EXECUTION COPY

                                CREDIT AGREEMENT


     CREDIT  AGREEMENT,  dated as of the 22nd day of January,  2003 by and among
COMPX  INTERNATIONAL  INC., a corporation  organized  under the laws of Delaware
(the  "Borrower"),  the lenders who are or may become a party to this Agreement,
as Lenders (the "Lenders"),  and WACHOVIA BANK, NATIONAL ASSOCIATION, a national
banking   association,   as   Administrative   Agent   for  the   Lenders   (the
"Administrative Agent").

                              STATEMENT OF PURPOSE

     The Borrower has requested,  and the Lenders have agreed, to extend certain
credit facilities to the Borrower on the terms and conditions of this Agreement.

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:


                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.1  Definitions.  The following  terms when used in this Agreement
shall have the meanings assigned to ----------- them below:

     "Administrative  Agent" means  Wachovia in its  capacity as  Administrative
Agent hereunder, and any successor thereto appointed pursuant to Section 12.9.

     "Administrative   Agent's  Correspondent"  means  Wachovia  Bank,  National
Association, London Branch, or any other financial institution designated by the
Administrative  Agent to act as its correspondent  hereunder with respect to the
distribution and payment of Alternative Currency Loans.

     "Administrative  Agent's  Office"  means the  office of the  Administrative
Agent  specified in or determined in accordance  with the  provisions of Section
13.1(c).

     "Affiliate" means, with respect to any Person, any other Person (other than
a Subsidiary of the Borrower)  which directly or indirectly  through one or more
intermediaries,  controls, or is controlled by, or is under common control with,
such first Person or any of its  Subsidiaries.  The term "control" means (a) the
power  to vote  ten  percent  (10%) or more of the  securities  or other  equity
interests of a Person  having  ordinary  voting  power,  or (b) the  possession,
directly or  indirectly,  of any other power to direct or cause the direction of
the management  and policies of a Person,  whether  through  ownership of voting
securities, by contract or otherwise.

     "Aggregate   Commitment"   means  the  aggregate  amount  of  the  Lenders'
Commitments  hereunder,  as such amount may be  increased,  reduced or otherwise
modified at any time or from time to time pursuant to the terms  hereof.  On the
Closing Date, the Aggregate Commitment shall be Forty-Seven Million Five Hundred
Thousand Dollars ($47,500,000). At no time shall the Aggregate Commitment exceed
Fifty Million Dollars ($50,000,000).

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

     "Alternative  Currency"  means (i) the euro,  (ii) the Canadian  Dollar and
(iii)  with the  prior  written  consent  of the  Administrative  Agent  and the
Lenders,  any  other  lawful  currency  (other  than  Dollars)  which is  freely
transferable  and convertible  into Dollars in the United States currency market
and freely  available  to all of the  Lenders in the  London  interbank  deposit
market.

     "Alternative  Currency  Amount"  means  with  respect  to each Loan made or
continued (or to be made or continued) in an Alternative Currency, the amount of
such Alternative Currency which is equivalent to the principal amount in Dollars
of such  Loan  at the  most  favorable  spot  exchange  rate  determined  by the
Administrative  Agent  to  be  available  to  it  at  approximately  11:00  a.m.
(Charlotte time) two (2) Business Days before such Loan is made or continued (or
to be made or  continued).  When used with respect to any other sum expressed in
Dollars, "Alternative Currency Amount" shall mean the amount of such Alternative
Currency  which is  equivalent to the amount so expressed in Dollars at the most
favorable  spot  exchange  rate  determined  by the  Administrative  Agent to be
available to it at the relevant time.

     "Alternative  Currency  Commitment"  means the  lesser  of (i) Ten  Million
Dollars ($10,000,000) and (ii) the Aggregate  Commitment,  as such amount may be
reduced  or  modified  at any time or from  time to time  pursuant  to the terms
hereof.

     "Alternative  Currency  Facility" means the alternative  currency  facility
established pursuant to Section 2.2.

     "Alternative   Currency   Lender"  means  Wachovia,   in  its  capacity  as
alternative currency lender hereunder.

     "Alternative  Currency Loan" means any revolving credit loan denominated in
an Alternative  Currency made by the Alternative Currency Lender to the Borrower
pursuant to Section 2.2, and all such Alternative Currency Loans collectively as
the context requires.

     "Alternative Currency Note" means the Alternative Currency Note made by the
Borrower payable to the order of the Alternative Currency Lender,  substantially
in the form of Exhibit A-3 hereto,  evidencing the  Alternative  Currency Loans,
and any  amendments,  supplements  and  modifications  thereto,  any substitutes
therefor and any replacements,  restatements, renewals or extensions thereof, in
whole or in part.

     "Applicable Law" means all applicable  provisions of  constitutions,  laws,
statutes,   ordinances,   rules,  treaties,   regulations,   permits,  licenses,
approvals,  interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.

     "Applicable  Margin"  shall have the  meaning  assigned  thereto in Section
4.1(c);  provided,  that  with  respect  to  each  LIBOR  Rate  Loan  made in an
Alternative  Currency,  the  Applicable  Margin shall include the Mandatory Cost
Rate, as determined pursuant to the formula set forth on Schedule 1.1(b) hereto.

     "Application"  means an  application,  in the form specified by the Issuing
Lender from time to time,  requesting  the  Issuing  Lender to issue a Letter of
Credit.

     "Approved Fund" means any Person (other than a natural Person),  including,
without limitation,  any special purpose entity, 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;  provided,
that with respect to any assignment of any  Commitment,  such Approved Fund must
be administered  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.

     "Arbitration  Rules"  shall have the  meaning  assigned  thereto in Section
13.6(a).

     "Assignment  and  Acceptance"  shall have the meaning  assigned  thereto in
Section 13.10.

     "Available Commitment" means, as to any Lender at any time, an amount equal
to (a) such Lender's Commitment less (b) such Lender's Extensions of Credit.

     "Base Rate"  means,  at any time,  the higher of (a) the Prime Rate and (b)
the  Federal  Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.

     "Base Rate Loan" means any Loan  bearing  interest at a rate based upon the
Base Rate as provided in Section 4.1(a).

     "Benefited Lender" shall have the meaning assigned thereto in Section 4.6.

     "Borrower" means CompX  International  Inc., a corporation  organized under
the laws of Delaware, in its capacity as borrower hereunder.

     "Business Day" means (a) for all purposes other than as set forth in clause
(b) below, any day other than a Saturday, Sunday or legal holiday on which banks
in Charlotte, North Carolina and New York, New York, are open for the conduct of
their domestic or international commercial banking business, as applicable,  and
(b) with  respect to all notices and  determinations  in  connection  with,  and
payments of principal and interest on, any LIBOR Rate Loan,  any day (i) that is
a Business Day described in clause (a) and that is also a day for trading by and
between banks in deposits for the  applicable  Permitted  Currency in the London
interbank  market  and (ii) on which  banks  are open for the  conduct  of their
domestic   and   international   banking   business   in  the  place  where  the
Administrative  Agent or the  Administrative  Agent's  Correspondent  shall make
available Loans in such Permitted Currency.  Notwithstanding the foregoing, with
respect  to  any  amount  denominated  or to be  denominated  in the  euro,  any
reference to a "Business  Day" shall be construed as a reference to a day (other
than a Saturday or Sunday) on which banks are generally open for business in New
York,  New York and  prime  banks in London  generally  provide  quotations  for
deposits denominated in the euro.

     "Calculation  Date"  shall  have the  meaning  assigned  thereto in Section
4.1(c).

     "Canadian  Dollar" means, at any time of  determination,  the then official
currency of Canada.

     "Capital  Expenditures"  means,  with  respect  to  the  Borrower  and  its
Subsidiaries  for any period,  the aggregate  amount of all  expenditures of the
Borrower and its Subsidiaries  during such period that, in conformity with GAAP,
are included in "additions to property, plant and equipment" or comparable items
reflected  in the  consolidated  financial  statements  of the  Borrower and its
Subsidiaries.

     "Capital  Lease"  means any lease of any property by the Borrower or any of
its Subsidiaries, as lessee, that should, in accordance with GAAP, be classified
and  accounted  for as a capital  lease on a  Consolidated  balance sheet of the
Borrower and its Subsidiaries.

     "Change in  Control"  shall have the  meaning  assigned  thereto in Section
11.1(h).

     "Closing  Date" means the date of this Agreement or such later Business Day
upon which each condition  described in Section 5.2 shall be satisfied or waived
in all respects in a manner acceptable to the Administrative  Agent, in its sole
discretion.

     "Code"  means  the  Internal  Revenue  Code  of  1986,  and the  rules  and
regulations thereunder, each as amended or modified from time to time.

     "Collateral" means the collateral  security for the Obligations  pledged or
granted pursuant to the Security Documents.

     "Collateral Agreement" means the collateral agreement of even date executed
by  the  Borrower  and  each  of  the  Subsidiary  Guarantors  in  favor  of the
Administrative  Agent, for the benefit of itself and the Lenders,  substantially
in the form of  Exhibit  I, as  amended,  restated,  supplemented  or  otherwise
modified from time to time.

     "Commitment" means, as to any Lender, the obligation of such Lender to make
Loans  (including,  without  limitation,  to participate in Swingline  Loans and
Alternative Currency Loans) to the Borrower, and issue or participate in Letters
of Credit issued for the account of the Borrower,  in an aggregate  principal or
face amount at any time  outstanding not to exceed the amount set forth opposite
such  Lender's  name on Schedule  1.1(a)  hereto,  as the same may be reduced or
modified at any time or from time to time pursuant to the terms hereof.

     "Commitment  Fee Rate" shall have the meaning  assigned  thereto in Section
4.3(a).

     "Commitment  Percentage"  means, as to any Lender at any time, the ratio of
(a) the amount of the Commitment of such Lender to (b) the Aggregate  Commitment
of all of the Lenders.

     "Consolidated"  means, when used with reference to financial  statements or
financial statement items of the Borrower and its Subsidiaries,  such statements
or items on a consolidated  basis in accordance  with  applicable  principles of
consolidation under GAAP.

     "Consolidated  Net  Worth"  means,  with  respect to the  Borrower  and its
Subsidiaries,  on any date of  determination,  the  total  shareholders'  equity
(including capital stock, additional paid-in capital and retained earnings after
deducting the treasury stock) of the Borrower and its Subsidiaries  appearing on
a Consolidated  balance sheet of the Borrower and its  Subsidiaries  prepared in
accordance  with GAAP  (excluding  on a  cumulative  basis any  adjustments  for
foreign currency translation).

     "Credit Facility" means,  collectively,  the Revolving Credit Facility, the
Swingline Facility, the Alternative Currency Facility and the L/C Facility.

     "Current  Dividend  Level"  shall  have the  meaning  set forth in  Section
10.6(c).

     "Debt" means, with respect to the Borrower and its Subsidiaries at any date
and without duplication,  the sum of the following calculated in accordance with
GAAP:  (a) all  liabilities,  obligations  and  indebtedness  for borrowed money
including but not limited to obligations evidenced by bonds,  debentures,  notes
or other similar  instruments of any such Person, (b) all obligations to pay the
deferred  purchase  price of property  or services of any such Person  (provided
that "Debt"  shall not include  trade  payables  and other  accrued  liabilities
arising in the  ordinary  course of business  which are either (i) not more than
ninety (90) days past due or (ii) if more than ninety (90) days past due,  being
contested in good faith by appropriate  proceedings diligently conducted and for
which  adequate  reserves have been provided in accordance  with GAAP),  (c) all
obligations of any such Person as lessee under Capital  Leases,  (d) all Debt of
any other  Person  secured  by a Lien on any asset of any such  Person,  (e) all
Guaranty  Obligations  of any such Person,  (f) all  obligations,  contingent or
otherwise,  of any such Person relative to the face amount of letters of credit,
whether or not drawn, including without limitation any Reimbursement Obligation,
and  banker's  acceptances  issued for the account of any such  Person,  (g) all
obligations  of any such  Person to  redeem,  repurchase,  exchange,  defease or
otherwise  make  payments  in respect of capital  stock or other  securities  or
partnership  interests of such Person, (h) all net payment obligations  incurred
by any such  Person  pursuant to Hedging  Agreements  (solely to the extent that
such net payment  obligations are in excess of $2,000,000),  (i) all outstanding
payment  obligations  with respect to Synthetic  Leases and (j) the  outstanding
attributed  principal  amount under any asset  securitization  program.  For the
purpose of item (h) above, (1) the amount of any net payment obligation pursuant
to any Hedging Agreement on any date shall be deemed to be the Termination Value
thereof as of such date and (2) "Termination Value" means, in respect of any one
or more Hedging Agreements,  after taking into account the effect of any legally
enforceable netting agreement relating to such Hedging  Agreements,  (A) for any
date on or after the date such  Hedging  Agreements  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 Hedging Agreements,
as  determined  based upon one or more  mid-market  or other  readily  available
quotations  provided by any recognized dealer in such Hedging  Agreements (which
may include any Person that is a Lender or an Affiliate thereof at the time such
Hedging Agreement is executed).

     "Default" means any of the events  specified in Section 11.1 which with the
passage of time, the giving of notice or any other  condition,  would constitute
an Event of Default.

     "Disputes" shall have the meaning set forth in Section 13.6.

     "Dollars"  or "$"  means,  unless  otherwise  qualified,  dollars in lawful
currency of the United States.

     "Dollar  Amount"  means (a) with respect to each Loan made or continued (or
to be made or  continued),  or  Letter of Credit  issued or  extended  (or to be
issued or  extended),  in Dollars,  the  principal  amount  thereof and (b) with
respect  to each  Loan  made or  continued  (or to be made or  continued)  in an
Alternative Currency, the amount of Dollars which is equivalent to the principal
amount of such Loan, at the most favorable spot exchange rate  determined by the
Administrative Agent at approximately 11:00 a.m. (the time of the Administrative
Agent's  Correspondent)  two  (2)  Business  Days  before  such  Loan is made or
continued (or to be made or continued).  When used with respect to any other sum
expressed in an Alternative  Currency,  "Dollar Amount" shall mean the amount of
Dollars  which is  equivalent  to the amount so  expressed  in such  Alternative
Currency  at  the  most   favorable   spot  exchange  rate   determined  by  the
Administrative Agent to be available to it at the relevant time.

     "Domestic  Subsidiary" means any Subsidiary of the Borrower organized under
the laws of any state of the United States or the District of Columbia.

     "EBIT"  means,  for any period,  the sum of the  following  determined on a
Consolidated basis, without  duplication,  for the Borrower and its Subsidiaries
in accordance  with GAAP: (a) Net Income for such period plus (b) the sum of the
following to the extent  deducted in determining  Net Income:  (i) income taxes,
franchise  taxes and similar  taxes  imposed in lieu of net income  taxes,  (ii)
Interest  Expense  and  (iii)  all non cash  charges  associated  with any asset
impairment  less  (c)  interest  income;  provided  that  for  the  purposes  of
determining  EBIT for any  period  during  which any  Permitted  Acquisition  is
consummated,  EBIT shall be adjusted to give effect to the  consummation of such
Permitted  Acquisition on a pro forma basis in accordance  with GAAP, as if such
Permitted Acquisition occurred on the first day of such period, such adjustments
to be  calculated  in a manner  reasonably  satisfactory  to the  Administrative
Agent.

     "EBITDA" means,  for any period,  the sum of the following  determined on a
Consolidated basis, without  duplication,  for the Borrower and its Subsidiaries
in accordance  with GAAP: (a) Net Income for such period plus (b) the sum of the
following to the extent  deducted in determining  Net Income:  (i) income taxes,
franchise  taxes and similar  taxes  imposed in lieu of net income  taxes,  (ii)
Interest Expense,  (iii)  amortization,  depreciation and other non-cash charges
and (iv) all non cash  charges  associated  with any asset  impairment  less (c)
interest  income;  provided that for the purposes of determining  EBITDA for any
period during which any Permitted  Acquisition is  consummated,  EBITDA shall be
adjusted to give effect to the  consummation of such Permitted  Acquisition on a
pro forma  basis in  accordance  with  GAAP,  as if such  Permitted  Acquisition
occurred on the first day of such period, such adjustments to be calculated in a
manner reasonably satisfactory to the Administrative Agent.

     "Eligible  Assignee"  means,  with respect to any assignment of the rights,
interest and obligations of a Lender hereunder,  a Person that is at the time of
such  assignment (a) a commercial  bank  organized  under the laws of the United
States or any state thereof,  having  combined  capital and surplus in excess of
$500,000,000,  (b) a  commercial  bank  organized  under  the laws of any  other
country  that is a  member  of the  Organization  of  Economic  Cooperation  and
Development,  or a political  subdivision of any such country,  having  combined
capital and surplus in excess of $500,000,000,  (c) a finance company, insurance
company or other financial  institution which in the ordinary course of business
extends  credit of the type  extended  hereunder  and that has  total  assets in
excess of $1,000,000,000, (d) already a Lender hereunder (whether as an original
party to this Agreement or as the assignee of another Lender), (e) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially all
of the commercial lending business of the assigning Lender, (f) any Affiliate of
assigning  Lender,  (g) any Approved  Fund or (h) any other Person that has been
approved  in  writing  as an  Eligible  Assignee  by (i)  other  than  upon  the
occurrence and during the  continuance  of any Default or Event of Default,  the
Borrower, and (ii) the Administrative Agent.

     "EMU" means  economic and monetary union as  contemplated  in the Treaty on
European Union.

     "EMU  Legislation"  means  legislative  measures of the Council of European
Union for the introduction of, change over to or operation of the euro.

     "Employee  Benefit Plan" means any employee benefit plan within the meaning
of Section 3(3) of ERISA which (a) is  maintained  for employees of the Borrower
or any ERISA Affiliate or (b) has at any time within the preceding six (6) years
been maintained for the employees of the Borrower or any current or former ERISA
Affiliate.

     "Environmental  Claims"  means any and all  administrative,  regulatory  or
judicial actions,  suits, demands, demand letters,  claims, liens,  accusations,
allegations,  notices of noncompliance or violation,  investigations (other than
internal  reports  prepared by any Person in the ordinary course of business and
not in response to any third party action or request of any kind) or proceedings
relating in any way to any actual or alleged violation of or liability under any
Environmental Law or relating to any permit issued, or any approval given, under
any such Environmental Law, including, without limitation, any and all claims by
Governmental Authorities for enforcement,  cleanup, removal, response,  remedial
or other  actions  or  damages,  contribution,  indemnification  cost  recovery,
compensation or injunctive relief resulting from Hazardous  Materials or arising
from alleged injury or threat of injury to human health or the environment.

     "Environmental Laws" means any and all federal,  foreign, state, provincial
and local laws, statutes,  ordinances,  rules, regulations,  permits,  licenses,
approvals,  interpretations  and orders of courts or  Governmental  Authorities,
relating to the protection of human health or the environment.

     "ERISA" means the Employee  Retirement Income Security Act of 1974, and the
rules and regulations thereunder, each as amended or modified from time to time.

     "ERISA  Affiliate"  means any  Person who  together  with the  Borrower  is
treated as a single employer  within the meaning of Section 414(b),  (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.

     "euro" means the single currency to which the  Participating  Member States
of the European Union have converted.

     "euro unit" means the currency unit of the euro.

     "Eurodollar  Reserve  Percentage"  means,  for any day with  respect to any
LIBOR Rate Loan denominated in Dollars,  the percentage  (expressed as a decimal
and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in
effect  for  such  day as  prescribed  by the  Federal  Reserve  Board  (or  any
successor) for determining the maximum reserve  requirement  (including  without
limitation  any  basic,  supplemental  or  emergency  reserves)  in  respect  of
eurocurrency  liabilities or any similar  category of  liabilities  for a member
bank of the Federal Reserve System in New York City.

     "Event of  Default"  means any of the events  specified  in  Section  11.1,
provided  that any  requirement  for passage of time,  giving of notice,  or any
other condition, has been satisfied.

     "Existing Facility" means the credit facility  established  pursuant to the
$100,000,000  Credit  Agreement  dated as of February 26, 1998, by and among the
Borrower,  Bankers Trust Company, as Agent, and the various lending institutions
party thereto, as amended, restated, supplemented or otherwise modified.

     "Extensions of Credit"  means,  as to any Lender at any time, (a) an amount
equal to the sum of (i) the aggregate  principal  amount of all Revolving Credit
Loans  made by such  Lender  then  outstanding,  (ii) such  Lender's  Commitment
Percentage  of  the  L/C  Obligations  then  outstanding,  (iii)  such  Lender's
Commitment  Percentage of the  Swingline  Loans then  outstanding  and (iv) such
Lender's   Commitment   Percentage  of  the  Alternative   Currency  Loans  then
outstanding  or (b) the  making of any Loan or  participation  in any  Letter of
Credit by such Lender, as the context requires.

     "FDIC" means the Federal Deposit  Insurance  Corporation,  or any successor
thereto.

     "Federal  Funds  Rate"  means,  the rate per  annum  (rounded  upwards,  if
necessary,  to the next higher 1/100th of 1%)  representing  the daily effective
federal  funds  rate as quoted by the  Administrative  Agent  and  confirmed  in
Federal  Reserve  Board  Statistical  Release  H.15  (519) or any  successor  or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not  available,  then "Federal  Funds Rate" shall mean a daily rate
which is determined,  in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national  federal funds
market at 9:00 a.m.  (Charlotte  time).  Rates for weekends or holidays shall be
the same as the rate for the most immediately preceding Business Day.

     "Fiscal  Year" means the fiscal year of the Borrower  and its  Subsidiaries
ending on the  nearest  Sunday  to  December  31 (for  United  States  reporting
purposes).

     "Foreign  Subsidiary"  means any  Subsidiary  of the Borrower not organized
under the laws of any State of the United States or the District of Columbia.

     "GAAP" means generally accepted accounting principles, as recognized by the
American Institute of Certified Public Accountants and the Financial  Accounting
Standards Board,  consistently  applied and maintained on a consistent basis for
the Borrower and its  Subsidiaries  throughout the period indicated and (subject
to Section 13.9)  consistent with the prior  financial  practice of the Borrower
and its Subsidiaries.

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

     "Governmental  Authority"  means any nation,  province,  state or political
subdivision  thereof,  and any  government or any Person  exercising  executive,
legislative,   regulatory  or  administrative  functions  of  or  pertaining  to
government,  and any  corporation or other entity owned or  controlled,  through
stock or capital ownership or otherwise, by any of the foregoing.

     "Guaranty   Obligation"  means,  with  respect  to  the  Borrower  and  its
Subsidiaries,  without duplication, any obligation,  contingent or otherwise, of
any such  Person  pursuant  to which such  Person  has  directly  or  indirectly
guaranteed  any Debt or other  obligations  of any  other  Person  and,  without
limiting the generality of the foregoing,  any  obligation,  direct or indirect,
contingent or  otherwise,  of any such Person (a) to purchase or pay (or advance
or supply  funds for the  purchase or payment of) such Debt or other  obligation
(whether  arising by virtue of  partnership  arrangements,  by agreement to keep
well, to purchase assets, goods,  securities or services, to take-or-pay,  or to
maintain financial statement condition or otherwise) or (b) entered into for the
purpose  of  assuring  in any other  manner  the  obligee  of such Debt or other
obligation  of the payment  thereof or to protect such  obligee  against loss in
respect  thereof  (in  whole or in  part);  provided,  that  the  term  Guaranty
Obligation  shall not  include  endorsements  for  collection  or deposit in the
ordinary course of business.

     "Hazardous  Materials"  means any  substances or materials (a) which are or
become  defined  as  hazardous   wastes,   hazardous   substances,   pollutants,
contaminants,  chemical  substances  or mixtures or toxic  substances  under any
Environmental  Law,  (b)  which  are  toxic,  explosive,  corrosive,  flammable,
infectious, radioactive,  carcinogenic,  mutagenic or otherwise harmful to human
health  or the  environment  and are or  become  regulated  by any  Governmental
Authority,  (c) the presence of which require investigation or remediation under
any Environmental Law or common law, (d) the discharge or emission or release of
which  requires  a  permit  or  license  under  any  Environmental  Law or other
Governmental  Approval,  (e) which are  deemed to  constitute  a  nuisance  or a
trespass  which  pose a health  or  safety  hazard  to  Persons  or  neighboring
properties,  (f) which consist of  underground  or  aboveground  storage  tanks,
whether  empty,  filled or  partially  filled with any  substance,  or (g) which
contain,  without  limitation,   asbestos,   polychlorinated   biphenyls,   urea
formaldehyde  foam  insulation,   petroleum   hydrocarbons,   petroleum  derived
substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.

     "Hedging  Agreement"  means any agreement with respect to any Interest Rate
Contract,  forward rate  agreement,  commodity swap,  forward  foreign  exchange
agreement, currency swap agreement, cross-currency rate swap agreement, currency
option  agreement or other agreement or arrangement  designed to alter the risks
of any Person arising from  fluctuations in interest  rates,  currency values or
commodity prices, all as amended,  restated,  supplemented or otherwise modified
from time to time.

     "Hedging  Obligations"  shall  have the  meaning  assigned  thereto  in the
definition of "Obligations".

     "Interest Expense" means, with respect to the Borrower and its Subsidiaries
for any period, the gross interest expense of the Borrower and its Subsidiaries,
all determined for such period on a Consolidated basis, without duplication,  in
accordance with GAAP.

     "Interest  Period"  shall  have the  meaning  assigned  thereto  in Section
4.1(b).

     "Interest Rate Contract" means any interest rate swap  agreement,  interest
rate  cap  agreement,  interest  rate  floor  agreement,  interest  rate  collar
agreement,  interest rate option or any other agreement regarding the hedging of
interest  rate risk exposure  executed in  connection  with hedging the interest
rate exposure of any Person and any confirming  letter executed pursuant to such
agreement,  all as amended,  restated,  supplemented or otherwise  modified from
time to time.

     "ISP  98"  means  the  International   Standby  Practices  (1998  Revision,
effective January 1, 1999),  International  Chamber of Commerce  Publication No.
590.

     "Issuing Lender" means Wachovia, in its capacity as issuer of any Letter of
Credit, or any successor thereto.

     "Joinder Agreement" means, collectively, each joinder agreement executed in
favor of the  Administrative  Agent for the  ratable  benefit  of itself and the
Lenders, substantially in the form of Exhibit J.

     "L/C Commitment" means the lesser of (a) Ten Million Dollars  ($10,000,000)
and (b) the Aggregate Commitment.

     "L/C Facility" means the letter of credit facility  established pursuant to
Article III.

     "L/C Obligations"  means at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate  amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.

     "L/C Participants" means the collective  reference to all the Lenders other
than the Issuing Lender.

     "Lender" means each Person executing this Agreement as a Lender (including,
without limitation, the Issuing Lender, the Swingline Lender and the Alternative
Currency  Lender  unless  the  context  otherwise  requires)  set  forth  on the
signature  pages hereto and each Person that  hereafter  becomes a party to this
Agreement as a Lender pursuant to Section 13.10.

     "Lender  Addition  and  Acknowledgment   Agreement"  means  each  agreement
executed  pursuant to Section 2.9 by the  Borrower  and an existing  Lender or a
Person  not  theretofore  a  Lender,  as  applicable,  and  acknowledged  by the
Administrative  Agent  and each  Guarantor,  providing  for an  increase  in the
Aggregate Commitment hereunder,  acknowledging that any Person not theretofore a
Lender shall be a party hereto and have the rights and  obligations  of a Lender
hereunder, and setting forth the Commitment of each Lender.

     "Lending  Office"  means,  with  respect to any Lender,  the office of such
Lender  maintaining  such Lender's  Commitment  Percentage of the  Extensions of
Credit.

     "Letters of Credit" shall have the meaning assigned thereto in Section 3.1.

     "Leverage Ratio" means the ratio calculated pursuant to Section 9.1.

     "LIBOR" means the rate of interest per annum determined on the basis of the
rate for deposits in Dollars in minimum  amounts of at least  $5,000,000 (or the
Alternative Currency Amount thereof with respect to a borrowing to be made in an
Alternative Currency) for a period equal to the applicable Interest Period which
appears on the Dow Jones Market Screen 3750, or the  applicable  Reuters  Screen
Page, as  determined  by the  Administrative  Agent in its sole  discretion,  at
approximately  11:00 a.m. (London time) two (2) Business Days prior to the first
day of the applicable  Interest Period  (rounded  upward,  if necessary,  to the
nearest  1/100th of 1%).  If, for any  reason,  such rate does not appear on Dow
Jones Market Screen 3750, or the applicable  Reuters  Screen Page,  then "LIBOR"
shall be determined by the Administrative  Agent to be the arithmetic average of
the rate per annum at which  deposits  in the  Permitted  Currency  in which the
applicable  Loan is  denominated  would be offered by first  class  banks in the
London  interbank  market to the  Administrative  Agent  (or the  Administrative
Agent's  Correspondent)  approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period for a period equal
to such Interest Period.  Each calculation by the Administrative  Agent of LIBOR
shall be conclusive and binding for all purposes, absent manifest error.

     "LIBOR Rate" means

     (i) with respect to any LIBOR Rate Loan denominated in Dollars,  a rate per
annum  (rounded  upwards,  if  necessary,  to the  next  higher  1/100th  of 1%)
determined by the Administrative Agent pursuant to the following formula:

     LIBOR Rate =     LIBOR
                      -------------------------------
                      1.00-Eurodollar Reserve Percentage

                  and

     (ii) with  respect to any LIBOR Rate Loan  denominated  in any  Alternative
Currency,  a rate per annum (rounded upwards,  if necessary,  to the next higher
1/100th of 1%) equal to LIBOR.

Each calculation by the Administrative Agent of the LIBOR Rate shall be
conclusive and binding for all purposes, absent manifest error.

     "LIBOR Rate Loan" means any Loan bearing  interest at a rate based upon the
LIBOR Rate as provided in Section 4.1(a).

     "Lien" means, with respect to any asset, any mortgage,  leasehold mortgage,
lien, pledge,  charge,  security  interest,  hypothecation or encumbrance of any
kind in respect of such  asset.  For the  purposes of this  Agreement,  a Person
shall be deemed to own  subject  to a Lien any asset  which it has  acquired  or
holds subject to the interest of a vendor or lessor under any  conditional  sale
agreement,  Capital Lease or other title  retention  agreement  relating to such
asset.

     "Liquidity"  means, with respect to the Borrower and its Subsidiaries as of
any date of determination, (i) consolidated cash and cash equivalents as of such
date plus (ii) the aggregate Available Commitments as of such date.

     "Loan  Documents"  means,  collectively,  this  Agreement,  the Notes,  the
Applications,  the Subsidiary Guaranty Agreement,  the Security Documents,  each
Joinder Agreement and each other document, instrument, certificate and agreement
executed and delivered by the Borrower or any  Subsidiary  thereof in connection
with this Agreement  (excluding any Hedging  Agreement),  all as may be amended,
restated, supplemented or otherwise modified from time to time.

     "Loans" means the collective  reference to the Revolving  Credit Loans, the
Alternative  Currency Loans and the Swingline Loans and "Loan" means any of such
Loans.

     "Mandatory  Cost  Rate"  means  an  addition  to the  interest  rate on any
Revolving  Credit  Loan or  Alternative  Currency  Loan  made by any  Lender  to
compensate  such Lender for the cost  imputed to the Lender  resulting  from the
imposition  from time to time under or  pursuant to the Bank of England Act 1998
and/or by the Bank of England and/or the Financial  Services Authority (or other
Governmental  Authorities  of the  United  Kingdom)  of a  requirement  to place
non-interest  bearing cash ratio deposits or special deposits  (whether interest
bearing or not) with the Bank of England  and/or fees to the Financial  Services
Authority  calculated  by reference to  liabilities  used to fund the  Revolving
Credit Loans and the Alternative  Currency Loans,  expressed as a rate per annum
and determined pursuant to the formula set forth on Schedule 1.1(b) hereto.

     "Material  Adverse  Effect"  means a  material  adverse  effect  on (i) the
properties,   business,   prospects,   operations  or  condition  (financial  or
otherwise)  of the  Borrower  and its  Subsidiaries  taken as a whole,  (ii) the
ability of the  Borrower  or any of its  Subsidiaries  to perform  its  material
obligations  under  the Loan  Documents  to which  it is a party,  or (iii)  the
validity and enforceability of the Loan Documents.

     "Material  Domestic  Subsidiary"  means,  at any  time,  (a)  any  Domestic
Subsidiary  of the Borrower  with net assets in excess of three  percent (3%) of
the total net assets of the  Borrower and its  Subsidiaries  as reflected on the
financial statements delivered in accordance with Section 7.1, (b) any parent of
any  Domestic  Subsidiary  referred to in clause (a) of this  definition,  which
parent is also a Domestic  Subsidiary and which parent is not deemed a "Material
Domestic Subsidiary" pursuant to clause (a) of this definition, (c) any Domestic
Subsidiary   of  the  Borrower   voluntarily   designated   in  writing  to  the
Administrative  Agent  by  the  Borrower  as a  "Material  Domestic  Subsidiary"
regardless  of whether such Domestic  Subsidiary is deemed a "Material  Domestic
Subsidiary"  pursuant  to  clause  (a) or (b) of  this  definition  and  (d) any
Domestic  Subsidiary  of the Borrower  that  executes  all the relevant  joinder
documents in  compliance  with Section 8.11  regardless of whether such Domestic
Subsidiary is deemed a "Material  Domestic  Subsidiary"  pursuant to clause (a),
(b) or (c) of this  definition;  provided,  however,  that  notwithstanding  the
foregoing,  Domestic  Subsidiaries  of the  Borrower  which  are  not  "Material
Domestic Subsidiaries" shall not have total net assets equal to greater than ten
percent  (10%) of total net assets of the Borrower and its  Subsidiaries  at any
time.

     "Mortgages" means the collective reference to each deed of trust, mortgage,
or other real property security document, whether encumbering a leasehold or fee
interest in real property,  required by the Administrative Agent and executed by
the  Borrower  or any  Material  Domestic  Subsidiary  thereof  in  favor of the
Administrative Agent, for the ratable benefit of itself and the Lenders, as each
such document may be amended, restated,  supplemented or otherwise modified from
time to time.

     "Multiemployer  Plan"  means a  "multiemployer  plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA  Affiliate is making,  or
is  accruing  an  obligation  to make,  or has  accrued an  obligation  to make,
contributions within the preceding six (6) years.

     "Net  Cash  Position"  means  on any day,  with  respect  to the  Operating
Account,  a sum equal to the opening available balance in the Operating Account,
plus any maturing  investment  principal and interest  credited to the Operating
Account,  minus the daily  presentment  of checks and Operating  Account  holds,
minus any floor balance which has been established to cover bank charges,  minus
any maturing  interest debited to the Operating  Account,  in each case for such
day.

     "Net Cash Proceeds"  means, as applicable,  (a) with respect to any sale or
other disposition of assets, the gross cash proceeds received by the Borrower or
any of its Subsidiaries  from such sale  (including,  without  limitation,  cash
received by way of deferred payment pursuant to a note receivable, conversion of
non-cash  consideration,  cash payments in respect of purchase price adjustments
or otherwise,  but only as and when such cash is actually received) less the sum
of (i) all income  taxes and other taxes  assessed by a  Governmental  Authority
which are paid or payable by the Borrower or any of its Subsidiaries as a result
of such sale or other  disposition,  (ii) any  other  costs,  fees and  expenses
incurred  in  connection  with  such  sale or other  disposition  and  (iii) the
principal amount of, premium, if any, and interest on any Debt which is required
to be repaid by the Borrower or any of its  Subsidiaries in connection with such
sale, (b) with respect to any offering of capital stock or issuance of Debt, the
gross  cash  proceeds  received  by the  Borrower  or  any  of its  Subsidiaries
therefrom less all legal,  underwriting and other fees and expenses  incurred in
connection  therewith  and (c) with  respect to any payment  under an  insurance
policy or in  connection  with a  condemnation  proceeding,  the  amount of cash
proceeds  received by the Borrower or any of its Subsidiaries  from an insurance
company  or  Governmental  Authority,  as  applicable,  net of all  expenses  of
collection  and  net of  all  income  taxes  and  other  taxes  assessed  by any
Governmental  Authority  which are paid or payable by the Borrower or any of its
Subsidiaries as a result of receiving any such payment.

     "Net Income" means, with respect to the Borrower and its Subsidiaries,  for
any period of  determination,  the net income (or loss) of the  Borrower and its
Subsidiaries for such period,  determined on a Consolidated  basis in accordance
with GAAP;  provided  that there shall be  excluded  from Net Income (a) the net
income (or loss) of any Person in which the Borrower or any of its  Subsidiaries
has a joint interest with a third party, except to the extent such net income is
actually  paid to the Borrower or any of its  Subsidiaries  by dividend or other
distribution  during  such  period,  (b) the net  income (or loss) of any Person
accrued  prior to the date it becomes a  Subsidiary  of such Person or is merged
into  or  consolidated  with  such  Person  or any of its  Subsidiaries  or that
Person's assets are acquired by such Person or any of its Subsidiaries,  (c) the
cumulative effect of a change in accounting  principles required or permitted by
a change in GAAP subsequent to the Closing Date, and (d) any net gain classified
as an extraordinary item in accordance with GAAP.

     "Non-Material  Domestic  Subsidiary"  means any Domestic  Subsidiary of the
Borrower which is not a Material Domestic Subsidiary.

     "Notes" means the collective  reference to the Revolving  Credit Notes, the
Alternative  Currency Note and the  Swingline  Note and "Note" means any of such
Notes.

     "Notice of Account  Designation" shall have the meaning assigned thereto in
Section 2.4(b).

     "Notice of Borrowing"  shall have the meaning  assigned  thereto in Section
2.4(a).

     "Notice of Conversion/Continuation" shall have the meaning assigned thereto
in Section 4.2.

     "Notice of Prepayment"  shall have the meaning  assigned thereto in Section
2.5(c).

     "Obligations"  means,  in each case,  whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the  filing of any  bankruptcy  or  similar  petition)  the  Loans,  (b) the L/C
Obligations,  (c) all existing or future payment and other  obligations owing by
the  Borrower  under any Hedging  Agreement  (which such  Hedging  Agreement  is
permitted  hereunder) with any Person that is a Lender hereunder or an Affiliate
of a Lender  hereunder at the time such Hedging  Agreement is executed (all such
obligations with respect to any such Hedging Agreement,  "Hedging  Obligations")
and (d) all other fees and commissions  (including  attorneys'  fees),  charges,
indebtedness,   loans,  liabilities,   financial  accommodations,   obligations,
covenants  and duties  owing by the Borrower or any of its  Subsidiaries  to the
Lenders or the  Administrative  Agent,  in each case under or in respect of this
Agreement,  any Note, any Letter of Credit or any of the other Loan Documents of
every kind, nature and description,  direct or indirect, absolute or contingent,
due or to become due, contractual or tortious,  liquidated or unliquidated,  and
whether or not evidenced by any note.

     "Officer's Compliance  Certificate" shall have the meaning assigned thereto
in Section 7.2.

     "Operating  Account" means the principal  operating account of the Borrower
maintained with Wachovia.

