LOAN AND SECURITY AGREEMENT



                                      among



                               FFP PARTNERS, L.P.
                                    ("FFPP")

                          FFP OPERATING PARTNERS, L.P.
                                    ("FFPO")

                               DIRECT FUELS, L.P.
                                ("Direct Fuels")

                               2801 Glenda Avenue
                          Fort Worth, Texas 76117-4391



                                       and





                            HSBC BUSINESS LOANS, INC.
                                ("Secured Party")



                    12655 North Central Expressway, Suite 300
                            Dallas, Texas 75243-1717


                             Dated: October 31, 1997





                                      

                                TABLE OF CONTENTS


1.  DEFINITIONS.............................................................1
         1.1.  CERTAIN SPECIFIC TERMS.......................................1
         1.2.  SINGULARS AND PLURALS........................................8
         1.3.  UCC DEFINITIONS..............................................9
2.  ADVANCES................................................................9
         2.1.  REQUESTS FOR ADVANCES FOR REVOLVING LOANS....................9
         2.2.  PROCEEDS OF ADVANCES FOR REVOLVING LOANS.....................9
         2.3.  ESTABLISHMENT OF RESERVES....................................9
         2.4.  LETTERS OF CREDIT............................................9
3.  COLLATERAL AND INDEBTEDNESS SECURED....................................10
         3.1.  SECURITY INTEREST...........................................10
         3.2. OTHER COLLATERAL.............................................11
         3.3.  INDEBTEDNESS SECURED........................................11
4.  CONDITIONS TO ADVANCES.................................................11
         4.1.  PARTNERSHIP ACTION..........................................11
         4.2.  PARTNERSHIP DOCUMENTS.......................................11
         4.3. OPINIONS.....................................................11
         4.4.  TRANSACTION DOCUMENTS.......................................12
         4.5. THIRD PARTY ACTION...........................................12
         4.6. GUARANTIES...................................................12
         4.7. OTHER MATTERS................................................12
5.  REPRESENTATIONS AND WARRANTIES.........................................12
         5.1.  PARTNERSHIP EXISTENCE.......................................12
         5.2.  PARTNERSHIP CAPACITY........................................12
         5.3.  VALIDITY OF RECEIVABLES.....................................12
         5.4.  INVENTORY...................................................13
         5.5.  TITLE TO COLLATERAL.........................................13
         5.6.  NOTES RECEIVABLE............................................13
         5.7.  EQUIPMENT...................................................13
         5.8.  PLACE OF BUSINESS...........................................14
         5.9.  FINANCIAL CONDITION.........................................14
         5.10.  TAXES......................................................14
         5.11.  LITIGATION.................................................14
         5.12.  ERISA MATTERS..............................................14
         5.13.  ENVIRONMENTAL MATTERS......................................15
         5.14.  VALIDITY OF TRANSACTION DOCUMENTS..........................15
         5.15.  NO CONSENT OR FILING.......................................15
         5.16.  NO VIOLATIONS..............................................15
         5.17.  TRADEMARKS AND PATENTS.....................................16
         5.18.  CONTINGENT LIABILITIES.....................................16
         5.19. SOLVENCY....................................................16
         5.20.  COMPLIANCE WITH LAWS.......................................16
         5.21.  LICENSES, PERMITS, ETC.....................................16
         5.22. USE OF PROCEEDS; MARGIN STOCK...............................16
         5.23. COMMISSIONS.................................................17
         5.24.  LABOR CONTRACTS............................................17
         5.25.  CONSOLIDATED SUBSIDIARIES..................................17
         5.26. ACCURACY OF REPRESENTATIONS.................................17
         5.27.  PARTNERSHIP INTERESTS......................................17
         5.28.  NO ADVERSE CHANGE..........................................17
         5.29.  NO DEFAULT.................................................17
         5.30.  MATERIAL AGREEMENTS........................................17
         5.31.  NO FINANCING OF CORPORATE TAKEOVERS........................17
6.  CERTAIN DOCUMENTS TO BE DELIVERED TO SECURED PARTY.....................17
         6.1.  DOCUMENTS...................................................17
         6.2.  INVOICES....................................................18
         6.3.  CHATTEL PAPER...............................................18
7.  COLLECTIONS............................................................18
8.  PAYMENT OF PRINCIPAL, INTEREST, FEES, AND COSTS AND EXPENSES...........18
         8.1.  PROMISE TO PAY PRINCIPAL....................................18
         8.2.  PROMISE TO PAY INTEREST.....................................19
         8.3.  PROMISE TO PAY FEES.........................................19
         8.4.  PROMISE TO PAY COSTS AND EXPENSES...........................20
         8.5.  METHOD OF PAYMENT OF PRINCIPAL, INTEREST, FEES, AND
                  COSTS AND EXPENSES.......................................20
         8.6.  COMPUTATION OF DAILY OUTSTANDING BALANCE....................21
         8.7.  ACCOUNT STATED..............................................21
         8.8. CAPITAL ADEQUACY.............................................21
         8.9. ADDITIONAL PROVISIONS APPLICABLE TO LIBOR....................22
9.  PROCEDURES AFTER SCHEDULING RECEIVABLES................................24
         9.1.  RETURNED MERCHANDISE........................................24
         9.2.  CREDITS AND EXTENSIONS......................................25
         9.3.   RETURNED INSTRUMENTS.......................................25
         9.4.  DEBIT MEMORANDA.............................................25
         9.5.  NOTES RECEIVABLE............................................25
10.  AFFIRMATIVE COVENANTS.................................................26
         10.1.  FINANCIAL STATEMENTS.......................................26
         10.2.  GOVERNMENT AND OTHER SPECIAL RECEIVABLES...................26
         10.3.  TERMS OF SALE..............................................27
         10.4.  BOOKS AND RECORDS..........................................27
         10.5.  INVENTORY IN POSSESSION OF THIRD PARTIES...................27
         10.6.  EXAMINATIONS...............................................27
         10.7.  VERIFICATION OF COLLATERAL.................................27
         10.8.  RESPONSIBLE PARTIES........................................27
         10.9.  TAXES......................................................27
         10.10.  LITIGATION................................................28
         10.11.  INSURANCE.................................................28
         10.12.  EXISTENCE; BUSINESS.......................................28
         10.13.  PENSION REPORTS...........................................29
         10.14.  NOTICE OF NON-COMPLIANCE..................................29
         10.15.  COMPLIANCE WITH ENVIRONMENTAL LAWS........................29
         10.16. DEFEND COLLATERAL..........................................29
         10.17.  USE OF PROCEEDS...........................................29
         10.18.  COMPLIANCE WITH LAWS......................................29
         10.19.  MAINTENANCE OF PROPERTY...................................29
         10.20.  LICENSES, PERMITS, ETC....................................30
         10.21.  TRADEMARKS AND PATENTS....................................30
         10.22.  ERISA.....................................................30
         10.23.  MAINTENANCE OF OWNERSHIP..................................30
         10.24.  ACTIVITIES OF CONSOLIDATED SUBSIDIARIES...................30
         10.25. LANDLORD AND WAREHOUSEMAN WAIVERS..........................30
         10.26. COMPLIANCE WITH MATERIAL AGREEMENTS........................30
         10.27. OTHER NOTICES..............................................30
11.  NEGATIVE COVENANTS....................................................31
         11.1.  LOCATION OF INVENTORY, EQUIPMENT, AND BUSINESS RECORDS.....31
         11.2.  BORROWED MONEY.............................................31
         11.3.  SECURITY INTEREST AND OTHER ENCUMBRANCES...................31
         11.4.  STORING AND USE OF COLLATERAL..............................31
         11.5.  MERGERS, CONSOLIDATIONS, OR SALES..........................31
         11.6.  PARTNERSHIP INTERESTS......................................31
         11.7.  DISTRIBUTIONS..............................................31
         11.8.  INVESTMENTS AND ADVANCES...................................31
         11.9.  GUARANTIES.................................................32
         11.10.  LEASES....................................................32
         11.11.  CAPITAL EXPENDITURES......................................32
         11.12.  COMPENSATION..............................................32
         11.13.  NAME CHANGE...............................................32
         11.14.  DISPOSITION OF COLLATERAL.................................32
         11.15.  FINANCIAL COVENANTS.......................................32
         11.16.  FISCAL YEAR AND ACCOUNTING METHOD.........................32
         11.17.  LINES OF BUSINESS.........................................32
12.  EVENTS OF DEFAULT.....................................................33
         12.1.  EVENTS OF DEFAULT..........................................33
         12.2.  EFFECTS OF AN EVENT OF DEFAULT.............................35
13.  SECURED PARTY'S RIGHTS AND REMEDIES...................................35
         13.1.  GENERALLY..................................................35
         13.2.  NOTIFICATION OF ACCOUNT DEBTORS............................35
         13.3.  POSSESSION OF COLLATERAL...................................36
         13.4.  COLLECTION OF RECEIVABLES..................................36
         13.5.  ENDORSEMENT OF CHECKS; DEBTOR'S MAIL.......................36
         13.6.  LICENSE TO USE PATENTS, TRADEMARKS, AND TRADENAMES.........36
14.  MISCELLANEOUS.........................................................36
         14.1.  PERFECTING THE SECURITY INTEREST; PROTECTING THE
                  COLLATERAL...............................................36
         14.2.  PERFORMANCE OF DEBTOR'S DUTIES.............................36
         14.3.  NOTICE OF SALE.............................................37
         14.4.  WAIVER BY SECURED PARTY....................................37
         14.5.  WAIVER BY DEBTOR...........................................37
         14.6.  SETOFF.....................................................37
         14.7.  ASSIGNMENT.................................................37
         14.8.  SUCCESSORS AND ASSIGNS.....................................37
         14.9.  MODIFICATION...............................................37
         14.10.  COUNTERPARTS..............................................37
         14.11.  GENERALLY ACCEPTED ACCOUNTING PRINCIPLES..................38
         14.12.  INDEMNIFICATION...........................................38
         14.13.  TERMINATION; PREPAYMENT PREMIUM...........................39
         14.14.  FURTHER ASSURANCES........................................40
         14.15.  HEADINGS..................................................40
         14.16.  CUMULATIVE SECURITY INTEREST, ETC.........................40
         14.17.  SECURED PARTY'S DUTIES....................................40
         14.18.  NOTICES GENERALLY.........................................40
         14.19.  SEVERABILITY..............................................40
         14.20.  INCONSISTENT PROVISIONS...................................40
         14.21.  USURY SAVINGS.............................................41
         14.22. PARTICIPATIONS.............................................41
         14.23.  APPLICABLE LAW............................................41
         14.24.  CONSENT TO JURISDICTION...................................42
         14.25.  JURY TRIAL WAIVER.........................................42
         14.26.  ARTICLE 15.10(b)..........................................42
         14.27.  FINAL AGREEMENT...........................................42


Debtor and Secured Party agree as follows:


1.  DEFINITIONS.

          1.1. CERTAIN SPECIFIC TERMS. For purposes of this Loan and Security
Agreement  (this  "Agreement"),  the  following  terms shall have the  following
meanings:

          (a) ACCOUNT DEBTOR means the person,  firm, or entity obligated to pay
     a Receivable.

          (b) ADVANCE  means any  Revolving  Loan or Term Loan made to Debtor by
     Secured Party pursuant to this Agreement.

          (c) BORROWING  CAPACITY means, at the time of computation,  the amount
     specified in Item 1 of the Schedule.

          (d) BUSINESS DAY means a day other than a Saturday,  Sunday,  or other
     day on which  banks are  authorized  or required to close under the laws of
     New  York  or  the  State;  provided,  that  such  day  is a day  in  which
     transactions occur in the London interbank market,  and provided,  further,
     that for purposes of Item 20 of the Schedule and of calculations  made with
     reference  thereto,  a Business Day shall be deemed to be the equivalent of
     1.4 calendar days.

          (e)  COLLATERAL  means  collectively  all of the  property  of  Debtor
     subject to the Security Interest and described in Sections 3.1 and 3.2.

          (f) CONSOLIDATED  SUBSIDIARY means any entity of which at least 50% of
     the equity interest is owned by Debtor directly,  or indirectly through one
     or more of its  subsidiaries.  If Debtor has no Consolidated  Subsidiaries,
     the  provisions of this  Agreement  relating to  Consolidated  Subsidiaries
     shall  be  inapplicable   without   affecting  the  applicability  of  such
     provisions to Debtor alone.

          (g)  CREDIT  means  any  discount,   allowance,   credit,  rebate,  or
     adjustment  granted by Debtor with  respect to a  Receivable,  other than a
     cash discount described in Item 3 of the Schedule.

          (h) DEBT SERVICE  COVERAGE means, for the period of  determination,  a
     ratio with the Net Profit After Taxes (as defined below) plus  depreciation
     and  amortization  expense  as the  numerator  and the  sum of the  regular
     principal payments of any long term debt due over the next 12 months as the
     denominator.

          (i)  DEBT TO  TANGIBLE  NET  WORTH  RATIO  means a  ratio  with  total
     liabilities minus the principal balance of any debt that is subordinated to
     Secured  Party in a manner  satisfactory  to Secured Party as the numerator
     and with Tangible Net Worth (as defined below) as the denominator.

          (j)  DEBTOR  means,  collectively,  FFPP,  FFPO and  Direct  Fuels (as
     defined  on the  cover  page to this  Agreement)  and,  if the  context  so
     requires, DEBTOR shall refer to any of such parties.

                                                     
          (k)  DISPOSAL  means the  intentional  or  unintentional  abandonment,
     discharge,   deposit,  injection,   dumping,  spilling,  leaking,  storing,
     burning,  thermal  destruction,  or placing of any Hazardous  Substances so
     that they or any of their constituents may enter the environment.

          (l) ELIGIBLE EQUIPMENT means that Equipment of Debtor in which Secured
     Party has a first-priority  perfected  security interest reduced by (i) any
     Equipment as to which a representation or warranty contained in Section 5.5
     or 5.7 is not, or does not continue to be, true and accurate;  and (ii) any
     Equipment  which  is  otherwise  unacceptable  to  Secured  Party,  in  its
     reasonable judgment.

          (m) ELIGIBLE  INVENTORY means all Inventory of Debtor in which Secured
     Party has a first-priority  perfected  security interest reduced by (i) any
     Inventory as to which a representation or warranty contained in Section 5.4
     or 5.5 is not, or does not continue to be, true and accurate;  and (ii) any
     Inventory  which  is  otherwise  unacceptable  to  Secured  Party,  in  its
     reasonable judgment.

          (n) ENVIRONMENT means any water including, but not limited to, surface
     water and ground water or water vapor;  any land  including land surface or
     subsurface;  stream sediments;  air; fish, wildlife,  plants; and all other
     natural resources or environmental media.

          (o)   ENVIRONMENTAL   LAWS  means  all  federal,   state,   and  local
     environmental,   land  use,  zoning,  health,   chemical  use,  safety  and
     sanitation  laws,  statutes,  ordinances,  regulations,  codes,  and  rules
     relating to the  protection of the  Environment  and/or  governing the use,
     storage,  treatment,  generation,  transportation,   processing,  handling,
     production,   or  disposal  of  Hazardous   Substances  and  the  policies,
     guidelines, procedures, interpretations,  decisions, orders, and directives
     of federal,  state,  and local  governmental  agencies and authorities with
     respect thereto.

          (p)  ENVIRONMENTAL  PERMITS  means all licenses,  permits,  approvals,
     authorizations,  consents,  or  registrations  required  by any  applicable
     Environmental Laws and all applicable judicial and administrative orders in
     connection with ownership, lease, purchase,  transfer, closure, use, and/or
     operation  of any  property  owned,  leased,  or  operated by Debtor or any
     Consolidated  Subsidiary  and/or  as  may  be  required  for  the  storage,
     treatment, generation, transportation, processing, handling, production, or
     disposal of Hazardous Substances.

          (q)  ENVIRONMENTAL   QUESTIONNAIRE   means  a  questionnaire  and  all
     attachments thereto concerning (i) activities and conditions  affecting the
     Environment  at any property of Debtor or any  Consolidated  Subsidiary  or
     (ii) the  enforcement  or possible  enforcement  of any  Environmental  Law
     against Debtor or any Consolidated Subsidiary.

          (r)  ENVIRONMENTAL  REPORT means a written report prepared for Secured
     Party by an environmental consulting or environmental engineering firm.

          (s) ERISA means the Employee  Retirement  Income Security Act of 1974,
     as amended from time to time.

          (t)  EURODOLLAR  INTEREST  PERIOD  means the  period of time for which
     LIBOR  shall be in  effect as to any  Advance  bearing  interest  at LIBOR,
     commencing  on the  date  of the  Advance  or the  expiration  date  of the
     immediately  preceding  Eurodollar  Interest  Period,  as the  case may be,
     applicable to and ending on the  effective  date of any rate change or rate
     continuation  made as provided in Section 8.9(a) as a Debtor may specify in
     a  Notice  of  Continuation/Conversion,   subject,  however  to  the  early
     termination provisions herein;  provided,  however, that (i) any Eurodollar
     Interest  Period which would otherwise end on a day which is not a Business
     Day shall be  extended  to the next  succeeding  Business  Day unless  such
     Business Day falls in another calendar month, in which case such Eurodollar
     Interest  Period shall end on the next  preceding  Business  Day, (ii) each
     Eurodollar  Interest  Period shall be three or six calendar months for each
     Revolving  Loan, and six or twelve calendar months for the Term Loan, or be
     of such  other  length as the  Debtor and the  Secured  Party may  mutually
     agree,  (iii) a  Eurodollar  Interest  Period may not be  selected  for any
     Advance if such period  would  terminate  later than the time  specified in
     Section 14.13(a), and (iv) a Eurodollar Interest Period may not be selected
     for any Advance if such  period  would  terminate  beyond a date on which a
     scheduled payment of principal on such Advance is required.

          (u)  EURODOLLAR  LENDING  OFFICE  means the  office  specified  as the
     Secured Party's "Eurodollar Lending Office" in Item 37 of the Schedule.

          (v) EURODOLLAR RESERVE  PERCENTAGE means, for any Eurodollar  Interest
     Period for any Advance bearing  interest at LIBOR,  the reserve  percentage
     applicable during such Eurodollar Interest Period (or if more than one such
     percentage  shall be so applicable,  the daily average of such  percentages
     for those days in such  Eurodollar  Interest  Period  during which any such
     percentage shall be so applicable)  under  regulations  issued from time to
     time by the Board of Governors of the Federal Reserve System.

          (w) EVENT OF DEFAULT means an Event of Default or Events of Default as
     defined in Section 12.1.

          (x)  EXTENSION  means the granting to an Account  Debtor of additional
     time within which such Account Debtor is required to pay a Receivable.

          (y) FEDERAL  BANKRUPTCY CODE means Title 11 of the United States Code,
     entitled "Bankruptcy," as amended, or any successor federal bankruptcy law.

          (z) GUARANTOR means,  collectively,  Direct Fuels Management  Company,
     Inc.  and FFP  Partners  Management  Company,  Inc.,  and if the context so
     requires, GUARANTOR shall refer to any of such parties.

          (aa) HAZARDOUS SUBSTANCES means,  without limitation,  any explosives,
     radon, radioactive materials,  asbestos, urea formaldehyde foam insulation,
     polychlorinated  biphenyls,  petroleum  and  petroleum  products,  methane,
     hazardous materials,  hazardous wastes, hazardous or toxic substances,  and
     any other material  defined as a hazardous  substance in Section 101(14) of
     the Comprehensive Environmental Response, Compensation and Liability Act of
     1980, 42 U.S.C. Section 9601(14).

          (bb) HIGHEST LAWFUL RATE means,  with respect to the Secured Party and
     Marine Midland Bank, the maximum nonusurious interest rate, if any, that at
     any  time or from  time to time may be  contracted  for,  taken,  reserved,
     charged or received  with respect to the Advances or on other  amounts,  if
     any, due to Secured Party or Marine Midland Bank pursuant to this Agreement
     or any other Transaction  Document,  under laws applicable to Secured Party
     and Marine  Midland Bank which are  presently in effect,  or, to the extent
     allowed by law, under such applicable laws which may hereafter be in effect
     and which allow a higher maximum nonusurious  interest rate than applicable
     laws now allow.

          (cc)  INDEBTEDNESS  means the  indebtedness  secured  by the  Security
     Interest and described in Section 3.3.

          (dd) INELIGIBLE  RECEIVABLES means the following described Receivables
     and any other Receivables which are not reasonably  satisfactory to Secured
     Party for credit or any other reason:

          (i) Any Receivable  which has remained unpaid for more than the number
     of days specified in Item 4 of the Schedule.

          (ii) Any Receivable with respect to which a representation or warranty
     contained in Sections  5.3, 5.5, or 5.6 is not, or does not continue to be,
     true and accurate, including, without limitation, any Receivable subject to
     a setoff.

          (iii) Any  Receivable  with  respect to which  Debtor has extended the
     time for payment  without the consent of Secured Party,  except as provided
     in Section 9.2(a).

          (iv)  Any  Receivable  as to  which  any one or more of the  following
     events  occurs:  a request or  petition  for  liquidation,  reorganization,
     arrangement,  adjustment  of debts,  adjudication  as a bankrupt,  or other
     relief  under the  bankruptcy,  insolvency,  or similar  laws of the United
     States, any state or territory thereof, or any foreign jurisdiction, now or
     hereafter in effect,  shall be filed by or against a Responsible  Party;  a
     Responsible  Party  shall make any  general  assignment  for the benefit of
     creditors;  a  receiver  or  trustee,  including,   without  limitation,  a
     "custodian," as defined in the Federal  Bankruptcy Code, shall be appointed
     for a Responsible  Party or for any of the assets of a  Responsible  Party;
     any other type of insolvency proceeding with respect to a Responsible Party
     (under the bankruptcy laws of the United States or otherwise) or any formal
     or informal proceeding for the dissolution or liquidation of, settlement of
     claims against,  or winding up of affairs of, a Responsible  Party shall be
     instituted;  all or any material part of the assets of a Responsible  Party
     shall be sold, assigned, or transferred;  a Responsible Party shall fail to
     pay its debts as they become due; or a Responsible  Party shall cease doing
     business as a going concern.

