Document:

EXHIBIT 10.1

                      AGREEMENT AND PLAN OF REORGANIZATION

                                  BY AND AMONG

                       EAGLE WIRELESS INTERNATIONAL, INC.,

                          EAGLE ACQUISITION CORPORATION

                                       AND

                              CLEARWORKS.NET, INC.

                         DATED AS OF SEPTEMBER 15, 2000

<PAGE>
                      AGREEMENT AND PLAN OF REORGANIZATION

      This AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as of
September 15, 2000, among Eagle Wireless International, Inc., a Texas
corporation ("PARENT"), Eagle Acquisition Corporation, a Delaware corporation
and a wholly-owned subsidiary of Parent ("MERGER SUB") and ClearWorks.net, Inc.,
a Delaware corporation ("COMPANY").

                                    RECITALS

      A. Upon the terms and subject to the conditions of this Agreement (as
defined in Section 1.2 below) and in accordance with the Delaware Corporation
Law ("DELAWARE LAW"), Parent and Company intend to enter into a business
combination transaction.

      B. The Board of Directors of Company unanimously (i) has determined that
the Merger (as defined in Section 1.1) is consistent with and in furtherance of
the long-term business strategy of Company and fair to, and in the best
interests of, Company and its shareholders, (ii) has approved this Agreement,
the Merger (as defined in Section 1.1) and the other transactions contemplated
by this Agreement, and (iii) has determined to recommend that the shareholders
of Company adopt and approve this Agreement and approve the Merger.

      C. The Board of Directors of Parent unanimously (i) has determined that
the Merger is consistent with and in furtherance of the long-term business
strategy of Parent and is fair to, and in the best interests of, Parent and its
stockholders, (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement, and (iii) has determined to
recommend that the stockholders of Parent approve the issuance of shares of
Parent Common Stock (as defined below) pursuant to the Merger (the "SHARE
ISSUANCE").

      D. Concurrently with the execution of this Agreement, (i) as a condition
and inducement to Parent's willingness to enter into this Agreement, certain
affiliates of Company are entering into Voting Agreements in the form attached
hereto as Exhibit A-1 (the "COMPANY VOTING AGREEMENTS") and (ii) as a condition
and inducement to Company's willingness to enter into this Agreement, certain
affiliates of Parent are entering into Voting Agreements in the form attached
hereto as Exhibit A-2 (the "PARENT VOTING Agreements").

      E. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "CODE").

                                      A-1
<PAGE>
      NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:

                                   ARTICLE I.

                                   THE MERGER

      1.1   THE MERGER.

      At the Effective Time (as defined in Section 1.2) and subject to and upon
the terms and conditions of this Agreement and the applicable provisions of
Delaware Law, Merger Sub shall be merged with and into Company (the "MERGER"),
the separate corporate existence of Merger Sub shall cease and Company shall
continue as the surviving corporation and as a wholly-owned subsidiary of
Parent. Company as the surviving corporation after the Merger is hereinafter
sometimes referred to as the "SURVIVING CORPORATION."

      1.2   EFFECTIVE TIME; CLOSING.

      Subject to the provisions of this Agreement, the parties hereto shall
cause the Merger to be consummated by filing an agreement and plan of merger and
articles, certificates or other appropriate filing documents with the Secretary
of State of the State of Delaware in accordance with the relevant provisions of
Delaware Law (collectively, the "CERTIFICATE OF MERGER") (the time of such
filing (or such later time as may be agreed in writing by Company and Parent and
specified in the Certificate of Merger) being the "EFFECTIVE TIME") as soon as
practicable on or after the Closing Date (as herein defined). Unless the context
otherwise requires, the term "AGREEMENT" as used herein refers collectively to
this Agreement and Plan of Reorganization and the Certificate of Merger. The
closing of the Merger (the "CLOSING") shall take place at the offices of Brewer
& Pritchard, P.C., Three Riverway, 18th Floor, Houston, Texas at a time and date
to be specified by the parties, which shall be no later than the second business
day after the satisfaction or waiver of the conditions set forth in Article VI,
or at such other time, date and location as the parties hereto agree in writing
(the "CLOSING DATE").

      1.3   EFFECT OF THE MERGER.

      At the Effective Time, the effect of the Merger shall be as provided in
this Agreement and the applicable provisions of Delaware Law. Without limiting
the generality of the foregoing and subject thereto, at the Effective Time, all
the property, rights, privileges, powers, and franchises of Company and Merger
Sub shall vest in the Surviving Corporation and all debts, liabilities, and
duties of Company and Merger Sub shall become the debts, liabilities, and duties
of the Surviving Corporation.

      1.4   CERTIFICATE OF INCORPORATION; BYLAWS.

      (a) At the Effective Time, the Certificate of Incorporation of Merger Sub,
as in effect immediately prior to the Effective Time, shall be the Certificate
of Incorporation of the Surviving Corporation until thereafter amended as
provided by law and such Certificate of Incorporation of the Surviving
Corporation; provided, however, that at the Effective Time the Certificate of
Incorporation of the Surviving Corporation shall be amended so that the name of
the Surviving Corporation shall be "ClearWorks.net, Inc."

      (b) The Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving
Corporation until thereafter amended.

      1.5   DIRECTORS AND OFFICERS.

      The initial directors of the Surviving Corporation shall be the directors
of Merger Sub immediately prior to the Effective Time, each to hold office in
accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation until their respective successors are duly elected or appointed and
qualified. The initial

                                      A-2
<PAGE>
officers of the Surviving Corporation shall be the officers of Merger Sub
immediately prior to the Effective Time, each to hold office in accordance with
the Certificate of Incorporation and Bylaws of the Surviving Corporation until
their respective successors are duly appointed.

      1.6   EFFECT ON CAPITAL STOCK.

      Subject to the terms and conditions of this Agreement, at the Effective
Time, by virtue of the Merger and without any action on the part of Merger Sub,
Company or the holders of any of the following securities, the following shall
occur:

      (a) CONVERSION OF COMPANY COMMON STOCK. Each share of Common Stock, par
value $.001 per share, of Company (the "COMPANY COMMON STOCK") issued and
outstanding immediately prior to the Effective Time, other than any shares of
Company Common Stock to be cancelled pursuant to Section 1.6(b)), will be
cancelled and extinguished and automatically converted (subject to Sections
1.6(e) and (f)) into the right to receive that number of shares of Common Stock,
$0.001 par value per share, of Parent (the "PARENT COMMON STOCK") equal to 0.8
(the "EXCHANGE RATIO"), upon surrender of the certificate representing such
share of Company Common Stock in the manner provided in Section 1.7 (or in the
case of a lost, stolen or destroyed certificate, upon delivery of an affidavit
(and bond, if required) in the manner provided in Section 1.9). If any shares of
Company Common Stock outstanding immediately prior to the Effective Time are
unvested or are subject to a repurchase option, risk of forfeiture, or other
condition under any applicable restricted stock purchase agreement or other
agreement with the Company, then, subject to the terms of the plan or agreement
pursuant to which such shares were issued, the shares of Parent Common Stock
issued in exchange for such shares of Company Common Stock will also be unvested
and subject to the same repurchase option, risk of forfeiture, or other
condition, and the certificates representing such shares of Parent Common Stock
may accordingly be marked with appropriate legends. Company shall take all
action that may be necessary to ensure that, from and after the Effective Time,
Parent is entitled to exercise any such repurchase option or other right set
forth in any such restricted stock purchase agreement or other agreement.

      (b) CANCELLATION OF PARENT-OWNED STOCK. Each share of Company Common Stock
held by Company or any direct or indirect wholly-owned subsidiary of Company
immediately prior to the Effective Time shall be cancelled and extinguished
without any conversion thereof.

      (c) STOCK OPTIONS AND WARRANTS. At the Effective Time, all options to
purchase Company Common Stock and stock appreciation rights then outstanding, if
any, and all warrants to purchase Company Common Stock shall be assumed by
Parent in accordance with Section 5.8 hereof.

      (d) CAPITAL STOCK OF MERGER SUB. Each share of Common Stock, par value
$.001 per share, of Merger Sub (the "MERGER SUB COMMON STOCK") issued and
outstanding immediately prior to the Effective Time shall be converted into or
exercisable for one validly issued, fully paid and nonassessable share of Common
Stock, par value $.001 per share, of the Surviving Corporation. Each certificate
evidencing ownership of shares of Merger Sub Common Stock shall evidence
ownership of such one share of capital stock of the Surviving Corporation.

      (e) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be adjusted to
reflect appropriately the effect of any stock split, reverse stock split, stock
dividend (including any dividend or distribution of securities convertible into
or exercisable for Parent Common Stock or Company Common Stock), reorganization,
recapitalization, reclassification or other like change with respect to Parent
Common Stock or Company Common Stock occurring on or after the date hereof and
prior to the Effective Time.

      (f) FRACTIONAL SHARES. No fraction of a share of Parent Common Stock will
be issued by virtue of the Merger, but in lieu thereof, each holder of shares of
Company Common Stock who would otherwise be entitled to a fraction of a share of
Parent Common Stock (after aggregating all fractional shares of Parent Common
Stock that otherwise would be received by such holder) shall, upon surrender of
such holder's Certificate(s) (as defined in Section 1.7(c)), receive from
Parent, at the sole discretion of Parent, either (A) an amount of cash (rounded
to the nearest whole cent), without interest, equal to the product of (i) such
fraction and (ii) the average closing price of Parent Common Stock for the five
trading days immediately preceding the last full trading day prior to the
Effective Time, as reported on the American Stock Exchange ("AMEX"), or (B) a
whole share of Parent Common Stock.

                                      A-3
<PAGE>
      1.7   SURRENDER OF CERTIFICATES; PAYMENT OF STOCK CONSIDERATION.

      (a) EXCHANGE AGENT. Parent and Company hereby select Registrar and
Transfer Company to act as the exchange agent (the "EXCHANGE AGENT") in the
Merger.

      (b) PARENT TO PROVIDE COMMON STOCK. Promptly after the Effective Time,
Parent shall make available to the Exchange Agent, for exchange in accordance
with this Article I, (i) the shares of Parent Common Stock issuable pursuant to
Section 1.6 in exchange for outstanding shares of Company Common Stock and (ii)
cash in an amount sufficient for payment in lieu of fractional shares pursuant
to Section 1.6(f), if any, and any dividends or distributions to which holders
of shares of Company Common Stock may be entitled pursuant to Section 1.7(d).

      (c) EXCHANGE PROCEDURES. As soon as practicable after the Effective Time
(and in any event within five business days after Parent's receipt of all
necessary shareholder list and other supporting information), Parent shall cause
the Exchange Agent to mail to each holder of record (as of the Effective Time)
of a certificate or certificates (the "CERTIFICATES"), which immediately prior
to the Effective Time represented outstanding shares whose shares were converted
into the right to receive shares of Parent Common Stock pursuant to Section
1.6(a), cash in lieu of any fractional shares pursuant to Section 1.6(f) and any
dividends or other distributions pursuant to Section 1.7(d), (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall contain such other provisions as
Parent may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing shares
of Parent Common Stock, cash in lieu of any fractional shares pursuant to
Section 1.6(f), and any dividends or other distributions pursuant to Section
1.7(d). Upon surrender of Certificates for cancellation to the Exchange Agent or
to such other agent or agents as may be appointed by Parent, together with such
letter of transmittal, duly completed and validly executed in accordance with
the instructions thereto, the holders of such Certificates shall be entitled to
receive in exchange therefore certificates representing the number of whole
shares of Parent Common Stock into which their shares of Company Common Stock
were converted at the Effective Time, payment in lieu of fractional shares which
such holders have the right to receive pursuant to Section 1.6(f), and any
dividends or distributions payable pursuant to Section 1.7(d), and the
Certificates so surrendered shall forthwith be cancelled. Until so surrendered,
outstanding Certificates will be deemed from and after the Effective Time, for
all corporate purposes, subject to Section 1.7(d) as to the payment of dividends
and other distributions, to evidence only the ownership of the number of full
shares of Parent Common Stock into which such shares of Company Common Stock
shall have been so converted and the right to receive an amount in cash in lieu
of the issuance of any fractional shares in accordance with Section 1.6(f).

      (d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions declared or made after the date of this Agreement with
respect to Parent Common Stock with a record date after the Effective Time will
be paid to the holders of any unsurrendered Certificate(s) with respect to the
shares of Parent Common Stock represented thereby until the holders of record of
such Certificate(s) shall surrender such Certificate(s). Subject to applicable
law, following surrender of any such Certificate(s), the Exchange Agent shall
deliver to the record holders thereof, without interest, a certificate(s)
representing whole shares of Parent Common Stock issued in exchange therefore
along with payment in lieu of fractional shares pursuant to Section 1.6(f)
hereof and the amount of any such dividends or other distributions with a record
date after the Effective Time payable with respect to such whole shares of
Parent Common Stock.

      (e) TRANSFERS OF OWNERSHIP. If any certificate representing shares of
Parent Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefore is registered, it will be a
condition of the issuance thereof that the Certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the persons
requesting such exchange will have paid to Parent or any agent designated by it
any transfer or other taxes required by reason of the issuance of certificates
representing shares of Parent Common Stock in any name other than that of the
registered holder of the Certificates surrendered, or established to the
satisfaction of Parent or any agent designated by it that such tax has been paid
or is not payable.

      (f) REQUIRED WITHHOLDING. Each of the Exchange Agent, Parent, and the
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of Company Common Stock such amounts as may be required
to be

                                      A-4
<PAGE>
deducted or withheld therefrom under the Code or under any provision of state,
local, or foreign tax law or under any other applicable legal requirement. To
the extent such amounts are so deducted or withheld, such amounts shall be
treated for all purposes under this Agreement as having been paid to the person
to whom such amounts would otherwise have been paid.

      (g) NO LIABILITY. Notwithstanding anything to the contrary in this Section
1.7, none of the Exchange Agent, Parent, the Surviving Corporation, or any party
hereto shall be liable to a holder of shares of Parent Common Stock or Company
Common Stock for any amount properly paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.

      1.8   NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK.

      All shares of Parent Common Stock issued upon the surrender for exchange
of shares of Company Common Stock in accordance with the terms hereof (together
with any cash paid in respect thereof pursuant to Section 1.6(f) and 1.7(d))
shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Company Common Stock, and there shall be no further
registration of transfers on the records of the Surviving Corporation of shares
of Company Common Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be cancelled and exchanged as
provided in this Article I.

      1.9   LOST, STOLEN OR DESTROYED CERTIFICATES.

      In the event that any Certificate shall have been lost, stolen or
destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed Certificate, upon the making of an affidavit of that fact by the
holder thereof, certificates representing the shares of Parent Common Stock into
which the shares of Company Common Stock represented by such Certificates were
converted pursuant to Section 1.6, cash for fractional shares, if any, as may be
required pursuant to Section 1.6(f) and any dividends or distributions payable
pursuant to Section 1.7(d); provided, however, that Parent may, in its
discretion and as a condition precedent to the issuance of such certificates
representing shares of Parent Common Stock, cash and other distributions,
require the owner of such lost, stolen or destroyed Certificate to deliver a
bond in such sum as it may reasonably direct as indemnity against any claim that
may be made against Parent, the Surviving Corporation, or the Exchange Agent
with respect to the Certificates alleged to have been lost, stolen or destroyed.

      1.10  TAX AND ACCOUNTING CONSEQUENCES.

      (a) It is intended by the parties hereto that the Merger shall constitute
a reorganization within the meaning of Section 368(a) of the Code. The parties
hereto adopt this Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.

      (b) It is also intended by the parties hereto that the Merger shall
qualify for accounting treatment as a purchase.

      1.11  TAKING OF NECESSARY ACTION; FURTHER ACTION.

      If, at any time after the Effective Time, any further action is necessary
or desirable to carry out the purposes of this Agreement and to vest the
Surviving Corporation with full right, title, and possession to all assets,
property, rights, privileges, powers and franchises of Company and Merger Sub,
the officers and directors of Company and Merger Sub are fully authorized in the
manner of their respective corporations or otherwise to take, and will take, all
such lawful and necessary action.

                                      A-5
<PAGE>
                                   ARTICLE II

                    REPRESENTATIONS AND WARRANTIES OF COMPANY

      Company represents and warrants to Parent and Merger Sub, subject to such
exceptions as are specifically disclosed in writing in the schedules hereto
(each such exception to reference the specific section number of this Article II
to which it applies and each other section number of this Article II to the
extent such applicability is reasonably apparent on the face of such exception),
dated as of the date hereof (the "COMPANY SCHEDULE"):

      2.1   ORGANIZATION OF COMPANY; SUBSIDIARIES.

      (a) Company and each of its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation; has the corporate power and authority to own, lease and operate
its assets and property and to carry on its business as now being conducted and
as proposed to be conducted; and is duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction in which the failure to
be so qualified would have a Material Adverse Effect (as defined in Section
8.3(b)(ii)) on Company.

      (b) Schedule 2.1(b) of the Company Schedule contains a true and complete
list of all of Company's subsidiaries, indicating the jurisdiction of
incorporation of each subsidiary and Company's equity interest therein. Neither
Company nor any of its subsidiaries directly or indirectly owns an equity,
membership, partnership, or similar interest in, or any interest convertible
into, or exchangeable or exercisable for any such interest in, any corporation,
partnership, joint venture, limited liability company or other business
association or entity.

      (c) Schedule 2.1(c) of the Company Schedule contains a true and correct
copy of the Certificate of Incorporation and Bylaws of Company and similar
governing instruments of each of its subsidiaries, each as amended to date, and
each such instrument is in full force and effect. Neither Company nor any of its
subsidiaries is in violation of any of the provisions of its Certificate of
Incorporation or Bylaws or equivalent governing instruments.

      (d) All of the outstanding shares of capital stock of each of Company's
subsidiaries are duly authorized, validly issued, fully paid and nonassessable
and are not subject to preemptive rights created by statute, the charter
documents of any such subsidiary or any agreement or document to which any such
subsidiary is party or by which its is bound, and all such shares are owned, of
record and beneficially, by Company or another subsidiary of Company free and
clear of all security interests, liens, claims, pledges, agreements, limitations
on voting rights, charges or other encumbrances of any nature.

      2.2   COMPANY CAPITAL STRUCTURE.

      The authorized capital stock of Company consists of 50,000,000 shares of
Common Stock, par value $.001 per share, of which there were 24,474,818 shares
issued and outstanding as of September 1, 2000, and 5,000,000 shares of
Preferred Stock, par value $.001 per share, of which no shares are issued or
outstanding as of September 1, 2000. All outstanding shares of Company Common
Stock are duly authorized, validly issued, fully paid, and nonassessable, and
are not subject to preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of Company, or any agreement or document to which
Company is a party or by which it is bound. As of the Closing, there is no
Company stock option plan or other incentive plan. As of September 1, 2000,
Company had reserved an aggregate of approximately 5,100,000 shares of Company
Common Stock for issuance to holders of warrants to purchase Company Common
Stock ("COMPANY WARRANTS") and Company options to purchase Company common stock.
All shares of Company Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, would be duly authorized, validly issued, fully paid,
and nonassessable. Schedule 2.2 of the Company Schedule lists (i) each
outstanding option to acquire shares of Company Common Stock at September 1,
2000, the name of the holder of such option, the number of shares subject to
such option, the exercise price of such option, the number of shares as to which
such option will have vested at such date, the vesting schedule for such option
and whether the exercisability of such option will be accelerated in any way by
the transactions contemplated by this Agreement or for any other reason, and
indicates the extent of acceleration, if any, and (ii) each outstanding Company
Warrant at September 1, 2000, the name of the holder of such Company Warrant,
the number of shares subject to such Company Warrant, the exercise price of such
Company Warrant, the number of shares as to which such Company Warrant will have
vested at such date, the vesting schedule for such Company Warrant and whether
the exercisability of such Company Warrant will be accelerated in any way by the
transactions contemplated by this Agreement or for any other reason, and
indicates the extent of acceleration, if any.

                                      A-6
<PAGE>
      2.3   OBLIGATIONS WITH RESPECT TO CAPITAL STOCK.

      Except as set forth in Company Schedule 2.2, as of the date hereof, there
are no equity securities, partnership interests, or similar ownership interests
of any class of Company, or any securities exchangeable or convertible into or
exercisable for such equity securities, partnership interests, or similar
ownership interests issued, reserved for issuance or outstanding. Except for
securities Company owns, directly or indirectly through one or more
subsidiaries, there are no equity securities, partnership interests, or similar
ownership interests of any class of any subsidiary of Company, or any security
exchangeable or convertible into or exercisable for such equity securities,
partnership interests or similar ownership interests issued, reserved for
issuance or outstanding. Except as set forth in Company Schedule 2.2, there are
no stock appreciation rights, phantom stock, or other similar rights of Company
and no options, warrants, equity securities, partnership interests, or similar
ownership interests, calls, rights (including preemptive rights), commitments or
agreements of any character to which Company or any of its subsidiaries is a
party, or by which it is bound, obligating Company or any of its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase,
redeem or otherwise acquire, or cause the repurchase, redemption or acquisition,
of any shares of capital stock of Company or any of its subsidiaries or
obligating Company or any of its subsidiaries to grant, extend, accelerate the
vesting of or enter into any such stock appreciation rights, phantom stock, or
other similar rights, or any such option, warrant, equity security, partnership
interest or similar ownership interest, call, right, commitment or agreement.
There are no registration rights and, to the knowledge of Company there are no
voting trusts, proxies or other agreements or understandings with respect to any
equity security of any class of Company or with respect to any equity security,
partnership interest or similar ownership interest of any class of any of its
subsidiaries.

      2.4   AUTHORITY.

      (a) Company has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Company, subject only to the approval and
adoption of this Agreement and the approval of the Merger by Company's
shareholders and the filing and recordation of the Certificate of Merger
pursuant to Delaware Law. Votes of the holders of a majority of the outstanding
shares of Company Common Stock is required for Company's shareholders to approve
and adopt this Agreement and approve the Merger. This Agreement has been duly
executed and delivered by Company and, assuming the due authorization,
execution, and delivery by Parent and Merger Sub, constitutes the valid and
binding obligations of Company, enforceable in accordance with its terms, except
as enforceability may be limited by bankruptcy and other similar laws and
general principles of equity. The execution and delivery of this Agreement by
Company do not, and the performance of this Agreement by Company will not, (i)
conflict with or violate the Certificate of Incorporation or Bylaws of Company
or the equivalent organizational documents of any of its subsidiaries, (ii)
subject to obtaining the approval of the Merger by Company's shareholders as
contemplated in Section 5.2 and compliance with the requirements set forth in
Section 2.4(b) below, conflict with or violate any law, rule, regulation, order,
judgment, or decree applicable to Company or any of its subsidiaries or by which
its or any of their respective properties is bound or affected, or (iii) result
in any breach of, or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or impair Company's rights or
alter the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration, or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or assets of
Company or any of its subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise, or other
instrument or obligation to which Company or any of its subsidiaries is a party
or by which Company or any of its subsidiaries or its or any of their respective
properties are bound or affected, except to the extent such conflict, violation,
breach, default, impairment or other effect could not, in the case of clause
(ii) or (iii), individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on Company or a material adverse effect on the ability
of Company to perform its obligations under this Agreement.

      (b) No consent, approval, order or authorization of, or registration,
declaration, or filing with any court, administrative agency or commission or
other governmental authority or instrumentality ("GOVERNMENTAL

                                      A-7
<PAGE>
ENTITY") is required by or with respect to Company in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby or thereby, except for (i) the filing of a Form S-4
Registration Statement (the "REGISTRATION STATEMENT") with the Securities and
Exchange Commission ("SEC") in accordance with the Securities Act of 1933, as
amended (the "SECURITIES ACT"), (ii) the filing of the Certificate of Merger
with the Secretary of State of Delaware, (iii) the filing of the Joint Proxy
Statement/Prospectus (as defined in Section 2.19) with the SEC in accordance
with the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), (iv)
such consents, approvals, orders, authorizations, registrations, declarations
and filings as may be required under applicable federal and state securities
laws, and the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR ACT"), and (v) such other consents, authorizations, filings,
approvals, and registrations which, if not obtained or made, could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Company or a material adverse effect on the ability of Company
to perform its obligations under this Agreement.

      2.5   SEC FILINGS; COMPANY FINANCIAL STATEMENTS.

      (a) Company has filed all forms, reports and documents required to be
filed with the SEC, and has made available to Parent such forms, reports and
documents in the form filed with the SEC. All such required forms, reports, and
documents (including those that Company may file subsequent to the date hereof)
are referred to herein as the "COMPANY SEC REPORTS." As of their respective
dates, the Company SEC Reports (i) were prepared in all material respects in
accordance with the requirements of the Securities Act or the Exchange Act, as
the case may be, and the rules and regulations of the SEC thereunder applicable
to such Company SEC Reports, and (ii) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. None of Company's subsidiaries is required to file
any forms, reports, or other documents with the SEC.

      (b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports (the
"COMPANY FINANCIALS"), including any Company SEC Reports filed after the date
hereof until the Closing, (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited interim financial
statements, as may be permitted by the SEC on Form 10-Q or Form 10-QSB, as
applicable, under the Exchange Act) and (iii) fairly presented the consolidated
financial position of Company and its subsidiaries at the respective dates
thereof and the consolidated results of its operations and cash flows for the
periods indicated, except that the unaudited interim financial statements were
or are subject to normal and recurring year-end adjustments which were not, or
are not expected to be, material in amount. The balance sheet of Company
contained in the Company SEC Reports as of June 30, 2000 is hereinafter referred
to as the "COMPANY BALANCE SHEET." Except as disclosed in the Company
Financials, neither Company nor any of its subsidiaries has any liabilities
(absolute, accrued, contingent or otherwise) of a nature required to be
disclosed on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with GAAP which are, individually or
in the aggregate, material to the business, results of operations or financial
condition of Company and its subsidiaries taken as a whole, except liabilities
(i) provided for in the Company Balance Sheet, or (ii) incurred since the date
of the Company Balance Sheet in the ordinary course of business and are
immaterial in the aggregate.

      (c) Schedule 2.5(c) of the Company Schedule contains a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by Company with the SEC
pursuant to the Securities Act or the Exchange Act.

      2.6   ABSENCE OF CERTAIN CHANGES OR EVENTS.

      Since the date of the Company Balance Sheet there has not been: (i) any
Material Adverse Effect on the Company, (ii) any declaration, setting aside or
payment of any dividend on, or other distribution (whether in cash, stock, or
property) in respect of, any of the Company's or any of its subsidiaries'
capital stock, or any purchase,

                                      A-8
<PAGE>
redemption or other acquisition by the Company of any of the Company's capital
stock or any other securities of the Company or its subsidiaries or any options,
warrants, calls or rights to acquire any such shares or other securities, (iii)
any split, combination, or reclassification of any of the Company's or any of
its subsidiaries' capital stock, (iv) any granting by the Company or any of its
subsidiaries of any increase in compensation or fringe benefits, except for
normal increases of cash compensation in the ordinary course of business
consistent with past practice, or any payment by the Company or any of its
subsidiaries of any bonus, except for bonuses made in the ordinary course of
business consistent with past practice, (v) any granting by the Company or any
of its subsidiaries of any increase in severance or termination pay, (vi) any
entry by the Company or any of its subsidiaries into any currently effective
employment, severance, termination or indemnification agreement or any other
agreement the benefits of which are contingent or the terms of which are
materially altered upon the occurrence of a transaction involving the Company of
the nature contemplated hereby, (vii) entry by the Company or any of its
subsidiaries into any licensing or other agreement with regard to the
acquisition or disposition of any material Intellectual Property (as defined
herein) other than licenses in the ordinary course of business consistent with
past practice, (viii) any material change by the Company in its accounting
methods, principles or practices, except as required by concurrent changes in
GAAP, (ix) any revaluation by the Company of any of its assets, including,
without limitation, writing down the value of capitalized inventory or writing
off notes or accounts receivable other than in the ordinary course of business
and consistent with past practice, (x) any changes in the vesting schedules of
outstanding Company options or Company Warrants, or (xi) any grant of stock
options or Company Warrants prior to the date of this Agreement other than
grants to new employees in connection with the commencement of their employment.

      2.7   TAXES.

      DEFINITION OF TAXES. For the purposes of this Agreement, "TAX" or "TAXES"
refers to any and all federal, state, local, and foreign taxes, assessments, and
other governmental charges, duties, impositions, and liabilities relating to
taxes, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed with respect
to such amounts and any obligations under any agreements or arrangements with
any other person with respect to such amounts and including any liability for
taxes of a predecessor entity.

      2.8   TAX RETURNS AND AUDITS.

      (a) Company and each of its subsidiaries have timely filed all federal,
state, local and foreign returns, estimates, information statements and reports
("RETURNS") and/or extensions relating to Taxes required to be filed by Company
and each of its subsidiaries with any Tax authority, except such Returns which
are not material to Company. Company and each of its subsidiaries have paid all
Taxes shown to be due on such Returns.

      (b) Company and each of its subsidiaries as of the Effective Time will
have withheld with respect to its employees all federal and state income Taxes,
Taxes pursuant to the Federal Insurance Contribution Act, Taxes pursuant to the
Federal Unemployment Tax Act, and other Taxes required to be withheld, except
such Taxes which are not material to Company.

      (c) Neither Company nor any of its subsidiaries has been delinquent in the
payment of any material Tax nor is there any material Tax deficiency
outstanding, proposed or assessed against Company or any of its subsidiaries,
nor has Company or any of its subsidiaries executed any unexpired waiver of any
statute of limitations on or extending the period for the assessment or
collection of any Tax.

      (d) No audit or other examination of any Return of Company or any of its
subsidiaries by any Tax authority is presently in progress, nor has Company or
any of its subsidiaries been notified of any request for such an audit or other
examination.

      (e) No adjustment relating to any Returns filed by Company or any of its
subsidiaries has been proposed in writing formally or informally by any Tax
authority to Company or any of its subsidiaries or any representative thereof.

                                      A-9
<PAGE>
      (f) Neither Company nor any of its subsidiaries has any liability for any
material unpaid Taxes which has not been accrued for or reserved on Company
Balance Sheet in accordance with GAAP, whether asserted or unasserted,
contingent or otherwise, which is material to Company, other than any liability
for unpaid Taxes that may have accrued since June 30, 2000 in connection with
the operation of the business of Company and its subsidiaries in the ordinary
course.

      (g) There is no contract, agreement, plan or arrangement to which Company
or any of its subsidiaries is a party as of the date of this Agreement,
including but not limited to the provisions of this Agreement, covering any
employee or former employee of Company or any of its subsidiaries that,
individually or collectively, would reasonably be expected to give rise to the
payment of any amount that would not be deductible pursuant to Sections 280G,
404 or 162(m) of the Code. There is no contract, agreement, plan, or arrangement
to which Company is a party or by which it is bound to compensate any individual
for excise taxes paid pursuant to Section 4999 of the Code.

      (h) Neither Company nor any of its subsidiaries has filed any consent
agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2)
of the Code apply to any disposition of a subsection (f) asset (as defined in
Section 341(f)(4) of the Code) owned by Company or any of its subsidiaries.

      (i) Neither Company nor any of its subsidiaries is party to or has any
obligation under any Tax-sharing, Tax indemnity or Tax allocation agreement or
arrangement.

      (j) None of Company's or its subsidiaries' assets are tax-exempt use
property within the meaning of Section 168(h) of the Code.

      (k) Company has (a) never been a member of an affiliated group (within the
meaning of Code Section 1504(a)) filing a consolidated federal income Tax Return
(other than a group the common parent of which was Company), (b) with respect to
the Taxes of any person (other than Company or any of its subsidiaries) (i) no
liability under Treas. Reg. Section 1.1502-6 (or any similar provision of state,
local or foreign law) and (ii) no material liability as a transferee or
successor and (c) never been a party to any joint venture, partnership or other
agreement that should be treated as a partnership for Tax purposes.

      (l) Company has not been either a "distributing corporation" or a
"controlled corporation" in a distribution of stock qualifying for tax-free
treatment under Section 355 of the Code.