     "Operating  Lease" shall mean, as to any Person as determined in accordance
with GAAP,  any lease of  property  (whether  real,  personal  or mixed) by such
Person as lessee which is not a Capital Lease.

     "Other Taxes" shall have the meaning assigned thereto in Section 4.13(b).

     "Participating  Member  State"  means  each state so  described  in any EMU
Legislation.

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

     "Pension Plan" means any Employee  Benefit Plan, other than a Multiemployer
Plan,  which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code and which (a) is  maintained  for the  employees of the Borrower or any
ERISA  Affiliate or (b) has at any time within the  preceding six (6) years been
maintained  for the  employees  of the  Borrower or any of its current or former
ERISA Affiliates.

     "Permitted Acquisition" has the meaning set forth in Section 10.3(c).

     "Permitted  Acquisition  Documents"  means with respect to any  acquisition
proposed by the Borrower or any Subsidiary thereof, the purchase agreement, sale
agreement,  merger  agreement or other agreement  evidencing  such  acquisition,
including,  without  limitation,  all legal  opinions  and each  other  document
executed, delivered, contemplated by or prepared in connection therewith and any
amendment, modification or supplement to any of the foregoing.

     "Permitted  Currency"  means Dollars or any Alternative  Currency,  or each
such currency, as the context requires.

     "Permitted  Holders" means (i) Harold C. Simmons,  (ii) the trustees of the
Harold C.  Simmons  Family  Trust No. 1 dated  January  1,  1964,  the Harold C.
Simmons  Family  Trust  No. 2 dated  January  1,  1964 and any  trust or  trusts
established  after the Closing Date for the benefit of Harold C. Simmons  and/or
his spouse or his or her  descendants,  whether  natural or adopted (such trusts
collectively,   the   "Trusts"   and   such   individuals,    collectively   the
"Beneficiaries"),  (iii) each of the Trusts, (iv) each of the Beneficiaries, (v)
any Person  controlled,  directly or  indirectly,  by one or more of the Persons
described in clauses (i) through (iv) above,  (vi) any employee  benefit plan or
pension fund of the Borrower or any  Subsidiary and any Person holding any class
of voting  stock of the Borrower or  Subsidiary  for or pursuant to the terms of
any such  plan or fund,  and (vii) any group  made up of  Persons  described  in
clauses (i) through (vi) above.

     "Person"  means an  individual,  corporation,  limited  liability  company,
partnership,  association,  trust,  business trust,  joint venture,  joint stock
company,  pool,  syndicate,  sole proprietorship,  unincorporated  organization,
Governmental Authority or any other form of entity or group thereof.

     "Pounds  Sterling" means, at any time of  determination,  the then official
currency of the United Kingdom of Great Britain and Northern Ireland.

     "Prime Rate" means,  at any time,  the rate of interest per annum  publicly
announced  from time to time by Wachovia  as its prime rate.  Each change in the
Prime Rate shall be  effective  as of the  opening of  business  on the day such
change in such prime rate occurs.  The parties hereto  acknowledge that the rate
announced  publicly  by  Wachovia as its prime rate is an index or base rate and
shall not  necessarily  be its lowest or best rate  charged to its  customers or
other banks.

     "Register" shall have the meaning assigned thereto in Section 13.10(d).

     "Reimbursement   Obligation"  means  the  obligation  of  the  Borrower  to
reimburse  the Issuing  Lender  pursuant to Section 3.5 for amounts  drawn under
Letters of Credit.

     "Replaced  Lender"  shall  have the  meaning  assigned  thereto  in Section
4.15(c).

     "Replacement  Lender"  shall have the meaning  assigned  thereto in Section
4.15(c).

     "Required  Lenders"  means,  at any date, any  combination of Lenders whose
Commitment  Percentages  aggregate at least  sixty-six  and  two-thirds  percent
(66-2/3%)  of the  Aggregate  Commitment  or, if the  Credit  Facility  has been
terminated pursuant to Section 11.2, any combination of Lenders holding at least
sixty-six and two-thirds percent (66-2/3%) of the aggregate Extensions of Credit
(with the  aggregate  amount of each  Lender's  risk  participation  and  funded
participation in Alternative Currency Loans, Swingline Loans and L/C Obligations
being deemed "held" by such Lender for the purposes of this definition).

     "Responsible  Officer"  means any of the  following:  the  chief  executive
officer, president, chief financial officer or controller of the Borrower or any
other officer of the Borrower reasonably acceptable to the Administrative Agent.

     "Revolving  Credit  Facility"  means  the  revolving  credit,   alternative
currency and swingline facilities established pursuant to Article II.

     "Revolving  Credit Loans" means any revolving  credit loan  denominated  in
Dollars  made by the Lenders to the  Borrower  pursuant to Section  2.1, and all
such revolving credit loans collectively as the context requires.

     "Revolving  Credit Notes" means the  collective  reference to the Revolving
Credit  Notes  made  by the  Borrower  payable  to the  order  of  each  Lender,
substantially in the form of Exhibit A-1 hereto, evidencing the Revolving Credit
Facility,  and  any  amendments,  supplements  and  modifications  thereto,  any
substitutes therefor, and any replacements, restatements, renewals or extensions
thereof,  in  whole  or in  part;  "Revolving  Credit  Note"  means  any of such
Revolving Credit Notes.

     "Revolving  Credit  Termination  Date"  means  the  earliest  of the  dates
referred to in Section 2.8.

     "Security  Documents"  means the  collective  reference  to the  Subsidiary
Guaranty  Agreement,  the  Collateral  Agreement,  the  Mortgages and each other
agreement or writing  pursuant to which the Borrower or any  Subsidiary  thereof
purports  to pledge  or grant a  security  interest  in any  property  or assets
securing  the  Obligations  or any such Person  purports to guaranty the payment
and/or  performance  of the  Obligations,  in each case,  as amended,  restated,
supplemented or otherwise modified from time to time.

     "Solvent"  means,  as to the Borrower and its  Subsidiaries on a particular
date,  that any such Person (a) has capital  sufficient to carry on its business
and  transactions  and all  business  and  transactions  in which it is about to
engage and is able to pay its debts as they mature,  (b) owns property  having a
value, at fair  valuation,  greater than the amount required to pay its probable
liabilities  (including  contingencies),  and (c) does not believe  that it will
incur debts or  liabilities  beyond its ability to pay such debts or liabilities
as they mature.

     "Subordinated  Debt"  means  the  collective  reference  to any Debt of the
Borrower  or any  Subsidiary  subordinated  in right and time of  payment to the
Obligations and containing such other terms and conditions,  in each case as are
satisfactory to the Required Lenders.

     "Subsidiary" means as to any Person, any corporation,  partnership, limited
liability  company or other entity of which more than fifty percent (50%) of the
outstanding  capital stock or other ownership  interests  having ordinary voting
power to elect a majority of the board of  directors  or other  managers of such
corporation,  partnership,  limited  liability company or other entity is at the
time  owned  by or  the  management  is  otherwise  controlled  by  such  Person
(irrespective  of  whether,  at the  time,  capital  stock  or  other  ownership
interests  of any  other  class or  classes  of such  corporation,  partnership,
limited  liability company or other entity shall have or might have voting power
by reason of the  happening  of any  contingency).  Unless  otherwise  qualified
references to "Subsidiary" or "Subsidiaries"  herein shall refer to those of the
Borrower.

     "Subsidiary Guaranty Agreement" means the unconditional  guaranty agreement
of  even  date   executed  by  the   Subsidiary   Guarantors  in  favor  of  the
Administrative  Agent,  for the  ratable  benefit  of  itself  and the  Lenders,
substantially  in the form of Exhibit H, as amended,  restated,  supplemented or
otherwise modified from time to time.

     "Subsidiary  Guarantors"  means the Material  Domestic  Subsidiaries of the
Borrower.

     "Sweep  Plus  Service  Program"  means the Sweep  Plus  Service  Program of
Wachovia  and any other  cash  management  arrangement  which the  Borrower  and
Wachovia  agree should be included in the  borrowing  and repayment of Swingline
Loans pursuant to Section 2.3.

     "Swingline  Commitment"  means  the  lesser  of (a)  Five  Million  Dollars
($5,000,000) and (b) the Aggregate Commitment.

     "Swingline  Facility" means the swingline facility  established pursuant to
Section 2.3.

     "Swingline  Lender"  means  Wachovia in its  capacity as  swingline  lender
hereunder.

     "Swingline  Loan" means any swingline  loan  denominated in Dollars made by
the  Swingline  Lender to the  Borrower  pursuant to Section  2.3,  and all such
swingline loans collectively as the context requires.

     "Swingline  Note" means the Swingline Note made by the Borrower  payable to
the order of the  Swingline  Lender,  substantially  in the form of Exhibit  A-2
hereto,  evidencing the Swingline  Loans,  and any  amendments,  supplements and
modifications   thereto,  any  substitutes   therefor,   and  any  replacements,
restatements, renewals or extensions thereof, in whole or in part.

     "Swingline   Termination  Date"  means  the  first  to  occur  of  (a)  the
resignation of Wachovia as Administrative  Agent in accordance with Section 12.9
and (b) the Revolving Credit Termination Date.

     "Synthetic Lease" means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered  borrowed money  indebtedness  for tax purposes but is
classified as an Operating Lease in accordance with GAAP.

     "Taxes" shall have the meaning assigned thereto in Section 4.13(a).

     "Termination Event" means except for any such event or condition that could
not reasonably be expected to have a Material Adverse Effect:  (a) a "Reportable
Event"  described in Section 4043 of ERISA for which the notice  requirement has
not been waived by the PBGC, or (b) the  withdrawal of the Borrower or any ERISA
Affiliate  from a Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a
Pension  Plan,  the filing of a notice of intent to  terminate a Pension Plan or
the treatment of a Pension Plan amendment as a  termination,  under Section 4041
of ERISA, if the plan assets are not sufficient to pay all plan liabilities,  or
(d) the institution of proceedings to terminate, or the appointment of a trustee
with  respect  to,  any  Pension  Plan by the PBGC,  or (e) any  other  event or
condition which would constitute  grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan,
or (f) the  imposition  of a Lien pursuant to Section 412 of the Code or Section
302 of ERISA,  or (g) the partial or complete  withdrawal of the Borrower of any
ERISA Affiliate from a Multiemployer Plan if withdrawal liability is asserted by
such plan, or (h) any event or condition which results in the  reorganization or
insolvency of a Multiemployer  Plan under Sections 4241 or 4245 of ERISA, or (i)
any event or condition which results in the termination of a Multiemployer  Plan
under  Section  4041A of  ERISA or the  institution  by PBGC of  proceedings  to
terminate a Multiemployer Plan under Section 4042 of ERISA.

     "Total Funded Debt" means, as of any date of determination  with respect to
the Borrower and its Subsidiaries on a Consolidated  basis without  duplication,
the sum of all Debt of the Borrower and its Subsidiaries.

     "Treaty on European  Union" means the Treaty of Rome of March 25, 1957,  as
amended by the Single  European Act of 1986 and the  Maastricht  Treaty  (signed
February 7, 1992), as amended from time to time.

     "UCC" means the Uniform  Commercial Code as in effect in the State of North
Carolina, as amended or modified from time to time.

     "Uniform  Customs" means the Uniform  Customs and Practice for  Documentary
Credits  (1993  Revision),  effective  January  1994  International  Chamber  of
Commerce Publication No. 500.

     "United States" means the United States of America.

     "Wachovia" means Wachovia Bank,  National  Association,  a national banking
association, and its successors.

     "Wholly-Owned"  means,  with respect to a Subsidiary,  any  Subsidiary  for
which all of the  shares of  capital  stock or other  ownership  interests  are,
directly or indirectly,  owned or controlled by the Borrower  and/or one or more
of its Wholly-Owned  Subsidiaries  (except for directors'  qualifying  shares or
other shares  required by Applicable  Law to be owned by a Person other than the
Borrower).

     SECTION 1.2  General.  Unless  otherwise  specified,  a  reference  in this
Agreement to a particular article, section, subsection, Schedule or Exhibit is a
reference  to that  article,  section,  subsection,  Schedule or Exhibit of this
Agreement. Wherever from the context it appears appropriate, each term stated in
either the  singular or plural  shall  include  the  singular  and  plural,  and
pronouns  stated in the  masculine,  feminine or neuter gender shall include the
masculine, the feminine and the neuter. Any reference herein to "Charlotte time"
shall refer to the applicable time of day in Charlotte, North Carolina.

     SECTION 1.3 Effectiveness of Euro Provisions. With respect to any state (or
the currency of such state) that is not a Participating Member State on the date
of this Agreement,  the provisions of Sections 4.1(g),  4.8(b),  4.8(c) and 4.14
shall  become  effective  in  relation  to such state (and the  currency of such
state) at and from the date on which such state becomes a  Participating  Member
State.

SECTION 1.4.  Other Definitions and Provisions.
              --------------------------------

     (a)  Use of  Capitalized  Terms.  Unless  otherwise  defined  therein,  all
capitalized terms defined in this Agreement shall have the defined meanings when
used  in  this  Agreement,  the  Notes  and  the  other  Loan  Documents  or any
certificate,  report  or  other  document  made or  delivered  pursuant  to this
Agreement.

     (b) Miscellaneous.  The words "hereof",  "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.


                                   ARTICLE II

                            REVOLVING CREDIT FACILITY

     SECTION 2.1 Revolving Credit Loans.  Subject to the terms and conditions of
this  Agreement,  and in reliance upon the  representations  and  warranties set
forth herein,  each Lender  severally  agrees to make Revolving  Credit Loans in
Dollars to the Borrower from time to time from the Closing Date through, but not
including,  the Revolving Credit  Termination Date as requested by the Borrower,
in  accordance  with the terms of Section 2.4;  provided,  that,  based upon the
Dollar Amount of all outstanding  Loans and L/C  Obligations,  (a) the aggregate
principal amount of all outstanding  Revolving Credit Loans (after giving effect
to any amount  requested)  shall not exceed the  Aggregate  Commitment  less the
Swingline Commitment less the sum of all outstanding  Alternative Currency Loans
and L/C  Obligations and (b) the aggregate  principal  amount of all outstanding
Revolving  Credit  Loans from any Lender to the  Borrower  shall not at any time
exceed such Lender's Commitment less such Lender's Commitment  Percentage of the
Swingline Commitment less such Lender's Commitment  Percentage of the sum of all
outstanding  Alternative  Currency  Loans and L/C  Obligations.  Each  Revolving
Credit Loan by a Lender shall be in a principal  amount  equal to such  Lender's
Commitment  Percentage of the  aggregate  principal  amount of Revolving  Credit
Loans  requested on such occasion.  Subject to the terms and conditions  hereof,
the Borrower may borrow,  repay and reborrow  Revolving  Credit Loans  hereunder
until the Revolving Credit Termination Date.

     SECTION 2.2 Alternative Currency Loans.

     (a)  Availability.  Subject to the terms and conditions of this  Agreement,
and in reliance upon the  representations  and warranties set forth herein,  the
Alternative  Currency  Lender agrees to make  Alternative  Currency Loans to the
Borrower from time to time from the Closing Date through, but not including, the
Revolving  Credit  Termination  Date as requested by the Borrower in  accordance
with the terms of Section 2.4;  provided,  that, based upon the Dollar Amount of
all outstanding Loans and L/C Obligations, the aggregate principal amount of all
outstanding  Alternative  Currency  Loans  (after  giving  effect to any  amount
requested) shall not exceed the lesser of (i) the Aggregate  Commitment less the
sum of the aggregate principal amount of all outstanding  Revolving Credit Loans
less the Swingline  Commitment less the sum of all outstanding L/C  Obligations,
and  (ii)  the  Alternative  Currency  Commitment;  provided  further  that  the
Alternative  Currency Lender will not make an Alternative Currency Loan from and
after the date which is one (1) day after it has  received  written  notice from
the Administrative  Agent (upon the request of the Required Lenders) that one or
more of the applicable  conditions to Extensions of Credit  specified in Section
5.3 is not then  satisfied  until such  conditions  are  satisfied  or waived in
accordance with the provisions of this Agreement (and the  Alternative  Currency
Lender shall be entitled to conclusively  rely on any such notice and shall have
no obligation to independently investigate the accuracy of such notice and shall
have no liability to the Borrower in respect thereof if such notice proves to be
inaccurate).  Alternative  Currency  Loans shall be funded in an amount equal to
the Alternative  Currency Amount of such Alternative  Currency Loan.  Subject to
the terms and  conditions  hereof,  the Borrower may borrow,  repay and reborrow
Alternative  Currency Loans  hereunder  until the Revolving  Credit  Termination
Date.

     (b) Refunding of Alternative Currency Loans.

          (i) Upon the  occurrence  and  during the  continuance  of an Event of
Default,   each  Alternative  Currency  Loan  may,  at  the  discretion  of  the
Alternative Currency Lender, be converted immediately to a Base Rate Loan funded
in  Dollars  by the  Lenders  in an amount  equal to the  Dollar  Amount of such
Alternative Currency Loan for the remainder of the Interest Period applicable to
such  Alternative  Currency  Loan.  Such  Base  Rate Loan  shall  thereafter  be
reflected as a Revolving  Credit Loan of the Lenders on the books and records of
the  Administrative  Agent.  Each Lender  shall fund its  respective  Commitment
Percentage  of such  Revolving  Credit  Loan as  required  to repay  Alternative
Currency Loans  outstanding to the Alternative  Currency Lender upon such demand
by the Alternative  Currency Lender in no event later than 2:00 p.m.  (Charlotte
time) on the next succeeding Business Day after such demand is made. No Lender's
obligation to fund its respective  Commitment Percentage of any Revolving Credit
Loan required to repay such  Alternative  Currency Loan shall be affected by any
other  Lender's  failure to fund its  Commitment  Percentage  of such  Revolving
Credit Loan,  nor shall any  Lender's  Commitment  Percentage  be increased as a
result of any such failure of any other Lender to fund its Commitment Percentage
of such Revolving Credit Loan.

          (ii) The Borrower shall pay to the Alternative  Currency  Lender,  for
the account of the  Alternative  Currency  Lender,  on demand the amount of such
Alternative  Currency Loans to the extent amounts  received from the Lenders are
not  sufficient to refund in full the  outstanding  Alternative  Currency  Loans
requested  or  required  to be  refunded  upon the  occurrence  and  during  the
continuance of an Event of Default. In addition,  the Borrower hereby authorizes
the  Administrative  Agent, upon the occurrence and during the continuance of an
Event of Default,  to charge any account  maintained  by the  Borrower  with the
Alternative  Currency  Lender (up to the amount  available  therein) in order to
immediately pay the Alternative  Currency Lender the amount of such  Alternative
Currency  Loans  to the  extent  amounts  received  from  the  Lenders  are  not
sufficient to repay in full the outstanding Alternative Currency Loans requested
or  required  to be  refunded.  If any  portion of any such  amount  paid to the
Alternative  Currency  Lender shall be recovered by or on behalf of the Borrower
from the Alternative Currency Lender in bankruptcy or otherwise, the loss of the
amount so recovered  shall be ratably shared among all the Lenders in accordance
with their respective Commitment  Percentages (unless the amount so recovered by
or on behalf of the Borrower  pertains to an Alternative  Currency Loan extended
after the occurrence and during the  continuance of an Event of Default of which
the  Alternative  Currency  Lender has  received  notice in the manner  required
pursuant to Section  12.5 and which such Event of Default has not been waived by
the Required Lenders or the Lenders, as applicable).

          (iii) Each  Lender  acknowledges  and agrees  that its  obligation  to
refund  Alternative  Currency Loans in accordance with the terms of this Section
2.2 is absolute and  unconditional and shall not be affected by any circumstance
whatsoever,  including,  without limitation,  non-satisfaction of the conditions
set forth in Article V.  Further,  each Lender agrees and  acknowledges  that if
prior to the refunding of any outstanding Alternative Currency Loans pursuant to
this Section 2.2,  one of the events  described in Section  11.1(i) or (j) shall
have  occurred,  each Lender will, on the date the applicable  Revolving  Credit
Loans would have been made, purchase an undivided participating interest in such
Alternative  Currency  Loans to be refunded in an amount equal to its Commitment
Percentage of the aggregate  amount of such  Alternative  Currency  Loans.  Each
Lender will immediately transfer to the Administrative Agent, for the account of
the Alternative Currency Lender, in immediately  available funds in Dollars, the
amount  of its  participation.  Whenever,  at any  time  after  the  Alternative
Currency  Lender  has  received  from any  Lender  such  Lender's  participating
interest in the refunded  Alternative  Currency Loans, the Alternative  Currency
Lender receives any payment on account thereof,  the Alternative Currency Lender
will  distribute  to such  Lender  its  participating  interest  in such  amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's  participating  interest was  outstanding and
funded).

          (iv) In the  event  that  any  Lender  fails  to make  payment  to the
Alternative  Currency  Lender of any  amount  due under this  Section  2.2,  the
Administrative  Agent, on behalf of the Alternative  Currency  Lender,  shall be
entitled to receive,  retain and apply against such obligation the principal and
interest  otherwise  payable  to such  Lender  hereunder  until the  Alternative
Currency  Lender  receives  such payment from such Lender or such  obligation is
otherwise fully satisfied.  In addition to the foregoing,  if for any reason any
Lender fails to make payment to the  Alternative  Currency  Lender of any amount
due under this  Section 2.2,  such Lender shall be deemed,  at the option of the
Administrative Agent, to have unconditionally and irrevocably purchased from the
Alternative Currency Lender, without recourse or warranty, an undivided interest
and participation in the applicable Alternative Currency Loan, and such interest
and  participation  may be recovered  from such Lender  together  with  interest
thereon  at the  Federal  Funds  Effective  Rate for each day  during the period
commencing on the date of demand and ending on the date such amount is received.

     SECTION 2.3 Swingline Loans.

     (a)  Availability.  Subject to the terms and conditions of this  Agreement,
the Swingline Lender agrees to make Swingline Loans to the Borrower from time to
time from the Closing Date through, but not including, the Swingline Termination
Date; provided, that (i) all Swingline Loans shall be denominated in Dollars and
(ii) based upon the Dollar Amount of all outstanding  Loans and L/C Obligations,
the aggregate principal amount of all outstanding  Swingline Loans (after giving
effect  to any  amount  requested),  shall  not  exceed  the  lesser  of (A) the
Aggregate  Commitment  less the sum of all outstanding  Revolving  Credit Loans,
Alternative Currency Loans and L/C Obligations and (B) the Swingline Commitment;
provided  further that the Swingline  Lender will not make a Swingline Loan from
and after the date  which is one (1) day after it has  received  written  notice
from the  Administrative  Agent (upon the request of the Required  Lenders) that
one or more of the  applicable  conditions to Extensions of Credit  specified in
Section 5.3 is not then satisfied  until such conditions are satisfied or waived
in accordance  with the provisions of this  Agreement (and the Swingline  Lender
shall be  entitled  to  conclusively  rely on any such  notice and shall have no
obligation to  independently  investigate  the accuracy of such notice and shall
have no liability to the Borrower in respect thereof if such notice proves to be
inaccurate).

     (b) Sweep Plus Service  Program.  On each Business Day, the  Administrative
Agent shall  calculate the Net Cash  Position.  If the Net Cash Position is less
than zero, then the Borrower shall be deemed to have irrevocably  requested that
the Swingline Lender make a Swingline Loan to the Borrower in an amount equal to
the lesser of (i) an amount, which when rounded up to the nearest $1,000, equals
or exceeds the amount of the deficit Net Cash Position and (ii) an amount, which
when added to the aggregate principal amount of all outstanding  Swingline Loans
(after giving effect to any amount  requested),  shall not exceed the lesser of,
based upon the Dollar Amount of all outstanding  Loans and L/C Obligations,  (A)
the Aggregate Commitment less the sum of all outstanding Revolving Credit Loans,
all outstanding  Alternative  Currency Loans and the L/C Obligations and (B) the
Swingline  Commitment;  provided,  however, that the obligation of the Swingline
Lender to make any such  Swingline  Loan to the Borrower shall be subject to all
the terms and conditions  hereof  (including,  without  limitation,  Section 5.3
hereof).

     (c) Payment of Principal and Interest.  Principal and interest on Swingline
Loans deemed requested  pursuant to Section 2.3(b) hereof shall be paid pursuant
to the terms and  conditions  of the Sweep  Plus  Service  Program  without  any
deduction,  setoff  or  counterclaim  whatsoever.   Principal  and  interest  on
Swingline Loans requested  pursuant to Section 2.3 hereof shall be paid pursuant
to the terms of this  Agreement.  Unless sooner paid pursuant to the  provisions
hereof or the provisions of the Sweep Plus Service Program, the principal of the
Swingline Loans shall be paid in full,  together with accrued interest  thereon,
on the Swingline Termination Date.

     (d) Refunding.

          (i) Swingline  Loans shall be refunded by the Lenders on demand by the
Swingline  Lender.  Such  refundings  shall be made by the Lenders in accordance
with their respective  Commitment  Percentages and shall thereafter be reflected
as  Revolving  Credit  Loans of the  Lenders  on the  books and  records  of the
Administrative   Agent.  Each  Lender  shall  fund  its  respective   Commitment
Percentage  of  Revolving  Credit  Loans as  required to repay  Swingline  Loans
outstanding to the Swingline  Lender upon demand by the Swingline  Lender but in
no event later than 2:00 p.m.  (Charlotte time) on the next succeeding  Business
Day after such demand is made.  No Lender's  obligation  to fund its  respective
Commitment  Percentage  of a  Swingline  Loan  shall be  affected  by any  other
Lender's  failure to fund its  Commitment  Percentage of a Swingline  Loan,  nor
shall any Lender's  Commitment  Percentage  be increased as a result of any such
failure of any other  Lender to fund its  Commitment  Percentage  of a Swingline
Loan.

          (ii) The  Borrower  shall pay to the  Swingline  Lender on demand  the
amount of such Swingline  Loans to the extent amounts  received from the Lenders
are not sufficient to refund in full the  outstanding  Swingline Loans requested
or required to be refunded.  In addition,  the Borrower  hereby  authorizes  the
Administrative  Agent to charge any account  maintained by the Borrower with the
Swingline  Lender (up to the amount  available  therein) in order to immediately
pay the  Swingline  Lender  the  amount of such  Swingline  Loans to the  extent
amounts  received  from  the  Lenders  are not  sufficient  to repay in full the
outstanding Swingline Loans requested or required to be refunded. If any portion
of any such amount paid to the  Swingline  Lender  shall be  recovered  by or on
behalf of the Borrower from the Swingline Lender in bankruptcy or otherwise, the
loss of the amount so recovered shall be ratably shared among all the Lenders in
accordance with their respective  Commitment  Percentages (unless the amounts so
recovered by or on behalf of the Borrower  pertain to a Swingline  Loan extended
after the occurrence and during the  continuance of an Event of Default of which
the Administrative  Agent has received notice in the manner required pursuant to
Section 12.5 and which such Event of Default has not been waived by the Required
Lenders or the Lenders, as applicable).

          (iii) Each  Lender  acknowledges  and agrees  that its  obligation  to
refund  Swingline  Loans in  accordance  with the terms of this  Section  2.3 is
absolute  and  unconditional  and  shall  not be  affected  by any  circumstance
whatsoever,  including,  without limitation,  non-satisfaction of the conditions
set forth in Article V.  Further,  each Lender agrees and  acknowledges  that if
prior to the  refunding  of any  outstanding  Swingline  Loans  pursuant to this
Section  2.3, one of the events  described in Section  11.1(i) or (j) shall have
occurred,  each Lender will, on the date the applicable  Revolving  Credit Loans
would have been made,  purchase  an  undivided  participating  interest  in such
Swingline  Loans to be refunded in an amount equal to its Commitment  Percentage
of the aggregate  amount of such Swingline  Loans.  Each Lender will immediately
transfer to the Swingline Lender, in immediately  available funds, the amount of
its  participation and upon receipt thereof the Swingline Lender will deliver to
such  Lender a  certificate  evidencing  such  participation  dated  the date of
receipt  of such  funds and for such  amount.  Whenever,  at any time  after the
Swingline  Lender has  received  from any  Lender  such  Lender's  participating
interest in a Swingline  Loan,  the  Swingline  Lender  receives  any payment on
account  thereof,  the  Swingline  Lender  will  distribute  to such  Lender its
participating  interest in such amount  (appropriately  adjusted, in the case of
interest  payments,  to reflect  the period of time during  which such  Lender's
participating interest was outstanding and funded).

          (iv) In the  event  that  any  Lender  fails  to make  payment  to the
Swingline  Lender of any amount due under this Section  2.3, the  Administrative
Agent, on behalf of the Swingline Lender,  shall be entitled to receive,  retain
and apply against such obligation the principal and interest  otherwise  payable
to such Lender  hereunder until the Swingline  Lender receives such payment from
such Lender or such obligation is otherwise fully satisfied.  In addition to the
foregoing,  if for any reason any Lender fails to make payment to the  Swingline
Lender of any amount due under this Section 2.3, such Lender shall be deemed, at
the option of the Administrative  Agent, to have unconditionally and irrevocably
purchased from the Swingline Lender,  without recourse or warranty, an undivided
interest and  participation in the applicable  Swingline Loan, and such interest
and  participation  may be recovered  from such Lender  together  with  interest
thereon  at the  Federal  Funds  Effective  Rate for each day  during the period
commencing on the date of demand and ending on the date such amount is received.

     SECTION 2.4 Procedure for Advances of Revolving  Credit Loans,  Alternative
Currency Loans and Swingline Loans.

     (a) Requests for Borrowing.

          (i)  Revolving  Credit  Loans  and  Alternative  Currency  Loans.  The
Borrower shall give the  Administrative  Agent  irrevocable prior written notice
substantially in the form attached hereto as Exhibit B (a "Notice of Borrowing")
not later than 12:00 p.m.  (Charlotte time) (A) on the same Business Day as each
Base Rate Loan  requested  under this  Section  2.4(a),  (B) at least  three (3)
Business  Days  before  each LIBOR Rate Loan  denominated  in Dollars and (C) at
least four (4)  Business  Days  before  each LIBOR Rate Loan  denominated  in an
Alternative Currency, of its intention to borrow, specifying:

               (1) the date of such borrowing, which shall be a Business Day;

               (2)  if  such  Loan  is  to  be a  Revolving  Credit  Loan  or an
          Alternative Currency Loan;

               (3) if such Loan is to be a Revolving  Credit Loan,  whether such
          Revolving Credit Loan shall be a LIBOR Rate Loan or a Base Rate Loan;

               (4) the  amount of such  borrowing,  which  shall be in an amount
          equal to the amount of the  Aggregate  Commitment  or the  Alternative
          Currency Commitment, as applicable, then available to the Borrower, or
          if less,  (1) with  respect to Base Rate Loans  (other than  Swingline
          Loans),  in an aggregate  principal  amount of  $3,000,000  or a whole
          multiple of  $1,000,000 in excess  thereof,  (2) with respect to LIBOR
          Rate Loans denominated in Dollars, in an aggregate principal amount of
          $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (3)
          with  respect  to  LIBOR  Rate  Loans  denominated  in an  Alternative
          Currency,  in an aggregate  principal  Alternative  Currency Amount of
          $2,000,000 or a whole multiple of $1,000,000 in excess thereof; and

               (5) if such Loan is to be a LIBOR Rate Loan,  the duration of the
          Interest Period applicable thereto.

A Notice of Borrowing received after 12:00 p.m. (Charlotte time) shall be deemed
received on the next  Business  Day.  The  Administrative  Agent shall  promptly
notify the Lenders of each Notice of Borrowing.

          (ii) Swingline Loans. Swingline Loans shall be requested in the manner
set forth in Section 2.3.

     (b) Disbursements.

          (i) Revolving Credit Loans. Not later than 2:00 p.m.  (Charlotte time)
on the proposed  borrowing date for any Revolving  Credit Loan, each Lender will
make available to the Administrative  Agent, for the account of the Borrower, at
the office of the Administrative Agent in Dollars in funds immediately available
to  the  Administrative  Agent,  such  Lender's  Commitment  Percentage  of  the
Revolving  Credit Loan to be made on such borrowing  date.  The Borrower  hereby
irrevocably authorizes the Administrative Agent to disburse the proceeds of each
borrowing requested pursuant to this Section 2.4 in immediately  available funds
by  crediting  or wiring such  proceeds to the deposit  account of the  Borrower
identified  in the most  recent  notice  substantially  in the form of Exhibit C
hereto (a "Notice of Account  Designation")  delivered  by the  Borrower  to the
Administrative  Agent or as may be otherwise requested by the Borrower from time
to time (subject to the reasonable consent of the Administrative Agent). Subject
to Section 4.7  hereof,  the  Administrative  Agent  shall not be  obligated  to
disburse  the portion of the  proceeds of any  Revolving  Credit Loan  requested
pursuant  to this  Section  2.4 to the  extent  that  any  Lender  has not  made
available  to  the  Administrative  Agent  its  Commitment  Percentage  of  such
Revolving  Credit  Loan.  Revolving  Credit  Loans to be made for the purpose of
refunding  Swingline  Loans  shall be made by the Lenders as provided in Section
2.3(d).  Revolving  Credit  Loans  to be  made  for  the  purpose  of  refunding
Alternative  Currency  Loans shall be made by the Lenders as provided in Section
2.2(b).

          (ii)  Alternative  Currency Loans. Not later than 11:00 a.m. (the time
of the Administrative Agent's Correspondent) on or before the proposed borrowing
date for any  Alternative  Currency Loan, the  Alternative  Currency Lender will
make available to the Administrative  Agent, for the account of the Borrower, at
the  office  of  the  Administrative  Agent's  Correspondent  in  the  requested
Alternative Currency in funds immediately available to the Administrative Agent,
the  Alternative  Currency Loan to be made on such borrowing  date. The Borrower
hereby irrevocably  authorizes the Administrative Agent to disburse the proceeds
of  each  borrowing  requested  pursuant  to  this  Section  2.4 in  immediately
available  funds by crediting or wiring such proceeds to the deposit  account of
the  Borrower  identified  in the most  recent  Notice  of  Account  Designation
delivered  by the  Borrower to the  Administrative  Agent or as may be otherwise
requested by the Borrower from time to time (subject to the  reasonable  consent
of the Administrative  Agent).  Subject to Section 4.7, the Administrative Agent
shall not be  obligated  to  disburse  the  portion of the  proceeds of any Loan
requested  pursuant  to this  Section  2.4 to the  extent  that the  Alternative
Currency  Lender  has  not  made  available  to the  Administrative  Agent  such
Alternative Currency Loan.

          (iii)  Swingline  Loans.  Swingline  Loans shall be  disbursed  in the
manner set forth in Section 2.3.

     SECTION 2.5 Repayment of Loans.

     (a) Repayment on the Revolving Credit Termination Date. The Borrower hereby
agrees to repay the  outstanding  principal  amount of (i) all Revolving  Credit
Loans in full in Dollars on the  Revolving  Credit  Termination  Date,  (ii) all
Alternative  Currency  Loans in full in the  Alternative  Currency in which each
Alternative   Currency  Loan  was  initially  funded  on  the  Revolving  Credit
Termination  Date  and  (iii)  all  Swingline  Loans in full in  Dollars  on the
Swingline  Termination Date (or, if earlier, in accordance with Section 2.3(d)),
together, in each case, with all accrued but unpaid interest thereon.

     (b) Mandatory Repayment of Revolving Credit Loans.

          (i)  Aggregate  Commitment.  If at  any  time  (as  determined  by the
Administrative  Agent under Section 2.5(b)(v)),  based upon the Dollar Amount of
all  outstanding  Loans and L/C  Obligations,  (A) solely  because  of  currency
fluctuation,  the  outstanding  principal  amount of all Revolving  Credit Loans
exceeds one hundred and five percent (105%) of the Aggregate Commitment less the
Swingline Commitment less the sum of all outstanding  Alternative Currency Loans
and L/C  Obligations  or (B) for any other  reason,  the  outstanding  principal
amount of all Revolving  Credit Loans exceeds the Aggregate  Commitment less the
Swingline Commitment less the sum of all outstanding  Alternative Currency Loans
and L/C  Obligations,  then, in each such case, the Borrower shall (I) first, if
(and to the extent)  necessary  to  eliminate  such  excess,  immediately  repay
outstanding Swingline Loans (and/or reduce any pending request for such Loans on
such day by the  Dollar  Amount of such  excess),  (II)  second,  if (and to the
extent)  necessary  to  eliminate  such excess,  immediately  repay  outstanding
Revolving  Credit  Loans which are Base Rate Loans by the Dollar  Amount of such
excess  (and/or  reduce any  pending  request  for such Loans on such day by the
Dollar Amount of such excess),  (III) third, if (and to the extent) necessary to
eliminate such excess,  immediately repay Revolving Credit Loans which are LIBOR
Rate Loans and  Alternative  Currency Loans (and/or reduce any pending  requests
for a borrowing or continuation or conversion of such Loans submitted in respect
of such Loans on such day by the Dollar  Amount of such excess) and (IV) fourth,
with respect to any Letters of Credit then  outstanding,  make a payment of cash
collateral into a cash collateral account opened by the Administrative Agent for
the benefit of the Lenders in an amount equal to the aggregate  then undrawn and
unexpired  amount of such Letters of Credit (such cash  collateral to be applied
in accordance with Section 11.2(b)).

          (ii) Alternative Currency Commitment. If at any time (as determined by
the Administrative Agent under Section 2.5(b)(v)),  based upon the Dollar Amount
of all  outstanding  Loans and L/C  Obligations,  (A) solely because of currency
fluctuation,  the outstanding principal amount of all Alternative Currency Loans
exceeds the lesser of (1) one hundred and five percent  (105%) of the  Aggregate
Commitment  less  the  Swingline  Commitment  less  the  sum of all  outstanding
Revolving  Credit Loans and L/C Obligations and (2) one hundred and five percent
(105%) of the Alternative  Currency  Commitment or (B) for any other reason, the
outstanding  principal  amount of all  Alternative  Currency  Loans  exceeds the
lesser of (1) the Aggregate  Commitment  less the Swingline  Commitment less the
sum of all  outstanding  Revolving  Credit Loans and L/C Obligations and (2) the
Alternative Currency  Commitment,  then, in each such case, such excess shall be
immediately  repaid, in the currency in which such Alternative  Currency Loan or
Alternative  Currency  Loans  were  initially  funded,  by the  Borrower  to the
Administrative Agent for the account of the Alternative Currency Lender.

          (iii)  Swingline  Commitment.  If at any  time (as  determined  by the
Administrative  Agent under Section 2.5(b)(v)),  based upon the Dollar Amount of
all outstanding  Loans and L/C  Obligations,  and for any reason the outstanding
principal  amount of all Swingline Loans exceeds the lesser of (1) the Aggregate
Commitment less the sum of all outstanding  Revolving Credit Loans,  Alternative
Currency Loans and L/C  Obligations and (2) the Swingline  Commitment,  then, in
each such case,  such excess shall be immediately  repaid by the Borrower to the
Administrative Agent for the account of the Swingline Lender.

