
Agent shall not have any duties or responsibilities,  except those expressly set
forth herein, nor shall the  Administrative  Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions,  responsibilities,  duties,  obligations or liabilities shall be read
into this  Agreement or any other Loan  Document or otherwise  exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the  use of the  term  "agent"  herein  and in the  other  Loan  Documents  with
reference to the  Administrative  Agent is not intended to connote any fiduciary
or other implied (or express)  obligations  arising under agency doctrine of any
applicable Law. Instead,  such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

     (b) The L/C Issuer  shall act on behalf of the Lenders  with respect to any
Letters of Credit issued by it and the documents associated  therewith,  and the
L/C Issuer  shall have all of the benefits  and  immunities  (i) provided to the
Administrative  Agent  in this  Article  X with  respect  to any  acts  taken or
omissions suffered by the L/C Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and the  applications  and  agreements  for
letters of credit  pertaining  to such Letters of Credit as fully as if the term
"Administrative  Agent"  as used  in this  Article  X and in the  definition  of
"Agent-Related  Person"  included  the L/C Issuer  with  respect to such acts or
omissions,  and (ii) as  additionally  provided  herein with  respect to the L/C
Issuer.

     10.02 Delegation of Duties.

     The Administrative Agent may execute any of its duties under this Agreement
or any other Loan Document by or through agents,  employees or attorneys-in-fact
and shall be  entitled  to advice of counsel  and other  consultants  or experts
concerning all matters pertaining to such duties. The Administrative Agent shall
not  be   responsible   for  the  negligence  or  misconduct  of  any  agent  or
attorney-in-fact  that it selects in the absence of gross  negligence or willful
misconduct.

     10.03 Liability of Administrative Agent.

     No Agent-Related Person shall (a) be liable for any action taken or omitted
to be taken by any of them under or in  connection  with this  Agreement  or any
other Loan Document or the transactions  contemplated hereby (except for its own
gross  negligence or willful  misconduct in connection with its duties expressly
set  forth  herein),  or (b) be  responsible  in any  manner  to any  Lender  or
participant for any recital,  statement,  representation or warranty made by any
Loan  Party or any  officer  thereof,  contained  herein  or in any  other  Loan
Document, or in any certificate, report, statement or other document referred to
or  provided  for in,  or  received  by the  Administrative  Agent  under  or in
connection  with,  this Agreement or any other Loan  Document,  or the validity,
effectiveness,  genuineness,  enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Loan Party or any other party
to any Loan  Document to perform its  obligations  hereunder or  thereunder.  No
Agent-Related  Person shall be under any obligation to any Lender or participant


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<PAGE>

to ascertain or to inquire as to the  observance  or  performance  of any of the
agreements  contained  in, or  conditions  of, this  Agreement or any other Loan
Document,  or to inspect the  properties,  books or records of any Loan Party or
any Affiliate thereof.

     10.04 Reliance by Administrative Agent.

     (a) The Administrative  Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing,  communication,  signature,  resolution,
representation,  notice,  consent,  certificate,  affidavit,  letter,  telegram,
facsimile,  telex or telephone  message,  electronic mail message,  statement or
other document or  conversation  believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons,  and upon advice
and  statements  of  legal  counsel  (including  counsel  to  any  Loan  Party),
independent  accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under any Loan Document unless (i) it shall first receive such advice
or concurrence of the Required Lenders (or such greater number of Lenders as may
be expressly required hereby in any instance) as it deems appropriate or (ii) if
it so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all  liability and expense which may be incurred by it by reason
of taking or  continuing  to take any such action  (other than any  liability or
expense  resulting  solely  from its gross  negligence  or willful  misconduct).
Notwithstanding  anything in this  Agreement  or any other Loan  Document to the
contrary,  the  Administrative  Agent shall in all cases be fully  protected  in
acting,  or in refraining  from acting,  under this  Agreement or any other Loan
Document in  accordance  with a request or consent of the  Required  Lenders (or
such  greater  number of  Lenders  as may be  expressly  required  hereby in any
instance)  and such  request  and any action  taken or  failure to act  pursuant
thereto shall be binding upon all the Lenders.

     (b) For purposes of determining compliance with the conditions specified in
Section 5.01, each Lender that has signed this Agreement shall be deemed to have
consented  to,  approved or accepted or to be satisfied  with,  each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative  Agent shall have received
notice  from such Lender  prior to the  proposed  Closing  Date  specifying  its
objection thereto.

     10.05 Notice of Default.

     The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent for
the account of the Lenders,  unless the Administrative Agent shall have received
written  notice  from a Lender  or the  Borrower  referring  to this  Agreement,
describing  such  Default and stating that such notice is a "notice of default."
The  Administrative  Agent will  notify the  Lenders of its  receipt of any such
notice.  The  Administrative  Agent shall take such action with  respect to such
Default as may be directed by the Required  Lenders (or such  greater  number of
Lenders as may be expressly  required hereby in any instance) in accordance with
Article IX; provided,  however,  that unless and until the Administrative  Agent
has received any such direction,  the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such  Default  as it shall  deem  advisable  or in the best  interest  of the
Lenders.

     10.06 Credit Decision; Disclosure of Information by Administrative Agent.

     Each  Lender  acknowledges  that  no  Agent-Related  Person  has  made  any
representation  or warranty to it, and that no act by the  Administrative  Agent
hereafter  taken,  including any consent to and  acceptance of any assignment or
review of the  affairs  of any Loan  Party or any  Affiliate  thereof,  shall be
deemed to constitute any representation or warranty by any Agent-Related  Person
to any Lender as to any matter,  including  whether  Agent-Related  Persons have
disclosed  material  information in their possession.  Each Lender represents to


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<PAGE>

the  Administrative  Agent that it has,  independently and without reliance upon
any  Agent-Related  Person and based on such documents and information as it has
deemed  appropriate,  made  its own  appraisal  of and  investigation  into  the
business,  prospects,  operations,  property,  financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries,  and all
applicable  bank  or  other   regulatory  Laws  relating  to  the   transactions
contemplated  hereby, and made its own decision to enter into this Agreement and
to extend  credit to the  Borrower and the other Loan  Parties  hereunder.  Each
Lender also represents that it will, independently and without reliance upon any
Agent-Related  Person and based on such  documents and  information  as it shall
deem  appropriate  at the  time,  continue  to  make  its own  credit  analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents,  and to make such investigations as it deems necessary
to inform itself as to the business, prospects,  operations, property, financial
and other  condition  and  creditworthiness  of the  Borrower and the other Loan
Parties.  Except for notices,  reports and other documents expressly required to
be  furnished  to  the  Lenders  by  the   Administrative   Agent  herein,   the
Administrative  Agent shall not have any duty or  responsibility  to provide any
Lender with any credit or other information concerning the business,  prospects,
operations,  property,  financial and other condition or creditworthiness of any
of the Loan Parties or any of their  respective  Affiliates  which may come into
the possession of any Agent-Related Person.