      2.9   COMPANY INTELLECTUAL PROPERTY.

      For the purposes of this Agreement, the following terms have the following
definitions:

      "INTELLECTUAL PROPERTY" shall mean any or all of the following and all
rights in, arising out of, or associated therewith: (i) all United States,
international and foreign patents and applications therefore and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data and customer lists, and all documentation
relating to any of the foregoing; (iii) all copyrights, copyrights registrations
and applications therefore, and all other rights corresponding thereto
throughout the world; (iv) all industrial designs and any registrations and
applications therefore throughout the world; (v) all trade names, logos, common
law trademarks and service marks, trademark and service mark registrations and
applications therefore throughout the world; (vi) all databases and data
collections and all rights therein throughout the world; (vii) all moral and
economic rights of authors and inventors, however denominated, throughout the
world, and (viii) any similar or equivalent rights to any of the foregoing
anywhere in the world. "COMPANY INTELLECTUAL PROPERTY" shall mean any
Intellectual Property that is owned by, or exclusively licensed to, Company.

      (a) No Company Intellectual Property or product or service of Company or
any of its subsidiaries is subject to any proceeding or outstanding decree,
order, judgment, contract, license, agreement, or stipulation restricting in any
manner the use, transfer, or licensing thereof by Company or any of its
subsidiaries, or which may affect the validity, use or enforceability of such
Company Intellectual Property.

                                      A-10
<PAGE>
      (b) To the knowledge of Company, Company owns, or has license or other
rights to use (sufficient for the conduct of its business as currently
conducted), each material item of Company Intellectual Property or other
Intellectual Property used by Company free and clear of any lien or encumbrance
(excluding licenses and related restrictions).

      (c) Neither Company nor any of its subsidiaries has transferred ownership
of or granted any license with respect to, any material Company Intellectual
Property to any third party.

      (d) To the knowledge of Company, the operation of the business of Company
and its subsidiaries as such business currently is conducted does not infringe
the Intellectual Property of any third party.

      (e) Neither Company nor any of its subsidiaries has received notice from
any third party that the operation of the business of Company or any of its
subsidiaries or any act, product, or service of Company or any of its
subsidiaries, infringes the Intellectual Property of any third party.

      (f) To the knowledge of Company, no person has or is infringing any
material Company Intellectual Property.

      (g) Company and each of its subsidiaries has taken reasonable steps to
protect Company's and its subsidiaries' rights in Company's confidential
information and trade secrets that it wishes to protect or any trade secrets or
confidential information of third parties provided to Company or any of its
subsidiaries, and, without limiting the foregoing, each of Company and its
subsidiaries has and enforces a policy requiring each employee and contractor to
execute a proprietary information/confidentiality agreement substantially in the
form provided to Parent and all current and former employees and contractors of
Company and any of its subsidiaries have executed such an agreement, except
where the failure to do so is not reasonably expected to be material to Company.

      2.10  COMPLIANCE; PERMITS; RESTRICTIONS.

      (a) Neither Company nor any of its subsidiaries is, in any material
respect, in conflict with, or in default or violation of (i) any law, rule,
regulation, order, judgment, or decree applicable to Company or any of its
subsidiaries or by which its or any of their respective properties is bound or
affected, or (ii) any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise, or other instrument or obligation
to which Company or any of its subsidiaries is a party or by which Company or
any of its subsidiaries or its or any of their respective properties is bound or
affected. To the knowledge of Company, no investigation or review by any
Governmental Entity is pending or threatened against Company or its
subsidiaries, nor has any Governmental Entity indicated an intention to conduct
the same. There is no material agreement, judgment, injunction, order, or decree
binding upon Company or any of its subsidiaries which has or would reasonably be
expected to have the effect of prohibiting or materially impairing any current
business practice of Company or any of its subsidiaries, any acquisition of
material property by Company or any of its subsidiaries or the conduct of
business by Company as currently conducted.

      (b) Company and its subsidiaries hold all permits, licenses, variances,
exemptions, orders, and approvals from governmental authorities which are
material to the operation of the business of Company, as set forth in Company
Schedule 2.10(b) (collectively, the "COMPANY PERMITS"). Company and its
subsidiaries are in compliance in all material respects with the terms of the
Company Permits.

      2.11  LITIGATION.

      As of the date of this Agreement, except as set forth in Company Schedule
2.11, there is no action, suit, proceeding, claim, arbitration, or investigation
pending, or as to which Company or any of its subsidiaries has received any
notice of assertion nor, to Company's knowledge, is there a threatened action,
suit, proceeding, claim, arbitration, or investigation against Company or any of
its subsidiaries which in each case reasonably would be likely to be material to
Company, or which in any manner challenges or seeks to prevent, enjoin, alter,
or delay any of the transactions contemplated by this Agreement.

                                      A-11
<PAGE>
      2.12  BROKERS' AND FINDERS' FEES.

      Company has not incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.

      2.13  EMPLOYEE BENEFIT PLANS.

      (a) Company or its subsidiaries do not contribute to, any pension,
profit-sharing, option, other incentive plan, or other Employee Benefit Plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974),
or has any obligation to or customary arrangement with employees for bonuses,
incentive compensation, vacations, severance pay, insurance, or other benefits,
except as set forth in Company Schedule 2.13.

      (b) Company is in compliance in all material respects with all applicable
material foreign, federal, state and local laws, rules and regulations
respecting employment, employment practices, terms and conditions of employment
and wages and hours.

      (c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, bonus
or otherwise) becoming due to any shareholder, director or Company employee or
any of its subsidiaries under any agreement or otherwise, (ii) increase any
benefits otherwise payable under any agreement, or (iii) result in the
acceleration of the time of payment or vesting of any such benefits.

      2.14  ABSENCE OF LIENS AND ENCUMBRANCES.

      Company and each of its subsidiaries has good and valid title to, or, in
the case of leased properties and assets, valid leasehold interests in, all of
its tangible properties and assets, real, personal and mixed, used in its
business, free and clear of any liens or encumbrances except as reflected in the
Company Financials and except for liens for Taxes not yet due and payable and
such imperfections of title and encumbrances, if any, which would not be
material to Company.

      2.15  ENVIRONMENTAL MATTERS.

      (a) Except as would not reasonably be likely to result in a Material
Adverse Effect on Company, (i) neither Company nor any of its subsidiaries has
generated, transported, stored, used, manufactured, disposed of, released or
exposed its employees or others to pollutants, contaminants, wastes, or any
toxic, radioactive or otherwise hazardous materials ("HAZARDOUS MATERIALS") in
violation of, or in a manner that would be reasonably likely to result in
liability under, any rule, regulation, treaty or statute promulgated by any
Governmental Entity in effect as of the date hereof to protect the environment
or to prohibit, regulate or control Hazardous Materials "ENVIRONMENTAL LAWS")
and (ii) no Hazardous Materials are located in, on or under any real property or
facility now or previously owned, leased or operated by Company or any of its
subsidiaries in a manner which would reasonably be expected to result in
liability under, or a violation of, any Environmental Law.

      (b) Except for matters which would not reasonably be expected to result in
a Material Adverse Effect on Company, no action, proceeding, revocation
proceeding, amendment procedure, writ, injunction or claim is pending, or to
Company's knowledge, threatened concerning any Company Permit relating to any
environmental matter, or otherwise relating to any Environmental Law.

      2.16  LABOR MATTERS.

      (i) There are no controversies pending or, to the knowledge of each of
Company and its respective subsidiaries, threatened, between Company or any of
its subsidiaries and any of their respective employees; (ii) as of the date of
this Agreement, neither Company nor any of its subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by Company or its subsidiaries nor does Company or its
subsidiaries know of any activities or proceedings of any labor union to
organize any such employees; and (iii) as of the date of this Agreement, neither
Company nor any of its subsidiaries has any knowledge of any strikes, slowdowns,
work stoppages or lockouts, or threats thereof, by or with respect to any
employees of Company or any of its subsidiaries.

                                      A-12
<PAGE>
      2.17  AGREEMENTS, CONTRACTS, AND COMMITMENTS.

      As of the date hereof, except as provided in Company Schedule 2.17,
neither Company nor any of its subsidiaries is a party to or is bound by:

      (a) (i) any employment or consulting agreement, contract or commitment
with any officer or director or higher level employee or member of Company's
Board of Directors, other than those that are terminable by Company or any of
its subsidiaries on no more than thirty (30) days' notice without liability or
financial obligation to Company, (ii) any such agreement, contract or commitment
with any employee, consultant, shareholder or other person that will result in
any obligation of Company or any of its subsidiaries to make any payments as a
result of the transactions contemplated hereby, (iii) any agreement with any
employee, consultant or shareholder of Company pursuant to which Company has
loaned or is obligated to loan any money thereto or (iv) any agreement or
arrangement providing for severance or termination pay;

      (b) any agreement or plan, including, without limitation, any stock option
plan, warrant agreement, stock appreciation right plan or stock purchase plan,
any of the benefits of which will be increased, or the vesting of benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which will
be calculated on the basis of any of the transactions contemplated by this
Agreement;

      (c) any agreement of indemnification of officers, directors or employees
of Company, except as provided for in Company's Articles of Incorporation or
Bylaws, or any guaranty of third party indebtedness or of obligations of
officers, directors, employees or agents of Company;

      (d) any agreement, contract or commitment containing any covenant limiting
in any respect the right of Company or any of its subsidiaries to engage in any
line of business in any geographic area or to compete with any person or
granting to any person any interest in Company's distribution rights;

      (e) any agreement, contract or commitment currently in force relating to
the disposition or acquisition by Company or any of its subsidiaries after the
date of this Agreement of a material amount of assets not in the ordinary course
of business or pursuant to which Company has any material ownership interest in
any corporation, partnership, joint venture or other business enterprise other
than Company's subsidiaries;

      (f) any agreement, contract or commitment containing exclusivity
provisions pursuant to which Company has agreed not to purchase the goods or
services of, or enter into a commercial relationship with, another person;

      (g) any mortgages, indentures, guarantees, loans or credit agreements,
security agreements or other agreements or instruments relating to the borrowing
of money or extension of credit;

      (h) any settlement agreement relating to any claim or suit;

      (i) any real property lease covering more than 5,000 square feet; or

      (j) any other agreement, lease, contract or commitment that involves
remaining obligations of Company of $10,000 or more individually. Neither
Company nor any of its subsidiaries, nor to Company's knowledge any other party
to a Company Contract (as defined below), is in breach, violation or default
under, and neither Company nor any of its subsidiaries has received written
notice that it has breached, violated or defaulted under, any of the terms or
conditions of any of the agreements, contracts or commitments to which Company
or any of its subsidiaries is a party or by which it is bound that are required
to be disclosed in the Company Schedules (any such agreement, contract or
commitment, a "COMPANY CONTRACT") in such a manner as would permit any other
party to cancel or terminate any such Company Contract, or would permit any
other party to seek material damages or other remedies (for any or all of such
breaches, violations or defaults, in the aggregate).

                                      A-13
<PAGE>
      2.18  INSURANCE.

      There is no material claim by Company or any of its subsidiaries pending
under any of the insurance policies and fidelity bonds covering the assets,
business, equipment, properties, operations, employees, officers and directors
of Company and its subsidiaries as to which coverage has been questioned, denied
or disputed by the underwriters of such policies or bonds.

      2.19  REGISTRATION STATEMENT; JOINT PROXY STATEMENT/PROSPECTUS.

      None of the information supplied or to be supplied by Company for
inclusion in (i) the Registration Statement (as defined in Section 2.5(b)) will
at the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading and (ii) the proxy statement/prospectus to be sent to the
shareholders of Company and stockholders of Parent in connection with the
meeting of Company's shareholders to consider the approval and adoption of this
Agreement and the approval of the Merger (the "COMPANY SHAREHOLDERS' MEETING")
and in connection with the meeting of Parent's stockholders to consider the
approval of the issuance of shares of Parent Common Stock pursuant to the terms
of the Merger (the "PARENT STOCKHOLDERS' Meeting") (such proxy
statement/prospectus as amended or supplemented is referred to herein as the
"JOINT PROXY STATEMENT/PROSPECTUS") shall not, (a) on the date the Joint Proxy
Statement/Prospectus is first mailed to Company's shareholders and Parent's
stockholders, (b) at the time of the Company Shareholders' Meeting or the Parent
Stockholders' Meeting and (c) at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not false or misleading, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Company
Shareholders' Meeting or the Parent Stockholders' Meeting which has become false
or misleading. The Joint Proxy Statement/Prospectus will comply as to form in
all material respects with the provisions of the Securities Act and Exchange
Act, and the rules and regulations thereunder. If at any time prior to the
Effective Time, any event relating to Company or any of its affiliates, officers
or directors should be discovered by Company which should be set forth in an
amendment to the Registration Statement or a supplement to the Joint Proxy
Statement/Prospectus, Company shall promptly inform Parent. Notwithstanding the
foregoing, Company makes no representation or warranty with respect to any
information supplied by Parent or Merger Sub that is contained in any of the
foregoing documents.

      2.20  BOARD APPROVAL.

      The Board of Directors of Company has, as of the date of this Agreement,
unanimously (i) determined that the Merger is fair to, advisable, and in the
best interests of Company and its shareholders, (ii) determined to recommend
that the shareholders of Company approve this Agreement and (iii) duly approved
the Merger, this Agreement, and the transactions contemplated hereby.

      2.21  STATE TAKEOVER STATUTES.

      The Board of Directors of Company has taken all actions so that (i) the
restrictions contained in Section 203 of the Delaware Law applicable to a
"business combination" (as defined in such Section 203) will not apply to the
execution, delivery or performance of this Agreement or to the consummation of
the Merger or the other transactions contemplated by this Agreement. No other
state takeover statute or similar statute or regulation applies to or purports
to apply to the Merger, this Agreement, the Company Voting Agreements or the
transactions contemplated hereby and thereby.

      2.22  FAIRNESS OPINION.

      Company will receive a written opinion from a firm acceptable to Parent,
dated prior to the Effective Time, that the Exchange Ratio is fair to Company's
shareholders from a financial point of view and has provided to Parent a copy of
such opinion.

                                      A-14
<PAGE>
                                   ARTICLE III

             REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

      Parent and Merger Sub jointly and severally represent and warrant to
Company, subject to such exceptions as are specifically disclosed in writing in
the schedules hereto (each such exception to reference the specific section
number of this Article III to which it applies and each other section number of
this Article III to the extent such applicability is reasonably apparent on the
face of such exception), dated as of the date hereof (the "PARENT SCHEDULE"):

      3.1   ORGANIZATION OF PARENT; SUBSIDIARIES.

      (a) Parent and each of its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation; has the corporate power and authority to own, lease and operate
its assets and property and to carry on its business as now being conducted and
as proposed to be conducted; and is duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction in which the failure to
be so qualified would have a Material Adverse Effect (as defined in Section
8.3(b)(ii)) on Parent.

      (b) Parent Schedule 3.1(b) contains a true and complete list of all of
Parent's subsidiaries, indicating the jurisdiction of incorporation of each
subsidiary and Parent's equity interest therein. Neither Parent nor any of its
subsidiaries directly or indirectly owns an equity, membership, partnership or
similar interest in, or any interest convertible into, or exchangeable or
exercisable for any such interest in, any corporation, partnership, joint
venture, limited liability company or other business association or entity.

      (c) Parent has delivered or made available to Company a true and correct
copy of the Article of Incorporation and Bylaws of Parent and similar governing
instruments of each of its subsidiaries, each as amended to date, and each such
instrument is in full force and effect. Neither Parent nor any of its
subsidiaries is in violation of any of the provisions of its Article of
Incorporation or Bylaws or equivalent governing instruments.

      (d) All of the outstanding shares of capital stock of each of Parent's
subsidiaries are duly authorized, validly issued, fully paid and nonassessable
and are not subject to preemptive rights created by statute, the charter
documents of any such subsidiary or any agreement or document to which any such
subsidiary is party or by which its is bound, and all such shares (other than
directors' qualifying shares in the case of applicable foreign subsidiaries) are
owned, of record and beneficially, by Parent or another subsidiary of Parent
free and clear of all security interests, liens, claims, pledges, agreements,
limitations on voting rights, charges or other encumbrances of any nature.

      3.2   PARENT CAPITAL STRUCTURE.

      The authorized capital stock of Parent consists of 100,000,000 shares of
Common Stock, par value $0.001 per share, of which 25,801,988 shares are issued
and outstanding as of August 31, 2000 and 5,000,000 shares of Preferred Stock,
par value $.001 per share, of which no shares are issued or outstanding. The
authorized capital stock of Merger Sub consists of 1,000 shares of Common Stock,
par value $.001 per share, all of which, as of the date hereof, is issued and
outstanding and is held by Parent. All outstanding shares of Parent Common Stock
are duly authorized, validly issued, fully paid, and non-assessable and are not
subject to preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of Parent or any agreement or document to which Parent
is a party or by which it is bound. As of August 31, 2000, Parent had reserved
an aggregate of 400,000 shares of Parent Common Stock, net of exercises, for
issuance to employees, consultants and non-employee directors pursuant to
Parent's stock option plan (the "PARENT STOCK OPTION PLAN"), under which options
are outstanding for 156,858 shares as of August 31, 2000. As of August 31, 2000,
Parent had reserved an aggregate of 2,450,259 shares of Parent Common Stock for
issuance to holders of warrants to purchase Parent Common Stock ("PARENT
WARRANTS"). All shares of Parent Common Stock subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, would be duly authorized, validly issued, fully
paid, and nonassessable.

                                      A-15
<PAGE>
      3.3   OBLIGATIONS WITH RESPECT TO CAPITAL STOCK.

      Except as set forth in Section 3.2, and except as set forth in Parent
Schedule 3.3, as of the date hereof, there are no equity securities, partnership
interests, or similar ownership interests of any class of Parent, or any
securities exchangeable or convertible into or exercisable for such equity
securities, partnership interests or similar ownership interests issued,
reserved for issuance or outstanding. Except for securities Parent owns,
directly or indirectly through one or more subsidiaries, there are no equity
securities, partnership interests or similar ownership interests of any class of
any subsidiary of Parent, or any security exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests issued, reserved for issuance or outstanding. Except as set
forth in Section 3.2, and except as set forth in Parent Schedule 3.3, there are
no stock appreciation rights, phantom stock or other similar rights of Parent
and no options, warrants, equity securities, partnership interests or similar
ownership interests, calls, rights (including preemptive rights), commitments or
agreements of any character to which Parent or any of its subsidiaries is a
party or by which it is bound obligating Parent or any of its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase,
redeem or otherwise acquire, or cause the repurchase, redemption or acquisition,
of any shares of capital stock of Parent or any of its subsidiaries or
obligating Parent or any of its subsidiaries to grant, extend, accelerate the
vesting of or enter into any such stock appreciation rights, phantom stock or
other similar rights or any such option, warrant, equity security, partnership
interest or similar ownership interest, call, right, commitment or agreement.
There are no registration rights and, to the knowledge of Parent there are no
voting trusts, proxies or other agreements or understandings with respect to any
equity security of any class of Parent or with respect to any equity security,
partnership interest or similar ownership interest of any class of any of its
subsidiaries.

      3.4   AUTHORITY.

      (a) Parent has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action on the part of Parent, subject only to the approval and
adoption of this Agreement and the approval of the Share Issuance by Parent's
stockholders and the filing and recordation of the Certificate of Merger
pursuant to Delaware Law. A vote of the holders of at least a majority of the
shares of Parent Common Stock present or represented by proxy at the Parent
Stockholders' Meeting is required for Parent's stockholders to approve and adopt
a Share Issuance. This Agreement has been duly executed and delivered by Parent
and Merger Sub and, assuming the due authorization, execution and delivery by
Company, constitutes the valid and binding obligations of Parent and Merger Sub,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy and other similar laws and general principles of equity.
The execution and delivery of this Agreement by Parent do not, and the
performance of this Agreement by Parent will not, (i) conflict with or violate
the Article of Incorporation or Bylaws of Parent or the equivalent
organizational documents of any of its subsidiaries, (ii) subject to obtaining
the approval of the Share Issuance by Parent's stockholders as contemplated in
Section 5.2 and compliance with the requirements set forth in Section 3.4(b)
below, conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to Parent or any of its subsidiaries or by which its or any of
their respective properties is bound or affected, or (iii) result in any breach
of, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or impair Parent's rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Parent
or any of its subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or any of its subsidiaries is a party or by which
Parent or any of its subsidiaries or its or any of their respective properties
are bound or affected, except to the extent such conflict, violation, breach,
default, impairment or other effect could not, in the case of clause (ii) or
(iii), individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Parent or a material adverse effect on Parent's
ability to perform its obligations under this Agreement.

      (b) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required by or with
respect to Parent in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, except
for (i) the filing of a Registration Statement with the SEC in accordance with
the Securities Act, (ii) the filing of the Certificate of Merger with the
Secretary of State of Delaware, (iii) the filing of the Joint Proxy
Statement/Prospectus with the SEC in accordance

                                      A-16
<PAGE>
with the Exchange Act, (iv) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
federal and state securities laws and the HSR Act, (v) the filing with AMEX of a
Notification Form for Listing of Additional Shares with respect to the shares of
Parent Common Stock issued, or to be reserved for issuance, in connection with
the Merger, and (vi) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not be material to Parent or
have a material adverse effect on the ability of the parties to consummate the
Merger or to perform the obligations under this Agreement.

      3.5   SEC FILINGS; PARENT FINANCIAL STATEMENTS.

      (a) Parent has filed all forms, reports and documents required to be filed
with the SEC since August 31, 1999, and has made available to Company such
forms, reports and documents in the form filed with the SEC. All such required
forms, reports, and documents (including those that Parent may file subsequent
to the date hereof) are referred to herein as the "PARENT SEC REPORTS." As of
their respective dates, the Parent SEC Reports (i) were prepared in all material
respects in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Parent SEC Reports, and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of Parent's
subsidiaries is required to file any forms, reports or other documents with the
SEC.

      (b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Parent SEC Reports (the
"PARENT FINANCIALS"), including any Parent SEC Reports filed after the date
hereof until the Closing, (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-QSB under the Exchange Act) and (iii) fairly presented the
consolidated financial position of Parent and its subsidiaries at the respective
dates thereof and the consolidated results of its operations and cash flows for
the periods indicated, except that the unaudited interim financial statements
were or are subject to normal and recurring year-end adjustments which were not,
or are not expected to be, material in amount. The balance sheet of Parent
contained in the Parent SEC Reports as of May 31, 2000 is hereinafter referred
to as the "PARENT BALANCE SHEET." Except as disclosed in the Parent Financials,
neither Parent nor any of its subsidiaries has any liabilities (absolute,
accrued, contingent or otherwise) of a nature required to be disclosed on a
balance sheet or in the related notes to the consolidated financial statements
prepared in accordance with GAAP which are, individually or in the aggregate,
material to the business, results of operations or financial condition of Parent
and its subsidiaries taken as a whole, except liabilities (i) provided for in
the Parent Balance Sheet, or (ii) incurred since the date of the Parent Balance
Sheet in the ordinary course of business and immaterial in the aggregate.

      (c) Parent Schedule 3.5(a) sets forth a complete and correct copy of any
amendments or modifications, which have not yet been filed with the SEC but
which are required to be filed, to agreements, documents or other instruments
which previously had been filed by Parent with the SEC pursuant to the
Securities Act or the Exchange Act.

      3.6   ABSENCE OF CERTAIN CHANGES OR EVENTS.

      Since the date of the Parent Balance Sheet there has not been: (i) any
Material Adverse Effect on the Parent, (ii) any split, combination, or
reclassification of any of Parent's or any of its subsidiaries' capital stock,
(iii) any granting by Parent or any of its subsidiaries of any increase in
compensation or fringe benefits, except for normal increases of cash
compensation in the ordinary course of business consistent with past practice,
or any payment by Parent or any of its subsidiaries of any bonus, except for
bonuses made in the ordinary course of business consistent with past practice,
(iv) any entry by Parent or any of its subsidiaries into any currently effective
employment, severance, termination or indemnification agreement or any other
agreement the benefits of which are contingent or the terms of which are
materially altered upon the occurrence of a transaction involving Parent of the
nature contemplated hereby, (v) entry by Parent or any of its subsidiaries into
any licensing or other agreement

                                      A-17
<PAGE>
with regard to the acquisition or disposition of any material Parent
Intellectual Property (as defined herein) other than licenses in the ordinary
course of business consistent with past practice, (vi) any material change by
Parent in its accounting methods, principles or practices, except as required by
concurrent changes in GAAP, (vii) any revaluation by Parent of any of its
assets, including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable other than in the ordinary
course of business and consistent with past practice, (viii) any changes in the
vesting schedules of outstanding Parent Options or Parent Warrants, or (ix) any
grant of stock options or warrants prior to the date of this Agreement other
than grants to new employees in connection with the commencement of their
employment.

      3.7   TAXES.

      (a) Parent and each of its subsidiaries have timely filed all Returns
and/or extensions relating to Taxes required to be filed by Parent and each of
its subsidiaries with any Tax authority, except such Returns which are not
material to Parent. Parent and each of its subsidiaries have paid all Taxes
shown to be due on such Returns.

      (b) Parent and each of its subsidiaries as of the Effective Time will have
withheld with respect to its employees all federal and state income Taxes, Taxes
pursuant to the Federal Insurance Contribution Act, Taxes pursuant to the
Federal Unemployment Tax Act and other Taxes required to be withheld, except
such Taxes which are not material to Parent.

      (c) Neither Parent nor any of its subsidiaries has been delinquent in the
payment of any material Tax nor is there any material Tax deficiency
outstanding, proposed or assessed against Parent or any of its subsidiaries, nor
has Parent or any of its subsidiaries executed any unexpired waiver of any
statute of limitations on or extending the period for the assessment or
collection of any Tax.

      (d) No audit or other examination of any Return of Parent or any of its
subsidiaries by any Tax authority is presently in progress, nor has Parent or
any of its subsidiaries been notified of any request for such an audit or other
examination.

      (e) No adjustment relating to any Returns filed by Parent or any of its
subsidiaries has been proposed in writing formally or informally by any Tax
authority to Parent or any of its subsidiaries or any representative thereof.

      (f) Neither Parent nor any of its subsidiaries has any liability for any
material unpaid Taxes which has not been accrued for or reserved on Parent
Balance Sheet in accordance with GAAP, whether asserted or unasserted,
contingent or otherwise, which is material to Parent, other than any liability
for unpaid Taxes that may have accrued since May 31, 2000 in connection with the
operation of the business of Parent and its subsidiaries in the ordinary course.

      (g) There is no contract, agreement, plan or arrangement to which Parent
or any of its subsidiaries is a party as of the date of this Agreement,
including but not limited to the provisions of this Agreement, covering any
employee or former employee of Parent or any of its subsidiaries that,
individually or collectively, would reasonably be expected to give rise to the
payment of any amount that would not be deductible pursuant to Sections 280G,
404 or 162(m) of the Code. There is no contract, agreement, plan or arrangement
to which Parent is a party or by which it is bound to compensate any individual
for excise taxes paid pursuant to Section 4999 of the Code.

      (h) Neither Parent nor any of its subsidiaries has filed any consent
agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2)
of the Code apply to any disposition of a subsection (f) asset(as defined in
Section 341(f)(4) of the Code) owned by Parent or any of its subsidiaries.

      (i) Neither Parent nor any of its subsidiaries is party to or has any
obligation under any Tax-sharing, Tax indemnity or Tax allocation agreement or
arrangement.

      (j) None of Parent's or its subsidiaries' assets are tax exempt use
property within the meaning of Section 168(h) of the Code.

                                      A-18
<PAGE>
      (k) Parent has (a) never been a member of an affiliated group (within the
meaning of Code Section 1504(a)) filing a consolidated federal income Tax Return
(other than a group the common parent of which was Parent), (b) with respect to
the Taxes of any person (other than Parent or any of its subsidiaries) (i) no
liability under Treas. Reg. Section 1.1502-6 (or any similar provision of state,
local or foreign law) and (ii) no material liability as a transferee or
successor and (c) never been a party to any joint venture, partnership or other
agreement that should be treated as a partnership for Tax purposes.

      3.8   PARENT INTELLECTUAL PROPERTY.

      For the purposes of this Agreement, the following terms have the following
definitions:

      "PARENT INTELLECTUAL PROPERTY" shall mean any Intellectual Property that
is owned by, or exclusively licensed to, Parent.

      (a) No Parent Intellectual Property or product or service of Parent or any
of its subsidiaries is subject to any proceeding or outstanding decree, order,
judgment, contract, license, agreement, or stipulation restricting in any manner
the use, transfer, or licensing thereof by Parent or any of its subsidiaries, or
which may affect the validity, use or enforceability of such Parent Intellectual
Property.

      (b) To the knowledge of Parent, Parent owns, or has license or other
rights to use (sufficient for the conduct of its business as currently
conducted), each material item of Parent Intellectual Property or other
Intellectual Property used by Parent free and clear of any lien or encumbrance
(excluding licenses and related restrictions).

      (c) Neither Parent nor any of its subsidiaries has transferred ownership
of, or granted any license with respect to any material Parent Intellectual
Property to any third party.

      (d) To the knowledge of Parent, the operation of the business of Parent
and its subsidiaries as such business currently is conducted does not infringe
the Intellectual Property of any third party.

      (e) Neither Parent nor any of its subsidiaries has received notice from
any third party that the operation of the business of Parent or any of its
subsidiaries or any act, product or service of Parent or any of its
subsidiaries, infringes the Intellectual Property of any third party.

      (f) To the knowledge of Parent, no person has or is infringing or
misappropriating any material Parent Intellectual Property.

      (g) Parent and each of its subsidiaries has taken reasonable steps to
protect Parent's and its subsidiaries' rights in Parent's confidential
information and trade secrets that it wishes to protect or any trade secrets or
confidential information of third parties provided to Parent or any of its
subsidiaries, and, without limiting the foregoing, each of Parent and its
subsidiaries has and enforces a policy requiring each employee and contractor to
execute a proprietary information/confidentiality agreement substantially in the
form provided to Company and all current and former employees and contractors of
Parent and any of its subsidiaries have executed such an agreement, except where
the failure to do so is not reasonably expected to be material to Parent.

      3.9   COMPLIANCE; PERMITS; RESTRICTIONS.

      (a) Neither Parent nor any of its subsidiaries is, in any material
respect, in conflict with, or in default or violation of (i) any law, rule,
regulation, order, judgment or decree applicable to Parent or any of its
subsidiaries or by which its or any of their respective properties is bound or
affected, or (ii) any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or any of its subsidiaries is a party or by which Parent or any
of its subsidiaries or its or any of their respective properties is bound or
affected. To the knowledge of Parent, no investigation or review by any
Governmental Entity is pending or threatened against Parent or its subsidiaries,
nor has any Governmental Entity indicated an intention to conduct the same.
There is no material agreement, judgment, injunction, order or decree binding
upon Parent or any of its subsidiaries which has or could reasonably be expected
to have the effect of prohibiting or materially

                                      A-19
<PAGE>
impairing any current business practice of Parent or any of its subsidiaries,
any acquisition of material property by Parent or any of its subsidiaries or the
conduct of business by Parent as currently conducted.

      (b) Parent and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities which are
material to the operation of the business of Parent (collectively, the "PARENT
PERMITS"). Parent and its subsidiaries are in compliance in all material
respects with the terms of the Parent Permits.

      3.10  LITIGATION.

      As of the date of this Agreement, excluding such matters as are disclosed
in Parent's SEC Reports, there is no action, suit, proceeding, claim,
arbitration or investigation pending, or as to which Parent or any of its
subsidiaries has received any notice of assertion nor, to Parent's knowledge, is
there a threatened action, suit, proceeding, claim, arbitration or investigation
against Parent or any of its subsidiaries which reasonably would be likely to be
material to Parent, or which in any manner challenges or seeks to prevent,
enjoin, alter or delay any of the transactions contemplated by this Agreement.

      3.11  BROKERS' AND FINDERS' FEES.

      Parent has not incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.

      3.12  EMPLOYEE BENEFIT PLANS.

      (a) Parent does not contribute to, any pension, profit-sharing, option,
other incentive plan, or other Employee Benefit Plan (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974), or has any obligation
to or customary arrangement with employees for bonuses, incentive compensation,
vacations, severance pay, insurance, or other benefits, except as set forth in
Parent Schedule 3.12(a).

      (b) Parent is in compliance in all material respects with all applicable
material foreign, federal, state and local laws, rules and regulations
respecting employment, employment practices, terms and conditions of employment
and wages and hours.

      (c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, bonus
or otherwise) becoming due to any stockholder, director or Parent employee or
any of its subsidiaries under any agreement or otherwise, (ii) increase any
benefits otherwise payable under any agreement, or (iii) result in the
acceleration of the time of payment or vesting of any such benefits.