          (v)  All  Receivables  owed by an  Account  Debtor  owing  Receivables
     classified as  ineligible  under any criterion set forth in any of Sections
     1.1(dd)(i)  through  1.1(dd)(iv),  if the outstanding dollar amount of such
     Receivables  constitutes a percentage of the aggregate  outstanding  dollar
     amount of all  Receivables  owed by such Account Debtor equal to or greater
     than the percentage specified in Item 5 of the Schedule.

          (vi) All Receivables owed by an Account Debtor which does not maintain
     its chief  executive  office in the United States or which is not organized
     under  the  laws  of the  United  States  or any  state,  unless  otherwise
     specified in Item 6 of the Schedule.

          (vii)  All  Receivables  owed by an  Account  Debtor  if Debtor or any
     person who, or entity which, directly or indirectly controls Debtor, either
     owns in whole or material  part, or directly or indirectly  controls,  such
     Account Debtor.

          (viii) Any Receivable arising from a consignment or other arrangement,
     pursuant  to which  the  subject  Inventory  is  returnable  if not sold or
     otherwise disposed of by the Account Debtor; any Receivable  constituting a
     partial  billing under terms providing for payment only after full shipment
     or  performance;  any  Receivable  arising  from a bill and hold sale or in
     connection  with any  prebilling  where the  Inventory or services have not
     been  delivered,  performed,  or accepted by the Account  Debtor if Secured
     Party has not  entered  into a written  agreement  satisfactory  to Secured
     Party  with such  Account  Debtor  relating  to such  Receivables;  and any
     Receivable as to which the Account Debtor contends the balance  reported by
     Debtor is incorrect or not owing.

          (ix) Any Receivable which is unenforceable  against the Account Debtor
     for any reason.

          (x) Any Receivable which is an Instrument,  Document, or Chattel Paper
     or  which  is  evidenced  by a note,  draft,  trade  acceptance,  or  other
     instrument  for the  payment  of money  where  such  Instrument,  Document,
     Chattel Paper, note, draft,  trade acceptance,  or other instrument has not
     been endorsed and delivered by Debtor to Secured Party.

          (xi) Any  Receivable or  Receivables  owed by an Account  Debtor which
     exceeds any credit  limit  established  by Secured  Party for such  Account
     Debtor;  provided,  that such Receivable or Receivables shall be ineligible
     only to the extent of such excess.

          (ee)  INTANGIBLE  ASSETS means (1) all loans or advances to, and other
     receivables  owing from, any officers,  employees,  subsidiaries  and other
     affiliates, (2) all investments,  whether in a subsidiary or otherwise, (3)
     goodwill,  (4) any other assets deemed intangible under generally  accepted
     accounting  principles,  and (5) any  other  assets  deemed  intangible  by
     Secured Party in its reasonable credit judgement.

          (ff) INTERNAL REVENUE CODE means the Internal Revenue Code of 1986, as
     amended from time to time.

          (gg) INVENTORY means inventory,  as defined in the Uniform  Commercial
     Code as in effect in the State as of the date of this Agreement, and in any
     event shall include returned or repossessed Goods.

          (hh) INVENTORY  BORROWING BASE means, at the time of  computation,  an
     amount up to the  percentages  specified  in Item 2 of the  Schedule of the
     dollar value of Eligible  Inventory,  such dollar value to be calculated at
     the lower of actual cost or market  value and  accounted  for in the manner
     specified  in Item 7 of the  Schedule,  less  the  amount  of any  reserves
     established by Secured Party in accordance with Section 2.3.

          (ii) INVOICE  means any document or documents  used, or to be used, to
     evidence a Receivable.

          (jj)  LETTER OF CREDIT  means any  documentary  or  standby  letter of
     credit issued by Marine Midland Bank for the account of the Debtor.

          (kk) LIBOR means with respect to the  applicable  Eurodollar  Interest
     Period in effect for each Advance bearing  interest at LIBOR,  the quotient
     obtained by dividing (a) the annual rate of interest  determined  by Marine
     Midland Bank, at or before 10:00 a.m.  (London time) (or as soon thereafter
     as  practicable),  on the third Business Day prior to the first day of such
     Eurodollar  Interest  Period,  to be the annual  rate of  interest at which
     deposits of U.S.  dollars are offered to Marine Midland Bank by prime banks
     in the London interbank market as may be selected by Marine Midland Bank in
     its sole discretion, acting in good faith, at the time of determination and
     in accordance  with the then existing  practice in such market for delivery
     on  the  first  day of  such  Eurodollar  Interest  Period  in  immediately
     available  funds and having a maturity  equal to such  Eurodollar  Interest
     Period in an amount  equal (or as nearly  equal as may be  possible) to the
     unpaid  principal  amount of such Advance by (b) a percentage equal to 100%
     minus  the  Eurodollar  Reserve  Percentage  for such  Eurodollar  Interest
     Period.  Each  determination  of  LIBOR  made  by  Marine  Midland  Bank in
     accordance  with this paragraph  shall be conclusive  except in the case of
     manifest error.

          (ll) MARINE  PAYMENT  ACCOUNT  means the special bank account to which
     Proceeds  of  Collateral,   including,  without  limitation,   payments  on
     Receivables  and other  payments  from  sales or leases of  Inventory,  are
     credited.  There is a Marine  Payment  Account if so indicated in Item 8 of
     the Schedule.

          (mm) NET PROFIT AFTER TAXES means, for a period of determination,  net
     income after provisions for taxes for such period, determined in accordance
     with generally accepted accounting principles consistently applied.

          (nn) NOTICE OF CONTINUATION/CONVERSION is defined in Section 8.9(a).

          (oo)  PENSION  EVENT  means,  with  respect to any Pension  Plan,  the
     occurrence of (i) any  prohibited  transaction  described in Section 406 of
     ERISA or in Section 4975 of the Internal  Revenue Code; (ii) any Reportable
     Event;  (iii) any complete or partial  withdrawal,  or proposed complete or
     partial  withdrawal,  of Debtor or any  Consolidated  Subsidiary  from such
     Pension  Plan;  (iv) any  complete  or  partial  termination,  or  proposed
     complete  or  partial  termination,  of  such  Pension  Plan;  or  (v)  any
     accumulated  funding  deficiency  (whether  or not  waived),  as defined in
     Section 302 of ERISA or in Section 412 of the Internal Revenue Code.


          (pp) PENSION PLAN means any pension  plan,  as defined in Section 3(2)
     of ERISA,  which is a  multiemployer  plan or a single  employer  plan,  as
     defined  in  Section  4001 of ERISA,  and  subject to Title IV of ERISA and
     which is (i) a plan maintained by Debtor or any Consolidated Subsidiary for
     employees or former employees of Debtor or of any Consolidated  Subsidiary;
     (ii) a plan to which Debtor or any Consolidated  Subsidiary  contributes or
     is required to contribute; (iii) a plan to which Debtor or any Consolidated
     Subsidiary was required to make  contributions  at any time during the five
     (5) calendar years preceding the date of this Agreement;  or (iv) any other
     plan with  respect  to which  Debtor  or any  Consolidated  Subsidiary  has
     incurred or may incur liability, including, without limitation,  contingent
     liability,  under  Title IV of ERISA  either to such plan or to the Pension
     Benefit  Guaranty  Corporation.  For purposes of this  definition,  and for
     purposes of Sections 1.1(ii),  5.12, and 12.1(i),  Debtor shall include any
     trade or business (whether or not incorporated) which, together with Debtor
     or any Consolidated Subsidiary,  is deemed to be a "single employer" within
     the meaning of Section 4001(b)(1) of ERISA.

          (qq) PRIME  RATE  means the rate of  interest  publicly  announced  by
     Marine  Midland  Bank from time to time as its prime rate,  which rate is a
     base rate for calculating  interest on certain loans. The rate announced by
     Marine  Midland Bank as its prime rate may or may not be the most favorable
     rate charged by Marine Midland Bank to its customers.

          (rr) RECEIVABLE means the right to payment for Goods sold or leased or
     services rendered by Debtor, whether or not earned by performance, and may,
     without  limitation,  in  whole  or in part be in the  form of an  Account,
     Chattel Paper, Document, or Instrument.

          (ss) RECEIVABLES BORROWING BASE means, at the time of its computation,
     the aggregate amount of the outstanding  Receivables in which Secured Party
     has a first priority  perfected security interest (adjusted with respect to
     Credits and returned  merchandise as provided in Article 9 hereof) less the
     amount of Ineligible  Receivables  and any reserves  established by Secured
     Party in accordance with Section 2.3.

          (tt) RELEASE  means  "release,"  as defined in Section  101(22) of the
     Comprehensive,  Environmental  Response,  Compensation and Liability Act of
     1980,  42  U.S.C.  Section  9601(22),   and  the  regulations   promulgated
     thereunder.

          (uu) REPORTABLE  EVENT means any event described in Section 4043(b) of
     ERISA or in regulations issued thereunder with regard to a Pension Plan.

          (vv)  RESPONSIBLE  PARTY means an Account Debtor, a general partner of
     an Account Debtor, or any party otherwise in any way directly or indirectly
     liable for the payment of a Receivable.

          (ww) REVOLVING LOAN is defined in Section 2.1.

          (xx)  SCHEDULE  means the schedule  executed in connection  with,  and
     which is a part of, this Agreement.

          (yy)  SECURED  PARTY  means the person or entity  defined on the cover
     page of this Agreement and any successors or assigns of Secured Party.

          (zz) SECURITY  INTEREST means the security interest granted to Secured
     Party by Debtor as described in Section 3.1.

          (aaa)  SOLVENT  means,  with  respect  to any  person  or  entity on a
     particular  determination date, that on such date (i) the fair value of the
     property of such person or entity is greater than the total amount of debts
     and  other  liabilities,  including,  without  limitation,  contingent  and
     unliquidated  liabilities,  of such person or entity; (ii) the present fair
     salable  value of the assets of such  person or entity is greater  than the
     amount that will be required to pay the  probable  liability of such person
     or  entity on its  existing  debts and  other  liabilities  as they  become
     absolute and  matured;  (iii) such person or entity is able to realize upon
     its assets and pay its debts and other liabilities, contingent obligations,
     and other commitments as they mature in the normal course of business; (iv)
     such  person or entity  does not intend to,  and does not  believe  that it
     will,  incur debts or other  liabilities  beyond such  person's or entity's
     ability to pay as such debts and other  liabilities  mature or become  due;
     and (v) such person or entity is not engaged in a business or  transaction,
     and is not about to engage in a business or a  transaction,  for which such
     person's or entity's property would constitute unreasonably small capital.

          (bbb) STATE means the State of the United States  specified in Item 31
     of the Schedule.

          (ccc)  TANGIBLE NET WORTH means the sum of  stockholders'  and owners'
     equity  plus the  principal  balance  of any debt that is  subordinated  to
     Secured  Party in a manner  satisfactory  to Secured  Party  minus the book
     value of Intangible Assets (as defined above), all determined in accordance
     with generally accepted accounting principles consistently applied.

          (ddd) TERM LOAN is defined in Section 2.5.

          (eee)  THIRD  PARTY  means any person or entity who has  executed  and
     delivered,  or who in the future may execute and deliver,  to Secured Party
     any agreement,  instrument,  or document,  pursuant to which such person or
     entity has guaranteed to Secured Party the payment of the  Indebtedness  or
     has granted Secured Party a security  interest in or lien on some or all of
     such person's or entity's  real or personal  property to secure the payment
     of the Indebtedness.

          (fff)  TRANSACTION  DOCUMENTS  means this Agreement and all documents,
     including,  without  limitation,  collateral  documents,  letter  of credit
     agreements,  notes,  acceptance  credit  agreements,  security  agreements,
     pledges,   guaranties,   mortgages,  title  insurance,   assignments,   and
     subordination  agreements  required  to be  executed  by Debtor,  any Third
     Party, or any Responsible Party pursuant hereto or in connection herewith.

          (ggg)  TREASURY  RATE means the weekly  average yield on United States
     Treasury  Securities-Constant  Maturity  Series issued by the United States
     Government for a term of three (3) years, as most recently published by the
     Federal Reserve Board in Federal  Reserve  Statistical  Release  H.15(519),
     immediately prior to the date of the applicable Advance. Each determination
     of the Treasury Rate by the Secured Party shall, in the absence of manifest
     error, be conclusive and binding.  The parties understand and agree that at
     any particular  time Secured Party may not be able to obtain a quotation of
     an applicable Treasury Rate and in such circumstance the Treasury Rate will
     not be available.

          (hhh) VALIDITY GUARANTY means an unlimited, continuing guaranty of the
     validity of the  collateral  by Steven B. Hawkins or other  officers of the
     Debtor acceptable to the Secured Party, in a form acceptable to the Secured
     Party.

          (iii) VALUE means, with respect to Inventory, the lower of actual cost
     or market value,  with respect to Equipment,  the net book value,  and with
     respect to Real Property, the fair market value, in each case as determined
     by appraisers acceptable to Secured Party in its sole discretion.

          1.2.  SINGULARS AND PLURALS.  Unless the context  otherwise  requires,
     words in the singular number include the plural,  and in the plural include
     the singular.

          1.3.  UCC  DEFINITIONS.  Unless  otherwise  defined in Section  1.1 or
     elsewhere in this Agreement,  capitalized words shall have the meanings set
     forth in the  Uniform  Commercial  Code as in effect in the State as of the
     date of this Agreement.


2.  ADVANCES.

          2.1.  REQUESTS  FOR ADVANCES FOR  REVOLVING  LOANS.  From time to time
     prior to the expiration of this  Agreement,  each Debtor may make a written
     or oral  request for an Advance as a  revolving  loan so long as the sum of
     the aggregate principal balance of all outstanding revolving loans and such
     requested  Advance of such requesting  Debtor does not exceed the Borrowing
     Capacity  designated for such  requesting  Debtor as then computed (each, a
     "Revolving  Loan");  and Secured Party shall make such  requested  Advance,
     provided that (i) the Borrowing  Capacity would not, after giving effect to
     the requested Advance, be so exceeded; (ii) there has not occurred an Event
     of Default or an event which,  with notice or lapse of time or both,  would
     constitute  an  Event  of  Default;   and  (iii)  all  representations  and
     warranties  contained  in  this  Agreement  and  in the  other  Transaction
     Documents are true and correct on the date such  requested  Advance is made
     as though made on and as of such date.  Notwithstanding any other provision
     of  this  Agreement,  Secured  Party  may  from  time to  time  reduce  the
     percentages  applicable to the Receivables Borrowing Base and the Inventory
     Borrowing  Base as they  relate to amounts  of the  Borrowing  Capacity  if
     Secured Party determines in its reasonable judgment,  that there has been a
     material  change in  circumstances  related  to any or all  Receivables  or
     Inventory from those  circumstances in existence on or prior to the date of
     this Agreement or in the financial or other condition of Debtor. Subject to
     the  provisions  contained  in Section 8.9 herein,  if Secured  Party shall
     reduce such percentage,  then Debtor shall have the right to prepay in full
     the total  outstanding  balance owing to Secured Party under this Agreement
     without  penalty,  notwithstanding  the  provisions  contained  in  Section
     14.13(b) herein; provided,  however, there shall not have occurred an Event
     of Default. Each oral request for an Advance shall be conclusively presumed
     to be made by a person authorized by Debtor to do so, and the making of the
     Advance to Debtor as  hereinafter  provided  shall  conclusively  establish
     Debtor's obligation to repay the Advance.

          2.2. PROCEEDS OF ADVANCES FOR REVOLVING LOANS.  Advances shall be made
     in the manner  agreed by Debtor and Secured Party in writing or, absent any
     such agreement, as determined by Secured Party.

          2.3.  ESTABLISHMENT  OF RESERVES.  Secured  Party may, at any time and
     from time to time, in its reasonable  judgment,  establish reserves against
     the  Receivables  or the  Inventory of Debtor.  The amount of such reserves
     shall  be  subtracted  from the  Receivables  Borrowing  Base or  Inventory
     Borrowing Base, as applicable, when calculating the amount of the Borrowing
     Capacity.  Subject to the  provisions  contained in Section 8.9 herein,  if
     Secured  Party shall  establish  such  reserve,  then Debtor shall have the
     right to prepay  in full the total  outstanding  balance  owing to  Secured
     Party under this Agreement without penalty,  notwithstanding the provisions
     contained in Section 14.13(b) herein;  provided,  however,  there shall not
     have occurred an Event of Default.

          2.4. LETTERS OF CREDIT.  At the request of Debtor,  and upon execution
     of Letter of Credit  documentation  satisfactory  to Marine  Midland  Bank,
     Secured  Party,  within  the  limits  of the  Borrowing  Capacity  as  then
     computed,  may guarantee  Letters of Credit issued from time to time by the
     Marine Midland Bank for the account of Debtor in an amount not exceeding in
     the aggregate at any one time outstanding the amount set forth in Item 9 of
     the Schedule.  The Letters of Credit shall be on terms mutually  acceptable
     to  Secured  Party  and  Debtor  and no  Letters  of Credit  shall  have an
     expiration  date  later than the  termination  date of this  Agreement.  An
     Advance in an amount equal to any amount paid by Marine Midland Bank on any
     draft  drawn  under any Letter of Credit  shall be made to Debtor,  and the
     proceeds  thereof  delivered  to  Marine  Midland  Bank,  immediately  upon
     notification to Secured Party that Marine Midland Bank made payment on such
     draft.  In  connection  with the issuance of any Letters of Credit,  Debtor
     shall pay to Secured Party the  applicable  fees charged by Marine  Midland
     Bank.

          2.5 TERM  LOAN.  A term loan in the  amount of  $8,000,000  (the "Term
     Loan") is  available  to Debtor in a  one-time  Advance on the date of this
     Agreement.

          2.6 JOINT AND SEVERAL LIABILITY.  FFPP, FFPO and Direct Fuels shall be
     jointly and severally liable for each Revolving Loan, each Letter of Credit
     and the Term Loan.


3.  COLLATERAL AND INDEBTEDNESS SECURED.

          3.1.  SECURITY  INTEREST.  Debtor  hereby  grants to  Secured  Party a
     security  interest  in, and a lien on,  the  following  property  of Debtor
     wherever located and whether now owned or hereafter acquired:

          (a)  All  Accounts,   Inventory,   Goods,  Fixtures,   Chattel  Paper,
     Documents, and Instruments, whether or not specifically assigned to Secured
     Party (including, without limitation, all Receivables).

          (b) All General Intangibles, whether or not assigned to Secured Party,
     including  without  limitation,  contracts,  contract  rights  and  general
     intangibles  of  Debtor,  including  without  limitation  all tax  refunds,
     claims, causes of action, judgments,  franchises, permits, licenses, supply
     contracts,   purchase   contracts,    agreements,   goodwill,   trademarks,
     copyrights,  trade secrets,  patents, and all rights and benefits of Debtor
     with respect thereto.

          (c) All  Equipment  (whether or not  affixed to  realty),  whether now
     owned or hereafter acquired, wherever located unless otherwise set forth on
     Exhibit B, under the heading Capital Leases Secured by Equipment.

          (d) All guaranties,  collateral,  liens on, or security  interests in,
     real or personal  property,  leases,  letters of credit,  and other rights,
     agreements, and property securing or relating to payment of Receivables.

          (e)  All  books,  records,  ledger  cards,  data  processing  records,
     computer software, and other property at any time evidencing or relating to
     Collateral.

          (f) All monies,  securities, and other property now or hereafter held,
     or received by, or in transit to, Secured Party from or for Debtor, and all
     of Debtor's  deposit  accounts,  credits,  and balances  with Secured Party
     existing at any time.

          (g) All parts,  accessories,  attachments,  special tools,  additions,
     replacements, substitutions, and accessions to or for all of the foregoing.

          (h)  All  proceeds  of  letters  of  credit  of  which  Debtor  is the
     beneficiary or in which Debtor has a beneficial interest.

          (i) All  proceeds  and  products of all of the  foregoing in any form,
     including,  without  limitation,  amounts  payable  under any  policies  of
     insurance  insuring the foregoing against loss or damage, and all increases
     and profits received from all of the foregoing.

         3.2. OTHER COLLATERAL.

          Nothing  contained in this Agreement shall limit the rights of Secured
     Party in and to any other collateral  securing the  Indebtedness  which may
     have been, or may  hereafter be,  granted to Secured Party by Debtor or any
     Third Party, pursuant to any other agreement.

          3.3.  INDEBTEDNESS  SECURED.  The Security Interest secures payment of
     any  and  all   indebtedness,   and  performance  of  all  obligations  and
     agreements,  of Debtor to Secured Party,  whether now existing or hereafter
     incurred or arising,  of every kind and  character,  primary or  secondary,
     direct or indirect,  absolute or contingent,  sole,  joint or several,  and
     whether  such  indebtedness  is from time to time  reduced  and  thereafter
     increased,  or entirely extinguished and thereafter reincurred,  including,
     without limitation: (a) all Advances; (b) all interest which accrues on any
     such indebtedness,  until payment of such indebtedness in full,  including,
     without limitation, all interest provided for under this Agreement; (c) all
     other monies  payable by Debtor,  and all  obligations  and  agreements  of
     Debtor to Secured Party,  pursuant to the  Transaction  Documents;  (d) all
     debts owed,  or to be owed,  by Debtor to others  which  Secured  Party has
     obtained, or may obtain, by assignment or otherwise; (e) all monies payable
     by any Third Party,  and all  obligations and agreements of any Third Party
     to Secured Party, pursuant to any of the Transaction Documents; and (f) all
     monies due, and to become due, pursuant to Section 8.3.