     10.07 Indemnification of Administrative Agent.

     Whether or not the transactions  contemplated  hereby are consummated,  the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of any Loan Party and without limiting the obligation
of any Loan Party to do so),  pro rata,  and hold  harmless  each  Agent-Related
Person  from and  against any and all  Indemnified  Liabilities  incurred by it;
provided,  however,  that (a) no Lender  shall be liable for the  payment to any
Agent-Related  Person of any  portion  of such  Indemnified  Liabilities  to the
extent  determined  in a final,  nonappealable  judgment by a court of competent
jurisdiction  to have  resulted  from  such  Agent-Related  Person's  own  gross
negligence or willful  misconduct;  provided,  however,  that no action taken in
accordance  with the directions of the Required  Lenders (or such greater number
of Lenders as may be expressly  required hereby in any instance) shall be deemed
to  constitute  gross  negligence  or willful  misconduct  for  purposes of this
Section and (b) no Lender  shall be liable for the payment to any  Agent-Related
Person  of  any   Indemnified   Liabilities   that  were  not  incurred  by  the
Administrative Agent in its capacity as such or by another  Agent-Related Person
in its capacity as such. Without limitation of the foregoing,  each Lender shall
reimburse  the  Administrative  Agent upon demand for its  ratable  share of any
costs or  out-of-pocket  expenses  (including  Attorney  Costs)  incurred by the
Administrative  Agent in connection with the preparation,  execution,  delivery,
administration,   modification,   amendment  or  enforcement   (whether  through
negotiations,  legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities  under, this Agreement,  any other Loan Document,  or
any  document  contemplated  by or  referred  to herein,  to the extent that the
Administrative  Agent is not reimbursed for such expenses by or on behalf of the
Borrower;  provided,  however, that no Lender shall be liable for the payment to
the Administrative Agent of any portion of such costs and expenses to the extent
determined  in  a  final,   nonappealable  judgment  by  a  court  of  competent
jurisdiction to have resulted solely from the  Administrative  Agent's own gross
negligence or willful misconduct.  The undertaking in this Section shall survive
termination of the Revolving  Commitments,  the payment of all other Obligations
and the resignation of the Administrative Agent.

     10.08 Administrative Agent in its Individual Capacity.

     Bank of America  and its  Affiliates  may make loans to,  issue  letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Loan Parties and their respective  Affiliates
as though Bank of America  were not the  Administrative  Agent or the L/C Issuer


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<PAGE>

hereunder  and  without  notice  to or  consent  of  the  Lenders.  The  Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates
may receive  information  regarding any Loan Party or its Affiliates  (including
information that may be subject to confidentiality  obligations in favor of such
Loan Party or such  Affiliate) and  acknowledge  that the  Administrative  Agent
shall be under no obligation to provide such  information to them.  With respect
to its Loans,  Bank of America  shall have the same rights and powers under this
Agreement as any other Lender and may exercise  such rights and powers as though
it were not the  Administrative  Agent or the L/C Issuer, and the terms "Lender"
and "Lenders" include Bank of America in its individual capacity.

     10.09 Successor Administrative Agent.

     The  Administrative  Agent may resign as  Administrative  Agent upon thirty
days'  notice  to the  Lenders  and the  Loan  Parties;  provided  that any such
resignation  by Bank of America shall also  constitute  its  resignation  as L/C
Issuer and Swing Line Lender.  If the  Administrative  Agent  resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a successor
administrative agent for the Lenders, which successor administrative agent shall
be subject to the  consent of the  Borrower  at all times  other than during the
existence of an Event of Default  (which  consent of the  Borrower  shall not be
unreasonably  withheld or  delayed).  If no  successor  administrative  agent is
appointed prior to the effective date of the  resignation of the  Administrative
Agent, the Administrative  Agent may appoint,  after consulting with the Lenders
and the Borrower, a successor  administrative agent from among the Lenders. Upon
the acceptance of its appointment as successor  administrative  agent hereunder,
the Person acting as such  successor  administrative  agent shall succeed to all
the rights,  powers and duties of the retiring  Administrative Agent, L/C Issuer
and Swing Line Lender and the  respective  terms  "Administrative  Agent",  "L/C
Issuer" and "Swing Line Lender" shall mean such successor  administrative agent,
Letter of Credit issuer and swing line lender,  and the retiring  Administrative
Agent's  appointment,  powers  and  duties  as  Administrative  Agent  shall  be
terminated and the retiring L/C Issuer's and Swing Line Lender's rights,  powers
and duties as such shall be terminated, without any other or further act or deed
on the part of such  retiring  L/C  Issuer  or Swing  Line  Lender  or any other
Lender,  other than the  obligation of the successor L/C Issuer to issue letters
of credit in substitution for the Letters of Credit, if any,  outstanding at the
time of  such  succession  or to make  other  arrangements  satisfactory  to the
retiring L/C Issuer to  effectively  assume the  obligations of the retiring L/C
Issuer with respect to such Letters of Credit. After any retiring Administrative
Agent's  resignation  hereunder as Administrative  Agent, the provisions of this
Article X and  Sections  11.04 and 11.05  shall  inure to its  benefit as to any
actions  taken or  omitted to be taken by it while it was  Administrative  Agent
under  this  Agreement.  If  no  successor  administrative  agent  has  accepted
appointment as Administrative Agent by the date thirty days following a retiring
Administrative  Agent's  notice  of  resignation,  the  retiring  Administrative
Agent's  resignation  shall  nevertheless  thereupon  become  effective  and the
Lenders shall perform all of the duties of the  Administrative  Agent  hereunder
until such time, if any, as the Required  Lenders  appoint a successor  agent as
provided for above.

     10.10 Administrative Agent May File Proofs of Claim.

     In case  of the  pendency  of any  receivership,  insolvency,  liquidation,
bankruptcy,  reorganization,   arrangement,  adjustment,  composition  or  other
judicial proceeding relative to any Loan Party, the Lenders hereby authorize the
Administrative  Agent  (irrespective of whether the principal of any Loan or L/C
Obligation  shall then be due and payable as herein  expressed or by declaration
or otherwise and  irrespective  of whether the  Administrative  Agent shall have
made any demand on the Borrower), to the extent permitted by applicable Laws:

          (a) to file and present evidence to prove a claim (on behalf of all of
     the Lenders in lieu of separate  claims filed by each Lender) for the whole
     amount of the  principal  and  interest  owing and unpaid in respect of the


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     Loans,  all L/C  Obligations and all other  Obligations  that are owing and
     unpaid and to file such other documents as may be necessary or advisable in
     order  to have the  claims  of the  Lenders  and the  Administrative  Agent
     (including   any  claim   for  the   reasonable   compensation,   expenses,
     disbursements and advances of the Lenders and the Administrative  Agent and
     their  respective  agents and counsel and all other amounts due the Lenders
     and the  Administrative  Agent under  Sections  2.03(i)  and (j),  2.09 and
     11.04) allowed in such judicial proceeding; and

          (b) to collect  and receive  any monies or other  property  payable or
     deliverable on any such claims and to distribute the same;

     and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial  proceeding is hereby  authorized by
each Lender to make such payments to the Administrative  Agent and, in the event
that the  Administrative  Agent  shall  consent to the  making of such  payments
directly to the Lenders,  to pay to the Administrative  Agent any amount due for
the  reasonable  compensation,  expenses,  disbursements  and  advances  of  the
Administrative  Agent and its agents and counsel,  and any other amounts due the
Administrative Agent under Sections 2.09 and 11.04.