          (iv)  Excess L/C  Obligations.  If at any time (as  determined  by the
Administrative Agent under Section 2.5(b)(v)) and for any reason, based upon the
Dollar Amount of all  outstanding  Loans and L/C  Obligations,  the  outstanding
amount of all L/C Obligations exceeds the lesser of (A) the Aggregate Commitment
less the  Swingline  Commitment  less the sum of the  amount of all  outstanding
Revolving  Credit  Loans  and  Alternative   Currency  Loans  and  (B)  the  L/C
Commitment,  then, in each such case,  the Borrower shall make a payment of cash
collateral into a cash collateral account opened by the Administrative Agent for
the benefit of the Lenders in an amount equal to the aggregate  then undrawn and
unexpired  amount of such Letters of Credit (such cash  collateral to be applied
in accordance with Section 11.2(b)).

          (v)  Compliance  and Payments.  The  Borrower's  compliance  with this
Section 2.5(b) shall be tested from time to time by the Administrative  Agent at
its sole  discretion,  but in any event shall be tested on (A) the date on which
the  Borrower  requests  the  Lenders  to make a  Revolving  Credit  Loan or the
Alternative  Currency Lender to make an Alternative Currency Loan or the Issuing
Lender to issue a Letter of Credit and (B) the date an  interest  payment is due
under Section 4.1(e).  Each such repayment pursuant to this Section 2.5(b) shall
be  accompanied  by any amount  required  to be paid  pursuant  to Section  4.11
hereof.

     (c) Optional Repayments. The Borrower may at any time and from time to time
repay the  Loans,  in whole or in part,  upon at least four (4)  Business  Days'
irrevocable  notice to the  Administrative  Agent with  respect  to  Alternative
Currency Loans, upon at least three (3) Business Days' irrevocable notice to the
Administrative Agent with respect to LIBOR Rate Loans denominated in Dollars and
upon one (1) Business Day irrevocable notice with respect to Base Rate Loans and
Swingline  Loans,  substantially  in the form  attached  hereto as  Exhibit D (a
"Notice of Prepayment"),  specifying (i) the date of repayment,  (ii) the amount
of  repayment,  (iii)  whether  the  repayment  is of  Revolving  Credit  Loans,
Alternative Currency Loans,  Swingline Loans, or a combination thereof,  and, if
of a  combination  thereof,  the amount  allocable  to each and (iv) whether the
repayment is of LIBOR Rate Loans denominated in an Alternative  Currency,  LIBOR
Rate Loans  denominated in Dollars,  Base Rate Loans, or a combination  thereof,
and, if of a combination  thereof, the amount allocable to each. Upon receipt of
such notice, the Administrative  Agent shall promptly notify each Lender. If any
such  notice is given,  the amount  specified  in such  notice  shall be due and
payable on the date set forth in such notice.  Partial repayments shall be in an
aggregate  amount (i) of $3,000,000 or a whole  multiple of $1,000,000 in excess
thereof with respect to Base Rate Loans (other than  Swingline  Loans),  (ii) of
$5,000,000 or a whole  multiple of $1,000,000 in excess  thereof with respect to
LIBOR Rate Loans denominated in Dollars, (iii) of $2,000,000 or a whole multiple
of $1,000,000 in excess  thereof  (based upon the  Alternative  Currency  Amount
thereof) with respect to Alternative  Currency Loans and (iv) permitted pursuant
to the terms and  conditions of the Sweep Plus Service  Program (or as otherwise
agreed to by the Swingline  Lender and the Borrower).  Each such repayment shall
be  accompanied  by any amount  required  to be paid  pursuant  to Section  4.11
hereof.

     (d) Limitation on Repayment of LIBOR Rate Loans. The Borrower may not repay
any LIBOR Rate Loan on any day other than on the last day of the Interest Period
applicable  thereto unless such repayment is accompanied by any amount  required
to be paid pursuant to Section 4.11 hereof.

     (e) Hedging Agreements. No repayment or prepayment pursuant to this Section
2.5 shall affect any obligations of the Borrower's obligations under any Hedging
Agreement.

     (f) Payment of Interest and Other  Expenses.  Each  repayment or prepayment
pursuant to this  Section 2.5 shall be  accompanied  by accrued  interest on the
amount repaid.

     SECTION 2.6 Notes.

     (a)  Revolving  Credit  Notes.  Except as  otherwise  provided  in  Section
13.10(a) - (e), each Lender's  Revolving  Credit Loans and the obligation of the
Borrower to repay such  Revolving  Credit Loans shall be evidenced by a separate
Revolving  Credit  Note  executed by the  Borrower  payable to the order of such
Lender.

     (b)  Alternative  Currency  Note.  The  Alternative  Currency Loans and the
obligation  of the Borrower to repay such  Alternative  Currency  Loans shall be
evidenced  by a separate  Alternative  Currency  Note  executed by the  Borrower
payable to the order of the Alternative Currency Lender.

     (c) Swingline  Note. The Swingline Loans and the obligation of the Borrower
to repay such  Swingline  Loans shall be evidenced by a separate  Swingline Note
executed by the Borrower payable to the order of the Swingline Lender.

     SECTION  2.7  Permanent  Reduction  of the  Aggregate  Commitment  and  the
Alternative Currency Commitment.

     (a) Voluntary Reduction.  The Borrower shall have the right at any time and
from time to time,  upon at least five (5) Business Days prior written notice to
the Administrative Agent, to permanently reduce, without premium or penalty, (i)
the entire  Aggregate  Commitment  at any time or (ii) portions of the Aggregate
Commitment,  from time to time, in an aggregate  principal  amount not less than
$3,000,000 or any whole multiple of $1,000,000 in excess thereof;  provided that
in no event shall the Aggregate Commitment be reduced to an amount less than the
face amount of all Letters of Credit then outstanding.

     (b)  Mandatory  Permanent  Reduction.  The  Aggregate  Commitment  shall be
permanently reduced by the following amounts:

          (i) 100% of the Net Cash  Proceeds  received by the Borrower or any of
its Subsidiaries  from any issuance of Debt (other than Debt permitted  pursuant
to Section 10.1);

          (ii) 100% of the Net Cash Proceeds  received by the Borrower or any of
its  Subsidiaries  in connection  with any sale of assets  (including its equity
ownership in any Person) unless,  with respect to any sale of assets  consisting
of property, plant or equipment of the Borrower or any of its Subsidiaries,  and
so long as no Default or Event of Default has occurred and is  continuing,  such
Net Cash Proceeds are reinvested in assets that are similar or  complimentary to
the assets sold (or otherwise in a manner acceptable to the Administrative Agent
and the Required Lenders,  in their sole discretion)  within two hundred seventy
(270) days after receipt of such Net Cash Proceeds;  provided,  that this clause
(ii) shall not apply with  respect to (A) any asset sales  permitted  by Section
10.5(a) - (g), (B) up to an aggregate  amount of $5,000,000 of the aggregate Net
Cash  Proceeds  received by the Borrower and the  Domestic  Subsidiaries  of the
Borrower  during the term of this  Agreement  pursuant  to this  clause (ii) and
clause  (iii)  below and (C) up to an  aggregate  amount of  $10,000,000  of the
aggregate Net Cash Proceeds received by the Foreign Subsidiaries of the Borrower
during the term of this Agreement  pursuant to this clause (ii) and clause (iii)
below;

          (iii) 100% of the Net Cash Proceeds received by the Borrower or any of
its  Subsidiaries  under any policy of insurance of such Person or in connection
with any condemnation  proceeding involving property of such Person,  unless, so
long as no Default or Event of Default has occurred and is continuing,  such Net
Cash Proceeds are utilized by the Borrower or such Subsidiary within two hundred
seventy (270) days of receipt of such Net Cash Proceeds to replace or repair any
of its assets  damaged  in  connection  with the  related  claim or  proceeding;
provided,  that this clause  (iii) shall not apply with  respect to (A) up to an
aggregate  amount of $5,000,000  of the aggregate Net Cash Proceeds  received by
the Borrower and the Domestic  Subsidiaries  of the Borrower  during the term of
this  Agreement  pursuant to this clause (iii) and clause (ii) above and (ii) up
to an  aggregate  amount  of  $10,000,000  of the  aggregate  Net Cash  Proceeds
received by the Foreign  Subsidiaries  of the  Borrower  during the term of this
Agreement pursuant to this clause (iii) and clause (ii) above;

          (iv) 100% of the Net Cash Proceeds  received by the Borrower or any of
its Domestic  Subsidiaries  from any offering of equity  securities  (other than
offerings  of equity  securities  made solely to the  Borrower,  any  Subsidiary
thereof or any Affiliate thereof).

     (c) Corresponding Reductions. Each partial permanent reduction permitted or
required pursuant to this Section 2.7 shall (i) permanently  reduce the Lenders'
Commitments pro rata in accordance with their respective Commitment  Percentages
and (ii)  permanently  reduce the  Alternative  Currency  Commitment pro rata in
accordance with the relative amount of the Alternative  Currency  Commitment and
the Aggregate Commitment.

     (d) Corresponding  Payments. Each permanent reduction permitted or required
pursuant to this  Section  2.7 shall be  accompanied  by a payment of  principal
sufficient  to  reduce  (i)  the  aggregate  Dollar  Amount  of all  outstanding
Revolving  Credit Loans,  Alternative  Currency  Loans,  Swingline Loans and L/C
Obligations, as applicable,  after such reduction to the Aggregate Commitment as
so reduced and (ii) to the extent that the  Alternative  Currency  Commitment is
reduced,  the aggregate  Dollar Amount of all outstanding  Alternative  Currency
Loans to the  Alternate  Currency  Commitment  as so reduced.  If the  Aggregate
Commitment  as so reduced is less than the aggregate  amount of all  outstanding
Letters of Credit,  the Borrower shall be required to deposit cash collateral in
a cash collateral account opened by the Administrative  Agent in an amount equal
to the aggregate  then undrawn and  unexpired  amount of such Letters of Credit.
Such cash collateral  shall be applied in accordance with Section  11.2(b).  Any
reduction of the Aggregate Commitment to zero shall be accompanied by payment of
all outstanding Revolving Credit Loans, Alternative Currency Loans and Swingline
Loans (and  furnishing of cash  collateral  satisfactory  to the  Administrative
Agent for all L/C  Obligations)  and  shall  result  in the  termination  of the
Commitments  and  Credit  Facility.  Such cash  collateral  shall be  applied in
accordance with Section 11.2(b). If the reduction of the Aggregate Commitment or
the Alternative Currency Commitment, as applicable requires the repayment of any
LIBOR Rate Loan,  such repayment  shall be accompanied by any amount required to
be paid pursuant to Section 4.11 hereof.

     SECTION 2.8  Termination  of Credit  Facility.  The Credit  Facility  shall
terminate on the earliest of (a) January 15, 2006,  (b) the date of  termination
by the Borrower  pursuant to Section 2.7 or (c) the date of  termination  by the
Administrative Agent on behalf of the Lenders pursuant to Section 11.2(a).

     SECTION 2.9 Increase of the Aggregate Commitment.  So long as no Default or
Event of Default shall have occurred and be continuing,  the Borrower shall have
the right from time to time upon not less than thirty  (30) days' prior  written
notice  to the  Administrative  Agent  to  increase  the  Aggregate  Commitment;
provided  that  (i)  no  Lender  shall  have  any  obligation  to  increase  its
Commitment,  (ii) such  requested  increase  shall be in an aggregate  principal
amount of  $2,500,000,  (iii) in no event  shall  the  Aggregate  Commitment  be
increased  to  an  aggregate   amount   greater  than  Fifty   Million   Dollars
($50,000,000)  and (iv) the  Borrower  and an  existing  Lender or a Person  not
theretofore  a  Lender,  as  applicable,  shall  execute a Lender  Addition  and
Acknowledgement  Agreement,  which shall be acknowledged  by the  Administrative
Agent  and  each  Guarantor  and  shall  be in  form  and  substance  reasonably
satisfactory to the Administrative Agent.

     (a) Any  increase in the  Aggregate  Commitment  which is  accomplished  by
increasing  the  Commitment  of any Lender  who is at the time of such  increase
party to this Agreement (which Lender shall consent to such increase in its sole
and absolute  discretion)  shall be accomplished as follows:  (i) this Agreement
will be amended by the Borrower,  the Administrative  Agent and the Lender whose
Commitment is being increased (but without any  requirement  that the consent of
any other Lenders be obtained) to reflect the revised  Commitment of each of the
Lenders,  (ii) the Administrative  Agent will update the Register to reflect the
revised Commitment and Commitment  Percentage of each of the Lenders,  (iii) the
outstanding   Revolving   Credit  Loans  and   Commitment   Percentages  of  L/C
Obligations,  Alternative Currency Loans and Swingline Loans will be reallocated
on the  effective  date of such increase  among the Lenders in  accordance  with
their revised Commitment Percentages (and the Lenders agree to make all payments
and adjustments  necessary to effect the reallocation and the Borrower shall pay
any and all costs  required  pursuant to Section  4.11 in  connection  with such
reallocation  if  the  Administrative  Agent  reasonably  determines  that  such
reallocation  requires a repayment of  outstanding  Revolving  Credit Loans) and
(iv) if requested,  the Borrower will deliver new a Revolving Credit Note to the
Lender whose  Commitment is being  increased  reflecting the revised  Commitment
amount of such Lender;

     (b) Any  increase in the  Aggregate  Commitment  which is  accomplished  by
addition of a new Lender under this Agreement  shall be accomplished as follows:
(i) such new Lender shall be subject to the consent of the Administrative  Agent
and the Borrower,  which consent shall not be unreasonably  withheld,  (ii) this
Agreement will be amended by the Borrower, the Administrative Agent and such new
Lender (but  without any  requirement  that the consent of any other  Lenders be
obtained)  to reflect  the  addition  of such new Lender as a Lender  hereunder,
(iii) the  Administrative  Agent will update the Register to reflect the revised
Commitment  and  Commitment   Percentage  of  each  of  the  Lenders,  (iv)  the
outstanding   Revolving   Credit  Loans  and   Commitment   Percentages  of  L/C
Obligations,  Alternative Currency Loans and Swingline Loans will be reallocated
on the  effective  date of such increase  among the Lenders in  accordance  with
their revised Commitment Percentages (and the Lenders agree to make all payments
and adjustments  necessary to effect the reallocation and the Borrower shall pay
any and all costs  required  pursuant to Section  4.11 in  connection  with such
reallocation  if  the  Administrative  Agent  reasonably  determines  that  such
reallocation requires a repayment of outstanding Revolving Credit Loans) and (v)
if  requested  the  Borrower  will  deliver a Revolving  Credit Note to such new
Lender; and

     (c)  Notwithstanding  anything to the contrary contained in this Agreement,
upon any  voluntary  reduction of the Aggregate  Commitment  pursuant to Section
2.7, the Borrower  shall no longer have the option to request an increase in the
Aggregate Commitment pursuant to this Section 2.9.


                                   ARTICLE III

                            LETTER OF CREDIT FACILITY

     SECTION 3.1 L/C Commitment. Subject to the terms and conditions hereof, the
Issuing Lender,  in reliance on the agreements of the other Lenders set forth in
Section 3.4(a),  agrees to issue standby letters of credit ("Letters of Credit")
for the  account of the  Borrower  on any  Business  Day from the  Closing  Date
through but not including the Revolving Credit  Termination Date in such form as
may be approved  from time to time by the  Issuing  Lender;  provided,  that the
Issuing  Lender shall have no obligation to issue any Letter of Credit if, after
giving effect to such issuance,  based upon the Dollar Amount of all outstanding
Loans and L/C  Obligations,  (a) the L/C Obligations  would exceed the lesser of
(i) the L/C  Commitment  or (ii) the  Aggregate  Commitment  less the  Swingline
Commitment  less the aggregate  principal  amount of all  outstanding  Revolving
Credit Loans and Alternative  Currency Loans or (b) the Available  Commitment of
any  Lender  would be less  than  zero.  Each  Letter  of  Credit  shall  (i) be
denominated in Dollars in a minimum amount of $100,000, (ii) be a standby letter
of  credit  issued  to  support  obligations  of  the  Borrower  or  any  of its
Subsidiaries,  contingent  or  otherwise,  incurred  in the  ordinary  course of
business,  (iii) expire on a date satisfactory to the Issuing Lender, which date
shall  be no  later  than  ninety  (90)  days  prior  to  the  Revolving  Credit
Termination  Date and (iv) be subject to the Uniform  Customs  and/or ISP 98, as
set forth in the Application or as determined by the Issuing Lender, and, to the
extent not inconsistent therewith,  the laws of the State of North Carolina. The
Issuing  Lender shall not at any time be obligated to issue any Letter of Credit
hereunder if such issuance  would  conflict with, or cause the Issuing Lender or
any L/C  Participant  to exceed  any limits  imposed  by,  any  Applicable  Law.
References herein to "issue" and derivations  thereof with respect to Letters of
Credit shall also include extensions or modifications of any existing Letters of
Credit, unless the context otherwise requires.

     SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrower,  may
from time to time  request  that the Issuing  Lender issue a Letter of Credit by
delivering  to the  Issuing  Lender  at the  Administrative  Agent's  Office  an
Application  therefor,  completed to the satisfaction of the Issuing Lender, and
such other  certificates,  documents  and other  papers and  information  as the
Issuing  Lender may reasonably  request.  Upon receipt of any  Application,  the
Issuing Lender shall process such  Application and the  certificates,  documents
and other  papers and  information  delivered to it in  connection  therewith in
accordance with its customary  procedures and shall,  subject to Section 3.1 and
Article V hereof,  promptly issue the Letter of Credit requested thereby (but in
no event  shall the  Issuing  Lender be  required  to issue any Letter of Credit
earlier  than four (4)  Business  Days  after  its  receipt  of the  Application
therefor  and all such  other  certificates,  documents  and  other  papers  and
information  relating  thereto) by issuing the original of such Letter of Credit
to the  beneficiary  thereof or as otherwise may be agreed by the Issuing Lender
and the Borrower;  provided that the Issuing  Lender shall not issue a Letter of
Credit  from and  after  the date  which  is one (1) day  after it has  received
written notice from the  Administrative  Agent (upon the request of the Required
Lenders) that one or more of the  applicable  conditions to Extensions of Credit
specified  in  Section  5.3 is not then  satisfied  until  such  conditions  are
satisfied or waived in accordance with the provisions of this Agreement (and the
Issuing  Lender  shall be entitled to  conclusively  rely on any such notice and
shall have no  obligation  to  independently  investigate  the  accuracy of such
notice and shall have no liability  to the  Borrower in respect  thereof if such
notice proves to be  inaccurate).  The Issuing Lender shall promptly  furnish to
the Borrower a copy of such Letter of Credit and promptly  notify each Lender of
the issuance  and upon  request by any Lender,  furnish to such Lender a copy of
such Letter of Credit and the amount of such Lender's participation therein.

     SECTION 3.3 Commissions and Other Charges.

     (a) The Borrower shall pay to the Administrative  Agent, for the account of
the Issuing Lender and the L/C Participants,  a letter of credit commission with
respect to each  Letter of Credit in an amount  equal to the face amount of such
Letter of Credit  multiplied by the Applicable Margin with respect to LIBOR Rate
Loans  (determined  on a per annum  basis).  Such  commission  shall be  payable
quarterly in arrears on the last  Business Day of each  calendar  quarter and on
the Revolving Credit Termination Date. The Administrative Agent shall,  promptly
following  its receipt  thereof,  distribute  to the Issuing  Lender and the L/C
Participants  all  commissions  received  pursuant  to this  Section  3.3(a)  in
accordance with their respective Commitment Percentages.

     (b) In addition to the  foregoing  commission,  the Borrower  shall pay the
Issuing  Lender an  issuance  fee with  respect  to each  Letter of Credit in an
amount  equal  to the  face  amount  of such  Letter  of  Credit  multiplied  by
one-eighth of one percent (0.125%) per annum. Such issuance fee shall be payable
quarterly in arrears on the last  Business Day of each  calendar  quarter and on
the Revolving Credit Termination Date.

     (c) In addition to the foregoing fees and  commissions,  the Borrower shall
pay or  reimburse  the Issuing  Lender for such normal and  customary  costs and
expenses as are incurred or charged by the Issuing Lender in issuing,  effecting
payment under, amending or otherwise administering any Letter of Credit.

     SECTION 3.4 L/C Participations.

     (a) The Issuing  Lender  irrevocably  agrees to grant and hereby  grants to
each L/C  Participant,  and,  to induce the Issuing  Lender to issue  Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby  accepts  and  purchases  from the Issuing  Lender,  on the terms and
conditions  hereinafter  stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's  Commitment  Percentage in
the Issuing Lender's  obligations and rights under and in respect of each Letter
of Credit  issued  hereunder  and the amount of each  draft paid by the  Issuing
Lender thereunder.  Each L/C Participant  unconditionally and irrevocably agrees
with the Issuing  Lender that, if a draft is paid under any Letter of Credit for
which the Issuing  Lender is not  reimbursed  in full by the Borrower  through a
Revolving  Credit  Loan or  otherwise  in  accordance  with  the  terms  of this
Agreement,  such L/C Participant  shall pay to the Issuing Lender upon demand at
the Issuing  Lender's  address for notices  specified  herein an amount equal to
such L/C Participant's Commitment Percentage of the amount of such draft, or any
part thereof, which is not so reimbursed.

     (b)  Upon  becoming  aware  of any  amount  required  to be paid by any L/C
Participant to the Issuing  Lender  pursuant to Section 3.4(a) in respect of any
unreimbursed  portion of any payment made by the Issuing Lender under any Letter
of Credit,  the Issuing  Lender shall notify each L/C  Participant of the amount
and due date of such required payment and such L/C Participant  shall pay to the
Issuing  Lender the amount  specified on the  applicable  due date.  If any such
amount is paid to the Issuing  Lender after the date such  payment is due,  such
L/C Participant  shall pay to the Issuing Lender on demand,  in addition to such
amount,  the product of (i) such amount,  times (ii) the daily  average  Federal
Funds Rate as determined by the Administrative  Agent during the period from and
including  the date such  payment  is due to the date on which  such  payment is
immediately  available  to the  Issuing  Lender,  times  (iii)  a  fraction  the
numerator of which is the number of days that elapse  during such period and the
denominator of which is 360. A certificate of the Issuing Lender with respect to
any amounts  owing under this Section  3.4(b) shall be conclusive in the absence
of  manifest  error.  With  respect  to  payment  to the  Issuing  Lender of the
unreimbursed  amounts  described in this Section 3.4(b), if the L/C Participants
receive  notice that any such  payment is due (A) prior to 1:00 p.m.  (Charlotte
time) on any Business  Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m.  (Charlotte time) on any Business Day, such payment shall be due
on the following Business Day.

     (c) Whenever,  at any time after the Issuing  Lender has made payment under
any Letter of Credit and has received from any L/C  Participant  its  Commitment
Percentage  of such  payment in  accordance  with this  Section 3.4, the Issuing
Lender receives any payment  related to such Letter of Credit (whether  directly
from the Borrower or otherwise),  or any payment of interest on account thereof,
the Issuing Lender will  distribute to such L/C  Participant  its pro rata share
thereof;  provided,  that in the event  that any such  payment  received  by the
Issuing Lender shall be required to be returned by the Issuing Lender,  such L/C
Participant  shall return to the Issuing Lender the portion  thereof  previously
distributed by the Issuing Lender to it.

     SECTION 3.5 Reimbursement  Obligation of the Borrower.  In the event of any
drawing  under any Letter of Credit,  the Borrower  agrees to reimburse  (either
with the proceeds of a Revolving Credit Loan as provided for in this Section 3.5
or with funds from other sources),  in the same day funds, the Issuing Lender on
each date on which the  Issuing  Lender  notifies  the  Borrower of the date and
amount of a draft  paid  under any  Letter of Credit  for the amount of (a) such
draft so paid and (b) any amounts  referred to in Section 3.3(c) incurred by the
Issuing  Lender in  connection  with such  payment.  Unless the  Borrower  shall
immediately notify the Issuing Lender that the Borrower intends to reimburse the
Issuing Lender for such drawing from other sources or funds,  the Borrower shall
be deemed to have timely given a Notice of Borrowing to the Administrative Agent
requesting that the Lenders make a Revolving Credit Loan bearing interest at the
Base  Rate on such  date in the  amount  of (a)  such  draft so paid and (b) any
amounts  referred  to in  Section  3.3(c)  incurred  by the  Issuing  Lender  in
connection with such payment, and the Lenders shall make a Revolving Credit Loan
bearing interest at the Base Rate in such amount, the proceeds of which shall be
applied to reimburse  the Issuing  Lender for the amount of the related  drawing
and costs and expenses.  Each Lender acknowledges and agrees that its obligation
to fund a Revolving Credit Loan in accordance with this Section 3.5 to reimburse
the Issuing  Lender for any draft paid under a Letter of Credit is absolute  and
unconditional  and  shall  not  be  affected  by  any  circumstance  whatsoever,
including,  without limitation,  non-satisfaction of the conditions set forth in
Section  2.4(a) or Article V. If the  Borrower  has elected to pay the amount of
such  drawing  with funds from other  sources  and shall fail to  reimburse  the
Issuing Lender as provided above, the unreimbursed  amount of such drawing shall
bear  interest at the rate which would be payable on any  outstanding  Base Rate
Loans which were then overdue from the date such amounts become payable (whether
at stated maturity, by acceleration or otherwise) until payment in full.

     SECTION 3.6 Obligations  Absolute.  The Borrower's  obligations  under this
Article III (including without limitation the Reimbursement Obligation) shall be
absolute and  unconditional  under any and all circumstances and irrespective of
any set-off,  counterclaim  or defense to payment which the Borrower may have or
have had against the Issuing Lender or any  beneficiary of a Letter of Credit or
any other Person.  The Borrower also agrees that the Issuing  Lender and the L/C
Participants  shall not be  responsible  for, and the  Borrower's  Reimbursement
Obligation  under Section 3.5 shall not be affected by, among other things,  the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid,  fraudulent or forged,  or any
dispute  between  or among the  Borrower  and any  beneficiary  of any Letter of
Credit or any other party to which such Letter of Credit may be  transferred  or
any claims  whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such  transferee.  The Issuing  Lender shall not be liable for any
error, omission, interruption or delay in transmission,  dispatch or delivery of
any message or advice,  however  transmitted,  in connection  with any Letter of
Credit,  except for errors or  omissions  caused by the Issuing  Lender's  gross
negligence or willful  misconduct.  The Borrower agrees that any action taken or
omitted by the Issuing  Lender under or in connection  with any Letter of Credit
or the related drafts or documents,  if done in the absence of gross  negligence
or willful misconduct,  shall be binding on the Borrower and shall not result in
any liability of the Issuing Lender or any L/C Participant to the Borrower.  The
responsibility  of the Issuing  Lender to the  Borrower in  connection  with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment  obligation  expressly provided for in such Letter of Credit, be limited
to determining  that the documents  (including each draft)  delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.

     SECTION 3.7 Effect of Application.  To the extent that any provision of any
Application  related to any Letter of Credit is inconsistent with the provisions
of this Article III, the provisions of this Article III shall apply.


                                   ARTICLE IV

                             GENERAL LOAN PROVISIONS

     SECTION 4.1 Interest.

     (a) Interest Rate Options.  Subject to the  provisions of this Section 4.1,
at the election of the Borrower,  (i) Revolving Credit Loans shall bear interest
at (A) the Base Rate plus the  Applicable  Margin as set forth in Section 4.1(c)
or (B) the LIBOR Rate plus the Applicable Margin as set forth in Section 4.1(c),
(ii)  Alternative  Currency Loans shall bear interest at the LIBOR Rate plus the
Applicable Margin as set forth in Section 4.1(c) and (iii) Swingline Loans shall
bear  interest  at the Base  Rate  plus the  Applicable  Margin  as set forth in
Section 4.1(c);  provided that the LIBOR Rate shall not be available until three
(3) Business Days after the Closing Date.  The Borrower shall select the rate of
interest  and  Interest  Period,  if any,  applicable  to any Loan at the time a
Notice of  Borrowing  is given  pursuant  to Section 2.4 or 3.5 or at the time a
Notice of Conversion/Continuation is given pursuant to Section 4.2. Each Loan or
portion  thereof  bearing  interest based on the Base Rate  (including,  without
limitation,  each  Swingline  Loan) shall be a "Base Rate Loan" and each Loan or
portion thereof bearing  interest based on the LIBOR Rate shall be a "LIBOR Rate
Loan." Any Revolving Credit Loan or any portion thereof as to which the Borrower
has not duly  specified  an interest  rate as provided  herein shall be deemed a
Base Rate Loan  denominated  in Dollars.  Any  Alternative  Currency Loan or any
portion thereof as to which the Borrower has not duly specified an interest rate
as provided  herein shall be deemed a LIBOR Rate Loan with an Interest Period of
one (1) month and shall be made four (4)  Business  Days  after  receipt of such
notice

     (b)  Interest  Periods.  In  connection  with each  LIBOR  Rate  Loan,  the
Borrower, by giving notice at the times described in Section 4.1(a), shall elect
an interest period (each,  an "Interest  Period") to be applicable to such Loan,
which  Interest  Period shall be a period of one (1), two (2), three (3), or six
(6) months (or, if available  to all of the  Lenders,  nine (9) months or twelve
(12) months) with respect to each LIBOR Rate Loan; provided that:

          (i) the Interest  Period  shall  commence on the date of advance of or
conversion  to any LIBOR Rate Loan and,  in the case of  immediately  successive
Interest Periods,  each successive Interest Period shall commence on the date on
which the immediately preceding Interest Period expires;

          (ii) if any Interest  Period would  otherwise  expire on a day that is
not a Business  Day, such  Interest  Period shall expire on the next  succeeding
Business Day; provided, that if any Interest Period with respect to a LIBOR Rate
Loan would otherwise  expire on a day that is not a Business Day but is a day of
the month  after  which no  further  Business  Day  occurs in such  month,  such
Interest Period shall expire on the immediately preceding Business Day;

          (iii) any  Interest  Period  with  respect  to a LIBOR  Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no  numerically  corresponding  day in the calendar  month at the end of such
Interest  Period)  shall end on the last  Business Day of the relevant  calendar
month at the end of such Interest Period;

          (iv) no Interest  Period  shall  extend  beyond the  Revolving  Credit
Termination Date; and

          (v) there shall be no more than six (6) Interest  Periods in effect at
any time.

     (c) Applicable Margin. The Applicable Margin provided for in Section 4.1(a)
with respect to any Loan (the "Applicable Margin") shall be based upon the table
set forth below and shall be determined and adjusted quarterly on the date (each
a  "Calculation  Date")  ten (10)  Business  Days  after  the date by which  the
Borrower  provides an Officer's  Compliance  Certificate  for the most  recently
ended fiscal quarter of the Borrower;  provided,  however,  that (a) the initial
Applicable  Margin shall be based on Pricing Level II (as shown below) and shall
remain at Pricing Level II until the first  Calculation Date occurring after the
Closing Date and,  thereafter the Pricing Level shall be determined by reference
to the  Leverage  Ratio (as  calculated  pursuant  to the  formula  set forth in
Section 9.1) as of the last day of the most recently ended fiscal quarter of the
Borrower  preceding the  applicable  Calculation  Date,  and (b) if the Borrower
fails to provide the Officer's Compliance Certificate as required by Section 7.2
for the most  recently  ended  fiscal  quarter  of the  Borrower  preceding  the
applicable  Calculation  Date, the Applicable  Margin from such Calculation Date
shall be  based on  Pricing  Level I (as  shown  below)  until  such  time as an
appropriate  Officer's  Compliance  Certificate  is provided,  at which time the
Pricing Level shall be  determined by reference to the Leverage  Ratio as of the
last day of the most  recently  ended fiscal  quarter of the Borrower  preceding
such  Calculation  Date.  The  Applicable  Margin  shall be  effective  from one
Calculation  Date  until  the  next  Calculation  Date.  Any  adjustment  in the
Applicable  Margin shall be applicable to all Extensions of Credit then existing
or subsequently made or issued.


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
----------------------------- ----------------------------- ---------------------------- ---------------------------
       <S>                           <C>                            <C>                      <C>
       Pricing Level                 Leverage Ratio                 LIBOR Rate                   Base Rate
                                                                 Applicable Margin           Applicable Margin
----------------------------- ----------------------------- ---------------------------- ---------------------------
----------------------------- ----------------------------- ---------------------------- ---------------------------
             I                 Greater than 2.00 to 1.00               2.00%                       1.00%
----------------------------- ----------------------------- ---------------------------- ---------------------------
----------------------------- ----------------------------- ---------------------------- ---------------------------
             II                Greater than 1.50 to 1.00
                               but less than or equal to
                                      2.00 to 1.00                     1.75%                       0.75%
----------------------------- ----------------------------- ---------------------------- ---------------------------
----------------------------- ----------------------------- ---------------------------- ---------------------------
            III                Greater than 1.00 to 1.00
                               but less than or equal to
                                      1.50 to 1.00                     1.50%                       0.50%
----------------------------- ----------------------------- ---------------------------- ---------------------------
----------------------------- ----------------------------- ---------------------------- ---------------------------
             IV                Less than or equal to 1.00
                                        to 1.00                        1.25%                       0.25%
----------------------------- ----------------------------- ---------------------------- ---------------------------
</TABLE>

     (d)  Default  Rate.  Subject  to Section  11.3,  at the  discretion  of the
Administrative Agent or as directed by the Required Lenders, upon the occurrence
and during the  continuance  of any Event of Default,  (i) the Borrower shall no
longer  have  the  option  to  request  LIBOR  Rate  Loans  (including,  without
limitation, Alternative Currency Loans) or Swingline Loans, (ii) all outstanding
LIBOR Rate Loans shall bear  interest  at a rate per annum two  percent  (2%) in
excess of the rate then  applicable  to LIBOR  Rate  Loans  until the end of the
applicable Interest Period and thereafter at a rate equal to two percent (2%) in
excess of the rate then applicable to Base Rate Loans, and (iii) all outstanding
Base Rate Loans and other Obligations  arising hereunder or under any other Loan
Document  shall bear  interest at a rate per annum equal to two percent  (2%) in
excess of the rate then applicable to Base Rate Loans or such other  Obligations
arising  hereunder or under any other Loan Document;  provided that clauses (i),
(ii) and (iii)  shall  apply  immediately  upon the  occurrence  and  during the
continuance of any Event of Default under Sections 11.1(a), 11.1(b), 11.1(i) and
11.1(j).  Interest  shall continue to accrue on the Notes after the filing by or
against the Borrower of any petition  seeking any relief in  bankruptcy or under
any act or law pertaining to insolvency or debtor relief, whether state, federal
or foreign.

     (e) Interest Payment and Computation. Interest on each Base Rate Loan shall
be  payable  in  arrears  on the  last  Business  Day of each  calendar  quarter
commencing March 31, 2003; and interest on each LIBOR Rate Loan shall be payable
on the last day of each Interest Period applicable thereto, and if such Interest
Period  extends  over  three  (3)  months,  at the end of each  three  (3) month
interval during such Interest Period.  Interest on LIBOR Rate Loans and all fees
payable  hereunder shall be computed on the basis of a 360-day year and assessed
for the  actual  number of days  elapsed  (except,  to the  extent  that  Pounds
Sterling is agreed upon as an  Alternative  Currency  pursuant to the definition
thereof,  for  Alternative  Currency Loans  denominated in Pounds Sterling which
shall be computed on the basis of a  365/66-day  year) and interest on Base Rate
Loans shall be computed on the basis of a  365/66-day  year and assessed for the
actual number of days elapsed.

     (f) Maximum Rate. In no contingency or event whatsoever shall the aggregate
of all amounts  deemed  interest  hereunder or under any of the Notes charged or
collected  pursuant  to the terms of this  Agreement  or  pursuant to any of the
Notes exceed the highest rate permissible under any Applicable Law which a court
of competent  jurisdiction  shall,  in a final  determination,  deem  applicable
hereto.  In the event that such a court determines that the Lenders have charged
or received  interest  hereunder in excess of the highest  applicable  rate, the
rate in effect  hereunder  shall  automatically  be reduced to the maximum  rate
permitted by Applicable Law and the Lenders shall at the Administrative  Agent's
option (i) promptly refund to the Borrower any interest  received by the Lenders
in excess of the maximum  lawful rate or (ii) apply such excess to the principal
balance of the Obligations on a pro rata basis. It is the intent hereof that the
Borrower not pay or contract to pay, and that neither the  Administrative  Agent
nor any Lender  receive or contract to receive,  directly or  indirectly  in any
manner whatsoever,  interest in excess of that which may be paid by the Borrower
under Applicable Law.

     (g) Basis of  Accrual.  Subject  to  Section  1.3  hereof,  if the basis of
accrual of interest or fees  expressed  in this  Agreement  with  respect to the
currency of any state that becomes a Participating  Member State, in judgment of
the  Administrative  Agent,  shall not be available because interest rate quotes
for the applicable  national  currency unit are no longer provided,  or shall be
inconsistent  with any convention or practice in the London Interbank Market for
the basis of accrual of interest or fees in respect of the euro, such convention
or practice shall replace such expressed basis effective as of and from the date
on which such state becomes a Participating  Member State;  provided that if any
Loan in the  currency  of such state is  outstanding  immediately  prior to such
date, such replacement shall take effect,  with respect to such Loan, at the end
of the then current Interest Period.

     SECTION  4.2 Notice  and Manner of  Conversion  or  Continuation  of Loans.
Provided  that  no  Default  or  Event  of  Default  has  occurred  and is  then
continuing,  the  Borrower  shall  have the  option to (a)  convert  at any time
following  the third  Business  Day after the Closing Date all or any portion of
any  outstanding  Base Rate Loans  (other than  Swingline  Loans) in a principal
amount equal to $5,000,000 or any whole multiple of $1,000,000 in excess thereof
into  one or more  LIBOR  Rate  Loans  denominated  in  Dollars,  (b)  upon  the
expiration of any Interest  Period,  convert all or any part of its  outstanding
LIBOR  Rate  Loans  denominated  in  Dollars  in a  principal  amount  equal  to
$3,000,000 or a whole  multiple of  $1,000,000 in excess  thereof into Base Rate
Loans (other than  Swingline  Loans),  (c) upon the  expiration  of any Interest
Period,  continue  any LIBOR Rate Loan  denominated  in  Dollars in a  principal
amount of $5,000,000 or any whole  multiple of $1,000,000 in excess thereof as a
LIBOR  Rate  Loan  denominated  in  Dollars  or (d) upon the  expiration  of any
Interest  Period,  continue any LIBOR Rate Loan  denominated in any  Alternative
Currency in a principal amount of $2,000,000 or any whole multiple of $1,000,000
in excess thereof (based on the Alternative  Currency Amount thereof) as a LIBOR
Rate Loan in the same  Alternative  Currency.  Whenever the Borrower  desires to
convert  or  continue  Loans as  provided  above,  the  Borrower  shall give the
Administrative  Agent  irrevocable  prior written notice in the form attached as
Exhibit E (a  "Notice  of  Conversion/Continuation")  not later  than 12:00 p.m.
(Charlotte  time)  four (4)  Business  Days  (with  respect  to any  Alternative
Currency Loan) and three (3) Business Days (with respect to any Loan denominated
in Dollars)  before the day on which a proposed  conversion or  continuation  of
such  Loan is to be  effective  specifying  (A) the  Loans  to be  converted  or
continued, and, in the case of any LIBOR Rate Loan to be converted or continued,
the last day of the Interest  Period  therefor,  (B) the  Permitted  Currency in
which such Loan is  denominated,  (C) the effective  date of such  conversion or
continuation  (which shall be a Business Day), (D) the principal  amount of such
Loans to be converted or continued, and (E) the Interest Period to be applicable
to such converted or continued LIBOR Rate Loan. The  Administrative  Agent shall
promptly notify the Lenders of such Notice of Conversion/Continuation.