      3.13  ABSENCE OF LIENS AND ENCUMBRANCES.

      Parent and each of its subsidiaries has good and valid title to, or, in
the case of leased properties and assets, valid leasehold interests in, all of
its tangible properties and assets, real, personal and mixed, used in its
business, free and clear of any liens or encumbrances except as reflected in the
Parent Financials and except for liens for Taxes not yet due and payable and
such imperfections of title and encumbrances, if any, which would not be
material to Parent.

      3.14  ENVIRONMENTAL MATTERS.

      (a) Except as would not reasonably be likely to result in a Material
Adverse Effect on Parent, (i) neither Parent nor any of its subsidiaries has
generated, transported, stored, used, manufactured, disposed of, released or
exposed its employees or others to Hazardous Materials in violation of, or in a
manner that would reasonably be likely to result in liability under, any
Environmental Law, and (ii) no Hazardous Materials are located in, on or under
any real property or facility now or previously owned, leased or operated by
Parent or any of its

                                      A-20
<PAGE>
subsidiaries in a manner which would reasonably be expected to result in
liability under, or in violation of, any Environmental Law.

      (b) Except for matters which would not reasonably be expected to result in
a Material Adverse Effect on Parent, no action, proceeding, revocation
proceeding, amendment procedure, writ, injunction or claim is pending, or to
Parent's knowledge, threatened concerning any Parent Permit relating to any
environmental matter, or otherwise relating to any Hazardous Material or any
Environmental Law.

      3.15  LABOR MATTERS.

      (a) There are no controversies pending or, to the knowledge of each of
Parent and its respective subsidiaries, threatened, between Parent or any of its
subsidiaries and any of their respective employees; (b) as of the date of this
Agreement, neither Parent nor any of its subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by Parent or its subsidiaries nor does Parent or its
subsidiaries know of any activities or proceedings of any labor union to
organize any such employees; and (iii) as of the date of this Agreement, neither
Parent nor any of its subsidiaries has any knowledge of any strikes, slowdowns,
work stoppages or lockouts, or threats thereof, by or with respect to any
employees of Parent or any of its subsidiaries.

      3.16  AGREEMENTS, CONTRACTS, AND COMMITMENTS.

      As of the date hereof, except as provided in Parent Schedule 3.16, neither
Parent nor any of its subsidiaries is a party to or is bound by:

      (a) (i) any employment or consulting agreement, contract or commitment
with any officer or director or member of Parent's Board of Directors, other
than those that are terminable by Parent or any of its subsidiaries on no more
than thirty (30) days' notice without liability or financial obligation to
Parent, (ii) any such agreement, contract or commitment with any employee,
consultant, stockholder or other person that will result in any obligation of
Parent or any of its subsidiaries to make any payments as a result of the
transactions contemplated hereby, (iii) any agreement with any employee,
consultant or stockholder of Parent pursuant to which Parent has loaned or is
obligated to loan any money thereto or (iv) any arrangement or agreement
providing for severance or termination pay;

      (b) any agreement or plan, including, without limitation, any stock option
plan, warrant agreement, stock appreciation right plan or stock purchase plan,
any of the benefits of which will be increased, or the vesting of benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which will
be calculated on the basis of any of the transactions contemplated by this
Agreement;

      (c) any agreement of indemnification of officers, directors or employees
of Parent, except as provided for in Parent's Articles of Incorporation or
Bylaws, or any guaranty of third party indebtedness or of obligations of
officers, directors, employees or agents of Parent;

      (d) any agreement, contract or commitment containing any covenant limiting
in any respect the right of Parent or any of its subsidiaries to engage in any
line of business in any geographic area or to compete with any person or
granting to any person any interest in Parent's distribution rights;

      (e) any agreement, contract or commitment currently in force relating to
the disposition or acquisition by Parent or any of its subsidiaries after the
date of this Agreement of a material amount of assets not in the ordinary course
of business or pursuant to which Parent has any material ownership interest in
any corporation, partnership, joint venture or other business enterprise other
than Parent's subsidiaries;

      (f) any contract, agreement or commitment containing exclusivity
provisions pursuant to which Parent has agreed not to purchase the goods (other
than local grocery products) or services of, or enter into a commercial
relationship with, another person;

                                      A-21
<PAGE>
      (g) any mortgages, indentures, guarantees, loans or credit agreements,
security agreements or other agreements or instruments relating to the borrowing
of money or extension of credit;

      (h) any settlement agreement relating to any claim or suit;

      (i) any real property lease covering more than 25,000 square feet; or

      (j) any other agreement, lease, contract or commitment that involves
remaining obligations of Parent of $100,000 or more individually. Neither Parent
nor any of its subsidiaries, nor to Parent's knowledge any other party to a
Parent Contract (as defined below), is in breach, violation or default under,
and neither Parent nor any of its subsidiaries has received written notice that
it has breached, violated or defaulted under, any of the terms or conditions of
any of the agreements, contracts or commitments to which Parent or any of its
subsidiaries is a party or by which it is bound that are required to be
disclosed in the Parent Schedules (any such agreement, contract or commitment, a
"PARENT CONTRACT") in such a manner as would permit any other party to cancel or
terminate any such Parent Contract, or would permit any other party to seek
material damages or other remedies (for any or all of such breaches, violations
or defaults, in the aggregate).

      3.17  INSURANCE.

      There is no material claim by Parent or any of its subsidiaries pending
under any of the insurance policies and fidelity bonds covering the assets,
business, equipment, properties, operations, employees, officers and directors
of Parent and its subsidiaries as to which coverage has been questioned, denied
or disputed by the underwriters of such policies or bonds.

      3.18  REGISTRATION STATEMENT; JOINT PROXY STATEMENT/PROSPECTUS.

      None of the information supplied or to be supplied by Parent for inclusion
in (i) the Registration Statement will at the time it becomes effective under
the Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading and (ii) the Joint Proxy
Statement/Prospectus shall not, (a) on the date the Joint Proxy
Statement/Prospectus is first mailed to Parent's stockholders and Company's
shareholders, (b) at the time of the Parent Stockholders' Meeting or the Company
Shareholders' Meeting and (c) at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not false or misleading, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Parent
Stockholders' Meeting or the Company Shareholders' Meeting which has become
false or misleading. The Joint Proxy Statement/Prospectus will comply as to form
in all material respects with the provisions of the Exchange Act and the rules
and regulations thereunder. If at any time prior to the Effective Time, any
event relating to Parent or any of its affiliates, officers or directors should
be discovered by Parent which should be set forth in an amendment to the
Registration Statement or a supplement to the Joint Proxy Statement/Prospectus,
Parent shall promptly inform Company. Notwithstanding the foregoing, Parent
makes no representation or warranty with respect to any information supplied by
Company that is contained in any of the foregoing documents.

      3.19  BOARD APPROVAL.

      The Board of Directors of Parent has, as of the date of this Agreement,
unanimously (i) determined that the Merger is fair to and in the best interests
of Parent and its stockholders, (ii) determined to recommend that the
stockholders of Parent approve the Share Issuance and (iii) duly approved the
Merger, this Agreement and the transactions contemplated hereby.

      3.20  FAIRNESS OPINION.

      Parent has received an opinion from G.A. Herrara & Co., dated prior to the
Effective Time, that the Exchange Ratio is fair to Parent from a financial point
of view and will provide to Company a copy of the written confirmation of such
opinion promptly after Parent's receipt thereof.

                                      A-22
<PAGE>
                                   ARTICLE IV

                       CONDUCT PRIOR TO THE EFFECTIVE TIME

      4.1   CONDUCT OF BUSINESS BY COMPANY.

      During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, Company and each of its subsidiaries shall, except to the extent
that Parent shall otherwise consent in writing, carry on its business, in the
ordinary course, in substantially the same manner as heretofore conducted and in
compliance with all applicable laws and regulations, pay its debts and taxes
when due subject to good faith disputes over such debts or taxes, pay or perform
other material obligations when due, and use its commercially reasonable efforts
consistent with past practices and policies to (i) preserve intact its present
business organization, (ii) keep available the services of its present officers
and employees, and (iii) preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has business
dealings.

      In addition, except as expressly permitted by the terms of this Agreement
and except as set forth in Schedule 4.1 without the prior written consent of
Parent, during the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, Company shall not do any of the following and shall not permit
its subsidiaries to do any of the following:

      (a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of warrants or options or restricted stock, or reprice
warrants or options granted under any employee, consultant, director or other
stock plans or agreements or authorize cash payments in exchange for any options
granted under any of such plans;

      (b) Grant any severance or termination pay to any officer or employee
except pursuant to written agreements outstanding, or policies existing, on the
date hereof and as previously disclosed in writing, or adopt any new severance
plan;

      (c) Transfer or license to any person or entity or otherwise extend, amend
or modify any rights to the Company Intellectual Property other than in the
ordinary course of business consistent with past practices;

      (d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;

      (e) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Company or its subsidiaries, except repurchases of
unvested shares at cost in connection with the termination of the employment
relationship with any employee pursuant to stock option or purchase agreements
in effect on the date hereof;

      (f) Issue, deliver, sell, authorize, pledge or otherwise encumber any
shares of capital stock or any securities convertible into shares of capital
stock, or subscriptions, rights, warrants or options to acquire any shares of
capital stock or any securities convertible into shares of capital stock, or
enter into other agreements or commitments of any character obligating it to
issue any such shares or convertible securities, other than (x) the issuance,
delivery and/or sale of Company Common Stock pursuant to the exercise of stock
options and Company Warrants outstanding as of the date of this Agreement, (y)
the issuance of Company common stock in connection with the possible acquisition
of Link-Two Communications, Inc. in an amount not to exceed 9,000,000 shares in
the aggregate, and (z) the issuance of up to 500,000 shares of Company common
stock to executive officers of Company;

      (g) Cause, permit, or propose any amendments to the Company Charter
Documents (or similar governing instruments of any of its subsidiaries);

                                      A-23
<PAGE>
      (h) Acquire or agree to acquire by merging or consolidating with, or by
purchasing any equity interest in or portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets (other than in the ordinary course of business consistent
with past practice) or enter into any joint ventures, strategic partnerships or
alliances;

      (i) Sell, lease, license, encumber or otherwise dispose of any properties
or assets except sales of inventory in the ordinary course of business
consistent with past practice, except for the sale, lease or disposition (other
than through licensing) of property or assets which are not material,
individually or in the aggregate, to the business of Company and its
subsidiaries;

      (j) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of Company, enter
into any agreement to maintain any financial statement condition or enter into
any arrangement having the economic effect of any of the foregoing other than in
connection with the financing of ordinary course trade payables consistent with
past practice;

      (k) Adopt or amend any employee benefit plan, policy or arrangement, any
employee stock purchase or employee stock option plan, or enter into any
employment contract or collective bargaining agreement (other than as required
by law or offer letters and letter agreements entered into in the ordinary
course of business consistent with past practice with employees who are
terminable "at will"), pay any special bonus or special remuneration to any
director or employee, or increase the salaries or wage rates or fringe benefits
(including rights to severance or indemnification) of its directors, officers,
employees or consultants other than annual review salary increases for
non-officer employees in the ordinary course of business consistent with past
practice;

      (l) (i) Pay, discharge, settle or satisfy any material claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), or litigation (whether or not commenced prior to the date of this
Agreement) in which Company is a defendant other than the payment, discharge,
settlement or satisfaction, in the ordinary course of business consistent with
past practice or in accordance with their terms, or liabilities recognized or
disclosed in the most recent consolidated financial statements (or the notes
thereto) of Company included in the Company SEC Reports or incurred in the
ordinary course of business consistent with past practice since the date of such
financial statements, or (ii) waive the benefits of, agree to modify in any
manner, terminate, release any person from or fail to enforce any
confidentiality or similar agreement to which Company or any of its subsidiaries
is a party or of which Company or any of its subsidiaries is a beneficiary;

      (m) Make any individual or series of related payments outside of the
ordinary course of business in excess of $10,000;

      (n) Except in the ordinary course of business consistent with past
practice, modify, amend or terminate any material contract or agreement to which
Company or any subsidiary thereof is a party or waive, delay the exercise of,
release or assign any material rights or claims thereunder;

      (o) Enter into any agreement, contract or commitment which if in existence
on the date hereof would be required to be listed in Company Schedule 2.17;

      (p) Revalue any of its assets or, except as required by GAAP, make any
change in accounting methods, principles or practices;

      (q) Incur or enter into any agreement, contract or commitment outside of
the ordinary course of business in excess of $10,000 individually;

      (r) Engage in any action that would reasonably be expected to cause the
Merger to fail to qualify as a "reorganization" under Section 368(a) of the
Code, whether or not otherwise permitted by the provisions of this Article IV;

                                      A-24
<PAGE>
      (s) Make any Tax election that, individually or in the aggregate, is
reasonably likely to adversely affect in any material respect the Tax liability
or Tax attributes of Company or any of its subsidiaries or settle or compromise
any material income Tax liability;

      (t) Enter into any collective bargaining agreements; or

      (u) Agree in writing or otherwise to take any of the actions described in
Section 4.1 (a) through (t) above.

      4.2   CONDUCT OF BUSINESS BY PARENT.

      During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, Parent and each of its subsidiaries shall, except to the extent
that Company shall otherwise consent in writing, carry on its business, in the
ordinary course, in substantially the same manner as heretofore conducted and in
compliance with all applicable laws and regulations, pay its debts and taxes
when due subject to good faith disputes over such debts or taxes, pay or perform
other material obligations when due, and use its commercially reasonable efforts
consistent with past practices and policies to (i) preserve intact its present
business organization, (ii) keep available the services of its present officers
and employees and (iii) preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has business
dealings.

      In addition, except as expressly permitted by the terms of this Agreement
and except as set forth in Parent Schedule 4.2, without the prior written
consent of Company, during the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement pursuant to
its terms or the Effective Time, Parent shall not do any of the following and
shall not permit its subsidiaries to do any of the following:

      (a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of warrants or options or restricted stock, or reprice
warrants or options granted under any employee, consultant, director or other
stock plans or authorize cash payments in exchange for any options granted under
any of such plans;

      (b) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock, except for intercompany dividends or distributions, or
split, combine or reclassify any capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for any capital stock, except as set forth in Parent Schedules;

      (c) Cause, permit or propose any amendments to the Parent Charter
Documents (or similar governing instruments of any of its subsidiaries) that
would have an adverse effect on the rights of holders of Parent Common Stock;

      (d) Revalue any of its assets or, except as required by GAAP, make any
change in accounting methods, principles or practices;

      (e) Engage in any action that would reasonably be expected to cause the
Merger to fail to qualify as a "reorganization" under Section 368(a) of the
Code, whether or not otherwise permitted by the provisions of this Article IV;

      (f) Make any Tax election that, individually or in the aggregate, is
reasonably likely to adversely affect in any material respect the Tax liability
or Tax attributes of Parent or any of its subsidiaries or settle or compromise
any material income Tax liability; or

      (g) Agree in writing or otherwise to take any of the actions described in
Sections 4.2 (a) through (f) above.

                                      A-25
<PAGE>
      4.3   CREDIT FACILITY AGREEMENT

      Notwithstanding the above Sections 4.1 and 4.2, the Company may enter into
a credit facility on mutually agreeable terms with Parent or a subsidiary of
Parent, whereby such party will provide a line of credit in an amount not to
exceed $5 million, collateralized by certain agreements and other assets of
Company.

                                    ARTICLE V

                              ADDITIONAL AGREEMENTS

      5.1   JOINT PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT.

      (a) As promptly as practicable after the execution of this Agreement,
Parent and Company shall jointly prepare and shall file with the SEC a document
or documents that will constitute (i) the S-4 and (ii) the Joint Proxy
Statement/Prospectus. Each of the parties hereto shall use commercially
reasonable efforts to cause the S-4 to become effective as promptly as
practicable after the date hereof, and, prior to the effective date of the S-4,
the parties hereto shall take all action required under any applicable Laws in
connection with the issuance of shares of Parent Common Stock pursuant to the
Merger. Parent or Company, as the case may be, shall furnish all information
concerning Parent or Company as the other party may reasonably request in
connection with such actions and the preparation of the S-4 and the Joint Proxy
Statement/ Prospectus. As promptly as practicable after the effective date of
the S-4, the Joint Proxy Statement/Prospectus shall be mailed to the
shareholders of Company and of Parent. Each of the parties hereto shall cause
the Joint Proxy Statement/Prospectus to comply as to form and substances to such
party in all material respects with the applicable requirements of (i) the
Exchange Act, (ii) the Securities Act, (iii) the rules and regulations of the
AMEX.

      (b) The Joint Proxy Statement/Prospectus shall include the approval of
this Agreement and the Merger and the recommendation of the Board of Directors
of Company to Company's shareholders that they vote in favor of approval of this
Agreement and the Merger, subject to the right of the Board of Directors of
Company to withdraw at any time prior to the date of the Company Shareholders'
Meeting its recommendation and to recommend a Superior Proposal determined to be
such in compliance with Section 5.4(a) of this Agreement. The Joint Proxy
Statement/Prospectus shall include the approval of the Share Issuance and the
recommendation of the Board of Directors of Parent to Parent's stockholders that
they vote in favor of approval of the Share Issuance.

      (c) No amendment or supplement to the Joint Proxy Statement/Prospectus or
the S-4 shall be made without the approval of Parent and Company, which approval
shall not be unreasonably withheld or delayed. Each of the parties hereto shall
advise the other parties hereto, promptly after it receives notice thereof, of
the time when the S-4 has become effective or any supplement or amendment has
been filed, of the issuance of any stop order, of the suspension of the
qualification of the Parent Common Stock issuable in connection with the Merger
for offering or sale in any jurisdiction, or of any request by the SEC for
amendment of the Joint Proxy Statement/Prospectus or the S-4 or comments thereon
and responses thereto or requests by the SEC for additional information.

      5.2   SHAREHOLDER AND STOCKHOLDER MEETINGS.

      Company shall call and hold the Company Shareholders' Meeting and Parent
shall call and hold the Parent Stockholders' Meeting as promptly as practicable
after the date hereof for the purpose of voting upon the adoption and approval
of this Agreement and the approval of the Merger (in the case of the Company
Shareholders' Meeting) and the Share Issuance (in the case of the Parent
Stockholders' Meeting) pursuant to the Joint Proxy Statement/Prospectus, and
Company and Parent shall use all reasonable efforts to hold the Parent
Stockholders' Meeting and the Company Shareholders' Meeting on the same day and
as soon as practicable after the date on which the S-4 becomes effective.
Nothing herein shall prevent Company or Parent from adjourning or postponing the
Company Shareholders' Meeting or the Parent Stockholders' Meeting, as the case
may be, if there are insufficient shares of Company Common Stock or Parent
Common Stock, as the case may be, necessary to conduct business at their
respective meetings of the shareholders or stockholders. The Board of Directors
of Company shall submit this Agreement and the Merger for shareholder approval
pursuant to Delaware Law subject only to the condition of shareholder approval
as described in Section 2.4. Unless Company's Board of Directors has withdrawn
its recommendation of this Agreement and the Merger in compliance with Section
5.4(a), Company shall use commercially reasonable efforts to solicit from its
shareholders proxies in favor of the adoption and approval of this Agreement and
the approval of the Merger pursuant to the Joint Proxy Statement/Prospectus and
shall take all other

                                      A-26
<PAGE>
commercially reasonable action necessary or advisable to secure the vote or
consent of shareholders required by Delaware Law or applicable AMEX requirements
to obtain such approval. Parent shall use commercially reasonable efforts to
solicit from its stockholders proxies in favor of the Share Issuance pursuant to
the Joint Proxy Statement/Prospectus and shall take all other commercially
reasonable action necessary or advisable to secure the vote or consent of
stockholders required by applicable AMEX requirements to obtain such approval.
Company shall call and hold the Company Shareholders' Meeting for the purpose of
voting upon the adoption and approval of this Agreement and the approval of the
Merger whether or not Company's Board of Directors at any time subsequent to the
date hereof withdraws its recommendation of this Agreement and the Merger.

      5.3   CONFIDENTIALITY; ACCESS TO INFORMATION.

      (a) The parties acknowledge that Company and Parent have previously
executed a Confidentiality Agreement, dated as of September 1, 2000 (the
"CONFIDENTIALITY AGREEMENT"), which Confidentiality Agreement will continue in
full force and effect in accordance with its terms.

      (b) Each of Company and Parent will afford the other and the other's
accountants, counsel and other representatives reasonable access to its
properties, books, records, shareholder lists and personnel during the period
prior to the Effective Time to obtain all information concerning its business as
such other party may reasonably request. No information or knowledge obtained in
any investigation pursuant to this Section 5.3 will affect or be deemed to
modify any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Merger.

      5.4   NO SOLICITATION.

      (i) From and after the date of this Agreement until the Effective Time or
termination of this Agreement pursuant to Article VII, Company and its
subsidiaries will not, nor will they authorize or permit any of their respective
officers, directors, affiliates or employees or any investment banker, attorney
or other advisor or representative retained by any of them to, directly or
indirectly, (A) solicit, initiate, encourage or induce the making, submission or
announcement of any Acquisition Proposal (as defined below), (B) participate in
any discussions or negotiations regarding, or furnish to any person any
information with respect to, or knowingly take any other action to facilitate
any inquiries or the making of any proposal that constitutes or may reasonably
be expected to lead to, any Acquisition Proposal, (C) engage in discussions with
any person with respect to any Acquisition Proposal, (D) approve, endorse or
recommend any Acquisition Proposal or (E) enter into any letter of intent or
similar document or any contract, agreement or commitment contemplating or
otherwise relating to any Acquisition Transaction (as defined below); provided,
however, that nothing contained in this Section 5.4(a) shall prohibit the Board
of Directors of Company from (m) complying with Rule 14d-9 or 14e-2(a)
promulgated under the Exchange Act with regard to a tender or exchange offer not
made after a violation of this Section 5.4(a) or (n) at any time prior to the
date of the Company Shareholders' Meeting, in response to a bona fide written
Acquisition Proposal received without the prior occurrence of a breach of this
Section 5.4(a) that Company's Board of Directors reasonably concludes
constitutes a Superior Proposal (as defined below), engaging in discussions or
participating in negotiations with and furnishing information to the party
making such Acquisition Proposal to the extent (1) the Board of Directors of
Company determines in good faith after consultation with its outside legal
counsel that its fiduciary obligations under applicable law require it to do so,
(2) (x) at least two business days prior to furnishing any such nonpublic
information to, or entering into discussions or negotiations with, such party,
Company gives Parent written notice of Company's intention to furnish nonpublic
information to, or enter into discussions or negotiations with, such party and
(y) Company receives from such party an executed confidentiality agreement
containing customary limitations on the use and disclosure of all nonpublic
written and oral information furnished to such party by or on behalf of Company,
and (3) contemporaneously with furnishing any such nonpublic information to such
party, Company furnishes such nonpublic information to Parent (to the extent
such nonpublic information has not been previously furnished by Company to
Parent). Company and its subsidiaries will immediately cease any and all
existing activities, discussions, or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
this Section 5.4(a) by any officer, director, affiliate or employee of Company
or any of its subsidiaries or any investment banker, attorney or other advisor
or representative of Company or any of its subsidiaries shall be deemed to be a
breach of this Section 5.4(a) by Company. (ii) For purposes of this Agreement,
(A) "ACQUISITION PROPOSAL" shall mean any offer, inquiry or proposal (other than
an offer, inquiry or proposal by Parent) relating to any

                                      A-27
<PAGE>
Acquisition Transaction. For the purposes of this Agreement; (B) "ACQUISITION
TRANSACTION" shall mean any transaction or series of related transactions other
than the transactions contemplated by this Agreement involving: (X) any
acquisition or purchase from Company by any person or "group" (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder) of
more than a 15% interest in the total outstanding voting securities of Company
or any of its subsidiaries or any tender offer or exchange offer that if
consummated would result in any person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) beneficially
owning 15% or more of the total outstanding voting securities of Company or any
of its subsidiaries or any merger, consolidation, business combination or
similar transaction involving Company pursuant to which the shareholders of
Company immediately preceding such transaction hold less than 85% of the equity
interests in the surviving or resulting entity of such transaction; (Y) any
sale, lease (other than in the ordinary course of business), exchange, transfer,
license (other than in the ordinary course of business), acquisition or
disposition of more than 15% of the assets of Company; or (Z) any liquidation,
dissolution, recapitalization or other significant corporate reorganization of
the Company; and (C) "SUPERIOR PROPOSAL" shall mean an Acquisition Proposal with
respect to which (x) if any cash consideration is involved, shall not be subject
to any financing contingency or with respect to which Company's Board of
Directors shall have reasonably determined (based upon the advice of Company's
financial advisors) that the acquiring party is capable of consummating the
proposed Acquisition Transaction on the terms proposed, and (y) Company's Board
of Directors shall have reasonably determined that the proposed Acquisition
Transaction provides greater value to the shareholders of Company than the
Merger (based upon a written opinion of Company's financial advisor). (iii) In
addition to the obligations of Company set forth in paragraph (i) of this
Section 5.4(a), Company as promptly as practicable, and in any event within 24
hours, shall advise Parent orally and in writing of any request for information
which Company reasonably believes would lead to an Acquisition Proposal or of
any Acquisition Proposal, or any inquiry with respect to or which Company
reasonably believes would lead to any Acquisition Proposal, the material terms
and conditions of such request, Acquisition Proposal or inquiry, and the
identity of the person or group making any such request, Acquisition Proposal or
inquiry. Company will keep Parent informed in all material respects of the
status and details (including material amendments or proposed amendments) of any
such request, Acquisition Proposal, or inquiry. In addition to the foregoing,
Company shall (A) provide Parent with at least 48 hours prior notice (or such
lesser prior notice as provided to the members of Company's Board of Directors
but in no event less than eight hours) of any meeting of Company's Board of
Directors at which Company's Board of Directors is reasonably expected to
consider an Acquisition Proposal and (B) provide Parent with at least three (3)
business days prior written notice of a meeting of Company's Board of Directors
at which Company's Board of Directors is reasonably expected to recommend a
Superior Proposal to its shareholders and together with such notice a copy of
the definitive documentation relating to such Superior Proposal.

      5.5   PUBLIC DISCLOSURE.

      Parent and Company will consult with each other and agree before issuing
any press release or otherwise making any public statement with respect to the
Merger, this Agreement or an Acquisition Proposal and will not issue any such
press release or make any such public statement prior to such agreement, except
as may be required by law or any listing agreement with a national securities
exchange, in which case reasonable efforts to consult with the other party will
be made prior to any such release or public statement. The parties have agreed
to the text of the joint press release announcing the signing of this Agreement.

      5.6   REASONABLE EFFORTS; NOTIFICATION.

      (a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use commercially reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement, including using commercially reasonable efforts to accomplish the
following: (i) the taking of all reasonable acts necessary to cause the
conditions precedent set forth in Article VI to be satisfied, (ii) the obtaining
of all necessary actions or nonactions, waivers, consents, approvals, orders and
authorizations from Governmental Entities and the making of all necessary
registrations, declarations and filings (including registrations, declarations
and filings with Governmental Entities, if any) and the taking of all reasonable
steps as may be necessary to avoid any suit, claim, action, investigation or
proceeding by any Governmental Entity, (iii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iv) the defending of any
suits, claims, actions, investigations or

                                      A-28
<PAGE>
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (v) the execution or delivery of any
additional instruments necessary to consummate the transactions contemplated by,
and to fully carry out the purposes of, this Agreement. In connection with and
without limiting the foregoing, Company and its Board of Directors shall, if any
state takeover statute or similar statute or regulation is or becomes applicable
to the Merger, this Agreement, the Company Voting Agreements or any of the
transactions contemplated hereby and thereby, use commercially reasonable
efforts to ensure that the Merger, this Agreement, the Company Voting Agreements
and the other transactions contemplated hereby and thereby may be consummated as
promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on the Merger,
this Agreement, the Company Voting Agreements and the transactions contemplated
hereby and thereby. Notwithstanding anything herein to the contrary, nothing in
this Agreement shall be deemed to require Parent or Company or any subsidiary or
affiliate thereof to agree to any divestiture by itself or any of its affiliates
of shares of capital stock or of any business, assets or property, or the
imposition of any material limitation on the ability of any of them to conduct
their business or to own or exercise control of such assets, properties and
stock.

      (b) Company shall give prompt notice to Parent of any representation or
warranty made by it contained in this Agreement becoming untrue or inaccurate,
or any failure of Company to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement, in each case, such that the conditions set forth in Section
6.3(a) or 6.3(b) would not be satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.

      (c) Parent shall give prompt notice to Company of any representation or
warranty made by it or Merger Sub contained in this Agreement becoming untrue or
inaccurate, or any failure of Parent or Merger Sub to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement, in each case, such that the conditions set
forth in Section 6.2(a) or 6.2(b) would not be satisfied; provided, however,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement.

      5.7   THIRD- PARTY CONSENTS.

      As soon as practicable following the date hereof, Parent and Company will
each use commercially reasonable efforts to obtain any consents, waivers and
approvals under any of its or its subsidiaries' respective agreements,
contracts, licenses or leases required to be obtained in connection with the
consummation of the transactions contemplated hereby.

      5.8   STOCK OPTIONS; WARRANTS.

      (a) At the Effective Time, each outstanding option to purchase shares of
Company Common Stock (each, a "COMPANY STOCK OPTION"), whether or not vested,
and each outstanding Company Warrant, whether or not then exercisable, shall by
virtue of the Merger be assumed by Parent. Each Company Stock Option and each
Company Warrant so assumed by Parent under this Agreement will continue to have,
and be subject to, the same terms and conditions of such options or warrants
immediately prior to the Effective Time, except that (i) each Company Stock
Option and each Company Warrant will be exercisable (or will become exercisable
in accordance with its terms) for that number of whole shares of Parent Common
Stock equal to the product of the number of shares of Company Common Stock that
were issuable upon exercise of such Company Stock Option or Company Warrant, as
applicable, immediately prior to the Effective Time multiplied by the Exchange
Ratio, rounded down to the nearest whole number of shares of Parent Common Stock
and (ii) the per share exercise price for the shares of Parent Common Stock
issuable upon exercise of such assumed Company Stock Option or Company Warrant
will be equal to the quotient determined by dividing the exercise price per
share of Company Common Stock at which such Company Stock Option or Company
Warrant, as applicable, was exercisable immediately prior to the Effective Time
by the Exchange Ratio, rounded up to the nearest whole cent.

      (b)   [Reserved].

                                      A-29
<PAGE>
      (c) Parent shall cause employees of Company and its subsidiaries as of the
Effective Time ("AFFECTED EMPLOYEES") to be credited with service with Company
and each of its subsidiaries for purposes of eligibility and vesting under each
employee benefit plan maintained by Parent or its subsidiaries after the
Effective Time to the extent of their service with Company provided, however,
that such service shall not be recognized to the extent that such recognition
would result in duplication of benefits. To the extent permitted by the Parent
Plans and applicable law, Parent will, or will cause Company to (i) waive all
limitations as to preexisting conditions, exclusions and waiting periods with
respect to participation and coverage requirements applicable to the Affected
Employees under any welfare benefit plans that such employees may be eligible to
participate in after the Effective Time, other than limitations or waiting
periods that are already in effect with respect to such employees and that have
not been satisfied as of the Effective Time under any welfare plan maintained
for the Affected Employees immediately prior to the Effective Time, and (ii)
provide each Affected Employee with credit for any co-payments and deductibles
paid prior to the Effective Time in satisfying any applicable deductible or
out-of-pocket requirements under any welfare plans that such employees are
eligible to participate in after the Effective Time.

      5.9   [Reserved].

      5.10  AMEX LISTING.

      Parent agrees to file with the AMEX a Notification Form for Listing of
Additional Shares with regards to the shares of Parent Common Stock issuable,
and those required to be reserved for issuance, in connection with the Merger.