     Nothing  contained  herein shall be deemed to authorize the  Administrative
Agent to  authorize or consent to or accept or adopt on behalf of any Lender any
plan of  reorganization,  arrangement,  adjustment or composition  affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

     10.11 Collateral and Guaranty Matters.

     The Lenders irrevocably  authorize the Administrative  Agent, at its option
and in its discretion,

          (a) to release  any Lien on any  Collateral  granted to or held by the
     Administrative  Agent under any Loan Document (i) upon  termination  of the
     Revolving  Commitments and payment in full of all  Obligations  (other than
     contingent  indemnification  obligations) and the expiration or termination
     of all Letters of Credit,  (ii) that is transferred or to be transferred as
     part of or in connection with any Disposition  permitted hereunder or under
     any  other  Loan  Document  or any  Involuntary  Disposition,  or  (iii) as
     approved in accordance with Section 11.01; and

          (b) to release any Guarantor from its  obligations  under the Guaranty
     if such  Person  ceases to be a  Subsidiary  as a result  of a  transaction
     permitted hereunder.

     Upon request by the Administrative  Agent at any time, the Required Lenders
     will confirm in writing the Administrative  Agent's authority to release or
     subordinate  its interest in particular  types or items of Property,  or to
     release any Guarantor from its obligations under the Guaranty,  pursuant to
     this Section 10.11.

     10.12 Other Agents; Arrangers and Managers.

     None of the  Lenders or other  Persons  identified  on the  facing  page or
signature  pages of this  Agreement  as a  "syndication  agent,"  "documentation
agent," "co-agent," "book manager," "lead manager,"  "arranger," "lead arranger"
or  "co-arranger"   shall  have  any  right,   power,   obligation,   liability,
responsibility  or duty under this  Agreement  other  than,  in the case of such
Lenders,  those  applicable  to  all  Lenders  as  such.  Without  limiting  the
foregoing,  none of the Lenders or other Persons so identified  shall have or be
deemed  to  have  any  fiduciary  relationship  with  any  Lender.  Each  Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or


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<PAGE>

other  Persons so  identified  in  deciding to enter into this  Agreement  or in
taking or not taking action hereunder.

                                   ARTICLE XI

                                  MISCELLANEOUS

     11.01 Amendments, Etc.

     No amendment or waiver of any provision of this Agreement or any other Loan
Document,  and no consent to any  departure  by the  Borrower  or any other Loan
Party  therefrom,  shall be effective  unless in writing  signed by the Required
Lenders and the Borrower or the applicable  Loan Party,  as the case may be, and
acknowledged by the Administrative  Agent, and each such waiver or consent shall
be  effective  only in the specific  instance  and for the specific  purpose for
which given; provided, however, that no such amendment, waiver or consent shall:

     (a) extend or increase the Revolving Commitment of any Lender (or reinstate
any  Revolving  Commitment  terminated  pursuant  to Section  9.02)  without the
written consent of such Lender (it being  understood and agreed that a waiver of
any  condition  precedent  set  forth in  Section  5.02 or of any  Default  or a
mandatory  reduction in Revolving  Commitments is not considered an extension or
increase in Revolving Commitments of any Lender);

     (b)  postpone any date fixed by this  Agreement or any other Loan  Document
for any payment of principal (excluding mandatory  prepayments),  interest, fees
or other  amounts  due to the Lenders  (or any of them)  hereunder  or under any
other Loan Document without the written consent of each Lender directly affected
thereby;

     (c) reduce the principal of, or the rate of interest  specified  herein on,
any Loan or L/C  Borrowing,  or any fees or other amounts  payable  hereunder or
under any other  Loan  Document  without  the  written  consent  of each  Lender
directly  affected  thereby;  provided,  however,  that only the  consent of the
Required Lenders shall be necessary to amend the definition of "Default Rate" or
to waive any obligation of the Borrower to pay interest at the Default Rate;

     (d) change  Section  2.13 or Section  9.03 in a manner that would alter the
pro rata sharing of payments  required  thereby  without the written  consent of
each Lender directly affected thereby;

     (e) change any  provision  of this Section or the  definition  of "Required
Lenders" or any other  provision  hereof  specifying the number or percentage of
Lenders  required to amend,  waive or otherwise  modify any rights  hereunder or
make any  determination  or grant any consent or take any action  hereunder,  in
each case without the written consent of each Lender directly affected thereby;

     (f) except in connection  with a Disposition  permitted under Section 8.05,
release all or substantially  all of the Collateral  without the written consent
of each Lender directly affected thereby; or

     (g)  release  the  Borrower  or,  except  in  connection  with a merger  or
consolidation  permitted  under  Section 8.04 or a Disposition  permitted  under
Section 8.05,  all or  substantially  all of the  Guarantors,  from its or their
obligations  under the Loan Documents without the written consent of each Lender
directly affected thereby;

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<PAGE>

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders  required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment,  waiver or consent shall, unless in writing and signed by
the Swing Line  Lender in addition to the  Lenders  required  above,  affect the
rights or duties  of the  Swing  Line  Lender  under  this  Agreement;  (iii) no
amendment,  waiver  or  consent  shall,  unless  in  writing  and  signed by the
Administrative  Agent in  addition  to the Lenders  required  above,  affect the
rights or duties of the  Administrative  Agent under this Agreement or any other
Loan Document;  and (iv) the Fee Letter may be amended,  or rights or privileges
thereunder   waived,  in  a  writing  executed  only  by  the  parties  thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment,  waiver or consent  hereunder,
except that the  Revolving  Commitment  of such Lender may not be  increased  or
extended without the consent of such Lender.

Notwithstanding  the fact that the  consent of all the  Lenders is  required  in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such  Lender sees fit on any  bankruptcy  reorganization  plan that  affects the
Loans,  and each Lender  acknowledges  that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (y) the  Required  Lenders  shall  determine  whether or not to allow a Loan
Party to use cash  collateral  in the  context  of a  bankruptcy  or  insolvency
proceeding and such determination shall be binding on all of the Lenders.

     11.02 Notices and Other Communications; Facsimile Copies.

     (a) General.  Unless otherwise  expressly  provided herein, all notices and
other  communications  provided for hereunder shall be in writing  (including by
facsimile  transmission).  All such written  notices  shall be mailed,  faxed or
delivered to the applicable address,  facsimile number or (subject to subsection
(c) below)  electronic  mail address,  and all notices and other  communications
expressly  permitted  hereunder  to be given by  telephone  shall be made to the
applicable telephone number, as follows:

               (i) if to the Borrower,  the Administrative Agent, the L/C Issuer
          or the Swing Line Lender, to the address, facsimile number, electronic
          mail address or telephone number specified for such Person on Schedule
          11.02 or to such other  address,  facsimile  number,  electronic  mail
          address or telephone  number as shall be designated by such party in a
          notice to the other parties; and

               (ii) if to any other Lender,  to the address,  facsimile  number,
          electronic  mail  address  or  telephone   number   specified  in  its
          Administrative  Questionnaire  or to  such  other  address,  facsimile
          number,  electronic  mail  address  or  telephone  number  as shall be
          designated   by  such  party  in  a  notice  to  the   Borrower,   the
          Administrative Agent, the L/C Issuer and the Swing Line Lender.