     SECTION 4.3 Fees.

     (a) Commitment Fee.  Commencing on the Closing Date, the Borrower shall pay
to the  Administrative  Agent, for the account of the Lenders,  a non-refundable
commitment fee at a rate per annum equal to the  applicable  rate based upon the
table set forth below (the  "Commitment  Fee Rate") on the average  daily unused
portion of the Aggregate  Commitment;  provided  that the amount of  outstanding
Swingline Loans and Alternative  Currency Loans shall not be considered usage of
the Revolving  Credit  Commitment for the purpose of calculating such commitment
fee. The  commitment fee shall be payable in arrears on the last Business Day of
each calendar  quarter  during the term of this Agreement  commencing  March 31,
2003, and on the Revolving Credit Termination Date. Such commitment fee shall be
distributed  by the  Administrative  Agent to the Lenders pro rata in accordance
with the Lenders'  respective  Commitment  Percentages.  The Commitment Fee Rate
shall be determined and adjusted  quarterly on each Calculation Date;  provided,
however,  that (a) the  initial  Commitment  Fee Rate  shall be based on Pricing
Level II (as shown below) and shall  remain at Pricing  Level II until the first
Calculation  Date  occurring  after the Closing Date and  thereafter the Pricing
Level shall be  determined  by reference to the  Leverage  Ratio (as  calculated
pursuant to the formula set forth in Section 9.1) as of the last day of the most
recently  ended  fiscal  quarter  of  the  Borrower   preceding  the  applicable
Calculation  Date,  and (b) if the  Borrower  fails  to  provide  the  Officer's
Compliance  Certificate  as required by Section 7.2 for the most recently  ended
fiscal quarter of the Borrower  preceding the applicable  Calculation  Date, the
Commitment Fee Rate from such Calculation Date shall be based on Pricing Level I
(as  shown  below)  until  such  time  as an  appropriate  Officer's  Compliance
Certificate is provided,  at which time the Pricing Level shall be determined by
reference to the Leverage  Ratio as of the last day of the most  recently  ended
fiscal quarter of the Borrower  preceding such Calculation  Date. The Commitment
Fee Rate shall be effective from one Calculation Date until the next Calculation
Date.

<TABLE>
<CAPTION>
--------------------- ---------------------------------------------------------------- -----------------------------
<S>                                           <C>                                          <C>
   Pricing Level                              Leverage Ratio                               Commitment Fee Rate
===================== ================================================================ =============================

         I                               Greater than 2.00 to 1.00                                0.35%
--------------------- ---------------------------------------------------------------- -----------------------------
--------------------- ---------------------------------------------------------------- -----------------------------

         II             Greater than 1.50 to 1.00 but less than or equal to 2.00 to               0.30%
                                                   1.00
--------------------- ---------------------------------------------------------------- -----------------------------
--------------------- ---------------------------------------------------------------- -----------------------------

        III             Greater than 1.00 to 1.00 but less than or equal to 1.50 to               0.25%
                                                   1.00
--------------------- ---------------------------------------------------------------- -----------------------------
--------------------- ---------------------------------------------------------------- -----------------------------

         IV                         Less than or equal to 1.00 to 1.00                            0.20%
--------------------- ---------------------------------------------------------------- -----------------------------
</TABLE>

     (b)  Administrative  Agent's and Other  Fees.  In order to  compensate  the
Administrative  Agent for  structuring  and syndicating the Extensions of Credit
and  for  its  obligations  hereunder,   the  Borrower  agrees  to  pay  to  the
Administrative  Agent,  for its account,  the fees set forth in the separate fee
letter  agreement  executed by the Borrower and the  Administrative  Agent dated
November 1, 2002.

     SECTION 4.4 Manner of Payment.

     (a) Loans and Letters of Credit Denominated in Dollars. Each payment by the
Borrower  on account of the  principal  of or  interest on any Loan or Letter of
Credit  denominated  in  Dollars  or of any fee,  commission  or  other  amounts
(including  the  Reimbursement  Obligation  with respect to any Letter of Credit
denominated in Dollars)  payable to the Lenders under this Agreement or any Note
(except as set forth in Section  4.4(b)) shall be made in Dollars not later than
1:00  p.m.  (Charlotte  time) on the  date  specified  for  payment  under  this
Agreement to the Administrative  Agent at the Administrative  Agent's Office for
the  account  of the  Lenders  (other  than  as set  forth  below)  pro  rata in
accordance with their  respective  Commitment  Percentages  (except as specified
below) in  immediately  available  funds and shall be made  without any set-off,
counterclaim or deduction  whatsoever.  Any payment received after such time but
before 2:00 p.m.  (Charlotte time) on such day shall be deemed a payment on such
date for the  purposes  of Section  11.1,  but for all other  purposes  shall be
deemed  to have been  made on the next  succeeding  Business  Day.  Any  payment
received after 2:00 p.m.  (Charlotte  time) shall be deemed to have been made on
the next succeeding  Business Day for all purposes.  With respect to each Letter
of Credit denominated in Dollars,  each payment to the  Administrative  Agent of
the Issuing Lender's fees or L/C Participants' commissions shall be made in like
manner,  but for the account of the Issuing Lender or the L/C  Participants,  as
the case may be.

     (b) Alternative  Currency Loans. Each payment by the Borrower on account of
the principal of or interest on the Alternative  Currency Loans shall be made in
such  Alternative   Currency  not  later  than  11:00  a.m.  (the  time  of  the
Administrative  Agent's  Correspondent)  on the date specified for payment under
this Agreement to the  Administrative  Agent's  account with the  Administrative
Agent's  Correspondent for the account of the Alternative Currency Lender (other
than as set  forth  below) in  immediately  available  funds,  and shall be made
without any set-off,  counterclaim or deduction whatsoever. Any payment received
after such time but before  12:00 noon (the time of the  Administrative  Agent's
Correspondent)  on such day  shall  be  deemed a  payment  on such  date for the
purposes of Section  11.1,  but for all other  purposes  shall be deemed to have
been made on the next succeeding  Business Day. Any payment received after 12:00
noon (the time of the Administrative  Agent's  Correspondent) shall be deemed to
have been made on the next succeeding Business Day for all purposes.

     (c) Pro Rata Treatment.  Upon receipt by the  Administrative  Agent of each
such payment,  the  Administrative  Agent shall distribute to each Lender at its
address  for  notices  set forth  herein its pro rata  share of such  payment in
accordance with such Lender's Commitment  Percentage (except as specified below)
and shall wire advice of the amount of such credit to each Lender.  Each payment
to the  Administrative  Agent of the Issuing Lender's fees or L/C  Participants'
commissions  shall be made in like  manner,  but for the  account of the Issuing
Lender  or the L/C  Participants,  as the  case  may  be.  Each  payment  to the
Administrative  Agent of  Administrative  Agent's fees or expenses shall be made
for the account of the Administrative  Agent. Each payment to the Administrative
Agent with respect to the Swingline Note  (including,  without  limitation,  the
Swingline  Lender's  fees or  expenses)  shall  be made for the  account  of the
Swingline Lender.  Each payment to the Administrative  Agent with respect to the
Alternative  Currency  Note  shall be made for the  account  of the  Alternative
Currency  Lender.  Any amount payable to any Lender under  Sections 4.10,  4.11,
4.12, 4.13 or 13.2 shall be paid to the Administrative  Agent for the account of
the applicable Lender. Subject to Section 4.1(b)(ii),  if any payment under this
Agreement  or any Note shall be  specified  to be made upon a day which is not a
Business  Day, it shall be made on the next  succeeding  day which is a Business
Day and such  extension of time shall in such case be included in computing  any
interest if payable along with such payment.

     SECTION 4.5  Crediting  of  Payments  and  Proceeds.  In the event that the
Borrower shall fail to pay any of the  Obligations  when due and the Obligations
have been  accelerated  pursuant to Section 11.2,  all payments  received by the
Lenders upon the Notes and the other  Obligations  and all net proceeds from the
enforcement of the Obligations shall be applied:  (a) first to all expenses then
due and payable by the Borrower  hereunder  and under the other Loan  Documents,
(b) then to all  indemnity  obligations  then due and  payable  by the  Borrower
hereunder  and under the other Loan  Documents,  (c) then to all  Administrative
Agent's  and  Issuing  Lender's  fees  then  due and  payable,  (d)  then to all
commitment  and other fees and  commissions  then due and  payable,  (e) then to
accrued and unpaid  interest on the Swingline  Note to the Swingline  Lender and
the Alternative  Currency Note to the  Alternative  Currency Lender (pro rata in
accordance  with  all  such  amounts  due),  (f)  then to the  principal  amount
outstanding under the Swingline Note to the Swingline Lender and the Alternative
Currency Note to the  Alternative  Currency  Lender (pro rata in accordance with
all such amounts due), (g) then to accrued and unpaid  interest on the Revolving
Credit Notes,  accrued and unpaid interest on the  Reimbursement  Obligation and
any Hedging Obligations  (including any termination payments and any accrued and
unpaid interest thereon) (pro rata in accordance with all such amounts due), (h)
then to the  principal  amount of the Revolving  Credit Notes and  Reimbursement
Obligation  (pro rata in  accordance  with all such amounts due) and (i) then to
the cash collateral account described in Section 11.2(b) hereof to the extent of
any L/C Obligations then outstanding, in that order.

     SECTION 4.6 Adjustments.  If any Lender (a "Benefited Lender") shall at any
time  receive  any  payment  of all or part of the  Obligations  owing to it, or
interest  thereon,  or if any Lender shall at any time receive any collateral in
respect to the Obligations owing to it (whether voluntarily or involuntarily, by
set-off or otherwise)  (other than pursuant to Sections 4.8, 4.9, 4.10,  4.11 or
13.2 hereof) in a greater  proportion  than any such  payment to and  collateral
received by any other  Lender,  if any,  in respect of the  similar  Obligations
owing to such other Lender,  or interest  thereon,  such Benefited  Lender shall
purchase  for cash from the  other  Lenders  such  portion  of each  such  other
Lender's  Extensions  of Credit,  or shall  provide such other  Lenders with the
benefits of any such collateral,  or the proceeds thereof, as shall be necessary
to cause such  Benefited  Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders;  provided,  that if all
or any portion of such excess  payment or benefits is thereafter  recovered from
such Benefited Lender, such purchase shall be rescinded,  and the purchase price
and benefits returned to the extent of such recovery,  but without interest. The
Borrower  agrees that each Lender so  purchasing  a portion of another  Lender's
Extensions  of Credit may  exercise  all rights of payment  (including,  without
limitation,  rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.

     SECTION  4.7 Nature of  Obligations  of  Lenders  Regarding  Extensions  of
Credit;  Assumption by the Administrative  Agent. The obligations of the Lenders
under this  Agreement to make the Loans and issue or  participate  in Letters of
Credit  are  several  and are  not  joint  or  joint  and  several.  Unless  the
Administrative  Agent  shall  have  received  notice  from a  Lender  prior to a
proposed  borrowing  date  that  such  Lender  will  not make  available  to the
Administrative  Agent such Lender's ratable portion of the amount to be borrowed
on such date  (which  notice  shall not release  such Lender of its  obligations
hereunder),  the Administrative  Agent may assume that such Lender has made such
portion available to the Administrative  Agent on the proposed borrowing date in
accordance  with Section  2.4(b) and the  Administrative  Agent may, in reliance
upon  such   assumption,   make  available  to  the  Borrower  on  such  date  a
corresponding  amount.  If such amount is made  available to the  Administrative
Agent  on a date  after  such  borrowing  date,  such  Lender  shall  pay to the
Administrative  Agent on demand an amount, until paid, equal to (a) with respect
to any Loan  denominated  in  Dollars,  the  product  of (i) the amount not made
available by such Lender in  accordance  with the terms  hereof,  times (ii) the
daily  average  Federal  Funds Rate  during  such  period as  determined  by the
Administrative  Agent,  times  (iii) a fraction  the  numerator  of which is the
number of days that elapse from and including such borrowing date to the date on
which such amount not made available by such Lender in accordance with the terms
hereof shall have become immediately  available to the Administrative  Agent and
the denominator of which is 360 and (b) with respect to any Loan  denominated in
an  Alternative  Currency,  the  amount  not made  available  by such  Lender in
accordance with the terms hereof and interest  thereon at a rate per annum equal
to the  Administrative  Agent's  aggregate  marginal cost (including the cost of
maintaining  any  required  reserves  or  deposit  insurance  and of  any  fees,
penalties,  overdraft  charges  or  other  costs  or  expenses  incurred  by the
Administrative  Agent as a result of the failure to deliver funds  hereunder) of
carrying such amount. A certificate of the Administrative  Agent with respect to
any amounts owing under this Section 4.7 shall be  conclusive,  absent  manifest
error.  If such Lender's  Commitment  Percentage  of such  borrowing is not made
available to the  Administrative  Agent by such Lender within three (3) Business
Days after such borrowing  date, the  Administrative  Agent shall be entitled to
recover such amount made  available by the  Administrative  Agent with  interest
thereon  at the rate per annum  applicable  to Base  Rate  Loans  hereunder,  on
demand,  from the  Borrower.  The  failure of any Lender to make  available  its
Commitment Percentage of any Loan requested by the Borrower shall not relieve it
or any other Lender of its obligation,  if any, hereunder to make its Commitment
Percentage of such Loan available on the borrowing  date, but no Lender shall be
responsible  for  the  failure  of any  other  Lender  to  make  its  Commitment
Percentage  of  such  Loan  available  on the  borrowing  date.  Notwithstanding
anything  set forth  herein  to the  contrary,  any  Lender  that  fails to make
available its Commitment Percentage of any Loan shall not (a) have any voting or
consent  rights under or with respect to any Loan  Document or (b)  constitute a
"Lender" (or be included in the calculation of Required  Lenders  hereunder) for
any voting or consent rights under or with respect to any Loan Document.

     SECTION 4.8. Redenomination of Alternative Currency Loans

     (a)  Conversion  to the Base  Rate.  If any  Alternative  Currency  Loan is
required  to bear  interest  based at the Base Rate  rather  than the LIBOR Rate
pursuant  to Section  4.1(d),  Section  4.10 or any other  applicable  provision
hereof,  such Loan shall be funded in  Dollars in an amount  equal to the Dollar
Amount of such  Alternative  Currency  Loan,  all subject to the  provisions  of
Section 2.5(b). The Borrower shall reimburse the Alternative  Currency Lender or
the Lenders, as applicable, upon any such conversion for any amounts required to
be paid under Section 4.11.

     (b) Redenomination of Loans and Obligations. Subject to Section 1.3 hereof,
(i) any Loan to be denominated  in the currency of the applicable  Participating
Member  State  shall be made in the euro and (ii) any  obligation  of any  party
under this  Agreement or any other Loan Document  which has been  denominated in
the currency of a  Participating  Member State shall be  redenominated  into the
euro.

     (c) Further Assurances.  The terms and provisions of this Agreement will be
subject  to  such  reasonable  changes  of  construction  as  determined  by the
Administrative   Agent  to  reflect  the   implementation  of  the  EMU  in  any
Participating  Member  State or any market  conventions  relating  to the fixing
and/or  calculation  of interest being changed or replaced and to reflect market
practice at that time, and subject thereto, to put the Administrative Agent, the
Lenders and the Borrower in the same  position,  so far as  possible,  that they
would  have  been  if  such  implementation  had  not  occurred.  In  connection
therewith,  the Borrower agrees, at the request of the Administrative  Agent, at
the  time  of or at any  time  following  the  implementation  of the EMU in any
Participating  Member  State or any market  conventions  relating  to the fixing
and/or  calculation  of interest  being  changed or  replaced,  to enter into an
agreement  amending this  Agreement in such manner as the  Administrative  Agent
shall reasonably request.

     SECTION 4.9. Regulatory Limitation.  In the event, as a result of increases
in the  value of  Alternative  Currencies  against  the  Dollar or for any other
reason,  the obligation of any of the Lenders to make Loans (taking into account
the Dollar Amount of the Obligations and all other  indebtedness  required to be
aggregated  under 12 U.S.C.A.  ss.84, as amended,  the  regulations  promulgated
thereunder and any other  Applicable Law) is determined by such Lender to exceed
its then applicable legal lending limit under 12 U.S.C.A. ss.84, as amended, and
the regulations promulgated thereunder,  or any other Applicable Law, the amount
of  additional  Extensions  of Credit such Lender  shall be obligated to make or
issue or  participate in hereunder  shall  immediately be reduced to the maximum
amount which such Lender may legally advance (as determined by such Lender), the
obligation of each of the remaining Lenders  hereunder shall be  proportionately
reduced,  based on their  applicable  Commitment  Percentages and, to the extent
necessary under such laws and regulations (as determined by each of the Lenders,
with respect to the  applicability of such laws and regulations to itself),  and
the  Borrower  shall  reduce,  or cause to be reduced,  complying  to the extent
practicable with the remaining  provisions hereof,  the Obligations  outstanding
hereunder by an amount sufficient to comply with such maximum amounts.

     SECTION 4.10 Changed Circumstances.

     (a)   Circumstances   Affecting   LIBOR  Rate  and   Alternative   Currency
Availability.  If with respect to any  Interest  Period for any LIBOR Rate Loan,
the Administrative  Agent, the Alternative  Currency Lender or any Lender (after
consultation with the  Administrative  Agent) shall determine that (i) by reason
of circumstances affecting the foreign exchange and interbank markets generally,
deposits in eurodollars or an Alternative Currency in the applicable amounts are
not being  quoted via Dow Jones  Market  Screen 3750 or the  applicable  Reuters
Screen  Page or  offered  to the  Administrative  Agent or such  Lender for such
Interest Period,  (ii) a fundamental change has occurred in the foreign exchange
or  interbank  markets  with  respect to any  Alternative  Currency  (including,
without limitation, changes in national or international financial, political or
economic conditions or currency exchange rates or exchange controls) or (iii) it
has become otherwise materially  impractical for the Alternative Currency Lender
to make such  Alternative  Currency Loan,  then the  Administrative  Agent shall
forthwith   give  notice  thereof  to  the  Borrower.   Thereafter,   until  the
Administrative  Agent  notifies the Borrower that such  circumstances  no longer
exist,  the obligation of the Lenders or the  Alternative  Currency  Lender,  as
applicable,  to  make  LIBOR  Rate  Loans  or  Alternative  Currency  Loans,  as
applicable, and the right of the Borrower to convert any Loan to or continue any
Loan as a LIBOR Rate Loan or an Alternative Currency Loan, as applicable,  shall
be  suspended,  and the  Borrower  shall repay in full (or cause to be repaid in
full) the then  outstanding  principal  amount of each such  LIBOR  Rate Loan or
Alternative  Currency  Loan,  as  applicable,  together  with  accrued  interest
thereon,  on the last day of the then current Interest Period applicable to such
LIBOR Rate Loan or Alternative Currency Loan, as applicable, or convert the then
outstanding  principal  amount  of each  such  LIBOR  Rate  Loan or  Alternative
Currency Loan, as applicable,  to a Base Rate Loan in Dollars as of the last day
of such  Interest  Period;  provided  that if the  Borrower  elects to make such
conversion,  the Borrower shall pay to the Administrative Agent, the Alternative
Currency  Lender  and the  Lenders  any and all costs,  fees and other  expenses
incurred by the  Administrative  Agent, the Alternative  Currency Lender and the
Lenders in effecting such conversion.

     (b) Laws Affecting LIBOR Rate and Alternative  Currency  Availability.  If,
after the date hereof, the introduction of, or any change in, any Applicable Law
or  any  change  in  the   interpretation  or  administration   thereof  by  any
Governmental  Authority,  central  bank or  comparable  agency  charged with the
interpretation  or administration  thereof,  or compliance by any of the Lenders
(or any of their  respective  Lending  Offices)  with any  request or  directive
(whether  or not  having the force of law) of any such  Governmental  Authority,
central bank or comparable agency,  shall make it unlawful or impossible for any
of the  Lenders  (or any of their  respective  Lending  Offices)  to  honor  its
obligations hereunder to make or maintain any LIBOR Rate Loan or any Alternative
Currency   Loan,   such  Lender  shall  promptly  give  notice  thereof  to  the
Administrative  Agent and the Administrative Agent shall promptly give notice to
the Borrower, and the other Lenders.  Thereafter, until the Administrative Agent
notifies  the  Borrower  that  such  circumstances  no  longer  exist,  (i)  the
obligations of the Lenders or the Alternative Currency Lender, as applicable, to
make LIBOR Rate Loans or Alternative  Currency  Loans,  as  applicable,  and the
right of the  Borrower to convert any Loan or continue  any Loan as a LIBOR Rate
Loan or an  Alternative  Currency  Loan, as  applicable,  shall be suspended and
thereafter the Borrower may select only Base Rate Loans  hereunder,  and (ii) if
any of the Lenders or the Alternative  Currency Lender,  as applicable,  may not
lawfully continue to maintain a LIBOR Rate Loan or an Alternative Currency Loan,
as applicable, to the end of the then current Interest Period applicable thereto
as a LIBOR Rate Loan or Alternative Currency Loan, as applicable, the applicable
LIBOR  Rate  Loan  or  an  Alternative  Currency  Loan,  as  applicable,   shall
immediately  be  converted  to a Base Rate Loan in Dollars for the  remainder of
such  Interest  Period;  provided  that if the  Borrower  elects  to  make  such
conversion,  the Borrower shall pay to the Administrative Agent, the Alternative
Currency  Lender  and the  Lenders  any and all costs,  fees and other  expenses
incurred by the  Administrative  Agent, the Alternative  Currency Lender and the
Lenders in effecting such conversion.

     (c) Increased Costs. If, after the date hereof, the introduction of, or any
change  in, any  Applicable  Law,  or in the  interpretation  or  administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration  thereof,  or compliance by any of the
Lenders  (or any of  their  respective  Lending  Offices)  with any  request  or
directive  (whether  or not  having  the  force  of law)  of  such  Governmental
Authority, central bank or comparable agency:

          (i) shall (except as provided in Section  4.13(e))  subject any of the
Lenders (or any of their  respective  Lending Offices) to any tax, duty or other
charge with respect to any Note, Letter of Credit or Application or shall change
the  basis  of  taxation  of  payments  to any of the  Lenders  (or any of their
respective  Lending Offices) of the principal of or interest on any Note, Letter
of Credit or  Application  or any other  amounts  due under  this  Agreement  in
respect  thereof  (except for changes in the rate of franchise tax or tax on the
overall  net  income of any of the  Lenders or any of their  respective  Lending
Offices  imposed by the  jurisdiction in which such Lender is organized or is or
should be qualified to do business or such Lending Office is located);  provided
that the Borrower  shall not be  obligated  to pay any amounts  pursuant to this
Section  4.10(c)(i)  to the extent  that such  amounts  are  duplicative  of any
amounts paid by the Borrower pursuant to Section 4.13; or

          (ii) shall impose,  modify or deem applicable any reserve  (including,
without limitation, any reserve imposed by the Board of Governors of the Federal
Reserve System),  special deposit,  insurance or capital or similar  requirement
against  assets of,  deposits with or for the account of, or credit  extended by
any of the Lenders (or any of their respective  Lending Offices) or shall impose
on any of the  Lenders  (or any of  their  respective  Lending  Offices)  or the
foreign exchange and interbank  markets any other condition  affecting any Note;
and the result of any of the  foregoing  events  described in clause (i) or (ii)
above is to increase  the costs to any of the Lenders of  maintaining  any LIBOR
Rate  Loan or an  Alternative  Currency  Loan,  as  applicable,  or  issuing  or
participating  in  Letters of Credit or to reduce the yield or amount of any sum
received or receivable  by any of the Lenders under this  Agreement or under the
Notes in  respect  of a LIBOR  Rate Loan or an  Alternative  Currency  Loan,  as
applicable, or Letter of Credit or Application,  then such Lender shall promptly
notify the  Administrative  Agent, and the  Administrative  Agent shall promptly
notify the Borrower of such fact and demand  compensation  therefor and,  within
fifteen (15) days after such notice by the  Administrative  Agent,  the Borrower
shall pay to such Lender such  additional  amount or amounts as will  compensate
such Lender or Lenders for such increased cost or reduction.  The Administrative
Agent will  promptly  notify the Borrower of any event of which it has knowledge
which will entitle such Lender to compensation pursuant to this Section 4.10(c);
provided,  that the Administrative  Agent shall incur no liability whatsoever to
the  Lenders or the  Borrower in the event it fails to do so. The amount of such
compensation  shall  be  determined,   in  the  applicable  Lender's  reasonable
discretion,  based upon the  assumption  that such Lender funded its  Commitment
Percentage of the LIBOR Rate Loans or Alternative Currency Loans, as applicable,
in the London interbank market and using any reasonable attribution or averaging
methods which such Lender deems appropriate and practical. A certificate of such
Lender setting forth the basis for determining such amount or amounts  necessary
to  compensate  such  Lender  shall be  forwarded  to the  Borrower  through the
Administrative  Agent and shall be conclusively  presumed to be correct save for
manifest error.

     (d) Exchange  Indemnification and Increased Costs. The Borrower shall, upon
demand from the  Administrative  Agent, pay to the  Administrative  Agent or any
applicable Lender, the amount of (i) any loss or cost or increased cost incurred
by the Administrative  Agent or any applicable Lender, (ii) any reduction in any
amount   payable  to  or  in  the  effective   return  on  the  capital  to  the
Administrative  Agent or any applicable Lender,  (iii) any interest or any other
return,  including  principal,  foregone  by  the  Administrative  Agent  or any
applicable  Lender  as a  result  of the  introduction  of,  change  over  to or
operation of the euro, or (iv) any currency  exchange loss, that  Administrative
Agent or any  Lender  sustains  as a result  of any  payment  being  made by the
Borrower in a currency other than that  originally  extended to the Borrower.  A
certificate of the Administrative  Agent setting forth the basis for determining
such  additional  amount or amounts  necessary to compensate the  Administrative
Agent or the applicable Lender shall be conclusively presumed to be correct save
for manifest error.

     SECTION 4.11 Indemnity. The Borrower hereby indemnifies each of the Lenders
against any loss or expense (including, without limitation, any foreign exchange
costs)  which  may  arise  or  be  attributable  to  each  Lender's   obtaining,
liquidating  or employing  deposits or other funds  acquired to effect,  fund or
maintain  any Loan (a) as a  consequence  of any failure by the Borrower to make
any payment when due of any amount due hereunder in connection with a LIBOR Rate
Loan or an Alternative  Currency Loan, (b) due to any failure of the Borrower to
borrow,  continue  or  convert  on a date  specified  therefor  in a  Notice  of
Borrowing  or  Notice  of  Conversion/Continuation  or (c)  due to any  payment,
prepayment or conversion of any LIBOR Rate Loan or any Alternative Currency Loan
on a date other than the last day of the Interest Period therefor. The amount of
such loss or expense shall be determined,  in the applicable Lender's reasonable
discretion,  based upon the  assumption  that such Lender funded its  Commitment
Percentage of the LIBOR Rate Loans in the London  interbank market and using any
reasonable  attribution or averaging methods which such Lender deems appropriate
and  practical.  A  certificate  of such  Lender  setting  forth  the  basis for
determining such amount or amounts  necessary to compensate such Lender shall be
forwarded  to the  Borrower  through  the  Administrative  Agent  and  shall  be
conclusively presumed to be correct save for manifest error.

     SECTION 4.12 Capital  Requirements.  If either (a) the  introduction of, or
any change in, or in the interpretation of, any Applicable Law or (b) compliance
with any  guideline  or request from any central  bank or  comparable  agency or
other  Governmental  Authority  (whether or not having the force of law), has or
would have the effect of  reducing  the rate of return on the capital of, or has
affected or would affect the amount of capital required to be maintained by, any
Lender or any corporation  controlling  such Lender as a consequence of, or with
reference to the Commitments and other  commitments of this type, below the rate
which such Lender or such other  corporation  could have  achieved  but for such
introduction,  change or  compliance,  then within five (5) Business  Days after
written  demand by any such Lender,  the Borrower  shall pay to such Lender from
time to time as  specified  by such  Lender  additional  amounts  sufficient  to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts submitted to the Borrower and the  Administrative  Agent by such
Lender,  shall,  in the absence of manifest error, be presumed to be correct and
binding for all purposes.

     SECTION 4.13 Taxes.

     (a)  Payments  Free and  Clear.  Except as  otherwise  provided  in Section
4.13(e),  any and all payments by the  Borrower  hereunder or under the Notes or
the Letters of Credit shall be made free and clear of and without  deduction for
any and all present or future taxes,  levies,  imposts,  deductions,  charges or
withholding, and all liabilities with respect thereto excluding, (i) in the case
of each Lender and the Administrative  Agent, income and franchise taxes imposed
by the  jurisdiction  under the laws of which such Lender or the  Administrative
Agent  (as the case may be) is  organized  or is or should  be  qualified  to do
business  or any  political  subdivision  thereof  and  (ii) in the case of each
Lender,  income and franchise taxes imposed by the jurisdiction of such Lender's
Lending  Office or any  political  subdivision  thereof  (all such  non-excluded
taxes, levies, imposts, deductions,  charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct or withhold any Taxes from or in respect of any sum payable  hereunder or
under any Note or in  respect  of any  Letter  of  Credit  to any  Lender or the
Administrative  Agent, (A) except as otherwise provided in Section 4.13(e),  the
sum payable  shall be  increased  as may be  necessary  so that after making all
required  deductions  or  withholdings  (including  deductions  or  withholdings
applicable  to  additional  sums payable under this Section 4.13) such Lender or
the  Administrative  Agent (as the case may be)  receives an amount equal to the
amount such party would have  received had no such  deductions  or  withholdings
been made, (B) the Borrower shall make such deductions or withholdings,  (C) the
Borrower shall pay the full amount deducted to the relevant taxing  authority or
other  authority in accordance  with  Applicable Law, and (D) the Borrower shall
deliver to the Administrative  Agent and such Lender evidence of such payment to
the  relevant  taxing  authority or other  Governmental  Authority in the manner
provided in Section 4.13(d).

     (b) Stamp and Other Taxes. In addition,  the Borrower shall pay any present
or future stamp,  registration,  recordation or  documentary  taxes or any other
similar fees or charges or excise or property taxes, levies of the United States
or  any  state  or  political  subdivision  thereof  or any  applicable  foreign
jurisdiction  which arise from any payment made hereunder or from the execution,
delivery or registration  of, or otherwise with respect to, this Agreement,  the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or  security  interest  in respect  thereof  (hereinafter  referred to as
"Other Taxes").

     (c)  Indemnity.  Except as  otherwise  provided  in  Section  4.13(e),  the
Borrower shall indemnify each Lender and the  Administrative  Agent for the full
amount of Taxes and Other Taxes (including,  without  limitation,  any Taxes and
Other Taxes imposed by any  jurisdiction  on amounts  payable under this Section
4.13) paid by such Lender or the  Administrative  Agent (as the case may be) and
any liability (including penalties,  interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally  asserted.  Such  indemnification  shall be made within thirty (30) days
from the date such Lender or the Administrative Agent (as the case may be) makes
written demand  therefor.  Within sixty (60) days of the written  request of the
Borrower,  the  Administrative  Agent and each Lender shall  execute and deliver
such  certificates,  forms or other documents which can be reasonably  furnished
thereby  consistent with the facts and which are reasonably  necessary to assist
the Borrower in applying for refunds of such Taxes or Other Taxes.

     (d)  Evidence  of  Payment.  Within  thirty (30) days after the date of any
payment  of  Taxes  or  Other  Taxes,   the  Borrower   shall   furnish  to  the
Administrative  Agent, at its address  referred to in Section 13.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.

     (e)  Delivery of Tax Forms.  To the extent  required by  Applicable  Law to
reduce or  eliminate  withholding  or  payment  of taxes,  each  Lender  and the
Administrative  Agent  shall  deliver  to  the  Borrower,  with  a  copy  to the
Administrative  Agent, on the Closing Date or concurrently  with the delivery of
the relevant  Assignment and  Acceptance,  as applicable,  (i) two United States
Internal Revenue Service Forms W-9, Forms W-8ECI or Forms W-8BEN,  as applicable
(or successor  forms)  properly  completed and certifying in each case that such
Lender is entitled to a complete  exemption from withholding or deduction for or
on account of any United  States  federal  income  taxes,  and (ii) an  Internal
Revenue Service Form W-8BEN or W-8ECI or successor  applicable form, as the case
may be, to establish an exemption from United States backup  withholding  taxes.
Each such Lender  further  agrees to deliver to the Borrower  with a copy to the
Administrative  Agent,  as applicable,  two Form W-9, Form W-8BEN or W-8ECI,  or
successor applicable forms or manner of certification, as the case may be, on or
before  the date that any such form  expires or  becomes  obsolete  or after the
occurrence  of any event  requiring a change in the most recent form  previously
delivered  by it to the  Borrower  certifying  in the case of a Form  W-9,  Form
W-8BEN or W-8ECI (or  successor  forms)  that such Lender is entitled to receive
payments  under this  Agreement  without  deduction or withholding of any United
States federal income taxes (unless in any such case an event (including without
limitation any change in treaty,  law or  regulation)  has occurred prior to the
date on which any such delivery  would  otherwise be required which renders such
forms  inapplicable or the exemption to which such forms relate  unavailable and
such Lender  notifies the Borrower and the  Administrative  Agent that it is not
entitled to receive payments  without  deduction or withholding of United States
federal  income  taxes) and,  in the case of a Form W-9,  Form W-8BEN or W-8ECI,
establishing   an  exemption   from  United  States  backup   withholding   tax.
Notwithstanding  anything in any Loan  Document to the  contrary,  the  Borrower
shall  not  be  required  to  pay  additional  amounts  to  any  Lender  or  the
Administrative  Agent under Section 4.13 or Section 4.10(c),  (i) if such Lender
or the  Administrative  Agent  fails to  comply  with the  requirements  of this
Section  4.13(e),  other than to the extent that such failure is due to a change
in law occurring after the date on which such Lender or the Administrative Agent
became a party to this Agreement or (ii) that are the result of such Lender's or
the  Administrative   Agent's  gross  negligence  or  willful   misconduct,   as
applicable.

     (f) Survival.  Without  prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 4.13 shall  survive the payment in full of the  Obligations  and
the termination of the Commitments.

     SECTION 4.14. Rounding and Other Consequential Changes.  Subject to Section
1.3 hereof,  without  prejudice  and in addition to any method of  conversion or
rounding  prescribed  by  any  EMU  Legislation  and  without  prejudice  to the
respective  obligations  of the  Borrower  to the  Administrative  Agent and the
Lenders and the  Administrative  Agent and the Lenders to the Borrower  under or
pursuant to this Agreement, except as expressly provided in this Agreement, each
provision of this Agreement, including, without limitation, the right to combine
currencies to effect a set-off,  shall be subject to such reasonable  changes of
interpretation as the  Administrative  Agent may from time to time specify to be
necessary or  appropriate to reflect the  introduction  of or change over to the
euro in Participating Member States.

     SECTION 4.15. Replacement of Lenders.

     (a) If any Lender requests compensation pursuant to Section 4.10 or Section
4.12, or if the Borrower is required to pay any additional  amount to any Lender
or any Governmental  Authority for the account of any Lender pursuant to Section
4.13,  then such Lender  shall use  reasonable  efforts to designate a different
lending office for funding or booking its  Extensions of Credit  hereunder or to
assign its rights and obligations hereunder to another of its offices,  branches
or  affiliates,  if,  in the  judgment  of  such  Lender,  such  designation  or
assignment  (A) would  eliminate or reduce amounts  payable  pursuant to Section
4.10,  Section 4.12 or Section  4.13,  as the case may be, in the future and (B)
would not subject such Lender to any unreimbursed  cost or expense and would not
otherwise be disadvantageous to such Lender.

     (b) If any Lender requests compensation pursuant to Section 4.10 or Section
4.12, or if the Borrower is required to pay any additional  amount to any Lender
or any Governmental  Authority for the account of any Lender pursuant to Section
4.13,  then the Borrower may, upon notice to such Lender and the  Administrative
Agent,  require  such  Lender to  assign  and  delegate,  without  recourse  (in
accordance with and subject to the restrictions contained in Section 13.10), all
of its  interests,  rights and  obligations  under this Agreement to an Eligible
Assignee  that shall  assume such  obligations  (which  assignee  may be another
Lender,  if a Lender  accepts such  assignment);  provided that (A) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld,  (B) such Lender shall have received
payment of an amount equal to the  outstanding  principal of its  Extensions  of
Credit,  accrued interest  thereon,  accrued fees,  breakage costs and all other
amounts  payable  to it  hereunder,  from the  assignee  (to the  extent of such
outstanding  principal  and accrued  interest  and fees) or the Borrower (in the
case of all other amounts) and (C) in the case of any such assignment  resulting
from a claim for  compensation  pursuant to Section 4.10 or Section  4.12,  such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required  to make any such  assignment  and  delegation  if,  prior
thereto, as a result of a waiver by such Lender or otherwise,  the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.

     (c) To the extent  that any Lender (a  "Replaced  Lender")  is  required to
assign all of its interests,  rights and obligations  under this Agreement to an
Eligible  Assignee (a "Replacement  Lender") pursuant to this Section 4.15, upon
the execution of all applicable assignment documents and the satisfaction of all
other conditions set forth herein,  the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to be a Lender  hereunder,  except
with  respect to the  indemnification  provisions  under this  Agreement,  which
provisions shall survive as to such Replaced Lender.

     SECTION 4.16. Security. The Obligations shall be secured as provided in the
Security Documents.


                                    ARTICLE V

                  CLOSING; CONDITIONS OF CLOSING AND BORROWING

     SECTION  5.1  Closing.  The  closing  shall  take  place at the  offices of
Kennedy, Covington, Lobdell & Hickman, L.L.P. at 10:00 a.m. on January 22, 2003,
or on such other date and time as the parties hereto shall mutually agree.

     SECTION 5.2  Conditions to Closing and Initial  Extensions  of Credit.  The
obligation  of the Lenders to close this  Agreement and to make the initial Loan
or issue or participate  in the initial Letter of Credit,  if any, is subject to
the satisfaction of each of the following conditions:

     (a) Executed  Loan  Documents.  The  following  Loan  Documents in form and
substance satisfactory to the Administrative Agent and each Lender:

          (i) this Agreement,

          (ii) the Revolving Credit Notes,

          (iii) the Alternative Currency Note,

          (iv) the Swingline Note,

          (v) the Subsidiary Guaranty Agreement;

          (vi) the Collateral Agreement;

          (vii) the Mortgages; and

          (viii) each other applicable Loan Document;

shall have been duly  authorized,  executed and delivered to the  Administrative
Agent by the parties  thereto,  shall be in full force and effect and no Default
or  Event of  Default  shall  exist  thereunder,  and the  Borrower  shall  have
delivered original counterparts thereof to the Administrative Agent.