      5.11  AFFILIATES.

      Set forth in Company Schedule 5.11 is a list of those persons who may be
deemed to be, in Company's reasonable judgment, affiliates of Company within the
meaning of Rule 145 promulgated under the Securities Act (each, a "COMPANY
AFFILIATE"). Company will promptly provide Parent with updates to such list with
respect to persons who may deemed, after the date hereof, to be Company
Affiliates. Company has provided to Parent (with respect to current Company
Affiliates), and will use its commercially reasonable efforts to deliver or
cause to be delivered to Parent, as promptly as practicable on or following the
date any person who subsequently becomes a Company Affiliate, from each person
who becomes a Company Affiliate after the date hereof, an executed affiliate
agreement in substantially the form attached hereto as Exhibit C (the "AFFILIATE
AGREEMENT"), each of which will be in full force and effect as of the Effective
Time. Parent will be entitled to place appropriate legends on the certificates
evidencing any Parent Common Stock to be received by a Company Affiliate
pursuant to the terms of the Affiliate Agreement, and to issue appropriate stop
transfer instructions to the transfer agent for the Parent Common Stock,
consistent with the terms of the Affiliate Agreement.

      5.12  REGULATORY FILINGS; REASONABLE EFFORTS.

      If required, as soon as may be reasonably practicable, Company and Parent
each shall file with the United States Federal Trade Commission (the "FTC") and
the Antitrust Division of the United States Department of Justice ("DOJ")
Notification and Report Forms relating to the transactions contemplated herein
as required by the HSR Act, as well as comparable pre-merger notification forms
required by the merger notification or control laws and regulations of any
applicable jurisdiction, as agreed to by the parties. Company and Parent each
shall promptly (a) supply the other with any information which may be required
in order to effectuate such filings and (b) supply any additional information
which reasonably may be required by the FTC, the DOJ or the competition or
merger control authorities of any other jurisdiction and which the parties may
reasonably deem appropriate; provided, however, that neither Parent nor Company
shall be required to agree to any divestiture by Parent or Company or any of
Parent's subsidiaries or affiliates of shares of capital stock or of any
business, assets or property of Parent or its subsidiaries or affiliates or of
Company, its affiliates, or the imposition of any material limitation on the
ability of any of them to conduct their businesses or to own or exercise control
of such assets, properties and stock.

      5.13  BOARD OF DIRECTORS.

      The Board of Directors of Parent will take all actions necessary such that
(a) Michael McClere, Shannon McLeroy, and Raymond Harrell shall be appointed to
Parent's Board of Directors as of the Effective Time and (b)

                                      A-30
<PAGE>
upon such appointment the Board of Directors of Parent will be comprised of
seven members. The other members of Board of Directors are H. Dean Cubley, Jim
Futer, A. L. Clifford, and Glen Goerke. Dr. H. Dean Cubley shall serve as the
Chairman of the Board until a successor is elected.

      5.14  PERSONAL GUARANTIES.

      Parent will use its reasonable best efforts to remove Michael McClere and
Shannon D. McLeroy as personal guarantors made by them with suppliers or other
creditors of Company; provided, however, that such obligation shall not require
Parent to extinguish any such obligations.

      5.15  OFFICERS; EMPLOYMENT AGREEMENTS.

      Michael McClere and Shannon McLeroy shall be appointed as officers of
Parent as of the Effective Time. Parent shall enter into mutually acceptable
employment agreements with Michael McClere and Shannon McLeroy not later than 15
business days after Closing, and Michael McClere and Shannon McLeroy agree to
terminate their prior employment agreements with Company.

                                   ARTICLE VI

                            CONDITIONS TO THE MERGER

      6.1   CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER.

      The respective obligations of each party to this Agreement to effect the
Merger shall be subject to the satisfaction at or prior to the Closing Date of
the following conditions:

      (a) SHAREHOLDER AND STOCKHOLDER APPROVALS. This Agreement shall have been
approved and adopted, and the Merger shall have been duly approved, by the
requisite vote under applicable law, by the shareholders of Company. The Share
Issuance shall have been approved by the requisite vote under applicable AMEX
rules by the stockholders of Parent.

      (b) REGISTRATION STATEMENT EFFECTIVE; JOINT PROXY STATEMENT. The SEC shall
have declared the S-4 effective. No stop order suspending the effectiveness of
the S-4 or any part thereof shall have been issued and no proceeding for that
purpose, and no similar proceeding in respect of the Joint Proxy
Statement/Prospectus, shall have been initiated or threatened in writing by the
SEC.

      (c) NO ORDER; HSR ACT. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is in effect and which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger. All waiting periods, if any,
under the HSR Act relating to the transactions contemplated hereby will have
expired or terminated early and all material foreign antitrust approvals
required to be obtained prior to the Merger in connection with the transactions
contemplated hereby shall have been obtained.

      (d) TAX OPINIONS. Each of Parent and Company shall have received a written
opinion from its tax counsel, in form and substance reasonably satisfactory to
it, to the effect that the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code and such opinions shall not have been
withdrawn. The parties to this Agreement agree to make such reasonable
representations as requested by such counsel for the purpose of rendering such
opinions.

      6.2   ADDITIONAL CONDITIONS TO OBLIGATIONS OF COMPANY.

      The obligation of Company to consummate and effect the Merger shall be
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by
Company:

                                      A-31
<PAGE>
      (a) REPRESENTATIONS AND WARRANTIES. Each representation and warranty of
Parent and Merger Sub contained in this Agreement (i) shall have been true and
correct as of the date of this Agreement and (ii) shall be true and correct on
and as of the Closing Date with the same force and effect as if made on the
Closing Date except, in the case of clauses (i) and (ii), (A) for such failures
to be true and correct that do not in the aggregate constitute a Material
Adverse Effect on Parent and Merger Sub provided, however, that such Material
Adverse Effect qualifier shall be inapplicable with respect to the
representations and warranties contained in Sections 3.2 and 3.19 (which
representations and warranties shall have been true and correct in all material
respects as of the date of this Agreement and shall be true and correct in all
material respects as of the Closing Date), and (B) for those representations and
warranties which address matters only as of a particular date (which
representations shall have been true and correct (subject to the qualifications
set forth in the preceding clause (A)) as of such particular date) (it being
understood that, for purposes of determining the accuracy of such
representations and warranties in connection with clauses (i) and (ii), all
"Material Adverse Effect" qualifications and other qualifications based on the
word "material" or similar phrases contained in such representations and
warranties shall be disregarded). Company shall have received a certificate with
respect to the foregoing signed on behalf of Parent by an authorized officer of
Parent.

      (b) AGREEMENTS AND COVENANTS. Parent and Merger Sub shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior to the
Closing Date, and Company shall have received a certificate to such effect
signed on behalf of Parent by an authorized officer of Parent.

      6.3   ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB.

      The obligations of Parent and Merger Sub to consummate and effect the
Merger shall be subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, any of which may be waived, in writing,
exclusively by Parent:

      (a) REPRESENTATIONS AND WARRANTIES. Each representation and warranty of
Company contained in this Agreement (i) shall have been true and correct as of
the date of this Agreement and (ii) shall be true and correct on and as of the
Closing Date with the same force and effect as if made on and as of the Closing
Date except, in the case of clauses (i) and (ii), (A) for such failures to be
true and correct that do not in the aggregate constitute a Material Adverse
Effect on the Company provided, however, that such Material Adverse Effect
qualifier shall be inapplicable with respect to the representations and
warranties contained in Section 2.2 and 2.20 (which representations and
warranties shall have been true and correct in all material respects as of the
date of this Agreement and shall be true and correct in all material respects as
of the Closing Date) and (B) for those representations and warranties which
address matters only as of a particular date (which representations shall have
been true and correct (subject to the qualifications set forth in the preceding
clause (A)) as of such particular date) (it being understood that, for purposes
of determining the accuracy of such representations and warranties in connection
with clauses (i) and (ii), all "Material Adverse Effect" qualifications and
other qualifications based on the word "material" or similar phrases contained
in such representations and warranties shall be disregarded). Parent shall have
received a certificate with respect to the foregoing signed on behalf of Company
by an authorized officer of Company.

      (b) AGREEMENTS AND COVENANTS. Company shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date, and Parent shall have received a certificate to such effect signed on
behalf of Company by an authorized officer of Company.

      (c) CONSENTS. Company shall have obtained all consents, waivers and
approvals required in connection with the consummation of the transactions
contemplated hereby.

                                      A-32
<PAGE>
                                   ARTICLE VII

                        TERMINATION, AMENDMENT AND WAIVER

      7.1   TERMINATION.

      This Agreement may be terminated at any time prior to the Effective Time,
whether before or after the requisite approval of the shareholders of Company
and the stockholders of Parent:

      (a) by mutual written consent duly authorized by the Boards of Directors
of Parent and Company;

      (b) by either Company or Parent if the Merger shall not have been
consummated by March 31, 2001 for any reason; provided, however, that the right
to terminate this Agreement under this Section 7.1(b) shall not be available to
any party whose action or failure to act has been a principal cause of or
resulted in the failure of the Merger to occur on or before such date and such
action or failure to act constitutes a material breach of this Agreement;

      (c) by either Company or Parent if a Governmental Entity shall have issued
an order, decree or ruling or taken any other action, in any case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Merger, which order, decree, ruling or other action is final and nonappealable;

      (d) by either Company or Parent if (i) required approval of the
shareholders of Company contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting of
Company shareholders duly convened therefore or at any adjournment thereof; or
(ii) the required approval by the stockholders of Parent of the Share Issuance
required under applicable AMEX rules shall not have been obtained by reason of
the failure to obtain the required vote at a meeting of Parent stockholders duly
convened therefore or at any adjournment or postponement thereof;

      (e) by Company, upon a breach of any representation, warranty, covenant or
agreement on the part of Parent set forth in this Agreement, or if any
representation or warranty of Parent shall have become untrue, in either case
such that the conditions set forth in Section 6.2(a) or Section 6.2(b) would not
be satisfied as of the time of such breach or as of the time such representation
or warranty shall have become untrue, provided, that if such inaccuracy in
Parent's representations and warranties or breach by Parent is curable by
Parent, then Company may not terminate this Agreement under this Section 7.1(e)
for thirty (30) days after delivery of written notice from Company to Parent of
such breach, provided Parent continues to exercise best efforts to cure such
breach (it being understood that Company may not terminate this Agreement
pursuant to this paragraph (e) if such breach by Parent is cured during such
thirty (30)-day period);

      (f) by Parent, upon a breach of any representation, warranty, covenant or
agreement on the part of Company set forth in this Agreement, or if any
representation or warranty of Company shall have become untrue, in either case
such that the conditions set forth in Section 6.3(a), (b), or (c) would not be
satisfied as of the time of such breach or as of the time such representation or
warranty shall have become untrue, provided, that if such inaccuracy in
Company's representations and warranties or breach by Company is curable by
Company, then Parent may not terminate this Agreement under this Section 7.1(f)
for thirty (30) days after delivery of written notice from Parent to Company of
such breach, provided Company continues to exercise best efforts to cure such
breach (it being understood that Parent may not terminate this Agreement
pursuant to this paragraph (f) if such breach by Company is cured during such
thirty (30)-day period);

      (g) by Parent, if (i) the Board of Directors of Company withdraws,
modifies or changes its recommendation of this Agreement or the Merger in a
manner adverse to Parent or its stockholders, (ii) the Board of Directors of
Company shall have recommended to the shareholders of Company an Acquisition
Proposal, (iii) the Company fails to comply with Section 5.4, (iv) an
Acquisition Proposal shall have been announced or otherwise become publicly
known and the Board of Directors of Company shall have (A) failed to recommend
against acceptance of such by its shareholders (including by taking no position,
or indicating its inability to take a position, with respect to the acceptance
by its shareholders of an Acquisition Proposal involving a tender offer or
exchange offer) or (B) failed to reconfirm its approval and recommendation of
this Agreement and the transactions contemplated hereby within five business
days thereafter or (v) the Board of Directors of Company resolves to take any of
the actions described above;

      (h) by Company, if the Board of Directors of Parent withdraws, modifies or
changes its recommendation of the Share Issuance in a manner adverse to Company
and its shareholders; or

                                      A-33
<PAGE>
      (i) by Company or Parent, if the respective Board Of Directors determines
in its due diligence review that a condition exists that would have a Material
Adverse Effect on the business or financial condition of Company or Parent, as
the case may be; provided, however, that notice is given pursuant to Section 7.2
on or before October 2, 2000.

      7.2   NOTICE OF TERMINATION; EFFECT OF TERMINATION.

      Any termination of this Agreement under Section 7.1 above will be
effective immediately upon the delivery of written notice of the terminating
party to the other parties hereto (or such later time as may be required by
Section 7.1). In the event of the termination of this Agreement as provided in
Section 7.1, this Agreement shall be of no further force or effect, except (i)
as set forth in this Section 7.2, Section 5.3(a), Section 7.3 and Article 8,
each of which shall survive the termination of this Agreement, and (ii) nothing
herein shall relieve any party from liability for fraud in connection with, or
any willful breach of, this Agreement.

      7.3   FEES AND EXPENSES.

      (a) GENERAL. Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Parent and Company
shall share equally all fees and expenses, other than attorneys' and accountants
fees and expenses, incurred (i) in relation to the printing and filing of the
Joint Proxy Statement/Prospectus (including any preliminary materials related
thereto) and the S-4 (including financial statements and exhibits) and any
amendments or supplements thereto or (ii) for the premerger notification and
report forms under the HSR Act.

      (b)   TERMINATION FEE PAYABLE BY COMPANY.

      (i) In the event that (A) Parent shall terminate this Agreement pursuant
to Section 7.1(g), or (B) this Agreement shall be terminated (x) pursuant to
Section 7.1(d)(i) and within 12 months after any such termination pursuant to
Section 7.1(d)(i), Company shall enter into a definitive agreement with respect
to any Company Acquisition, then, in the case of clause (A), promptly after such
termination, or in the case of clause (B), concurrently with the consummation of
such Company Acquisition, Company shall pay to Parent $1,000,000 in cash (the
"TERMINATION FEE"); provided, however, that no fee shall be payable pursuant to
this Section 7.3(b)(i) if at the time of such vote of Company's shareholders,
the representations of Parent or Merger Sub contained in this Agreement shall
have become untrue or inaccurate, or Parent or Merger Sub shall have failed to
comply with in any material respect any covenant or agreement to be complied
with by it under this Agreement, in each case such that the conditions set forth
in Section 6.2(a) or 6.2(b) would not be satisfied (excluding, for purposes of
this analysis, clause (B)(z) of Section 8.3(b)(ii)).

      (ii) In the event that this Agreement shall be terminated pursuant to
Section 7.1(d)(i), then promptly after such termination Company shall pay to
Parent $750,000 in cash; provided, however, that no fee shall be payable
pursuant to this Section 7.3(b)(ii) if (A) prior to the payment of such fee,
Company shall have paid or become obligated to pay the Termination Fee pursuant
to Section 7.3(b)(i) or (B) at the time of such vote of Company's shareholders,
the representations of Parent or Merger Sub contained in this Agreement shall
have become untrue or inaccurate, or Parent or Merger Sub shall have failed to
comply with in any material respect any covenant or agreement to be complied
with by it under this Agreement, in each case such that the conditions set forth
in Section 6.2(a) or 6.2(b) would not be satisfied (excluding, for purposes of
this analysis, clause (B)(z) of Section 8.3(b)(ii)). Any fee payable pursuant to
this Section 7.3(b)(ii) will be credited against any Termination Fee that
Company becomes obligated to pay pursuant to Section 7.3(b)(i).

      (iii) In the event that Parent shall terminate this Agreement pursuant to
Section 7.1(f), then Company shall promptly reimburse Parent for Parent's
reasonable costs and expenses in connection with this Agreement and the
transactions contemplated hereby up to $750,000.

      (iv) Company acknowledges that the agreements contained in this Section
7.3(b) are an integral part of the transactions contemplated by this Agreement,
and that, without these agreements, Parent would not enter into this Agreement;
accordingly, if Company fails to pay in a timely manner the amounts due pursuant
to this Section 7.3(b) and, in order to obtain such payment, Parent makes a
claim that results in a judgment against Company for the amounts set forth in
this Section

                                      A-34
<PAGE>
7.3(b), Company shall pay to Parent its costs and expenses (including attorneys'
fees and expenses) in connection with such suit, together with interest on the
amounts set forth in this Section 7.3(b) at the prime rate of Citibank, N.A. in
effect on the date such payment was required to be made. Payment of the fees
described in this Section 7.3(b) shall not be in lieu of damages incurred in the
event of willful breach of this Agreement. For the purposes of this Agreement,
"COMPANY ACQUISITION" shall mean any of the following transactions (other than
the transactions contemplated by this Agreement): (A) a merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving Company pursuant to which the shareholders of Company
immediately preceding such transaction hold less than 60% of the aggregate
equity interests in the surviving or resulting entity of such transaction, (B) a
sale or other disposition by Company of assets representing in excess of 40% of
the aggregate fair market value of Company's business immediately prior to such
sale or (C) the acquisition by any person or group (including by way of a tender
offer or an exchange offer or issuance by Company), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing in excess of 40% of the voting power of the then outstanding shares
of capital stock of Company.

      (c) TERMINATION FEE PAYABLE BY PARENT.

      (i) In the event that (A) Company shall terminate this Agreement pursuant
to Section 7.1(h), or (B) this Agreement shall be terminated (x) pursuant to
Section 7.1(d)(ii) and within 12 months after any such termination pursuant to
Section 7.1(d)(ii), Parent shall enter into a definitive agreement to acquire a
corporation providing the same services as Company on the same terms as set
forth in this Agreement, then concurrently with the consummation of such Parent
Acquisition, Parent shall pay to Company $1,000,000 in cash (the "PARENT
TERMINATION FEE"); provided, however, that no fee shall be payable pursuant to
this Section 7.3(c)(i) if at the time of the vote of Parent's shareholders, the
representations of Company contained in this Agreement shall have become untrue
or inaccurate, or Company shall have failed to comply with in any material
respect any covenant or agreement to be complied with by it under this
Agreement, in each case such that the conditions set forth in Section 6.3(a),
6.3(b), or 6.3(c) would not be satisfied (excluding clause (B)(z) of Section
8.3(b)(ii) for the purpose of this analysis)).

      (ii) In the event (A) that this Agreement shall be terminated pursuant to
Section 7.1(d)(ii), or (B) that Company shall terminate this Agreement pursuant
to Section 7.1(e), then promptly after such termination Parent shall pay to
Company $750,000 in cash; provided, however, that no fee shall be payable
pursuant to this Section 7.3(c)(ii) if at the time of the vote of Parent's
shareholders, the representations of Company contained in this Agreement shall
have become untrue or inaccurate, or Company shall have failed to comply with in
any material respect any covenant or agreement to be complied with by it under
this Agreement, in each case such that the conditions set forth in Section
6.3(a), 6.3(b), or 6.3(c) would not be satisfied (excluding clause (B)(z) of
Section 8.3(b)(ii) for the purpose of this analysis)). Any fee payable pursuant
to this Section 7.3(c)(ii) will be credited against any Parent Termination Fee
that Company becomes obligated to pay pursuant to Section 7.3(c)(i).

      (iii) Parent acknowledges that the agreements contained in this Section
7.3(c) are an integral part of the transactions contemplated by this Agreement,
and that, without these agreements, Company would not enter into this Agreement;
accordingly, if Parent fails to pay in a timely manner the amounts due pursuant
to this Section 7.3(c) and, in order to obtain such payment, Company makes a
claim that results in a judgment against Parent for the amounts set forth in
this Section 7.3(c), Parent shall pay to Company its costs and expenses
(including attorneys' fees and expenses) in connection with such suit, together
with interest on the amounts set forth in this Section 7.3(c) at the prime rate
of Citibank, N.A. in effect on the date such payment was required to be made.
Payment of the fees described in this Section 7.3(c) shall not be in lieu of
damages incurred in the event of willful breach of this Agreement.

      7.4   AMENDMENT.

      Subject to applicable law, this Agreement may be amended by the parties
hereto at any time by execution of an instrument in writing signed on behalf of
each of Parent, Merger Sub and Company.

                                      A-35
<PAGE>
      7.5   EXTENSION; WAIVER.

      At any time prior to the Effective Time, any party hereto may, to the
extent legally allowed, (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. Delay in exercising any right under this Agreement shall
not constitute a waiver of such right.

                                  ARTICLE VIII

                               GENERAL PROVISIONS

      8.1   SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

      The representations and warranties of Company, Parent and Merger Sub
contained in this Agreement shall terminate at the Effective Time, and only the
covenants that by their terms survive the Effective Time shall survive the
Effective Time.

      8.2   NOTICES.

      All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial delivery service,
or sent via telecopy (receipt confirmed) to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy numbers for
a party as shall be specified by like notice):

           (a)    if to Parent or Merger Sub, to:

                  Eagle Wireless International , Inc.
                  101 Courageous Drive
                  League City, Texas 77573
                  Attention: President
                  Telecopy No.: (281) 334-5302

                  with copies to:

                  Brewer & Pritchard, P.C.
                  Three Riverway, 18th Floor
                  Houston, Texas 77056
                  Attention: Thomas C. Pritchard / Cavas S. Pavri
                  Telecopy No.: (713) 659-2430

           (b)    if to Company, to:

                  ClearWorks.net, Inc.
                  2450 Fondren, Suite 200
                  Houston, Texas 77063
                  Attention: General Counsel
                  Telecopy No.: (713) 334-6565

      8.3   INTERPRETATION; DEFINITIONS.

      (a) When a reference is made in this Agreement to Exhibits, such reference
shall be to an Exhibit to this Agreement unless otherwise indicated. When a
reference is made in this Agreement to Sections, such reference

                                      A-36
<PAGE>
shall be to a Section of this Agreement. Unless otherwise indicated the words
"include," "includes" and "including" when used herein shall be deemed in each
case to be followed by the words "without limitation." The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. When
reference is made herein to "the business of" an entity, such reference shall be
deemed to include the business of all direct and indirect subsidiaries of such
entity. Reference to the subsidiaries of an entity shall be deemed to include
all direct and indirect subsidiaries of such entity.

      (b)   For purposes of this Agreement:

      (i) the term "KNOWLEDGE" means with respect to a party hereto, with
respect to any matter in question, the actual knowledge of the executive
officers of such party;

      (ii) the term "MATERIAL ADVERSE EFFECT" when used in connection with an
entity means any change, event, violation, inaccuracy, circumstance or effect
that is, or is reasonably likely to be, materially adverse to the business,
assets, liabilities, financial condition or results of operations of such entity
and its subsidiaries taken as a whole; provided, however, that in no event shall
(A) a decrease in such entity's stock price or the failure to meet or exceed
Wall Street research analysts' or such entity's internal earnings or other
estimates or projections in and of itself constitute a Material Adverse Effect
or (B) any change, event, violation, inaccuracy, circumstance or effect that
results from (x) changes affecting the industry in which such entity operates
generally (which changes do not disproportionately affect such entity), (y)
changes affecting the United States economy generally or (z) the public
announcement or pendency of the Merger, constitute a Material Adverse Effect;

      (iii) the term "PERSON" shall mean any individual, corporation (including
any non-profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company (including any
limited liability company or joint stock company), firm or other enterprise,
association, organization, entity or Governmental Entity.

      8.4   COUNTERPARTS.

      This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other party, it being understood that all parties need not sign the same
counterpart.

      8.5   ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES.

      This Agreement and the documents and instruments and other agreements
among the parties hereto as contemplated by or referred to herein, including the
Company Schedules and the Parent Schedules (a) constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, it being understood that the
Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement; and (b) are not
intended to confer upon any other person any rights or remedies hereunder.

      8.6   SEVERABILITY.

      In the event that any provision of this Agreement, or the application
thereof, becomes or is declared by a court of competent jurisdiction to be
illegal, void or unenforceable, the remainder of this Agreement will continue in
full force and effect and the application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business, and other purposes of
such void or unenforceable provision.

      8.7   OTHER REMEDIES; SPECIFIC PERFORMANCE.

      Except as otherwise provided herein, any and all remedies herein expressly
conferred upon a party will be deemed cumulative with and not exclusive of any
other remedy conferred hereby, or by law or equity upon such

                                      A-37
<PAGE>
party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to seek an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.

      8.8   GOVERNING LAW.

      Except to the extent mandatorily governed by Delaware Law, this Agreement
shall be governed by and construed in accordance with the laws of the State of
Texas, regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof.

      8.9   ARBITRATION.

      If a dispute should arise, all claims, disputes, controversies,
differences or other matters in question arising out of the Agreement to each
other in the matters stated in this Agreement (the claims) shall be settled
finally, completely and conclusively by arbitration in Houston, Harris County,
Texas, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "Rules"), by one or more arbitrators chosen in
accordance with the Rules. Arbitration shall be initiated by written demand by
the party seeking arbitration. This Agreement to arbitrate shall be specifically
enforceable only in the District Court of Harris County, Texas. A decision of
the arbitrator or arbitrators shall be final, conclusive and binding on Parent
and the Company, and judgment may be entered thereon in the District Court of
Harris County, Texas, to enforce such decision and the benefits thereof. Upon
appointment, the arbitrators shall then proceed to decide the arbitration
subjects in accordance with the Rules. Any arbitration held in accordance with
this paragraph shall be private and confidential and no person shall be entitled
to attend the hearings except the arbitrator(s), the stenographer, if one is
requested, Parent, Company, and any designated representatives of the parties.
The matters submitted for arbitration, the hearings and proceedings thereunder
and the arbitration award shall be kept and maintained in strictest confidence
by the parties and shall not be discussed, disclosed or communicated to any
persons. On request of either party, the record of the proceeding shall be
sealed and may not be disclosed except insofar, and only insofar, as may be
necessary to enforce the award of the arbitrators and any judgment enforcing
such award. If counsel is required to seek the enforcement of this agreement or
this particular section, counsel shall be entitled to recover its (his)
reasonable and necessary attorneys' fees and costs from the opposing party.

      8.10  RULES OF CONSTRUCTION.

      The parties hereto agree that they have been represented by counsel during
the negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.

      8.11  ASSIGNMENT.

      No party may assign either this Agreement or any of its rights, interests,
or obligations hereunder without the prior written approval of the other
parties. Subject to the preceding sentence, this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

                                      A-38
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.

EAGLE WIRELESS INTERNATIONAL, INC.

SIGNATURE:________________________

TITLE:____________________________

CLEARWORKS.NET, INC.

SIGNATURE:________________________

TITLE:____________________________

                                      A-39EXHIBIT 10.1

==============================================================================

                           SECOND AMENDED AND RESTATED

                                CREDIT AGREEMENT

                          Dated as of November 1, 2000

                                      among

                                METALS USA, INC.

                       THE INSTITUTIONS FROM TIME TO TIME

                            PARTIES HERETO AS LENDERS

                                       and

                                  BANK ONE, NA

                                    as Agent

 ==============================================================================

                             ANDREWS & KURTH L.L.P.

                             600 Travis, Suite 4200
                              Houston, Texas 77002

 ==============================================================================
<PAGE>
                                TABLE OF CONTENTS

SECTION                                                                   PAGE

ARTICLE 1 DEFINITIONS........................................................1

  1.1   CERTAIN DEFINED TERMS................................................1
  1.2   REFERENCES..........................................................23
  1.3   AMENDMENT AND RESTATEMENT OF AMENDED AND RESTATED CREDIT AGREEMENT..23

ARTICLE 2 THE LOAN FACILITIES...............................................23

  2.1   LOANS...............................................................23
  2.2   RATE OPTIONS FOR ALL ADVANCES.......................................25
  2.3   OPTIONAL PAYMENTS; MANDATORY PREPAYMENTS............................25
  2.4   REDUCTION OF COMMITMENTS............................................26
  2.5   METHOD OF BORROWING.................................................26
  2.6   METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR ADVANCES.........26
  2.7   MINIMUM AMOUNT OF EACH ADVANCE......................................27
  2.8   METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR CONVERSION AND
        CONTINUATION OF ADVANCES............................................27
  2.9   DEFAULT RATE........................................................28
  2.10  METHOD OF PAYMENT...................................................28
  2.11  REVOLVING NOTES, TELEPHONIC NOTICES.................................28
  2.12  PROMISE TO PAY; INTEREST AND COMMITMENT FEES; INTEREST PAYMENT DATES;
        INTEREST AND FEE BASIS; TAXES; LOAN AND CONTROL ACCOUNTS............28
  2.13  NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND AGGREGATE
        COMMITMENT REDUCTIONS...............................................33
  2.14  LENDING INSTALLATIONS...............................................34
  2.15  NON-RECEIPT OF FUNDS BY THE AGENT...................................34
  2.16  TERMINATION DATE....................................................34
  2.17  REPLACEMENT OF CERTAIN LENDERS......................................34

ARTICLE 3 THE LETTER OF CREDIT FACILITY.....................................35

  3.1   OBLIGATION TO ISSUE.................................................35
  3.2   TYPES AND AMOUNTS...................................................35
  3.3   CONDITIONS..........................................................36
  3.4   PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT.........................36
  3.5   LETTER OF CREDIT PARTICIPATION......................................37
  3.6   REIMBURSEMENT OBLIGATION............................................37
  3.7   LETTER OF CREDIT FEES...............................................38
  3.8   ISSUING BANK REPORTING REQUIREMENTS.................................38
  3.9   INDEMNIFICATION; EXONERATION........................................38
  3.10  CASH COLLATERAL.....................................................39

ARTICLE 4 CHANGE IN CIRCUMSTANCES...........................................40

  4.1   YIELD PROTECTION....................................................40
  4.2   CHANGES IN CAPITAL ADEQUACY REGULATIONS.............................41
  4.3   AVAILABILITY OF TYPES OF ADVANCES...................................41
  4.4   FUNDING INDEMNIFICATION.............................................41
  4.5   LENDER STATEMENTS; SURVIVAL OF INDEMNITY............................42

ARTICLE 5 CONDITIONS PRECEDENT..............................................42

  5.1   ADVANCES AND LETTERS OF CREDIT......................................42
  5.2   EACH ADVANCE AND LETTER OF CREDIT...................................43

                                       i
<PAGE>
ARTICLE 6 REPRESENTATIONS AND WARRANTIES....................................44

  6.1   ORGANIZATION; CORPORATE POWERS......................................44
  6.2   AUTHORITY...........................................................44
  6.3   NO CONFLICT; GOVERNMENTAL CONSENTS..................................44
  6.4   FINANCIAL STATEMENTS................................................45
  6.5   NO MATERIAL ADVERSE CHANGE..........................................45
  6.6   TAXES...............................................................45
  6.7   LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS.......................46
  6.8   SUBSIDIARIES........................................................46
  6.9   ERISA...............................................................46
  6.10  ACCURACY OF INFORMATION.............................................47
  6.11  SECURITIES ACTIVITIES...............................................48
  6.12  MATERIAL AGREEMENTS.................................................48
  6.13  COMPLIANCE WITH LAWS................................................48
  6.14  ASSETS AND PROPERTIES...............................................48
  6.15  STATUTORY INDEBTEDNESS RESTRICTIONS.................................48
  6.16  INSURANCE...........................................................48
  6.17  LABOR MATTERS.......................................................48
  6.18  ENVIRONMENTAL MATTERS...............................................49
  6.19  BENEFITS............................................................49
  6.20  SENIOR DEBT STATUS..................................................49

ARTICLE 7 COVENANTS.........................................................49

  7.1   REPORTING...........................................................50
  7.2   AFFIRMATIVE COVENANTS...............................................54
  7.3   NEGATIVE COVENANTS..................................................57
  7.4   FINANCIAL COVENANTS.................................................68

ARTICLE 8 DEFAULTS..........................................................70

  8.1   DEFAULTS............................................................70

ARTICLE 9 ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES73

  9.1   TERMINATION OF COMMITMENTS; ACCELERATION............................73
  9.2   DEFAULTING LENDER...................................................73
  9.3   AMENDMENTS..........................................................74
  9.4   PRESERVATION OF RIGHTS..............................................75

ARTICLE 10 GENERAL PROVISIONS...............................................76

  10.1  SURVIVAL OF REPRESENTATIONS.........................................76
  10.2  GOVERNMENTAL REGULATION.............................................76
  10.3  PERFORMANCE OF OBLIGATIONS..........................................76
  10.4  HEADINGS............................................................77
  10.5  ENTIRE AGREEMENT....................................................77
  10.6  SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT.....................77
  10.7  EXPENSES; INDEMNIFICATION...........................................77
  10.8  NUMBERS OF DOCUMENTS................................................79
  10.9  ACCOUNTING..........................................................79
  10.10 SEVERABILITY OF PROVISIONS..........................................79
  10.11 NONLIABILITY OF LENDERS.............................................79
  10.12 GOVERNING LAW.......................................................79
  10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.............79
  10.14 NO STRICT CONSTRUCTION..............................................81
  10.15 SUBORDINATION OF INTERCOMPANY INDEBTEDNESS..........................81
  10.16 USURY NOT INTENDED..................................................82
  10.17 BUSINESS LOANS......................................................83

                                       ii
<PAGE>
ARTICLE 11 THE AGENT........................................................83

  11.1  APPOINTMENT; NATURE OF RELATIONSHIP.................................83
  11.2  POWERS..............................................................83
  11.3  GENERAL IMMUNITY....................................................84
  11.4  NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, COLLATERAL, RECITALS,
        ETC.................................................................84
  11.5  ACTION ON INSTRUCTIONS OF LENDERS...................................84
  11.6  EMPLOYMENT OF AGENTS AND COUNSEL....................................84
  11.7  RELIANCE ON DOCUMENTS; COUNSEL......................................85
  11.8  THE AGENT'S REIMBURSEMENT AND INDEMNIFICATION.......................85
  11.9  RIGHTS AS A LENDER..................................................85
  11.10 LENDER CREDIT DECISION..............................................85
  11.11 SUCCESSOR AGENT.....................................................85
  11.12 COLLATERAL DOCUMENTS................................................86

ARTICLE 12 SETOFF; RATABLE PAYMENTS.........................................87

  12.1  SETOFF..............................................................87
  12.2  RATABLE PAYMENTS....................................................87
  12.3  APPLICATION OF PAYMENTS.............................................87
  12.4  RELATIONS AMONG LENDERS.............................................88

ARTICLE 13 BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS................89

  13.1  SUCCESSORS AND ASSIGNS..............................................89
  13.2  PARTICIPATIONS......................................................89
  13.3  ASSIGNMENTS.........................................................90
  13.4  CONFIDENTIALITY.....................................................91
  13.5  DISSEMINATION OF INFORMATION........................................91

ARTICLE 14 NOTICES..........................................................92

  14.1  GIVING NOTICE.......................................................92
  14.2  CHANGE OF ADDRESS...................................................92

ARTICLE 15 COUNTERPARTS.....................................................92

ARTICLE 16 LIMITED WAIVER OF DEFAULTS.......................................92

                                      iii
<PAGE>
      EXHIBITS AND SCHEDULES

                                    EXHIBITS

EXHIBIT A     --  Form of Assignment Agreement
                  (Definitions, Sections 2.17 and 13.3)

EXHIBIT B     --  Commitments
                  (Definitions)

EXHIBIT C     --  Form of Revolving Note
                  (Definitions)

EXHIBIT D     --  Form of Swing Line Note
                  (Definitions)

EXHIBIT E     --  Form of Borrowing Notice (Section 2.6)

EXHIBIT F     --  Form of Request for Letter of Credit (Section 3.3)

EXHIBIT G     --  Form of Borrower's Counsel's Opinion
                  (Section 5.1)

EXHIBIT H     --  Form of Officer's Certificate
                  (Sections 5.2 and 7.1(A)(iii))

EXHIBIT I     --  Form of Compliance Certificate
                  (Sections 5.2 and 7.1(A)(iii))

EXHIBIT J     --  Form of Guaranty Supplement
                  (Section 7.3(G)(ii))

EXHIBIT K     --  Commitment and Acceptance
                  (Section 2.4(b))

EXHIBIT L     --  Form of Borrowing Base Certificate
                  (Section 7.1(A)(v))

                                       iv
<PAGE>
                                    SCHEDULES

Schedule 1.1.3  --    Permitted Existing Indebtedness (Definitions)

Schedule 1.1.4  --    Permitted Existing Investments (Definitions)

Schedule 1.1.5  --    Permitted Existing Liens (Definitions)

Schedule 6.8    --    Subsidiaries (Section 6.8)

Schedule 7.3    --    Subordination Terms (Section 7.3(A))

                                       v
<PAGE>
                           SECOND AMENDED AND RESTATED
                                CREDIT AGREEMENT

      This Second Amended and Restated Credit Agreement dated as of November 1,
2000 is entered into among Metals USA, Inc., a Delaware corporation, the
institutions from time to time parties hereto as Lenders, whether by execution
of this Agreement or an Assignment Agreement pursuant to SECTION 13.3, and Bank
One, NA, having an office in Chicago, Illinois, in its capacity as contractual
representative for itself and the other Lenders to amend and restate the
"Amended and Restated Credit Agreement" (as defined below) which is hereby
amended and restated in its entirety. The parties hereto agree as follows:

                                   ARTICLE 1

                                   DEFINITIONS
1.1 CERTAIN DEFINED TERMS. In addition to the terms defined above, the following
terms used in this Agreement shall have the following meanings, applicable both
to the singular and the plural forms of the terms defined.