     All such  notices and other  communications  shall be deemed to be given or
made upon the  earlier to occur of (i)  actual  receipt  by the  relevant  party
hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on
behalf of the relevant  party  hereto;  (B) if delivered by mail,  four Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been  confirmed by telephone;  and (D) if delivered by
electronic  mail  (which  form of  delivery  is  subject  to the  provisions  of
subsection (c) below), when delivered; provided, however, that notices and other
communications  to the  Administrative  Agent, the L/C Issuer and the Swing Line
Lender pursuant to Article II shall not be effective until actually  received by
such  Person.  In no event shall a voicemail  message be  effective as a notice,
communication or confirmation hereunder.

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     (b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may
be  transmitted  and/or  signed  by  facsimile.  The  effectiveness  of any such
documents and signatures  shall,  subject to applicable Law, have the same force
and  effect  as  manually  signed  originals  and shall be  binding  on all Loan
Parties,  the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such  documents and  signatures be confirmed by a manually
signed  original  thereof;  provided,  however,  that the  failure to request or
deliver the same shall not limit the effectiveness of any facsimile  document or
signature.

     (c)  Limited Use of  Electronic  Mail.  Electronic  mail and  internet  and
intranet websites may be used only to distribute routine communications, such as
financial  statements and other  information as provided in Section 7.02, and to
distribute Loan Documents for execution by the parties  thereto,  and may not be
used for any other purpose.

     (d) Reliance by Administrative  Agent and Lenders. The Administrative Agent
and the Lenders  shall be  entitled to rely and act upon any notices  (including
telephonic Loan Notices and Swing Line Loan Notices)  purportedly given by or on
behalf  of the  Borrower  even if (i)  such  notices  were  not made in a manner
specified herein,  were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient,  varied from any confirmation  thereof.  The Borrower shall indemnify
each Agent-Related Person and each Lender from all losses,  costs,  expenses and
liabilities   resulting  from  the  reliance  by  such  Person  on  each  notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other  communications  with the  Administrative  Agent  may be  recorded  by the
Administrative  Agent,  and each of the parties  hereto hereby  consents to such
recording.

     11.03 No Waiver; Cumulative Remedies.

     No failure by any Lender or the  Administrative  Agent to exercise,  and no
delay by any such Person in exercising,  any right,  remedy,  power or privilege
hereunder  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise of any right,  remedy,  power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights,  remedies,  powers and  privileges  herein  provided are
cumulative  and not  exclusive of any rights,  remedies,  powers and  privileges
provided by law.

     11.04 Attorney Costs, Expenses and Taxes.

     The Borrower  agrees (a) to pay or reimburse the  Administrative  Agent for
all reasonable  costs and expenses  incurred in connection with the development,
preparation,  negotiation  and  execution of this  Agreement  and the other Loan
Documents  and any  amendment,  waiver,  consent  or other  modification  of the
provisions  hereof and  thereof  (whether or not the  transactions  contemplated
hereby or thereby are consummated),  and the consummation and  administration of
the transactions  contemplated hereby and thereby,  including all Attorney Costs
and costs and expenses in connection  with the use of Intralinks,  Inc. or other
similar information  transmission systems in connection with this Agreement, and
(b) to pay or reimburse the  Administrative  Agent and each Lender for all costs
and expenses incurred in connection with the enforcement, attempted enforcement,
or preservation of any rights or remedies under this Agreement or the other Loan
Documents  (including all such costs and expenses  incurred during any "workout"
or restructuring in respect of the Obligations and during any legal  proceeding,
including any  proceeding  under any Debtor Relief Law),  including all Attorney
Costs.  The  foregoing  costs and  expenses  shall  include all search,  filing,
recording,  title  insurance  and  appraisal  charges and fees and taxes related
thereto,  and other out-of-pocket  expenses incurred by the Administrative Agent


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or any Lender and the cost of independent  public  accountants and other outside
experts  retained by the  Administrative  Agent or any  Lender.  All amounts due
under this Section 11.04 shall be payable  within ten Business Days after demand
therefor.  The  agreements in this Section shall survive the  termination of the
Revolving Commitments and repayment of all other Obligations.

     11.05 Indemnification by the Borrower.

     Whether or not the transactions  contemplated  hereby are consummated,  the
Borrower agrees to indemnify and hold harmless each Agent-Related  Person,  each
Lender and their respective Affiliates, directors, officers, employees, counsel,
trustees,    advisors,   agents   and   attorneys-in-fact    (collectively   the
"Indemnitees")  from and against any and all liabilities,  obligations,  losses,
damages, penalties,  claims, demands, actions, judgments, suits, costs, expenses
and  disbursements  (including  Attorney Costs) of any kind or nature whatsoever
which may at any time be imposed on,  incurred  by or asserted  against any such
Indemnitee  in any way relating to or arising out of or in  connection  with (a)
the execution, delivery, enforcement,  performance or administration of any Loan
Document or any other  agreement,  letter or instrument  delivered in connection
with  the  transactions   contemplated   thereby  or  the  consummation  of  the
transactions contemplated thereby, (b) any Revolving Commitment,  Loan or Letter
of Credit or the use or proposed use of the proceeds  therefrom  (including  any
refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit),  (c) any actual or alleged presence or
release of Hazardous  Materials  on or from any  property  currently or formerly
owned or operated by the Borrower,  any  Subsidiary or any other Loan Party,  or
any Environmental  Liability related in any way to the Borrower,  any Subsidiary
or any other Loan Party,  or (d) any actual or  prospective  claim,  litigation,
investigation or proceeding  relating to any of the foregoing,  whether based on
contract,  tort or any other theory (including any investigation of, preparation
for, or defense of any pending or threatened claim, investigation, litigation or
proceeding) and regardless of whether any Indemnitee is a party thereto (all the
foregoing,  collectively,  the  "Indemnified  Liabilities");  provided that such
indemnity shall not, as to any Indemnitee,  be available to the extent that such
liabilities,  obligations, losses, damages, penalties, claims, demands, actions,
judgments,  suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross  negligence or willful  misconduct of such  Indemnitee.  No Indemnitee
shall  be  liable  for  any  damages  arising  from  the  use by  others  of any
information  or other  materials  obtained  through  IntraLinks or other similar
information  transmission  systems in connection with this Agreement,  provided,
however, the Borrower may have a claim against an Indemnitee,  and an Indemnitee
may be liable to the  Borrower,  to the extent,  but only to the extent,  of any
such damages  suffered by the Borrower which the Borrower  proves were caused by
such Indemnitee's  willful misconduct or gross negligence.  Notwithstanding  any
provision  in this  Agreement  or any other Loan  Document to the  contrary,  no
Indemnitee shall have any liability for any indirect,  punitive or consequential
damages  relating to this Agreement or any other Loan Document or arising out of
its activities in connection  herewith or therewith (whether before or after the
Closing Date).  All amounts due under this Section 11.05 shall be payable within
ten Business Days after demand  therefor.  The  agreements in this Section shall
survive the  resignation of the  Administrative  Agent,  the  replacement of any
Lender,  the  termination  of  the  Revolving  Commitments  and  the  repayment,
satisfaction or discharge of all the other Obligations.