          4. CONDITIONS TO ADVANCES. Notwithstanding any other provision of this
     Agreement or any of the other Transaction Documents,  and without affecting
     in any manner the rights of Secured Party under any other provision of this
     Agreement, Secured Party shall not be obligated to make Advances unless and
     until the following conditions have been, and continue to be, satisfied:

          4.1.  PARTNERSHIP  ACTION.  Debtor shall have taken all  necessary and
     appropriate  partnership  action,  and the  Partners  of Debtor  shall have
     adopted resolutions authorizing,  and the partners of Debtor (to the extent
     required under Debtor's  organizational  documents or applicable law) shall
     have  consented  to, this  Agreement,  and the  borrowings  hereunder,  the
     execution and delivery of the  Transaction  Documents and the taking of all
     action  required of Debtor by the Transaction  Documents;  and Debtor shall
     have  furnished  to  Secured  Party  certified  copies of such  partnership
     resolutions  and such other  corporate  documents  as Secured  Party  shall
     reasonably request.

          4.2. PARTNERSHIP DOCUMENTS. There shall have been furnished to Secured
     Party (a) copies of the  certificate  of limited  partnership  and  limited
     partnership  agreements of Debtor,  certified by its general  partner as of
     the date of this  Agreement;  (b) a  certificate  of Debtor's  existence or
     equivalent certificate duly issued of recent date by the Secretary of State
     of the state  specified in Item 10 of the  Schedule,  and  certificates  of
     authority  to do  business  in each state in which  Debtor is  licensed  or
     qualified to do business;  (c) a certificate  of incumbency  specifying the
     officers of the general  partner of Debtor,  together  with their  specimen
     signatures;  and (d) such other and further  documents as Secured Party may
     reasonably  request,  including,  without  limitation,  tax status  reports
     covering payment of franchise taxes, if any, and other taxes.

          4.3. OPINIONS.  Independent counsel for Debtor shall have furnished to
     Secured Party their favorable opinion, in form and content  satisfactory to
     Secured Party and Debtor and their  respective  counsel,  dated the date of
     this  Agreement.  If this  Agreement  is being  executed  and  delivered in
     connection with the acquisition of stock or assets by Debtor,  Debtor shall
     also have  caused  the seller of such stock or assets to furnish to Secured
     Party an opinion of counsel for such seller or a letter authorizing Secured
     Party to rely on such an  opinion,  in form  and  content  satisfactory  to
     Secured Party and its counsel, dated the date of this Agreement.

          4.4.  TRANSACTION  DOCUMENTS.  Debtor shall have  delivered to Secured
     Party  all the  Transaction  Documents,  as  required  by,  and in form and
     content satisfactory to, Secured Party and its counsel.

          4.5.  THIRD  PARTY  ACTION.  Each Third Party shall have (i) taken all
     necessary and appropriate  corporate and shareholder  action, and the Board
     of Directors of the Third Party shall have adopted resolutions  authorizing
     the  execution  and  delivery  of the  guaranty of such Third Party and the
     taking of all action  called for  thereby;  and (ii)  furnished  to Secured
     Party certified copies of evidence of such corporate and shareholder action
     and such other  corporate  documents  as  Secured  Party  shall  reasonably
     request.

          4.6.  GUARANTIES.  Guarantors  shall have  executed  and  delivered to
     Secured Party guaranties in form and substance acceptable to Secured Party,
     covering all indebtedness of Debtor to Secured Party,  however incurred and
     whenever  arising,  containing a waiver of subrogation  and similar rights,
     and the Secured Party shall have received the Validity Guaranty in form and
     substance acceptable to Secured Party.

          4.7.  OTHER  MATTERS.  All matters  incidental  to the  execution  and
     delivery  of the  Transaction  Documents,  and all action  required  by the
     Transaction  Documents,  shall be  satisfactory to Secured Party and to its
     counsel.


          5.  REPRESENTATIONS  AND WARRANTIES.  To induce Secured Party to enter
     into this  Agreement,  and make  Advances  to  Debtor  from time to time as
     herein  provided,  Debtor  represents  and  warrants  and,  so  long as any
     Indebtedness  remains unpaid or this Agreement remains in effect,  shall be
     deemed continuously to represent and warrant as follows:

          5.1.  PARTNERSHIP  EXISTENCE.  Debtor is duly  organized  and existing
     under the laws of the state  specified  in Item 10 of the  Schedule  and is
     duly  licensed or qualified  to do business  and in good  standing in every
     state in which the nature of its  business  or  ownership  of its  property
     requires such licensing or qualification.

          5.2. PARTNERSHIP CAPACITY. The execution, delivery, and performance of
     the  Transaction  Documents  are  within  Debtor's  powers,  have been duly
     authorized by all necessary and appropriate partnership action, and are not
     in contravention of any law or the terms of Debtor's certificate of limited
     partnership or limited  partnership  agreement or any amendment thereto, or
     of any indenture, agreement, undertaking, or other document to which Debtor
     is a party or by  which  Debtor  or any of  Debtor's  property  is bound or
     affected.

          5.3.  VALIDITY  OF  RECEIVABLES.  (a) Each  Receivable  is genuine and
     enforceable  in accordance  with its terms and represents an undisputed and
     bona fide  indebtedness  owing to Debtor by the  Account  Debtor  obligated
     thereon; (b) there are no defenses,  setoffs, or counterclaims  against any
     Receivable;  (c) no payment  has been  received on any  Receivable,  and no
     Receivable  is subject to any Credit or  Extension or  agreements  therefor
     unless  written  notice  specifying  such payment,  Credit,  Extension,  or
     agreement  has been  delivered  to  Secured  Party;  (d) each  copy of each
     Invoice is a true and  genuine  copy of the  original  Invoice  sent to the
     Account Debtor named therein and accurately  evidences the transaction from
     which the  underlying  Receivable  arose,  and the date  payment  is due as
     stated on each such Invoice or computed based on the  information set forth
     on each such Invoice is correct;  (e) all Chattel Paper, and all promissory
     notes, drafts, trade acceptances,  and other instruments for the payment of
     money  relating to or  evidencing  each  Receivable,  and each  endorsement
     thereon,  are true and genuine and in all respects what they purport to be,
     and are the valid and binding  obligation of all parties  thereto,  and the
     date or dates  stated  on all such  items as the date on which  payment  in
     whole or in part is due is correct;  (f) all  Inventory  described  in each
     Invoice has been  delivered to the Account  Debtor named in such Invoice or
     placed  for such  delivery  in the  possession  of a  carrier  not owned or
     controlled  directly  or  indirectly  by Debtor;  (g) all  evidence  of the
     delivery or shipment of Inventory is true and genuine;  (h) all services to
     be  performed  by  Debtor in  connection  with  each  Receivable  have been
     performed  by  Debtor;  and (i) all  evidence  of the  performance  of such
     services by Debtor is true and genuine.

          5.4.  INVENTORY.  (a) All  representations  made by Debtor to  Secured
     Party,  and all documents and schedules  given by Debtor to Secured  Party,
     relating to the description, quantity, quality, condition, and valuation of
     the  Inventory  are true and  correct;  (b)  Debtor  has not  received  any
     Inventory  on  consignment  or  approval  unless  Debtor (i) has  delivered
     written notice to Secured Party  describing any Inventory  which Debtor has
     received on  consignment  or  approval,  (ii) has marked such  Inventory on
     consignment or approval or has segregated it from all other Inventory,  and
     (iii) has appropriately marked its records to reflect the existence of such
     Inventory on consignment or approval;  (c) Inventory is located only at the
     address  or  addresses  of  Debtor  set  forth  at the  beginning  of  this
     Agreement,  the  locations  specified in Item 11 of the  Schedule,  or such
     other  place or places as approved  by Secured  Party in  writing;  (d) all
     Inventory is insured as required by Section 10.11,  pursuant to policies in
     full  compliance  with  the  requirements  of  such  Section;  and  (e) all
     Inventory has been  produced by Debtor in accordance  with the Federal Fair
     Labor Standards Act of 1938, as amended,  and all rules,  regulations,  and
     orders promulgated thereunder.

          5.5.  TITLE TO  COLLATERAL.  (a) Debtor is the owner of the Collateral
     free of all security  interests,  liens, and other encumbrances  except the
     Security  Interest and except as described in Item 12 of the Schedule;  (b)
     Debtor has the  unconditional  authority to grant the Security  Interest to
     Secured Party; and (c) assuming that all necessary Uniform  Commercial Code
     filings have been made and, if  applicable,  assuming  compliance  with the
     Federal Assignment of Claims Act of 1940, as amended,  Secured Party has an
     enforceable  first  lien  on all  Collateral,  subordinate  only  to  those
     security  interests,  liens, or  encumbrances  described as having priority
     over the Security Interest in Item 12 of the Schedule.

          5.6. NOTES RECEIVABLE.  No Receivable is an Instrument,  Document,  or
     Chattel  Paper or is evidenced by any note,  draft,  trade  acceptance,  or
     other  instrument  for  the  payment  of  money,  except  such  Instrument,
     Document, Chattel Paper, note, draft, trade acceptance, or other instrument
     as has been  endorsed and  delivered by Debtor to Secured Party and has not
     been presented for payment and returned uncollected for any reason.

          5.7. EQUIPMENT. Equipment is located, and Equipment which is a Fixture
     is affixed to real property, only at the address or addresses of Debtor set
     forth at the beginning of this Agreement,  the locations  specified in Item
     11 of the  Schedule,  or such other  place or places as approved by Secured
     Party in writing. Such real property is owned by Debtor or by the person or
     persons  named in Item 11 of the  Schedule  and if owned by the  Debtor  is
     encumbered  only by the  mortgage  or  mortgages  listed  in Item 11 of the
     Schedule.

          5.8.  PLACE OF  BUSINESS.  (a) Unless  otherwise  disclosed to Secured
     Party in Item 11 or Item 13 of the Schedule,  Debtor is engaged in business
     operations  which are in whole,  or in part,  carried on at the  address or
     addresses  specified  at the  beginning of this  Agreement  and at no other
     address or  addresses;  (b) if Debtor has more than one place of  business,
     its chief  executive  office  is at the  address  specified  as such at the
     beginning  of this  Agreement;  and (c)  Debtor's  records  concerning  the
     Collateral are kept at the address or addresses  specified at the beginning
     of this Agreement or in Item 13 of the Schedule.

          5.9.  FINANCIAL  CONDITION.  Debtor has  furnished  to  Secured  Party
     Debtor's most current  financial  statements,  which  statements  represent
     correctly  and fairly the results of the  operations  and  transactions  of
     Debtor  and the  Consolidated  Subsidiaries  as of the  dates,  and for the
     period  referred to, and have been  prepared in accordance  with  generally
     accepted accounting  principles  consistently  applied during each interval
     involved and from  interval to interval.  Since the date of such  financial
     statements,  there  have not been any  materially  adverse  changes  in the
     financial  condition  reflected  in such  financial  statements,  except as
     disclosed in writing by Debtor to Secured Party.

          5.10.  TAXES.  Except as  disclosed  in  writing  by Debtor to Secured
     Party: (a) all federal and other tax returns required to be filed by Debtor
     and each Consolidated Subsidiary have been filed, and all taxes required by
     such returns have been paid;  and (b) neither  Debtor nor any  Consolidated
     Subsidiary has received any notice from the Internal Revenue Service or any
     other taxing authority proposing additional taxes.

          5.11. LITIGATION.  Except as disclosed in writing by Debtor to Secured
     Party, there are no actions, suits, proceedings,  or investigations pending
     or,  to  the  knowledge  of  Debtor,   threatened  against  Debtor  or  any
     Consolidated   Subsidiary  or  any  basis  therefor   which,  if  adversely
     determined,  would, in any case or in the aggregate,  materially  adversely
     affect the property,  assets, financial condition, or business of Debtor or
     any  Consolidated  Subsidiary or materially  impair the right or ability of
     Debtor  or  any   Consolidated   Subsidiary  to  carry  on  its  operations
     substantially as conducted on the date of this Agreement.

          5.12.  ERISA  MATTERS.  (a) No Pension  Plan has been  terminated,  or
     partially terminated,  or is insolvent, or in reorganization,  nor have any
     proceedings  been  instituted to terminate or reorganize  any Pension Plan;
     (b) neither Debtor nor any  Consolidated  Subsidiary has withdrawn from any
     Pension  Plan in a complete  or  partial  withdrawal,  nor has a  condition
     occurred  which,  if  continued,  would  result in a  complete  or  partial
     withdrawal; (c) neither Debtor nor any Consolidated Subsidiary has incurred
     any  withdrawal  liability,   including,  without  limitation,   contingent
     withdrawal  liability,  to any Pension Plan, pursuant to Title IV of ERISA;
     (d)  neither  Debtor  nor any  Consolidated  Subsidiary  has  incurred  any
     liability  to the  Pension  Benefit  Guaranty  Corporation  other  than for
     required  insurance  premiums  which  have  been  paid  when  due;  (e)  no
     Reportable  Event has  occurred;  (f) no  Pension  Plan or other  "employee
     pension benefit plan," as defined in Section 3(2) of ERISA, to which Debtor
     or any  Consolidated  Subsidiary  is a party  has an  "accumulated  funding
     deficiency"  (whether or not waived), as defined in Section 302 of ERISA or
     in Section 412 of the Internal  Revenue Code;  (g) the present value of all
     benefits  vested  under any  Pension  Plan does not exceed the value of the
     assets of such Pension Plan  allocable  to such vested  benefits;  (h) each
     Pension Plan and each other "employee  benefit plan," as defined in Section
     3(3) of ERISA, to which Debtor or any Consolidated Subsidiary is a party is
     in   substantial   compliance   with  ERISA,   and  no  such  plan  or  any
     administrator,  trustee,  or fiduciary  thereof has engaged in a prohibited
     transaction  described  in Section  406 of ERISA or in Section  4975 of the
     Internal  Revenue  Code;  (i) each  Pension  Plan and each other  "employee
     benefit plan," as defined in Section 3(2) of ERISA,  to which Debtor or any
     Consolidated  Subsidiary is a party has received a favorable  determination
     by the Internal Revenue Service with respect to qualification under Section
     401(a)  of the  Internal  Revenue  Code;  and (j)  neither  Debtor  nor any
     Consolidated  Subsidiary  has incurred any  liability to a trustee or trust
     established  pursuant  to Section  4049 of ERISA or to a trustee  appointed
     pursuant to Section 4042(b) or (c) of ERISA.

          5.13. ENVIRONMENTAL MATTERS.

          Except as provided in Exhibit D:

          (a) Any  Environmental  Questionnaire  previously  provided to Secured
     Party was and is accurate and complete and does not omit any material  fact
     the  omission  of  which  would  make  the  information  contained  therein
     materially misleading.

          (b) No above ground or underground storage tanks containing  Hazardous
     Substances  are, or have been located on, any property  owned,  leased,  or
     operated  by Debtor or any  Consolidated  Subsidiary,  except to the extent
     permitted  by law.  Any such  storage  tank owned,  leased,  or operated by
     Debtor  materially  complies  with all  Environmental  Laws and  neither is
     leaking nor has leaked to a degree which would  require  remediation  under
     any applicable Environmental Laws, and that any and all acts required under
     applicable Environmental Laws in connection with any such leakage have been
     performed.

          (c)  No  property  owned,   leased,  or  operated  by  Debtor  or  any
     Consolidated  Subsidiary  is, or to the knowledge of Debtor has been,  used
     for  the  Disposal  of any  Hazardous  Substance  or for the  treatment  or
     Disposal of Hazardous Substances, except to the extent permitted by law.

          (d) No Release of any Hazardous  Substances to the knowledge of Debtor
     has occurred,  or is threatened on, at or from any property owned,  leased,
     controlled, or operated by Debtor or any Consolidated Subsidiary.

          (e) Neither  Debtor nor any  Consolidated  Subsidiary has knowledge of
     any existing,  pending, or threatened suit, claim, notice of violation,  or
     request for information under any Environmental Law.

          (f) Debtor and each  Consolidated  Subsidiary are in compliance  with,
     and have obtained all Environmental  Permits required by, all Environmental
     Laws.

          5.14.  VALIDITY OF TRANSACTION  DOCUMENTS.  The Transaction  Documents
     constitute  the legal,  valid,  and binding  obligations of Debtor and each
     Consolidated  Subsidiary  and any Third  Parties  thereto,  enforceable  in
     accordance with their respective  terms,  except as  enforceability  may be
     limited by applicable  bankruptcy  and  insolvency  laws and laws affecting
     creditors' rights generally.

          5.15.  NO  CONSENT  OR  FILING.  No  consent,  license,  approval,  or
     authorization of, or registration,  declaration, or filing with, any court,
     governmental  body or  authority,  or other person or entity is required in
     connection  with the  valid  execution,  delivery,  or  performance  of the
     Transaction  Documents  or for the  conduct  of  Debtor's  business  as now
     conducted,  other than filings and recordings to perfect security interests
     in or liens on the Collateral in connection with the Transaction Documents.

          5.16. NO VIOLATIONS. Neither Debtor nor any Consolidated Subsidiary is
     in violation of any term of its articles,  or certificate of incorporation,
     or by-laws, or of any mortgage, borrowing agreement, or other instrument or
     agreement pertaining to indebtedness for borrowed money. Neither Debtor nor
     any  Consolidated  Subsidiary  is in  violation  of any  term of any  other
     indenture,  instrument,  or agreement to which it is a party or by which it
     or its  property  may be bound,  resulting,  or which might  reasonably  be
     expected to result,  in a material and adverse  effect upon its business or
     assets.  Neither Debtor nor any Consolidated  Subsidiary is in violation of
     any order, writ, judgment,  injunction, or decree of any court of competent
     jurisdiction  or of any statute,  rule, or  regulation of any  governmental
     authority,  the violation of which could  materially  adversely  affect the
     condition,   business,   or  operations  of  Debtor  or  any   Consolidated
     Subsidiary. The execution and delivery of the Transaction Documents and the
     performance  of all of the same,  is, and will be, in  compliance  with the
     foregoing  and will not result in any violation  thereof,  or result in the
     creation of any mortgage,  lien, security interest,  charge, or encumbrance
     upon,  any  properties  or assets except in favor of Secured  Party.  There
     exists no fact or circumstance (whether or not disclosed in the Transaction
     Documents) which materially  adversely affects, or in the future (so far as
     Debtor can now foresee) may  materially  adversely  affect,  the condition,
     business,  or  operations of Debtor or any  Consolidated  Subsidiary or any
     Third Party.

          5.17. TRADEMARKS AND PATENTS.  Debtor and each Consolidated Subsidiary
     possesses  all  trademarks,   trademark  rights,  patents,  patent  rights,
     tradenames,  tradename  rights and copyrights  that are required to conduct
     its business as now conducted  without  conflict with the rights or claimed
     rights of others.  A list of the  foregoing  is set forth in Item 14 of the
     Schedule.

          5.18.  CONTINGENT  LIABILITIES.  There are no  suretyship  agreements,
     guaranties,  or other contingent  liabilities of Debtor or any Consolidated
     Subsidiary which are not disclosed by the financial statements described in
     Section 5.9 or Item 25 of the Schedule.

          5.19.   SOLVENCY.   Debtor   individually   is,  and  Debtor  and  the
     Consolidated Subsidiaries taken as a whole are, and during the term of this
     Agreement, Debtor individually,  and the Consolidated Subsidiaries taken as
     a whole,  will be, at all times,  Solvent,  both  before  and after  giving
     effect to the  transactions  contemplated by the Transaction  Documents and
     any acquisition of stock or assets occurring in conjunction with or related
     to the Transaction Documents.

          5.20.   COMPLIANCE  WITH  LAWS.  Debtor  is  in  compliance  with  all
     applicable laws,  rules,  regulations,  and other legal  requirements  with
     respect to its business and the use,  maintenance,  and  operations  of the
     real and  personal  property  owned or leased by it in the  conduct  of its
     business,  the  violation of which could  materially  adversely  affect the
     condition, business, operations of Debtor or any Consolidated Subsidiary.

          5.21.  LICENSES,   PERMITS,  ETC.  Each  material  franchise,   grant,
     approval,  authorization,  license, permit, easement, consent, certificate,
     and order of and  registration,  declaration,  and filing with,  any court,
     governmental  body or authority,  or other person or entity required for or
     in  connection   with  the  conduct  of  Debtor's  and  each   Consolidated
     Subsidiary's business as now conducted is in full force and effect. Neither
     Debtor nor any of its Consolidated  Subsidiaries is in default under or has
     otherwise  violated  the  terms of such  licenses.  As of the date  hereof,
     Debtor has advised Secured Party, in writing,  of all regulatory defects or
     deficiencies under any state laws applicable to Debtor and its Consolidated
     Subsidiaries of which Debtor has been advised or has actual knowledge.

          5.22. USE OF PROCEEDS;  MARGIN STOCK.  Neither Debtor's  execution and
     delivery of the  Transaction  Documents  nor the borrowing by Debtor of any
     sums pursuant  thereto violates Section 7 of the Securities Act of 1934, as
     amended, or any rule or regulation thereunder, and Debtor neither owns, nor
     intends to purchase or carry,  any "margin  stock." None of the proceeds of
     the  Revolving  Credit,  Term Loan,  or  Letters of Credit  will be used in
     violation  of  Regulation  G, U, T, or X of the Board of  Governors  of the
     Federal Reserve System.