      As used in this Agreement:

      "ACCOUNTS" all accounts, contract rights, chattel paper, instruments and
documents, whether now owned or hereafter created or acquired by Borrower or any
of its Subsidiaries or, to the extent of such interest, in which Borrower or any
of its Subsidiaries now has or hereafter acquires any interest.

      "ACCOUNTS RECEIVABLE" shall mean trade accounts receivable of Borrower and
its Subsidiaries as determined in accordance with Agreement Accounting
Principles.

      "ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the Original Closing Date, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage of voting power) of the
outstanding equity interests of another Person.

      "ADVANCE" means a borrowing hereunder consisting of the aggregate amount
of the several Revolving Loans made by the Lenders to the Borrower of the same
Type and, in the case of Eurodollar Rate Advances, for the same Interest Period.

      "AFFECTED LENDER" is defined in SECTION 2.17 hereof.

      "AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3

<PAGE>
under the Securities Exchange Act of 1934) of greater than ten percent (10%) or
more of any class of voting securities (or other voting interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of Capital Stock, by contract or otherwise.

      "AGENT" means Bank One in its capacity as contractual representative for
itself and the Lenders pursuant to ARTICLE XI hereof and any successor Agent
appointed pursuant to Article XI hereof.

      "AGGREGATE COMMITMENT" means the aggregate of the Commitments of all the
Lenders, as amended from time to time pursuant to the terms hereof. The
Aggregate Commitment shall be (i) Three Hundred Million and 00/100 Dollars
($300,000,000.00) from the Effective Date to June 30, 2001; (ii) $275,000,000
from June 30, 2001 to December 31, 2001; and (iii) $250,000,000 thereafter to
the Termination Date.

      "AGREEMENT" means this Second Amended and Restated Credit Agreement, as it
may be amended, restated or otherwise modified and in effect from time to time.

      "AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles in effect from time to time, applied in a manner consistent with that
used in preparing the financial statements referred to in SECTION 6.4 hereof,
PROVIDED, HOWEVER, that with respect to the calculation of financial ratios and
other financial tests required by this Agreement, "Agreement Accounting
Principles" means generally accepted accounting principles as in effect as of
the Effective Date, applied in a manner consistent with that used in preparing
the financial statements referred to in SECTION 6.4 hereof; PROVIDED, FURTHER,
HOWEVER, all PRO FORMA financial statements reflecting Acquisitions shall be
prepared in accordance with the requirements established by the Commission for
acquisition accounting for reporting acquisitions by public companies (whether
or not such Acquisitions are required to be publicly reported).

      "ALTERNATE BASE RATE" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Corporate Base Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b)
one-half of one percent (0.5%) per annum.

      "AMENDED AND RESTATED CREDIT AGREEMENT" means the Amended and Restated
Credit Agreement dated February 11, 1998 among the Borrower, the financial
institutions parties thereto and the Agent, as amended from time to time.

      "APPLICABLE COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under SECTION 2.12(C)(I) hereof, determined in accordance with
the provisions of Section 2.12(D)(II) hereof.

      "APPLICABLE EURODOLLAR MARGIN" means, as at any date of determination, the
rate per annum then applicable to Eurodollar Rate Loans, determined in
accordance with the provisions of SECTION 2.12(D)(II) hereof.

      "APPLICABLE FLOATING RATE MARGIN" means, as at any date of determination,
the rate per annum then applicable to Floating Rate Loans, determined in
accordance with the provisions of SECTION 2.12(D)(II) hereof.

                                       2
<PAGE>
      "APPLICABLE L/C FEE PERCENTAGE" means, with respect to any Letter of
Credit and as at any date of determination, a rate per annum equal to the
Applicable Eurodollar Margin in effect on such date.

      "ARRANGER" means Banc One Capital  Markets,  Inc. (as successor to First
Chicago Capital  Markets,  Inc.), in its capacity as the arranger for the loan
transaction evidenced by this Agreement.

      "ASSIGNMENT AGREEMENT" shall mean an assignment and acceptance agreement
entered into in connection with an assignment pursuant to SECTION 13.3 hereof in
substantially the form of Exhibit A.

      "AUTHORIZED OFFICER" means any of the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of the Borrower,
acting singly.

      "BANK ONE" means Bank One, NA, a national banking association with its
office in Houston, Texas, in its individual capacity, and its successors.

      "BASE EBITDA" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of the amounts for such period, without
duplication, of:

      (i)   Net Income, PLUS

      (ii)  Interest Expense, PLUS

      (iii) charges against income for foreign, federal, state and local taxes,
to the extent deducted in computing Net Income, PLUS

      (iv)  depreciation  expense,  to the extent  deducted in  computing  Net
Income, PLUS

      (v) amortization expense, including, without limitation, amortization of
goodwill, other intangible assets and Transaction Costs, to the extent deducted
in computing Net Income, PLUS

      (vi) other non-cash charges classified as long-term deferrals in
accordance with Agreement Accounting Principles, to the extent deducted in
computing Net Income, MINUS

      (vii) Net Extraordinary Gains, PLUS

     (viii) non-cash extraordinary losses (and any non-cash nonrecurring
unusual losses arising in or outside of the ordinary course of business not
included in extraordinary losses determined in accordance with Agreement
Accounting Principles) but only to the extent such amounts were not utilized to
offset gains in calculating Net Extraordinary Gains.

      Base EBITDA shall be calculated for any period by including the actual
amount for the applicable period ending on such day.

                                       3
<PAGE>
      "BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer Plan) in respect of which the Borrower or any
other member of the Controlled Group is, or within the immediately preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA.

      "BORROWER"  means  Metals USA,  Inc., a Delaware  corporation,  together
with its successors and assigns,  including a  debtor-in-possession  on behalf
of the Borrower.

      "BORROWING DATE" means a date on which an Advance or Swing Line Loan is
made hereunder.

      "BORROWING BASE" means an amount determined from time to time as follows:

      (i) 75% of the aggregate book value of all Accounts Receivable shown on
the most recent Borrowing Base Certificate delivered pursuant to SECTION
7.1(A)(V) hereof, minus

      (ii) the aggregate outstanding Capital (as defined in the Securitization
Facility), together with any similar amount incurred in connection with the
Indebtedness, if any, permitted in SECTION 7.3(A)(XIV), plus

      (iii) 50% of the aggregate book value of all Inventory shown on the most
recent Borrowing Base Certificate delivered pursuant to SECTION 7.1(a)(v)
hereof, minus

      (iv) 6 months rent for each location where Borrower has not obtained a
landlord lien waiver as required pursuant to SECTION 7.2(M).

      In the absence of the applicable Borrowing Base Certificate, the Agent
shall determine the Borrowing Base from time to time in its reasonable
discretion, taking into account all information reasonably available to it, and
the Borrowing Base from time to time so determined shall be the Borrowing Base
for all purposes of this Agreement until the applicable Borrowing Base
Certificate is furnished to and accepted by the Agent.

      "BORROWING BASE CERTIFICATE" means a certificate, duly executed by the
Authorized Officer, appropriately completed and in substantially the form of
Exhibit L.

      "BORROWING NOTICE" is defined in SECTION 2.6 hereof.

      "BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Chicago, Illinois
and on which dealings in Dollars are carried on in the London interbank market
and (ii) for all other purposes a day (other than a Saturday or Sunday) on which
banks are open for business in Chicago, Illinois.

      "CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities, including
Capitalized Leases and Permitted Purchase Money Indebtedness) (other than in
connection with Permitted Acquisitions) by the Borrower and its Subsidiaries
during that period that, in conformity with Agreement Accounting Principles, are
required to be included in or reflected by the property, plant, equipment or
similar

                                       4
<PAGE>
fixed asset accounts reflected in the consolidated balance sheet of the Borrower
and its Subsidiaries.

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

      "CAPITALIZED LEASE" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.

      "CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.

      "CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations for any such deposits with a term of more than ten (10)
days); (iii) shares of money market, mutual or similar funds having assets in
excess of $100,000,000 and the investments of which are limited to investment
grade securities (i.e., securities rated at least Baa by Moody's Investors
Service, Inc. or at least BBB by Standard & Poor's Ratings Group); (iv)
commercial paper of United States and foreign banks and bank holding companies
and their subsidiaries and United States and foreign finance, commercial
industrial or utility companies which, at the time of acquisition, are rated A-1
(or better) by Standard & Poor's Ratings Group or P-1 (or better) by Moody's
Investors Services, Inc.; (v) corporate bonds, mortgage-backed securities and
municipal bonds in each case of a domestic issuer rated at the date of
acquisition not less than Aaa by Moody's Investor Services, Inc. or AAA by
Standard & Poor's Ratings Group with maturities of no more than two (2) years
from the date of acquisition; (vi) repurchase agreements secured by debt
securities of the type described in part (i) above, the market value of which,
including accrued interest, is not less than 100% of the amount of the
repurchase agreement, with maturities of no more than two years from the date of
acquisition, issued by or acquired from or through any Lender or any bank or
trust company organized under the laws of the United States or any state thereof
and having capital and surplus aggregating at least $100,000,000.00; and (vii)
money market funds with respect to which not less than 90% of such funds are
invested in the type of investments specified in CLAUSES (I) through (V) above;
PROVIDED, unless the context otherwise requires, that the maturities of such
Cash Equivalents shall not exceed 365 days.

      "CHANGE" is defined in SECTION 4.2 hereof.

      "CHANGE OF CONTROL" means an event or series of events by which:

                                       5
<PAGE>
      (i) any "person" or "group" (as such terms are used in SECTIONS 13(D) and
14(D) of the Exchange Act) is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of 30% or more of the combined
voting power of the Borrower's Capital Stock ordinarily having the right to vote
at an election of directors;

      (ii)  during any period of 24 consecutive calendar months, individuals:

            (a)   who were  directors of the Borrower on the first day of such
      period, or

            (b) whose election or nomination for election to the board of
      directors of the Borrower was recommended or approved by at least a
      majority of the directors then still in office who were directors of the
      Borrower on the first day of such period, or whose election or nomination
      for election was so approved, shall cease to constitute a majority of the
      board of directors of the Borrower;

      (iii) the Borrower consolidates with or merges into another corporation or
conveys, transfers or leases all or substantially all of its property to any
Person, or any corporation consolidates with or merges into the Borrower, in
either event pursuant to a transaction in which the outstanding Capital Stock of
the Borrower is reclassified or changed into or exchanged for cash, securities
or other property;

      (iv) other than as a result of a transaction permitted under the terms of
this Agreement, the Borrower shall cease to own, of record and beneficially,
with sole voting and dispositive power, (a) 80% of the outstanding shares of
Capital Stock of each of the Guarantors, (b) 100% of the outstanding shares of
Capital Stock of the Metals Receivables Corporation, or (c) shall cease to have
the power, directly or indirectly, to elect a majority of the members of the
board of directors of each of the Guarantors; or

      (v) a "Change of Control" (as defined in the Indenture) shall have
occurred.

      "CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, or any successor statute.

      "COLLATERAL" means any and all "Collateral" as defined in any applicable
Security Document, and Pledged Collateral (Amended and Restated Pledge
Agreement).

      "COMMISSION" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.

      "COMMITMENT" means, for each Lender, the obligation of such Lender to make
Revolving Loans and to purchase participations in Letters of Credit not
exceeding the amount set forth on Exhibit B to this Agreement opposite its name
thereon under the heading "Commitment" or on Schedule 1 of the Assignment
Agreement by which it became a Lender, as such amount may be modified from time
to time pursuant to the terms of this Agreement or to give effect to any
applicable Assignment Agreement.

                                       6
<PAGE>
      "CONSOLIDATED NET WORTH" means, at a particular date, all amounts which
would be included under shareholders' equity for the Borrower and its
consolidated Subsidiaries determined in accordance with Agreement Accounting
Principles.

      "CONSOLIDATED TANGIBLE ASSETS" means the total assets of the Borrower and
its Subsidiaries on a consolidated basis, but excluding therefrom all items that
are treated as intangibles under Agreement Accounting Principles.

      "CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBS"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.

      "CONTINGENT OBLIGATION", as applied to any Person, means any Contractual
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another, including,
without limitation, any such Indebtedness, obligation or liability of another
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received.

      "CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of
any equity or debt securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument, in each case in writing, to which that
Person is a party or by which it or any of its properties is bound, or to which
it or any of its properties is subject.

      "CONTROLLED GROUP" means the group consisting of (i) any corporation which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower; (ii) a partnership or other trade
or business (whether or not incorporated) which is under common control (within
the meaning of Section 414(c) of the Code) with the Borrower; and (iii) a member
of the same affiliated service group (within the meaning of Section 414(m) of
the Code) as the Borrower, any corporation described in CLAUSE (I) above or any
partnership or trade or business described in CLAUSE (II) above.

      "CONTROLLED SUBSIDIARY" of any Person means a Subsidiary of such Person
(i) 90% or more of the total Equity Interests or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more wholly-owned Subsidiaries of such Person and (ii)
of which such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies, whether through the ownership
of voting securities, by agreement or otherwise.

                                       7
<PAGE>
      "CONVERSION/CONTINUATION NOTICE" is defined in SECTION 2.8(D) hereof.

      "CORPORATE BASE RATE" means the corporate base rate of interest announced
by Bank One from time to time, changing when and as said corporate base rate
changes.

      "CURE LOAN" is defined in SECTION 9.2(III) hereof.

      "CUSTOMARY PERMITTED LIENS" means:

            (i) Liens with respect to the payment of taxes, assessments or
      governmental charges in all cases which are not yet due or (if
      foreclosure, distraint, sale or other similar proceedings shall not have
      been commenced) which are being contested in good faith by appropriate
      proceedings properly instituted and diligently conducted and with respect
      to which adequate reserves or other appropriate provisions are being
      maintained in accordance with Agreement Accounting Principles;

            (ii) statutory Liens of landlords and Liens of suppliers, mechanics,
      carriers, materialmen, warehousemen or workmen and other similar Liens
      imposed by law created in the ordinary course of business for amounts not
      yet due or which are being contested in good faith by appropriate
      proceedings properly instituted and diligently conducted and with respect
      to which adequate reserves or other appropriate provisions are being
      maintained in accordance with Agreement Accounting Principles;

            (iii) Liens incurred or deposits made, in each case, in the ordinary
      course of business in connection with worker's compensation, unemployment
      insurance or other types of social security benefits or to secure the
      performance of bids, tenders, sales, contracts (other than for the
      repayment of borrowed money), surety, appeal and performance bonds;
      PROVIDED that (a) all such Liens do not in the aggregate materially
      detract from the value of the Borrower's or such Subsidiary's assets or
      property taken as a whole or materially impair the use thereof in the
      operation of the businesses taken as a whole, and (b) with respect to
      Liens securing bonds to stay judgments or in connection with appeals do
      not secure at any time an aggregate amount which if paid at such time
      would result in the occurrence or existence of a Default;

            (iv) Liens arising with respect to zoning restrictions, easements,
      licenses, reservations, covenants, rights-of-way, utility easements,
      building restrictions and other similar charges or encumbrances on the use
      of real property which do not in any case materially detract from the
      value of the property subject thereto or interfere with the ordinary
      conduct of the business of the Borrower or any of its Subsidiaries;

            (v) Liens of attachment or judgment with respect to judgments, writs
      or warrants of attachment, or similar process against the Borrower or any
      of its Subsidiaries which do not constitute a Default under SECTION 8.1(H)
      hereof; and

            (vi) any interest or title of the lessor in the property subject to
      any operating lease entered into by the Borrower or any of its
      Subsidiaries in the ordinary course of business.

      "DEFAULT" means an event described in ARTICLE VIII hereof.

                                       8
<PAGE>
      "DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the Termination Date.

      "DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.

      "DOLLAR" and "$" means dollars in the lawful currency of the United
States.

      "DOMESTIC SUBSIDIARIES" means any Subsidiary of any Person organized under
the laws of any state of the United States.

      "EBITDA" means, for any period, on a consolidated basis for the Borrower
and its Subsidiaries, the sum of the amounts for such period, without
duplication, of:

      (i)   Net Income,

PLUS        (ii) Interest Expense,

PLUS        (iii) Charges against income for foreign, federal, state and local
            taxes, to the extent deducted in computing Net Income,

PLUS        (iv) Depreciation expense, to the extent deducted in computing Net
            Income,

PLUS        (v) Amortization expense, including, without limitation,
            amortization of goodwill and other intangible assets to the extent
            deducted in computing Net Income,

PLUS        (vi) Other non-cash charges classified as long-term deferrals in
            accordance with Agreement Accounting Principles, to the extent
            deducted in computing Net Income,

MINUS       (vii) Net Extraordinary Gains,

PLUS        (viii) Non-cash extraordinary losses (and any non-cash nonrecurring
            unusual losses arising in or outside of the ordinary course of
            business not included in extraordinary losses determined in
            accordance with Agreement Accounting Principles) but only to the
            extent such amounts were not utilized to offset gains in calculating
            Net Extraordinary Gains,

PLUS        (ix) Any PRO FORMA adjustments which are consistent with the
            Commission's regulations and practices as of the Original Closing
            Date (whether or not applicable) to account for adjustments to
            historical EBITDA for an acquired entity and which are realizable as
            a result of negotiated and executed contractual arrangements.

                                       9
<PAGE>
      As used herein "NET EXTRAORDINARY GAINS" shall mean the sum of, but only
if positive, extraordinary gains (and any nonrecurring unusual gains arising in
or outside of the ordinary course of business not included in extraordinary
gains determined in accordance with Agreement Accounting Principles which have
been included in the determination of Net Income) minus extraordinary losses
(and any nonrecurring unusual losses arising in or outside of the ordinary
course of business not included in extraordinary losses determined in accordance
with Agreement Accounting Principles). EBITDA shall be calculated for any period
by including the actual amount for the applicable period ending on such day,
including the EBITDA attributable to Permitted Acquisitions occurring during
such period on a PRO FORMA basis for the period from the first day of the
applicable period through the date of the closing of each Permitted Acquisition,
utilizing (a) where available or required pursuant to the terms of this
Agreement, historical audited and/or reviewed unaudited financial statements
obtained from the seller, broken down by fiscal quarter in the Borrower's
reasonable judgment or (b) unaudited financial statements (where no audited or
reviewed financial statements are required pursuant to the terms of this
Agreement) reviewed internally by the Borrower, broken down by fiscal quarter in
the Borrower's reasonable judgment.

      "EFFECTIVE DATE" shall mean November 1, 2000.

      "ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to federal, state and local laws or
regulations relating to or addressing pollution or protection of the
environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 ET SEQ., the Occupational Safety and Health Act of 1970,
29 U.S.C. ss. 651 ET seq., and the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss. 6901 ET SEQ., in each case including any amendments thereto,
any successor statutes, and any regulations or guidance promulgated thereunder,
and any state or local equivalent thereof.

      "ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority
for (a) any liability under Environmental, Health or Safety Requirements of Law,
or (b) damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.

      "ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement of
law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."

      "EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.

                                       10
<PAGE>
      "EURODOLLAR BASE RATE" means, with respect to a Eurodollar Rate Loan for
the relevant Interest Period, the rate determined by the Agent to be the
arithmetic average of the respective rates at which deposits in Dollars are
offered by Bank One to first-class banks in the London interbank market at
approximately 11 a.m. (London time) two Business Days prior to the first day of
such Interest Period, in the approximate amounts of the portions of the relevant
Eurodollar Rate Loan of Bank One, and having a maturity approximately equal to
such Interest Period, as adjusted for Reserves.

      "EURODOLLAR RATE" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such Interest
Period plus the then Applicable Eurodollar Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/100 of 1% if the rate is not such a
multiple.

      "EURODOLLAR RATE ADVANCE" means an Advance which bears interest at the
Eurodollar Rate.

      "EURODOLLAR RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate.

      "FAIR VALUE" means (i) with respect to the Capital Stock of the Borrower,
the closing price for such Capital Stock on the trading date immediately
preceding the date of the applicable acquisition agreement; PROVIDED, such
amount may be discounted to the extent such discount is permitted by Agreement
Accounting Principles and (ii) with respect to other assets, the value of the
relevant asset as of the date of acquisition or sale determined in an
arm's-length transaction conducted in good faith between an informed and willing
buyer and an informed and willing seller under no compulsion to buy.

      "FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.

      "FIXED CHARGE COVERAGE RATIO" is defined in SECTION 7.4(A) hereof.

      "FLOATING RATE" means, for any day for any Loan, a rate per annum equal to
the Alternate Base Rate for such day plus the then Applicable Floating Rate
Margin, changing and as the Alternate Base Rate or Applicable Floating Rate
Margin changes.

      "FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.

      "FLOATING RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Floating Rate.

                                       11
<PAGE>
      "FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as defined
in Section 3(3) of ERISA which (i) is maintained or contributed to for the
benefit of employees of the Borrower, any of its Subsidiaries or any member of
its Controlled Group, (ii) is not covered by ERISA pursuant to 1 of ERISA, and
(iii) could reasonably subject Borrower or any of its Domestic Subsidiaries to
liability.

      "FOREIGN PENSION PLAN" means any Foreign Employee Benefit Plan which under
applicable local law is required to be funded through a trust or other funding
vehicle.

      "GOVERNMENTAL ACTS" is defined in SECTION 3.9(A) hereof.

      "GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

      "GROSS NEGLIGENCE" means recklessness, the absence of the slightest care
or the complete disregard of consequences. Gross Negligence does not mean the
absence of ordinary care or diligence, or an inadvertent act or inadvertent
failure to act. If the term "gross negligence" is used with respect to the Agent
or any Lender or any indemnitee in any of the other Loan Documents, it shall
have the meaning set forth herein.

      "GUARANTORS" means all of the Borrower's Domestic Subsidiaries as of the
Effective Date and any other New Subsidiaries which are domestic subsidiaries
and have satisfied the provisions of SECTION 7.3(G)(II) hereof, and their
respective successors and assigns. Notwithstanding anything herein to the
contrary, the Metals Receivables Corporation, if formed, shall not be required
to be or become a Guarantor and shall not be included in the definition of
Guarantor.

      "GUARANTY" means that certain Amended and Restated Guaranty dated as of
the Effective Date, executed by the Guarantors in favor of the Agent, for the
ratable benefit of the Lenders, as it may be amended, modified, supplemented
and/or restated (including to add new Guarantors), and as in effect from time to
time.

      "HEDGING OBLIGATIONS" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.

      "HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured
Obligations from time to time and shall refer to (i) each Lender in respect of
its Loans, (ii) the Issuing Bank in respect of Reimbursement Obligations, (iii)
the Agent, the Lenders, the Swing Line Bank and the Issuing Bank in respect of
all other present and future obligations and liabilities of the Borrower

                                       12
<PAGE>
or any of its Domestic Subsidiaries of every type and description arising under
or in connection with this Agreement or any other Loan Document, (iv) each
Indemnitee in respect of the obligations and liabilities of the Borrower to such
Person hereunder, (v) each Lender (or affiliate thereof), in respect of all
Hedging Obligations of the Borrower or any of its Subsidiaries to such Lender
(or such affiliate) as exchange party or counterparty under any Interest Rate
Agreement, and (vi) their respective successors, transferees and assigns.

      "INDEBTEDNESS" of any Person means, without duplication, such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (iii) obligations, whether or not assumed, secured by Liens or payable
out of the proceeds or production from property or assets now or hereafter owned
or acquired by such Person, (iv) obligations which are evidenced by notes,
acceptances or other instruments, (v) Capitalized Lease Obligations, (vi)
reimbursement obligations with respect to letters of credit (other than
commercial letters of credit) issued for the account of such Person, (vii)
Hedging Obligations, (viii) Off Balance Sheet Liabilities and (ix) Contingent
Obligations in respect of obligations of another Person of the type described in
the foregoing CLAUSES (I) through (VIII). The amount of Indebtedness of any
Person at any date shall be without duplication (i) the outstanding balance at
such date of all unconditional obligations as described above and the maximum
liability of any such Contingent Obligations at such date and (ii) in the case
of Indebtedness of others secured by a Lien to which the property or assets
owned or held by such Person is subject, the lesser of the fair market value at
such date of any asset subject to a Lien securing the Indebtedness of others and
the amount of the Indebtedness secured. Indebtedness shall include the
unrecovered investment of purchasers or transferees of Receivables Interests
from Originators or Metals Receivables Corporation pursuant to the Receivables
Purchase Documents or any other obligation of the Borrower, Metals Receivables
Corporation or the Originators to purchasers/transferees of Receivables
Interests or the agent for such purchasers/transferees pursuant to and in
connection with the Receivables Purchase Documents, and, without limitation of
the other provisions herein, such Indebtedness shall be deemed to be funded
Indebtedness for purposes of SECTION 7.1(F) and part of Total Debt for purposes
of SECTION 2.12 and SECTION 7.4.

      "INDEMNIFIED MATTERS" is defined in SECTION 10.7(B) hereof.

      "INDEMNITEES" is defined in SECTION 10.7(B) hereof.

      "INDENTURE" means that certain Indenture dated as of February 11, 1998
between the Borrower and U.S. Trust Company of California, N.A., as Trustee, as
amended, supplemented or modified in accordance with SECTION 7.3(R) hereof.

      "INTEREST EXPENSE" means, for any period, the total interest expense of
the Borrower and its consolidated Subsidiaries, whether paid or accrued
(including the interest component of Capitalized Leases, the interest component
of synthetic leases or tax retention operating leases, net payments and credits
(if any) pursuant to Hedging Obligations relating to interest rate protection,
commitment and letter of credit fees and discount and other fees and charges
incurred under the Receivables Purchase Documents), but excluding interest
expense not payable in cash

                                       13
<PAGE>
(including amortization of discount), all as determined in conformity with
Agreement Accounting Principles.

      "INTEREST PERIOD" means, with respect to a Eurodollar Rate Loan, a period
of one (1), two (2), three (3), or six (6) months commencing on a Business Day
selected by the Borrower pursuant to this Agreement. Such Interest Period shall
end on (but exclude) the day which corresponds numerically to such date one,
two, three or six months thereafter; provided, however, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.

      "INVENTORY" means inventory of Borrower and its Subsidiaries as determined
in accordance with Agreement Accounting Principles.

      "INVESTMENT" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any purchase by that Person
of all or substantially all of the assets of a business conducted by another
Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.

      "IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.

      "ISSUING BANKS" means Bank One and any other Lender which, at the
Borrower's request, agrees, in each such Lender's sole discretion, to become an
Issuing Bank for the purpose of issuing Letters of Credit, and their respective
successors and assigns, in each case in such Lender's separate capacity as an
issuer of Letters of Credit pursuant to SECTION 3.1. The designation of any
Lender as an Issuing Bank after the date hereof shall be subject to the prior
written consent of the Agent.

      "L/C DRAFT" means a draft drawn on an Issuing Bank pursuant to a Letter of
Credit.

      "L/C INTEREST" shall have the meaning ascribed to such term in SECTION 3.5
hereof.

      "L/C OBLIGATIONS" means, without duplication, an amount equal to the sum
of (i) the aggregate of the amount then available for drawing under each of the
Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the applicable Issuing Bank, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount of all
Letters of Credit requested by the Borrower but not yet issued (unless the
request for an unissued Letter of Credit has been denied).

                                       14
<PAGE>
      "LENDERS" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.

      "LENDING INSTALLATION" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.

      "LETTER OF CREDIT" means the letters of credit issued by the Issuing Banks
pursuant to Section 3.1 hereof after the Original Closing Date.

      "LEVERAGE RATIO" is defined in SECTION 7.4(B) hereof.

      "LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, encumbrance or security agreement or preferential
arrangements of any kind or nature whatsoever (including, without limitation,
the interest of a vendor or lessor under any conditional sale, Capitalized Lease
or other title retention agreement).