     11.06 Payments Set Aside.

     To the extent that any payment by or on behalf of any Loan Party is made to
the  Administrative  Agent or any  Lender,  or the  Administrative  Agent or any
Lender exercises its right of set-off,  and such payment or the proceeds of such
set-off  or  any  part  thereof  is  subsequently  invalidated,  declared  to be
fraudulent or  preferential,  set aside or required  (including  pursuant to any
settlement  entered  into by the  Administrative  Agent  or such  Lender  in its
discretion)  to be  repaid  to a  trustee,  receiver  or  any  other  party,  in
connection  with any proceeding  under any Debtor Relief Law or otherwise,  then


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(a) to the extent of such recovery,  the  obligation or part thereof  originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not  occurred,  and (b)
each Lender severally agrees to pay to the Administrative  Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent (to the  extent  such  amount  had been  remitted  to such  Lender),  plus
interest  thereon  from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in effect.

     11.07 Successors and Assigns.

     (a) The provisions of this Agreement and the other Loan Documents  shall be
binding  upon and inure to the  benefit of the  parties  hereto and  thereto and
their respective successors and assigns permitted hereby or thereby, except that
the  Borrower  may  not  assign  or  otherwise  transfer  any of its  rights  or
obligations  hereunder or thereunder  without the prior written  consent of each
Lender  and no Lender  may  assign or  otherwise  transfer  any of its rights or
obligations  hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section,  (ii) by way of  participation  in
accordance with the provisions of subsection (d) of this Section or (iii) by way
of pledge or assignment of a security  interest  subject to the  restrictions of
subsection (f) of this Section (and any other  attempted  assignment or transfer
by any  party  hereto  shall  be null  and  void).  Nothing  in this  Agreement,
expressed or implied,  shall be construed to confer upon any Person  (other than
the parties hereto,  their respective  successors and assigns  permitted hereby,
Participants  to the extent  provided in subsection  (d) of this Section and, to
the  extent  expressly  contemplated  hereby,  the  Indemnitees)  any  legal  or
equitable right, remedy or claim under or by reason of this Agreement.

     (b) Any Lender may at any time assign to one or more Eligible Assignees all
or a portion of its rights and  obligations  under this  Agreement and the other
Loan Documents  (including all or a portion of its Revolving  Commitment and the
Loans  (including for purposes of this  subsection  (b),  participations  in L/C
Obligations and in Swing Line Loans) at the time owing to it); provided that (i)
except  in the case of an  assignment  of the  entire  remaining  amount  of the
assigning Lender's Revolving Commitment and the Loans at the time owing to it or
in the case of an  assignment  to a Lender  or an  Affiliate  of a Lender  or an
Approved Fund with respect to a Lender,  the  aggregate  amount of the Revolving
Commitment  (which  for this  purpose  includes  Loans  outstanding  thereunder)
subject to each such  assignment,  determined as of the date the  Assignment and
Assumption  with respect to such  assignment is delivered to the  Administrative
Agent or, if "Trade Date" is specified in the Assignment and  Assumption,  as of
the  Trade  Date,  shall  not  be  less  than  $5,000,000  unless  each  of  the
Administrative  Agent and,  so long as no Event of Default has  occurred  and is
continuing,  the  Borrower  otherwise  consents  (each  such  consent  not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made as
an assignment of a proportionate  part of all the assigning  Lender's rights and
obligations  under this  Agreement  with  respect to the Loans or the  Revolving
Commitment  assigned,  except that this clause (ii) shall not apply to rights in
respect of Swing Line  Loans;  and (iii) the  parties to each  assignment  shall
execute and deliver to the  Administrative  Agent an Assignment and  Assumption,
together with a processing and recordation fee of $3,500.  Subject to acceptance
and recording thereof by the Administrative  Agent pursuant to subsection (c) of
this Section, from and after the effective date specified in each Assignment and
Assumption,  the Eligible Assignee thereunder shall be a party to this Agreement
and, to the extent of the interest  assigned by such  Assignment and Assumption,
have the rights  and  obligations  of a Lender  under  this  Agreement,  and the


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assigning  Lender  thereunder  shall, to the extent of the interest  assigned by
such  Assignment and  Assumption,  be released from its  obligations  under this
Agreement (and, in the case of an Assignment and Assumption  covering all of the
assigning  Lender's  rights and obligations  under this  Agreement,  such Lender
shall  cease to be a party  hereto  but shall  continue  to be  entitled  to the
benefits of Sections 3.01, 3.04, 3.05, 11.04 and 11.05 with respect to facts and
circumstances  occurring prior to the effective date of such  assignment).  Upon
request,  the Borrower (at its expense)  shall execute and deliver a Note to the
assignee Lender. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this subsection  shall be treated
for purposes of this  Agreement as a sale by such Lender of a  participation  in
such rights and obligations in accordance with subsection (d) of this Section.

     (c) The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at the Administrative Agent's Office a copy of each
Assignment and Assumption  delivered to it and a register for the recordation of
the names and addresses of the Lenders,  and the Revolving  Commitments  of, and
principal  amounts  of the  Loans and L/C  Obligations  owing  to,  each  Lender
pursuant to the terms hereof from time to time (the "Register").  The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the  Lenders  may treat each  Person  whose  name is  recorded  in the  Register
pursuant  to the terms  hereof as a Lender  hereunder  for all  purposes of this
Agreement,  notwithstanding  notice  to the  contrary.  The  Register  shall  be
available for inspection by the Borrower and any Lender,  at any reasonable time
and from time to time upon reasonable prior notice.

     (d) Any Lender may at any time,  without  the consent of, or notice to, the
Borrower or the Administrative  Agent, sell  participations to any Person (other
than a natural  person or the Borrower or any of the  Borrower's  Affiliates  or
Subsidiaries)  (each,  a  "Participant")  in all or a portion  of such  Lender's
rights and/or  obligations  under this Agreement  (including all or a portion of
its   Revolving   Commitment   and/or  the  Loans   (including   such   Lender's
participations  in L/C  Obligations  and/or  Swing  Line  Loans)  owing  to it);
provided that (i) such Lender's  obligations  under this Agreement  shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the  performance  of such  obligations  and (iii) the  Borrower,  the
Administrative  Agent and the other  Lenders  shall  continue to deal solely and
directly  with  such  Lender  in  connection   with  such  Lender's  rights  and
obligations under this Agreement.  Any agreement or instrument pursuant to which
a Lender sells such a participation  shall provide that such Lender shall retain
the  sole  right  to  enforce  this  Agreement  and to  approve  any  amendment,
modification  or waiver of any provision of this  Agreement;  provided that such
agreement  or  instrument  may provide  that such  Lender will not,  without the
consent of the Participant, agree to any amendment, waiver or other modification
described  in the first  proviso to Section  11.01 that  directly  affects  such
Participant. Subject to subsection (e) of this Section, the Borrower agrees that
each  Participant  shall be entitled to the benefits of Sections 3.01,  3.04 and
3.05 to the same extent as if it were a Lender and had  acquired its interest by
assignment  pursuant to subsection (b) of this Section.  To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 11.09
as though it were a Lender,  provided such  Participant  agrees to be subject to
Section 2.13 as though it were a Lender.

     (e) A  Participant  shall not be entitled  to receive  any greater  payment
under Section 3.01 or 3.04 than the  applicable  Lender would have been entitled
to receive with respect to the participation  sold to such  Participant,  unless
the sale of the  participation  to such  Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower
is notified of the  participation  sold to such Participant and such Participant
agrees, for the benefit of the Borrower,  to comply with Section 11.15 as though
it were a Lender.