          5.23. COMMISSIONS. No brokerage commission, finders fee, or investment
     banking  fees are  payable by Debtor to any person or entity in  connection
     with the Transaction  Documents or the transactions  contemplated  thereby,
     other than the payment by Debtor to Tony Abernethey,  or his assigns,  of a
     loan  origination fee equal to one-half  percent (0.5%) of the total amount
     of the credit facilities provided hereunder.

          5.24. LABOR CONTRACTS.  Neither Debtor nor any Consolidated Subsidiary
     is a party to any  collective  bargaining  agreement  or to any existing or
     threatened labor dispute or controversies except as set forth in Item 15 of
     the Schedule.

          5.25.   CONSOLIDATED   SUBSIDIARIES.   Debtor   has  no   Consolidated
     Subsidiaries  other than those listed in Item 33 of the  Schedule,  and the
     percentage  ownership  of Debtor in each such  Consolidated  Subsidiary  is
     specified in such Item 33.

          5.26. ACCURACY OF  REPRESENTATIONS.  No representation,  warranty,  or
     statement  by  Debtor  or  any  Third  Party  contained  herein,  or in any
     certificate,  financial statement, or other document furnished by Debtor or
     any Third  Party  pursuant  hereto,  or in  connection  herewith,  fails to
     contain any  representation  or warranty  not  misleading  in any  material
     respect in light of the circumstances under which it is made.

          5.27. PARTNERSHIP INTERESTS.  Debtor's total partnership interests are
     set forth in Item 16 of the Schedule. No other partnership interests of the
     Debtor of any class or type are authorized or outstanding.

          5.28.  NO ADVERSE  CHANGE.  As of September  30, 1997,  (a) no adverse
     change  has  occurred  in the  financial  condition  of Debtor or any Third
     Party,  and (b) no other matter exists or has occurred  which might have an
     adverse affect on the Debtor or any Third Party, financial or otherwise.

          5.29.  NO  DEFAULT.  No event has  occurred  and is  continuing  which
     constitutes an Event of Default or, upon passage of time,  will  constitute
     an Event of Default.

          5.30.  MATERIAL  AGREEMENTS.  Debtor is not in default in any material
     respect under any loan agreement,  indenture, mortgage, security agreement,
     or other  material  agreement  or  obligation  to which it is a party or by
     which any of its properties are bound.

          5.31.  NO  FINANCING  OF  CORPORATE  TAKEOVERS.  No  proceeds  of  the
     Revolving  Credit or the Term Loan will be used to acquire any  security in
     any  transaction  that is subject  to  Section  13 or 14 of the  Securities
     Exchange  Act of 1934,  including  particularly  (but  without  limitation)
     Section 13(d) and 14(d) thereof.


          6. CERTAIN DOCUMENTS TO BE DELIVERED TO SECURED PARTY.

          6.1.  DOCUMENTS.  Debtor shall deliver to Secured Party, all documents
     specified in Item 17 of the Schedule, as frequently as indicated therein or
     at such other times as Secured Party may reasonably request,  and all other
     documents and  information  reasonably  requested by Secured Party,  all in
     form,  content and detail  satisfactory to Secured Party. The documents and
     schedules to be provided under this Section are solely for the  convenience
     of Secured Party in administering this Agreement and maintaining records of
     the  Collateral.  Debtor's  failure to provide  Secured Party with any such
     schedule shall not affect the Security Interest.

          6.2. INVOICES.  If requested by Secured Party,  copies of all Invoices
     not  previously  delivered  to Secured  Party shall be delivered to Secured
     Party with each schedule of  Receivables.  Copies of all Invoices which are
     voided or  canceled  or which,  for any other  reason,  do not  evidence  a
     Receivable  shall be  included  in such  delivery.  If any  Invoice or copy
     thereof is lost, destroyed, or otherwise unavailable,  Debtor shall account
     in  writing,  in form  satisfactory  to  Secured  Party,  for such  missing
     Invoice.

          6.3.  CHATTEL  PAPER.  The  original  of each  item of  Chattel  Paper
     evidencing  a  Receivable  shall be  delivered  to  Secured  Party with the
     schedule  listing  the  Receivable  which it  evidences,  together  with an
     assignment  in form  and  content  satisfactory  to  Secured  Party of such
     Chattel Paper by Debtor to the Secured Party.


          7.   COLLECTIONS.   Unless  Secured  Party  notifies  Debtor  that  it
     specifically dispenses with one or more of the following requirements,  any
     Proceeds of Collateral received by Debtor,  including,  without limitation,
     payments  on  Receivables  and  other  payments  from  sales or  leases  of
     Inventory,  shall be held by Debtor in trust for Secured  Party in the same
     medium  in which  received,  shall  not be  commingled  with any  assets of
     Debtor,  and shall be delivered  immediately to Secured  Party.  So long as
     Secured  Party  elects to keep the Marine  Payment  Account  in  existence,
     Debtor shall deposit Proceeds of Collateral into the Marine Payment Account
     and shall, on the day of each such deposit, forward to Secured Party a copy
     of the deposit  receipt of the depository bank indicating that such deposit
     has been made. Upon receipt of Proceeds of Collateral, Secured Party, shall
     apply such Proceeds  directly to the Indebtedness in the manner provided in
     Section 8.5.  Checks drawn on the Marine  Payment  Account,  and all or any
     part of the balance of the Marine  Payment  Account,  shall be applied from
     time to time to the Indebtedness in the manner provided in Section 8.5.


          8. PAYMENT OF PRINCIPAL, INTEREST, FEES, AND COSTS AND EXPENSES.

          8.1. PROMISE TO PAY PRINCIPAL.

          (a) Debtor promises to pay to Secured Party the outstanding  principal
     of the Revolving Credit in full upon termination of this Agreement pursuant
     to  Section  14.13,  or  acceleration  of  the  time  for  payment  of  the
     Indebtedness,  pursuant to Section 12.2. Whenever the outstanding principal
     balance of the  Revolving  Credit  exceeds the Borrowing  Capacity,  Debtor
     shall  immediately  pay to  Secured  Party the  excess  of the  outstanding
     principal balance of the Revolving Credit over the Borrowing Capacity.

          (b) Debtor promises to pay to Secured Party the outstanding  principal
     of the Term Loan as follows:

          (i) In 35  consecutive  monthly  installments  each in the  amount  of
     $95,238.10,  commencing on December 1, 1997, and  thereafter,  on the first
     day of each  succeeding  calendar  month through and  including  October 1,
     2000, and

          (ii) In one final  installment  on November 1, 2000,  in the amount of
     the unpaid principal balance of, and accrued interest upon, the Term Loan.

          (iii)  Notwithstanding  the  foregoing  clauses  (i) and  (ii) of this
     subsection  (b),  in the event this  Agreement  is  terminated  pursuant to
     Section  14.13,  or  accelerated  pursuant to Section  12.2,  Debtor  shall
     immediately pay to Secured Party in full, the outstanding  unpaid principal
     balance of, and accrued interest upon, the Term Loan.

          8.2. PROMISE TO PAY INTEREST.

          (a) Debtor  promises to pay to Secured Party interest on the principal
     of  Advances  from  time to time  unpaid at the  lesser of (i) the  Highest
     Lawful Rate or (ii) the  fluctuating per annum rate specified in Item 18 of
     the  Schedule.  From  the  date  of  the  occurrence  of,  and  during  the
     continuance of, an Event of Default,  Debtor, as additional compensation to
     Secured Party for its increased credit risk promises to pay interest on (i)
     the  principal  of  Advances,  whether  or not past due;  and (ii) past due
     interest and any other amount past due under the Transaction Documents,  at
     a per annum  rate of the  lesser of (i) the  Highest  Lawful  Rate and (ii)
     3.00%  greater  than each of the rates of interest  specified in Item 18 of
     the Schedule.

          (b)  Interest  (other  than past due  interest as set forth in Section
     8.2(a))  shall be due and  payable  (i) on the first  day of each  month in
     arrears, (ii) on termination of this Agreement,  pursuant to Section 14.13,
     (iii) on acceleration of the time for payment of the Indebtedness, pursuant
     to Section  12.2,  and (iv) on the date the  Indebtedness  is paid in full.
     Past due interest (as set forth in Section 8.2(a)) shall be due and payable
     immediately upon demand.

          (c) Any change in the  interest  rate  resulting  from a change in the
     Prime Rate shall take effect  simultaneously  with such change in the Prime
     Rate.  Interest shall be computed on the daily unpaid principal  balance of
     Advances.  Interest shall be calculated for each calendar day at 1/360th of
     the  applicable  per annum rate which will result in an effective per annum
     rate higher than that  specified  in Item 18 of the  Schedule,  unless such
     calculation  would exceed the Highest  Lawful Rate,  in which case interest
     shall be  calculated  for each  calendar day at 1/365th or 1/366th,  as the
     case may be, of the  applicable  per annum rate. In no event shall the rate
     of interest exceed the Highest Lawful Rate. If Debtor pays to Secured Party
     interest in excess of the Highest Lawful Rate, such excess shall be applied
     in reduction of the principal of Advances made pursuant to this  Agreement,
     and  any  remaining  excess  interest,  after  application  thereof  to the
     principal of Advances, shall be refunded to Debtor.

          8.3. PROMISE TO PAY FEES.

          (a) Debtor shall pay to Secured Party any fees specified in Item 19 of
     the Schedule on the  applicable  due dates also specified in Item 19 of the
     Schedule.

          (b) The fees described in this Agreement  represent  compensation  for
     services rendered and to be rendered separate and apart from the lending of
     money or the provision of credit and do not constitute compensation for the
     use,  detention,  or forbearance of money, and the obligation of the Debtor
     to pay each fee  described  herein shall be in addition to, and not in lieu
     of, the obligation of Debtor to pay interest,  other fees described in this
     Agreement,  and expenses  otherwise  described in this Agreement.  All fees
     including,  without limitation, those referred to in this Section, shall be
     part of the obligations of the Debtor  hereunder,  shall be  nonrefundable,
     and shall,  to the fullest extent  permitted by law, bear interest,  if not
     paid when due, at the rate of interest specified in Section 8.2 (a)(ii).

          8.4. PROMISE TO PAY COSTS AND EXPENSES.

          (a) Debtor agrees to pay to Secured  Party,  on demand,  all costs and
     expenses as provided in this Agreement, and all costs and expenses incurred
     by  Secured  Party  from time to time in  connection  with this  Agreement,
     including,   without   limitation,   those   incurred  in:  (i)  preparing,
     negotiating,  amending,  waiving,  or granting  consent with respect to the
     terms  of  any or all of the  Transaction  Documents;  (ii)  enforcing  the
     Transaction Documents; (iii) performing, pursuant to Section 14.2, Debtor's
     duties under the  Transaction  Documents  upon Debtor's  failure to perform
     them; (iv) filing  financing  statements,  assignments,  or other documents
     relating  to the  Collateral  (e.g.,  filing  fees,  recording  taxes,  and
     documentary stamp taxes); (v) maintaining the Marine Payment Account;  (vi)
     administering  the  Transaction  Documents,  but not  ordinary  general and
     administrative  expenses;  (vii) compromising,  pursuing,  or defending any
     controversy,  action, or proceeding resulting, directly or indirectly, from
     Secured Party's relationship with Debtor, regardless of whether Debtor is a
     party  to such  controversy,  action,  or  proceeding  and of  whether  the
     controversy,  action, or proceeding occurs before or after the Indebtedness
     has been paid in full;  (viii) realizing upon or protecting any Collateral;
     (ix)  enforcing or collecting any  Indebtedness  or guaranty  thereof;  (x)
     employing  collection agencies or other agents to collect any or all of the
     Receivables;  (xi)  examining  Debtor's books and records or inspecting the
     Collateral   including,   without  limitation,   the  reasonable  costs  of
     examinations  and  inspections  conducted by third  parties,  provided that
     nothing  herein shall limit Secured  Party's  right to audit,  examination,
     inspection,  or other fees  otherwise  payable under Section 8.3; and (xii)
     obtaining  independent  appraisals from time to time as deemed necessary or
     appropriate by Secured Party.

          (b)  Without  limiting  Section  8.4(a),  Debtor also agrees to pay to
     Secured Party, on demand, the reasonable fees and disbursements incurred by
     Secured  Party for attorneys  retained by Secured  Party for advice,  suit,
     appeal,  or insolvency or other  proceedings  under the Federal  Bankruptcy
     Code or otherwise,  in connection  with this Agreement,  including  without
     limitation any purpose specified in Section 8.4(a).

          8.5.  METHOD OF PAYMENT OF PRINCIPAL,  INTEREST,  FEES,  AND COSTS AND
     EXPENSES.  Without limiting Debtor's obligation,  pursuant to Sections 8.1,
     8.2.,  8.3, and 8.4 to pay the principal of Advances,  interest,  fees, and
     costs and  expenses,  the following  provisions  shall apply to the payment
     thereof:

          (a) Payment of Principal. Debtor authorizes Secured Party to apply any
     Proceeds  of  Collateral,   including,  without  limitation,   payments  on
     Receivables,  other  payments  from sales or leases of  Inventory,  and any
     funds in the Marine Payment Account, to the unpaid principal of Advances.

          (b)  Payment  of  Interest,  Fees,  and  Costs and  Expenses.  Without
     limiting Debtor's  obligation to pay accrued interest,  fees, and costs and
     expenses,  Debtor authorizes Secured Party to (provided,  however,  Secured
     Party shall incur no liability  for failure to): (i) make an Advance to pay
     for such items;  or (ii) apply Proceeds of Collateral,  including,  without
     limitation, payments on Receivables, other payments from sales or leases of
     Inventory,  and any funds in the Marine Payment Account,  to the payment of
     such items.

          (c)  Notwithstanding  any other provision of this  Agreement,  Secured
     Party,  in its sole  discretion,  shall  determine the manner and amount of
     application of payments and credits and Proceeds of Collateral,  if any, to
     be  made  on  all  or  any  part  of any  component  or  components  of the
     Indebtedness,  whether principal,  interest,  fees, costs and expenses,  or
     otherwise.

          8.6.  COMPUTATION  OF DAILY  OUTSTANDING  BALANCE.  For the purpose of
     calculating the aggregate  principal balance of outstanding  Advances under
     Section  2.1,  Advances  shall be deemed to be paid on the date that checks
     drawn on, or other funds  received  from,  the Marine  Payment  Account are
     applied by Secured Party to Advances, and on the date any other payments on
     Receivables,  or other  payments from sales or leases of Inventory to be so
     applied,  have been processed for  collection by Secured  Party;  provided,
     however,  for the purpose of calculating  interest payable by Debtor, funds
     from the Marine Payment  Account,  payments on Receivables,  other payments
     from sales or leases of Inventory,  and any other payments, shall be deemed
     to be applied to Advances  the number of days  specified  in Item 20 of the
     Schedule  after the  application  of such  funds  from the  Marine  Payment
     Account or receipt of such  payments  by Secured  Party,  and the amount of
     interest  payable  will be  adjusted  by  Secured  Party  from time to time
     accordingly.  Notwithstanding any other provision of this Agreement, if any
     item  presented for  collection  by Secured  Party is not honored,  Secured
     Party may reverse any provisional  credit which has been given for the item
     and make  appropriate  adjustments  to the amount of interest and principal
     due.

          8.7.  ACCOUNT  STATED.  Debtor  agrees  that  each  monthly  or  other
     statement  of  account  mailed  or  delivered  by  Secured  Party to Debtor
     pertaining to the outstanding  balance of Advances,  the amount of interest
     due thereon, fees, and costs and expenses shall be final,  conclusive,  and
     binding on Debtor and shall  constitute an "account stated" with respect to
     the matters contained therein unless, within thirty (30) calendar days from
     when such  statement  is mailed  or, if not  mailed,  delivered  to Debtor,
     Debtor shall  deliver to Secured  Party  written  notice of any  objections
     which it may have as to such statement of account,  and in such event, only
     the items to which  objection  is  expressly  made in such notice  shall be
     considered to be disputed by Debtor.

          8.8. CAPITAL  ADEQUACY.  Debtor shall pay directly to Secured Party as
     set forth below, on request, such amounts as Secured Party may determine to
     be necessary to compensate  Secured Party for any costs which it determines
     are  attributable  to the  maintenance  by  Secured  Party,  pursuant  to a
     governmental  requirement implemented or effective after the date hereof or
     a change made in any governmental requirement after the date hereof, or any
     change  in  the  interpretation,  application  or  administration  thereof,
     whether or not having the force of law, but affecting the banking  industry
     generally,  of capital in respect  of Secured  Party's  commitment  to lend
     hereunder,  such  compensation to include,  without  limitation,  an amount
     equal to any reduction of the rate of return on assets or equity of Secured
     Party (or its  parent  holding  company)  which  Secured  Party  could have
     achieved  with  respect  to  such  commitment  but  for  such  governmental
     requirement or change in a  governmental  requirement or any such change in
     the interpretation,  application or administration thereof,  whether or not
     having the force of law,  but  affecting  the banking  industry  generally.
     Secured Party will notify Debtor of any event  occurring  after the date of
     this Agreement that will entitle Secured Party to compensation  pursuant to
     this Section as promptly as practicable after it obtains knowledge thereof.
     Debtor will not be responsible for any amounts as compensation  pursuant to
     this Section accruing prior to ninety (90) days before the notice to Debtor
     in accordance  with the preceding  sentence.  In the event Secured Party is
     entitled to such  compensation,  Secured  Party will furnish  Debtor with a
     certificate  setting  forth the amount of each request by Secured Party for
     compensation  under this Section,  with such  certificate  setting forth in
     reasonable  detail the basis for determining,  and the calculation of, such
     compensation.  Determinations and allocations by Secured Party for purposes
     of this Section of the effect of any governmental  requirement  pursuant to
     this  Section,  or of the effect of  capital  maintained  pursuant  to this
     Section,  on  Secured  Party's  cost  or  rate  of  return  of  maintaining
     Indebtedness  or its  obligation  to  make  Advances,  and  of the  amounts
     required to compensate Secured Party hereunder,  shall be conclusive absent
     manifest error.

          8.9. ADDITIONAL PROVISIONS APPLICABLE TO LIBOR.

          (a)  Notice  of  Continuation/Conversion.  If  Debtor  desires  at the
     expiration of a Eurodollar  Interest  Period to continue such Advance as an
     Advance  bearing  interest at LIBOR for a new Eurodollar  Interest  Period,
     such Debtor shall give Secured Party notice thereof,  either telephonically
     or in writing, no later than 10:00 a.m. (London time) on the third Business
     Day  immediately  preceding  the last day of the then  expiring  Eurodollar
     Interest Period,  which shall specify the aggregate principal amount of the
     Eurodollar  Rate Loan to be continued for a new Eurodollar  Interest Period
     and the new Eurodollar  Interest Period to be applicable thereto. If Debtor
     desires at the expiration of an applicable  Eurodollar  Interest  Period to
     convert all or part of an Advance from an Advance bearing interest at LIBOR
     to an Advance bearing interest at the Prime Rate, the Debtor shall give the
     Secured Party notice thereof,  either  telephonically  or in writing in the
     aforesaid manner. Each  continuation/conversion  notice shall be in writing
     (each a "Notice of  Continuation/Conversion"),  and any  telephonic  notice
     shall be promptly  followed by such Debtor's delivery to Secured Party of a
     Notice of Continuation/Conversion.

          (b)  Failure  to  Deliver  Notice of  Continuation/Conversion.  If the
     applicable  Debtor  shall  have  failed  to  properly  deliver  a Notice of
     Continuation/Conversion specifying a continuation or conversion pursuant to
     Section  8.9(a),  such Debtor  shall be deemed to have  elected to continue
     such Advance bearing interest at LIBOR for a Eurodollar  Interest Period of
     the same duration as the Eurodollar Interest Period so expiring.

          (c)  Eurodollar  Deposits  Unavailable  or  LIBOR  Unascertainable  or
     Uneconomical.  In  the  event  that,  prior  to  the  commencement  of  any
     Eurodollar  Interest Period for any Advance  bearing  interest at LIBOR, by
     reason  of   circumstances   affecting  the  Eurodollar   interbank  market
     generally,  the Secured Party or Marine Midland Bank shall have  reasonably
     determined  in good faith  (which  determination  shall be  conclusive  and
     binding  upon all parties  hereto)  that (i) U.S.  dollars in the  relevant
     amount and for the relevant  Eurodollar  Interest  Period for such Advances
     bearing  interest at LIBOR are not available in the  applicable  Eurodollar
     interbank  market  generally,  or (ii) adequate and reasonable means do not
     exist for ascertaining LIBOR applicable to such Eurodollar Interest Period,
     whereupon (x) any request for an Advance bearing interest at LIBOR shall be
     deemed a request  for an Advance  based upon the Prime  Rate,  and (y) each
     outstanding  Advance bearing interest at LIBOR shall be converted,  without
     any additional notice to or from the affected Borrower, to an Advance based
     upon the Prime  Rate  (disregarding  any  requirements  for any notice or a
     minimum  aggregate  principal  amount)  on the last  day of the  Eurodollar
     Interest Period with respect thereto.

          (d) Special Fees in Respect of Reserve Requirements.  Debtor agrees to
     pay to Secured Party on any such  Advances  bearing  interest at LIBOR,  as
     additional interest,  such amounts as will compensate Secured Party for any
     cost to Secured  Party,  from time to time,  of any  additional  reserve or
     additional special deposit  requirement against assets held by, or deposits
     in or for the amount of any loans by,  Secured  Party which are imposed on,
     or deemed applicable by, such Lender,  from time to time, under or pursuant
     to any  applicable  governmental  requirements  respecting  the  Eurodollar
     Lending  Office or any Advance  bearing  interest at LIBOR.  In  connection
     herewith,  Secured  Party  shall not be  required to prove that it actually
     funded any Advance  bearing  interest at LIBOR,  in whole or in part,  with
     matching  deposits in U.S.  dollars  acquired by Secured Party from a prime
     bank in the Eurodollar  interbank  market,  irrespective of whether Secured
     Party has any such  deposits.  A  certificate  as to the amount of any such
     cost (including  calculations,  in reasonable  detail,  showing how Secured
     Party  computed  and  allocated  such cost) shall be promptly  furnished by
     Secured  Party to Debtor and shall,  in the absence of manifest  error,  be
     conclusive and binding.