      "LOAN(S)" means, with respect to a Lender, such Lender's portion of any
Advance made pursuant to SECTION 2.1(A) hereof (individually a "REVOLVING Loan"
and collectively, the "Revolving Loans"), and in the case of the Swing Line
Bank, any Swing Line Loan made pursuant to SECTION 2.1(B) hereof, and
collectively all such Revolving Loans and Swing Line Loans, whether made or
continued as or converted to Floating Rate Loans or Eurodollar Rate Loans.

      "LOAN ACCOUNT" is defined in SECTION 2.12(F) hereof.

      "LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranty, the Pledge
Agreements, the Security Agreements and all other documents, instruments and
agreements executed in connection therewith or contemplated thereby, as the same
may be amended, restated or otherwise modified and in effect from time to time.

      "MARGIN STOCK" shall have the meaning ascribed to such term in Regulation
U.

      "MATERIAL ADVERSE EFFECT" means a material adverse effect upon (i) the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower, or the Borrower and its Subsidiaries, taken as a
whole, (ii) the ability of the Borrower or any of its Subsidiaries to perform
their respective obligations under the Loan Documents in any material respect or
(iii) the ability of the Lenders or the Agent to enforce in any material respect
their rights under the Loan Documents or with respect to the Collateral.

      "MATERIAL SUBSIDIARY" means (i) any "Significant Subsidiary" as defined in
Regulation S-X issued pursuant to the Securities Act and the Exchange Act and
(ii) any other Subsidiary of the Borrower which at any time comprises ten
percent (10%) or more of the Borrower's Consolidated Tangible Assets.

      "MAXIMUM RATE" means the maximum nonusurious interest rate under
applicable law. To the extent Texas law may apply to this Agreement, the maximum
lawful rate under this Agreement shall be the weekly indicated rate ceiling
under the Texas Finance Code, Chapter

                                       15
<PAGE>
303, as amended, unless any other lawful rate ceiling exceeds the rate ceiling
so determined, and then the higher rate ceiling shall apply.

      "MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either the Borrower or any member of the Controlled
Group.

      "NET INCOME" means, for any period, the net earnings (or loss) after taxes
of the Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with Agreement
Accounting Principles.

      "NEW SUBSIDIARY" is defined in SECTION 7.3(G)(II).

      "NON PRO RATA LOAN" is defined in SECTION 9.2 hereof.

      "NOTICE OF ASSIGNMENT" is defined in SECTION 13.3(B) hereof.

      "NOTES" means the Revolving Notes and the Swing Line Note.
       -----

      "OBLIGATIONS" means all Loans, advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower to the Agent, any Lender, the Swing
Line Bank, the Arranger, any Affiliate of the Agent or any Lender, or any
Indemnitee, of any kind or nature, present or future, arising under this
Agreement, the Notes or any other Loan Document, whether or not evidenced by any
note, guaranty or other instrument, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification, or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements, paralegals' fees (in each case whether or not allowed), and any
other sum chargeable to the Borrower under this Agreement or any other Loan
Document.

      "OFF BALANCE SHEET LIABILITIES" of a Person means (i) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries,
including, without limitation, pursuant to the Receivables Purchase Documents,
(ii) any liability under any sale and leaseback transactions which do not create
a liability on the consolidated balance sheet of such Person, (iii) any
liability under any financing lease or so-called "synthetic" lease transaction
or tax retention operating lease, or (iv) any obligations arising with respect
to any other transaction which is the functional equivalent of or takes the
place of borrowing but which does not constitute a liability on the consolidated
balance sheets of such Person and its Subsidiaries.

      "ORIGINAL CLOSING DATE" means July 15, 1997.

      "ORIGINAL CREDIT AGREEMENT" means the Credit Agreement dated as of July
15, 1997 among the Borrower, the financial institutions parties thereto and the
Agent, as amended and restated as of February 11, 1998.

                                       16
<PAGE>
      "ORIGINATORS" means the Borrower,  Metals USA Flat Rolled Central, Inc.,
Metals  USA  Specialty  Metals,  Northcentral,  Inc.,  Metals  USA  Plates and
Shapes,  Northeast,  L.P.,  Metals USA Plates  and Shapes  Southwest,  Limited
Partnership,  Metals USA Plates and Shapes Southeast,  Inc., Metals USA Plates
and Shapes Southcentral, Inc. or Metals USA Carbon Flat Rolled, Inc.

      "OTHER TAXES" is defined in Section 2.12(E)(II) hereof.

      "PARTICIPANTS" is defined in SECTION 13.2(A) hereof.

      "PAYMENT DATE" means the last Business Day of each March, June, September
and December.

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

      "PERMITTED ACQUISITION" is defined in SECTION 7.3(G)(III) hereof.

      "PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrower
and its Subsidiaries identified as such on SCHEDULE 1.1.3 to this Agreement.

      "PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.4 to this Agreement.

      "PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.5 to this Agreement.

      "PERMITTED PURCHASE MONEY INDEBTEDNESS" is defined in SECTION 7.3(a)(ix)
hereof.

      "PERMITTED RECEIVABLES TRANSFER" means (i) the sale or other transfer by
any Originator of Receivables (and any related security and collections)
(collectively, "Receivables Interests") for fair market value and without
recourse (except for limited recourse customary for similar structured finance
transactions) to Borrower and (ii) a sale by Borrower to Metals Receivables
Corporation of Receivables Interests purchased by Borrower from an Originator or
transferred to Borrower by an Originator, in each case pursuant to the
Securitization Facility (as amended, modified and/or restated from time to time
in accordance with the terms of this Agreement, the "Receivables Purchase
Documents").

      "PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal,
refinancing or extension of any Indebtedness (other than the Senior Subordinated
Notes) permitted by this Agreement that (i) does not exceed the aggregate
principal amount (plus associated fees and expenses) of the Indebtedness being
replaced, renewed, refinanced or extended, (ii) does not rank at the time of
such replacement, renewal, refinancing or extension senior to the Indebtedness
being replaced, renewed, refinanced or extended, and (iii) does not contain
terms (including, without limitation, terms relating to security, amortization,
maturity, interest rate, premiums, fees, covenants, event of default and
remedies) materially less favorable to the Borrower or to the Lenders than those
applicable to the Indebtedness being replaced, renewed, refinanced or extended.

                                       17
<PAGE>
      "PERMITTED SUBORDINATED INDEBTEDNESS" is defined in SECTION 7.3(A)(III)
hereof.

      "PERSON" means any individual, corporation, firm, enterprise, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity of any kind, or any
government or political subdivision or any agency, department or instrumentality
thereof.

      "PLAN" means an employee benefit plan defined in Section 3(3) of ERISA in
respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.

      "PLEDGE AGREEMENTS" means (i) the Amended and Restated Pledge Agreement
dated as of the Effective Date executed by the Borrower in favor of the Agent
(ii) any pledge agreement executed by any Subsidiary with respect to the Capital
Stock of any other Subsidiary executed pursuant to the terms of SECTION 7.2(K),
in each case, as amended, modified, supplemented and/or restated (including to
add additional pledged Capital Stock of additional Subsidiaries, and (iii) the
Pledge of Cash and Deposit Accounts dated the Effective Date executed by
Borrower in favor of the Agent.

      "PRO RATA SHARE" means, with respect to any Lender, the percentage
obtained by dividing (A) such Lender's Commitment at such time (as adjusted from
time to time in accordance with the provisions of this Agreement) by (B) the sum
of the Aggregate Commitments at such time; PROVIDED, HOWEVER, if the Commitments
are terminated pursuant to the terms of this Agreement, then "Pro Rata Share"
means the percentage obtained by dividing (x) the sum of such Lender's L/C
Obligations and Revolving Loans, and in the case of the Swing Line Bank, Swing
Line Loans by (y) the aggregate amount of all Revolving Loans, Swing Line Loans
and L/C Obligations.

      "PURCHASERS" is defined in SECTION 13.3(A) hereof.

      "RATE OPTION" means the Eurodollar Rate or the Floating Rate.

      "RECEIVABLE(S)" means and includes all of the Borrower's and its
Subsidiaries' presently existing and hereafter arising or acquired accounts,
accounts receivable, and all present and future rights of the Borrower and its
Subsidiaries to payment for goods sold or leased or for services rendered
(except those evidenced by instruments or chattel paper), whether or not they
have been earned by performance, and all rights in any merchandise or goods
which any of the same may represent, and all right, title, security and
guaranties with respect to each of the foregoing, including, without limitation,
any right of stoppage in transit.

      "RECEIVABLES INTERESTS" is defined in the definition of Permitted
Receivables Transfer above.

      "RECEIVABLES PURCHASE DOCUMENTS" is defined in the definition of Permitted
Receivables Transfer above.

      "REGISTER" is defined in SECTION 13.3(C) hereof.

                                       18
<PAGE>
      "REGULATION T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).

      "REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying Margin
Stock applicable to member banks of the Federal Reserve System.

      "REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).

      "REIMBURSEMENT OBLIGATION" is defined in SECTION 3.6 hereof.

      "RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.

      "RENTALS" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property but does not include any
amounts payable under Capitalized Leases of such Person.

      "REPLACEMENT LENDER" is defined in SECTION 2.17 hereof.

      "REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days after
such event occurs, PROVIDED, HOWEVER, that a failure to meet the minimum funding
standards of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.

      "REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate,
are equal to or greater than fifty-one percent (51%); PROVIDED, HOWEVER, that,
if any of the Lenders shall have failed to fund its Pro Rata Share of any
Revolving Loan requested by the Borrower, or any Swing Line Loan as requested by
the Agent, which such Lenders are obligated to fund under the terms of this
Agreement and any such failure has not been cured, then for so long as such
failure continues, "REQUIRED LENDERS" means Lenders (excluding all Lenders whose
failure to fund their respective Pro Rata Shares of such Revolving Loans or
Swing Line Loans has not been so cured) whose Pro Rata Shares represent at least
fifty-one percent (51%) of the aggregate Pro Rata Shares of such Lenders;
PROVIDED FURTHER, HOWEVER, that, if the Commitments have been terminated
pursuant to the terms of this Agreement, "REQUIRED LENDERS" means Lenders
(without regard to such Lenders' performance of their respective obligations
hereunder) whose

                                       19
<PAGE>
aggregate ratable shares (stated as a percentage) of the aggregate outstanding
principal balance of all Loans and L/C Obligations are equal to or greater than
fifty-one percent (51%).

      "REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the Securities Exchange Act of
1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.

      "RESERVES" shall mean the maximum reserve requirement, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) with
respect to "Eurocurrency liabilities" or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or category of extensions of credit or other
assets which includes loans by a non-United States office of any Lender to
United States residents.

      "RESTRICTED PAYMENT" means (i) any dividend or other distribution, direct
or indirect, on account of any Equity Interests of the Borrower now or hereafter
outstanding, except a dividend payable solely in the Borrower's Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock, (ii) any redemption, retirement, purchase or other
acquisition for value, direct or indirect, of any Equity Interests of the
Borrower or any of its Subsidiaries now or hereafter outstanding, other than in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Borrower) of other Equity Interests of the
Borrower (other than Disqualified Stock), (iii) any redemption, purchase,
retirement, defeasance, prepayment or other acquisition for value, direct or
indirect, of any Permitted Subordinated Indebtedness, and (iv) any payment of a
claim for the rescission of the purchase or sale of, or for material damages
arising from the purchase or sale of, any Permitted Subordinated Indebtedness or
any Equity Interests of the Borrower or any of the Borrower's Subsidiaries, or
of a claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission.

      "REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
by which the lesser of (i) the Aggregate Commitment and (ii) the Borrowing Base
at such time exceeds the Revolving Credit Obligations at such time.

      "REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the outstanding principal amount of the Loans (including the Swing Line
Loans) at such time, plus (ii) the L/C Obligations at such time.

      "REVOLVING LOAN" is defined in the definition of "Loans" above.

                                       20
<PAGE>
      "REVOLVING NOTE" means a promissory note, in substantially the form of
Exhibit C hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Commitment, including any amendment, restatement,
modification, renewal or replacement of such Revolving Note.

      "RISK-BASED CAPITAL GUIDELINES" is defined in SECTION 4.2 hereof.

      "SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii)
all Hedging Obligations owing to any Lender or any affiliate of any Lender under
agreements with respect thereto entered into with any Lender or any affiliate of
any Lender.

      "SECURITIZATION FACILITY" means that certain securitization transaction
among Metals Receivables Corporation, Falcon Asset Securitization Corporation,
certain financial institutions parties thereto and Bank One, NA, formerly known
as The First National Bank of Chicago, as agent, evidenced by that certain
Receivables Purchase Agreement dated January 21, 1999 and all other documents
executed in connection therewith.

      "SECURITY AGREEMENTS" means (i) the Security Agreement dated as of the
Effective Date executed by Borrower in favor of Agent; (ii) the Security
Agreement dated as of the Effective Date executed by the Borrower's Subsidiaries
in favor of the Agent; and (iii) any Security Agreement executed by any
Subsidiary pursuant to the terms of SECTION 7.2(L), in each case, as amended,
modified, supplemented and/or restated.

      "SECURITY DOCUMENTS" means, collectively, the Pledge Agreements, the
Security Agreements and any and all other agreements, deeds of trust, mortgages,
chattel mortgages, security agreements, pledges, guaranties, assignments of
production or proceeds of production, assignments of income, assignments of
contract rights, assignments of partnership interest, assignments of royalty
interest, assignments of performance, completion or surety bond, standby
agreements, subordination agreements, undertakings and other instruments and
financing statements now or hereafter executed and delivered as security for the
Secured Obligations, as any of them may from time to time be amended, modified,
restated or supplemented.

      "SENIOR SUBORDINATED NOTES" means those certain 8-5/8% Senior Subordinated
Notes due February 15, 2008, issued by the Borrower in the aggregate principal
amount of up to $300,000,000 pursuant to the Indenture, as amended, supplemented
or modified in accordance with SECTION 7.3(R) hereof.

      "SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.

      "SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.

                                       21
<PAGE>
      "SWING LINE BANK" means Bank One or any other Lender as a successor Swing
Line Bank.

      "SWING LINE COMMITMENT" means the obligation of the Swing Line Bank to
make Swing Line Loans up to a maximum principal amount of $25,000,000 at any one
time outstanding.

      "SWING LINE LOAN" means (i) any Swing Line Loan made pursuant to the
Amended and Restated Credit Agreement and outstanding on the Effective Date and
(ii) a Loan made available to the Borrower by the Swing Line Bank pursuant to
SECTION 2.1(B) hereof.

      "SWING LINE NOTE" means a promissory note, in substantially the form of
Exhibit D hereto, duly executed by the Borrower and payable to the order of the
Swing Line Bank in the amount of its Swing Line Commitment, including any
amendment, restatement, modification, renewal or replacement of such Swing Line
Note.

      "SYNDICATION PERIOD" is defined in SECTION 2.2 hereof.

      "TAXES" is defined in SECTION 2.12(E)(I) hereof.

      "TERMINATION DATE" means the earlier of (i) February 11, 2003 and (ii) the
date of termination of the Aggregate Commitment pursuant to SECTION 2.4 hereof
or the Commitments pursuant to Section 9.1 hereof.

      "TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the Termination of, or the appointment
of a trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of the Borrower or any member of the Controlled Group from a
Multiemployer Plan.

      "TOTAL DEBT" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of Indebtedness of the Borrower and its
Subsidiaries, other than Hedging Obligations.

      "TRANSFEREE" is defined in SECTION 13.5 hereof.

      "TYPE" means, with respect to any Loan, its nature as a Floating Rate Loan
or a Eurodollar Rate Loan.

                                       22
<PAGE>
      "UNFUNDED LIABILITIES" means (i) in the case of Single Employer Plans, the
amount (if any) by which the present value of all vested nonforfeitable benefits
under all Single Employer Plans exceeds the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Plans, and (ii) in the case of Multiemployer Plans, the
withdrawal liability that would be incurred by the Controlled Group if all
members of the Controlled Group completely withdrew from all Multiemployer
Plans.

      "UNMATURED DEFAULT" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.

      Any accounting terms used in this Agreement which are not specifically
defined herein shall have the meanings customarily given them in accordance with
generally accepted accounting principles in existence as of the Effective Date
hereof.

1.2 REFERENCES. The existence throughout the Agreement of references to the
Borrower's Subsidiaries is for a matter of convenience only. Any references to
Subsidiaries of the Borrower set forth herein shall not in any way be construed
as consent by the Agent or any Lender to the establishment, maintenance or
acquisition of any Subsidiary, except as may otherwise be permitted hereunder.

1.3 AMENDMENT AND RESTATEMENT OF AMENDED AND RESTATED CREDIT AGREEMENT. The
Borrower, the Lenders, the Agent, the Swing Line Bank and the Issuing Banks
agree that, upon (i) the execution and delivery of this Agreement by each of the
parties hereto and (ii) satisfaction (or waiver by the Agent and all of the
Lenders) of the conditions precedent set forth in SECTION 5.1, the terms and
provisions of the Amended and Restated Credit Agreement shall be and hereby are
amended, superseded and restated in their entirety by the terms and provisions
of this Agreement. This Agreement is not intended to and shall not constitute a
novation of the Amended and Restated Credit Agreement or the indebtedness
created thereunder. All other Loans made under the Amended and Restated Credit
Agreement shall be repaid on the Effective Date. The commitments of each Lender
that is a party to the Amended and Restated Credit Agreement shall, on the
Effective Date, automatically be deemed amended to constitute such Lender's
Commitment hereunder.

                                   ARTICLE 2

                               THE LOAN FACILITIES

      2.1 LOANS.

      (a) REVOLVING LOANS. Upon the satisfaction of the conditions precedent set
forth in SECTIONS 5.1 and 5.2, from and including the Effective Date and prior
to the Termination Date, each Lender severally and not jointly agrees, on the
terms and conditions set forth in this Agreement, to make Revolving Loans to the
Borrower from time to time, in Dollars, in an amount not to exceed such Lender's
Pro Rata Share of Revolving Credit Availability at such time; PROVIDED, HOWEVER,
at no time shall the Revolving Credit Obligations exceed the lesser of (i) the
Aggregate Commitment and (ii) the Borrowing Base. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow Revolving Loans at any
time prior to

                                       23
<PAGE>
the Termination Date. The Revolving Loans made on the Effective Date shall
initially be Floating Rate Loans and thereafter may be continued as Floating
Rate Loans or converted into Eurodollar Rate Loans in the manner provided in
SECTION 2.8 and subject to the other conditions and limitations therein set
forth and set forth in this ARTICLE II. On the Termination Date, the Borrower
shall repay in full the outstanding principal balance of the Loans. Each Advance
under this SECTION 2.1(A) shall consist of Revolving Loans made by each Lender
ratably in proportion to such Lender's respective Pro Rata Share.

      (b) SWING LINE LOANS.

            (i) AMOUNT OF SWING LINE LOANS. Upon the satisfaction of the
      conditions precedent set forth in SECTION 5.1 and 5.2, from and including
      the Effective Date and prior to the Termination Date, the Swing Line Bank
      agrees, on the terms and conditions set forth in this Agreement, to make
      swing line loans to the Borrower from time to time, in Dollars, in an
      amount not to exceed the Swing Line Commitment (each, individually, a
      "SWING LINE LOAN" and collectively, the "SWING LINE LOANS"); provided,
      HOWEVER, at no time shall the Revolving Credit Obligations ------- exceed
      the lesser of (x) the Aggregate Commitment and (y) the Borrowing Base; and
      provided, further, that at no time shall the sum of (A) the outstanding
      amount of the Swing Line Loans, plus (B) the outstanding amount of
      Revolving Loans made by the Swing Line Bank pursuant to SECTION 2.1(A)
      (after giving effect to any concurrent repayment of ---------------
      Loans), exceed the Swing Line Bank's Commitment at such time. Subject to
      the terms of this Agreement, the Borrower may borrow, repay and reborrow
      Swing Line Loans at any time prior to the Termination Date.

            (ii) BORROWING NOTICE. The Borrower shall deliver to the Agent and
      the Swing Line Bank a Borrowing Notice, signed by it, not later than 10:00
      a.m. (Chicago time) on the Borrowing Date of each Swing Line Loan,
      specifying (i) the applicable Borrowing Date (which shall be a Business
      Day), and (ii) the aggregate amount of the requested Swing Line Loan. The
      Swing Line Loans shall at all times be Floating Rate Loans, which shall be
      an amount not less than $250,000 and increments of $100,000 in excess
      thereof. The Agent shall promptly notify each Lender of such request.

            (iii) MAKING OF SWING LINE LOANS. Promptly after receipt of the
      Borrowing Notice under SECTION 2.1(B)(II) in respect of Swing Line Loans,
      the Agent shall notify each Lender by telex or telecopy, or other similar
      form of transmission, of the requested Swing Line Loan. Not later than
      2:00 p.m. (Chicago time) on the applicable Borrowing Date, the Swing Line
      Bank shall make available its Swing Line Loan, in funds immediately
      available in Chicago to the Agent at its address specified pursuant to
      ARTICLE XIV. The Agent will promptly make the funds so received from the
      Swing Line Bank available to the Borrower at the Agent's aforesaid
      address.

            (iv) REPAYMENT OF SWING LINE LOANS. The Swing Line Loans shall be
      evidenced by the Swing Line Note, and each Swing Line Loan shall be paid
      in full by the Borrower on or before the fifth Business Day after the
      Borrowing Date for such Swing Line Loan. The Borrower may at any time pay,
      without penalty or premium, all outstanding Swing Line Loans or, in a
      minimum amount and increments of $100,000,

                                       24
<PAGE>
      any portion of the outstanding Swing Line Loans, upon notice to the Agent
      and the Swing Line Bank. In addition, the Agent (i) may at any time in its
      sole discretion with respect to any outstanding Swing Line Loan, or (ii)
      shall on the fifth Business Day after the Borrowing Date of any Swing Line
      Loan, require each Lender (including the Swing Line Bank) to make a
      Revolving Loan in the amount of such Lender's Pro Rata Share of such Swing
      Line Loan, for the purpose of repaying such Swing Line Loan. Not later
      than 2:00 p.m. (Chicago time) on the date of any notice received pursuant
      to this SECTION 2.1(B)(IV), each Lender shall make available its required
      Revolving Loan or Revolving Loans, in funds immediately available in
      Chicago to the Agent at its address specified pursuant to Article XIV.
      Revolving Loans made pursuant to this SECTION 2.1(B)(IV) shall initially
      be Floating Rate Loans and thereafter may be continued as Floating Rate
      Loans or converted into Eurodollar Rate Loans in the manner provided in
      SECTION 2.8 and subject to the other conditions and limitations therein
      set forth and set forth in this ARTICLE II. Unless a Lender shall have
      notified the Swing Line Bank, prior to its making any Swing Line Loan,
      that any applicable condition precedent set forth in SECTIONS 5.1 and 5.2
      had not then been satisfied, such Lender's obligation to make Revolving
      Loans pursuant to this SECTION 2.1(B)(IV) to repay Swing Line Loans shall
      be unconditional, continuing, irrevocable and absolute and shall not be
      affected by any circumstances, including, without limitation, (A) any
      set-off, counterclaim, recoupment, defense or other right which such
      Lender may have against the Agent, the Swing Line Bank or any other
      Person, (B) the occurrence of continuance of a Default or Unmatured
      Default, (C) any adverse change in the condition (financial or otherwise)
      of the Borrower, or (D) any other circumstances, happening or event
      whatsoever. In the event that any Lender fails to make payment to the
      Agent of any amount due under this SECTION 2.1(B)(IV), the Agent shall be
      entitled to receive, retain and apply against such obligation the
      principal and interest otherwise payable to such Lender hereunder until
      the Agent receives such payment from such Lender or such obligation is
      otherwise fully satisfied. In addition to the foregoing, if for any reason
      any Lender fails to make payment to the Agent of any amount due under this
      SECTION 2.1(B)(IV), such Lender shall be deemed, at the option of the
      Agent, to have unconditionally and irrevocably purchased from the Swing
      Line Bank, without recourse or warranty, an undivided interest and
      participation in the applicable Swing Line Loan in the amount of such
      Revolving Loan, and such interest and participation may be recovered from
      such Lender together with interest thereon at the Federal Funds Effective
      Rate for each day during the period commencing on the date of demand and
      ending on the date such amount is received. On the Termination Date, the
      Borrower shall repay in full the outstanding principal balance of the
      Swing Line Loans.

      2.2 RATE OPTIONS FOR ALL ADVANCES. The Revolving Loans may be Floating
Rate Advances or Eurodollar Rate Advances, or a combination thereof, selected by
the Borrower in accordance with SECTION 2.8. The Borrower may select, in
accordance with SECTION 2.8, Rate Options and Interest Periods applicable to
portions of the Revolving Loans; provided that there shall be no more than seven
(7) Interest Periods in effect with respect to all of the Revolving Loans at any
time.

      2.3 OPTIONAL PAYMENTS; MANDATORY PREPAYMENTS.

                                       25
<PAGE>
      (a) OPTIONAL PAYMENTS. The Borrower may from time to time repay or prepay,
without penalty or premium all or any part of outstanding Floating Rate
Advances; PROVIDED, that the Borrower may not so prepay Floating Rate Advances
unless it shall have provided at least one Business Day's written notice to the
Agent of such prepayment. Eurodollar Rate Advances may be voluntarily repaid or
prepaid prior to the last day of the applicable Interest Period, subject to the
indemnification provisions contained in SECTION 4.4, PROVIDED, that the Borrower
may not so prepay Eurodollar Rate Advances unless it shall have provided at
least two (2) Business Days' written notice to the Agent of such prepayment.

      (b) MANDATORY PREPAYMENTS. If at any time and for any reason the Revolving
Credit Obligations are greater than the lesser of (i) the Aggregate Commitment
and (ii) the Borrowing Base, the Borrower shall immediately make a mandatory
prepayment of the Obligations in an amount equal to such excess. In addition, if
Revolving Credit Availability is at any time less than the amount of contingent
L/C Obligations outstanding at any time, the Borrower shall deposit cash
collateral with the Agent in an amount equal to the amount by which such L/C
Obligations exceed such Revolving Credit Availability. The Borrower shall also
make the mandatory prepayment, if any, required by SECTION 7.3(J). All of the
mandatory prepayments made under this SECTION 2.3(B) shall be applied first to
Floating Rate Loans and to any Eurodollar Rate Loans maturing on such date and
then to subsequently maturing Eurodollar Rate Loans in order of maturity.

      2.4 REDUCTION OF COMMITMENTS.

      (a) VOLUNTARY REDUCTION OF COMMITMENT. The Borrower may permanently reduce
the Aggregate Commitment in whole, or in part ratably among the Lenders, in an
aggregate minimum amount of $5,000,000 and integral multiples of $5,000,000 in
excess of that amount (unless the Aggregate Commitment is reduced in whole),
upon at least three (3) Business Days' written notice to the Agent, which notice
shall specify the amount of any such reduction; PROVIDED, HOWEVER, that the
amount of the Aggregate Commitment may not be reduced below the aggregate
principal amount of the outstanding Revolving Credit Obligations. All accrued
commitment fees shall be payable on the effective date of any partial or
complete termination of the obligations of the Lenders to make Revolving Loans
hereunder.

      (b) MANDATORY REDUCTION OF COMMITMENT. The Aggregate Commitment shall be
reduced at the times and by the amounts set forth in the definition thereof and
as required by SECTION 7.3(J).

      2.5 METHOD OF BORROWING. Not later than 2:00 p.m. (Chicago time) on each
Borrowing Date, each Lender shall make available its Revolving Loan, in funds
immediately available in Chicago to the Agent at its address specified pursuant
to Article XIV. The Agent will promptly make the funds so received from the
Lenders available to the Borrower at the Agent's aforesaid address.

      2.6 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR ADVANCES. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Agent irrevocable notice in substantially the form
of Exhibit E hereto (a "BORROWING NOTICE") not later

                                       26
<PAGE>
than 10:00 a.m. (Chicago time) (i) on the Borrowing Date of each Floating Rate
Advance and (ii) three Business Days before the Borrowing Date for each
Eurodollar Rate Advance, specifying: (A) the Borrowing Date (which shall be a
Business Day) of such Advance; (B) the aggregate amount of such Advance; (C) the
Type of Advance selected; and (D) in the case of each Eurodollar Rate Advance,
the Interest Period applicable thereto. Each Floating Rate Advance and all
Obligations other than Loans shall bear interest from and including the date of
the making of such Advance to (but not including) the date of repayment thereof
at the Floating Rate, changing when and as such Floating Rate changes. Changes
in the rate of interest on that portion of any Advance maintained as a Floating
Rate Loan will take effect simultaneously with each change in the Alternate Base
Rate. Each Eurodollar Rate Advance shall bear interest from and including the
first day of the Interest Period applicable thereto to (but not including) the
last day of such Interest Period at the interest rate determined as applicable
to such Eurodollar Rate Advance.

      2.7 MINIMUM AMOUNT OF EACH ADVANCE. Each Advance (other than an Advance to
repay Swing Line Loans pursuant to SECTION 2.1(B)(IV) or a Reimbursement
Obligation pursuant to SECTION 3.6) shall be in the minimum amount of $5,000,000
(and in multiples of $1,000,000 if in excess thereof), PROVIDED, HOWEVER, that
any Floating Rate Advance may be in the amount of the unused Aggregate
Commitment.

      2.8 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR CONVERSION AND
      CONTINUATION OF ADVANCES.

      (a) RIGHT TO CONVERT. The Borrower may elect from time to time, subject to
the provisions of SECTION 2.2 and this SECTION 2.8, and, for any conversion of a
Eurodollar Rate Advance other than at the end of an Interest Period, subject to
payment of amounts payable under SECTION 4.4, to convert all or any part of a
Revolving Loan of any Type into any other Type or Types of Loans.

      (b) AUTOMATIC CONVERSION AND CONTINUATION. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
Eurodollar Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Agent notice in accordance with SECTION 2.8(D) requesting that, at the end of
such Interest Period, such Eurodollar Rate Loans continue as a Eurodollar Rate
Loan.

      (c) NO CONVERSION POST-DEFAULT OR POST-UNMATURED DEFAULT. Notwithstanding
anything to the contrary contained in SECTION 2.8(A) or SECTION 2.8(B), no
Revolving Loan may be converted into or continued as a Eurodollar Rate Loan
(except with the consent of the Required Lenders) when any Default or Unmatured
Default has occurred and is continuing.

      (d) CONVERSION/CONTINUATION NOTICE. The Borrower shall give the Agent
irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of a
Floating Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar
Rate Loan not later than 10:00 a.m. (Chicago time) three (3) Business Days prior
to the date of the requested conversion or continuation, specifying: (i) the
requested date (which shall be a Business Day) of such

                                       27
<PAGE>
conversion or continuation; (ii) the amount and Type of the Loan to be converted
or continued; and (iii) the amount of Eurodollar Rate Loan(s) into which such
Loan is to be converted or continued and the duration of the Interest Period
applicable thereto.

      2.9 DEFAULT RATE. After the occurrence and during the continuance of a
Default, at the option of the Agent or at the direction of the Required Lenders,
the interest rate(s) applicable to the Obligations shall be equal to the
Floating Rate plus two percent (2.0%) per annum and fees payable under SECTION
3.7 with respect to standby Letters of Credit shall be increased by two percent
(2.0%) per annum.

      2.10 METHOD OF PAYMENT. All payments of principal, interest, and fees
hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to ARTICLE XIV, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by 2:00 p.m. (Chicago time)
on the date when due and shall be made ratably among the Lenders (unless such
amount is not to be shared ratably in accordance with the terms hereof). Each
payment delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds which the Agent
received at its address specified pursuant to ARTICLE XIV or at any Lending
Installation specified in a notice received by the Agent from such Lender. The
Borrower authorizes the Agent to charge the account of the Borrower maintained
with Bank One for each payment of principal, interest, fees and other amounts as
it becomes due hereunder.

      2.11 REVOLVING NOTES, TELEPHONIC NOTICES. Each Lender is authorized to
record the principal amount of each of its Revolving Loans and each repayment
with respect to its Revolving Loans on the schedule attached to its respective
Revolving Note; PROVIDED, HOWEVER, that the failure to so record shall not
affect the Borrower's obligations under any such Revolving Note. The Borrower
authorizes the Lenders and the Agent to extend Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower. The Borrower agrees to deliver promptly to the Agent a
written confirmation, signed by an Authorized Officer, if such confirmation is
requested by the Agent or any Lender, of each telephonic notice. If the written
confirmation differs in any material respect from the action taken by the Agent
and the Lenders, (i) the telephonic notice shall govern absent manifest error
and (ii) the Agent or the Lender, as applicable, shall promptly notify the
Authorized Officer who provided such confirmation of such difference.