     (f) Any  Lender  may at any time  pledge  or  assign,  or grant a  security
interest  in, all or any portion of its rights under this  Agreement  (including
under its Note,  if any) to secure  obligations  of such Lender,  including  any
pledge or assignment to secure  obligations to a Federal Reserve Bank;  provided
that no such  pledge or  assignment  shall  release  such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

     (g)  Notwithstanding  anything to the contrary  contained herein, if at any
time Bank of America assigns all of its Revolving  Commitment and Loans pursuant
to  subsection  (b) above,  Bank of America may, (i) upon thirty days' notice to
the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon thirty days'
notice to the  Borrower,  resign as Swing Line Lender.  In the event of any such


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resignation as L/C Issuer or Swing Line Lender,  the Borrower shall be entitled,
with the consent of the  Required  Lenders,  to appoint from among the Lenders a
successor L/C Issuer or Swing Line Lender hereunder;  provided, however, that no
failure  by the  Borrower  to  appoint  any  such  successor  shall  affect  the
resignation  of Bank of America as L/C Issuer or Swing Line Lender,  as the case
may be. If Bank of America resigns as L/C Issuer, it shall retain all the rights
and  obligations  of the L/C Issuer  hereunder  with  respect to all  Letters of
Credit outstanding as of the effective date of its resignation as L/C Issuer and
all L/C  Obligations  with respect  thereto  (including the right to require the
Lenders  to make Base Rate  Loans or fund risk  participations  in  Unreimbursed
Amounts pursuant to Section  2.03(c)).  If Bank of America resigns as Swing Line
Lender,  it shall  retain all the rights of the Swing Line Lender  provided  for
hereunder with respect to Swing Line Loans made by it and  outstanding as of the
effective date of such  resignation,  including the right to require the Lenders
to make Base Rate Loans or fund risk  participations  in outstanding  Swing Line
Loans pursuant to Section 2.04(c).

     11.08 Confidentiality.

     Each of the  Administrative  Agent and the Lenders  agrees to maintain  the
confidentiality  of the Information (as defined below),  except that Information
may be disclosed (a) to its and its Affiliates' directors,  officers,  employees
and agents,  including  accountants,  legal counsel and other advisors (it being
understood  that the Persons to whom such disclosure is made will be informed of
the  confidential  nature  of such  Information  and  instructed  to  keep  such
Information  confidential);  (b)  to the  extent  requested  by  any  regulatory
authority;  (c) to the extent  required by applicable  laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Agreement;
(e) in  connection  with the  exercise of any  remedies  hereunder  or any suit,
action or proceeding  relating to this  Agreement or the  enforcement  of rights
hereunder;  (f) subject to an agreement containing provisions  substantially the
same as those of this Section,  to (i) any Eligible  Assignee of or  Participant
in, or any prospective Eligible Assignee of or Participant in, any of its rights
or obligations  under this Agreement or (ii) any direct or indirect  contractual
counterparty or prospective counterparty (or such contractual  counterparty's or
prospective  counterparty's  professional  advisor)  to  any  credit  derivative
transaction relating to obligations of the Loan Parties; (g) with the consent of
the Borrower;  (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes  available to
the Administrative Agent or any Lender on a nonconfidential  basis from a source
other  than  the  Borrower;  or (i) to the  National  Association  of  Insurance
Commissioners  or any other similar  organization  or any nationally  recognized
rating  agency  that  requires  access to  information  about a Lender's  or its
Affiliates'  investment portfolio in connection with ratings issued with respect
to such Lender or its Affiliates.  In addition, the Administrative Agent and the
Lenders may disclose the existence of this Agreement and information  about this
Agreement to market data  collectors,  similar service  providers to the lending
industry,  and service providers to the Administrative  Agent and the Lenders in
connection with the administration  and management of this Agreement,  the other
Loan Documents,  the Revolving Commitments,  and the Credit Extensions.  For the
purposes of this Section,  "Information" means all information received from any
Loan  Party  relating  to any Loan  Party or its  business,  other than any such
information  that is  available to the  Administrative  Agent or any Lender on a
nonconfidential basis prior to disclosure by any Loan Party. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered  to have complied with its  obligation to do so if such Person has
exercised  the same  degree  of care to  maintain  the  confidentiality  of such
Information  as such Person  would accord to its own  confidential  information.
Notwithstanding  anything  herein  to  the  contrary,  "Information"  shall  not
include,  and the  Administrative  Agent and each  Lender may  disclose  without
limitation of any kind, any information  with respect to the "tax treatment" and
"tax structure" (in each case, within the meaning of Treasury Regulation Section
1.6011-4) of the transactions  contemplated hereby and all materials of any kind
(including   opinions  or  other  tax   analyses)   that  are  provided  to  the
Administrative  Agent or such  Lender  relating  to such tax  treatment  and tax
structure;  provided  that with  respect to any document or similar item that in


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either case contains  information  concerning the tax treatment or tax structure
of the transaction as well as other information,  this sentence shall only apply
to such  portions  of the  document  or  similar  item  that  relate  to the tax
treatment  or tax  structure  of the Loans,  Letters of Credit and  transactions
contemplated hereby.

     11.09 Set-off.

     In addition to any rights and remedies of the Lenders provided by law, upon
the occurrence and during the  continuance of any Event of Default,  each Lender
and any  Affiliate of a Lender is  authorized at any time and from time to time,
without  prior notice to the  Borrower or any other Loan Party,  any such notice
being  waived  by the  Borrower  (on its own  behalf  and on behalf of each Loan
Party) to the fullest extent  permitted by law, to set off and apply any and all
deposits (general or special, time or demand,  provisional or final) at any time
held by, and other  indebtedness at any time owing by, such Lender to or for the
credit  or the  account  of the  respective  Loan  Parties  against  any and all
Obligations owing to such Lender hereunder or under any other Loan Document, now
or hereafter existing,  irrespective of whether or not the Administrative  Agent
or such Lender  shall have made demand  under this  Agreement  or any other Loan
Document.   Each  Lender  agrees   promptly  to  notify  the  Borrower  and  the
Administrative Agent after any such set-off and application made by such Lender;
provided,  however,  that the failure to give such  notice  shall not affect the
validity of such set-off and application.

     11.10 Interest Rate Limitation.

     Notwithstanding  anything to the contrary  contained in any Loan  Document,
the interest paid or agreed to be paid under the Loan Documents shall not exceed
the maximum  rate of  non-usurious  interest  permitted by  applicable  Law (the
"Maximum  Rate").  If the  Administrative  Agent  or any  Lender  shall  receive
interest in an amount that exceeds the Maximum Rate,  the excess  interest shall
be  applied  to the  principal  of the  Loans  or,  if it  exceeds  such  unpaid
principal,  refunded  to the  Borrower.  In  determining  whether  the  interest
contracted for,  charged,  or received by the  Administrative  Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by applicable
Law, (a) characterize  any payment that is not principal as an expense,  fee, or
premium rather than interest,  (b) exclude voluntary prepayments and the effects
thereof,  and (c) amortize,  prorate,  allocate,  and spread in equal or unequal
parts the total  amount of  interest  throughout  the  contemplated  term of the
Obligations hereunder.

     11.11 Counterparts.

     This Agreement may be executed in one or more  counterparts,  each of which
shall be deemed an original,  but all of which together shall constitute one and
the same instrument.