          (e)  Reasonable  Efforts.  Secured  Party  agrees that it will use all
     reasonable efforts,  including ,without  limitation,  reasonable good faith
     efforts,  to  designate a different  Eurodollar  Lending  Office to make or
     maintain  any Advance  bearing  interest at LIBOR,  in order to avoid or to
     minimize,  as the case may be,  the  payment  by Debtor  of any  additional
     amounts under the terms of Section 8.9(d), and that it will, as promptly as
     practicable,  notify the Debtor of the  existence  of any event  which will
     require the  payment by Debtor of any such  additional  amounts;  provided,
     that the Secured  Party shall not be  obligated  to make  Advances  bearing
     interest at LIBOR  hereunder at any office  located in the United States to
     avoid or minimize such payments.

          (f) Funding  Losses.  If Debtor  makes any payment of principal on any
     Advance  bearing  interest at LIBOR,  or converts  such an Advance  into an
     Advance  bearing  interest at the Prime Rate on any day other than the last
     day of the Eurodollar  Interest  Period  applicable  thereto,  Debtor shall
     reimburse the Secured Party within ten (10) Business Days after demand, for
     any resulting loss or expense actually  incurred by it, including  (without
     limitation)  any loss  incurred in  obtaining,  liquidating,  employing  or
     redeploying  deposits or foreign currencies from third parties  (including,
     without limitation,  the amount of Secured Party's  consequential  losses),
     for the period after any such payment or conversion through the end of such
     Eurodollar  Interest Period (the  calculation of such loss or expense shall
     include a credit,  not in excess of such loss or expense,  for the interest
     that could be earned by the Secured Party as a result of redepositing  such
     amount),  together with interest  thereon at the past due rate specified in
     Section  8.2(a) from the date of demand until paid in full;  provided  that
     Secured Party shall have delivered to Debtor a certificate as to the amount
     of such loss or  expense,  which  certificate  shall be  conclusive  in the
     absence of manifest error. In connection herewith,  Secured Party shall not
     be required to prove that it actually funded any Advance  bearing  interest
     at LIBOR,  in whole or in part,  with  matching  deposits  in U.S.  dollars
     acquired  by  the  Secured  Party  from a  prime  bank  in  the  applicable
     Eurodollar interbank market,  irrespective of whether Secured Party has any
     such deposits.

          (g) Changes in Law Rendering LIBOR Loans  Unlawful.  In the event that
     after the date  hereof  it shall be  unlawful  for  Secured  Party,  in the
     reasonable  determination  in  good  faith  of  Secured  Party,  to make or
     maintain any Advance as an Advance bearing interest at LIBOR, Secured Party
     shall,  upon the  occurrence  of such event,  notify the Debtor in writing,
     stating the reasons  therefor;  provided,  however,  that before giving any
     such  notice,  Secured  Party shall use  reasonable  good faith  efforts to
     designate a different  Eurodollar  Lending  Office to make or maintain such
     Advance as an Advance bearing  interest at LIBOR if such  designation  will
     avoid the need for giving such notice and will not be otherwise  materially
     disadvantageous  to the Secured Party.  Upon receiving a notice of any such
     event,  the Debtor shall have the following  options,  one of which must be
     exercised:

          (i) to prepay  immediately  all of the Advances which are so affected;
     or,

          (ii)  convert  all  affected  Advances   (including  accrued  interest
     thereon) to Advances based on the rate of interest based on the Prime Rate.

          (h)......Reimbursable  Taxes.  Debtor  covenants and agrees that, with
     respect to each Advance bearing interest at LIBOR:

          (i) Debtor will pay,  when due (upon prior  written  notice by Secured
     Party, and on an after-tax basis), all present and future income, stamp and
     other taxes, levies, costs and charges whatsoever imposed, assessed, levied
     or collected on or in respect of such Advance;  provided,  however, that if
     Debtor disputes in good faith any such taxes,  levies, costs or charges and
     refuses to pay same pending  resolution  of such  dispute,  Debtor shall so
     advise  Secured  Party in writing and shall make the  appropriate  reserves
     therefor.  Debtor's obligation pursuant hereto shall exclude,  however, any
     such taxes,  levies, costs or charges imposed or determined by reference to
     income  of  Secured  Party  or  any   Eurodollar   Lending  Office  by  any
     jurisdiction  in which the  Secured  Party or any such  Eurodollar  Lending
     Office is located (all such non-excluded taxes,  levies,  costs and charges
     being collectively called "Reimbursable  Taxes" in this Section).  Promptly
     after  the  date on  which  payment  of any  such  Reimbursable  Tax is due
     pursuant to applicable  law,  Debtor will, at the request of Secured Party,
     furnish to Secured Party an official  receipt issued by the relevant taxing
     authority  showing the amount of such tax and its payment by Debtor or such
     other  evidence in form and  substance  satisfactory  to Secured Party that
     Debtor has met its obligation under this Section.

          (ii) Debtor will  indemnify the Secured Party  against,  and reimburse
     the Secured  Party on demand for,  any  Reimbursable  Taxes paid by Secured
     Party upon  Debtor's  failure to pay such amounts in a timely  manner after
     written  notice by the Secured  Party,  and any loss,  liability,  claim or
     expense,  including  interest,  penalties and reasonable  legal fees,  that
     Secured Party may incur at any time arising out of or in connection  with a
     failure by the Debtor to pay such Reimbursable  Taxes. A certificate of the
     Secured  Party as to the  amount of any such  Reimbursable  Taxes and other
     amounts paid by the Secured  Party shall be  conclusive  and binding in the
     absence of manifest error.

          (iii) All payments on account of the  principal of and interest on the
     Advances  and all other  amounts  payable  by Debtor to the  Secured  Party
     hereunder  shall be made free and clear of and without  reduction by reason
     of any  Reimbursable  Taxes,  all of which  will be for the  account of the
     Debtor and paid when due by the Debtor.

          (iv) If  Debtor  is ever  required  to pay any  Reimbursable  Tax with
     respect  to any  Advance  bearing  interest  at LIBOR,  Debtor may elect to
     convert  all  outstanding  Advances  bearing  interest at LIBOR to Advances
     bearing  interest at the Prime Rate,  but such election  shall not diminish
     Debtor's  obligation to pay all  Reimbursable  Taxes  theretofore  imposed,
     assessed, levied or collected.

          (v)  Notwithstanding  the foregoing  provisions of this Section to the
     contrary,  Debtor shall have no  obligation to pay to the Secured Party any
     amount  payable by reason of the failure of the Secured  Party to file,  to
     the extent the Secured Party is legally  entitled to file, any statement of
     exemption  required  by  Treasury  Regulation  Section  1.1441-4(a)  or any
     subsequent  version  thereof  promulgated  under the Code, or any claim for
     relief from United  Kingdom Inland Tax pursuant to Article 11 of the United
     States-United Kingdom Income Tax Treaty.


          9. PROCEDURES AFTER SCHEDULING RECEIVABLES.

          9.1.   RETURNED   MERCHANDISE.   Debtor  shall  notify  Secured  Party
     immediately of the return,  rejection,  repossession,  stoppage in transit,
     loss,  damage,  or  destruction  of any material  portion of the Inventory.
     Secured  Party  shall  make  appropriate  adjustments  to  the  Receivables
     Borrowing  Base and the Inventory  Borrowing  Base to reflect the return of
     such Inventory.

          9.2. CREDITS AND EXTENSIONS.

          (a) Granting of Credits and Extensions.  Debtor may grant such Credits
     and such  Extensions  as are  ordinary  in the  usual  course  of  Debtor's
     business  without the prior consent of Secured  Party;  provided,  however,
     that any such Extension shall not extend the time for payment beyond thirty
     (30) days after the  original  due date as shown on the Invoice  evidencing
     the related  Receivable,  or as computed based on the information set forth
     on such Invoice.

          (b)  Accounting for Credits and  Extensions.  Debtor shall make a full
     accounting  of each grant of a Credit or an  Extension,  including  a brief
     description  of the reasons  therefor  and a copy of all credit  memoranda.
     Such accountings  shall be in form  satisfactory to Secured Party and shall
     be  delivered to Secured  Party daily or at such other  intervals as may be
     specified in Item 17 of the Schedule. All credit memoranda issued by Debtor
     shall be numbered  consecutively  and copies of the same, when delivered to
     Secured  Party,  shall be in numerical  order and accounted for in the same
     manner as provided in Section 6.2 with respect to Invoices.

          (c)  Adjustment  to  Receivables   Borrowing   Base.  The  Receivables
     Borrowing Base will be reduced by the amount of all Credits reflected in an
     accounting  required  by  Section  9.2(b)  and by the  full  amount  of any
     Receivables for which Extensions were granted.

          9.3.  RETURNED  INSTRUMENTS.  In the  event  that  any  check or other
     instrument   received  in  payment  of  a  Receivable   shall  be  returned
     uncollected for any reason,  Secured Party shall again forward the same for
     collection or return the same to Debtor.  Upon receipt of a returned  check
     or  instrument  by Debtor,  Debtor  shall  immediately  make the  necessary
     entries on its books and records to reinstate the Receivable as outstanding
     and  unpaid and  immediately  notify  Secured  Party of such  entries.  All
     Receivables  of an  Account  Debtor  with  respect  to which  such check or
     instrument was received shall thereupon become Ineligible Receivables.

          9.4. DEBIT MEMORANDA.

          (a) Unless Secured Party otherwise notifies Debtor in writing,  Debtor
     shall deliver at least weekly to Secured Party,  together with the schedule
     of Receivables provided for in Item 17 of the Schedule, copies of all debit
     memoranda issued by Debtor.

          (b) All debit  memoranda  issued by Debtor,  when delivered to Secured
     Party, shall be accounted for in the same manner as provided in Section 6.2
     with respect to Invoices.

          9.5. NOTES RECEIVABLE. Any note or other instrument (except a check or
     other  instrument  for the immediate  payment of money) with respect to any
     Receivable  accepted by Debtor without the prior written consent of Secured
     Party shall be excluded from the Borrowing  Capacity.  If Secured Party, in
     its  reasonable  judgment,  consents to the  acceptance of any such note or
     instrument,  the same shall be  considered  as evidence  of the  Receivable
     giving rise to such note or  instrument,  shall be subject to the  Security
     Interest and included in the determination of Borrowing Capacity, and shall
     not  constitute  payment of such  Receivable,  and Debtor  shall  forthwith
     endorse such note or  instrument  to the order of Secured Party and deliver
     the  same  to  Secured  Party,  together  with  the  Schedule  listing  the
     Receivables which it evidences. Upon collection,  the proceeds of such note
     or instrument may be applied  directly to unpaid  Advances,  interest,  and
     costs and expenses as provided in Section 8.5.


          10.  AFFIRMATIVE  COVENANTS.  So long as any part of the  Indebtedness
     remains unpaid,  or this Agreement  remains in effect,  Debtor shall comply
     with the  covenants  contained  in Item 21 of the  Schedule or elsewhere in
     this Agreement, and with the covenants listed below:

          10.1. FINANCIAL STATEMENTS. Debtor shall furnish to Secured Party:

          (a)  Within  90  days  after  the  end of each  fiscal  year,  audited
     consolidated   financial   statements   of  Debtor  and  all   Consolidated
     Subsidiaries  as  of  the  end  of  such  year,   fairly  presenting  their
     consolidated  financial  position,  which  statements  shall  consist  of a
     balance sheet and related statements of income, retained earnings, and cash
     flow covering the period of Debtor's immediately preceding fiscal year, and
     which  shall  be  audited  by  independent   certified  public  accountants
     satisfactory  to  Secured  Party  and  accompanied  by an  opinion  by such
     certified public accountants (which shall not be qualified by reason of any
     limitation  imposed by Debtor) to the effect that the financial  statements
     have  been  prepared  in  accordance  with  generally  accepted  accounting
     principles  and that the  examination  of the accounts in  connection  with
     those  financial  statements  has been made in  accordance  with  generally
     accepted auditing  standards and,  accordingly,  includes such tests of the
     accounting  records  and such other  audit  procedures  as were  considered
     necessary in the circumstances by such certified public accountants.

          (b) Within thirty (30) days after the end of each month,  consolidated
     and  consolidating  financial  statements  of Debtor and each  Consolidated
     Subsidiary as of the end of such month, fairly presenting Debtor's and such
     Consolidated   Subsidiary's  financial  position,  which  statements  shall
     consist of a balance sheet and related  statements of income,  and retained
     earnings  covering  the period  from the end of the  immediately  preceding
     fiscal year to the end of such month,  all in such detail as Secured  Party
     may  reasonably  request  and  signed  and  certified  to be correct by the
     president or chief financial  officer of Debtor or other financial  officer
     satisfactory to Secured Party.

          (c) Within thirty (30) days after the end of each month,  a compliance
     certificate  executed by the president or chief financial officer of Debtor
     or other  financial  officer  satisfactory  to Secured Party in the form of
     Exhibit A attached hereto and made a part hereof.

          (d)  Promptly  after  their  preparation,  copies of any and all proxy
     statements,  financial  statements,  and reports  which Debtor or any Third
     Party sends to its  shareholders,  and copies of any and all  periodic  and
     special reports and registration statements which Debtor or any Third Party
     files with the Securities and Exchange Commission.

          (e) Such additional information,  including but not limited to current
     business  plans by fiscal year end, as Secured  Party may from time to time
     reasonably  request regarding the financial and business affairs of Debtor,
     or any Consolidated Subsidiary, or any Third Party.

          10.2. GOVERNMENT AND OTHER SPECIAL RECEIVABLES.  Debtor shall promptly
     notify  Secured Party in writing of the  existence of any  Receivable as to
     which the  perfection,  enforceability,  or  validity  of  Secured  Party's
     Security  Interest in such Receivable,  or Secured Party's right or ability
     to  obtain  direct  payment  to  Secured  Party  of the  Proceeds  of  such
     Receivable,  is  governed by any  federal or state  statutory  requirements
     other  than  those  of the  Uniform  Commercial  Code,  including,  without
     limitation,  any Receivable subject to the Federal Assignment of Claims Act
     of 1940, as amended.

          10.3. TERMS OF SALE. The terms on which sales or leases giving rise to
     Receivables  are  made  shall  be as  specified  in  Items  3 and 22 of the
     Schedule.

          10.4.  BOOKS AND RECORDS.  Debtor shall maintain,  at its own cost and
     expense,  accurate  and  complete  books and  records  with  respect to the
     Collateral,  in form satisfactory to Secured Party, and including,  without
     limitation, records of all payments received and all Credits and Extensions
     granted  with  respect  to  the  Receivables,  of  the  return,  rejection,
     repossession,  stoppage in transit,  loss,  damage,  or  destruction of any
     Inventory, and of all other dealings affecting the Collateral. Debtor shall
     deliver such books and records to Secured  Party or its  representative  on
     request.  At Secured Party's request,  Debtor shall mark all or any records
     to indicate  the  Security  Interest.  Debtor  shall  further  indicate the
     Security  Interest on all financial  statements issued by it or shall cause
     the Security Interest to be so indicated by its accountants.

          10.5.  INVENTORY IN  POSSESSION  OF THIRD  PARTIES.  If any  Inventory
     remains  in the hands or  control  of any of  Debtor's  agents,  finishers,
     contractors,  or processors, or any other third party, Debtor, if requested
     by Secured  Party,  shall  notify  such party of Secured  Party's  Security
     Interest  in the  Inventory  and  shall  instruct  such  party to hold such
     Inventory for the account of Secured Party and subject to the  instructions
     of Secured Party.

          10.6. EXAMINATIONS. Debtor shall at all reasonable times and from time
     to time permit Secured Party or its agents to inspect the Collateral and to
     examine  and make  extracts  from,  or copies  of, any of  Debtor's  books,
     ledgers, reports, correspondence, and other records.

          10.7.  VERIFICATION OF COLLATERAL.  Secured Party shall have the right
     to verify  all or any  Collateral  in any  manner  and  through  any medium
     Secured  Party may consider  appropriate  and Debtor  agrees to furnish all
     assistance  and  information  and perform any acts which  Secured Party may
     require in connection therewith. Third party inventory confirmation service
     providers must be bonded and act as an Agent for Secured Party,  permitting
     Secured Party to rely directly upon all findings.

          10.8.  RESPONSIBLE  PARTIES.  Debtor shall notify Secured Party of the
     occurrence of any event  specified in Section  1.1(dd)(iv)  with respect to
     any Responsible Party promptly after receiving notice thereof.

          10.9. TAXES. Debtor shall promptly pay and discharge all of its taxes,
     assessments,  and  other  governmental  charges  prior to the date on which
     penalties are attached thereto, establish adequate reserves for the payment
     of such  taxes,  assessments,  and  other  governmental  charges,  make all
     required  withholding  and other tax deposits,  and, upon request,  provide
     Secured  Party with  receipts or other proof that such taxes,  assessments,
     and  other  governmental  charges  have  been  paid  in a  timely  fashion;
     provided,  however, that nothing contained herein shall require the payment
     of any  tax,  assessment,  or  other  governmental  charge  so  long as its
     validity is being contested in good faith,  and by appropriate  proceedings
     diligently  conducted,  and adequate  reserves for the payment thereof have
     been established.

          10.10. LITIGATION.

          (a)  Debtor  shall  promptly  notify  Secured  Party in writing of any
     litigation,  proceeding,  or counterclaim  against, or of any investigation
     of,  Debtor or any  Consolidated  Subsidiary  if:  (i) the  outcome of such
     litigation,  proceeding,  counterclaim, or investigation may materially and
     adversely  affect the finances or operations of Debtor or any  Consolidated
     Subsidiary  or title  to, or the value  of,  any  Collateral;  or (ii) such
     litigation,  proceeding,   counterclaim,  or  investigation  questions  the
     validity of any  Transaction  Document or any action taken, or to be taken,
     pursuant to any Transaction Document.

          (b) Debtor shall furnish to Secured Party such  information  regarding
     any such litigation, proceeding,  counterclaim, or investigation as Secured
     Party shall request.

          10.11. INSURANCE.

          (a) Debtor  shall at all times  carry and  maintain  in full force and
     effect such  insurance  as Secured  Party may from time to time  reasonably
     require,   in  coverage,   form,  and  amount,   and  issued  by  insurers,
     satisfactory to Debtor and Secured Party,  including,  without  limitation:
     workers' compensation or similar insurance; public liability insurance; and
     insurance  against  such  other  risks as are  usually  insured  against by
     business entities of established  reputation engaged in the same or similar
     businesses as Debtor and similarly situated.

          (b) Debtor shall  deliver to Secured Party  certificates  of insurance
     required  by  Secured  Party,  with  appropriate  endorsements  designating
     Secured Party and Marine Midland Bank as an additional  insured,  mortgagee
     and loss payee as  requested  by Secured  Party.  Each policy of  insurance
     shall provide that if such policy is canceled for any reason whatsoever, if
     any substantial change is made in the coverage which affects Secured Party,
     or if such  policy is  allowed to lapse for  nonpayment  of  premium,  such
     cancellation,  change,  or lapse shall not be effective as to Secured Party
     until  thirty (30) days after  receipt by Secured  Party of written  notice
     thereof from the insurer issuing such policy.

          (c) Debtor hereby appoints Secured Party as its attorney-in-fact, with
     full  authority in the place and stead of Debtor and in the name of Debtor,
     Secured  Party,  or  otherwise,  from  time  to  time  in  Secured  Party's
     discretion,  to take any  actions  and to  execute  any  instruments  which
     Secured  Party may deem  necessary  or desirable  to obtain,  adjust,  make
     claims under,  and otherwise deal with insurance  required  pursuant hereto
     and to  receive,  endorse,  and  collect  any  drafts or other  instruments
     delivered in connection therewith;  provided,  however, Secured Party shall
     not take  any such  action  or make  any such  execution  until an Event of
     Default has occurred.

          10.12. EXISTENCE; BUSINESS.

          (a) Debtor shall take all  necessary  steps to preserve its  existence
     and its right to conduct  business in all states in which the nature of its
     business or ownership of its property requires such qualification.

          (b) Debtor shall engage only in the operation of  convenience  stores,
     truck  stops,  and the retail sale of motor  fuel;  the  operation  of fuel
     terminals,  including the processing of commingled products and storage and
     delivery of fuel for third  parties;  the wholesale  distribution  of motor
     fuel; and activities ancillary to the foregoing.

          10.13.  PENSION  REPORTS.  Upon the  occurrence of any Pension  Event,
     Debtor  shall  furnish to Secured  Party,  as soon as possible  and, in any
     event,  within thirty (30) days after Debtor knows,  or has reason to know,
     of such  occurrence,  the  statement of the  president  or chief  financial
     officer of Debtor  setting  forth the details of such Pension Event and the
     action which Debtor proposes to take with respect thereto.

          10.14. NOTICE OF NON-COMPLIANCE.  Debtor shall notify Secured Party in
     writing  of any  failure  by Debtor or any Third  Party to comply  with any
     provision of any  Transaction  Document  immediately  upon learning of such
     non-compliance,  or if any  representation  or  warranty  contained  in any
     Transaction Document is no longer true in any material respect.

          10.15. COMPLIANCE WITH ENVIRONMENTAL LAWS.

          (a) Debtor shall materially comply with all Environmental Laws.