     (b) Closing Certificates; etc.

          (i) Officer's  Certificate of the Borrower.  The Administrative  Agent
shall have received a certificate from a Responsible Officer of the Borrower, in
form and substance  satisfactory to the Administrative Agent, to the effect that
all  representations  and  warranties  of  the  Borrower  and  its  Subsidiaries
contained in this Agreement and the other Loan  Documents are true,  correct and
complete;  that the Borrower and its Subsidiaries are not in violation of any of
the covenants  contained in this Agreement and the other Loan  Documents;  that,
after giving  effect to the  transactions  contemplated  by this  Agreement,  no
Default  or  Event of  Default  has  occurred  and is  continuing;  and that the
Borrower and its Subsidiaries have satisfied each of the closing conditions.

          (ii)  Certificate  of Secretary  of the  Borrower and each  Subsidiary
Guarantor.  The  Administrative  Agent shall have received a certificate  of the
secretary or assistant  secretary of the Borrower and each Subsidiary  Guarantor
certifying as to the incumbency and genuineness of the signature of each officer
of the Borrower or such Subsidiary  Guarantor  executing Loan Documents to which
it is a party and  certifying  that  attached  thereto  is a true,  correct  and
complete  copy of (A) the  articles  of  incorporation  of the  Borrower or such
Subsidiary  Guarantor and all amendments  thereto,  certified by the appropriate
Governmental  Authority in its jurisdiction of incorporation,  (B) the bylaws of
the  Borrower  or such  Subsidiary  Guarantor  as in  effect on the date of such
certifications,  (C)  resolutions  duly adopted by the Board of Directors of the
Borrower and such Subsidiary Guarantor  authorizing the borrowings  contemplated
hereunder and the execution,  delivery and performance of this Agreement and the
other Loan Documents to which it is a party, and (D) each  certificate  required
to be delivered pursuant to Section 5.2(b)(iii).

          (iii) Certificates of Good Standing.  The  Administrative  Agent shall
have received (A)  certificates  as of a recent date of the good standing of the
Borrower and each  Subsidiary  Guarantor  under the laws of its  jurisdiction of
organization  and, to the extent  requested by the  Administrative  Agent,  each
other jurisdiction where the Borrower and each Subsidiary Guarantor is qualified
to do business and (B) a  certificate  of the relevant  taxing  authority of the
jurisdiction  of  organization  of the  Borrower and each  Subsidiary  Guarantor
certifying  that  such  Person  has  filed  required  tax  returns  and  owes no
delinquent taxes.

          (iv) Opinions of Counsel. The Administrative Agent shall have received
favorable  opinions of counsel to the  Borrower  and each  Subsidiary  Guarantor
addressed  to the  Administrative  Agent and the  Lenders  with  respect  to the
Borrower, the Subsidiary  Guarantors,  the Loan Documents and such other matters
as the Lenders shall request.

          (v) Tax Forms. The Administrative  Agent shall have received copies of
the United States  Internal  Revenue  Service forms required by Section  4.13(e)
hereof.

     (c) Collateral.

          (i) Filings and  Recordings.  All  filings and  recordations  that are
necessary  to perfect the security  interests  of the Lenders in the  collateral
described  in  the  Security   Documents   shall  have  been   received  by  the
Administrative  Agent and the Administrative  Agent shall have received evidence
satisfactory to the Administrative Agent that upon such filings and recordations
such security  interests  constitute  valid and perfected  first  priority Liens
therein  (subject only to Liens  permitted  pursuant to Section 10.2);  provided
that with regard to any Foreign  Subsidiary whose capital stock is to be pledged
hereunder,  (i) the  Borrower may  evidence  compliance  herewith by providing a
perfected first priority security  interest (or the equivalent  thereof pursuant
to the Applicable Laws and practices of any relevant  foreign  jurisdiction)  in
the  relevant  indicia of  ownership  of such  Foreign  Subsidiary  and (ii) the
Borrower  or the  applicable  Domestic  Subsidiary  of the  Borrower  owning the
capital stock or other membership interests of such Foreign Subsidiary shall not
be required to pledge more than that  percentage  of all issued and  outstanding
shares  of all  capital  stock or other  membership  interests  of such  Foreign
Subsidiary  the  granting  of a security  interest  in which shall not result in
material  adverse tax  consequences to the Borrower or such applicable  Domestic
Subsidiary  (it  being  acknowledged  by  the  Borrower,  the  Lenders  and  the
Administrative  Agent that, as of the Closing Date, such percentage  required to
be pledged is sixty-five percent (65%)).

          (ii) Pledged Collateral.  The Administrative Agent shall have received
original stock certificates or other certificates (or the equivalent taking into
account the Applicable Laws and practices of any relevant foreign  jurisdiction)
of each Material Domestic Subsidiary and, to the extent that the Applicable Laws
and practices of any relevant foreign  jurisdiction  provide for the issuance of
stock  certificates  or other  certificates,  each Foreign  Subsidiary  which is
directly  owned  by the  Borrower  or a  Domestic  Subsidiary  of  the  Borrower
evidencing the capital stock or other ownership  interests  pledged  pursuant to
the  Collateral  Agreement,  together  with an undated stock power for each such
certificate  duly executed in blank by the registered  owner  thereof;  provided
that  with  regard  to any  Foreign  Subsidiary  whose  stock  is to be  pledged
hereunder,  the  Borrower  may  evidence  compliance  herewith  by  providing  a
perfected first priority security  interest (or the equivalent  thereof pursuant
to the Applicable Laws and practices of any relevant  foreign  jurisdiction)  in
the relevant indicia of ownership of such Foreign Subsidiary.

          (iii)  Foreign  Security  Interests and Filings.  Notwithstanding  the
provisions  of the  foregoing  subsections  (c)(i) and (ii),  with regard to any
Foreign  Subsidiary  whose stock is to be pledged  hereunder,  (A) the  Borrower
shall not be required to deliver a foreign pledge  agreement  unless  reasonably
requested to do so by the Administrative Agent and (B) the Borrower shall not be
required  to deliver an opinion of counsel as to the  perfection,  validity  and
binding nature of the security interests created pursuant to such foreign pledge
agreement unless reasonably requested to do so by the Administrative Agent.

          (iv) Lien Search.  The  Administrative  Agent shall have  received the
results of a Lien search (including a search as to judgments, pending litigation
and tax matters) made against the Borrower and the Subsidiary  Guarantors  under
the Uniform Commercial Code (or applicable  judicial docket) as in effect in any
state in which any of its assets are located, indicating among other things that
its assets are free and clear of any Lien except for Liens permitted hereunder.

          (v) Hazard and Liability  Insurance.  The  Administrative  Agent shall
have  received  certificates  of  insurance  for the current  policy year of the
Borrower,  and, if requested by the Administrative Agent, copies (certified by a
Responsible  Officer)  of  insurance  policies  in the form  required  under the
Security Documents and otherwise in form and substance  reasonably  satisfactory
to the Administrative Agent.

          (vi) Title Insurance.  The Administrative  Agent shall have received a
marked-up  commitment  for a policy of title  insurance,  providing  coverage in
amount  satisfactory  to  the  Administrative  Agent,  insuring  Lenders'  first
priority  Liens and showing no Liens  prior to Lenders'  Liens other than for ad
valorem taxes not yet due and payable, with title insurance companies acceptable
to the  Administrative  Agent,  on each parcel of real  property  subject to the
Mortgages, with the final title insurance policies being delivered within thirty
(30) days after the Closing  Date.  Further,  the Borrower  agrees to provide or
obtain any customary  affidavits and indemnities as may be required or necessary
to obtain title insurance satisfactory to the Administrative Agent.

          (vii) Title Exceptions.  The Administrative  Agent shall have received
copies of all  recorded  documents  creating  exceptions  to the title  policies
referred to in Section 5.2(c)(vi).

          (viii) Matters Relating to Flood Hazard Properties. The Administrative
Agent  shall have  received a  certification  form of a  certification  from the
National Research Center, or any successor agency thereto, regarding each parcel
of real property securing any portion of the Obligations.

          (ix) Surveys.  The Administrative  Agent shall have received copies of
as-built surveys prepared on or prior to the Closing Date of each parcel of real
property  subject to the  Mortgages  certified by a registered  engineer or land
surveyor,  which surveys shall be in form and substance sufficient to permit the
issuance of the final title policy without  exception for matters which would be
revealed by current, accurate as-built surveys of such parcels of real property.
To the extent  that any such survey was not  prepared  within the sixty (60) day
period immediately  preceding the Closing Date, such survey shall be accompanied
by an affidavit (a "Survey  Affidavit") of an authorized  signatory of the owner
of such property  stating that there have been no improvements or  encroachments
to the property since the date of the  respective  survey such that the existing
survey is no longer accurate.  Such survey shall show the area of such property,
all boundaries of the land with courses and distances indicated, including chord
bearings and arc and chord  distances for all curves,  and shall show dimensions
and  locations  of all  easements,  private  drives,  roadways,  and other facts
materially  affecting  such  property,  and shall show such other details as the
Administrative Agent may reasonably request,  including without limitation,  any
encroachment (and the extent thereof in feet and inches) onto the property or by
any of the improvements on the property upon adjoining land or upon any easement
burdening the property;  any improvements,  to the extent  constructed,  and the
relation of the improvements by distances to the boundaries of the property,  to
any easements burdening the property,  and to the established building lines and
the street  lines;  and if  improvements  are  existing,  the  locations  of all
utilities serving the improvement.

          (x) Environmental  Assessments.  The  Administrative  Agent shall have
received a copy of an existing or updated Phase I  environmental  assessment for
each  parcel  of  real  property   subject  to  the  Mortgages  and  such  other
environmental reports reasonably requested by the Administrative Agent regarding
each  such  parcel of real  property  showing  no  environmental  conditions  or
liabilities in violation of Environmental Laws that could reasonably be expected
to have a Material Adverse Effect.

          (xi) Other Real Property  Information.  The Administrative Agent shall
have  received  such  other  certificates,  documents  and  information  as  are
reasonably requested by the Lenders, each in form and substance  satisfactory to
the Administrative Agent.

     (d) Consents; Defaults.

          (i) Governmental  and Third Party  Approvals.  The Borrower shall have
obtained all necessary  material  approvals,  authorizations and consents of any
Person and of all Governmental  Authorities and courts having  jurisdiction with
respect to the  transactions  contemplated  by this Agreement and the other Loan
Documents.

          (ii) No Injunction,  Etc. No action, suit, proceeding,  investigation,
regulation or  legislation  shall have been  instituted,  threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of, this
Agreement or the other Loan Documents or the consummation by the Borrower or any
of its Subsidiaries of the transactions contemplated hereby or thereby, or which
would be reasonably likely to have a Material Adverse Effect.

          (iii) No Event of Default.  No Default or Event of Default  shall have
occurred and be continuing.

     (e) Financial Matters.

          (i) Financial Statements. The Administrative Agent shall have received
the  audited   Consolidated   financial  statements  of  the  Borrower  and  its
Subsidiaries  for each of the Borrower's  Fiscal Years ending in 2001,  2000 and
1999, each as filed with the Securities and Exchange  Commission and prepared in
accordance with GAAP.

          (ii)  Financial  Condition   Certificate.   The  Borrower  shall  have
delivered  to the  Administrative  Agent a  certificate,  in form and  substance
satisfactory  to the  Administrative  Agent,  and  certified  as  accurate  by a
Responsible Officer, that (A) the Borrower and each of its Subsidiaries are each
Solvent as of the Closing Date, (B) the payables of the Borrower and each of its
Subsidiaries  are current and not past due as of the  Closing  Date  (except for
those  payables  which  are  being   contested  in  good  faith  by  appropriate
proceedings  diligently  conducted  and for which  adequate  reserves  have been
provided  in  accordance  with GAAP),  (C)  attached  thereto  are  calculations
evidencing  compliance  on a pro forma  basis with the  covenants  contained  in
Article  IX hereof as the most  recent  quarterly  financial  statements  of the
Borrower and its  Subsidiaries  (provided that, with respect to Section 9.3, the
Interest Coverage Ratio requirement shall be 2.00 to 1.0 for the purpose of this
Section  5.2(e)(ii)),  (D) attached thereto are  calculations  setting forth the
total net assets of each Domestic  Subsidiary of the Borrower as the most recent
quarterly  financial  statements  of the Borrower and its  Subsidiaries  for the
purpose of determining which Domestic  Subsidiaries of the Borrower are Material
Domestic  Subsidiaries  on the Closing  Date and (E) the  financial  projections
previously  delivered  to the  Administrative  Agent  represent  the good  faith
estimates  (utilizing  reasonable  assumptions)  of the financial  condition and
operations of the Borrower and its Subsidiaries as of the date thereof.

          (iii) Payment at Closing; Fee Letters. The Borrower shall have paid to
the  Administrative  Agent and the Lenders the fees set forth or  referenced  in
Section 4.3 and any other accrued and unpaid fees or  commissions  due hereunder
(including,  without limitation,  reasonable legal fees and expenses) and to any
other  Person  such  amount  as  may be  due  thereto  in  connection  with  the
transactions contemplated hereby, including all taxes, fees and other charges in
connection with the execution,  delivery,  recording, filing and registration of
any of the Loan Documents.

     (f) Miscellaneous.

          (i) Notice of Borrowing.  The Administrative Agent shall have received
(A) a Notice of Borrowing,  as applicable,  from the Borrower in accordance with
Section  2.4(a) and (B) a Notice of Account  Designation  from the  Borrower  in
accordance  with Section 2.4(b)  specifying the account or accounts to which the
proceeds of any Loans made after the Closing Date are to be disbursed.

          (ii) Existing Facility.  The Existing Facility shall be repaid in full
and  terminated,  and the  Administrative  Agent  shall have  received a pay-off
letter in form and substance  satisfactory  to it evidencing  such repayment and
termination.

          (iii)  Miscellaneous  Matters.  The  Administrative  Agent  shall have
received such  information  as it may have  requested  from the Borrower and its
Subsidiaries relating to litigation, tax, accounting,  labor, insurance, pension
liabilities  (actual  or  contingent),   leases  of  real  property,  agreements
evidencing Debt, ownership of assets by the Borrower or any of its Subsidiaries,
environmental matters, contingent liabilities and management of the Borrower and
its Subsidiaries (including, as applicable, copies of all documents, instruments
and agreements relating to such subjects), and such information shall be in form
and substance satisfactory to Administrative Agent.

          (iv) Other Documents. All opinions, certificates and other instruments
and all  proceedings in connection  with the  transactions  contemplated by this
Agreement  shall be  satisfactory  in form and  substance to the  Administrative
Agent.  The  Administrative  Agent  shall  have  received  copies  of all  other
documents,  certificates  and  instruments  reasonably  requested  thereby  with
respect to the transactions contemplated by this Agreement.

     SECTION 5.3 Conditions to All Extensions of Credit.  The obligations of the
Lenders to make any  Extensions of Credit  (including  the initial  Extension of
Credit),  convert or continue  any Loan  and/or the  Issuing  Lender to issue or
extend any Letter of Credit are  subject to the  satisfaction  of the  following
conditions  precedent  on  the  relevant  borrowing,  conversion,  continuation,
issuance or extension date:

     (a) Continuation of Representations and Warranties. The representations and
warranties  contained  in Article VI shall be true and correct on and as of such
borrowing,  conversion,  continuation,  issuance or extension date with the same
effect as if made on and as of such  date,  except  for any  representation  and
warranty made as of an earlier date,  which  representation  and warranty  shall
remain true and correct as of such earlier date.

     (b) No Existing Default. No Default or Event of Default shall have occurred
and be continuing (i) on the  borrowing,  conversion or  continuation  date with
respect to such Loan or after giving  effect to the Loans to be made,  converted
or  continued on such date or (ii) on the issue date with respect to such Letter
of Credit or after giving  effect to the issuance or extension of such Letter of
Credit on such date.

     (c)  Notices.  The  Administrative  Agent  shall have  received a Notice of
Borrowing or Notice of Conversion/Continuation, as applicable, from the Borrower
in accordance with Section 2.4(a).

     (d) Compliance with Borrowing Limits.  The Borrower shall have demonstrated
that  compliance  with  Section  2.5(b)  (i) on  the  borrowing,  conversion  or
continuation  date with respect to such Loan or after giving effect to the Loans
to be made,  converted  or  continued  on such date or (ii) on the  issuance  or
extension  date with respect to such Letter of Credit or after giving  effect to
the issuance or extension of such Letter of Credit on such date.

     (e) Additional Documents. The Administrative Agent shall have received each
additional  document,   instrument,  legal  opinion  or  other  item  reasonably
requested by it.


                                   ARTICLE VI

                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER

     SECTION 6.1  Representations  and Warranties.  To induce the Administrative
Agent and the Lenders to enter into this  Agreement and to induce the Lenders to
make Extensions of Credit,  the Borrower  hereby  represents and warrants to the
Administrative  Agent and  Lenders  both before and after  giving  effect to the
transactions contemplated hereunder that:

     (a)  Organization;  Power;  Qualification.  Each  of the  Borrower  and its
Subsidiaries (i) is duly organized,  validly existing and in good standing under
the laws of the  jurisdiction of its  incorporation  or formation,  (ii) has the
power and  authority to own its  properties  and to carry on its business as now
being and  hereafter  proposed to be conducted  and (iii) is duly  qualified and
authorized  to do business in each  jurisdiction  in which the  character of its
properties  or the  nature  of its  business  requires  such  qualification  and
authorization,  except where the failure to be so qualified could not reasonably
be expected to have a Material  Adverse Effect.  The  jurisdictions in which the
Borrower and its  Subsidiaries  are organized and qualified to do business as of
the Closing Date are described on Schedule 6.1(a).

     (b) Ownership.  Each  Subsidiary of the Borrower  (including  each Material
Domestic  Subsidiary) as of the Closing Date is listed on Schedule 6.1(b). As of
the Closing  Date,  the  capitalization  of the  Borrower  and its  Subsidiaries
consists of the number of shares,  authorized,  issued and outstanding,  of such
classes and series, with or without par value, described on Schedule 6.1(b). All
outstanding  shares have been duly  authorized  and validly issued and are fully
paid and nonassessable,  with no personal  liability  attaching to the ownership
thereof,  and not subject to any preemptive or similar rights.  The shareholders
of the Subsidiaries of the Borrower and the number of shares owned by each as of
the Closing Date are described on Schedule 6.1(b). As of the Closing Date, there
are no outstanding stock purchase warrants, subscriptions,  options, securities,
instruments  or  other  rights  of any  type or  nature  whatsoever,  which  are
convertible  into,  exchangeable  for or  otherwise  provide  for or permit  the
issuance of capital stock of the Borrower or its  Subsidiaries,  except pursuant
to plans and agreements  described in the Borrower's  periodic  filings with the
SEC.

     (c) Authorization of Agreement,  Loan Documents and Borrowing.  Each of the
Borrower and its Subsidiaries  has the right,  power and authority and has taken
all  necessary  corporate  and  other  organizational  action to  authorize  the
execution, delivery and performance of this Agreement and each of the other Loan
Documents to which it is a party in accordance with their respective terms. This
Agreement  and each of the other  Loan  Documents  have been duly  executed  and
delivered  by the  duly  authorized  officers  of the  Borrower  and each of its
Subsidiaries party thereto,  and each such document constitutes the legal, valid
and  binding  obligation  of the  Borrower  or  its  Subsidiary  party  thereto,
enforceable in accordance with its terms,  except as such  enforceability may be
limited by bankruptcy, insolvency,  reorganization,  moratorium or similar state
or  federal  debtor  relief  laws from time to time in effect  which  affect the
enforcement of creditors'  rights in general and the  availability  of equitable
remedies.

     (d) Compliance of Agreement,  Loan Documents and Borrowing with Laws,  Etc.
The execution,  delivery and performance by the Borrower and its Subsidiaries of
the Loan  Documents  to which each such Person is a party,  in  accordance  with
their respective  terms, the Extensions of Credit hereunder and the transactions
contemplated  hereby do not and will not, by the passage of time,  the giving of
notice or otherwise,  (i) require any material  Governmental Approval or violate
any material Applicable Law relating to the Borrower or any of its Subsidiaries,
(ii)  conflict  with,  result in a breach of or  constitute a default  under the
articles  of  incorporation,  bylaws or other  organizational  documents  of the
Borrower or any of its  Subsidiaries  or any  material  indenture,  agreement or
other  instrument  to  which  such  Person  is a party  or by  which  any of its
properties may be bound or any  Governmental  Approval  relating to such Person,
(iii) result in or require the creation or  imposition of any material Lien upon
or with respect to any  property now owned or hereafter  acquired by such Person
other than Liens arising  under the Loan  Documents or (iv) require any material
consent or material  authorization  of,  material filing with, or other material
act in respect  of, an  arbitrator  or  Governmental  Authority  and no material
consent  of any other  Person is  required  in  connection  with the  execution,
delivery, performance, validity or enforceability of this Agreement.

     (e) Compliance with Law; Governmental  Approvals.  Each of the Borrower and
its Subsidiaries (i) has all Governmental  Approvals  required by any Applicable
Law for it to conduct its  business,  each of which is in full force and effect,
is final and not  subject  to review on  appeal  and is not the  subject  of any
pending  or,  to its  knowledge,  threatened  attack  by  direct  or  collateral
proceeding,   (ii)  is  in  compliance  in  all  material   respects  with  each
Governmental  Approval  applicable  to it  and  in  compliance  with  all  other
Applicable Laws relating to it or any of its respective properties and (iii) has
timely filed all material reports,  documents and other materials required to be
filed by it under all Applicable  Laws with any  Governmental  Authority and has
retained all material records and documents  required to be retained by it under
Applicable Law.

     (f) Tax Returns and Payments. Each of the Borrower and its Subsidiaries has
duly filed or caused to be filed all federal tax returns,  all state tax returns
and all other  material  tax  returns  (including  material  local tax  returns)
required by Applicable Law to be filed, and has paid, or made adequate provision
for the payment of, all federal taxes,  state taxes and all other material taxes
(including material local taxes), assessments and governmental charges or levies
upon it and its property,  income, profits and assets which are 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. Such returns  accurately  reflect in all material respects
all  liability  for taxes of the Borrower and its  Subsidiaries  for the periods
covered  thereby.  There is no ongoing audit or examination or, to the knowledge
of the Borrower,  other  investigation by any Governmental  Authority of the tax
liability of the Borrower and its  Subsidiaries,  except as could not reasonably
be expected to have a Material  Adverse Effect.  No  Governmental  Authority has
asserted any Lien or other claim against the Borrower or any Subsidiary  thereof
with respect to unpaid taxes which has not been  discharged or resolved,  except
unpaid taxes which are being contested in good faith by appropriate  proceedings
diligently  conducted  and for which  adequate  reserves  have been  provided in
accordance  with GAAP.  The  charges,  accruals and reserves on the books of the
Borrower and any of its  Subsidiaries  in respect of federal,  state,  local and
other taxes for all Fiscal Years and portions  thereof since the organization of
the  Borrower  and any of its  Subsidiaries  are in the judgment of the Borrower
adequate,  and the Borrower does not anticipate any additional material taxes or
material  assessments for any of such years with respect to the Borrower and its
Subsidiaries taken as a whole.

     (g)  Intellectual   Property   Matters.   Each  of  the  Borrower  and  its
Subsidiaries  owns  or  possesses  rights  to  use  all  franchises,   licenses,
copyrights,  copyright applications,  patents, patent rights or licenses, patent
applications,  trademarks, trademark rights, service marks, service mark rights,
trade  names,  trade name  rights,  copyrights  and rights  with  respect to the
foregoing  which are  required to conduct its  business,  except for those,  the
failure of which to own or possess,  could not  reasonably be expected to have a
Material  Adverse  Effect.  To its  knowledge,  (i) no event has occurred  which
permits,  or after notice or lapse of time or both would permit,  the revocation
or  termination  of any  such  rights  and (ii)  neither  the  Borrower  nor any
Subsidiary thereof is liable to any Person for infringement under Applicable Law
with respect to any such rights as a result of its business operations,  in each
case which could reasonably be expected to have a Material Adverse Effect.

     (h) Environmental Matters.

          (i) The properties  owned,  leased or operated by the Borrower and its
Subsidiaries now or in the past do not contain,  and to their knowledge have not
previously contained, any Hazardous Materials in amounts or concentrations which
(A)  constitute or constituted a violation of applicable  Environmental  Laws or
(B) could give rise to liability under  applicable  Environmental  Laws, in each
case the result of which could reasonably be expected to have a Material Adverse
Effect;

          (ii)  The  Borrower,  each  Subsidiary  and  such  properties  and all
operations conducted in connection therewith are in compliance, and have been in
compliance,   with  all   applicable   Environmental   Laws,  and  there  is  no
contamination  at, under or about such properties or such operations which could
interfere  with the  continued  operation of such  properties or impair the fair
saleable  value  thereof,  except  to the  extent  any  such  non-compliance  or
contamination  could not  reasonably  be  expected  to have a  Material  Adverse
Effect;

          (iii) Neither the Borrower nor any Subsidiary thereof has received any
notice of violation, alleged violation,  non-compliance,  liability or potential
liability regarding  environmental matters,  Hazardous Materials,  or compliance
with  Environmental  Laws, nor does the Borrower or any Subsidiary  thereof have
knowledge or reason to believe that any such notice will be received or is being
threatened,  except as could  not  reasonably  be  expected  to have a  Material
Adverse Effect;

          (iv) Hazardous  Materials have not been  transported or disposed of by
the Borrower or any of its Subsidiaries or, to the Borrower's knowledge,  by any
other Person to or from the properties owned, leased or operated by the Borrower
and its  Subsidiaries  in  violation  of, or in a manner or to a location  which
could give rise to liability under,  Environmental  Laws, nor have any Hazardous
Materials been generated,  treated, stored or disposed of by the Borrower or any
of its Subsidiaries or, to the Borrower's knowledge,  by any other Person at, on
or under any of such  properties in violation of, or in a manner that could give
rise to liability under, any applicable Environmental Laws that could reasonably
be expected to have a Material Adverse Effect;

          (v) No judicial  proceedings or governmental or administrative  action
is  pending,  or,  to the  knowledge  of the  Borrower,  threatened,  under  any
Environmental Law to which the Borrower or any Subsidiary  thereof is or will be
named as a  potentially  responsible  party with respect to such  properties  or
operations conducted in connection therewith,  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 Borrower, any Subsidiary or such properties or
such  operations  that could  reasonably be expected to have a Material  Adverse
Effect; and

          (vi) There has been no release, or to the Borrower's knowledge, threat
of release,  of  Hazardous  Materials  at or from  properties  owned,  leased or
operated by the Borrower or any Subsidiary,  now or in the past, in violation of
or  in  amounts  or  in a  manner  that  could  give  rise  to  liability  under
Environmental  Laws that could reasonably be expected to have a Material Adverse
Effect.

         (i)   ERISA.

               (i) As of the Closing  Date,  neither the  Borrower nor any ERISA
Affiliate maintains or contributes to, or has any obligation under, any Employee
Benefit Plans other than those identified on Schedule 6.1(i);

               (ii)  The  Borrower  and  each  ERISA  Affiliate  is in  material
compliance  with all  applicable  provisions  of ERISA and the  regulations  and
published interpretations  thereunder with respect to all Employee Benefit Plans
except for any required  amendments for which the remedial  amendment  period as
defined in Section  401(b) of the Code has not yet  expired  and except  where a
failure to so comply could not reasonably be expected to have a Material Adverse
Effect.  Each  Employee  Benefit  Plan that is  intended to be  qualified  under
Section 401(a) of the Code has been  determined by the Internal  Revenue Service
to be so qualified,  and each trust related to such plan has been  determined to
be exempt under  Section  501(a) of the Code except for such plans that have not
yet received  determination  letters but for which the remedial amendment period
for submitting a determination letter has not yet expired. No liability has been
incurred by the Borrower or any ERISA  Affiliate  which remains  unsatisfied for
any  taxes  or  penalties  with  respect  to any  Employee  Benefit  Plan or any
Multiemployer  Plan except for a liability that could not reasonably be expected
to have a Material Adverse Effect;

               (iii)  As  of  the  Closing   Date,  no  Pension  Plan  has  been
terminated,  nor has any accumulated  funding  deficiency (as defined in Section
412 of the Code)  been  incurred  (without  regard to any waiver  granted  under
Section 412 of the Code),  nor has any funding waiver from the Internal  Revenue
Service been received or requested with respect to any Pension Plan, nor has the
Borrower or any ERISA Affiliate  failed to make any  contributions or to pay any
amounts due and owing as  required  by Section  412 of the Code,  Section 302 of
ERISA  or the  terms  of any  Pension  Plan  prior  to the  due  dates  of  such
contributions  under  Section 412 of the Code or Section  302 of ERISA,  nor has
there been any event  requiring any disclosure  under Section  4041(c)(3)(C)  or
4063(a) of ERISA with respect to any Pension Plan;

               (iv)  Except   where  the   failure  of  any  of  the   following
representations  to be correct in all material  respects could not reasonably be
expected to have a Material  Adverse Effect,  neither the Borrower nor any ERISA
Affiliate has: (A) engaged in a nonexempt  prohibited  transaction  described in
Section 406 of the ERISA or Section 4975 of the Code, (B) incurred any liability
to the PBGC which  remains  outstanding  other than the payment of premiums  and
there are no premium  payments  which are due and  unpaid,  (C) failed to make a
required  contribution or payment to a Multiemployer Plan, or (D) failed to make
a required installment or other required payment under Section 412 of the Code;

               (v) No Termination  Event has occurred or is reasonably  expected
to occur; and

               (vi)  Except   where  the   failure  of  any  of  the   following
representations  to be correct in all material  respects could not reasonably be
expected to have a Material Adverse Effect,  no proceeding,  claim (other than a
benefits claim in the ordinary course of business), lawsuit and/or investigation
is  existing  or, to the best  knowledge  of the  Borrower  after  due  inquiry,
threatened  concerning  or involving any (A) employee  welfare  benefit plan (as
defined in Section 3(1) of ERISA) currently  maintained or contributed to by the
Borrower or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.

          (j) Margin Stock.  Neither the Borrower nor any Subsidiary  thereof is
engaged  principally  or as one of its  activities  in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used,  directly or  indirectly,  in  Regulation U of the
Board of Governors of the Federal  Reserve  System).  No part of the proceeds of
any of the Loans or Letters of Credit  will be used for  purchasing  or carrying
margin stock or for any purpose which  violates,  or which would be inconsistent
with, the provisions of Regulation T, U or X of such Board of Governors.

          (k)  Government  Regulation.  Neither the Borrower nor any  Subsidiary
thereof is an "investment  company" or a company  "controlled" by an "investment
company" (as each such term is defined or used in the Investment  Company Act of
1940,  as amended) and neither the Borrower  nor any  Subsidiary  thereof is, or
after giving  effect to any  Extension of Credit will be,  subject to regulation
under the Public Utility Holding Company Act of 1935 or the Interstate  Commerce
Act, each as amended,  or any other  Applicable  Law which limits its ability to
incur or consummate the transactions contemplated hereby.

          (l) Employee Relations.  Each of the Borrower and its Subsidiaries has
a stable work force in place and is not, as of the  Closing  Date,  party to any
collective  bargaining  agreement nor has any labor union been recognized as the
representative  of its  employees  except as set forth on Schedule  6.1(l).  The
Borrower knows of no pending,  threatened or contemplated strikes, work stoppage
or other  collective  labor  disputes  involving  its  employees or those of its
Subsidiaries  that could  reasonably  be  expected  to have a  Material  Adverse
Effect.

          (m)  Burdensome  Provisions.  Neither the Borrower nor any  Subsidiary
thereof is a party to any indenture,  agreement,  lease or other instrument,  or
subject to any corporate or partnership  restriction,  Governmental  Approval or
Applicable  Law which could be  reasonably  expected to have a Material  Adverse
Effect.  No  Subsidiary  is party to any  agreement or  instrument  or otherwise
subject to any  restriction or encumbrance  that restricts or limits its ability
to make dividend payments or other distributions in respect of its capital stock
to the Borrower or any Subsidiary or to transfer any of its assets or properties
to the Borrower or any other  Subsidiary in each case other than existing  under
or by reason of the Loan Documents or Applicable Law.

          (n) Financial  Statements.  The (i) audited Consolidated balance sheet
of the  Borrower  and its  Subsidiaries  as of December 31, 2001 and the related
audited statements of income and retained earnings and cash flows for the Fiscal
Year then ended and (ii)  unaudited  Consolidated  balance sheet of the Borrower
and its  Subsidiaries  as of September  30, 2002 and related  unaudited  interim
statements  of  income  and  retained  earnings,  in  each  case  including  the
accompanying  notes,  copies of which have been furnished to the  Administrative
Agent and each  Lender,  are  complete  and  correct  and  fairly  present  on a
Consolidated basis the financial position,  results of operations and cash flows
of the Borrower and its  Subsidiaries  as of such dates and for the periods then
ended  (other than  customary,  year end  adjustments  for  unaudited  financial
statements). All such financial statements,  including the related schedules and
notes thereto,  have been prepared in accordance with GAAP. The Borrower and its
Subsidiaries  have no Debt,  obligation  or other  unusual  forward or long-term
commitment which is not fairly reflected in the foregoing  financial  statements
or in the notes thereto.

          (o) No Material  Adverse Change.  Except as publicly  disclosed by the
Borrower prior to the Closing Date,  since September 30, 2002, there has been no
material  adverse  change in the  properties,  assets,  liabilities  (actual  or
contingent),   business,  operations,  prospects,  or  condition  (financial  or
otherwise) of the Borrower and its Subsidiaries,  taken as a whole, and no event
has occurred or  condition  arisen that could  reasonably  be expected to have a
Material Adverse Effect.

          (p)  Solvency.  As of the Closing Date and after giving effect to each
Extension of Credit made  hereunder,  the Borrower and each of its  Subsidiaries
will be Solvent.

          (q) Titles to  Properties.  Each of the Borrower and its  Subsidiaries
has such title to the real  property  owned or leased by it as is  necessary  or
desirable to the conduct of its business and valid and legal title to all of its
personal  property and assets,  except those which have been  disposed of by the
Borrower or its  Subsidiaries  subsequent to such date which  dispositions  have
been in the  ordinary  course of business or as  otherwise  expressly  permitted
hereunder.

          (r) Liens.  None of the  properties  and assets of the Borrower or any
Subsidiary  thereof is subject to any Lien,  except Liens permitted  pursuant to
Section 10.2. No financing  statement  under the Uniform  Commercial Code of any
state  which  names  the  Borrower  or any  Subsidiary  thereof  or any of their
respective trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other  jurisdiction  and neither the Borrower nor
any Subsidiary  thereof has signed any such financing  statement or any security
agreement  authorizing  any secured party  thereunder to file any such financing
statement, except to perfect those Liens permitted by Section 10.2 hereof.

          (s) Debt and Guaranty  Obligations.  Schedule 6.1(s) is a complete and
correct  listing of all Debt and  Guaranty  Obligations  of the Borrower and its
Subsidiaries  as of the Closing Date in excess of  $3,000,000.  The Borrower and
its  Subsidiaries  have performed and are in compliance with all of the terms of
such Debt and Guaranty  Obligations and all instruments and agreements  relating
thereto,  and no default or event of default,  or event or condition  which with
notice or lapse of time or both  would  constitute  such a  default  or event of
default  on the part of the  Borrower  or any of its  Subsidiaries  exists  with
respect to any such Debt or Guaranty Obligation.

          (t)  Litigation.  Except for matters  existing on the Closing Date and
set forth on Schedule 6.1(t), there are no actions, suits or proceedings pending
nor, to the  knowledge of the Borrower,  threatened  against or in any other way
relating adversely to or affecting the Borrower or any Subsidiary thereof or any
of their respective properties in any court or before any arbitrator of any kind
or before or by any Governmental Authority that, if adversely determined,  could
reasonably be expected to have a Material Adverse Effect.

          (u) Absence of Defaults.  No event has occurred or is continuing which
constitutes  a Default or an Event of Default,  or which  constitutes,  or which
with the passage of time or giving of notice or both would constitute, a default
or  event of  default  by the  Borrower  or any  Subsidiary  thereof  under  any
judgment,  decree or order to which the Borrower or its  Subsidiaries is a party
or by  which  the  Borrower  or its  Subsidiaries  or any  of  their  respective
properties may be bound or which would require the Borrower or its  Subsidiaries
to make any payment  thereunder  prior to the scheduled  maturity date therefor,
except where such default or defaults,  if any, could not reasonably be expected
to have a Material Adverse Effect.

          (v) Senior Debt Status.  The  Obligations  of the Borrower and each of
its Subsidiaries under this Agreement and each of the other Loan Documents ranks
and  shall  continue  to rank at least  senior in  priority  of  payment  to all
Subordinated  Debt and all  senior  unsecured  Debt of each such  Person  and is
designated as "Senior Indebtedness" under all instruments and documents,  now or
in the future,  relating to all Subordinated  Debt and all senior unsecured Debt
of such Person.

          (w) Accuracy and Completeness of Information. All written information,
reports and other  papers and data  produced by or on behalf of the  Borrower or
any  Subsidiary  thereof and furnished to the Lenders were, at the time the same
were so furnished,  complete and correct in all material  respects to the extent
necessary  to give the  recipient a true and  accurate  knowledge of the subject
matter. No document  furnished or written  statement made to the  Administrative
Agent or the Lenders by the  Borrower or any  Subsidiary  thereof in  connection
with the  negotiation,  preparation or execution of this Agreement or any of the
Loan Documents  contains or will contain any untrue statement of a fact material
to the  creditworthiness  of the Borrower or its  Subsidiaries  or omits or will
omit to  state a  material  fact  necessary  in  order  to make  the  statements
contained  therein not misleading in any material  respect.  The Borrower is not
aware of any facts which it has not  disclosed in writing to the  Administrative
Agent having a Material Adverse Effect.

     SECTION  6.2  Survival  of   Representations   and  Warranties,   Etc.  All
representations   and   warranties   set  forth  in  this  Article  VI  and  all
representations and warranties contained in any certificate,  or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this  Agreement.  All  representations  and warranties
made  under this  Agreement  shall be made or deemed to be made at and as of the
Closing Date (except those that are expressly made as of a specific date), shall
survive the Closing Date and shall not be waived by the  execution  and delivery
of this Agreement,  any investigation made by or on behalf of the Lenders or any
borrowing hereunder.