      2.12 PROMISE TO PAY; INTEREST AND COMMITMENT FEES; INTEREST PAYMENT DATES;
      INTEREST AND FEE BASIS; TAXES; LOAN AND CONTROL ACCOUNTS.

      (a) PROMISE TO PAY. The Borrower unconditionally promises to pay when due
the principal amount of each Loan and all other Obligations incurred by it, and
to pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the Notes.

      (b) INTEREST PAYMENT DATES. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof and at maturity (whether by acceleration or
otherwise). Interest accrued on each Eurodollar Rate Loan shall be payable on
the last day of its applicable Interest Period, on any

                                       28
<PAGE>
date on which the Eurodollar Rate Loan is prepaid, whether by acceleration or
otherwise, and at maturity; PROVIDED, HOWEVER, interest accrued on each
Eurodollar Rate Loan having an Interest Period longer than three months shall
also be payable on the last day of each three-month interval during such
Interest Period. Interest accrued on the principal balance of all other
Obligations shall be payable in arrears (i) on the last day of each calendar
month, commencing on the first such day following the incurrence of such
Obligation, (ii) upon repayment thereof in full or in part, and (iii) if not
theretofore paid in full, at the time such other Obligation becomes due and
payable (whether by acceleration or otherwise).

      (c) COMMITMENT FEES.

            (i) The Borrower shall pay to the Agent, for the account of the
      Lenders in accordance with their Pro Rata Shares, from and after the
      Effective Date until the date on which the Aggregate Commitment shall be
      terminated in whole, a commitment fee accruing at the rate of the then
      Applicable Commitment Fee Percentage, on the amount by which (A) the
      Aggregate Commitment in effect from time to time exceeds (B) the Revolving
      Credit Obligations in effect from time to time. All such commitment fees
      payable under this CLAUSE (C) shall be payable quarterly in arrears on
      each Payment Date occurring after the Effective Date (with the first such
      payment being calculated for the period from the Effective Date and ending
      on such Payment Date), and, in addition, on the date on which the
      Aggregate Commitment shall be terminated in whole.

            (ii) The Borrower agrees to pay to the Agent for the sole account of
      the Agent and the Arranger (unless otherwise agreed between the Agent or
      the Arranger and any Lender) the fees set forth in the letter agreement
      dated November 1, 1998 between the Agent and/or the Arranger and the
      Borrower entered into from time to time, payable at the times and in the
      amounts set forth therein.

      (d) Interest and Fee Basis; Applicable Eurodollar Margin, Applicable
Floating Rate Margin and Applicable Commitment Fee Percentage.

            (i) Interest and fees shall be calculated for actual days elapsed on
      the basis of a 360-day year. Interest shall be payable for the day an
      Obligation is incurred but not for the day of any payment on the amount
      paid if payment is received prior to 2:00 p.m. (Chicago time) at the place
      of payment. If any payment of principal of or interest on a Loan or any
      payment of any other Obligations shall become due on a day which is not a
      Business Day, such payment shall be made on the next succeeding Business
      Day and, in the case of a principal payment, such extension of time shall
      be included in computing interest in connection with such payment.

            (ii) The Applicable Eurodollar Margin, Applicable Floating Rate
      Margin and Applicable Commitment Fee Percentage shall be determined from
      time to time by reference to the table set forth below, on the basis of
      the then applicable Leverage Ratio as described in this (D); provided,
      however, if utilizing the Leverage Ratio instead of the "Adjusted Leverage
      Ratio" (as defined below) would result in lowering the Applicable
      Eurodollar Margin, Applicable Floating Rate Margin and Applicable
      Commitment Fee Percentage by more than one Level as set forth in the table
      below, then the Applicable

                                       29
<PAGE>
      Eurodollar Margin, Applicable Floating Rate Margin and Applicable
      Commitment Fee Percentage shall be the Level that is one Level lower than
      the Level determined using the Adjusted Leverage Ratio. For purposes
      hereof "Adjusted Leverage Ratio" shall mean the Leverage Ratio calculated
      utilizing EBITDA without taking into account the adjustments set forth in
      CLAUSE (IX) in the definition thereof.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                LEVEL I             LEVEL II            LEVEL III           LEVEL IV            LEVEL V            LEVEL VI
--------------- ------------------- ------------------- ------------------- ------------------- ------------------ --------------
LEVERAGE RATIO  LESS THAN OR EQUAL  GREATER THAN 3.00   GREATER THAN 3.50   GREATER THAN 4.00   GREATER THAN 4.50  GREATER THAN
                TO 3.00 TO 1.00     TO 1.00 AND LESS    TO 1.00 AND LESS    TO 1.00 AND LESS    TO 1.00 AND LESS   5.00 TO 1.00
                                    THAN OR EQUAL TO    THAN OR EQUAL TO    THAN OR EQUAL TO    THAN OR EQUAL TO
                                    3.50 TO 1.00        4.00 TO 1.00        4.50 TO 1.00        5.00 TO 1.00
--------------- ------------------- ------------------- ------------------- ------------------- ------------------ --------------
<S>             <C>                 <C>                 <C>                 <C>                 <C>                <C>
APPLICABLE
COMMITMENT
FEE PERCENTAGE  0.375%              0.375%              0.50%               0.50%               0.50%              0.50%
--------------- ------------------- ------------------- ------------------- ------------------- ------------------ --------------
APPLICABLE
EURODOLLAR
RATE MARGIN
AND APPLICABLE
L/C FEE
PERCENTAGE      2.00%               2.25%               2.50%               2.75%               3.00%              3.25%
--------------- ------------------- ------------------- ------------------- ------------------- ------------------ --------------
APPLICABLE
FLOATING RATE
MARGIN             0%               0.25%               0.50%               0.75%               1.00%              1.25%
--------------- ------------------- ------------------- ------------------- ------------------- ------------------ --------------
</TABLE>

For purposes of this SECTION 2.12(D)(II), the Leverage Ratio shall be determined
as of the last day of each fiscal quarter based upon (A) for Total Debt, Total
Debt as of the last day of each such fiscal quarter; and (B) for EBITDA, EBITDA
for the twelve-month period ending on such day calculated as set forth in the
definition thereof. Upon receipt of the financial statements delivered pursuant
to SECTION 7.1(A)(I) (subject to adjustment upon receipt of the financial
statements delivered pursuant to SECTION 7.1(A)(II)), the Applicable Eurodollar
Margin, Applicable Floating Rate Margin and Applicable Commitment Fee Percentage
shall be adjusted, such adjustment being effective five (5) Business Days
following the Agent's receipt of such financial statements and the compliance
certificate required to be delivered in connection therewith pursuant to SECTION
7.1(A)(III); provided, that if the Borrower shall not have timely delivered its
financial statements in accordance with SECTION 7.1(A)(I) or (II), as
applicable, then commencing on the date upon which such financial statements
should have been delivered and continuing until such financial statements are
actually delivered, it shall be assumed for purposes of determining the
Applicable Eurodollar Margin, Applicable Floating Rate Margin and Applicable
Commitment Fee Percentage that the Leverage Ratio was greater than 5.00 to 1.0.

      (e) Taxes.

            (i) Any and all payments by the Borrower hereunder shall be made
      free and clear of and without deduction for any and all present or future
      taxes, levies, imposts, deductions, charges or withholdings or any
      liabilities with respect thereto including those arising after the
      Original Closing Date hereof as a result of the adoption of or any change
      in any law, treaty, rule, regulation, guideline or determination of a
      Governmental Authority or any change in the interpretation or application
      thereof by a Governmental Authority but excluding, in the case of each
      Lender and the Agent, such taxes (including income taxes, franchise taxes
      and branch profit taxes) as are imposed on or measured by

                                       30
<PAGE>
      such Lender's or Agent's, as the case may be, income by the United States
      of America or any Governmental Authority of the jurisdiction under the
      laws of which such Lender or Agent, as the case may be, is organized (all
      such non-excluded taxes, levies, imposts, deductions, charges,
      withholdings, and liabilities which the Agent or a Lender determines to be
      applicable to this Agreement, the other Loan Documents, the Commitments,
      the Loans or the Letters of Credit being hereinafter referred to as
      "Taxes"). If the Borrower shall be required by law to deduct any Taxes
      from or in respect of any sum payable hereunder or under the other Loan
      Documents to any Lender or the Agent (other than due to a Lender's failure
      to comply with SECTION 2.12(E)(VII)), (A) the sum payable shall be
      increased as may be necessary so that after making all required deductions
      (including deductions applicable to additional sums payable under this
      SECTION 2.12(E)) such Lender or the Agent (as the case may be) receives an
      amount equal to the sum it would have received had no such deductions been
      made, (B) the Borrower shall make such deductions, and (C) the Borrower
      shall pay the full amount deducted to the relevant taxation authority or
      other authority in accordance with applicable law. If a withholding tax of
      the United States of America or any other Governmental Authority shall be
      or become applicable (y) after the Original Closing Date, to such payments
      by the Borrower made to the Lending Installation or any other office that
      a Lender may claim as its Lending Installation, or (z) after such Lender's
      selection and designation of any other Lending Installation, to such
      payments made to such other Lending Installation, such Lender shall use
      reasonable efforts to make, fund and maintain its Loans through another
      Lending Installation of such Lender in another jurisdiction so as to
      reduce the Borrower's liability hereunder, if the making, funding or
      maintenance of such Loans through such other Lending Installation of such
      Lender does not, in the judgment of such Lender, otherwise adversely
      affect such Loans, or obligations under the Commitments or such Lender.

            (ii) In addition, the Borrower agrees to pay any present or future
      stamp or documentary taxes or any other excise or property taxes, charges,
      or similar levies which arise from any payment made hereunder, from the
      issuance of Letters of Credit hereunder, or from the execution, delivery
      or registration of, or otherwise with respect to, this Agreement, the
      other Loan Documents, the Commitments, the Loans or the Letters of Credit
      (hereinafter referred to as "Other Taxes").

            (iii) The Borrower indemnifies each Lender and the Agent for the
      full amount of Taxes and Other Taxes (including, without limitation, any
      Taxes or Other Taxes imposed by any Governmental Authority on amounts
      payable under this SECTION 2.12(E)) paid by such Lender or the Agent (as
      the case may be) and any liability (including penalties, interest, and
      expenses) arising therefrom or with respect thereto, whether or not such
      Taxes or Other Taxes were correctly or legally asserted. This
      indemnification shall be made within thirty (30) days after the date such
      Lender or the Agent (as the case may be) makes written demand therefor. A
      certificate as to any additional amount payable to any Lender or the Agent
      under this SECTION 2.12(E) submitted to the Borrower and the Agent (if a
      Lender is so submitting) by such Lender or the Agent shall show in
      reasonable detail the amount payable and the calculations used to
      determine such amount and shall, absent manifest error, be final,
      conclusive and binding upon all parties hereto. With respect to such
      deduction or withholding for or on account of any Taxes and to

                                       31
<PAGE>
      confirm that all such Taxes have been paid to the appropriate Governmental
      Authorities, the Borrower shall promptly (and in any event not later than
      thirty (30) days after receipt) furnish to each Lender and the Agent such
      certificates, receipts and other documents as may be required (in the
      judgment of such Lender or the Agent) to establish any tax credit to which
      such Lender or the Agent may be entitled.

            (iv) Within thirty (30) days after the date of any payment of Taxes
      or Other Taxes by the Borrower, the Borrower shall furnish to the Agent
      the original or a certified copy of a receipt evidencing payment thereof.

            (v) Without prejudice to the survival of any other agreement of the
      Borrower hereunder, the agreements and obligations of the Borrower
      contained in this Section 2.12(e) shall survive the payment in full of
      principal and interest hereunder, the termination of the Letters of Credit
      and the termination of this Agreement.

            (vi) Without limiting the obligations of the Borrower under this
      SECTION 2.12(E), each Lender that is not created or organized under the
      laws of the United States of America or a political subdivision thereof
      shall deliver to the Borrower and the Agent on or before the Effective
      Date, or, if later, the date on which such Lender becomes a Lender
      pursuant to SECTION 13.3, a true and accurate certificate executed in
      duplicate by a duly authorized officer of such Lender, in a form
      satisfactory to the Borrower and the Agent, to the effect that such Lender
      is capable under the provisions of an applicable tax treaty concluded by
      the United States of America (in which case the certificate shall be
      accompanied by two executed copies of Form W-8BEN of the IRS) or under
      Section 1442 of the Code (in which case the certificate shall be
      accompanied by two copies of Form W-8ECI of the IRS) of receiving payments
      of interest hereunder without deduction or withholding of United States
      federal income tax. Each such Lender further agrees to deliver to the
      Borrower and the Agent from time to time a true and accurate certificate
      executed in duplicate by a duly authorized officer of such Lender
      substantially in a form satisfactory to the Borrower and the Agent, before
      or promptly upon the occurrence of any event requiring a change in the
      most recent certificate previously delivered by it to the Borrower and the
      Agent pursuant to this SECTION 2.12(e)(vi). Further, each Lender which
      delivers a certificate accompanied by Form W-8BEN of the IRS covenants and
      agrees to deliver to the Borrower and the Agent within fifteen (15) days
      prior to January 1, [2002], and every third (3rd) anniversary of such date
      thereafter on which this Agreement is still in effect, another such
      certificate and two accurate and complete original signed copies of Form
      W-8BEN (or any successor form or forms required under the Code or the
      applicable regulations promulgated thereunder), and each Lender that
      delivers a certificate accompanied by Form W-8ECI of the IRS covenants and
      agrees to deliver to the Borrower and the Agent within fifteen (15) days
      prior to the beginning of each subsequent taxable year of such Lender
      during which this Agreement is still in effect, another such certificate
      and two accurate and complete original signed copies of IRS Form W-8ECI
      (or any successor form or forms required under the Code or the applicable
      regulations promulgated thereunder). Each such certificate shall certify
      as to one of the following:

                                       32
<PAGE>
                  (A) that such Lender is capable of receiving payments of
            interest hereunder without deduction or withholding of United States
            of America federal income tax;

                  (B) that such Lender is not capable of receiving payments of
            interest hereunder without deduction or withholding of United States
            of America federal income tax as specified therein but is capable of
            recovering the full amount of any such deduction or withholding from
            a source other than the Borrower and will not seek any such recovery
            from the Borrower; or

                  (C) that, as a result of the adoption of or any change in any
            law, treaty, rule, regulation, guideline or determination of a
            Governmental Authority or any change in the interpretation or
            application thereof by a Governmental Authority after the date such
            Lender became a party hereto, such Lender is not capable of
            receiving payments of interest hereunder without deduction or
            withholding of United States of America federal income tax as
            specified therein and that it is not capable of recovering the full
            amount of the same from a source other than the Borrower.

      Each Lender shall promptly furnish to the Borrower and the Agent such
additional documents as may be reasonably required by the Borrower or the Agent
to establish any exemption from or reduction of any Taxes or Other Taxes
required to be deducted or withheld and which may be obtained without undue
expense to such Lender.

      (f) LOAN ACCOUNT. Each Lender shall maintain in accordance with its usual
practice an account or accounts (a "LOAN ACCOUNT") evidencing the Obligations of
the Borrower to such Lender owing to such Lender from time to time, including
the amount of principal and interest payable and paid to such Lender from time
to time hereunder and under the Notes.

      (g) CONTROL ACCOUNT. The Register maintained by the Agent pursuant to
SECTION 13.3(C) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Advance made hereunder, the type of Loan comprising such
Advance and any Interest Period applicable thereto, (ii) the effective date and
amount of each Assignment Agreement delivered to and accepted by it and the
parties thereto pursuant to SECTION 13.3, (iii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder or under the Notes, (iv) the amount of any sum received by the
Agent from the Borrower hereunder and each Lender's share thereof and (v) all
other appropriate debits and credits as provided in this Agreement, including,
without limitation, all fees, charges, expenses and interest.

      (h) ENTRIES BINDING. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest error,
unless the Borrower objects to information contained in the Register and each
Loan Account within thirty (30) days of the Borrower's receipt of such
information.

      2.13 NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND AGGREGATE
      COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will
      notify each

                                       33
<PAGE>
      Lender of the contents of each Aggregate Commitment reduction notice,
      Commitment Increase Notice, Borrowing Notice, Continuation/Conversion
      Notice, and repayment notice received by it hereunder. The Agent will
      notify each Lender of the interest rate applicable to each Eurodollar Rate
      Loan promptly upon determination of such interest rate and will give each
      Lender prompt notice of each change in the Alternate Base Rate.

      2.14 LENDING INSTALLATIONS. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Revolving Notes shall be deemed held by each Lender for the
benefit of such Lending Installation. Each Lender may, by written or facsimile
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.

      2.15 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.

      2.16 TERMINATION DATE. This Agreement shall be effective until the
Termination Date. Notwithstanding the termination of this Agreement on the
Termination Date, until all of the Obligations (other than contingent indemnity
obligations) shall have been fully and indefeasibly paid and satisfied, all
financing arrangements among the Borrower and the Lenders in connection with
this Agreement shall have been terminated (other than under agreements with
respect to Hedging Obligations) and all of the Letters of Credit shall have
expired, been canceled or terminated, all of the rights and remedies under this
Agreement and the other Loan Documents shall survive and the Agent shall be
entitled to retain its security interest in and to all existing and future
Collateral.

      2.17 REPLACEMENT OF CERTAIN LENDERS. In the event a Lender ("AFFECTED
Lender") shall have: (i) failed to fund its Pro Rata Share of any Advance
requested by the Borrower, or to fund a Revolving Loan in order to repay Swing
Line Loans pursuant to SECTION 2.1(B)(IV), which such Lender is obligated to
fund under the terms of this Agreement and which failure has not been cured,
(ii) requested compensation from the Borrower under SECTIONS 2.12(E), 4.1 or 4.2
to recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred generally by the other Lenders, (iii) delivered a
notice pursuant to Section 4.3 claiming that such Lender is unable to extend
Eurodollar Rate Loans to the Borrower for reasons not generally applicable to
the other Lenders or (iv) has invoked Section 10.2, then, in any such

                                       34
<PAGE>
case, the Borrower or the Agent may make written demand on such Affected Lender
(with a copy to the Agent in the case of a demand by the Borrower and a copy to
the Borrower in the case of a demand by the Agent) for the Affected Lender to
assign, and such Affected Lender shall use its best efforts to assign pursuant
to one or more duly Assignment Agreements five (5) Business Days after the date
of such demand, to one or more financial institutions that comply with the
provisions of SECTION 13.3(a) which the Borrower or the Agent, as the case may
be, shall have engaged for such purpose ("REPLACEMENT LENDER"), all of such
Affected Lender's rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, its Commitment, all Loans owing to it,
all of its participation interests in existing Letters of Credit, and its
obligation to participate in additional Letters of Credit hereunder) in
accordance with SECTION 13.3. The Agent agrees, upon the occurrence of such
events with respect to an Affected Lender and upon the written request of the
Borrower, to use its reasonable efforts to obtain the Commitments from one or
more financial institutions to act as a Replacement Lender. The Agent is
authorized to execute one or more of such assignment agreements as
attorney-in-fact for any Affected Lender failing to execute and deliver the same
within five (5) Business Days after the date of such demand. Further, with
respect to such assignment the Affected Lender shall have concurrently received,
in cash, all amounts due and owing to the Affected Lender hereunder or under any
other Loan Document, including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment, amounts payable under
SECTIONS 2.12(E), 4.1, and 4.2 with respect to such Affected Lender and
compensation payable under SECTION 2.12(C) in the event of any replacement of
any Affected Lender under CLAUSE (II) or CLAUSE (III) of this SECTION 2.17;
PROVIDED that upon such Affected Lender's replacement, such Affected Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of SECTIONS 2.12(E), 4.1, 4.2, 4.4, and 10.7, as well as to any fees
accrued for its account hereunder and not yet paid, and shall continue to be
obligated under SECTION 11.8. Upon the replacement of any Affected Lender
pursuant to this SECTION 2.17, the provisions of SECTION 9.2 shall continue to
apply with respect to Advances which are then outstanding with respect to which
the Affected Lender failed to fund its Pro Rata Share and which failure has not
been cured.

                                   ARTICLE 3

                          THE LETTER OF CREDIT FACILITY

      3.1 OBLIGATION TO ISSUE. Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
the Borrower herein set forth, each Issuing Bank hereby agrees to issue for the
account of the Borrower through such Issuing Bank's branches as it and the
Borrower may jointly agree, one or more Letters of Credit in accordance with
this ARTICLE III, from time to time during the period, commencing on the
Effective Date and ending on the Business Day prior to the Termination Date.

      3.2 TYPES AND AMOUNTS. No Issuing Bank shall have any obligation to and no
Issuing Bank shall:

            (i) issue any Letter of Credit if on the date of issuance, before or
      after giving effect to the Letter of Credit requested hereunder, (A) the
      Revolving Credit Obligations at

                                       35
<PAGE>
      such time would exceed the lesser of (x) the Aggregate Commitment and (y)
      the Borrowing Base at such time, or (B) the aggregate outstanding amount
      of the L/C Obligations would exceed $50,000,000; or

            (ii) issue any Letter of Credit which has an expiration date later
      than the date which is the earlier of one (1) year after the date of
      issuance thereof or five (5) Business Days immediately preceding the
      Termination Date.

      3.3 CONDITIONS. In addition to being subject to the satisfaction of the
conditions contained in SECTIONS 5.1 and 5.2, the obligation of an Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:

            (i) the Borrower shall have delivered to the applicable Issuing Bank
      at such times and in such manner as such Issuing Bank may reasonably
      prescribe, a request for issuance of such Letter of Credit in
      substantially the form of EXHIBIT F hereto, duly executed applications for
      such Letter of Credit, and such other documents, instructions and
      agreements as may be reasonably required pursuant to the terms thereof,
      and the proposed Letter of Credit shall be reasonably satisfactory to such
      Issuing Bank as to form and content; and

            (ii) as of the date of issuance no order, judgment or decree of any
      court, arbitrator or Governmental Authority shall purport by its terms to
      enjoin or restrain the applicable Issuing Bank from issuing such Letter of
      Credit and no law, rule or regulation applicable to such Issuing Bank and
      no request or directive (whether or not having the force of law) from a
      Governmental Authority with jurisdiction over such Issuing Bank shall
      prohibit or request that such Issuing Bank refrain from the issuance of
      Letters of Credit generally or the issuance of that Letter of Credit.

      If any provision in a letter of credit application delivered in connection
with the foregoing is inconsistent with or more restrictive than a provision
contained in this Agreement, the provisions contained in this Agreement shall
control.

      3.4 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT.

      (a) Subject to the terms and conditions of this ARTICLE III and provided
that the applicable conditions set forth in SECTIONS 5.1 and 5.2 hereof have
been satisfied, the applicable Issuing Bank shall, on the requested date, issue
a Letter of Credit on behalf of the Borrower in accordance with such Issuing
Bank's usual and customary business practices and, in this connection, such
Issuing Bank may assume that the applicable conditions set forth in SECTION 5.2
hereof have been satisfied unless it shall have received notice to the contrary
from the Agent or a Lender or has knowledge that the applicable conditions have
not been met.

      (b) The applicable Issuing Bank shall give the Agent written or telex
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance of a Letter of Credit, provided, however, that the failure to provide
such notice shall not result in any liability on the part of such Issuing Bank.

                                       36
<PAGE>
      (c) No Issuing Bank shall extend or amend any Letter of Credit unless the
requirements of this SECTION 3.4 are met as though a new Letter of Credit was
being requested and issued.

      3.5 LETTER OF CREDIT PARTICIPATION. Unless a Lender shall have notified
the Issuing Bank, prior to its issuance of a Letter of Credit, that any
applicable condition precedent set forth in SECTIONS 5.1 and 5.2 had not then
been satisfied, immediately upon the issuance of each other Letter of Credit
hereunder, each Lender shall be deemed to have automatically, irrevocably and
unconditionally purchased and received from the applicable Issuing Bank an
undivided interest and participation in and to such Letter of Credit, the
obligations of the Borrower in respect thereof, and the liability of such
Issuing Bank thereunder (collectively, an "L/C INTEREST") in an amount equal to
the amount available for drawing under such Letter of Credit multiplied by such
Lender's Pro Rata Share. Each Issuing Bank will notify each Lender promptly upon
presentation to it of an L/C Draft or upon any other draw under a Letter of
Credit. On or before the Business Day on which an Issuing Bank makes payment of
each such L/C Draft or, in the case of any other draw on a Letter of Credit, on
demand by the Agent, each Lender shall make payment to the Agent, for the
account of the applicable Issuing Bank, in immediately available funds in an
amount equal to such Lender's Pro Rata Share of the amount of such payment or
draw. The obligation of each Lender to reimburse the Issuing Banks under this
SECTION 3.5 shall be unconditional, continuing, irrevocable and absolute;
PROVIDED, HOWEVER, the obligation of each Lender shall not extend to payments
made under a Letter of Credit resulting from the Issuing Bank's Gross Negligence
or willful misconduct in honoring any L/C Draft. In the event that any Lender
fails to make payment to the Agent of any amount due under this SECTION 3.5, the
Agent shall be entitled to receive, retain and apply against such obligation the
principal and interest otherwise payable to such Lender hereunder until the
Agent receives such payment from such Lender or such obligation is otherwise
fully satisfied; PROVIDED, HOWEVER, that nothing contained in this sentence
shall relieve such Lender of its obligation to reimburse the applicable Issuing
Bank for such amount in accordance with this SECTION 3.5.

      3.6 REIMBURSEMENT OBLIGATION. The Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to the Agent, for the account of
the Lenders, the amount of each advance which may be drawn under or pursuant to
a Letter of Credit or an L/C Draft related thereto (such obligation of the
Borrower to reimburse the Agent for an advance made under a Letter of Credit or
L/C Draft being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with
respect to such Letter of Credit or L/C Draft). If the Borrower at any time
fails to repay a Reimbursement Obligation pursuant to this SECTION 3.6, the
Borrower shall be deemed to have elected to borrow Revolving Loans from the
Lenders, as of the date of the advance giving rise to the Reimbursement
Obligation, equal in amount to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loans shall be made as of the date of the payment
giving rise to such Reimbursement Obligation, automatically, without notice and
without any requirement to satisfy the conditions precedent otherwise applicable
to an Advance of Revolving Loans. Such Revolving Loans shall constitute a
Floating Rate Advance, the proceeds of which Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on the day such Reimbursement Obligation arises and,
for any reason, the Lenders are unable to make or have no obligation to make
Revolving Loans, then such Reimbursement Obligation shall bear interest from and
after such day, until paid in full, at the interest rate applicable to a
Floating Rate Advance.

                                       37
<PAGE>
      3.7 LETTER OF CREDIT FEES. The Borrower agrees to pay (i) quarterly, in
arrears, on each Payment Date to the Agent for the ratable benefit of the
Lenders, except as set forth in SECTION 9.2, a letter of credit fee at a rate
per annum equal to the Applicable L/C Fee Percentage on the average daily
outstanding face amount available for drawing under all Letters of Credit, (ii)
quarterly in arrears to the Agent for the sole account of the Issuing Banks, a
fronting fee at such percentage rate per annum as shall be agreed between the
Borrower and each such Issuing Bank on the aggregate average daily outstanding
amount available for drawing under each such Issuing Bank's Letters of Credit,
payable quarterly in arrears, and (iii) to the Agent for the benefit of each
Issuing Bank, all customary fees and other issuance, amendment, document
examination, negotiation and presentment expenses and related charges in
connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by the Issuing Banks with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit, payable at the time of
invoice of such amounts.

      3.8 ISSUING BANK REPORTING REQUIREMENTS. In addition to the notices
required by SECTION 3.4(C), each Issuing Bank shall, no later than the tenth
Business Day following the last day of each month, provide to the Agent, upon
the Agent's request, schedules, in form and substance reasonably satisfactory to
the Agent, showing the date of issue, account party, amount, expiration date and
the reference number of each Letter of Credit issued by it outstanding at any
time during such month and the aggregate amount payable by the Borrower during
such month. In addition, upon the request of the Agent, each Issuing Bank shall
furnish to the Agent copies of any Letter of Credit and any application for or
reimbursement agreement with respect to a Letter of Credit to which the Issuing
Bank is party and such other documentation as may reasonably be requested by the
Agent. Upon the request of any Lender, the Agent will provide to such Lender
information concerning such Letters of Credit.

      3.9 INDEMNIFICATION; EXONERATION.

      (a) In addition to amounts payable as elsewhere provided in this ARTICLE
III, the Borrower hereby agrees to protect, indemnify, pay and save harmless the
Agent, each Issuing Bank and each Lender from and against any and all
liabilities and costs which the Agent, such Issuing Bank or such Lender may
incur or be subject to as a consequence, direct or indirect, of (i) the issuance
of any Letter of Credit other than, in the case of the applicable Issuing Bank,
as a result of its Gross Negligence or willful misconduct, as determined by the
final judgment of a court of competent jurisdiction, or (ii) the failure of the
applicable Issuing Bank to honor a drawing under a Letter of Credit as a result
of any act or omission, whether rightful or wrongful, of any present or future
DE JURE or DE FACTO Governmental Authority (all such acts or omissions herein
called "GOVERNMENTAL ACTS").

      (b) As among the Borrower, the Lenders, the Agent and the Issuing Banks,
the Borrower assumes all risks of the acts and omissions of, or misuse of such
Letter of Credit by, the beneficiary of any Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions of the Letter
of Credit applications and Letter of Credit reimbursement agreements executed by
the Borrower at the time of request for any Letter of Credit, neither the Agent,
any Issuing Bank nor any Lender shall be responsible (in the absence of Gross
Negligence or willful misconduct in connection therewith, as determined by the
final judgment

                                       38
<PAGE>
of a court of competent jurisdiction): (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of the Letters of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) for failure of the beneficiary of a Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, or other similar form of
teletransmission or otherwise; (v) for errors in interpretation of technical
trade terms; (vi) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (vii) for the misapplication by the beneficiary of a
Letter of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of the Agent,
the Issuing Banks and the Lenders, including, without limitation, any
Governmental Acts. None of the above shall affect, impair, or prevent the
vesting of any Issuing Bank's rights or powers under this SECTION 3.9.

      (c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the applicable Issuing Bank, the Agent or any Lender under any
resulting liability to the Borrower or relieve the Borrower of any of its
obligations hereunder to any such Person.

      (d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 3.9 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.

      3.10 CASH COLLATERAL. Notwithstanding anything to the contrary herein or
in any application for a Letter of Credit, after the occurrence and during the
continuance of Default, the Borrower shall, upon the Agent's demand, deliver to
the Agent for the benefit of the Lenders and the Issuing Banks, cash, or other
collateral of a type satisfactory to the Required Lenders, having a value, as
determined by such Lenders, equal to the aggregate outstanding L/C Obligations.
In addition, if the Revolving Credit Availability is at any time less than the
amount of contingent L/C Obligations outstanding at any time, the Borrower shall
deposit cash collateral with the Agent in an amount equal to the amount by which
such L/C Obligations exceed such Revolving Credit Availability. Any such
collateral shall be held by the Agent in a separate account appropriately
designated as a cash collateral account in relation to this Agreement and the
Letters of Credit and retained by the Agent for the benefit of the Lenders and
the Issuing Banks as collateral security for the Borrower's obligations in
respect of this Agreement and each of the Letters of Credit and L/C Drafts. Such
amounts shall be applied to reimburse the Issuing Banks for drawings or payments
under or pursuant to Letters of Credit or L/C Drafts, or if no such
reimbursement is required, to payment of such of the other Obligations as the
Agent shall determine. If no Default shall be continuing, amounts remaining in
any cash collateral account established pursuant to this SECTION 3.10 which are
not to be applied to reimburse an Issuing

                                       39
<PAGE>
Bank for amounts actually paid or to be paid by such Issuing Bank in respect of
a Letter of Credit or L/C Draft, shall be returned to the Borrower (after
deduction of the Agent's expenses incurred in connection with such cash
collateral account).