          (b)  Debtor  shall not  suffer,  cause,  or  permit  the  Disposal  of
     Hazardous  Substances at any property owned,  leased,  or operated by it or
     any Consolidated Subsidiary in material violation of any Environmental Law.
     For purposes of this Section 10.15,  "material" means any fine, penalty, or
     liabilities per occurrence in excess of $20,000.

          (c) Debtor shall  promptly  notify  Secured  Party in the event of the
     Disposal of any  Hazardous  Substance at any  property  owned,  leased,  or
     operated by Debtor or any Consolidated  Subsidiary,  or in the event of any
     Release,  or threatened Release,  of a Hazardous  Substance,  from any such
     property in material violation of any Environmental Law.

          (d) Debtor shall, at Secured Party's reasonable  request,  provide, at
     Debtor's expense, updated Environmental Questionnaires and/or Environmental
     Reports concerning any property owned, leased, or operated by Debtor or any
     Consolidated Subsidiary at a maximum cost to Debtor annually of $20,000.

          (e) Debtor shall  deliver  promptly to Secured Party (i) copies of any
     documents received from the United States  Environmental  Protection Agency
     or  any  state,  county,  or  municipal   environmental  or  health  agency
     concerning Debtor's or any Consolidated  Subsidiary's operations;  and (ii)
     copies of any documents submitted by Debtor or any Consolidated  Subsidiary
     to the United States Environmental  Protection Agency or any state, county,
     or municipal environmental or health agency concerning its operations.

          10.16.  DEFEND COLLATERAL.  Debtor shall defend the Collateral against
     the claims and demands of all other  parties  (other than  Secured  Party),
     including,   without  limitation,   defenses,  setoffs,  and  counterclaims
     asserted by any Account Debtor against Debtor or Secured Party.

          10.17.  USE OF  PROCEEDS.  Debtor  shall use the  proceeds of Advances
     solely  for  Debtor's  working  capital,  for such  other  legal and proper
     corporate  purposes as are consistent  with all applicable  laws,  Debtor's
     certificate of limited partnership and partnership  agreement,  resolutions
     of the Debtor's partners, and the terms of the Transaction Documents.

          10.18.  COMPLIANCE WITH LAWS.  Debtor shall comply with all applicable
     laws, rules, regulations,  and other legal requirements with respect to its
     business and the use, maintenance,  and operations of the real and personal
     property owned or leased by it in the conduct of its business.

          10.19.  MAINTENANCE  OF PROPERTY.  Debtor shall maintain its property,
     including, without limitation, the Collateral, in good condition and repair
     and shall  prevent  the  Collateral,  or any part  thereof,  from  being or
     becoming an accession to other goods not constituting Collateral.

          10.20.  LICENSES,  PERMITS,  ETC.  Debtor  shall  maintain  all of its
     material franchises, grants, authorizations,  licenses, permits, easements,
     consents,  certificates, and orders, if any, in full force and effect until
     their respective expiration dates.

          10.21.  TRADEMARKS  AND  PATENTS.  Debtor  shall  maintain  all of its
     material trademarks,  trademark rights, patents,  patent rights,  licenses,
     permits, tradenames, tradename rights, and approvals, if any, in full force
     and effect until their respective expiration dates.

          10.22. ERISA. Debtor shall comply with the provisions of ERISA and the
     Internal Revenue Code with respect to each Pension Plan.

          10.23.  MAINTENANCE  OF OWNERSHIP.  Debtor shall at all times maintain
     ownership of the percentages of issued and outstanding  equity interests of
     each  Consolidated  Subsidiary  set  forth in Item 33 of the  Schedule  and
     notify  Secured  Party  in  writing  prior  to the  formation  of  any  new
     Consolidated Subsidiary.

          10.24. ACTIVITIES OF CONSOLIDATED SUBSIDIARIES.  Unless the provisions
     of this Section are expressly  waived by Secured  Party in writing,  Debtor
     shall cause each  Consolidated  Subsidiary to comply with Sections 10.1(b),
     10.9, 10.11(a),  10.12, 10.15, and 10.18 through 10.22, inclusive,  and any
     of the  provisions  contained in Item 21 of the  Schedule,  and shall cause
     each  Consolidated  Subsidiary  to  refrain  from  doing  any of  the  acts
     proscribed by Sections 11.2,  11.3, and 11.5 through 11.14,  inclusive,  or
     proscribed by any of the provisions contained in Item 21 of the Schedule.

          10.25. LANDLORD AND WAREHOUSEMAN  WAIVERS.  Unless expressly waived by
     Secured Party in writing,  Debtor shall use its best efforts to obtain from
     each  landlord  from whom  Debtor  leases  property,  and the owner of each
     warehouse in which  Collateral  is stored,  a waiver or  disclaimer  of any
     interest  in, and an  agreement  to permit  the  removal  of, all  personal
     property  Collateral;  provided,  however,  if Debtor  does not obtain such
     waiver, disclaimer, and agreement within sixty (60) days of the date hereof
     with respect to such Collateral, such Collateral shall be excluded from the
     Borrowing Capacity.

          10.26.  COMPLIANCE  WITH MATERIAL  AGREEMENTS.  The Debtor shall,  and
     shall cause its Consolidated Subsidiary to, comply in all material respects
     with all material agreements, indentures, mortgages or documents binding on
     it or affecting its properties or business.

          10.27.   OTHER  NOTICES.   The  Debtor  shall,  and  shall  cause  its
     Consolidated  Subsidiary to,  promptly  notify the Secured Party of (a) any
     change in its  financial  condition  or its  business,  the effect of which
     could have a material adverse effect,  (b) any default under any agreement,
     contract or other  instrument to which it is a party or by which any of its
     properties  are  bound,  or  any   acceleration  of  the  maturity  of  any
     Indebtedness owing by the Debtor or its Consolidated Subsidiary, the effect
     of which could have a material  adverse  effect,  (c) any material  adverse
     claim against or affecting the Debtor or its  Consolidated  Subsidiary,  or
     any of their properties, or any actual or potential contingent liabilities,
     involving an amount or amounts,  in the aggregate,  exceeding $25,000,  and
     (d) the  commencement of, and any material  determination  in, any material
     litigation with any third party or any proceeding  before any  Governmental
     Authority affecting the Debtor or any Consolidated  Subsidiary involving an
     amount or amounts, in the aggregate, exceeding $25,000 other than any claim
     or  litigation  referred  to in (c) and (d)  which is fully  insured  (less
     customary  deductibles)  by one or more binding and  enforceable  insurance
     policies  in favor of the  Debtor  or its  Consolidated  Subsidiary,  which
     policies are issued in accordance with provisions of this Agreement.


          11.  NEGATIVE  COVENANTS.  So  long as any  part  of the  Indebtedness
     remains unpaid or this  Agreement  remains in effect,  Debtor,  without the
     written consent of Secured Party,  shall not violate any covenant contained
     in Item 21 of the Schedule and shall not:

          11.1. LOCATION OF INVENTORY, EQUIPMENT, AND BUSINESS RECORDS. Move the
     Inventory,  Equipment,  or the records  concerning the Collateral  from the
     location  where  they  are  kept as  specified  in  Items  11 and 13 of the
     Schedule.

          11.2. BORROWED MONEY.  Create,  incur,  assume, or suffer to exist any
     liability for borrowed money,  except to Secured Party and except as may be
     specified in Item 23 of the Schedule.

          11.3. SECURITY INTEREST AND OTHER ENCUMBRANCES. Create, incur, assume,
     or  suffer  to  exist  any  mortgage,  security  interest,  lien,  or other
     encumbrance  upon any of its  properties  or assets,  whether  now owned or
     hereafter  acquired,  except  mortgages,  security  interests,  liens,  and
     encumbrances  (a) in favor of Secured  Party and (b) as may be specified in
     Item 12 of the  Schedule.  Debtor  agrees  that it will  not,  without  the
     Secured Party's prior written consent (a) create,  incur,  assume or suffer
     to  exist  or to be  created,  incurred  or  assumed,  any  lien,  security
     interest,  option or other  encumbrance of any kind upon any of its rights,
     title and interests in any of its real  property  assets.  Further,  Debtor
     hereby agrees that it will not,  without the Secured  Party's prior written
     consent,  enter into any agreement with or in favor of any person or entity
     other than the  Secured  Party,  which  agreement  would  hinder,  qualify,
     prohibit or otherwise  limit in any manner the Debtor's right or ability to
     (a) create, incur, assume or suffer to exist or to be created,  incurred or
     assumed,  any lien,  security interest,  option or other encumbrance or any
     kind upon any of its right,  title and interest in any of its real property
     assets whatsoever,  or (b) sell, transfer, convey or assign any of its real
     property  assets  unless  in the  ordinary  course of  business;  provided,
     however,  none of the foregoing  shall restrict or prohibit the granting of
     purchase  money  security  interests  made in  connection  with any capital
     expenditures contemplated in Section 11.11.

          11.4.  STORING  AND USE OF  COLLATERAL.  Place the  Collateral  in any
     warehouse which may issue a negotiable Document with respect thereto or use
     the Collateral in violation of any provision of the Transaction  Documents,
     of any  applicable  statute,  regulation,  or  ordinance,  or of any policy
     insuring the Collateral.

          11.5. MERGERS, CONSOLIDATIONS, OR SALES. (a) Merge or consolidate with
     or into any  corporation;  (b) enter into any joint venture or  partnership
     with any person,  firm, or corporation;  (c) convey,  lease, or sell all or
     any  material  portion of its  property  or assets or business to any other
     person,  firm,  or  corporation  except  for the sale of  Inventory  in the
     ordinary  course of its business and in  accordance  with the terms of this
     Agreement;  or (d) convey,  lease, or sell any of its assets to any person,
     firm, or corporation for less than the fair market value thereof;  provided
     however,  that the  distribution  of assets and the  mergers  occurring  in
     connection with the division of FFPP and its Consolidated Subsidiaries into
     two separate operating entities,  as set forth in a registration  statement
     that  will  be  filed  with  the  United  States  Securities  and  Exchange
     Commission shall be permitted.

          11.6. PARTNERSHIP INTERESTS. Purchase or redeem any of its partnership
     interests or otherwise change the capital structure of Debtor or change the
     relative  rights,  preferences,  or  limitations  relating  to  any  of its
     partnership  interests;  provided  however,  that any such  change  made in
     connection with the division of FFPP and its Consolidated Subsidiaries into
     two separate operating entities,  as set forth in a registration  statement
     that  will  be  filed  with  the  United  States  Securities  and  Exchange
     Commission shall be permitted.

          11.7.  DISTRIBUTIONS.  Pay  any  cash  distributions  on  any  of  its
     partnership  interests  or dividends  on any of its capital  stock,  if the
     payment of such  distributions  or  dividends  would result in a failure to
     comply  with  any of the  financial  covenants  required  by Item 30 of the
     Schedule.

          11.8.  INVESTMENTS  AND ADVANCES.  Make any investment in, or advances
     to, any other person, firm, or corporation,  except (a) advance payments or
     deposits against  purchases made in the ordinary course of Debtor's regular
     business;  (b) direct obligations of the United States of America;  (c) any
     existing   investments  in,  or  existing  advances  to,  the  Consolidated
     Subsidiaries;  or (d) any  investments or advances that may be specified in
     Item 24 of the Schedule.

          11.9.  GUARANTIES.  Become a guarantor,  a surety, or otherwise liable
     for  the  debts  or  other  obligations  of  any  other  person,  firm,  or
     corporation,  whether by guaranty or  suretyship  agreement,  agreement  to
     purchase indebtedness,  agreement for furnishing funds through the purchase
     of goods,  supplies,  or  services  (or by way of stock  purchase,  capital
     contribution,  advance,  or loan) for the purpose of paying or  discharging
     indebtedness,  or otherwise,  except as an endorser of instruments  for the
     payment  of money  deposited  to its bank  account  for  collection  in the
     ordinary  course of business  and except as may be  specified in Item 25 of
     the Schedule.

          11.10.  LEASES.  Enter, as lessee,  into any lease of real or personal
     property (whether such lease is classified on Debtor's financial statements
     as a capital  lease or operating  lease) if the aggregate of the rentals of
     such lease and of Debtor's other then existing leases would exceed,  in any
     one of  Debtor's  fiscal  years,  the  amount  specified  in Item 26 of the
     Schedule.

          11.11. CAPITAL EXPENDITURES. Make or incur any capital expenditures in
     any one fiscal year in an aggregate amount in excess of the amount, if any,
     specified in Item 27 of the Schedule.

          11.12. COMPENSATION.

          (a) Pay,  or  obligate  itself to pay,  directly  or  indirectly,  any
     salaries,  bonuses,  dividends,  or other  compensation  to its officers or
     directors,  or  members  of  their  immediate  families,  in the  aggregate
     exceeding the amount, if any, specified in Item 28 of the Schedule.

          (b) Pay,  or  obligate  itself to pay,  directly  or  indirectly,  any
     salaries,  bonuses, dividends, or other compensation to the individuals, if
     any,  specified in Item 29 of the Schedule in excess of the amount  therein
     specified for such individuals.

          11.13.  NAME CHANGE.  Change its name  without  giving at least thirty
     (30) days prior written  notice of its proposed new name to Secured  Party,
     together  with  delivery  to Secured  Party of UCC-1  Financing  Statements
     reflecting  Debtor's new name,  all in form and substance  satisfactory  to
     Secured Party.

          11.14. DISPOSITION OF COLLATERAL. Sell, assign, or otherwise transfer,
     dispose of, or encumber the Collateral or any interest therein,  or grant a
     security interest therein, or license thereof,  except to Secured Party and
     except the sale or lease of Inventory in the ordinary course of business of
     Debtor and in accordance with the terms of this Agreement.

          11.15.  FINANCIAL  COVENANTS.   Fail  to  comply  with  the  financial
     covenants set forth in Item 30 of the Schedule.

          11.16. FISCAL YEAR AND ACCOUNTING METHOD.  Debtor shall not, and shall
     not permit any of its Consolidated  Subsidiaries to, change its fiscal year
     or  method  of  accounting  other  than as may be  permitted  by  Generally
     Accepted Accounting Principles.

          11.17.  LINES OF BUSINESS.  The Debtor shall not, and shall not permit
     its  Consolidated  Subsidiaries  to, directly or indirectly,  engage in any
     business  significantly and materially  different from those in which it is
     presently engaged or substantially alter its method of doing business.


          12. EVENTS OF DEFAULT.

          12.1.  EVENTS OF  DEFAULT.  The  occurrence  of any one or more of the
     following  events shall  constitute an event of default  (individually,  an
     Event of Default and, collectively, Events of Default):

          (a)  Nonpayment.  Nonpayment  when  due  of any  principal,  interest,
     premium, fee, cost, or expense due under the Transaction Documents.

          (b)  Negative  Covenants.  Default  in  the  observance  of any of the
     covenants or agreements of Debtor contained in Article 11.

          (c) Article 7. Default in the  observance  of any of the  covenants or
     agreements of Debtor contained in Article 7.

          (d) Other Covenants. Default in the observance of any of the covenants
     or agreements  of Debtor  contained in the  Transaction  Documents -- other
     than in Article 11,  Article 7 or Sections  8.1,  8.2, 8.3, or 8.4 -- or in
     any other  agreement  with Secured  Party which is not remedied  within the
     earlier  of ten (10) days after (i)  notice  thereof  by  Secured  Party to
     Debtor,  or (ii) the date  Debtor was  required  to give  notice to Secured
     Party under Section 10.14.

          (e) Cessation of Business or Voluntary Insolvency Proceedings. The (i)
     cessation of  operations  of Debtor's  business as conducted on the date of
     this  Agreement;  (ii)  filing by  Debtor  of a  petition  or  request  for
     liquidation,  reorganization,  arrangement,  adjudication  as  a  bankrupt,
     relief as a debtor,  or other relief under the bankruptcy,  insolvency,  or
     similar  laws of the United  States of  America  or any state or  territory
     thereof or any  foreign  jurisdiction  now or  hereafter  in effect;  (iii)
     making by Debtor of a general assignment for the benefit of creditors; (iv)
     consent  by the  Debtor  to  the  appointment  of a  receiver  or  trustee,
     including,  without  limitation,  a "custodian,"  as defined in the Federal
     Bankruptcy Code, for Debtor or any of Debtor's  assets;  (v) making of any,
     or  sending of any,  notice of any  intended  bulk sale by Debtor;  or (vi)
     execution by Debtor of a consent to any other type of insolvency proceeding
     (under the Federal  Bankruptcy Code or otherwise) or any formal or informal
     proceeding for the  dissolution or liquidation of, or settlement of, claims
     against or winding up of affairs of, Debtor.

          (f)  Involuntary  Insolvency  Proceedings.  (i) The  appointment  of a
     receiver,  trustee,  custodian,  or officer  performing  similar functions,
     including,  without  limitation,  a "custodian,"  as defined in the Federal
     Bankruptcy  Code,  for  Debtor or any of  Debtor's  assets;  or the  filing
     against  Debtor of a request or petition for  liquidation,  reorganization,
     arrangement,  adjudication  as  a  bankrupt,  or  other  relief  under  the
     bankruptcy,  insolvency,  or similar laws of the United  States of America,
     any  state  or  territory  thereof,  or  any  foreign  jurisdiction  now or
     hereafter in effect;  or of any other type of insolvency  proceeding (under
     the  Federal  Bankruptcy  Code or  otherwise)  or any  formal  or  informal
     proceeding  for the  dissolution or  liquidation  of,  settlement of claims
     against,  or winding up of affairs of Debtor  shall be  instituted  against
     Debtor; and (ii) such appointment shall not be vacated, or such petition or
     proceeding  shall not be  dismissed,  within  sixty  (60) days  after  such
     appointment, filing, or institution.

          (g) Other Indebtedness and Agreements.  Failure by Debtor to pay, when
     due (or, if permitted by the terms of any applicable documentation,  within
     any applicable grace period),  any indebtedness  owing by Debtor to Secured
     Party or any other person or entity (other than the  Indebtedness  incurred
     pursuant to this Agreement, and including, without limitation, indebtedness
     evidencing a deferred  purchase  price),  whether such  indebtedness  shall
     become due by scheduled maturity, by required prepayment,  by acceleration,
     by demand,  or  otherwise,  or  failure by the Debtor to perform  any term,
     covenant,  or agreement on its part to be performed  under any agreement or
     instrument  (other than a Transaction  Document)  evidencing or securing or
     relating to any indebtedness  owing by Debtor when required to be performed
     if the effect of such  failure is to permit  the holder to  accelerate  the
     maturity of such indebtedness.

          (h)  Judgments.  Any judgment or judgments  against Debtor (other than
     any judgment for which Debtor is fully insured) which  individually,  or in
     the aggregate,  are in an amount  greater than  $20,000.00 and which remain
     unpaid,  unstayed on appeal,  undischarged,  unbonded, or undismissed for a
     period of thirty (30) days.

          (i) Pension  Default.  Any Reportable  Event which Secured Party shall
     determine  in good faith  constitutes  grounds for the  termination  of any
     Pension  Plan  by the  Pension  Benefit  Guaranty  Corporation,  or for the
     appointment by an appropriate  United States district court of a trustee to
     administer  any Pension Plan,  shall occur and shall  continue  thirty (30)
     days  after  written  notice  thereof to Debtor by  Secured  Party;  or the
     Pension  Benefit  Guaranty  Corporation  shall  institute   proceedings  to
     terminate  any  Pension  Plan or to  appoint a trustee  to  administer  any
     Pension  Plan;  or a trustee  shall be appointed by an  appropriate  United
     States  district  court to administer any Pension Plan; or any Pension Plan
     shall  be  terminated;  or  Debtor  or any  Consolidated  Subsidiary  shall
     withdraw  from  a  Pension  Plan  in a  complete  withdrawal  or a  partial
     withdrawal;  or there shall arise  vested  unfunded  liabilities  under any
     Pension Plan that, in the good faith opinion of Secured Party, have or will
     or might have a material  adverse  effect on the finances or  operations of
     Debtor;  or Debtor or any Consolidated  Subsidiary shall fail to pay to any
     Pension Plan any contribution  which it is obligated to pay under the terms
     of such  plan or any  agreement  or which  is  required  to meet  statutory
     minimum funding standards.

          (j)  Collateral;  Impairment.  There shall  occur with  respect to the
     Collateral any (i) fraud; (ii) material  misappropriation,  conversion,  or
     diversion;  (iii) levy,  seizure,  or  attachment;  or (iv) material  loss,
     theft, or damage.

          (k) Change.  There shall occur any  materially  adverse  change in the
     business or financial condition of Debtor.

          (l) Third Party  Default.  There shall occur with respect to any Third
     Party or any Consolidated Subsidiary,  including,  without limitation,  any
     Guarantor or  Consolidated  Subsidiary  (i) any event  described in Section
     12.1(e),  12.1(f), 12.1(g), or 12.1(h); (ii) any pension default event such
     as described in Section 12.1(i) with respect to any pension plan maintained
     by such Third Party or such Consolidated  Subsidiary;  or (iii) any failure
     by Third Party or such  Consolidated  Subsidiary  to perform in  accordance
     with the terms of any agreement between such Third Party and Secured Party,
     or any  default  or event of default  by such  Third  Party  under any such
     agreement.

          (m)  Representations.   Any  certificate,  statement,  representation,
     warranty,  or financial  statement furnished by, or on behalf of, Debtor or
     any  Third  Party,  pursuant  to, or in  connection  with,  this  Agreement
     (including,  without limitation,  representations and warranties  contained
     herein) or as an inducement  to Secured Party to enter into this  Agreement
     or any other lending  agreement  with Debtor shall prove to have been false
     in any material respect at the time as of which the facts therein set forth
     were   certified  or  to  have  omitted  any   substantial   contingent  or
     unliquidated  liability or claim against Debtor or any such Third Party, or
     if on the date of the execution of this Agreement there shall have been any
     materially  adverse  change  in any  of the  facts  disclosed  by any  such
     statement or certificate  which shall not have been disclosed in writing to
     Secured Party at, or prior to, the time of such execution.