                                   ARTICLE VII

                        FINANCIAL INFORMATION AND NOTICES

     Until all the  Obligations  have been  paid and  satisfied  in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section  13.11,  the  Borrower  will  furnish or cause to be furnished to the
Administrative  Agent at the  Administrative  Agent's  Office at the address set
forth in Section  13.1 and to the Lenders at their  respective  addresses as set
forth on  Schedule  1.1(a),  or such other  office as may be  designated  by the
Administrative Agent and Lenders from time to time:

     SECTION 7.1 Financial Statements and Projections.

     (a) Quarterly Financial Statements. As soon as practicable and in any event
within fifty (50) days after each fiscal quarter of each Fiscal Year,  unaudited
Consolidated  financial  statements of the Borrower and its Subsidiaries for the
fiscal  quarter  then  ended and that  portion of the  Fiscal  Year then  ended,
including  the notes  thereto,  all in  reasonable  detail and  prepared  by the
Borrower in accordance with GAAP and in compliance with the applicable reporting
requirements  of the Securities and Exchange  Commission for issuers of publicly
traded  securities,  and  certified  by  the  chief  financial  officer  or  the
controller  of the  Borrower  to present  fairly in all  material  respects  the
financial condition of the Borrower and its Subsidiaries on a Consolidated basis
as of their  respective  dates and the results of operations of the Borrower and
its Subsidiaries for the respective  periods then ended,  subject to normal year
end adjustments (it being agreed that the requirements of this subsection may be
satisfied  by delivery of the  applicable  quarterly  report on Form 10-Q of the
Borrower to the  Securities  and Exchange  Commission to the extent that: (i) it
contains the foregoing  information,  (ii) it is delivered within the applicable
time period noted herein and is  available to the  Administrative  Agent and the
Lenders on EDGAR and (iii) the Borrower  notifies the  Administrative  Agent and
the Lenders  within the time period noted herein that it is available to them on
EDGAR).

     (b) Annual  Financial  Statements.  As soon as practicable and in any event
within  one  hundred  and five (105)  days  after the end of each  Fiscal  Year,
audited  Consolidated  financial statements of the Borrower and its Subsidiaries
for the Fiscal Year then ended,  including the notes thereto,  all in reasonable
detail  and  certified  by an  independent  public  accounting  firm  reasonably
acceptable to the Administrative  Agent in accordance with GAAP, and accompanied
by a report  thereon  by such  independent  public  accounting  firm that is not
qualified  with respect to scope  limitations  imposed by the Borrower or any of
its  Subsidiaries  or with  respect to  accounting  principles  followed  by the
Borrower or any of its Subsidiaries not in accordance with GAAP (it being agreed
that the  requirements  of this  subsection  may be satisfied by delivery of the
applicable  annual  report on Form 10-K of the  Borrower to the  Securities  and
Exchange   Commission  to  the  extent  that:  (i)  it  contains  the  foregoing
information, (ii) it is delivered within the applicable time period noted herein
and is available to the Administrative  Agent and the Lenders on EDGAR and (iii)
the Borrower notifies the  Administrative  Agent and the Lenders within the time
period noted herein that it is available to them on EDGAR).

     SECTION  7.2  Officer's  Compliance  Certificate.  At each  time  financial
statements  are delivered  pursuant to Sections  7.1(a) or (b) and at such other
times as the Administrative Agent shall reasonably request, a certificate of the
chief financial officer,  the controller or the treasurer of the Borrower in the
form of Exhibit F attached hereto (an "Officer's Compliance Certificate").

     SECTION 7.3 Accountants' Certificate. At each time financial statements are
delivered  pursuant to Section 7.1(b), a certificate from the independent public
accountants certifying such financial statements addressed to the Administrative
Agent for the benefit of the Lenders and stating that, in connection  with their
audit,  nothing  came to their  attention  that caused them to believe  that the
Borrower failed to comply with the terms, covenants, provisions or conditions of
Article IX of this Agreement insofar as they relate to accounting matters.

     SECTION 7.4 Other Reports. Such other information regarding the operations,
business  affairs  and  financial  condition  of  the  Borrower  or  any  of its
Subsidiaries as the Administrative Agent or any Lender may reasonably request.

     SECTION 7.5 Notice of Litigation and Other Matters. Prompt (but in no event
later  than ten (10) days after an officer  of the  Borrower  obtains  knowledge
thereof) telephonic and written notice of:

     (a) the commencement of (i) all proceedings and investigations by or before
any Governmental  Authority and (ii) all actions and proceedings in any court or
before any  arbitrator  against or  involving  the  Borrower  or any  Subsidiary
thereof or any of their respective  properties,  assets or businesses  which, if
adversely  determined,  could  reasonably be expected to have a Material Adverse
Effect;

     (b) any notice of any violation  received by the Borrower or any Subsidiary
thereof from any  Governmental  Authority  including,  without  limitation,  any
notice of violation of  Environmental  Laws, which violation could reasonably be
expected to have a Material Adverse Effect;

     (c) any labor  controversy that has resulted in, or threatens to result in,
a strike or other work action  against the  Borrower or any  Subsidiary  thereof
that could reasonably be expected to have a Material Adverse Effect;

     (d) any attachment, judgment, lien, levy or order exceeding $3,000,000 that
may be assessed  against or  threatened  against the Borrower or any  Subsidiary
thereof;

     (e) (i) any Default or Event of Default or (ii) the occurrence or existence
of any event or  circumstance  that could  reasonably  be  expected  to become a
Default or Event of Default;

     (f) (i) any  unfavorable  determination  letter from the  Internal  Revenue
Service  regarding the  qualification  of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any ERISA  Affiliate of the PBGC's  intent to terminate  any Pension
Plan or to have a trustee  appointed to administer  any Pension Plan,  (iii) all
notices  received by the Borrower or any ERISA  Affiliate  from a  Multiemployer
Plan  sponsor  concerning  the  imposition  or  amount of  withdrawal  liability
pursuant to Section 4202 of ERISA and (iv) the Borrower  obtaining  knowledge or
reason to know that the Borrower or any ERISA  Affiliate has filed or intends to
file a  notice  of  intent  to  terminate  any  Pension  Plan  under a  distress
termination within the meaning of Section 4041(c) of ERISA; and

     (g) any event which makes any of the  representations  set forth in Section
6.1 inaccurate in any respect (provided that, with respect to any representation
set forth in  Section  6.1 that is not  subject to a  materiality  or a Material
Adverse  Effect  qualification,   any  event  which  makes  such  representation
inaccurate in any material respect).

     SECTION 7.6  Accuracy of  Information.  All written  information,  reports,
statements  and other papers and data  furnished by or on behalf of the Borrower
to the  Administrative  Agent or any Lender whether pursuant to this Article VII
or any other  provision of this  Agreement,  or any of the  Security  Documents,
shall, at the time the same is so furnished, comply with the representations and
warranties set forth in Section 6.1(w).


                                  ARTICLE VIII

                              AFFIRMATIVE COVENANTS

     Until all of the  Obligations  have been paid and satisfied in full and the
Commitments terminated,  unless consent has been obtained in the manner provided
for in Section 13.11, the Borrower will, and will cause each of its Subsidiaries
to:

     SECTION 8.1 Preservation of Corporate Existence and Related Matters. Except
as permitted  by Section  10.4,  preserve  and  maintain its separate  corporate
existence and all rights,  franchises,  licenses and privileges necessary to the
material conduct of its business,  and qualify and remain qualified as a foreign
corporation  and  authorized  to do business in each  jurisdiction  in which the
failure to so qualify could  reasonably  be expected to have a Material  Adverse
Effect.

     SECTION 8.2 Maintenance of Property. In addition to the requirements of any
of the Security  Documents,  protect and preserve all  properties  useful in and
material to its business,  including copyrights,  patents,  trade names, service
marks  and  trademarks;  maintain  in  good  working  order  and  condition  all
buildings,  equipment and other  tangible real and personal  property;  and from
time to time make or cause to be made all renewals,  replacements  and additions
to such property necessary for the conduct of its business, so that the business
carried on in connection therewith may be conducted in a commercially reasonable
manner.

     SECTION  8.3  Insurance.  Maintain  insurance  with  financially  sound and
reputable  insurance  companies  against  such risks and in such  amounts as are
customarily  maintained by similar businesses  (including,  without  limitation,
hazard and business interruption  coverage) and as may be required by Applicable
Law and as are required by any Security  Documents,  and on the Closing Date and
from  time to time  thereafter  deliver  to the  Administrative  Agent  upon its
request a detailed  list of the insurance  then in effect,  stating the names of
the insurance companies,  retention amounts,  the amounts of the insurance,  the
dates of the expiration thereof and the properties and risks covered thereby.

     SECTION 8.4 Accounting Methods and Financial Records.  Maintain a system of
accounting,  and keep such books,  records and accounts (which shall be true and
complete in all material  respects) as may be required or as may be necessary to
permit the  preparation of financial  statements in accordance  with GAAP and in
compliance  with  the   regulations  of  any   Governmental   Authority   having
jurisdiction over it or any of its properties.

     SECTION 8.5 Payment and  Performance  of  Obligations.  Pay and perform all
Obligations  under  this  Agreement  and the other  Loan  Documents,  and pay or
perform (a) all taxes,  assessments and other  governmental  charges that may be
levied  or  assessed  upon  it or  any  of  its  property,  and  (b)  all  other
indebtedness,  obligations  and  liabilities in accordance  with customary trade
practices;  provided,  that the Borrower or such Subsidiary may contest any item
described  in clauses  (a) or (b) of this  Section  8.5 in good faith so long as
adequate reserves are maintained with respect thereto in accordance with GAAP.

     SECTION  8.6  Compliance  With Laws and  Approvals.  Observe  and remain in
compliance  in all material  respects with all  Applicable  Laws and maintain in
full force and effect all Governmental Approvals, in each case applicable to the
conduct of its business.

     SECTION 8.7  Environmental  Laws.  In addition to and without  limiting the
generality  of Section 8.6, (a) comply with,  and ensure such  compliance by all
tenants and  subtenants,  if any,  with all  applicable  Environmental  Laws and
obtain and comply with and maintain, and ensure that all tenants and subtenants,
if any,  obtain and comply with and maintain,  any and all licenses,  approvals,
notifications,  registrations  or permits  required by applicable  Environmental
Laws,  except to the extent  that the failure to do so could not  reasonably  be
expected  to have a Material  Adverse  Effect,  (b)  conduct  and  complete  all
investigations,  studies,  sampling and testing,  and all remedial,  removal and
other actions  required under  Environmental  Laws,  and promptly  comply in all
respects with all lawful orders and  directives  of any  Governmental  Authority
regarding  Environmental  Laws, except to the extent that such actions are being
contested  in good  faith by  appropriate  proceedings,  adequate  reserves  are
maintained with respect to such actions in accordance with GAAP and the pendency
of such  actions  could not  reasonably  be expected to have a Material  Adverse
Effect, and (c) defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective parents, Subsidiaries,  Affiliates, employees,
agents, officers and directors, from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise,  arising out of, or in any way
relating  to  the  presence  of  Hazardous  Materials,   or  the  violation  of,
noncompliance  with or liability under any Environmental  Laws applicable to the
operations of the Borrower or any such Subsidiary,  or any orders,  requirements
or demands of  Governmental  Authorities  related  thereto,  including,  without
limitation,  reasonable  attorney's and  consultant's  fees,  investigation  and
laboratory fees, response costs, court costs and litigation expenses,  except to
the extent that any of the foregoing  directly result from the gross  negligence
or willful misconduct of the party seeking indemnification therefor.

     SECTION 8.8 Compliance with ERISA. In addition to and without  limiting the
generality  of Section 8.6, (a) except where the failure to so comply could not,
individually  or in the  aggregate,  reasonably  be  expected to have a Material
Adverse Effect, (i) comply with all material applicable  provisions of ERISA and
the  regulations  and published  interpretations  thereunder with respect to all
Employee  Benefit  Plans,  (ii) not take any  action or fail to take  action the
result of which could be a  liability  to the PBGC or to a  Multiemployer  Plan,
(iii) not  participate  in any prohibited  transaction  that could result in any
civil  penalty  under ERISA or tax under the Code and (iv) operate each Employee
Benefit  Plan in such a manner  that  will not  incur  any tax  liability  under
Section  4980B of the Code or any  liability  to any  qualified  beneficiary  as
defined in Section 4980B of the Code and (b) furnish to the Administrative Agent
upon the  Administrative  Agent's request such additional  information about any
Employee  Benefit  Plan as may be  reasonably  requested  by the  Administrative
Agent.

     SECTION 8.9 Compliance  With  Agreements.  Comply in all material  respects
with each term,  condition and provision of all material leases,  agreements and
other instruments  entered into in the conduct of its business;  provided,  that
the  Borrower  or any such  Subsidiary  may  contest  any such  material  lease,
agreement or other  instrument in good faith through  applicable  proceedings so
long as adequate reserves are maintained in accordance with GAAP.

     SECTION  8.10  Visits  and  Inspections.   Permit  representatives  of  the
Administrative Agent or any Lender, from time to time upon reasonable notice, to
visit and inspect its  properties;  inspect,  audit and make  extracts  from its
books,  records and files,  including,  but not limited to,  management  letters
prepared by independent  accountants;  and discuss with its principal  officers,
and its independent accountants,  its business, assets,  liabilities,  financial
condition, results of operations and business prospects.

     SECTION 8.11 Additional Subsidiaries and Additional Collateral.

     (a) Material Domestic Subsidiaries.  Notify the Administrative Agent of (1)
the creation or  acquisition  of any  Material  Domestic  Subsidiary  or (2) any
Domestic  Subsidiary of the Borrower becoming a Material Domestic  Subsidiary as
evidenced by the information set forth in the Officer's  Compliance  Certificate
delivered  pursuant to Section 7.2, and  promptly  thereafter  (and in any event
within   thirty  (30)  days),   cause  to  be  executed  and  delivered  to  the
Administrative  Agent (i) a duly executed Joinder  Agreement  (pursuant to which
such Material Domestic  Subsidiary shall become party to the Guaranty Agreement,
the Collateral Agreement and any other applicable Security Documents), (ii) such
other  instruments  and  documents  and other  items of the type  required to be
delivered  pursuant  to Section  5.2(c),  all in form and  substance  reasonably
satisfactory to the Administrative  Agent, as may be reasonably  required by the
Administrative  Agent to obtain a first priority  perfected security interest in
all personal  property and real  property of such Material  Domestic  Subsidiary
(subject  to  Permitted  Liens),   (iii)  such  closing  documents  and  closing
certificates  of the type required to be delivered  pursuant to Section  5.2(b),
including,  without  limitation,  favorable  legal  opinions  addressed  to  the
Administrative   Agent  and  the  Lenders  in  form  and  substance   reasonably
satisfactory  thereto with respect to such duly executed Joinder  Agreement (and
the  Guaranty  Agreement,  the  Collateral  Agreement  and any other  applicable
Security Documents to which such Material Domestic Subsidiary shall become party
thereto in connection therewith), in each case as may reasonably be requested by
the Administrative  Agent, and (iv) such other documents and certificates as may
be reasonably requested by the Administrative Agent.

     (b) Non-Material Domestic Subsidiaries.  Notify the Administrative Agent of
the  creation  or  acquisition  of any  Non-Material  Domestic  Subsidiary,  and
promptly  thereafter (and in any event within forty-five (45) days), cause to be
executed and  delivered to the  Administrative  Agent,  in each case only to the
extent  requested  by the  Administrative  Agent,  (i) a duly  executed  Joinder
Agreement  (pursuant to which the Borrower or the applicable Domestic Subsidiary
of the Borrower  shall pledge to the  Administrative  Agent the capital stock of
such  Non-Material  Domestic  Subsidiary),   (ii)  such  other  instruments  and
documents  and other  items of the type  required  to be  delivered  pursuant to
Section  5.2(c),  all in  form  and  substance  reasonably  satisfactory  to the
Administrative  Agent, as may be reasonably required by the Administrative Agent
to obtain a first priority  perfected  security interest in the capital stock of
such  Non-Material  Domestic  Subsidiary  and (iii)  such  other  documents  and
certificates as may be reasonably requested by the Administrative Agent.

     (c) Foreign  Subsidiaries.  Notify the Administrative Agent of the creation
or acquisition of any Foreign Subsidiary which is directly owned by the Borrower
or a Domestic  Subsidiary of the Borrower,  and promptly  thereafter (and in any
event within  forty-five  (45) days),  cause to be executed and delivered to the
Administrative  Agent,  in  each  case  only  to  the  extent  requested  by the
Administrative  Agent, (i) a duly executed Joinder Agreement  (pursuant to which
the Borrower or the applicable  Domestic Subsidiary of the Borrower shall pledge
to  the  Administrative  Agent  no  more  that  percentage  of  all  issued  and
outstanding  shares of all capital stock or other  membership  interests of such
Foreign Subsidiary the granting of a security interest in which shall not result
in material adverse tax consequences to the Borrower or the applicable  Domestic
Subsidiary  (it  being  acknowledged  by  the  Borrower,  the  Lenders  and  the
Administrative  Agent that, as of the Closing Date, such percentage  required to
be  pledged is  sixty-five  percent  (65%)),  (ii) such  other  instruments  and
documents  and other  items of the type  required  to be  delivered  pursuant to
Section  5.2(c),  all in  form  and  substance  reasonably  satisfactory  to the
Administrative  Agent, as may be reasonably required by the Administrative Agent
to obtain a first priority  perfected  security interest in the capital stock of
such Foreign Subsidiary,  (iii) such closing documents and closing  certificates
of the type  required to be  delivered  pursuant to Section  5.2(b),  including,
without  limitation,  favorable legal opinions  addressed to the  Administrative
Agent and the Lenders in form and substance reasonably satisfactory thereto with
respect to such duly executed  Joinder  Agreement (and the Collateral  Agreement
and any  other  applicable  Security  Documents  to which the  Borrower  (or the
applicable  Domestic  Subsidiary) and such Foreign Subsidiary shall become party
thereto in connection therewith), in each case as may reasonably be requested by
the Administrative  Agent, and (iv) such other documents and certificates as may
be  reasonably  requested  by  the  Administrative  Agent.  Notwithstanding  the
provisions  of the  foregoing  subsection  (b)(i),  the  Borrower  may  evidence
compliance with such  subsection  (b)(i) by providing a perfected first priority
security interest (or the equivalent thereof pursuant to the Applicable Laws and
practices  of any relevant  foreign  jurisdiction)  in the  relevant  indicia of
ownership of such Foreign Subsidiary.

     (d) Additional Real Property Collateral. Notify the Administrative Agent of
the  acquisition  of any real property by the Borrower or any Material  Domestic
Subsidiary  that is of the same type and character of the Collateral  subject to
any  Security  Document,  but  that  is not  subject  to the  existing  Security
Documents   (including  pursuant  to  any  after-acquired   property  provisions
thereof), and any other event or condition that may require additional action of
any nature in order to preserve the  effectiveness  and perfected  status of the
liens and security  interests of the  Administrative  Agent and the Lenders with
respect to such real  property  pursuant  to the  Security  Documents  and,  and
promptly  thereafter  (and in any event  within  thirty (30) days),  cause to be
executed and  delivered to the  Administrative  Agent (i) such  instruments  and
documents  and other  items of the type  required  to be  delivered  pursuant to
Section  5.2(c),  all in  form  and  substance  reasonably  satisfactory  to the
Administrative  Agent, as may be reasonably required by the Administrative Agent
to obtain a first  priority  perfected  security  interest in such real property
(subject  to Liens  permitted  pursuant  to  Section  10.2),  (ii) such  closing
documents and closing certificates of the type required to be delivered pursuant
to  Section  5.2(b),  in  form  and  substance  reasonably  satisfactory  to the
Administrative  Agent and the  Lenders  with  respect  to such  instruments  and
documents,  in each case as may  reasonably  be requested by the  Administrative
Agent,  and (iii) such other  documents  and  certificates  as may be reasonably
requested by the Administrative Agent.

     SECTION 8.12 Use of Proceeds.  Use the proceeds of the Extensions of Credit
(a) to refinance the Existing  Facility and (b) for working  capital and general
corporate  requirements  of the Borrower  and its  Subsidiaries,  including  the
payment  of  certain  fees  and  expenses   incurred  in  connection   with  the
transactions contemplated by this Agreement.

     SECTION  8.13  Further  Assurances.  Make,  execute  and  deliver  all such
additional and further acts, things, deeds and instruments as the Administrative
Agent the Required  Lenders  (through the  Administrative  Agent) may reasonably
require to document and consummate the transactions  contemplated  hereby and to
vest  completely  in and insure the  Administrative  Agent and the Lenders their
respective rights under this Agreement, the Notes, the Letters of Credit and the
other Loan Documents.


                                   ARTICLE IX

                               FINANCIAL COVENANTS

     Until all of the  Obligations  have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 13.11, the Borrower and its Subsidiaries on a Consolidated basis will
not:

     SECTION 9.1 Leverage  Ratio. As of any fiscal quarter end, permit the ratio
of (a) Total Funded Debt on such date,  to (b) EBITDA for the period of four (4)
consecutive  fiscal quarters ending on or immediately  prior to such date, to be
greater than 2.50 to 1.00.

     SECTION 9.2 Consolidated Net Worth.  Permit, at any time,  Consolidated Net
Worth to be less than the sum of (a)  $135,000,000  plus (b) an amount  equal to
fifty percent (50%) of aggregate Net Income of the Borrower and its Subsidiaries
since  September  30, 2002;  provided  that,  in the event that Borrower and its
Subsidiaries on a Consolidated basis have a net loss for any fiscal quarter, Net
Income  for  purposes  of this  Section  9.2 shall be deemed to be zero for such
fiscal quarter.

     SECTION 9.3 Interest  Coverage  Ratio.  As of any fiscal quarter end during
the periods set forth below, permit the ratio of (a) EBIT for the period of four
(4) consecutive  fiscal quarters ending on or immediately prior to such date, to
(b)  Interest  Expense for the period of four (4)  consecutive  fiscal  quarters
ending on or immediately  prior to such date, to be less than the  corresponding
ratio set forth below:

Period                                                               Ratio
------                                                               -----
Closing Date through and including December 31, 2003             2.25 to 1.00
January 1, 2004 and thereafter                                   2.50 to 1.00

     SECTION 9.4 Capital  Expenditures.  During any Fiscal Year,  permit Capital
Expenditures to be greater than the sum of (i) one hundred thirty percent (130%)
of depreciation  and amortization  expense  (calculated in accordance with GAAP)
for the prior Fiscal Year and (ii) $5,000,000.


                                    ARTICLE X

                               NEGATIVE COVENANTS

     Until all of the  Obligations  have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in  Section  13.11,  the  Borrower  has  not  and  will  not  permit  any of its
Subsidiaries to:

     SECTION 10.1 Limitations on Debt. Create,  incur, assume or suffer to exist
any Debt except:

     (a) the Obligations (excluding any Hedging Obligations);

     (b)  Debt  incurred  in  connection   with  a  Hedging   Agreement  with  a
counterparty and upon terms and conditions  (including interest rate) reasonably
satisfactory to the Administrative Agent;  provided,  that any counterparty that
is a  Lender  or The  Bank of  Montreal  shall  be  deemed  satisfactory  to the
Administrative Agent;

     (c) Debt  existing on the Closing Date and not  otherwise  permitted  under
this  Section  10.1,  as  set  forth  on  Schedule  6.1(s),   and  the  renewal,
refinancing,  extension and  replacement  (but not the increase in the aggregate
principal amount) thereof;

     (d)  Guaranty  Obligations  in favor of the  Administrative  Agent  for the
benefit of the Administrative Agent and the Lenders;

     (e)  unsecured  Debt of the Borrower and the  Domestic  Subsidiaries  in an
aggregate amount not to exceed $5,000,000 on any date of determination (provided
that such  Debt may be  secured  to the  extent  that any such Debt is  created,
incurred,  assumed or suffered to exist in  connection  with Capital  Leases and
purchase money financing);

     (f) Debt of the Foreign  Subsidiaries in an aggregate  amount not to exceed
$10,000,000 on any date of determination;

     (g) intercompany Debt (i) between the Borrower and any Domestic  Subsidiary
of the Borrower or between any Domestic Subsidiary of the Borrower and any other
Domestic  Subsidiary of the Borrower,  (ii) between the Borrower and any Foreign
Subsidiary of the Borrower or between the Borrower or any Domestic Subsidiary of
the Borrower and any Foreign  Subsidiary  of the Borrower and (iii)  between any
Foreign  Subsidiary  of the Borrower  and any other  Foreign  Subsidiary  of the
Borrower; and

     (h)  Debt of any  Person  acquired  in  accordance  with  Section  10.3(c),
including  any renewal,  extension or  refinancing,  but not any increase in the
aggregate principal amount, thereof (provided that such Debt was not incurred in
connection  with such  acquisition);  provided,  that no agreement or instrument
with respect to Debt  permitted to be incurred by this Section  shall  restrict,
limit or  otherwise  encumber  (by  covenant  or  otherwise)  the ability of any
Subsidiary  of the  Borrower to make any  payment to the  Borrower or any of its
Subsidiaries (in the form of dividends,  intercompany advances or otherwise) for
the purpose of enabling the Borrower to pay the Obligations.

     SECTION  10.2  Limitations  on Liens.  Create,  incur,  assume or suffer to
exist,  any  Lien  on or  with  respect  to  any  of its  assets  or  properties
(including,  without  limitation,  shares of  capital  stock or other  ownership
interests), real or personal, whether now owned or hereafter acquired, except:

     (a) Liens for taxes,  assessments and other governmental  charges or levies
(excluding  any  Lien  imposed  pursuant  to any of the  provisions  of ERISA or
Environmental  Laws)  not yet due or as to which the  period  of grace,  if any,
related  thereto has not expired or which are being  contested in good faith and
by  appropriate  proceedings  if adequate  reserves are maintained to the extent
required by GAAP;

     (b)  the  claims  of  materialmen,   mechanics,   carriers,   warehousemen,
processors, landlords or other similar parties for labor, materials, supplies or
rentals  incurred in the ordinary course of business,  (i) which are not overdue
for a period of more than thirty (30) days or (ii) which are being  contested in
good faith and by appropriate proceedings;

     (c) Liens  consisting of deposits or pledges made in the ordinary course of
business in connection with, or to secure payment of, obligations under workers'
compensation, unemployment insurance or similar legislation;

     (d) Liens constituting  encumbrances in the nature of zoning  restrictions,
easements  and  rights or  restrictions  of record on the use of real  property,
which in the  aggregate are not  substantial  in amount and which do not, in any
case,  detract from the value of such  property or impair the use thereof in the
ordinary conduct of business;

     (e) Liens of the Administrative Agent for the benefit of the Administrative
Agent and the Lenders;

     (f) Liens not otherwise  permitted by this Section 10.2 and in existence on
the Closing Date and described on Schedule 10.2;

     (g) (i) Liens securing Debt incurred in connection  with Capital Leases and
purchase  money  Debt (in each case to the  extent  that such Debt is  permitted
under  Section  10.1(e));   provided  that  (A)  such  Liens  shall  be  created
substantially simultaneously with the acquisition or lease of the related asset,
(B) such Liens do not at any time encumber any property  other than the property
financed  by such  Debt,  (C) the  amount of such Debt  secured  thereby  is not
increased  and (D) the  principal  amount of such Debt  secured by any such Lien
shall at no time  exceed one hundred  percent  (100%) of the  original  purchase
price or lease  payment  amount of such property at the time it was acquired and
(ii) Liens on the assets of any Foreign Subsidiary securing Debt of such Foreign
Subsidiary (to the extent that such Debt is permitted under Section 10.1(f));

     (h) Liens in favor of the Borrower or a Domestic Subsidiary of the Borrower
on assets of any other Subsidiary of the Borrower;

     (i) Liens securing judgments not giving rise to an Event of Default so long
as (i) such Lien is adequately  bonded and (ii) any appropriate legal proceeding
which may have been duly  initiated  for the review of such  judgment  shall not
have been finally  terminated or the period within which such  proceeding may be
initiated shall not have expired;

     (j) Liens  encumbering  deposits  made to secure  obligations  arising from
statutory,  regulatory,  contractual or warranty requirements of the Borrower or
any of its Subsidiaries, including rights of offset and set-off, incurred in the
ordinary course of business;

     (k) Liens in favor of custom and revenue authorities arising as a matter of
law to secure  payment of custom duties in connection  with the  importation  of
goods in the ordinary course of business;

     (l) Liens arising from the precautionary  filing of Uniform Commercial Code
financing statements (or similar foreign counterparts) regarding leases; and

     (m) rights of setoff or  bankers'  liens upon  deposits of cash in favor of
banks or  other  financial  institutions  in the  ordinary  course  of  business
(provided that, to the extent requested by the  Administrative  Agent, such bank
or other  financial  institution  has executed and  delivered a deposit  account
control  agreement  with  respect to such  deposits  pursuant to the  Collateral
Agreement).

     SECTION 10.3 Limitations on Loans, Advances,  Investments and Acquisitions.
Purchase,  own,  invest in or otherwise  acquire,  directly or  indirectly,  any
capital stock, interests in any partnership or joint venture (including, without
limitation, the creation or capitalization of any Subsidiary),  evidence of Debt
or other obligation or security,  substantially all or a portion of the business
or assets of any other Person or any other investment or interest  whatsoever in
any other Person, or make or permit to exist, directly or indirectly, any loans,
advances or extensions of credit to, or any investment in cash or by delivery of
property in, any Person except:

     (a) investments (i) existing on the Closing Date in  Subsidiaries,  (ii) in
Subsidiaries  formed or acquired  after the Closing Date so long as the Borrower
and its Subsidiaries  comply with the applicable  provisions of Section 8.11 and
(iii)  existing  on the  Closing  Date  in  the  form  of  loans,  advances  and
investments described on Schedule 10.3;

     (b)   investments  in  (i)   marketable   direct   obligations   issued  or
unconditionally guaranteed by the United States of America or any agency thereof
maturing  within one  hundred  twenty  (120)  days from the date of  acquisition
thereof,  (ii)  commercial  paper maturing no more than one hundred twenty (120)
days from the date of creation  thereof and currently  having the highest rating
obtainable  from either  Standard & Poor's Ratings  Services,  a division of The
McGraw-Hill   Companies,   Inc.  or  Moody's  Investors  Service,   Inc.,  (iii)
certificates of deposit maturing no more than one hundred twenty (120) days from
the date of creation thereof issued by commercial banks  incorporated  under the
laws of the United States of America, each having combined capital,  surplus and
undivided  profits of not less than  $500,000,000  and having a rating of "A" or
better by a nationally  recognized rating agency;  provided,  that the aggregate
amount  invested in such  certificates  of deposit  shall not at any time exceed
$5,000,000 for any one such  certificate of deposit and  $10,000,000 for any one
such bank, or (iv) time deposits maturing no more than thirty (30) days from the
date of creation  thereof with commercial  banks or savings banks or savings and
loan  associations  each having membership either in the FDIC or the deposits of
which are insured by the FDIC and in amounts not exceeding  the maximum  amounts
of insurance thereunder; and

     (c)  investments by the Borrower or any of its  Subsidiaries in the form of
acquisitions of all,  substantially  all or a majority of the stock or assets of
the business or a line of business (whether by the acquisition of capital stock,
assets or any  combination  thereof) of any other  Person  (each,  a  "Permitted
Acquisition"); provided that:

          (i) the Person to be acquired shall be a going  concern,  engaged in a
business,  or the assets to be  acquired  shall be used in a  business  which is
similar,  related or  complimentary  to the line of business of the Borrower and
its Subsidiaries as required pursuant to Section 10.12;

          (ii) the Borrower or such Subsidiary (unless the Person to be acquired
complies with Section 8.11), as applicable, shall be the surviving Person and no
Change in Control shall have been effected thereby;

          (iii)  the  Borrower  shall  have  delivered  written  notice  of such
proposed   acquisition  to  the  Administrative   Agent  (for  delivery  by  the
Administrative Agent to the Lenders) and the Lenders, which notice shall include
the proposed  closing date of such  proposed  acquisition,  not less than twenty
(20) calendar days prior to such proposed closing date;

          (iv) the Borrower  shall have  delivered to the  Administrative  Agent
copies of the Permitted Acquisition Documents;

          (v) the Borrower shall have certified on or before the closing date of
such proposed acquisition, in writing and in a form reasonably acceptable to the
Administrative  Agent and the Lenders,  that such proposed  acquisition has been
approved by the board of directors or equivalent governing body of the Person to
be acquired;

          (vi) no  Default  or Event  of  Default  shall  have  occurred  and be
continuing both before and after giving effect to such proposed acquisition;

          (vii) the Borrower shall have complied with Section 8.11;

          (viii) the Borrower shall have delivered to the  Administrative  Agent
and the Lenders an Officer's Compliance Certificate dated as of the closing date
of such proposed  acquisition  demonstrating,  in form and substance  reasonably
satisfactory  thereto,  pro forma  compliance  with each  covenant  contained in
Article IX (both before and after giving  effect to such  proposed  acquisition)
(it being agreed by the Borrower,  the Administrative Agent and the Lenders that
such calculations  shall assume that all Debt assumed or incurred in conjunction
with such proposed  acquisition  was incurred at the beginning of the applicable
calculation  period  and that all  income  and  expenses  associated  with  such
proposed  acquisition  shall be treated as earned and included in the  pro-forma
calculations (both on a consolidated and consolidating basis));

          (ix) the Borrower  shall have at least  $10,000,000  in Liquidity both
before and after giving effect to such proposed acquisition; and

          (x) the  Person to be  acquired  is not  subject to  material  pending
litigation which could reasonably be expected to have a Material Adverse Effect;

     (d) intercompany  loans and advances in connection with  intercompany  Debt
permitted under Section 10.1(g);

     (e) Hedging Agreements permitted pursuant to Section 10.1; and

     (f) purchases of assets in the ordinary course of business.

     SECTION 10.4 Limitations on Mergers and Liquidation.  Merge, consolidate or
enter into any similar  combination with any other Person or liquidate,  wind-up
or dissolve itself (or suffer any liquidation or dissolution) except:

     (a) (i) any Wholly-Owned Domestic Subsidiary of the Borrower may merge with
the  Borrower or any other  Wholly-Owned  Domestic  Subsidiary  of the  Borrower
(provided that (1) in any merger  involving the Borrower,  the Borrower shall be
the surviving  entity and (2) in any merger  involving any Subsidiary  Guarantor
(and  not  involving  the  Borrower),  such  Subsidiary  Guarantor  shall be the
surviving entity) and (ii) any Wholly-Owned  Foreign  Subsidiary of the Borrower
may merge with any other Wholly-Owned Foreign Subsidiary of the Borrower;

     (b) (i) any Wholly-Owned Domestic Subsidiary of the Borrower may merge into
the  Person  such  Wholly-Owned  Domestic  Subsidiary  was  formed to acquire in
connection  with an acquisition  permitted by Section  10.3(c)  (provided  that,
after giving  effect to such  acquisition,  such Person shall be a  Wholly-Owned
Domestic  Subsidiary and shall comply with the requirements set forth in Section
8.11) and (ii) any  Wholly-Owned  Foreign  Subsidiary  of the Borrower may merge
into the Person such  Wholly-Owned  Foreign  Subsidiary was formed to acquire in
connection with an acquisition permitted by Section 10.3(c); and

     (c) (i) any  Wholly-Owned  Domestic  Subsidiary of the Borrower may wind-up
into the Borrower or any other Wholly-Owned  Domestic Subsidiary of the Borrower
and (ii) any  Wholly-Owned  Foreign  Subsidiary of the Borrower may wind-up into
any other Wholly-Owned Foreign Subsidiary of the Borrower.

     SECTION 10.5 Limitations on Sale of Assets.  Convey,  sell, lease,  assign,
transfer  or  otherwise  dispose  of any of its  property,  business  or  assets
(including,  without  limitation,  the  sale of any  receivables  and  leasehold
interests and any sale-leaseback or similar  transaction),  whether now owned or
hereafter acquired except:

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

     (b) the sale of obsolete assets no longer used or usable in the business of
the Borrower or any of its Subsidiaries;

     (c) the transfer of assets to the Borrower or any  Wholly-Owned  Subsidiary
of the Borrower pursuant to Section 10.4(c);

     (d) the sale or discount without recourse of accounts receivable arising in
the ordinary  course of business in connection with the compromise or collection
thereof;

     (e) the disposition of any Hedging Agreement;

     (f) sales or grants of licenses in the  ordinary  course of business to use
the patents,  trade  secrets,  know-how and other  intellectual  property of the
Borrower  and its  Subsidiaries  to the extent  that any such  license  does not
prohibit the Borrower or its Subsidiaries  from using any material  technologies
licensed  unless  for  due  consideration,   or  require  the  Borrower  or  its
Subsidiaries to pay fees for the use of any material technology;

     (g) any distribution permitted pursuant to Section 10.6; and

     (h) sales of assets (i) by the Borrower or any Domestic  Subsidiary  of the
Borrower in an aggregate amount not to exceed $5,000,000 during the term of this
Agreement  and (ii) by any Foreign  Subsidiary  of the  Borrower in an aggregate
amount not to exceed $10,000,000 during the term of this Agreement.

     SECTION 10.6 Limitations on Dividends and Distributions. Declare or pay any
dividends  upon any of its  capital  stock  or any  other  ownership  interests;
purchase,  redeem,  retire or otherwise  acquire,  directly or  indirectly,  any
shares  of  its  capital  stock  or  other  ownership  interests,  or  make  any
distribution  of cash,  property  or assets  among the  holders of shares of its
capital stock or other  ownership  interests,  or make any change in its capital
structure; provided that:

     (a) the Borrower or any  Subsidiary  may pay dividends in shares of its own
capital stock;

     (b) any Subsidiary may pay cash dividends to the Borrower;

     (c) the Borrower may pay cash  dividends  on its capital  stock,  purchase,
redeem,  retire or  otherwise  acquire,  directly or  indirectly,  shares of its
capital stock (including  purchases of treasury stock), or make distributions of
cash,  property or assets among its  shareholders in an aggregate  amount not to
exceed the lesser of (i) twelve and  one-half  cents  ($0.125)  per share in any
calendar  quarter,  or (ii)  $8,000,000 in any calendar year (such quarterly and
annual limitations, hereinafter, the "Current Dividend Level"); and

     (d) in addition to transactions  permitted under  subsection (c) above, the
Borrower may pay cash dividends on its capital stock,  purchase,  redeem, retire
or  otherwise  acquire,  directly or  indirectly,  shares of its  capital  stock
(including purchases of treasury stock), or make distributions of cash, property
or assets among its  shareholders in an aggregate  amount not to exceed,  during
the term of this Agreement,  the sum of (i) $6,000,000 plus (ii) an amount equal
to  fifty  percent  (50%)  of  aggregate  Net  Income  of the  Borrower  and its
Subsidiaries since September 30, 2002.

     SECTION 10.7 Limitations on Exchange and Issuance of Capital Stock.  Issue,
sell or otherwise  dispose of any class or series of capital  stock that, by its
terms  or by  the  terms  of  any  security  into  which  it is  convertible  or
exchangeable, is, or upon the happening of an event or passage of time would be,
(a)  convertible  or  exchangeable  into Debt or (b)  required to be redeemed or
repurchased, including at the option of the holder, in whole or in part, or has,
or upon the happening of an event or passage of time would have, a redemption or
similar payment due.