     11.12 Integration.

     This  Agreement,  together  with the other Loan  Documents,  comprises  the
complete and  integrated  agreement of the parties on the subject  matter hereof
and  thereof  and  supersedes  all prior  agreements,  written or oral,  on such
subject  matter.  In the event of any conflict  between the  provisions  of this
Agreement and those of any other Loan Document, the provisions of this Agreement
shall control; provided that the inclusion of supplemental rights or remedies in
favor of the  Administrative  Agent or the  Lenders in any other  Loan  Document
shall not be deemed a  conflict  with this  Agreement.  Each Loan  Document  was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.

                                       79
<PAGE>

     11.13 Survival of Representations and Warranties.

     All  representations  and  warranties  made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in connection
herewith or  therewith  shall  survive the  execution  and  delivery  hereof and
thereof. Such representations and warranties have been or will be relied upon by
the Administrative  Agent and each Lender,  regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative  Agent or any Lender may have had notice or knowledge of
any  Default at the time of any Credit  Extension,  and shall  continue  in full
force and  effect as long as any Loan or any other  Obligation  hereunder  shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

     11.14 Severability.

     If any provision of this  Agreement or the other Loan  Documents is held to
be  illegal,   invalid  or  unenforceable,   (a)  the  legality,   validity  and
enforceability of the remaining  provisions of this Agreement and the other Loan
Documents  shall not be affected or impaired  thereby and (b) the parties  shall
endeavor  in  good  faith  negotiations  to  replace  the  illegal,  invalid  or
unenforceable  provisions  with valid  provisions  the economic  effect of which
comes as close as  possible  to that of the  illegal,  invalid or  unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

     11.15 Tax Forms.

          (a) (i) Each Lender that is not a "United  States  person"  within the
     meaning of Section  7701(a)(30)  of the  Internal  Revenue Code (a "Foreign
     Lender") shall deliver to the Administrative Agent, prior to receipt of any
     payment  subject to  withholding  under the Internal  Revenue Code (or upon
     accepting an assignment of an interest  herein),  two duly signed completed
     copies of either IRS Form W-8BEN or any successor thereto (relating to such
     Foreign  Lender and  entitling it to an exemption  from,  or reduction  of,
     withholding  tax on all payments to be made to such  Foreign  Lender by the
     Borrower  pursuant to this  Agreement)  or IRS Form W-8ECI or any successor
     thereto  (relating to all payments to be made to such Foreign Lender by the
     Borrower pursuant to this Agreement) or such other evidence satisfactory to
     the  Borrower  and the  Administrative  Agent that such  Foreign  Lender is
     entitled to an exemption  from,  or  reduction  of, U.S.  withholding  tax,
     including any exemption  pursuant to Section 881(c) of the Internal Revenue
     Code.  Thereafter and from time to time, each such Foreign Lender shall (A)
     promptly submit to the Administrative  Agent such additional duly completed
     and signed copies of one of such forms (or such successor forms as shall be
     adopted from time to time by the relevant United States taxing authorities)
     as may  then be  available  under  then  current  United  States  laws  and
     regulations to avoid,  or such evidence as is  satisfactory to the Borrower
     and the Administrative  Agent of any available  exemption from or reduction
     of, United States  withholding  taxes in respect of all payments to be made
     to such Foreign  Lender by the  Borrower  pursuant to this  Agreement,  (B)
     promptly  notify the  Administrative  Agent of any change in  circumstances
     which would modify or render  invalid any claimed  exemption or  reduction,
     and (C) take such steps as shall not be materially  disadvantageous  to it,
     in the  reasonable  judgment  of  such  Lender,  and  as may be  reasonably
     necessary (including the re-designation of its Lending Office) to avoid any
     requirement  of  applicable  Laws that the Borrower  make any  deduction or
     withholding for taxes from amounts payable to such Foreign Lender.

          (ii) Each Foreign  Lender,  to the extent it does not act or ceases to
     act for its own  account  with  respect to any  portion of any sums paid or
     payable to such Lender under any of the Loan Documents (for example, in the
     case of a typical  participation  by such  Lender),  shall  deliver  to the


                                       80
<PAGE>

     Administrative Agent on the date when such Foreign Lender ceases to act for
     its own  account  with  respect  to any  portion  of any such  sums paid or
     payable,  and at such other times as may be necessary in the  determination
     of the Administrative Agent (in the reasonable exercise of its discretion),
     (A) two duly signed completed copies of the forms or statements required to
     be provided by such Lender as set forth above,  to establish the portion of
     any such sums paid or payable  with  respect to which such  Lender acts for
     its own account  that is not subject to U.S.  withholding  tax, and (B) two
     duly signed completed copies of IRS Form W-8IMY (or any successor thereto),
     together  with any  information  such Lender  chooses to transmit with such
     form, and any other  certificate  or statement of exemption  required under
     the Internal  Revenue Code, to establish that such Lender is not acting for
     its own account  with respect to a portion of any such sums payable to such
     Lender.

          (iii) The Borrower shall not be required to pay any additional  amount
     to any Foreign  Lender  under  Section  3.01 (A) with  respect to any Taxes
     required  to be  deducted  or  withheld  on the  basis of the  information,
     certificates  or statements of exemption such Lender  transmits with an IRS
     Form W-8IMY  pursuant to this Section  11.15(a) or (B) if such Lender shall
     have failed to satisfy the foregoing  provisions of this Section  11.15(a);
     provided that if such Lender shall have  satisfied the  requirement of this
     Section  11.15(a) on the date such Lender  became a Lender or ceased to act
     for its own  account  with  respect  to any  payment  under any of the Loan
     Documents,  nothing in this Section  11.15(a) shall relieve the Borrower of
     its  obligation  to pay any amounts  pursuant to Section  3.01 in the event
     that,  as a  result  of  any  change  in  any  applicable  law,  treaty  or
     governmental   rule,   regulation   or   order,   or  any   change  in  the
     interpretation,  administration or application  thereof,  such Lender is no
     longer properly  entitled to deliver forms,  certificates or other evidence
     at a subsequent date establishing the fact that such Lender or other Person
     for the account of which such Lender receives any sums payable under any of
     the  Loan  Documents  is  not  subject  to  withholding  or is  subject  to
     withholding at a reduced rate.

          (iv) The  Administrative  Agent may, without  reduction,  withhold any
     Taxes  required to be deducted and withheld  from any payment  under any of
     the Loan  Documents  with  respect to which the Borrower is not required to
     pay additional amounts under this Section 11.15(a).

     (b) Upon the  request of the  Administrative  Agent,  each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Internal
Revenue Code shall deliver to the Administrative Agent two duly signed completed
copies of IRS Form W-9. If such  Lender  fails to deliver  such forms,  then the
Administrative  Agent may withhold  from any interest  payment to such Lender an
amount  equivalent  to the  applicable  back-up  withholding  tax imposed by the
Internal Revenue Code, without reduction.

     (c) If any Governmental Authority asserts that the Administrative Agent did
not properly  withhold or backup withhold,  as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender shall
indemnify  the  Administrative  Agent  therefor,  including  all  penalties  and
interest,  any taxes imposed by any  jurisdiction  on the amounts payable to the
Administrative  Agent  under this  Section,  and costs and  expenses  (including
Attorney  Costs) of the  Administrative  Agent,  unless such failure to properly
withhold  or backup  withhold,  as the case may be, was solely the result of the
Administrative Agent's gross negligence or willful misconduct. The obligation of
the Lenders under this Section shall  survive the  termination  of the Revolving
Commitments, repayment of all other Obligations hereunder and the resignation of
the Administrative Agent.