          (n)  Challenge to Validity.  Debtor or any Third Party  commences  any
     action or  proceeding  to contest  the  validity or  enforceability  of any
     Transaction   Document  or  any  lien  or  security   interest  granted  or
     obligations evidenced by any Transaction Document.

          (o) Death or Incapacity;  Termination. Any Third Party dies or becomes
     incapacitated,  or terminates or attempts to terminate,  in accordance with
     its terms or otherwise, any guaranty or other Transaction Document executed
     by such Third Party.

          (p) Change of  Ownership.  If all, or a  controlling  interest of, the
     equity  interests  of  Debtor  shall  be  sold,   assigned,   or  otherwise
     transferred,  other than any sale,  assignment,  or transfer  occurring  in
     connection with the division of FFPP and its Consolidated Subsidiaries into
     two separate operating entities,  as set forth in a registration  statement
     that  will  be  filed  with  the  United  States  Securities  and  Exchange
     Commission, or if a security interest or other encumbrance shall be granted
     or otherwise acquired therein or with respect thereto.

          (q)  Termination  of  Validity  Agreement.  Upon  termination  of  any
     Validity Guaranty then in effect, unless such Validity Guaranty is replaced
     by another  Validity  Guaranty in  substantially  the same form and content
     executed  by an  officer  of Debtor in favor of and  acceptable  to Secured
     Party effective upon any such termination.

          12.2. EFFECTS OF AN EVENT OF DEFAULT.

          (a) Upon the  happening  of one or more  Events of Default  (except an
     Event of Default under either  Section  12.1(e) or 12.1(f)),  Secured Party
     may declare any  obligations it may have hereunder to be canceled,  and the
     principal of the  Indebtedness  then  outstanding to be immediately due and
     payable, together with all interest thereon and costs and expenses accruing
     under the Transaction  Documents.  Upon such  declaration,  any obligations
     Secured Party may have  hereunder  shall be immediately  canceled,  and the
     Indebtedness  then  outstanding  shall become  immediately  due and payable
     without presentation, demand, or further notice of any kind to Debtor.

          (b) Upon the  happening of one or more Events of Default under Section
     12.1(e) or 12.1(f), Secured Party's obligations hereunder shall be canceled
     immediately,  automatically,  and without notice, and the Indebtedness then
     outstanding shall become immediately due and payable without  presentation,
     demand, or notice of any kind to the Debtor.


          13. SECURED PARTY'S RIGHTS AND REMEDIES.

          13.1.  GENERALLY.  Secured Party's rights and remedies with respect to
     the Collateral, in addition to those rights granted herein and in any other
     agreement  between  Debtor and Secured  Party now or  hereafter  in effect,
     shall be those of a secured party under the Uniform  Commercial  Code as in
     effect in the State and under any other applicable law.

          13.2.   NOTIFICATION  OF  ACCOUNT  DEBTORS.  At  any  time  after  the
     occurrence of an Event of Default or an event which with notice or lapse of
     time, or both, would constitute an Event of Default,  Secured Party may, at
     any time and from time to time,  contact Account Debtors directly to notify
     any or all Account  Debtors of the  Security  Interest  and may direct such
     Account  Debtors to make all  payments on  Receivables  directly to Secured
     Party. Notwithstanding the foregoing, Secured Party may at any time contact
     Account Debtors directly to verify Receivables.

          13.3.  POSSESSION  OF  COLLATERAL.  Whenever  Secured  Party  may take
     possession of the Collateral,  pursuant to Section 13.1,  Secured Party may
     take  possession of the  Collateral on Debtor's  premises or may remove the
     Collateral,  or any part thereof, to such other places as the Secured Party
     may, in its sole  discretion,  determine.  If requested  by Secured  Party,
     Debtor shall assemble all the books and records  relating to the Collateral
     and  deliver it to  Secured  Party at such  place as may be  designated  by
     Secured Party.

          13.4.  COLLECTION OF  RECEIVABLES.  Upon the occurrence of an Event of
     Default or an event  which  with  notice or lapse of time,  or both,  would
     constitute an Event of Default,  Secured Party may demand, collect, and sue
     for all monies and Proceeds due, or to become due, on the  Receivables  (in
     either  Debtor's or Secured  Party's name at the latter's  option) with the
     right to enforce, compromise,  settle, or discharge any or all Receivables.
     If Secured Party takes any action contemplated by this Section with respect
     to any  Receivable,  Debtor  shall not exercise any right that Debtor would
     otherwise have had to take such action with respect to such Receivable.

          13.5. ENDORSEMENT OF CHECKS;  DEBTOR'S MAIL. Debtor hereby irrevocably
     appoints  Secured  Party the  Debtor's  agent with full power,  in the same
     manner,  to the same extent,  and with the same effect as if Debtor were to
     do the same,  immediately after the occurrence of an Event of Default or an
     event  which with notice or lapse of time,  or both,  would  constitute  an
     Event of Default,  to endorse Debtor's name on any Instruments or Documents
     pertaining to any Collateral,  to receive and collect all mail addressed to
     Debtor,  to direct  the  place of  delivery  of such  mail to any  location
     designated  by Secured  Party,  to open such mail,  to remove all  contents
     therefrom,  and to retain all contents thereof  constituting or relating to
     the Collateral.  This agency is unconditional and shall not terminate until
     all of the  Indebtedness  is paid in  full  and  this  Agreement  has  been
     terminated.  Secured  Party  agrees to give  Debtor  notice in the event it
     exercises this agency,  except with respect to the  endorsement of Debtor's
     name on any instruments or documents pertaining to any Collateral.

          13.6.  LICENSE TO USE  PATENTS,  TRADEMARKS,  AND  TRADENAMES.  Debtor
     grants to Secured Party a royalty-free, non-transferable license to use any
     and all patents,  trademarks,  and tradenames now or hereafter owned by, or
     licensed to,  Debtor for the  purposes of  manufacturing  and  disposing of
     Inventory after the occurrence of an Event of Default.  All Inventory shall
     at least meet quality standards maintained by Debtor prior to such Event of
     Default.


          14. MISCELLANEOUS.

          14.1.  PERFECTING THE SECURITY  INTEREST;  PROTECTING THE  COLLATERAL.
     Debtor hereby  authorizes  Secured Party to file such financing  statements
     relating to the Collateral  without Debtor's  signature  thereon as Secured
     Party  may  deem  appropriate,  and  appoints  Secured  Party  as  Debtor's
     attorney-in-fact  (without  requiring  Secured  Party) to execute  any such
     financing statement or statements in Debtor's name and to perform all other
     acts which  Secured  Party deems  appropriate  to perfect and  continue the
     Security Interest and to protect, preserve, and realize upon the Collateral
     and any insurance proceeds thereof.

          14.2. PERFORMANCE OF DEBTOR'S DUTIES. Upon Debtor's failure to perform
     any of its  duties  under the  Transaction  Documents,  including,  without
     limitation,  the duty to obtain  insurance as  specified in Section  10.11,
     Secured Party may, but shall not be obligated  to,  perform any or all such
     duties.

          14.3. NOTICE OF SALE.  Without in any way requiring notice to be given
     in the following manner,  Debtor agrees that any notice by Secured Party of
     sale,  disposition,  or other intended action  hereunder,  or in connection
     herewith,  whether required by the Uniform  Commercial Code as in effect in
     the State or otherwise,  shall  constitute  reasonable  notice to Debtor if
     such notice is mailed by regular or certified  mail,  postage  prepaid,  at
     least ten (10) days prior to such action,  to Debtor's  address,  attention
     Vice  President - Finance,  or  addresses  specified  above or to any other
     address  which  Debtor has  specified  in  writing to Secured  Party as the
     address to which notices hereunder shall be given to Debtor,.

          14.4. WAIVER BY SECURED PARTY. No course of dealing between Debtor and
     Secured Party and no delay or omission by Secured  Party in exercising  any
     right or remedy  under the  Transaction  Documents  or with  respect to any
     Indebtedness  shall  operate as a waiver  thereof or of any other  right or
     remedy,  and no single or partial exercise thereof shall preclude any other
     or further  exercise  thereof or the exercise of any other right or remedy.
     All rights and remedies of Secured Party are cumulative.

          14.5.  WAIVER BY DEBTOR.  Secured  Party shall have no  obligation  to
     take, and Debtor shall have the sole responsibility for taking, any and all
     steps to preserve  rights  against any and all Account  Debtors and against
     any  and all  prior  parties  to any  note,  Chattel  Paper,  draft,  trade
     acceptance,  or other  instrument  for the payment of money  covered by the
     Security  Interest  whether or not in Secured Party's  possession.  Secured
     Party shall not be responsible to Debtor for loss or damage  resulting from
     Secured Party's failure to enforce any Receivables or to collect any moneys
     due, or to become due, thereunder or other Proceeds constituting Collateral
     hereunder.   Debtor  waives  protest  of  any  note,  check,  draft,  trade
     acceptance,  or other  instrument  for the  payment  of money  constituting
     Collateral  at any time held by Secured Party on which Debtor is in any way
     liable  and  waives  notice of any other  action  taken by  Secured  Party,
     including,  without  limitation,   notice  of  Secured  Party's  intent  to
     accelerate the Indebtedness or any part thereof.

          14.6.  SETOFF.  Without  limiting  any other  right of Secured  Party,
     whenever  Secured  Party has the right to declare  any  Indebtedness  to be
     immediately  due and payable  (whether or not it has so declared),  Secured
     Party, at its sole election,  may setoff against the  Indebtedness  any and
     all  monies  then or  thereafter  owed to  Debtor by  Secured  Party in any
     capacity,  whether or not the  Indebtedness  or the  obligation to pay such
     monies owed by Secured Party is then due, and Secured Party shall be deemed
     to have  exercised  such  right of setoff  immediately  at the time of such
     election  even  though  any charge  therefor  is made or entered on Secured
     Party's records subsequent thereto.

          14.7.  ASSIGNMENT.  The rights and benefits of Secured Party hereunder
     shall,  if  Secured  Party so  agrees,  inure to any  party  acquiring  any
     interest in the Indebtedness or any part thereof.

          14.8.  SUCCESSORS  AND  ASSIGNS.  Secured  Party and  Debtor,  as used
     herein,  shall include the successors or assigns of those  parties,  except
     that Debtor shall not have the right to assign its rights  hereunder or any
     interest herein.

          14.9. MODIFICATION. No modification,  rescission,  waiver, release, or
     amendment of any provision of this Agreement  shall be made,  except as may
     be provided in Item 35 of the Schedule or by a written  agreement signed by
     Debtor and a duly authorized officer of Secured Party.

          14.10.  COUNTERPARTS.  This Agreement may be executed in any number of
     counterparts,  and by Secured  Party and Debtor on  separate  counterparts,
     each of which,  when so executed and delivered,  shall be an original,  but
     all of which shall together constitute one and the same Agreement.

          14.11.  GENERALLY  ACCEPTED  ACCOUNTING   PRINCIPLES.   Any  financial
     calculation  to be made,  all  financial  statements  and  other  financial
     information  to be  provided,  and  all  books  and  records  to be kept in
     connection  with the provisions of this  Agreement,  shall be in accordance
     with generally accepted accounting  principles  consistently applied during
     each interval and from interval to interval; provided, however, that in the
     event changes in generally accepted accounting principles shall be mandated
     by the Financial  Accounting Standards Board or any similar accounting body
     of comparable  standing,  or should be  recommended  by Debtor's  certified
     public  accountants,  to the extent such changes would affect any financial
     calculations  to be made in  connection  herewith,  such  changes  shall be
     implemented  in making such  calculations  only from and after such date as
     Debtor and Secured  Party shall have amended  this  Agreement to the extent
     necessary to reflect such changes in the financial  and other  covenants to
     which such calculations relate.

          14.12. INDEMNIFICATION.

          (a) If after  receipt  of any  payment  of all,  or any  part of,  the
     Indebtedness, Secured Party is, for any reason, compelled to surrender such
     payment to any person or entity  because such payment is  determined  to be
     void or voidable as a preference,  an impermissible  setoff, or a diversion
     of trust funds, or for any other reason,  the  Transaction  Documents shall
     continue in full force and Debtor shall be liable,  and shall indemnify and
     hold Secured Party  harmless  for, the amount of such payment  surrendered.
     The   provisions   of  this   Section   shall  be  and   remain   effective
     notwithstanding  any  contrary  action which may have been taken by Secured
     Party in reliance upon such payment,  and any such contrary action so taken
     shall be without  prejudice to Secured Party's rights under the Transaction
     Documents  and shall be deemed to have been  conditioned  upon such payment
     having become final and  irrevocable.  The provisions of this Section shall
     survive the termination of this Agreement and the Transaction Documents.

          (B) DEBTOR AGREES TO  INDEMNIFY,  DEFEND,  AND HOLD  HARMLESS  SECURED
     PARTY,  ITS  OFFICERS,  DIRECTORS,  EMPLOYEES,   REPRESENTATIVES,   AGENTS,
     ATTORNEYS,  ACCOUNTANTS,  AND EXPERTS  ("INDEMNIFIED  PARTIES")  FROM,  AND
     AGAINST, ANY AND ALL LIABILITIES, CLAIMS, DAMAGES, PENALTIES, EXPENDITURES,
     LOSSES,  OR  CHARGES,   INCLUDING,   BUT  NOT  LIMITED  TO,  ALL  COSTS  OF
     INVESTIGATION,   MONITORING,  LEGAL  REPRESENTATIONS,   REMEDIAL  RESPONSE,
     REMOVAL,  RESTORATION,  OR PERMIT  ACQUISITION,  WHICH  MAY NOW,  OR IN THE
     FUTURE, BE UNDERTAKEN,  SUFFERED,  PAID,  AWARDED,  ASSESSED,  OR OTHERWISE
     INCURRED BY INDEMNIFIED PARTIES AS A RESULT OF THE PRESENCE OF, RELEASE OF,
     OR  THREATENED  RELEASE  OF  HAZARDOUS   SUBSTANCES  IN  VIOLATION  OF  ANY
     ENVIRONMENTAL LAWS ON, IN, OR UNDER THE PROPERTY OWNED, LEASED, OR OPERATED
     BY DEBTOR OR ANY CONSOLIDATED SUBSIDIARY. THE LIABILITY OF DEBTOR UNDER THE
     COVENANTS OF THIS SECTION IS NOT LIMITED BY ANY  EXCULPATORY  PROVISIONS IN
     THIS AGREEMENT OR ANY OTHER DOCUMENTS  SECURING THE  INDEBTEDNESS AND SHALL
     SURVIVE  REPAYMENT OF THE  INDEBTEDNESS  OR  EXPIRATION  OR ANY TRANSFER OR
     TERMINATION OF THIS  AGREEMENT  REGARDLESS OF THE MEANS OF SUCH TRANSFER OR
     TERMINATION.  DEBTOR AGREES THAT INDEMNIFIED PARTIES SHALL NOT BE LIABLE IN
     ANY WAY FOR THE COMPLETENESS OR ACCURACY OF ANY ENVIRONMENTAL REPORT OR THE
     INFORMATION CONTAINED THEREIN. DEBTOR FURTHER AGREES THAT SECURED PARTY HAS
     NO DUTY TO WARN  DEBTOR OR ANY OTHER  PERSON OR ENTITY  ABOUT ANY ACTUAL OR
     POTENTIAL ENVIRONMENTAL CONTAMINATION OR OTHER PROBLEM THAT MAY HAVE BECOME
     APPARENT, OR WILL BECOME APPARENT, TO INDEMNIFIED PARTIES.

          (C) DEBTOR  AGREES TO PAY,  INDEMNIFY,  AND HOLD  INDEMNIFIED  PARTIES
     HARMLESS FROM, AND AGAINST, ANY AND ALL LIABILITIES,  OBLIGATIONS,  LOSSES,
     DAMAGES,   PENALTIES,   ACTIONS,  JUDGMENTS,  SUITS,  COSTS,  EXPENSES,  OR
     DISBURSEMENTS  OF  ANY  KIND  OR  NATURE  WHATSOEVER  (INCLUDING,   WITHOUT
     LIMITATION,   COUNSEL  AND  SPECIAL  COUNSEL  FEES  AND   DISBURSEMENTS  IN
     CONNECTION  WITH  ANY   LITIGATION,   INVESTIGATION,   HEARING,   OR  OTHER
     PROCEEDING)  WITH  RESPECT,  OR IN  ANY  WAY  RELATED,  TO  THE  EXISTENCE,
     EXECUTION, DELIVERY,  ENFORCEMENT,  PERFORMANCE, AND ADMINISTRATION OF THIS
     AGREEMENT  AND  ANY  OTHER  TRANSACTION  DOCUMENT  (ALL  OF THE  FOREGOING,
     COLLECTIVELY,  THE  "INDEMNIFIED  LIABILITIES").  THE  AGREEMENTS  IN  THIS
     SECTION SHALL SURVIVE REPAYMENT OF THE INDEBTEDNESS.

          (D) THE FOREGOING  INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
     NOTWITHSTANDING  THE  SOLE  OR  CONCURRENT  NEGLIGENCE  OF  EVERY  KIND  OR
     CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT
     OR AN  OMISSION,  INCLUDING  WITHOUT  LIMITATION,  ALL  TYPES OF  NEGLIGENT
     CONDUCT  IDENTIFIED IN THE RESTATEMENT  (SECOND) OF TORTS OF ONE OR MORE OF
     THE INDEMNIFIED  PARTIES OR BY REASON OF STRICT  LIABILITY  IMPOSED WITHOUT
     FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED  PARTIES. TO THE EXTENT THAT AN
     INDEMNIFIED  PARTY IS FOUND TO HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR
     WILLFUL MISCONDUCT,  THIS CONTRACTUAL  OBLIGATION OF INDEMNIFICATION  SHALL
     CONTINUE  BUT SHALL ONLY  EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED
     TO HAVE  OCCURRED  BY REASON OF EVENTS  OTHER THAN THE GROSS  NEGLIGENT  OR
     WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTY.

          14.13. TERMINATION; PREPAYMENT PREMIUM.

          (a)  Termination.  This  Agreement  is,  and  is  intended  to  be,  a
     continuing  Agreement  and shall  remain in full  force and  effect  for an
     initial term equal to the term set forth in Item 32 of the Schedule and for
     any  renewal  term also  specified  in Item 32 of the  Schedule;  provided,
     however,  that either party may terminate  this  Agreement as of the end of
     the initial term or any  subsequent  renewal term by giving the other party
     notice to terminate in writing at least sixty (60) days prior to the end of
     any such period whereupon at the end of such period all Indebtedness  shall
     be due and payable in full without presentation,  demand, or further notice
     of any  kind,  whether  or not  all or any  part of  such  Indebtedness  is
     otherwise  due  and  payable   pursuant  to  the  agreement  or  instrument
     evidencing same. Secured Party may terminate this Agreement immediately and
     without notice upon the occurrence of an Event of Default.  Notwithstanding
     the  foregoing or anything in this  Agreement or elsewhere to the contrary,
     the  Security  Interest,  Secured  Party's  rights and  remedies  under the
     Transaction  Documents and Debtor's  obligations and liabilities  under the
     Transaction Documents,  shall survive any termination of this Agreement and
     shall  remain  in full  force  and  effect  until  all of the  Indebtedness
     outstanding,  or contracted or committed for (whether or not  outstanding),
     before the receipt of such notice by Secured  Party,  and any extensions or
     renewals  thereof  (whether  made before or after  receipt of such notice),
     together with interest accruing thereon after such notice, shall be finally
     and irrevocably  paid in full. No Collateral shall be released or financing
     statement  terminated until: (i) such final and irrevocable payment in full
     of the Indebtedness as described in the preceding sentence; and (ii) Debtor
     and Secured  Party  execute a mutual  general  release,  subject to Section
     14.12 of this Agreement,  in form and substance satisfactory to the Secured
     Party and Debtor and their respective counsel.

          (b) Prepayment  Premium.  If Debtor pays in full all, or substantially
     all, of the principal  balance of Advances  prior to the end of the initial
     term or any renewal  term of this  Agreement as set forth in Item 32 of the
     Schedule,  other than temporarily  from funds  internally  generated in the
     ordinary course of business or from a public offering of equity  interests,
     at the time of any such payment  Debtor shall also pay to Secured Party the
     prepayment  premium  set forth in Item 34 of the  Schedule.  Any  tender of
     payment in full of such  principal  balance  following an  acceleration  by
     Secured Party of the  Indebtedness,  pursuant to Section 12.2 shall not be,
     for  purposes  of  this  Section,  deemed  to be  considered  a  prepayment
     requiring Debtor to pay the prepayment  premium set forth in Item 34 of the
     Schedule.

          14.14.  FURTHER ASSURANCES.  From time to time, Debtor shall take such
     action and execute and deliver to Secured Party such additional  documents,
     instruments,  certificates,  and agreements as Secured Party may reasonably
     request to effectuate the purposes of the Transaction Documents.

          14.15.  HEADINGS.  Article and Section headings used in this Agreement
     are for  convenience  only and shall not  affect the  construction  of this
     Agreement.

          14.16.  CUMULATIVE SECURITY INTEREST,  ETC. The execution and delivery
     of this  Agreement  shall in no manner impair or affect any other  security
     (by   endorsement   or  otherwise)   for  payment  or  performance  of  the
     Indebtedness,  and no security  taken  hereafter as security for payment or
     performance of the  Indebtedness  shall impair in any manner or affect this
     Agreement,  or the security  interest granted hereby,  all such present and
     future additional security to be considered as cumulative security.