     SECTION  10.8  Transactions   with  Affiliates.   Except  for  transactions
permitted by 10.3, 10.6 and 10.7 and those transactions  existing on the Closing
Date and identified on Schedule 10.8, directly or indirectly enter into, or be a
party to, any  transaction  with any of its  Affiliates,  except pursuant to the
reasonable  requirements of its business and upon fair and reasonable terms that
are no less  favorable to it than it would  obtain in a comparable  arm's length
transaction with a Person not its Affiliate.

     SECTION 10.9 Certain Accounting Changes; Organizational Documents.

     (a) Make any change in its  accounting  treatment and  reporting  practices
except as required or permitted by GAAP; or

     (b) Amend,  modify or change its articles of  incorporation  (or  corporate
charter or other similar  organizational  documents) or amend,  modify or change
its bylaws (or other similar  documents)  in any manner  adverse in any material
respect to the rights or interests of the Lenders.

     SECTION 10.10  Amendments;  Payments and Prepayments of Subordinated  Debt.
Amend or modify (or permit the modification or amendment of) any of the terms or
provisions of any  Subordinated  Debt, or cancel or forgive,  make any elective,
voluntary or optional  payment or prepayment  on, or redeem or acquire for value
(including,  without  limitation,  by way of  depositing  with any trustee  with
respect  thereto money or  securities  before due for the purpose of paying when
due) any Subordinated Debt.

     SECTION 10.11 Restrictive Agreements.

     (a) Enter into any Debt which contains any negative pledge on assets or any
covenants  more  restrictive  than the  provisions  of Articles  VIII,  IX and X
hereof, or which restricts,  limits or otherwise  encumbers its ability to incur
Liens on or with  respect  to any of its  assets or  properties  other  than the
assets or properties securing such Debt.

     (b) Enter into or permit to exist any agreement which impairs or limits the
ability of any Subsidiary of the Borrower to pay dividends to the Borrower.

     SECTION  10.12  Nature  of  Business.  Alter in any  material  respect  the
character  or  conduct  of the  business  conducted  by  the  Borrower  and  its
Subsidiaries  taken as a whole  as of the  Closing  Date  (except  as  otherwise
permitted by the terms of this Agreement).

     SECTION 10.13  Impairment of Security  Interests.  Take or omit to take any
action,  which  might or would  have the  result  of  materially  impairing  the
security  interests  in favor of the  Administrative  Agent with  respect to the
Collateral or grant to any Person (other than the  Administrative  Agent for the
benefit  of itself and the  Lenders  pursuant  to the  Security  Documents)  any
interest whatsoever in the Collateral,  except for Liens permitted under Section
10.2 and asset sales permitted under Section 10.5.


                                   ARTICLE XI

                              DEFAULT AND REMEDIES

     SECTION 11.1 Events of Default.  Each of the following shall  constitute an
Event of  Default,  whatever  the reason for such event and  whether it shall be
voluntary or  involuntary  or be effected by operation of law or pursuant to any
judgment  or  order  of any  court  or any  order,  rule  or  regulation  of any
Governmental Authority or otherwise:

     (a) Default in Payment of Principal of Loans and Reimbursement Obligations.
The Borrower  shall  default in any payment of  principal  of any Loan,  Note or
Reimbursement  Obligation  when and as due  (whether at  maturity,  by reason of
acceleration or otherwise).

     (b) Other Payment  Default.  The Borrower shall default in the payment when
and as due (whether at maturity,  by reason of acceleration or otherwise) of (i)
interest on any Loan, Note or Reimbursement  Obligation,  and such default shall
continue unremedied for five (5) Business Days or (ii) any other Obligation, and
such default shall continue unremedied for ten (10) Business Days.

     (c) Misrepresentation.  Any representation or warranty made or deemed to be
made by the Borrower or any of its Subsidiaries under this Agreement,  any other
Loan  Document or any  amendment  hereto or thereto,  shall at any time prove to
have been  incorrect or misleading  in any material  respect when made or deemed
made.

     (d) Default in Performance of Certain Covenants. The Borrower or any of its
Subsidiaries  shall default in the  performance or observance of any covenant or
agreement  contained  in Sections  7.1,  7.2 or 7.5(e)(i) or Articles IX or X of
this Agreement.

     (e) Default in Performance of Other Covenants and Conditions.  The Borrower
or any Subsidiary  thereof shall default in the performance or observance of any
term,  covenant,  condition or agreement contained in this Agreement (other than
as  specifically  provided for otherwise in this Section 11.1) or any other Loan
Document and such default shall  continue for a period of thirty (30) days after
written  notice  thereof has been given to the  Borrower  by the  Administrative
Agent.

     (f) Hedging  Agreement.  The Borrower  shall default in the  performance or
observance of any terms,  covenant,  condition or agreement (after giving effect
to any applicable grace or cure period) under any Hedging Agreement with respect
to any Debt or other  obligation  in a principal  amount in excess of $3,000,000
and such default causes the termination of such Hedging Agreement or permits any
counterparty to such Hedging Agreement to terminate any such Hedging Agreement.

     (g) Debt  Cross-Default.  The Borrower or any of its Subsidiaries shall (i)
default in the payment of any Debt  (other  than the Notes or any  Reimbursement
Obligation)  the  aggregate  outstanding  amount  of which  Debt is in excess of
$3,000,000  beyond the period of grace if any,  provided  in the  instrument  or
agreement  under which such Debt was created,  or (ii) default in the observance
or performance of any other  agreement or condition  relating to any Debt (other
than the Notes or any Reimbursement Obligation) the aggregate outstanding amount
of which Debt is in excess of  $3,000,000  or  contained  in any  instrument  or
agreement  evidencing,  securing  or  relating  thereto or any other event shall
occur or  condition  exist,  the  effect  of  which  default  or other  event or
condition  is to cause,  or to permit  the  holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause,  with the giving
of notice if required,  any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).

     (h)  Change  in  Control.  (i)  The  sale,  lease  or  transfer  of  all or
substantially  all of the  Borrower's  assets to any  person or group of persons
(within the meaning of Section 13(d) of the Securities  Exchange Act of 1934, as
amended), (ii) the liquidation or dissolution of the Borrower,  (iii) any person
or group of persons  (within  the  meaning of  Section  13(d) of the  Securities
Exchange  Act of 1934,  as amended),  other than the  Permitted  Holders,  shall
obtain  ownership or control in one or more series of  transactions of more than
thirty-five  percent (35%) of the common stock or  thirty-five  percent (35%) of
the voting power of the Borrower  entitled to vote in the election of members of
the board of  directors of the Borrower or (iv) during any period of twelve (12)
consecutive  calendar months,  individuals who, at the beginning of such period,
constituted the Borrower's  board of directors  (together with any new directors
whose  election by the  Borrower's  board of directors or whose  nomination  for
election  by the  Borrower's  stockholders  was  approved  by a vote of at least
two-thirds  (2/3rds)  of the  directors  then still in office  who  either  were
directors at the beginning of such period or whose  election or  nomination  for
election was previously so approved)  cease for any reason,  other than death or
disability,  to constitute a majority of the directors  then in office (any such
event, a "Change in Control").

     (i) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary thereof
shall (i) commence a voluntary case under the federal bankruptcy laws (as now or
hereafter  in effect),  (ii) file a petition  seeking to take  advantage  of any
other  laws,   domestic  or  foreign,   relating  to   bankruptcy,   insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest  in a timely and  appropriate  manner any  petition  filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate  manner,
the  appointment  of, or the taking of  possession  by, a  receiver,  custodian,
trustee,  or  liquidator  of itself or of a  substantial  part of its  property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due,  (vi) make a general  assignment  for the benefit of  creditors,  or
(vii) take any  corporate  action  for the  purpose  of  authorizing  any of the
foregoing.

     (j) Involuntary Bankruptcy Proceeding.  A case or other proceeding shall be
commenced against the Borrower or any Domestic  Subsidiary  thereof in any court
of competent  jurisdiction  seeking (i) relief under the federal bankruptcy laws
(as now or  hereafter  in effect) or under any other laws,  domestic or foreign,
relating to bankruptcy, insolvency,  reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian,  liquidator or
the like for the Borrower or any Domestic  Subsidiary  thereof or for all or any
substantial part of their respective assets,  domestic or foreign, and such case
or proceeding  shall  continue  without  dismissal or stay for a period of sixty
(60) consecutive days, or an order granting the relief requested in such case or
proceeding  (including,  but not  limited  to, an order for  relief  under  such
federal bankruptcy laws) shall be entered.

     (k) Failure of Agreements.  This  Agreement or any other Loan Document,  at
any time after its  execution  and  delivery  and for any  reason  other than as
expressly  permitted  hereunder  or  the  satisfaction  in  full  of  all of the
Obligations,  ceases  to be in full  force  and  effect;  or the  Borrower,  any
Subsidiary  Guarantor or any other Person contests in any manner the validity or
enforceability of this Agreement or any other Loan Document;  or the Borrower or
any  Subsidiary  Guarantor  denies  that  it has  any or  further  liability  or
obligation  under this  Agreement  or any other Loan  Document,  or  purports to
revoke, terminate or rescind this Agreement or any other Loan Document.

     (l) Termination  Event. The occurrence of any of the following events:  (i)
the Borrower or any ERISA  Affiliate  fails to make full payment when due of all
amounts  which,  under the  provisions of any Pension Plan or Section 412 of the
Code,  the Borrower or any ERISA  Affiliate is required to pay as  contributions
thereto,  (ii) an accumulated  funding deficiency in excess of $5,000,000 occurs
or exists,  whether or not waived,  with  respect to any Pension  Plan,  (iii) a
Termination Event or (iv) the Borrower or any ERISA Affiliate as employers under
one or more Multiemployer  Plans makes a complete or partial withdrawal from any
such  Multiemployer  Plan  and the  plan  sponsor  of such  Multiemployer  Plans
notifies such withdrawing  employer that such employer has incurred a withdrawal
liability requiring payments in an amount exceeding $5,000,000.

     (m) Judgment. A judgment or order for the payment of money which causes the
aggregate  amount of all such judgments to exceed  $5,000,000 in any Fiscal Year
shall be entered  against the Borrower or any of its  Subsidiaries  by any court
and such judgment or order shall continue without discharge or stay for a period
of sixty (60) days.

     (n)  Environmental.  Any one or more  Environmental  Claims shall have been
asserted against the Borrower or any of its  Subsidiaries;  the Borrower and its
Subsidiaries  would be reasonable likely to incur liability as a result thereof;
and such liability would be reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect.

     SECTION 11.2 Remedies. Upon the occurrence of an Event of Default, with the
consent of the  Required  Lenders,  the  Administrative  Agent may,  or upon the
request of the Required Lenders,  the  Administrative  Agent shall, by notice to
the Borrower:

     (a) Acceleration;  Termination of Facilities.  Declare the principal of and
interest on the Loans, the Notes and the  Reimbursement  Obligations at the time
outstanding, and all other amounts owed to the Lenders and to the Administrative
Agent  under  this  Agreement  or any of the other  Loan  Documents  (including,
without limitation, all L/C Obligations, whether or not the beneficiaries of the
then outstanding  Letters of Credit shall have presented or shall be entitled to
present the documents required thereunder) and all other Obligations (other than
Hedging Obligations),  to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice  of any  kind,  all of  which  are  expressly  waived,  anything  in this
Agreement  or the other Loan  Documents  to the  contrary  notwithstanding,  and
terminate  the  Credit  Facility  and  any  right  of the  Borrower  to  request
borrowings or Letters of Credit thereunder;  provided,  that upon the occurrence
of an Event of Default  specified in Section 11.1(i) or (j), the Credit Facility
shall be  automatically  terminated  and all  Obligations  (other  than  Hedging
Obligations)  shall  automatically  become due and payable without  presentment,
demand,  protest or other notice of any kind, all of which are expressly waived,
anything  in this  Agreement  or in any  other  Loan  Document  to the  contrary
notwithstanding.

     (b) Letters of Credit.  With  respect to all Letters of Credit with respect
to  which  presentment  for  honor  shall  not have  occurred  at the time of an
acceleration  pursuant to the preceding paragraph,  require the Borrower at such
time to, and the Borrower shall,  deposit in a cash collateral account opened by
the  Administrative  Agent an amount  equal to the  aggregate  then  undrawn and
unexpired amount of such Letters of Credit. Amounts held in such cash collateral
account  shall be applied by the  Administrative  Agent to the payment of drafts
drawn under such Letters of Credit,  and the unused  portion  thereof  after all
such  Letters of Credit  shall have  expired or been fully drawn  upon,  if any,
shall be applied to repay the other  Obligations on a pro rata basis.  After all
such  Letters  of Credit  shall  have  expired or been  fully  drawn  upon,  the
Reimbursement  Obligation  shall have been  satisfied and all other  Obligations
shall  have been paid in full,  the  balance,  if any,  in such cash  collateral
account shall be returned to the Borrower.

     (c) Rights of  Collection.  Exercise  on behalf of the  Lenders  all of its
other rights and remedies  under this  Agreement,  the other Loan  Documents and
Applicable Law, in order to satisfy all of the Borrower's Obligations.

     SECTION  11.3  Rights  and  Remedies  Cumulative;   Non-Waiver;   etc.  The
enumeration  of the  rights and  remedies  of the  Administrative  Agent and the
Lenders set forth in this  Agreement  is not intended to be  exhaustive  and the
exercise  by the  Administrative  Agent and the  Lenders  of any right or remedy
shall not preclude  the  exercise of any other rights or remedies,  all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Loan  Documents or that may now or hereafter  exist
at law or in equity or by suit or otherwise.  No delay or failure to take action
on the part of the  Administrative  Agent or any Lender in exercising any right,
power or privilege  shall operate as a waiver  thereof,  nor shall any single or
partial  exercise of any such right,  power or  privilege  preclude any other or
further exercise thereof or the exercise of any other right,  power or privilege
or shall be  construed  to be a waiver  of any  Event of  Default.  No course of
dealing between the Borrower,  the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any  provision  of this  Agreement  or any of the  other  Loan  Documents  or to
constitute a waiver of any Event of Default.

     SECTION 11.4.  Judgment  Currency.  The  obligation of the Borrower to make
payments of the principal of and interest on the Notes and the obligation of any
such Person to make payments of any other amounts payable  hereunder or pursuant
to any other Loan Document in the currency  specified for such payment shall not
be  discharged  or  satisfied  by any tender,  or any  recovery  pursuant to any
judgment, which is expressed in or converted into any other currency,  except to
the extent that such tender or recovery  shall  result in the actual  receipt by
each  of the  Administrative  Agent  and  Lenders  of  the  full  amount  of the
particular Permitted Currency expressed to be payable pursuant to the applicable
Loan Document.  The  Administrative  Agent shall,  using all amounts obtained or
received from the Borrower pursuant to any such tender or recovery in payment of
principal of and interest on the Obligations,  promptly  purchase the applicable
currency  at  the  most   favorable   spot  exchange  rate   determined  by  the
Administrative  Agent to be available to it. The  obligation  of the Borrower to
make payments in the applicable  currency shall be enforceable as an alternative
or  additional  cause of action  solely  for the  purpose of  recovering  in the
applicable  currency the amount, if any, by which such actual receipt shall fall
short of the full amount of the currency expressed to be payable pursuant to the
applicable Loan Document.


                                   ARTICLE XII

                            THE ADMINISTRATIVE AGENT

     SECTION 12.1 Appointment. Each of the Lenders hereby irrevocably designates
and  appoints  Wachovia  as  Administrative  Agent  of such  Lender  under  this
Agreement and the other Loan  Documents for the term hereof and each such Lender
irrevocably authorizes Wachovia as Administrative Agent for such Lender, to take
such action on its behalf under the  provisions of this  Agreement and the other
Loan  Documents  and to  exercise  such  powers and  perform  such duties as are
expressly  delegated to the Administrative  Agent by the terms of this Agreement
and such other Loan Documents, together with such other powers as are reasonably
incidental  thereto.  Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents,  the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein,  or  any  fiduciary  relationship  with  any  Lender,  and  no  implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this  Agreement  or the other Loan  Documents  or  otherwise  exist
against the Administrative  Agent. Any reference to the Administrative  Agent in
this Article XII shall be deemed to refer to the Administrative  Agent solely in
its capacity as Administrative Agent and not in its capacity as a Lender.

     SECTION 12.2 Delegation of Duties. The Administrative Agent may execute any
of its respective duties under this Agreement and the other Loan Documents by or
through agents or  attorneys-in-fact  and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not  be  responsible   for  the  negligence  or  misconduct  of  any  agents  or
attorneys-in-fact selected by the Administrative Agent with reasonable care.

     SECTION 12.3 Exculpatory  Provisions.  Neither the Administrative Agent nor
any  of  its  officers,   directors,   employees,   agents,   attorneys-in-fact,
Subsidiaries or Affiliates  shall be (a) liable for any action lawfully taken or
omitted  to be  taken by it or such  Person  under or in  connection  with  this
Agreement or the other Loan Documents  (except for actions  occasioned solely by
its or such  Person's  own  gross  negligence  or  willful  misconduct),  or (b)
responsible  in any manner to any of the Lenders for any  recitals,  statements,
representations or warranties made by the Borrower or any of its Subsidiaries or
any officer  thereof  contained in this Agreement or the other Loan Documents 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 the  other  Loan  Documents  or  for  the  value,  validity,
effectiveness,  genuineness,  enforceability or sufficiency of this Agreement or
the other  Loan  Documents  or for any  failure  of the  Borrower  or any of its
Subsidiaries   to  perform  its   obligations   hereunder  or  thereunder.   The
Administrative  Agent  shall  not be  under  any  obligation  to any  Lender  to
ascertain  or to  inquire  as to the  observance  or  performance  of any of the
agreements  contained in, or conditions  of, this  Agreement,  or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries.

     SECTION 12.4 Reliance by the Administrative Agent. The Administrative Agent
shall be entitled to rely,  and shall be fully  protected  in relying,  upon any
note, writing,  resolution,  notice, consent,  certificate,  affidavit,  letter,
cablegram,  telegram,  telecopy, telex or teletype message,  statement, order 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,  without limitation,  counsel to the
Borrower),   independent   accountants   and  other  experts   selected  by  the
Administrative  Agent. The Administrative  Agent may deem and treat the payee of
any Note as the owner thereof for all purposes  unless such Note shall have been
transferred in accordance with Section 13.10. The Administrative  Agent shall be
fully  justified in failing or refusing to take any action under this  Agreement
and the other  Loan  Documents  unless it shall  first  receive  such  advice or
concurrence of the Required  Lenders (or, when expressly  required  hereby or by
the relevant other Loan Documents,  all the Lenders) as it deems  appropriate or
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  except  for its own  gross  negligence  or
willful  misconduct.  The  Administrative  Agent  shall  in all  cases  be fully
protected in acting, or in refraining from acting,  under this Agreement and the
Notes in accordance  with a request of the Required  Lenders (or, when expressly
required  hereby,  all the  Lenders),  and such  request and any action taken or
failure to act  pursuant  thereto  shall be binding upon all the Lenders and all
future holders of the Notes.

     SECTION  12.5  Notice of  Default.  The  Administrative  Agent shall not be
deemed to have  knowledge or notice of the occurrence of any Default or Event of
Default unless it has received notice from a Lender or the Borrower referring to
this  Agreement,  describing  such  Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice,  it shall  promptly give notice  thereof to the Lenders.
The Administrative  Agent shall take such action with respect to such Default or
Event of Default as shall be  reasonably  directed by the Required  Lenders (or,
when expressly required hereby, all the Lenders); provided that unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be  obligated  to) take such  action,  or refrain  from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best  interests of the Lenders,  except to the extent that
other  provisions of this  Agreement  expressly  require that any such action be
taken or not be taken only with the consent and  authorization or the request of
the Lenders or Required Lenders, as applicable.

     SECTION 12.6  Non-Reliance on the  Administrative  Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its respective officers,  directors,  employees,  agents,  attorneys-in-fact,
Subsidiaries or Affiliates has made any  representations or warranties to it and
that no act by the Administrative Agent hereafter taken, including any review of
the  affairs  of the  Borrower  or any of its  Subsidiaries,  shall be deemed to
constitute any  representation  or warranty by the  Administrative  Agent to any
Lender.  Each  Lender  represents  to the  Administrative  Agent  that  it  has,
independently  and without reliance upon the  Administrative  Agent or any other
Lender,   and  based  on  such  documents  and  information  as  it  has  deemed
appropriate,  made its own  appraisal of and  investigation  into the  business,
operations,  property, financial and other condition and creditworthiness of the
Borrower  and its  Subsidiaries  and made its own decision to make its Loans and
issue or  participate  in  Letters  of  Credit  hereunder  and  enter  into this
Agreement.  Each Lender also represents that it will,  independently and without
reliance upon the  Administrative  Agent or any other Lender,  and based on such
documents and information as it shall deem appropriate at the time,  continue to
make its own credit  analysis,  appraisals and decisions in taking or not taking
action  under  this  Agreement  and the other Loan  Documents,  and to make such
investigation  as it  deems  necessary  to  inform  itself  as to the  business,
operations,  property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries.  Except for notices,  reports and other documents
expressly  required to be furnished to the Lenders by the  Administrative  Agent
hereunder or by the other Loan  Documents,  the  Administrative  Agent shall not
have any duty or  responsibility  to provide any Lender with any credit or other
information concerning the business,  operations,  property, financial and other
condition or  creditworthiness  of the Borrower or any of its Subsidiaries which
may  come  into  the  possession  of  the  Administrative  Agent  or  any of its
respective   officers,   directors,   employees,   agents,    attorneys-in-fact,
Subsidiaries or Affiliates.

     SECTION  12.7   Indemnification.   The  Lenders   agree  to  indemnify  the
Administrative  Agent in its capacity as such and (to the extent not  reimbursed
by the Borrower and without  limiting the  obligation of the Borrower to do so),
ratably  according to the respective  amounts of their  Commitment  Percentages,
from  and  against  any  and  all  liabilities,  obligations,  losses,  damages,
penalties,  actions,  judgments,  suits, costs, expenses or disbursements of any
kind whatsoever which may at any time  (including,  without  limitation,  at any
time  following  the payment of the Notes or any  Reimbursement  Obligation)  be
imposed on, incurred by or asserted against the Administrative  Agent in any way
relating to or arising out of this Agreement or the other Loan Documents, or any
documents,  reports or other information provided to the Administrative Agent or
any  Lender  or  contemplated  by or  referred  to  herein  or  therein  or  the
transactions  contemplated  hereby or thereby or any action  taken or omitted by
the  Administrative  Agent  under or in  connection  with any of the  foregoing;
provided  that no Lender  shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses  or  disbursements  resulting  solely  from the  Administrative
Agent's bad faith,  gross  negligence or willful  misconduct.  The agreements in
this  Section  12.7 shall  survive the payment of the Notes,  any  Reimbursement
Obligation and all other amounts  payable  hereunder and the termination of this
Agreement.

     SECTION  12.8 The  Administrative  Agent in Its  Individual  Capacity.  The
Administrative  Agent and its  respective  Subsidiaries  and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the  Borrower  as though the  Administrative  Agent were not the  Administrative
Agent  hereunder.  With  respect to any Loans made or renewed by it and any Note
issued  to it  and  with  respect  to  any  Letter  of  Credit  issued  by it or
participated in by it, the  Administrative  Agent shall have the same rights and
powers under this  Agreement and the other Loan  Documents as any Lender and may
exercise the same as though it were not the Administrative  Agent, and the terms
"Lender" and "Lenders" shall include the Administrative  Agent in its individual
capacity.

     SECTION  12.9   Resignation   of  the   Administrative   Agent;   Successor
Administrative  Agent.  Subject to the appointment and acceptance of a successor
as provided  below,  the  Administrative  Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower.  Upon any such resignation,  the
Required  Lenders  shall  have the right to appoint a  successor  Administrative
Agent,  which  successor  shall have  minimum  capital  and  surplus of at least
$500,000,000.  If no successor Administrative Agent shall have been so appointed
by the Required Lenders and shall have accepted such  appointment  within thirty
(30) days after the Administrative Agent's giving of notice of resignation, then
the  Administrative  Agent may,  on behalf of the  Lenders,  appoint a successor
Administrative  Agent, which successor shall have minimum capital and surplus of
at least $500,000,000.  Upon the acceptance of any appointment as Administrative
Agent   hereunder  by  a  successor   Administrative   Agent,   such   successor
Administrative  Agent  shall  thereupon  succeed to and become  vested  with all
rights, powers,  privileges and duties of the retiring Administrative Agent, and
the  retiring  Administrative  Agent  shall be  discharged  from its  duties and
obligations  hereunder.  After any retiring  Administrative  Agent's resignation
hereunder as  Administrative  Agent,  the  provisions of this Section 12.9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.

     SECTION 12.10 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 the Borrower or any Guarantor,  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)  shall  be  entitled  and  empowered,  by  intervention  in  such
proceeding or otherwise:

     (a) to file and  prove a claim for the whole  amount of the  principal  and
interest owing and unpaid in respect of the Loans,  the 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  Administrative
Agent and the  Lenders  (including  any claim for the  reasonable  compensation,
expenses, disbursements and advances of the Administrative Agent and the Lenders
and  their  respective  agents  and  counsel  and  all  other  amounts  due  the
Administrative  Agent and the Lenders under this Agreement,  including,  without
limitation,  Section 3.3, Section 4.3 and Section 13.2) 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 this
Agreement (including, without limitation, Section 4.3 and Section 13.2). 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.


                                  ARTICLE XIII

                                  MISCELLANEOUS

     SECTION 13.1 Notices.

     (a)  Method  of  Communication.   Except  as  otherwise  provided  in  this
Agreement,  all notices and  communications  hereunder  shall be in writing (for
purposes  hereof,  the term  "writing"  shall include  information in electronic
format  such as  electronic  mail  and  internet  web  pages),  or by  telephone
subsequently confirmed in writing. Any notice shall be effective if delivered by
hand  delivery or sent via  electronic  mail,  posting on an internet  web page,
telecopy, recognized overnight courier service or certified mail, return receipt
requested,  and shall be presumed  to be  received by a party  hereto (i) on the
date of delivery if delivered by hand or sent by electronic mail,  posting on an
internet web page, telecopy, (ii) on the next Business Day if sent by recognized
overnight courier service and (iii) on the third Business Day following the date
sent by certified mail,  return receipt  requested.  A telephonic  notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the  controlling  and  proper  notice in the event of a  discrepancy  with or
failure to receive a confirming written notice.

     (b) Addresses for Notices.  Notices to any party shall be sent to it at the
following addresses,  or any other address as to which all the other parties are
notified in writing.

         If to the Borrower:        CompX International Inc.
                                    Three Lincoln Centre
                                    5430 LBJ Freeway, Suite 1700
                                    Dallas, Texas 75240-2697
                                    Attention: J. Mark Hollingsworth
                                    Telephone No.: (972) 233-1700
                                    Telecopy No.: (972) 448-1445

         If to Wachovia as          Wachovia Bank, National Association
          Administrative Agent:     Charlotte Plaza, CP-8
                                    201 South College Street
                                    Charlotte, North Carolina 28288-0680
                                    Attention:  Syndication Agency Services
                                    Telephone No.:  (704) 374-2698
                                    Telecopy No.:  (704) 383-0288

         If to any Lender:          To the address set forth on Schedule 1.1(a)

     (c)  Administrative   Agent's  Office.  The  Administrative   Agent  hereby
designates its office located at the address set forth above,  or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrower and Lenders,  as the Administrative  Agent's Office referred to herein,
to which  payments due are to be made and at which Loans will be  disbursed  and
Letters  of Credit  issued,  except for  Alternative  Currency  Loans,  to which
payments  due  are to be  made  at the  office  of  the  Administrative  Agent's
Correspondent.

     SECTION 13.2 Expenses;  Indemnity. The Borrower will (a) pay all reasonable
out-of-pocket expenses (including,  without limitation,  all costs of electronic
or internet  distribution  of any information  hereunder) of the  Administrative
Agent in  connection  with (i) the  preparation,  execution and delivery of this
Agreement and each other Loan Document,  whenever the same shall be executed and
delivered,  including, without limitation, all out-of-pocket syndication and due
diligence  expenses and  reasonable  fees and  disbursements  of counsel for the
Administrative  Agent and (ii) the  preparation,  execution  and delivery of any
waiver, amendment or consent by the Administrative Agent or the Lenders relating
to this Agreement or any other Loan  Document,  including,  without  limitation,
reasonable fees and disbursements of counsel for the  Administrative  Agent, (b)
pay all reasonable  out-of-pocket  expenses of the Administrative Agent and each
Lender actually incurred in connection with the  administration  and enforcement
of any rights and  remedies of the  Administrative  Agent and Lenders  under the
Credit Facility,  including, without limitation, in connection with any workout,
restructuring,  bankruptcy or other similar proceeding,  creating and perfecting
Liens in favor of  Administrative  Agent on behalf of  Lenders  pursuant  to any
Security Document,  enforcing any Obligations of, or collecting any payments due
from, the Borrower or any Subsidiary  Guarantor by reason of an Event of Default
(including in connection with the sale of, collection from, or other realization
upon  any of  the  Collateral  or the  enforcement  of the  Subsidiary  Guaranty
Agreement),  consulting with appraisers,  accountants,  engineers, attorneys and
other Persons  concerning  the nature,  scope or value of any right or remedy of
the  Administrative  Agent or any  Lender  hereunder  or under  any  other  Loan
Document or any factual  matters in connection  therewith,  which expenses shall
include,  without  limitation,  the reasonable  fees and  disbursements  of such
Persons,  and (c) defend,  indemnify and hold harmless the Administrative  Agent
and  the  Lenders,  and  their  respective  parents,  Subsidiaries,  Affiliates,
employees,  agents,  officers  and  directors,  from  and  against  any  losses,
penalties,  fines,  liabilities,   settlements,  damages,  costs  and  expenses,
suffered by any such Person in  connection  with any claim  (including,  without
limitation,  any  Environmental  Claims),  investigation,  litigation  or  other
proceeding  (whether  or not the  Administrative  Agent or any Lender is a party
thereto) and the prosecution and defense  thereof,  arising out of or in any way
connected  with the  Loans,  this  Agreement,  any other  Loan  Document  or any
documents,  reports or other information provided to the Administrative Agent or
any Lender or contemplated by or referred herein or therein or the  transactions
contemplated  hereby  or  thereby,  including,  without  limitation,  reasonable
attorney's and consultant's fees and settlement costs, except to the extent that
any of the  foregoing  directly  result  from the gross  negligence  or  willful
misconduct of the party seeking indemnification therefor.

     SECTION 13.3 Set-off.

     (a) In addition to any rights now or hereafter granted under Applicable Law
and not by way of limitation of any such rights,  upon and after the  occurrence
of any Event of Default and during the continuance  thereof, the Lenders and any
assignee or participant of a Lender in accordance  with Section 13.10 are hereby
authorized by the Borrower at any time or from time to time,  without  notice to
the Borrower or to any other  Person,  any such notice  being  hereby  expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or  special,  time or  demand,  including,  but  not  limited  to,  indebtedness
evidenced by  certificates  of deposit,  whether  matured or unmatured)  and any
other  indebtedness  at any  time  held or  owing  by the  Lenders,  or any such
assignee  or  participant  to or for the credit or the  account of the  Borrower
against and on account of the Obligations irrespective of whether or not (a) the
Lenders shall have made any demand under this Agreement or any of the other Loan
Documents or (b) the Administrative  Agent shall have declared any or all of the
Obligations to be due and payable as permitted by Section 11.2 and although such
Obligations  shall be  contingent or  unmatured.  Notwithstanding  the preceding
sentence, each Lender agrees to notify the Borrower and the Administrative Agent
after any such set-off and application;  provided, that the failure to give such
notice shall not affect the validity of such set-off and application.

     (b)  Any  amount  to be  set-off  pursuant  to  Section  13.3(a)  shall  be
denominated in Dollars and any amount  denominated  in an  Alternative  Currency
shall be in an amount  equal to the  Dollar  Amount  of such  amount at the most
favorable  spot  exchange  rate  determined  by the  Administrative  Agent to be
available to it; provided that if at the time of any such  determination no such
spot exchange rate can reasonably be determined,  the  Administrative  Agent may
use any  reasonable  method as it deems  applicable to determine  such rate, any
such determination to be conclusive absent manifest error.

     (c)  Each  Lender  and  any  assignee  or  participant  of such  Lender  in
accordance  with Section 13.10 are hereby  authorized by the Borrower to combine
currencies,  as deemed necessary by such Person,  in order to effect any set-off
pursuant to Section 13.3(a).

     SECTION 13.4  Governing Law. This  Agreement,  the Notes and the other Loan
Documents,  unless otherwise expressly set forth therein,  shall be governed by,
construed  and  enforced  in  accordance  with  the  laws of the  State of North
Carolina,  without  reference  to the  conflicts  or  choice  of law  principles
thereof.

     SECTION 13.5 Jurisdiction and Venue.

     (a) Jurisdiction.  The Borrower hereby irrevocably consents to the personal
jurisdiction  of the state and federal  courts  located in  Mecklenburg  County,
North Carolina (and any courts from which an appeal from any of such courts must
or may be taken),  in any action,  claim or other proceeding  arising out of any
dispute  in  connection  with this  Agreement,  the  Notes  and the  other  Loan
Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations.  The Borrower hereby irrevocably consents to the
service of a summons and  complaint  and other  process in any action,  claim or
proceeding brought by the Administrative  Agent or any Lender in connection with
this Agreement, the Notes or the other Loan Documents, any rights or obligations
hereunder or thereunder,  or the performance of such rights and obligations,  on
behalf of itself or its  property,  in the manner  specified  in  Section  13.1.
Nothing in this Section 13.5 shall affect the right of the Administrative  Agent
or any Lender to serve legal process in any other manner permitted by Applicable
Law or affect the right of the  Administrative  Agent or any Lender to bring any
action or proceeding against the Borrower or its properties in the courts of any
other jurisdictions.

     (b) Venue. The Borrower hereby irrevocably waives any objection it may have
now or in the future to the laying of venue in the aforesaid jurisdiction in any
action,  claim or other  proceeding  arising out of or in  connection  with this
Agreement,  any other Loan Document or the rights and obligations of the parties
hereunder or thereunder.  The Borrower  irrevocably  waives,  in connection with
such action,  claim or proceeding,  any plea or claim that the action,  claim or
other proceeding has been brought in an inconvenient forum.

     SECTION 13.6 Binding Arbitration; Waiver of Jury Trial.

     (a) Binding  Arbitration.  Upon demand of the Borrower,  the Administrative
Agent or the Required  Lenders,  whether made before or after institution of any
judicial proceeding, any dispute, claim or controversy arising out of, connected
with or  relating to this  Agreement  or any other Loan  Document  ("Disputes"),
between  or among  parties  hereto  and to the  other  Loan  Documents  shall be
resolved by binding  arbitration as provided  herein.  Institution of a judicial
proceeding  by a party  does  not  waive  the  right  of that  party  to  demand
arbitration hereunder.  Disputes may include,  without limitation,  tort claims,
counterclaims,  claims  brought  as class  actions,  claims  arising  from  Loan
Documents executed in the future,  disputes as to whether a matter is subject to
arbitration,  or claims  concerning  any  aspect of the past,  present or future
relationships  arising out of or connected with the Loan Documents.  Arbitration
shall be  conducted  under and  governed by the  Commercial  Financial  Disputes
Arbitration  Rules  (the  "Arbitration   Rules")  of  the  American  Arbitration
Association  (the  "AAA")  and the  Federal  Arbitration  Act.  All  arbitration
hearings  shall  be  conducted  in  Charlotte,  North  Carolina.  The  expedited
procedures  set  forth in Rule 51, et seq.  of the  Arbitration  Rules  shall be
applicable  to  claims of less  than  $1,000,000.  All  applicable  statutes  of
limitations shall apply to any Dispute. A judgment upon the award may be entered
in any court  having  jurisdiction.  Notwithstanding  anything  foregoing to the
contrary,  any  arbitration  proceeding  demanded  hereunder  shall begin within
ninety  (90) days  after  such  demand  thereof  and shall be  concluded  within
one-hundred twenty (120) days after such demand.  These time limitations may not
be  extended  unless a party  hereto  shows  cause for  extension  and then such
extension  shall not exceed a total of sixty (60) days. The panel from which all
arbitrators are selected shall be comprised of licensed  attorneys selected from
the  Commercial  Financial  Dispute  Arbitration  Panel of the AAA.  The  single
arbitrator  selected for expedited  procedure  shall be a retired judge from the
highest court of general jurisdiction,  state or federal, of the state where the
hearing  will be  conducted.  The  parties  hereto do not  waive any  applicable
Federal or state substantive law except as provided herein.  Notwithstanding the
foregoing, this paragraph shall not apply to any Hedging Agreement.

     (b) Jury Trial.  THE  ADMINISTRATIVE  AGENT,  EACH LENDER AND THE  BORROWER
HEREBY ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY
WAIVED THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM
OR  OTHER  PROCEEDING  ARISING  OUT OF  ANY  DISPUTE  IN  CONNECTION  WITH  THIS
AGREEMENT,  THE NOTES OR THE OTHER LOAN  DOCUMENTS,  ANY  RIGHTS OR  OBLIGATIONS
HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

     (c) Preservation of Certain Remedies. Notwithstanding the preceding binding
arbitration  provisions,  the  parties  hereto  and  the  other  Loan  Documents
preserve,  without diminution,  certain remedies that such Persons may employ or
exercise  freely,  either alone, in conjunction  with or during a Dispute.  Each
such Person shall have and hereby  reserves the right to proceed in any court of
proper  jurisdiction  or by self help to exercise  or  prosecute  the  following
remedies,  as  applicable:  (i) all  rights  to  foreclose  against  any real or
personal property or other security by exercising a power of sale granted in the
Loan  Documents or under  Applicable  Law or by judicial  foreclosure  and sale,
including  a  proceeding  to  confirm  the  sale,  (ii) all  rights of self help
including peaceful  occupation of property and collection of rents, set off, and
peaceful  possession  of  property,  (iii)  obtaining  provisional  or ancillary
remedies including injunctive relief,  sequestration,  garnishment,  attachment,
appointment of receiver and in filing an involuntary bankruptcy proceeding,  and
(iv) when  applicable,  a judgment by  confession of judgment.  Preservation  of
these  remedies  does not  limit  the power of an  arbitrator  to grant  similar
remedies that may be requested by a party in a Dispute.

     SECTION  13.7  Reversal of  Payments.  To the extent the  Borrower  makes a
payment or payments to the  Administrative  Agent for the ratable benefit of the
Lenders or the  Administrative  Agent  receives  any  payment or proceeds of the
collateral  which  payments  or proceeds  or any part  thereof are  subsequently
invalidated,  declared  to be  fraudulent  or  preferential,  set  aside  and/or
required  to be repaid to a  trustee,  receiver  or any  other  party  under any
bankruptcy  law, state or federal law, common law or equitable  cause,  then, to
the extent of such payment or proceeds  repaid,  the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such  payment or  proceeds  had not been  received  by the  Administrative
Agent.