                                       81
<PAGE>

     11.16 Replacement of Lenders.

     Under any  circumstances set forth herein providing that the Borrower shall
have the right to replace a Lender as a party to this  Agreement,  the  Borrower
may,  upon  notice to such Lender and the  Administrative  Agent,  replace  such
Lender by causing such Lender to assign its Revolving Commitment and outstanding
Loans (with the  assignment  fee to be paid by the  Borrower  in such  instance)
pursuant to Section 11.07(b) to one or more other Lenders or Eligible  Assignees
procured by the  Borrower;  provided,  however,  that if the Borrower  elects to
exercise such right with respect to any Lender pursuant to Section  3.06(b),  it
shall be obligated  to replace all Lenders  that have made similar  requests for
compensation  pursuant to Section 3.01 or 3.04.  The  Borrower  shall (x) pay in
full all  principal,  interest,  fees and  other  amounts  owing to such  Lender
through  the date of  replacement  (including  any amounts  payable  pursuant to
Section 3.01, Section 3.04 and Section 3.05), (y) provide appropriate assurances
and indemnities  (which may include letters of credit) to the L/C Issuer and the
Swing Line Lender as each may reasonably  require with respect to any continuing
obligation to fund  participation  interests in any L/C Obligations or any Swing
Line Loans then  outstanding,  and (z) release such Lender from its  obligations
under the Loan Documents. Any Lender being replaced shall execute and deliver an
Assignment and Assumption with respect to such Lender's Revolving Commitment and
outstanding Loans and participations in L/C Obligations and Swing Line Loans.

     11.17 Governing Law.

     (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH,
the LAW OF THE  STATE  OF NEW  YORK  applicable  to  agreements  made  and to be
performed  entirely  within such State;  PROVIDED THAT ALL PARTIES  HERETO SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

     (b) ANY LEGAL ACTION OR  PROCEEDING  WITH RESPECT TO THIS  AGREEMENT OR ANY
OTHER  LOAN  DOCUMENT  MAY BE  BROUGHT  IN THE  COURTS  OF THE STATE OF NEW YORK
SITTING IN NEW YORK, NEW YORK, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF SUCH STATE,  AND BY EXECUTION AND DELIVERY OF THIS  AGREEMENT,  THE BORROWER,
THE ADMINISTRATIVE Agent AND EACH LENDER CONSENTS,  FOR ITSELF AND IN RESPECT OF
ITS PROPERTY,  TO THE  NON-EXCLUSIVE  JURISDICTION  OF THOSE COURTS.  EACH PARTY
HERETO IRREVOCABLY  WAIVES ANY OBJECTION,  INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE  GROUNDS OF FORUM NON  CONVENIENS,  WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH  JURISDICTION
IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT  RELATED  THERETO.  EACH PARTY
HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

     11.18 Waiver of Right to Trial by Jury.

     EACH PARTY TO THIS AGREEMENT  HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY  CLAIM,  DEMAND,  ACTION OR CAUSE OF ACTION  ARISING  UNDER ANY LOAN
DOCUMENT OR IN ANY WAY  CONNECTED  WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN  DOCUMENT,  OR THE
TRANSACTIONS  RELATED  THERETO,  IN EACH CASE  WHETHER NOW EXISTING OR HEREAFTER
ARISING,  AND WHETHER  FOUNDED IN CONTRACT OR TORT OR OTHERWISE;  AND EACH PARTY
HEREBY  AGREES AND  CONSENTS  THAT ANY SUCH  CLAIM,  DEMAND,  ACTION OR CAUSE OF


                                       82
<PAGE>

ACTION  SHALL BE DECIDED BY COURT  TRIAL  WITHOUT A JURY,  AND THAT ANY PARTY TO
THIS  AGREEMENT MAY FILE AN ORIGINAL  COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN  EVIDENCE OF THE CONSENT OF THE  SIGNATORIES  HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

                            [SIGNATURE PAGES FOLLOW]


<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed as of the date first above written.

BORROWER:                           C&D TECHNOLOGIES, INC.,
                                    a Delaware corporation

                                    By:/s/ Stephen E. Markert, Jr.
                                      ------------------------------------------
                                    Name:   Stephen E. Markert, Jr.
                                    Title:  Chief Financial Officer

GUARANTORS:                C&D CHARTER HOLDINGS, INC.,
                                    a Delaware corporation

                                    By:/s/ Robert Marley
                                       -----------------------------------------
                                    Name:   Robert T. Marley
                                    Title:  Vice President and Treasurer

                                    C&D INTERNATIONAL INVESTMENT HOLDINGS, INC.,
                                    a Delaware corporation

                                    By:/s/ Robert Marley
                                      ------------------------------------------
                                    Name:   Robert T. Marley
                                    Title:  Vice President and Treasurer

                                            [Signature Pages Continue]


<PAGE>



ADMINISTRATIVE
AGENT:                     Bank of America, N.A.,
                                    as Administrative Agent

                                    By:/s/ Michael Brashler
                                      ------------------------------------------
                                    Name:   Michael Brashler
                                    Title:  Senior Agency Officer

LENDERS:                   Bank of America, N.A.,
                                    as a Lender, L/C Issuer and Swing Line
                                    Lender

                                    By:/s/ R. M. Searson
                                      ------------------------------------------
                                    Name:   Robert M. Searson
                                    Title:  Senior Vice President

                                    JPMORGAN CHASE BANK

                                    By:/s/Thomas F. Conroy, Jr.
                                      ------------------------------------------
                                    Name:   Thomas F. Conroy, Jr
                                    Title:  Vice President

                                    LASALLE BANK NATIONAL ASSOCIATION

                                    By:/s/ Roger Pillsbury
                                       -----------------------------------------
                                    Name:   Roger Pillsbury
                                    Title:  Senior Vice President

                                    FLEET NATIONAL BANK

                                    By:/s/ Henry F. Bullitt
                                       -----------------------------------------
                                    Name:   Henry F. Bullitt
                                    Title:  Senior Vice President

                                    WACHOVIA BANK, NATIONAL ASSOCIATION

                                    By:/s/ Melanie Snyder
                                       -----------------------------------------
                                    Name:   Melanie Snyder
                                    Title:  Associate

                                    THE BANK OF NEW YORK

                                    By:/s/ Susan M. Graham
                                       -----------------------------------------
                                    Name:   Susan M. Graham
                                    Title:  Vice President

                                    [SIGNATURE PAGES CONTINUE]


<PAGE>


                                    MANUFACTURERS & TRADERS TRUST COMPANY

                                    By:/s/ Joshua C. Becker
                                       -----------------------------------------
                                    Name:   Joshua C. Becker
                                    Title:  Officer

                                    PNC BANK, NATIONAL ASSOCIATION

                                    By:/s/ Robert J. Giannone
                                       -----------------------------------------
                                    Name:   Robert J. Giannone
                                    Title:  Vice President

                                    CITIZENS BANK

                                    By:/s/ Mark W. Torie
                                       -----------------------------------------
                                    Name:   Mark W. Torie
                                    Title:  Vice President

                                    COMERICA BANK

                                    By:/s/ Richard C. Hampson
                                       -----------------------------------------
                                    Name:   Richard C. Hampson
                                    Title:  Vice President