          14.17. SECURED PARTY'S DUTIES. Without limiting any other provision of
     this  Agreement:  (a) the powers  conferred on Secured Party  hereunder are
     solely to protect its  interests  and shall not impose any duty to exercise
     any such  powers;  and (b) except as may be  required  by  applicable  law,
     Secured  Party  shall not have any duty as to any  Collateral  or as to the
     taking of any necessary steps to preserve rights against any parties or any
     other rights pertaining to any Collateral.

          14.18.  NOTICES  GENERALLY.   All  notices  and  other  communications
     hereunder shall be made by telegram, telex, telecopy, facsimile,  overnight
     air courier, or certified or registered mail, return receipt requested, and
     shall be deemed to be received  (whether  actually  received or not) by the
     party  to whom  sent:  (i)  one  Business  Day  after  sending,  if sent by
     telegram,  telex, telecopy,  facsimile,  or overnight air courier; and (ii)
     three Business Days after mailing, if sent by certified or registered mail.
     All such  notices  and  other  communications  to a party  hereto  shall be
     addressed  to such party at the  address of that party (or in the case of a
     telecopy,  or facsimile  machine,  to the facsimile  machine number of such
     party) set forth on the cover page hereof or to such other  address as such
     party may  designate  for  itself in a notice to the other  party  given in
     accordance with this Section.

          14.19. SEVERABILITY.  The provisions of this Agreement are independent
     of, and separable from, each other, and no such provision shall be affected
     or  rendered  invalid or  unenforceable  by virtue of the fact that for any
     reason any other such provision may be invalid or unenforceable in whole or
     in part. If any provision of this Agreement is prohibited or  unenforceable
     in  any   jurisdiction,   such  provision  shall  be  ineffective  in  such
     jurisdiction  only to the extent of such  prohibition or  unenforceability,
     and such prohibition or  unenforceability  shall not invalidate the balance
     of such provision to the extent it is not prohibited or  unenforceable  nor
     render   prohibited   or   unenforceable   such   provision  in  any  other
     jurisdiction.

          14.20.  INCONSISTENT  PROVISIONS.  The terms of this Agreement and the
     other  Transaction  Documents shall be cumulative except to the extent that
     they are specifically inconsistent with each other, in which case the terms
     of this Agreement shall prevail.

          14.21.  USURY  SAVINGS.  All  agreements  between  the  Debtor and the
     Secured  Party,  whether  now  existing  or  hereafter  arising and whether
     written or oral, are hereby expressly  limited so that in no contingency or
     event   whatsoever,   whether  by  reason  of  demand  being  made  on  the
     indebtedness or otherwise,  shall the amount paid, or agreed to be paid, to
     the Secured Party for the use, forbearance, or detention of the money to be
     loaned under this  Agreement or otherwise or for the payment or performance
     of any  covenant  or  obligation  contained  herein  or in any  other  Loan
     Document   exceed  the  Highest  Lawful  Rate.  If,  as  a  result  of  any
     circumstances whatsoever,  fulfillment of any provision hereof or of any of
     such  documents,  at the time  performance of such provision  shall be due,
     shall involve  transcending the limit of validity  prescribed by applicable
     usury law,  then,  ipso facto,  the  obligation  to be  fulfilled  shall be
     reduced to the limit of such validity,  and if, from any such circumstance,
     the Secured  Party shall ever receive  interest or anything  which might be
     deemed interest under  applicable law which would exceed the Highest Lawful
     Rate, such amount which would be excessive interest shall be applied to the
     reduction of the principal  amount of the  obligations of the Debtor to the
     Secured  Party and not to the  payment of  interest,  or if such  excessive
     interest exceeds the unpaid principal  balance of the obligations of Debtor
     to the Secured Party under any Transaction  Document,  such excess shall be
     refunded to Debtor. All sums paid or agreed to be paid to the Secured Party
     for the use, forbearance, or detention of the indebtedness of Debtor to the
     Secured  Party  shall,  to the  extent  permitted  by  applicable  law,  be
     amortized, prorated, allocated, and spread throughout the full term of such
     indebtedness  until payment in full of the principal thereof (including the
     period of any renewal or extension thereof) so that the interest on account
     of such  indebtedness  shall not exceed the Highest  Lawful Rate. The terms
     and  provisions of this Section  shall  control and  supersede  every other
     provision of all agreements  between  Debtor and the Secured Party.  If, at
     any time and from time to time,  (i) the amount of interest  payable to the
     Secured  Party on any date shall be  computed  at the  Highest  Lawful Rate
     pursuant to this Section and (ii) for any subsequent  interest  computation
     period the amount of interest  otherwise payable to the Secured Party would
     be less than the Highest Lawful Rate,  then the amount of interest  payable
     to the Secured Party, for such subsequent interest computation period shall
     continue to be computed at the Highest  Lawful Rate until the total  amount
     of interest  payable to the Secured Party,  shall equal the total amount of
     interest  which would have been  payable to the Secured  Party if the total
     amount of interest had been computed without giving effect to this Section.

          14.22.  PARTICIPATIONS.  Secured Party may at any time grant to one or
     more banks or other institutions a participating  interest in the Borrowing
     Capacity or any or all of the  Advances.  In the event of any such grant by
     Secured  Party of a  participating  interest,  Secured  Party shall  remain
     responsible for the performance of its  obligations  hereunder,  and Debtor
     shall continue to deal solely and directly with Secured Party in connection
     with Secured  Party's  rights and  obligations  under this  Agreement.  Any
     agreement  pursuant to which Secured  Party may grant such a  participating
     interest  shall  provide that Secured Party shall retain the sole right and
     responsibility to enforce the Indebtedness,  including, without limitation,
     the right to approve any amendment, modification or waiver of any provision
     of this Agreement.  Debtor shall cooperate with any audits and other credit
     investigations  and reviews  undertaken for the purpose of a participation,
     and Secured Party shall be entitled to disclose any  information in Secured
     Party's possession regarding Debtor,  whether or not such information shall
     be of a confidential nature,  subject only to the agreement of such lenders
     to maintain the confidentiality of any confidential information.

          14.23. APPLICABLE LAW. THIS AGREEMENT,  AND THE TRANSACTIONS EVIDENCED
     HEREBY, SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE INTERNAL LAWS OF THE
     STATE,  WITHOUT  REGARD TO  PRINCIPLES OF CONFLICTS OF LAW, AS THE SAME MAY
     FROM TIME TO TIME BE IN EFFECT, INCLUDING,  WITHOUT LIMITATION, THE UNIFORM
     COMMERCIAL CODE AS IN EFFECT IN THE STATE.

          14.24.  CONSENT TO  JURISDICTION.  DEBTOR AND SECURED PARTY AGREE THAT
     ANY ACTION OR  PROCEEDING  TO ENFORCE,  OR ARISING OUT OF, THE  TRANSACTION
     DOCUMENTS MAY BE COMMENCED IN ANY COURT IN DALLAS,  TEXAS,  AND EACH WAIVES
     PERSONAL  SERVICE  OF  PROCESS  AND  AGREES  THAT A SUMMONS  AND  COMPLAINT
     COMMENCING  AN ACTION OR  PROCEEDING  IN ANY SUCH COURT  SHALL BE  PROPERLY
     SERVED AND SHALL CONFER  PERSONAL  JURISDICTION  IF SERVED BY REGISTERED OR
     CERTIFIED  MAIL,  OR AS OTHERWISE  PROVIDED BY THE LAWS OF THE STATE OR THE
     UNITED STATES.

          14.25.  JURY TRIAL WAIVER.  DEBTOR AND SECURED PARTY HEREBY KNOWINGLY,
     VOLUNTARILY,  AND INTENTIONALLY  WAIVE ANY RIGHT TO TRIAL BY JURY DEBTOR OR
     SECURED PARTY MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN
     CONNECTION  WITH THE  TRANSACTION  DOCUMENTS  OR THE  TRANSACTIONS  RELATED
     THERETO.  DEBTOR REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF
     SECURED PARTY HAS REPRESENTED,  EXPRESSLY OR OTHERWISE,  THAT SECURED PARTY
     WILL NOT, IN THE EVENT OF  LITIGATION,  SEEK TO ENFORCE  THIS RIGHT TO JURY
     TRIAL WAIVER.  DEBTOR  ACKNOWLEDGES  THAT SECURED PARTY HAS BEEN INDUCED TO
     ENTER INTO THIS  AGREEMENT BY, AMONG OTHER THINGS,  THE  PROVISIONS OF THIS
     SECTION.

          14.26.  ARTICLE  15.10(b).  THE DEBTOR AND SECURED  PARTY HEREBY AGREE
     THAT, EXCEPT FOR ARTICLE 15.10(b) THEREOF,  THE PROVISIONS OF CHAPTER 15 OF
     TITLE  79 OF  THE  REVISED  CIVIL  STATUTES  OF  TEXAS,  1925,  AS  AMENDED
     (REGULATING   CERTAIN  REVOLVING  CREDIT  LOANS  AND  REVOLVING   TRI-PARTY
     ACCOUNTS) SHALL NOT APPLY TO THE TRANSACTION DOCUMENTS.

          14.27.  FINAL AGREEMENT.  THIS WRITTEN AGREEMENT  REPRESENTS THE FINAL
     AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE  CONTRADICTED  BY EVIDENCE OF
     PRIOR,  CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
     ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


Accepted at Dallas, Texas by:

HSBC BUSINESS LOANS, INC.           FFP PARTNERS, L.P.
("Secured Party")                   ("FFPP")


By:                                 By:  FFP PARTNERS MANAGEMENT
       Neal T. Legan                     COMPANY,  INC., a Delaware 
       Vice President                    corporation,  General Partner
   

                                    By:
                                         Steven B. Hawkins, Vice President

                                    FFP OPERATING PARTNERS, L.P.
                                    ("FFPO")

                                    By:  FFP   PARTNERS   MANAGEMENT   
                                         COMPANY,   INC.,  a Delaware
                                         corporation, General Partner


                                    By:
                                         Steven B. Hawkins, Vice President


                                    DIRECT FUELS, L.P.
                                    ("Direct Fuels")

                                    By:  DIRECT FUELS  MANAGEMENT COMPANY, INC.
                                         a Texas corporation, General Partner
                              


                                    By:
                                         Steven B. Hawkins, Vice President


                                    SCHEDULE


        This  Schedule is a part of a Loan and Security  Agreement,  dated as of
October 31, 1997,  between FFP PARTNERS,  L.P.,  FFP OPERATING  PARTNERS,  L.P.,
DIRECT FUELS, L.P. and HSBC BUSINESS LOANS,  INC.  Capitalized terms used herein
have the same  meaning  given to such terms in the Loan and  Security  Agreement
unless otherwise defined herein. The abbreviation "N/A" means the information is
not applicable to this transaction.

1.      Borrowing Capacity  (ss. 1.1(c))

        Borrowing Capacity in the aggregate with respect to FFP Partners,  L.P.,
        FFP Operating Partners, L.P., and Direct Fuels, L.P., at any time, shall
        be the net  amount  determined  by taking  the  lesser of the  following
        amounts:

               (A)    $15,000,000

                      or

               (B) the amount equal to up to the sum of:

                      (i)    85% of the Receivables Borrowing Base; and

                      (ii)   the lesser of $7,500,000 (the "Maximum  Amount") or
                             50% of the  Value of the  amount  of the  Inventory
                             Borrowing Base;

               and subtracting  from the lesser of (A) or (B) above,  the sum of
               (w) banker's acceptances,  plus (x) letters of guaranty, plus (y)
               Letters of Credit.

2.      Inventory Borrowing Base Percentages  (ss.ss. 1.1(m) & 1.1(hh))

        The  following  percentages  of Value are  applicable  to the  following
        categories of Eligible Inventory:

        Finished goods, to the extent up to 50%; raw materials, to the extent of
        up to 50%.

3.      Cash Discount  (ss.ss. 1.1(g) & 10.3)

        Maximum Cash Discount of 2%, 10 days.

4.      Receivables--Age  (ss. 1.1(dd)(i))

        Three (3) times the normal and  customary  period of any given  invoice,
        but not to exceed 90 days after the Invoice date.

5.      Receivables Disqualification Percentage  (ss. 1.1 (dd)(v))

        50% or more.

6.      Permissible Foreign Account Debtors  (ss. 1.1(dd)(vi))

        None.

7.      Inventory Accounting   (ss. 1.1(hh)

        First-in, First-out (FIFO).

8.      Marine Payment Account  (ss. 1.1(ll))

        There is a Marine Payment Account that is governed by a separate blocked
        Account Agreement with LaSalle National Bank, Chicago, Illinois.

               Name and Address of depository bank:

               LaSalle National Bank
               135 S. LaSalle Avenue
               Chicago, Illinois 60603

               Account No. 2299-386
               (Depository Account)


9.      Letters of Credit  (ss. 2.4)

        $2,000,000.00  (subject  to  a  sublimit  of  $1,000,000  for  overnight
        exposure related to Automated Clearing House transfers).

10.     State of Organization  (ss. 4.2 & 5.1)

        FFP Partners, L.P.:  Delaware

        FFP Operating Partners, L.P.:  Delaware

        Direct Fuels, L.P.: Texas

11.     Location (s) of Inventory and Equipment  (ss.ss. 5.4(c), 5.7, 
        5.8(a), and 11.1)

        See Attached Addendum.

12.     Permitted Encumbrances  (ss. 5.5(a), 5.5(c) & 11.3)

        Only as shown on Exhibit B.

13.     Business Records Location  (ss. 5.8(a), 5.8(c) & 11.1)

        See Item 11 above.

14.     Trademarks and Patents  (ss. 5.17)

        Trademarks:   FFP Partners; Kwik Pantry; Drivers; Drivers Diner; 
                      Financial Express Money Order Company; Lazer Wizard

        Patents:      None.


15.     Labor Contracts  (ss. 5.24)

        None.

16.     Partnership Interests  (ss. 5.27)

        Hickory Branch Trading Company, L.L.C. -- 36.06%

        See also Item 33.

17.     Required Documents  (ss.ss. 6.1, 9.2(b), 9.4(a))

                                                               Frequency
                                                                  Due

          Borrowing Base Report                      Monthly, within 20 days 
                                                     after end of month.

          Receivables Summary Aging                  Monthly, within 20 days 
                                                     after end of month.

          Invoice register / sales journal           As requested.

          Inventory Reports                          Monthly, within 20 days 
                                                     after end of month.

          Cash Receipts Journal and Schedule of      As requested.
          Payments on Receivables

          Credits and Extensions Reports             As requested.

          Copies of shipping documents relating to   As requested.
          the Receivables

          List of names and addresses of Account     Semi-Annually on June 30 
          Debtors                                    and December 31

          Payable aging report                       Monthly, within 20 days 
                                                     after end of month.

          Reconciliation report, reconciling         Monthly, within 30 days 
          monthly financial statements with          after end of month.
          Receivables Aging, Inventory and Payable
          Aging

18.     Interest Rate  (ss. 8.2(a),(c))

        Revolving Credit:  At Debtor's option,  (1) Prime Rate or (2) LIBOR plus
        2.25%,  available in increments of $500,000 for Interest Periods of 3 or
        6 months.

        Term Loan:  At Debtor's  option,  (1) Prime Rate,  (2) LIBOR plus 2.25%,
        available in increments of $1,000,000  for Interest  Periods of 6 months
        or one year, or (3) Treasury Rate plus 2.50%.

19.     Fees and Due Dates  (ss.ss. 2.4 and 8.3(a))


     Type                        Amount                       Due Date(s)

 Loan Origination        One-half of one percent (.50%)     Closing Date only
 (payable to Tony        of the Borrowing Capacity
 Abernethy)

 Unused Line Fee        Three-eighths of one percent        Monthly, in arrears
                        (.375%) per annum on the           
                        Revolving Credit Commitment.


Letter of Credit        Normal and customary fees and       Customary
                        charges.

Collateral              $60/hour, not to exceed             First day of month
Examination Expense     $9,000.00 per year for actual       following
Reimbursement           time of examination.                examination


20.     Uncollected Funds Adjustment  (ss. 8.6)

        Zero (0) Business Days.

21.     Additional Covenants  (ss.ss. 10.24 and 11)


22.     Terms of Sale  (ss. 10.3)

        Due  dates of no more  than  thirty  (30)  calendar  days  from  date of
        Invoice,   except  in  regard  to  transactions  specified  below  under
        "Datings."

        Datings:      None.

23.     Permitted Borrowings  (ss. 11.2)

        Only as shown on Exhibit B.

24.     Permitted Investments and Advances  (ss. 11.8(d))

        Up to $500,000 in advances to Nu-Way  Beverage  Company,  outstanding at
        any given time, which is presently  evidenced by that certain promissory
        note  dated  July 1,  1995  issued  by Nu-Way  Beverage  Company  to FFP
        Operating Partners, L.P., in the original principal amount of $500,000.

25.     Permitted Guaranties  (ss.ss. 5.18, 11.9)

        None.

26.     Maximum Annual Lease Rentals(ss. 11.10)

        N/A

27.     Permitted Capital Expenditures  (ss. 11.11)

        Up to $6,000,000 annually.

28.     Maximum Aggregate Compensation  (ss. 11.12(a))

        N/A

29.     Maximum Annual Compensation for Certain Individuals  (ss. 11.12(b))

        N/A

30.     Financial Covenants  (ss. 11.7 & 11.15)

        (a)    Minimum Tangible Net Worth:  Debtor shall maintain at all times a
               minimum Tangible Net Worth ("TNW") in the amounts set forth below
               which are to be  measured  monthly  for the time period set forth
               below:


                 Amount                              Time Period

   $19,100,000                         Closing through December 30, 1998

   Prior year-end TNW plus $400,000    December 31, 1998 to December 30, 1999

   Prior year-end TNW plus $400,000    December 31, 1999 to December 30, 2000

   Prior                               year-end  TNW plus  $400,000
                                       December    31,    2000   to
                                       termination    (in   periods
                                       terminating  on  December 30
                                       and  commencing  on December
                                       31)

   Provided  that for any  extension  period,  the  amount  shall be
   increased by $400,000 from the prior year-end TNW.

        (b)    Maximum Debt to Tangible Net Worth: Debtor shall maintain a ratio
               of total liabilities (excluding the principal balance of any debt
               that is subordinated to Secured Party in a manner satisfactory to
               Secured Party) to Tangible Net Worth of no greater than the ratio
               set forth below during the time periods set forth below:


   Ratio                  Time Period

  3.6 to 1             At each month-end

        (c)    Cash Flow  Coverage:  Debtor  shall  maintain,  for the period of
               determination  indicated  below, a ratio with: (i) the Net Profit
               After Taxes,  plus  depreciation and amortization  expense,  less
               distributions to holders of equity  interests,  all for the prior
               twelve  fiscal months as the  numerator;  and (ii) the sum of the
               regular  contractually  scheduled  principal payments of any long
               term  debt  due  over  the  next  twelve  fiscal  months  as  the
               denominator.


   Ratio                  Time Period

  1.5 to 1           Each fiscal year-end.

31.     State  (ss. 1.1(bbb))

        Texas.

32.     Term  (ss. 14.13(a),(b))

        Initial term:  The initial term of the Loan  Agreement  commences on the
        date hereof and terminates on November 1, 2000.

        Renewal term: Twelve months.

33.     Percentage of Equity Ownership of Consolidated Subsidiaries   
        (ss. 5.25 & 10.23)
        
        FFP Operating Partners, L.P. -- 99%
        FFP Financial Services, L.P. -- 99%
        Direct Fuels, L.P. -- 99%
        FFP Transportation, L.L.C. -- 100%
        Practical Tank Management -- 100%
        FFP Money Order Company, Inc. -- 100%

34.     Prepayment Premium  (ss. 14.13(b))

        Revolving  Credit  Facility.  2% of the then approved Maximum Amount (as
        defined in Item 1 hereof) in the first twelve  months of the  Agreement;
        1% of the Maximum  Amount in the second twelve months of the  Agreement;
        and  1/2% of the  Maximum  Amount  in the  third  twelve  months  of the
        Agreement.

        Term Loan.  2% of the prepaid  amount in the first twelve  months of the
        Agreement;  1% of the prepaid  amount in the second twelve months of the
        Agreement;  and 1/2% of the prepaid amount in the third twelve months of
        the  Agreement.  Notwithstanding  the  foregoing,  the Term  Loan may be
        repaid without  prepayment  penalty if the prepayment is a result of the
        proceeds of the formation of a real estate investment trust.

35.     Other Provisions  (ss. 14.9)

36.     Licenses (ss. 5.21)

        N/A

37.     Eurodollar Lending Office (ss. 1.1(u))

38.     Term Loan (ss. 2.5)

        The lesser of:

        (A)    $8,000,000; or

        (B) 60% of the Value of the Eligible Equipment on the closing date.

The undersigned have executed this Schedule on October 31, 1997.



                                                                               
HSBC BUSINESS LOANS INC.            FFP PARTNERS, L.P.

                                    By:     FFP PARTNERS MANAGEMENT
By:                                         COMPANY, INC., General Partner
        Neal T. Legan
        Vice President


                                        By:
                                             Steven B. Hawkins, Vice President


                                    FFP OPERATING PARTNERS, L.P.

                                    By:    FFP PARTNERS MANAGEMENT
                                           COMPANY, INC., General Partner


                                        By:
                                             Steven B. Hawkins, Vice President


                                    DIRECT FUELS, L.P.

                                    By:    DIRECT FUELS PARTNERS
                                           MANAGEMENT COMPANY, INC., 
                                           General Partner

                                        By:
                                             Steven B. Hawkins, Vice President