     SECTION 13.8 Injunctive Relief; Punitive Damages.

     (a) The  Borrower  recognizes  that,  in the  event the  Borrower  fails to
perform,  observe or discharge any of its obligations or liabilities  under this
Agreement,  any remedy of law may prove to be inadequate  relief to the Lenders.
Therefore,  the Borrower agrees that the Lenders, at the Lenders' option,  shall
be  entitled  to  temporary  and  permanent  injunctive  relief in any such case
without the necessity of proving actual damages.

     (b) The  Administrative  Agent,  the Lenders and the Borrower (on behalf of
itself  and its  Subsidiaries)  hereby  agree that no such  Person  shall have a
remedy of  punitive  or  exemplary  damages  against  any other  party to a Loan
Document  and each such Person  hereby  waives any right or claim to punitive or
exemplary  damages  that  they  may  now  have or may  arise  in the  future  in
connection  with  any  Dispute,   whether  such  Dispute  is  resolved   through
arbitration or judicially.

     SECTION 13.9 Accounting  Matters.  Except as otherwise  expressly  provided
herein,  all terms of an  accounting  or financial  nature shall be construed in
accordance  with GAAP,  as in effect from time to time,  provided  that,  if the
Borrower  notifies  the  Administrative  Agent  that the  Borrower  requests  an
amendment  to any  provision  hereof  to  eliminate  the  effect  of any  change
occurring  after the date  hereof in GAAP or in the  application  thereof on the
operation  of  such  provision  (or if the  Administrative  Agent  notifies  the
Borrower that the Required  Lenders request an amendment to any provision hereof
for such  purpose),  regardless  of whether any such  notice is given  before or
after such change in GAAP or in the  application  thereof,  then such  provision
shall be interpreted  on the basis of GAAP as in effect and applied  immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance therewith.

     SECTION 13.10 Successors and Assigns; Participations.

     (a) Benefit of Agreement. This Agreement shall be binding upon and inure to
the benefit of the  Borrower,  the  Administrative  Agent and the  Lenders,  all
future holders of the Notes, and their respective successors and assigns, except
that the Borrower  shall not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of each Lender.

     (b) Assignment by Lenders.  Each Lender may, in the ordinary  course of its
business and in accordance  with  Applicable  Law, sell or assign to any Lender,
any  Affiliate  of a Lender and with the consent of the  Borrower (so long as no
Default or Event of Default has occurred and is  continuing)  and the consent of
the Administrative  Agent, which consents shall not be unreasonably  withheld or
delayed,  assign  to  one or  more  Eligible  Assignees  (any  of the  foregoing
assignees  or  purchasers,  a  "Participating  Lender")  all or a portion of its
interests,  rights  and  obligations  under  this  Agreement  and the other Loan
Documents (including,  without limitation, all or a portion of the Extensions of
Credit at the time owing to it and the Notes held by it); provided that:

          (i) each such  assignment  shall be of a constant,  and not a varying,
percentage  of all the  assigning  Lender's  rights and  obligations  under this
Agreement;

          (ii) if less than all of the  assigning  Lender's  Commitment is to be
assigned, the Commitment so assigned shall not be less than $5,000,000;

          (iii) the parties to each such assignment shall execute and deliver to
the Administrative  Agent, for its acceptance and recording in the Register,  an
Assignment and Acceptance substantially in the form of Exhibit G attached hereto
(an "Assignment and Acceptance"),  together with (to the extent requested by any
Purchasing Lender) any Note or Notes subject to such assignment;

          (iv) where  consent of the Borrower to an  assignment  to a Purchasing
Lender is required hereunder  (including consent to an assignment to an Approved
Fund),  the Borrower shall be deemed to have given its consent five (5) Business
Days after the date written  notice  thereof has been delivered by the assigning
Lender  (through  the  Administrative  Agent)  unless such  consent is expressly
refused by the Borrower prior to such fifth (5th) Business Day;

          (v) such  assignment  shall not,  without the consent of the  Borrower
require the Borrower to file a  registration  statement  with the Securities and
Exchange Commission or apply to or qualify the Loans or the Notes under the blue
sky laws of any state; and

          (vi) the  assigning  Lender shall pay to the  Administrative  Agent an
assignment fee of $3,500 upon the execution by such Lender of the Assignment and
Acceptance;  provided that no such fee shall be payable upon any assignment by a
Lender to an Affiliate of such Lender.

Upon such  execution,  delivery,  acceptance and  recording,  from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business  Days after the  execution  thereof  (unless
otherwise  agreed to by the  Administrative  Agent),  (A) the Purchasing  Lender
thereunder  shall  be a  party  hereto  and,  to the  extent  provided  in  such
Assignment and  Acceptance,  have the rights and  obligations of a Lender hereby
and (B) the Lender  thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.

     (c) Rights and Duties Upon  Assignment.  By  executing  and  delivering  an
Assignment and Acceptance,  the assigning  Lender  thereunder and the Purchasing
Lender  thereunder  confirm to and agree  with each other and the other  parties
hereto as set forth in such Assignment and Acceptance.

     (d)  Register.  The  Administrative  Agent  shall  maintain  a copy of each
Assignment and Acceptance  delivered to it and a register for the recordation of
the names and  addresses  of the  Lenders  and the amount of the  Extensions  of
Credit  with  respect to each  Lender  from time to time (the  "Register").  The
entries in the Register shall be conclusive,  in the absence of manifest  error,
and the Borrower, the Administrative Agent and the Lenders may treat each person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this  Agreement.  The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.

     (e) Issuance of New Notes. Upon its receipt of an Assignment and Acceptance
executed by an assigning  Lender and a Purchasing  Lender together with any Note
or Notes (if  applicable)  subject to such  assignment and (if  applicable)  the
written  consent to such  assignment,  the  Administrative  Agent shall, if such
Assignment and Acceptance has been completed and is substantially in the form of
Exhibit G:

          (i) accept such Assignment and Acceptance;

          (ii) record the information contained therein in the Register;

          (iii) give prompt notice thereof to the Lenders and the Borrower; and

          (iv) promptly  deliver a copy of such Assignment and Acceptance to the
Borrower.

Within  five (5)  Business  Days after  receipt of notice,  the  Borrower  shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes,  a new Note or Notes to the order of such  Purchasing  Lender (to
the extent requested  thereby) in amounts equal to the Commitment  assumed by it
pursuant to such  Assignment and Acceptance and a new Note or Notes to the order
of the assigning Lender (to the extent requested  thereby) in an amount equal to
the Commitment  retained by it hereunder.  Such new Note or Notes shall be in an
aggregate  principal  amount  equal to the  aggregate  principal  amount of such
surrendered Note or Notes,  shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially  the form of the assigned
Notes delivered to the assigning Lender. Each surrendered Note or Notes shall be
canceled  and  returned  to  the  Borrower.  Notwithstanding  anything  in  this
Agreement to the contrary,  any Lender which has not been issued a Note or Notes
hereunder  may at any time deliver a written  request for a Note or Notes to the
Administrative  Agent and the  Borrower.  Within  five (5)  Business  Days after
receipt of notice,  the Borrower shall execute and deliver to the Administrative
Agent,  a Note or Notes (as  applicable)  to the order of such Lender in amounts
equal to the Commitment of such Lender. Upon receipt thereby, the Administrative
Agent shall promptly deliver such Note or Notes to such Lender.

     (f)  Participations.  Each Lender may,  without notice to or the consent of
the  Borrower  or the  Administrative  Agent,  in  the  ordinary  course  of its
commercial  banking  business  and  in  accordance  with  Applicable  Law,  sell
participations  to one or more banks or other  entities  (any such bank or other
entity, a "Participant") in all or a portion of its rights and obligations under
this  Agreement  (including,  without  limitation,  all  or  a  portion  of  its
Extensions of Credit and the Notes held by it); provided that:

          (i) each  such  participation  shall  be in an  amount  not less  than
$5,000,000;

          (ii)  such  Lender's  obligations  under  this  Agreement  (including,
without limitation, its Commitment) shall remain unchanged;

          (iii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations;

          (iv) such Lender  shall  remain the holder of the Notes held by it for
all purposes of this Agreement;

          (v) 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;

          (vi)  such  Lender  shall not  permit  such  Participant  the right to
approve any waivers,  amendments or other modifications to this Agreement or any
other Loan Document other than waivers,  amendments or modifications which would
reduce  the  principal  of or the  interest  rate on any  Loan or  Reimbursement
Obligation, extend the term or increase the amount of the Commitment, reduce the
amount of any fees to which such  Participant is entitled,  extend any scheduled
payment  date for  principal of any Loan or,  except as  expressly  contemplated
hereby or thereby,  release  substantially all of the Collateral or any Security
Document; and

          (vii) any such  disposition  shall  not,  without  the  consent of the
Borrower  require  the  Borrower  to  file a  registration  statement  with  the
Securities  and Exchange  Commission  to apply to qualify the Loans or the Notes
under the blue sky law of any state.

     The Borrower agrees that each Participant shall be entitled to the benefits
of Section 4.7, Section 4.8, Section 4.9,  Section 4.10,  Section 4.11,  Section
4.12,  Section  4.13 and Section  13.3 to the same extent as if it were a Lender
and had acquired its interest by  assignment  pursuant to paragraph  (b) of this
Section 13.10;  provided that a Participant shall not be entitled to receive any
greater  payment  under  Section 4.7,  Section 4.8,  Section 4.9,  Section 4.10,
Section 4.11,  Section 4.12, and Section 4.13 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  and such  Participant  shall have
delivered to the Administrative Agent all United States Internal Revenue Service
Forms required pursuant to Section 4.13(e).

     (g) Disclosure of Information;  Confidentiality.  The Administrative  Agent
and the  Lenders  shall  hold all  non-public  information  with  respect to the
Borrower  obtained pursuant to the Loan Documents (or any Hedging Agreement with
a Lender  or the  Administrative  Agent)  in  accordance  with  their  customary
procedures   for  handling   confidential   information;   provided,   that  the
Administrative Agent may disclose information relating to this Agreement to Gold
Sheets and other similar bank trade publications, such information to consist of
deal terms and other  information  customarily  found in such  publications  and
provided further,  that the Administrative  Agent or any Lender may disclose any
such  information  to the  extent  such  disclosure  is (i)  required  by law or
requested  or required  pursuant to any legal  process,  (ii)  requested  by, or
required  to be  disclosed  to,  any rating  agency,  or  regulatory  or similar
authority (including,  without limitation, the National Association of Insurance
Commissioners)  or (iii) used in any suit,  action or proceeding for the purpose
of defending  itself,  reducing its liability or  protecting  any of its claims,
rights, remedies or interests under or in connection with the Loan Documents (or
any Hedging  Agreement with a Lender or the  Administrative  Agent).  Any Lender
may, in connection with any assignment,  proposed  assignment,  participation or
proposed   participation  pursuant  to  this  Section  13.10,  disclose  to  the
Purchasing   Lender,   proposed   Purchasing   Lender,   Participant,   proposed
Participant,  or to any  direct or  indirect  contractual  counterparty  in swap
agreements  or  such  contractual   counterparty's   professional   advisor  any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower;  provided, that prior to any such disclosure, each such Purchasing
Lender,  proposed  Purchasing  Lender,   Participant  or  proposed  Participant,
contractual  counterparty or professional advisor shall agree to be bound by the
provisions of this Section 13.10(g).

     (h) Certain  Pledges or  Assignments.  Any Lender may at any time pledge or
assign a  security  interest  in all or any  portion  of its  rights  under this
Agreement  or any other Loan  Document  to secure  obligations  of such  Lender,
including, without limitation, any pledge or assignment to secure obligations to
a Federal Reserve Bank; provided that no such pledge or assignment of a security
interest  shall  release  a Lender  form  any of its  obligations  hereunder  or
substitute such pledgee or assignee for such Lender as a party hereto.

     SECTION 13.11 Amendments,  Waivers and Consents.  Except as set forth below
or as specifically  provided in the Credit  Agreement or any other Loan Document
(including,  without limitation,  Section 2.9), any term, covenant, agreement or
condition of this Agreement or any of the other Loan Documents may be amended or
waived by the Lenders,  and any consent  given by the Lenders,  if, but only if,
such amendment,  waiver or consent is in writing signed by the Required  Lenders
(or by the  Administrative  Agent with the consent of the Required  Lenders) and
delivered to the Administrative  Agent and, in the case of an amendment,  signed
by the Borrower; provided that, except as specifically set forth in Section 2.9,
no  amendment,  waiver or consent  shall (a) increase (i) the  Commitment of any
Lender,  (ii)  the  Alternative  Currency  Commitment  or  (iii)  the  Swingline
Commitment,  (b)  reduce  the rate of  interest  or fees  payable on any Loan or
Reimbursement Obligation, (c) reduce or forgive the principal amount of any Loan
or Reimbursement  Obligation,  (d) extend the originally scheduled time or times
of payment of the principal of any Loan or Reimbursement  Obligation or the time
or times of payment of interest on any Loan or  Reimbursement  Obligation or any
fee or commission  with respect  thereto,  (e) permit any  subordination  of the
principal or interest on any Loan or Reimbursement  Obligation,  (f) release the
Borrower from the Obligations (other than Hedging  Obligations)  hereunder,  (g)
release any  Subsidiary  Guarantor  from its  obligations  under the  Subsidiary
Guaranty  Agreement,  (h)  permit any  assignment  (other  than as  specifically
permitted or contemplated in this Agreement) of any of the Borrower's rights and
obligations hereunder, (i) release any Collateral the fair market value of which
exceeds  $1,000,000  or release any  Security  Document  (other than asset sales
permitted  pursuant to Section 10.5 and as otherwise  specifically  permitted or
contemplated in this Agreement or the applicable Security  Document),  (j) amend
the definition of Alternative Currency, (k) amend the provisions of this Section
13.11  or the  definition  of  Required  Lenders,  (l)  extend  the  time of the
obligation of the Lenders to make or issue or  participate in Letters of Credit,
in each case,  without the prior written  consent of each Lender or (m) amend or
waive the provisions of Section  2.7(b).  In addition,  no amendment,  waiver or
consent to the  provisions  (a) of Article XII shall be made without the written
consent of the  Administrative  Agent,  (b) of Article III shall be made without
the written  consent of the Issuing  Lender,  (c) relating to Swingline Loans or
the  Swingline  Facility  shall  be made  without  the  written  consent  of the
Swingline  Lender  and  (d)  relating  to  Alternative  Currency  Loans  or  the
Alternative  Currency  Facility shall be made without the written consent of the
Alternative Currency Lender.

     SECTION 13.12 Performance of Duties. The Borrower's  obligations under this
Agreement  and  each of the  other  Loan  Documents  shall be  performed  by the
Borrower at its sole cost and expense.

     SECTION 13.13 All Powers Coupled with Interest.  All powers of attorney and
other  authorizations  granted to the Lenders,  the Administrative Agent and any
Persons  designated by the  Administrative  Agent or any Lender  pursuant to any
provisions of this Agreement or any of the other Loan Documents  shall be deemed
coupled  with  an  interest  and  shall  be  irrevocable  so  long as any of the
Obligations  remain  unpaid or  unsatisfied,  any of the  Commitments  remain in
effect or the Credit Facility has not been terminated.

     SECTION 13.14 Survival of Indemnities.  Notwithstanding  any termination of
this  Agreement,  the  indemnities  to which  the  Administrative  Agent and the
Lenders are  entitled  under the  provisions  of this Article XIII and any other
provision of this Agreement and the other Loan Documents  shall continue in full
force and effect and shall  protect  the  Administrative  Agent and the  Lenders
against events arising after such termination as well as before.

     SECTION  13.15  Titles and  Captions.  Titles  and  captions  of  Articles,
Sections and  subsections  in, and the table of contents of, this  Agreement are
for  convenience  only,  and neither  limit nor amplify the  provisions  of this
Agreement.

     SECTION 13.16  Severability of Provisions.  Any provision of this Agreement
or  any  other  Loan  Document  which  is  prohibited  or  unenforceable  in any
jurisdiction  shall, as to such jurisdiction,  be ineffective only to the extent
of such prohibition or  unenforceability  without  invalidating the remainder of
such  provision or the remaining  provisions  hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.

     SECTION 13.17 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate  counterparts,  each of
which when so executed  shall be deemed to be an  original  and shall be binding
upon all parties,  their successors and assigns, and all of which taken together
shall constitute one and the same agreement.

     SECTION 13.18 Term of Agreement. This Agreement shall remain in effect from
the Closing  Date  through  and  including  the date upon which all  Obligations
arising  hereunder or under any other Loan Document shall have been indefeasibly
and  irrevocably  paid and  satisfied  in full  and all  Commitments  have  been
terminated. The Administrative Agent is hereby permitted to release all Liens on
the Collateral in favor of the Administrative  Agent, for the ratable benefit of
itself and the Lenders,  upon repayment of the outstanding  principal of and all
accrued  interest on the Loans,  payment of all  outstanding  fees and  expenses
hereunder and the  termination  of the Lender's  Commitments.  No termination of
this  Agreement  shall affect the rights and  obligations  of the parties hereto
arising  prior  to such  termination  or in  respect  of any  provision  of this
Agreement which survives such termination.

     SECTION  13.19 Advice of Counsel.  Each of the parties  represents  to each
other party hereto that it has discussed this Agreement with its counsel.

     SECTION 13.20 No Strict Construction.  The parties hereto have participated
jointly in the  negotiation  and  drafting  of this  Agreement.  In the event an
ambiguity or question of intent or interpretation  arises,  this Agreement shall
be construed as if drafted  jointly by the parties  hereto and no presumption or
burden of proof shall arise favoring or  disfavoring  any party by virtue of the
authorship of any provisions of this Agreement.

     SECTION 13.21  Inconsistencies with Other Documents;  Independent Effect of
Covenants.

     (a)  In the  event  there  is a  conflict  or  inconsistency  between  this
Agreement  and any  other  Loan  Document,  the  terms of this  Agreement  shall
control;  provided,  that any provision of the Security  Documents which imposes
additional  burdens on the Borrower or its Subsidiaries or further restricts the
rights of the Borrower or its Subsidiaries or gives the Administrative  Agent or
Lenders  additional rights shall not be deemed to be in conflict or inconsistent
with this Agreement and shall be given full force and effect.

     (b) The  Borrower  expressly  acknowledges  and agrees  that each  covenant
contained in Articles VIII, IX, or X hereof shall be given  independent  effect.
Accordingly,  the  Borrower  shall not  engage in any  transaction  or other act
otherwise  permitted under any covenant contained in Articles VIII, IX, or X if,
before or after giving effect to such  transaction or act, the Borrower shall or
would be in breach of any other covenant contained in Articles VIII, IX, or X.

     SECTION  13.22  Continuity of Contract.  The parties  hereto agree that the
occurrence or  non-occurrence  of EMU, any event or events  associated  with EMU
and/or the introduction of the euro in all or any part of the European Union (a)
will not result in the  discharge,  cancellation,  rescission or  termination in
whole or in part of this Agreement or any other Loan Document, (b) will not give
any party the right to cancel, rescind,  terminate or vary this Agreement or any
other Loan  Document or (c) will not give rise to an Event of  Default,  in each
case other than as specifically provided in this Agreement.

                           [Signature pages to follow]


<PAGE>



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

                                  BORROWER:

[CORPORATE SEAL]                  COMPX INTERNATIONAL INC., as Borrower

                                  By:/s/David A. Bowers
                                  ---------------------------------------------
                                  Name: David A. Bowers
                                  ---------------------------------------------
                                  Title:President
                                  ---------------------------------------------


                [Signature pages continued on the following page]




<PAGE>


                        ADMINISTRATIVE AGENT AND LENDERS:

                                WACHOVIA BANK, NATIONAL
                                ASSOCIATION, as Administrative Agent
                                and Lender

                                By:/s/Thomas F. Snider
                                -----------------------------------------------
                                Name: Thomas F. Snider
                                -----------------------------------------------
                                Title:Vice President
                                -----------------------------------------------


                [Signature pages continued on the following page]




<PAGE>


                               COMPASS BANK, as Lender

                               By: /s/Key Coker
                               ------------------------------------------------
                               Name:  Key Coker
                               ------------------------------------------------
                               Title: Executive Vice President
                               ------------------------------------------------


                [Signature pages continued on the following page]


<PAGE>


                               COMERICA BANK, as Lender

                               By:/s/Mark B. Grover
                               ------------------------------------------------
                               Name: Mark B. Grover
                               ------------------------------------------------
                               Title:First Vice President
                               ------------------------------------------------




<PAGE>





                                 Schedule 1.1(a)
                                       to
                                Credit Agreement

                             Lenders and Commitments


<TABLE>
<CAPTION>
---------------------------------------------------- -------------------------- --------------------------------------
                      LENDER                                COMMITMENT                       COMMITMENT
                                                            PERCENTAGE
---------------------------------------------------- -------------------------- --------------------------------------
---------------------------------------------------- -------------------------- --------------------------------------
Wachovia Bank, National Association
Charlotte Plaza, CP-8
<C>                                                       <C>                              <C>
201 South College Street                                  52.6315789473%                   $25,000,000.00
Charlotte, North Carolina 28288-0680
Attention:  Syndication Agency Services
Telephone No.: (704) 374-2698
Telecopy No.: (704) 383-0288

---------------------------------------------------- -------------------------- --------------------------------------
---------------------------------------------------- -------------------------- --------------------------------------
Compass Bank
8080 N. Central Expway, Suite 250
Dallas, Texas  75206                                      26.3157894737%                   $12,500,000.00
Attention:  Key Coker
Telephone No.: 214-706-8044
Telecopy No.: 214-346-2746

---------------------------------------------------- -------------------------- --------------------------------------
---------------------------------------------------- -------------------------- --------------------------------------
Comerica Bank
U.S. Banking Department- South
4100 Spring Valley Road, Suite 400                        21.0526315790%                   $10,000,000.00
Dallas, Texas  75244
Attention:  Janet L. Wheeler
Telephone No.:  972-361-2652
Telecopy No.:   972-361-2550

---------------------------------------------------- -------------------------- --------------------------------------
---------------------------------------------------- -------------------------- --------------------------------------
TOTAL:                                                         100%                        $47,500,000.00
---------------------------------------------------- -------------------------- --------------------------------------
</TABLE>





<PAGE>


                                 Schedule 1.1(b)
                                       To
                                Credit Agreement


                               Mandatory Cost Rate


1.   The  Mandatory  Cost Rate is an addition to the interest rate to compensate
     Lenders for the cost of compliance with (a) the requirements of the Bank of
     England  and/or the United  Kingdom's  Financial  Services  Authority  (the
     "Financial  Services  Authority")  (or, in either case, any other authority
     which replaces all or any of its functions) or (b) the  requirements of the
     European Central Bank.

2.   On  the  first  day  of  each  Interest  Period  (or as  soon  as  possible
     thereafter),  the  Administrative  Agent shall  calculate,  as a percentage
     rate,  a rate (the  "Additional  Cost Rate") for each Lender in  accordance
     with  the  paragraphs  set out  below.  The  Mandatory  Cost  Rate  will be
     calculated  by  the  Administrative  Agent  as a  weighted  average  of the
     Lenders'  Additional  Cost Rates  (weighted in proportion to the percentage
     participation of each Lender in the relevant Loan) and will be expressed as
     a percentage rate per annum.

3.   The Additional  Cost Rate for any Lender lending from a Lending Office in a
     Participating  Member State will be the percentage  notified by that Lender
     to the  Administrative  Agent.  This  percentage  will be certified by that
     Lender  in its  notice  to the  Administrative  Agent to be its  reasonable
     determination  of the cost  (expressed  as a  percentage  of that  Lender's
     participation in all Loans made from that Lending Office) of complying with
     the minimum reserve requirements of the European Central Bank in respect of
     loans made from that Lending Office.

4.   The  Additional  Cost Rate for any Lender  lending from a Lending Office in
     the  United  Kingdom  will be  calculated  by the  Administrative  Agent as
     follows:

     (a) in relation to a Loan denominated in Pounds Sterling:

                       [OBJECT OMITTED] percent per annum

     (b) in relation to a Loan in denominated in any Alternative  Currency other
than Pounds Sterling:

                                [OBJECT OMITTED]
percent per annum.

        Where:

          A    is the percentage of Eligible  Liabilities  (assuming these to be
               in excess of any stated  minimum)  which that Lender is from time
               to time  required  to  maintain  as an  interest  free cash ratio
               deposit  with the Bank of  England  to  comply  with  cash  ratio
               requirements.

          B    is LIBOR for the relevant Interest Period on the relevant Loan.

          C    is the  percentage  (if any) of Eligible  Liabilities  which that
               Lender is  required  from time to time to  maintain  as  interest
               bearing Special Deposits with the Bank of England.

          D    is the  percentage  rate per annum payable by the Bank of England
               to the Administrative Agent on interest bearing Special Deposits.

          E    is designed to compensate  Lenders for amounts  payable under the
               Fees Rules and is calculated by the Administrative Agent as being
               the  average of the most recent  rates of charge  supplied by any
               applicable   reference  banks  (the  "Reference  Banks")  to  the
               Administrative  Agent pursuant to paragraph 7 below and expressed
               in pounds per (pound)1,000,000.

5.   For the purposes of this Schedule 1.1(b):

     (a)  "Eligible  Liabilities"  has the meaning given to it from time to time
under or pursuant to the Bank of England Act 1998 or (as may be  appropriate) by
the Bank of England;

     (b) "Fees  Rules"  means the rules on periodic  fees  contained  in the FSA
Supervision  Manual or such other law or regulation as may be in force from time
to time in respect of the payment of fees for the acceptance of deposits;

     (c) "Fee Tariffs"  means the fee tariffs  specified in the Fees Rules under
the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated
fee required  pursuant to the Fees Rules but taking into account any  applicable
discount rate); and

     (d) "Special Deposits" has the meanings given to it from time to time under
or pursuant to the Bank of England  Act 1998 or (as may be  appropriate)  by the
Bank of England;

     (e) "Tariff Base" has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.

6.   In application of the above formulae, A, B, C and D will be included in the
     formulae as percentages  (i.e. 5 percent will be included in the formula as
     5 and not as 0.05).  A negative  result  obtained by  subtracting  D from B
     shall be taken as zero.  The  resulting  figures  shall be  rounded to four
     decimal places.

7.   If requested by the  Administrative  Agent,  each Reference Bank shall,  as
     soon as practicable after publication by the Financial Services  Authority,
     supply  to the  Administrative  Agent the rate of  charge  payable  by that
     Reference  Bank to the Financial  Services  Authority  pursuant to the Fees
     Rules in respect of the relevant  financial year of the Financial  Services
     Authority  (calculated for this purpose by that Reference Bank as being the
     average  of the Fee  Tariffs  applicable  to that  Reference  Bank for that
     financial year) and expressed in pounds per  (pound)1,000,000 of the Tariff
     Base of that Reference Bank.

8.   Each Lender shall  supply any  information  required by the  Administrative
     Agent  for  the  purpose  of  calculating  its  Additional  Cost  Rate.  In
     particular, but without limitation,  each Lender shall supply the following
     information on or prior to the date on which it becomes a Lender:

     (a) the jurisdiction of its Lending Office; and

     (b) any other  information  that the  Administrative  Agent may  reasonably
require for such purpose.

     Each Lender shall promptly notify the Administrative Agent of any change to
     the information provided by it pursuant to this paragraph.

9.   The  percentages  of each  Lender for the  purpose of A and C above and the
     rates of charge of each  Reference Bank for the purpose of E above shall be
     determined by the Administrative  Agent based upon the information supplied
     to it  pursuant to  paragraphs  7 and 8 above and on the  assumption  that,
     unless a Lender  notifies the  Administrative  Agent to the contrary,  each
     Lender's  obligations  in  relation  to cash  ratio  deposits  and  Special
     Deposits are the same as those of a typical bank from its  jurisdiction  of
     incorporation with a Lending Office in the same jurisdiction as its Lending
     Office.

10.  The  Administrative  Agent  shall have no  liability  to any person if such
     determination  results  in an  Additional  Cost  Rate  which  over or under
     compensates any Lender and shall be entitled to assume that the information
     provided by any Lender or Reference  Bank pursuant to paragraphs 3, 7 and 8
     above is true and correct in all respects.

11.  The  Administrative  Agent shall distribute the additional amounts received
     as a result of the  Mandatory  Cost Rate to the Lenders on the basis of the
     Additional Cost Rate for each Lender based on the  information  provided by
     each  Lender and each  Reference  Bank  pursuant to  paragraphs  3, 7 and 8
     above.

12.  Any  determination  by the  Administrative  Agent pursuant to this Schedule
     1.1(b) in relation to a formula,  the  Mandatory  Cost Rate,  an Additional
     Cost Rate or any  amount  payable  to a Lender  shall,  in the  absence  of
     manifest error, be conclusive and binding on all parties.

13.  The Administrative Agent may from time to time, after consultation with the
     Borrower  and the  Lenders,  determine  and  notify to all  parties  of any
     amendments  which are required to be made to this Schedule  1.1(b) in order
     to comply with any change in law,  regulation or any requirements from time
     to time imposed by the Bank of England, the Financial Services Authority or
     the  European  Central  Bank (or, in any case,  any other  authority  which
     replaces all or any of its functions) and any such determination  shall, in
     the absence of manifest error, be conclusive and binding on all parties.



<PAGE>






                                CREDIT AGREEMENT

                          dated as of January 22, 2003,

                                  by and among

                            COMPX INTERNATIONAL INC.
                                  as Borrower,

                         the Lenders referred to herein,
                                   as Lenders,

                                       and

                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                             as Administrative Agent


                           WACHOVIA SECURITIES, INC.,
                   as Sole Lead Arranger and Sole Book Manager





<PAGE>



                                TABLE OF CONTENTS

                                                                       Page


ARTICLE I  DEFINITIONS................................................. 1
SECTION 1.1           Definitions.......................................1
SECTION 1.2           General...........................................19
SECTION 1.3           Effectiveness of Euro Provisions..................20
SECTION 1.4.          Other Definitions and Provisions..................20


ARTICLE II  REVOLVING CREDIT FACILITY...................................20
SECTION 2.1           Revolving Credit Loans............................20
SECTION 2.2           Alternative Currency Loans........................20
SECTION 2.3           Swingline Loans...................................22
SECTION 2.4           Procedure for Advances of Revolving Credit
                      Loans, Alternative Currency Loans and
                      Swingline Loans...................................25
SECTION 2.5           Repayment of Loans................................26
SECTION 2.6           Notes.............................................29
SECTION 2.7           Permanent Reduction of the
                      Aggregate Commitment and the Alternative
                      Currency Commitment...............................29
SECTION 2.8           Termination of Credit Facility....................31
SECTION 2.9           Increase of the Aggregate Commitment..............31


ARTICLE III  LETTER OF CREDIT FACILITY..................................32
SECTION 3.1           L/C Commitment....................................32
SECTION 3.2           Procedure for Issuance of Letters of Credit.......33
SECTION 3.3           Commissions and Other Charges.....................33
SECTION 3.4           L/C Participations................................34
SECTION 3.5           Reimbursement Obligation of the Borrower..........35
SECTION 3.6           Obligations Absolute..............................35
SECTION 3.7           Effect of Application.............................36


ARTICLE IV  GENERAL LOAN PROVISIONS.....................................36
SECTION 4.1           Interest..........................................36
SECTION 4.2           Notice and Manner of Conversion or
                      Continuation of Loans.............................39
SECTION 4.3           Fees..............................................40
SECTION 4.4           Manner of Payment.................................40
SECTION 4.5           Crediting of Payments and Proceeds................42
SECTION 4.6           Adjustments.......................................42
SECTION 4.7           Nature of Obligations of Lenders
                      Regarding Extensions of Credit; Assumption
                      by the Administrative Agent.......................42
SECTION 4.8.          Redenomination of Alternative Currency Loans......43
SECTION 4.9.          Regulatory Limitation.............................44
SECTION 4.10          Changed Circumstances.............................44
SECTION 4.11         Indemnity..........................................47
SECTION 4.12         Capital Requirements...............................47
SECTION 4.13         Taxes..............................................48
SECTION 4.14.        Rounding and Other Consequential Changes...........49
SECTION 4.15.        Replacement of Lenders.............................51
SECTION 4.16.        Security...........................................51


ARTICLE V  CLOSING; CONDITIONS OF CLOSING AND BORROWING.................51
SECTION 5.1           Closing...........................................51
SECTION 5.2           Conditions to Closing and Initial
                      Extensions of Credit..............................51
SECTION 5.3           Conditions to All Extensions of Credit............56


ARTICLE VI  REPRESENTATIONS AND WARRANTIES OF THE BORROWER..............57
SECTION 6.1           Representations and Warranties....................57
SECTION 6.2           Survival of Representations and Warranties, Etc...64


ARTICLE VII  FINANCIAL INFORMATION AND NOTICES..........................64
SECTION 7.1           Financial Statements and Projections..............65
SECTION 7.2           Officer's Compliance Certificate..................65
SECTION 7.3           Accountants' Certificate..........................65
SECTION 7.4           Other Reports.....................................66
SECTION 7.5           Notice of Litigation and Other Matters............66
SECTION 7.6           Accuracy of Information...........................67


ARTICLE VIII  AFFIRMATIVE COVENANTS.....................................67
SECTION 8.1           Preservation of Corporate Existence
                      and Related Matters...............................67
SECTION 8.2           Maintenance of Property...........................67
SECTION 8.3           Insurance.........................................67
SECTION 8.4           Accounting Methods and Financial Records..........67
SECTION 8.5           Payment and Performance of Obligations............68
SECTION 8.6           Compliance With Laws and Approvals................68
SECTION 8.7           Environmental Laws................................68
SECTION 8.8           Compliance with ERISA.............................68
SECTION 8.9           Compliance With Agreements........................69
SECTION 8.10         Visits and Inspections.............................69
SECTION 8.11         Additional Subsidiaries and Additional Collateral..69
SECTION 8.12         Use of Proceeds....................................71
SECTION 8.13         Further Assurances.................................71


ARTICLE IX  FINANCIAL COVENANTS.........................................71
SECTION 9.1           Leverage Ratio....................................71
SECTION 9.2           Consolidated Net Worth............................71
SECTION 9.3           Interest Coverage Ratio...........................71
SECTION 9.4           Capital Expenditures..............................72


ARTICLE X  NEGATIVE COVENANTS...........................................72
SECTION 10.1         Limitations on Debt................................72
SECTION 10.2         Limitations on Liens...............................73
SECTION 10.3         Limitations on Loans, Advances,
                     Investments and Acquisitions.......................74
SECTION 10.4         Limitations on Mergers and Liquidation.............76
SECTION 10.5         Limitations on Sale of Assets......................77
SECTION 10.6         Limitations on Dividends and Distributions.........77
SECTION 10.7         Limitations on Exchange and
                     Issuance of Capital Stock..........................78
SECTION 10.8         Transactions with Affiliates.......................78
SECTION 10.9         Certain Accounting Changes; Organizational
                     Documents..........................................78
SECTION 10.10        Amendments; Payments and Prepayments of
                     Subordinated Debt..................................79
SECTION 10.11        Restrictive Agreements.............................79
SECTION 10.12        Nature of Business.................................79
SECTION 10.13        Impairment of Security Interests...................79


ARTICLE XI  DEFAULT AND REMEDIES........................................79
SECTION 11.1         Events of Default..................................79
SECTION 11.2         Remedies...........................................82
SECTION 11.3         Rights and Remedies Cumulative; Non-Waiver; etc....83
SECTION 11.4.        Judgment Currency..................................83


ARTICLE XII  THE ADMINISTRATIVE AGENT...................................84
SECTION 12.1         Appointment........................................84
SECTION 12.2         Delegation of Duties...............................84
SECTION 12.3         Exculpatory Provisions.............................84
SECTION 12.4         Reliance by the Administrative Agent...............84
SECTION 12.5         Notice of Default..................................85
SECTION 12.6         Non-Reliance on the Administrative Agent
                     and Other Lenders..................................85
SECTION 12.7         Indemnification....................................86
SECTION 12.8         The Administrative Agent in Its
                     Individual Capacity................................86
SECTION 12.9         Administrative Agent May File Proofs of Claim......86
SECTION 12.10        Resignation of the Administrative Agent;
                     Successor Administrative Agent.....................86


ARTICLE XIII  MISCELLANEOUS.............................................88
SECTION 13.1         Notices............................................88
SECTION 13.2         Expenses; Indemnity................................89
SECTION 13.3         Set-off............................................89
SECTION 13.4         Governing Law......................................90
SECTION 13.5         Jurisdiction and Venue.............................90
SECTION 13.6         Binding Arbitration; Waiver of Jury Trial..........91
SECTION 13.7         Reversal of Payments...............................92
SECTION 13.8         Injunctive Relief; Punitive Damages................92
SECTION 13.9         Accounting Matters.................................92
SECTION 13.10        Successors and Assigns; Participations.............93
SECTION 13.11        Amendments, Waivers and Consents...................97
SECTION 13.12        Performance of Duties..............................97
SECTION 13.13        All Powers Coupled with Interest...................97
SECTION 13.14        Survival of Indemnities............................97
SECTION 13.15        Titles and Captions................................98
SECTION 13.16        Severability of Provisions.........................98
SECTION 13.17        Counterparts.......................................98
SECTION 13.18        Term of Agreement..................................98
SECTION 13.19        Advice of Counsel..................................98
SECTION 13.20        No Strict Construction.............................98
SECTION 13.21        Inconsistencies with Other Documents;
                     Independent Effect of Covenants....................98
SECTION 13.22        Continuity of Contract.............................99




<PAGE>


                             EXHIBITS AND SCHEDULES

EXHIBITS

Exhibit A-1          -        Form of Revolving Credit Note
Exhibit A-2          -        Form of Swingline Note
Exhibit A-3          -        Form of Alternative Currency Note
Exhibit B            -        Form of Notice of Borrowing
Exhibit C            -        Form of Notice of Account Designation
Exhibit D            -        Form of Notice of Prepayment
Exhibit E            -        Form of Notice of Conversion/Continuation
Exhibit F            -        Form of Officer's Compliance Certificate
Exhibit G            -        Form of Assignment and Acceptance
Exhibit H            -        Form of Subsidiary Guaranty Agreement
Exhibit I            -        Form of Collateral Agreement
Exhibit J            -        Form of Joinder Agreement


SCHEDULES

Schedule 1.1(a)      -        Lenders and Commitments
Schedule 1.1(b)      -        Mandatory Cost Rate
Schedule 6.1(a)      -        Jurisdictions of Organization and Qualification
Schedule 6.1(b)      -        Subsidiaries and Capitalization
Schedule 6.1(i)      -        ERISA Plans
Schedule 6.1(l)      -        Labor and Collective Bargaining Agreements
Schedule 6.1(s)      -        Debt and Guaranty Obligations
Schedule 6.1(t)      -        Litigation
Schedule 10.2        -        Existing Liens
Schedule 10.3        -        Existing Loans, Advances and Investments
Schedule 10.8        -        Transactions with Affiliates