                                   ARTICLE 4

                             CHANGE IN CIRCUMSTANCES

      4.1 YIELD PROTECTION. If any law or any governmental or quasi-governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) adopted after the Original Closing Date and having general
applicability to all banks within the jurisdiction in which such Lender operates
(excluding, for the avoidance of doubt, the effect of and phasing in of capital
requirements or other regulations or guidelines passed prior to the Original
Closing Date), or any interpretation or application thereof by any Governmental
Authority charged with the interpretation or application thereof, or the
compliance of any Lender therewith,

      (a) to the extent not otherwise covered pursuant to the provisions of
SECTION 2.12(E), subjects any Lender or any applicable Lending Installation to
any tax, duty, charge or withholding on or from payments due from the Borrower
(excluding, in the case of each Lender and the Agent, such taxes (including
income taxes, franchise taxes and branch profit taxes) as are imposed on or
measured by such Lender's or Agent's, as the case may be, income by the United
States of America or any Governmental Authority of the jurisdiction under the
laws of which such Lender or Agent, as the case may be, is organized ), or
changes the basis of taxation of payments to any Lender in respect of its Loans,
its L/C Interests, the Letters of Credit or other amounts due it hereunder, or

      (b) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to Eurodollar Rate Loans)
with respect to its Loans, L/C Interests or the Letters of Credit, or

      (c) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making, funding or
maintaining the Loans, the L/C Interests or the Letters of Credit or reduces any
amount received by any Lender or any applicable Lending Installation in
connection with Loans or Letters of Credit, or requires any Lender or any
applicable Lending Installation to make any payment calculated by reference to
the amount of Loans or L/C Interests held or interest received by it or by
reference to the Letters of Credit, by an amount deemed material by such Lender;

      and the result of any of the foregoing is to increase the cost to that
Lender of making, renewing or maintaining its Loans, L/C Interests or Letters of
Credit or to reduce any amount received under this Agreement, then, within 15
days after receipt by the Borrower of written demand by such Lender pursuant to
SECTION 4.5, the Borrower shall pay such Lender that portion of such increased
expense incurred or reduction in an amount received which such Lender determines
is attributable to making, funding and maintaining its Loans, L/C Interests,
Letters of Credit and its Commitment.

                                       40
<PAGE>
      4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines (i)
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "Change" (as defined below), and (ii) such
increase in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation to
make Loans hereunder, then, within 15 days after receipt by the Borrower of
written demand by such Lender pursuant to SECTION 4.5, the Borrower shall pay
such Lender the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans, its L/C Interests, the Letters of
Credit or its obligation to make Loans hereunder (after taking into account such
Lender's policies as to capital adequacy). "CHANGE" means (i) any change after
the Original Closing Date of this Agreement in the "Risk-Based Capital
Guidelines" (as defined below) excluding, for the avoidance of doubt, the effect
of any phasing in of such Risk-Based Capital Guidelines or any other capital
requirements passed prior to the Original Closing Date hereof, or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the Original Closing Date and having general
applicability to all banks and financial institutions within the jurisdiction in
which such Lender operates which affects the amount of capital required or
expected to be maintained by any Lender or any Lending Installation or any
corporation controlling any Lender. "RISK-BASED CAPITAL GUIDELINES" means (i)
the risk-based capital guidelines in effect in the United States on the Original
Closing Date, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the Original Closing Date.

      4.3 AVAILABILITY OF TYPES OF ADVANCES. If (i) any Lender determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or (ii) the Required Lenders determine that (x)
deposits of a type and maturity appropriate to match fund Eurodollar Rate
Advances are not available or (y) the interest rate applicable to a Type of
Advance does not accurately reflect the cost of making or maintaining such an
Advance, then the Agent shall suspend the availability of the affected Type of
Advance and, in the case of any occurrence set forth in CLAUSE (I) require any
Advances of the affected Type to be converted to Floating Rate Loans until the
circumstances giving rise to such suspension no longer exist.

      4.4 FUNDING INDEMNIFICATION. If any payment of a Eurodollar Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment, or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, or a Eurodollar Rate Advance is converted on a day
other than the last day of the applicable Interest Period, the Borrower
indemnifies each Lender for any loss or cost incurred by it resulting therefrom
(including loss of profit other than loss of profit represented by the
Applicable Eurodollar Margin which would have been payable for such Interest
Period), including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain the Eurodollar Rate Advance.

                                       41
<PAGE>
      4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. If reasonably possible, each
Lender shall designate an alternate Lending Installation with respect to its
Eurodollar Rate Loans to reduce any liability of the Borrower to such Lender
under SECTIONS 4.1 and 4.2 or to avoid the unavailability of a Type of Advance
under SECTION 4.3, so long as such designation is not disadvantageous to such
Lender. Each Lender requiring compensation pursuant to SECTION 2.12(E) or to
this ARTICLE IV shall use its reasonable efforts to notify the Borrower and the
Agent in writing of any Change, law, policy, rule, guideline or directive giving
rise to such demand for compensation not later than ninety (90) days following
the date upon which the responsible account officer of such Lender knows or
should have known of such Change, law, policy, rule, guideline or directive;
PROVIDED, HOWEVER, that the failure to so notify the Borrower shall not affect
the Borrower's obligations under this SECTION 4.5. Any demand for compensation
pursuant to this ARTICLE IV shall be in writing and shall state the amount due,
if any, under SECTION 4.1, 4.2 or 4.4 and shall set forth in reasonable detail
the calculations upon which such Lender determined such amount. Such written
demand shall be rebuttably presumed correct for all purposes. Determination of
amounts payable under such Sections in connection with a Eurodollar Rate Loan
shall be calculated as though each Lender funded its Eurodollar Rate Loan
through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether in fact that is the case or not. The obligations of the
Borrower under SECTIONS 4.1, 4.2 and 4.4 shall survive payment of the
Obligations and termination of this Agreement.

                                   ARTICLE 5

                              CONDITIONS PRECEDENT

      5.1 ADVANCES AND LETTERS OF CREDIT. The Lenders shall not be required to
make further Loans or issue any Letters of Credit or purchase any participations
therein unless (i) no law, regulation, order, judgment or decree of any
Governmental Authority shall, and the Agent shall not have received any notice
that litigation is pending or threatened which is likely to, (A) enjoin,
prohibit or restrain the making of the Loans or (B) impose or result in the
imposition of a Material Adverse Effect; and (ii) the Borrower has furnished on
or before the Effective Date to the Agent each of the following, with sufficient
copies for the Lenders, all in form and substance satisfactory to the Agent and
the Lenders:

      (a) Copies, certified by the Secretary or Assistant Secretary of the
Borrower and each Guarantor, of its articles or certificate of incorporation
(which copies for the Borrower shall be certified as of a recent date by the
appropriate governmental officer in its respective jurisdiction of
incorporation), its by-laws and of its Board of Directors' resolutions (and
resolutions of other bodies, if any are deemed necessary by counsel for any
Lender) authorizing the execution of the Loan Documents;

      (b) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower and each Guarantor, which shall identify by name and
title and bear the signature of the officers of the Borrower and Guarantors
authorized to sign the Loan Documents and, in the case of the Borrower, to
request Loans and Letters of Credit hereunder, upon which certificate the
Lenders shall be entitled to rely until informed of any change in writing by the
Borrower;

                                       42
<PAGE>
      (c) A certificate, in form and substance satisfactory to the Agent, signed
by the chief financial officer or treasurer of the Borrower, (i) stating that on
the Effective Date no Default or Unmatured Default has occurred and is
continuing, and (ii) setting forth the calculation of the Leverage Ratio as of
September 30, 2000;

      (d) A written opinion of the Borrower's and Guarantors' general counsel
and outside counsel, addressed to the Agent and the Lenders, in substantially
the form attached as Exhibit G hereto;

      (e) Revolving Notes payable to the order of each of the applicable Lenders
dated February 11, 1998;

      (f) A Swing Line Note payable to the order of Bank One dated February 11,
1998;

      (g) Written money transfer instructions reasonably requested by the Agent,
addressed to the Agent and signed by an Authorized Officer;

      (h) The Guaranty executed by each of the Guarantors;

      (i) The Pledge Agreements executed by the Borrower in connection with
which the Borrower shall have delivered stock certificates, stock powers and
UCC-1 financing statements;

      (j) The Security Agreements executed by Borrower and each of its
Subsidiaries, together with all financing statements and other documents,
agreements and instruments required by the Agent in connection therewith;

      (k) The payment of an amendment fee in the amount of $875,000 to the Agent
for the benefit of each Lender ratably in proportion to such Lender's respective
Pro Rata Share together with such other fees as the Borrower has agreed in
writing to pay to the Agent;

      (l) The closing of the modification of the Securitization Facility on
terms satisfactory to the Lenders, including an extension of the Securitization
Facility for 365 days; and

      (m) Such other documents as the Agent or any Lender or its counsel may
have reasonably requested.

      5.2 EACH ADVANCE AND LETTER OF CREDIT. The Lenders shall not be required
to make any Advance, issue any Letter of Credit or purchase any participation
therein, unless on the applicable Borrowing Date, or in the case of a Letter of
Credit, the date on which the Letter of Credit is to be issued:

      (i) There exists no Default or Unmatured Default; and

      (ii) The representations and warranties contained in ARTICLE VI are true
and correct as of such Borrowing Date (unless such representation and warranty
expressly relates to an earlier date or is no longer true solely as a result of
transactions permitted by this Agreement).

                                       43
<PAGE>
      Each Borrowing Notice with respect to each such Advance and the letter of
credit application with respect to a Letter of Credit shall constitute a
representation and warranty by the Borrower that the conditions contained in
SECTIONS 5.2(I) and (II) have been satisfied. If any Lender has a reasonable
basis for believing a Default or Unmatured Default may have occurred and is
continuing or that the Borrower is not able to make one or more of the
representations and warranties set forth in ARTICLE VI, such Lender may require
a duly completed officer's certificate in substantially the form of EXHIBIT H
hereto and/or a duly completed compliance certificate in substantially the form
of EXHIBIT I hereto as a condition to making an Advance or the issuance of any
Letter of Credit.

                                   ARTICLE 6

                         REPRESENTATIONS AND WARRANTIES

      The Borrower represents and warrants as follows to each Lender and the
Agent as of the Effective Date, and thereafter on each date as required by
SECTION 5.2:

      6.1 ORGANIZATION; CORPORATE POWERS. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is duly
qualified to do business and is in good standing under the laws of each
jurisdiction in which failure to be so qualified and in good standing could not
reasonably be expected to have a Material Adverse Effect and (iii) has all
requisite corporate power and authority to own, operate and encumber its
property and to conduct its business as presently conducted and as proposed to
be conducted.

      6.2 AUTHORITY.

      (a) The Borrower and each of its Subsidiaries has the requisite power and
authority to execute, deliver and perform each of the Loan Documents to be
executed by it, (b) The execution, delivery, performance and filing, as the case
may be, of each of the Loan Documents to which the Borrower or any of its
Subsidiaries is party, and the consummation of the transactions contemplated
thereby, have been duly approved by the respective boards of directors and, if
necessary, the shareholders of the Borrower and its Subsidiaries, and such
approvals have not been rescinded. No other corporate action or proceedings on
the part of the Borrower or its Subsidiaries are necessary to consummate such
transactions.

      (b) Each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the case
may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, is in full force and effect
and the Borrower and its Subsidiaries have performed and complied with all the
material terms, provisions, agreements and conditions set forth therein and
required to be performed or complied with by such parties on or before the
Effective Date, and no unmatured default, default or breach of any material
covenant by any such party exists thereunder.

      6.3 NO CONFLICT; GOVERNMENTAL CONSENTS. The execution, delivery and
performance of each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party do not and will not (i) conflict with the certificate or
articles of incorporation or by-laws of the

                                       44
<PAGE>
Borrower or any such Subsidiary, (ii) constitute a tortious interference with
any Contractual Obligation of any Person or conflict with, result in a breach of
or constitute (with or without notice or lapse of time or both) a default under
any Requirement of Law (including, without limitation, any Environmental
Property Transfer Act) or Contractual Obligation of the Borrower or any such
Subsidiary, or require termination of any Contractual Obligation, except such
interference, breach, default or termination which individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect,
(iii) result in or require the creation or imposition of any Lien whatsoever
upon any of the property or assets of the Borrower or any such Subsidiary, other
than Liens permitted by the Loan Documents, or (iv) require any approval of the
Borrower's or any such Subsidiary's shareholders except such as have been
obtained. The execution, delivery and performance of each of the Loan Documents
to which the Borrower or any of its Subsidiaries is a party do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by any Governmental Authority, including under any
Environmental Property Transfer Act, except filings, consents or notices which
have been made, obtained or given, or which, if not made, obtained or given,
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.

      6.4 FINANCIAL STATEMENTS. The consolidated financial statements of the
Borrower and its Subsidiaries dated June 30, 2000 and furnished on behalf of the
Borrower to financial institutions invited to participate in the credit facility
evidenced by this Agreement, fairly present, in conformity with generally
accepted accounting principles, the consolidated financial condition of the
Borrower and such Subsidiaries as of the dates contained therein and their
consolidated results of operations and cash flows for such periods stated.

      6.5 NO MATERIAL ADVERSE CHANGE. Since December 31, 1999, there has
occurred no event or circumstance which has had or could reasonably be expected
to have a Material Adverse Effect.

      6.6 TAXES.

      (a) Tax Examinations. All material deficiencies which have been asserted
against the Borrower or any of the Borrower's Subsidiaries as a result of any
federal, state, local or foreign tax examination for each taxable year in
respect of which an examination has been conducted have been fully paid or
finally settled or are being contested in good faith, and as of the Effective
Date no issue has been raised by any taxing authority in any such examination
which, by application of similar principles, reasonably can be expected to
result in assertion by such taxing authority of a material deficiency for any
other year not so examined which has not been reserved for in the Borrower's
consolidated financial statements to the extent, if any, required by Agreement
Accounting Principles.

      (b) Payment of Taxes. All tax returns and reports of the Borrower and its
Subsidiaries required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
Agreement Accounting Principles or for which the failure to file could not
reasonably be expected to have a Material Adverse Effect. The Borrower has no
knowledge

                                       45
<PAGE>
of any proposed tax assessment against the Borrower or any of its Subsidiaries
that will have or could reasonably be expected to have a Material Adverse
Effect.

      6.7 LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS. There is no action,
suit, proceeding, arbitration or (to the Borrower's knowledge after diligent
inquiry) investigation before or by any Governmental Authority or private
arbitrator pending or, to the Borrower's knowledge after diligent inquiry,
threatened against the Borrower or any of its Subsidiaries or any property of
any of them (i) challenging the validity or the enforceability of any material
provision of the Loan Documents or (ii) which will have or could reasonably be
expected to have a Material Adverse Effect. There is no material loss
contingency within the meaning of Agreement Accounting Principles which has not
been reflected in the consolidated financial statements of the Borrower and its
Subsidiaries prepared and delivered pursuant to SECTION 7.1(A) for the fiscal
period during which such material loss contingency was incurred. Neither the
Borrower nor any of its Subsidiaries is (i) in violation of any applicable
Requirements of Law which violation will have or could reasonably be expected to
have a Material Adverse Effect, or (ii) subject to or in default with respect to
any final judgment, writ, injunction, restraining order or order of any nature,
decree, rule or regulation of any court or Governmental Authority which will
have or could reasonably be expected to have a Material Adverse Effect.

      6.8 SUBSIDIARIES. SCHEDULE 6.8 to this Agreement (i) contains a
description as of the Effective Date (or as of the date of any supplement
thereto) of the corporate structure of, the Borrower and its Subsidiaries and
any other Person in which the Borrower or any of its Subsidiaries holds an
Equity Interest; and (ii) accurately sets forth as of the Effective Date (or as
of the date of any supplement thereto) (A) the correct legal name, the
jurisdiction of incorporation and the jurisdictions in which each of the
Borrower and the Subsidiaries of the Borrower is qualified to transact business
as a foreign corporation, (B) for each Subsidiary of the Borrower which is not a
wholly-owned Subsidiary, the authorized, issued and outstanding shares of each
class of Capital Stock of such Subsidiaries and the owners of such shares (both
as of the Effective Date and on a fully-diluted basis), and (C) a summary of the
direct and indirect partnership, joint venture, or other Equity Interests, if
any, of the Borrower and each Subsidiary of the Borrower in any Person that is
not a corporation. After the formation or acquisition of any New Subsidiary
permitted under SECTION 7.3(G)(II), if requested by the Agent, the Borrower
shall provide a supplement to Schedule 6.8 or as permitted to exist under
SECTION 7.2(F) to this Agreement. None of the issued and outstanding Capital
Stock of the Borrower or any of its Subsidiaries is subject to any redemption or
repurchase agreement. The outstanding Capital Stock of the Borrower and each of
the Borrower's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable. The Borrower has no Subsidiaries other than (i) the Subsidiaries
set forth on SCHEDULE 6.8 and (ii) any Subsidiaries acquired in connection with
a Permitted Acquisition, in connection with which the Borrower shall have
provided all of the documents, instruments and agreements as required by this
Agreement.

      6.9 ERISA. No Benefit Plan has incurred any material accumulated funding
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code)
whether or not waived. Neither the Borrower nor any member of the Controlled
Group has incurred any material liability to the PBGC which remains outstanding
other than the payment of premiums, and there are no premium payments which have
become due which are unpaid. Schedule B to the most recent annual report filed
with the IRS with respect to each Benefit Plan and, if so

                                       46
<PAGE>
requested, furnished to the Lenders, is complete and accurate. Since the date of
each such Schedule B, there has been no material adverse change in the funding
status or financial condition of the Benefit Plan relating to such Schedule B.
Neither the Borrower nor any member of the Controlled Group has (i) failed to
make a required contribution or payment to a Multiemployer Plan or (ii) made a
complete or partial withdrawal under Sections 4203 or 4205 of ERISA from a
Multiemployer Plan, in either event which could result in any material
liability. Neither the Borrower nor any member of the Controlled Group has
failed to make a required installment or any other required payment under
Section 412 of the Code, in either case involving any material amount, on or
before the due date for such installment or other payment. Neither the Borrower
nor any member of the Controlled Group is required to provide security to a
Benefit Plan under Section 401(a)(29) of the Code due to a Plan amendment that
results in an increase in current liability for the plan year. Neither the
Borrower nor any of its Subsidiaries maintains or contributes to any employee
welfare benefit plan within the meaning of Section 3(1) of ERISA which provides
benefits to employees after termination of employment other than as required by
Section 601 of ERISA. Each Plan which is intended to be qualified under Section
401(a) of the Code as currently in effect is so qualified, and each trust
related to any such Plan is exempt from federal income tax under Section 501(a)
of the Code as currently in effect. The Borrower and all Subsidiaries are in
compliance in all material respects with the responsibilities, obligations and
duties imposed on them by ERISA and the Code with respect to all Plans. Neither
the Borrower nor any of its Subsidiaries nor any fiduciary of any Plan has
engaged in a nonexempt prohibited transaction described in Sections 406 of ERISA
or 4975 of the Code which could reasonably be expected to subject the Borrower
or any Guarantor to material liability. Neither the Borrower nor any member of
the Controlled Group has taken or failed to take any action which would
constitute or result in a Termination Event, which action or inaction could
reasonably be expected to subject the Borrower to material liability. Neither
the Borrower nor any Subsidiary is subject to any liability under Sections 4063,
4064, 4069, 4204 or 4212(c) of ERISA and no other member of the Controlled Group
is subject to any liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of
ERISA which could reasonably be expected to subject the Borrower or any
Guarantor to material liability. Neither the Borrower nor any of its
Subsidiaries has, by reason of the transactions contemplated hereby, any
obligation to make any payment to any employee pursuant to any Plan or existing
contract or arrangement. For purposes of this SECTION 6.9 "material" means any
noncompliance or basis for liability which could reasonably be likely to subject
the Borrower or any of its Subsidiaries to liability individually or in the
aggregate for all such matters in excess of $10,000,000. Each Foreign Pension
Plan is in compliance in all material respects with all laws, regulations and
rules applicable thereto and the respective requirements of the governing
documents for such Plan. The aggregate of the liabilities to provide all of the
accrued benefits under any Foreign Employee Benefit Plan does not exceed the
current fair market value of the assets held in the trust or other funding
vehicle for such Plan.

      6.10 ACCURACY OF INFORMATION. The information, exhibits and reports
furnished by or on behalf of the Borrower and any of its Subsidiaries to the
Agent or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents, and all certificates and documents delivered to the
Agent and the Lenders pursuant to the terms thereof, taken as a whole, do not
contain as of the date furnished any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained
herein or therein, taken as a whole, in light of the circumstances under which
they were made, not misleading.

                                       47
<PAGE>
      6.11 SECURITIES ACTIVITIES. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.

      6.12 MATERIAL AGREEMENTS. Neither the Borrower nor any of its Subsidiaries
is a party to any Contractual Obligation or subject to any charter or other
corporate restriction which individually or in the aggregate will have or could
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any of its Subsidiaries has received notice or has knowledge that (i) it is
in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to it, or (ii) any condition exists which, with the giving of notice
or the lapse of time or both, would constitute a default with respect to any
such Contractual Obligation, in each case, except where such default or
defaults, if any, individually or in the aggregate will not have or could not
reasonably be expected to have a Material Adverse Effect.

      6.13 COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.

      6.14 ASSETS AND PROPERTIES. The Borrower and each of its Subsidiaries has
good and marketable title to all of its assets and properties (tangible and
intangible, real or personal) owned by it or a valid leasehold interest in all
of its leased assets (except insofar as marketability may be limited by any laws
or regulations of any Governmental Authority affecting such assets), except
where the failure to have any such title will not have or could not reasonably
be expected to have a Material Adverse Effect, and all such assets and property
are free and clear of all Liens, except Liens permitted under SECTION 7.3(C).
Substantially all of the assets and properties owned by, leased to or used by
the Borrower and/or each such Subsidiary of the Borrower are in adequate
operating condition and repair, ordinary wear and tear excepted. Neither this
Agreement nor any other Loan Document, nor any transaction contemplated under
any such agreement, will affect any right, title or interest of the Borrower or
such Subsidiary in and to any of its assets in a manner that will have or could
reasonably be expected to have a Material Adverse Effect.

      6.15 STATUTORY INDEBTEDNESS RESTRICTIONS. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, or any other federal, state or local statute,
ordinance or regulation which limits its ability to incur indebtedness or its
ability to consummate the transactions contemplated hereby.

      6.16 INSURANCE. The Borrower's and its Subsidiaries' insurance policies
and programs reflect coverage that is reasonably consistent with prudent
industry practice.

      6.17 LABOR MATTERS. As of the Effective Date, to the Borrower's and its
Subsidiaries' knowledge, there are no material labor disputes to which the
Borrower or any of its Subsidiaries may become a party, including, without
limitation, any strikes, lockouts or other disputes relating to such Persons'
plants and other facilities.

                                       48
<PAGE>
      6.18 ENVIRONMENTAL MATTERS.

      (a) (i) The operations of the Borrower and its Subsidiaries comply in all
material respects with Environmental, Health or Safety Requirements of Law;

            (ii) The Borrower and its Subsidiaries have all material permits,
      licenses or other authorizations required under Environmental, Health or
      Safety Requirements of Law and are in material compliance with such
      permits;

            (iii) neither the Borrower, any of its Subsidiaries nor any of their
      respective present property or operations, or, to the best of, the
      Borrower's or any of its Subsidiaries' knowledge, any of their respective
      past property or operations, are subject to or the subject of, any
      investigation known to the Borrower or any of its Subsidiaries, any
      judicial or administrative proceeding, order, judgment, decree, settlement
      or other agreement respecting: (A) any material violation of
      Environmental, Health or Safety Requirements of Law; (B) any material
      remedial action; or (C) any material claims or liabilities arising from
      the Release or threatened Release of a Contaminant into the environment;

            (iv) there is not now, nor to the best of the Borrower's or any of
      its Subsidiaries' knowledge has there ever been on or in the property of
      the Borrower or any of its Subsidiaries any landfill, waste pile,
      underground storage tanks, aboveground storage tanks, surface impoundment
      or hazardous waste storage facility of any kind, any polychlorinated
      biphenyls (PCBs) used in hydraulic oils, electric transformers or other
      equipment, or any asbestos containing material that in the case of any of
      the foregoing could be reasonably expected to result in any material
      claims or liabilities; and

            (v) neither the Borrower nor any of its Subsidiaries has any
      material Contingent Obligation in connection with any Release or
      threatened Release of a Contaminant into the environment.

      (b) For purposes of this SECTION 6.18 "material" means any noncompliance
or tbasis for liability which could reasonably be expected individually or in
the aggregate to have a Material Adverse Effect.

      6.19 BENEFITS. Each of the Borrower and its Subsidiaries will benefit from
the financing arrangement established by this Agreement. The Agent and the
Lenders have stated and the Borrower acknowledges that, but for the agreement by
each of the Guarantors to execute and deliver the Guaranty, the Agent and the
Lenders would not have made available the credit facilities established hereby
on the terms set forth herein.

      6.20 SENIOR DEBT STATUS. The Secured Obligations constitute "Senior Debt"
as defined in the Indenture and are entitled to the benefits of the
subordination provisions contained therein.

                                   ARTICLE 7

                                    COVENANTS

                                       49
<PAGE>
      The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations), unless the Required Lenders shall
otherwise give prior written consent:

      7.1 REPORTING. The Borrower shall:

      (A) FINANCIAL REPORTING. Furnish to the Lenders:

            (I) QUARTERLY REPORTS. As soon as practicable, and in any event
      within forty-five (45) days after the end of each of the first three
      quarters in each fiscal year, the consolidated balance sheet of the
      Borrower and its Subsidiaries as at the end of such period and the related
      consolidated statements of income and cash flows of the Borrower and its
      Subsidiaries for such fiscal quarter and for the period from the beginning
      of the then current fiscal year to the end of such fiscal quarter,
      certified by the chief financial officer of the Borrower on behalf of the
      Borrower as fairly presenting the consolidated financial position of the
      Borrower and its Subsidiaries as at the dates indicated and the results of
      their operations and cash flows for the periods indicated in accordance
      with Agreement Accounting Principles, subject to normal year end
      adjustments. In addition, as soon as practicable, and in any event within
      forty-five (45) days after the end of the fourth fiscal quarter in each
      fiscal year, such financial statements and information as shall be
      reasonably acceptable to the Agent as sufficient for the calculation of
      the Leverage Ratio as of the end of such fiscal quarter, certified by the
      chief financial officer of the Borrower.

            (II) ANNUAL REPORTS. As soon as practicable, and in any event within
      ninety (90) days after the end of each fiscal year, (a) the consolidated
      balance sheet of the Borrower and its Subsidiaries as at the end of such
      fiscal year and the related consolidated statements of income,
      stockholders' equity and cash flows of the Borrower and its Subsidiaries
      for such fiscal year, and in comparative form the corresponding figures
      for the previous fiscal year and (b) an audit report on the items listed
      in CLAUSE (A) hereof of independent certified public accountants of
      recognized national standing, which audit report shall be unqualified and
      shall state that such financial statements fairly present the consolidated
      financial position of the Borrower and its Subsidiaries as at the dates
      indicated and the results of their operations and cash flows for the
      periods indicated in conformity with Agreement Accounting Principles and
      that the examination by such accountants in connection with such
      consolidated financial statements has been made in accordance with
      generally accepted auditing standards. The deliveries made pursuant to
      this CLAUSE (II) shall be accompanied by any management letter prepared by
      the above-referenced accountants.

            (III) OFFICER'S CERTIFICATE. Together with each delivery of any
      financial statement (a) pursuant to CLAUSES (I) and (II) of this SECTION
      7.1(A), an Officer's Certificate of the Borrower, substantially in the
      form of EXHIBIT H attached hereto and made a part hereof, stating that no
      Default or Unmatured Default exists, or if any Default or Unmatured
      Default exists, stating the nature and status thereof and (b) pursuant to
      CLAUSES (I) and (II) of this SECTION 7.1(A), a compliance certificate,
      substantially in the form of EXHIBIT I attached hereto and made a part
      hereof, signed by the Borrower's chief financial

                                       50
<PAGE>
      officer or treasurer, setting forth calculations for the period then
      ended, which demonstrate compliance, when applicable, with the provisions
      of SECTION 7.4, and which calculate the Leverage Ratio for purposes of
      determining the then Applicable Eurodollar Margin, Applicable Floating
      Rate Margin and Applicable Commitment Fee Percentage.

            (IV) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. Not less
      frequently than once during each 12-month period following the Effective
      Date, a copy of the plan and forecast (including a projected balance
      sheet, income statement and statement of cash flow) of the Borrower and
      its Subsidiaries for the upcoming 12-month period prepared in such detail
      as shall be reasonably satisfactory to the Agent.

            (V) BORROWING BASE CERTIFICATES. Within 30 days after the end of
      each calendar month, a completed Borrowing Base Certificate calculating
      and certifying the Borrower Base as of the last day of such calendar
      month, signed on behalf of the Borrower by an Authorized Officer
      accompanied by a summary report by product group on the aging of all
      Accounts Receivable, using a format and otherwise in a manner acceptable
      to the Agent.

      (B) NOTICE OF DEFAULT. Promptly upon any of the chief executive officer,
chief operating officer, chief financial officer, treasurer or controller of the
Borrower obtaining knowledge (i) of any condition or event which constitutes a
Default or Unmatured Default, or becoming aware that any Lender or Agent has
given any written notice with respect to a claimed Default or Unmatured Default
under this Agreement, or (ii) that any Person has given any written notice to
the Borrower or any Subsidiary of the Borrower or taken any other action with
respect to a claimed default or event or condition of the type referred to in
SECTION 8.1(E), deliver to the Agent and the Lenders a notice specifying (A) the
nature and period of existence of any such claimed default, Default, Unmatured
Default, condition or event, (B) the notice given or action taken by such Person
in connection therewith, and (C) what action the Borrower has taken, is taking
and proposes to take with respect thereto.

      (C) LAWSUITS. (i) Promptly upon the Borrower obtaining knowledge of the
institution of, or written threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or any of its
Subsidiaries or any property of the Borrower or any of its Subsidiaries, which
action, suit, proceeding, governmental investigation or arbitration exposes, or
in the case of multiple actions, suits, proceedings, governmental investigations
or arbitrations arising out of the same general allegations or circumstances
which could reasonably be expected to have a Material Adverse Effect, give
written notice thereof to the Agent and provide such other information as may be
reasonably available to enable each Lender and the Agent and its counsel to
evaluate such matters; and (ii) in addition to the requirements set forth in
CLAUSE (I) of this SECTION 7.1(C), upon request of the Agent or the Required
Lenders, promptly give written notice of the status of any action, suit,
proceeding, governmental investigation or arbitration covered by a report
delivered pursuant to CLAUSE (I) above or disclosed in any filing with the
Commission and provide such other information as may be reasonably available to
it that would not violate any attorney-client privilege by disclosure to the
Lenders to enable each Lender and the Agent and its counsel to evaluate such
matters.

                                       51
<PAGE>
      (D) ERISA NOTICES. Deliver or cause to be delivered to the Agent and the
Lenders, at the Borrower's expense, the following information and notices as
soon as reasonably possible, and in any event:

            (i) (A) within ten (10) Business Days after the Borrower obtains
      knowledge that a Termination Event has occurred, a written statement of
      the chief financial officer of the Borrower describing such Termination
      Event and the action, if any, which the Borrower has taken, is taking or
      proposes to take with respect thereto, and when known, any action taken or
      threatened by the IRS, DOL or PBGC with respect thereto and (B) within ten
      (10) Business Days after any member of the Controlled Group obtains
      knowledge that a Termination Event has occurred which could reasonably be
      expected to subject the Borrower or any member of the Controlled Group to
      liability individually or in the aggregate in excess of $1,000,000, a
      written statement of the chief financial officer of the Borrower
      describing such Termination Event and the action, if any, which the member
      of the Controlled Group has taken, is taking or proposes to take with
      respect thereto, and when known, any action taken or threatened by the
      IRS, DOL or PBGC with respect thereto;

            (ii) within ten (10) Business Days after the Borrower or any of its
      Subsidiaries obtains knowledge that a prohibited transaction (defined in
      Sections 406 of ERISA and Section 4975 of the Code) has occurred which
      could result in material liability, a statement of the chief financial
      officer of the Borrower describing such transaction and the action which
      the Borrower or such Subsidiary has taken, is taking or proposes to take
      with respect thereto;

            (iii) within ten (10) Business Days after the Borrower or any of its
      Subsidiaries receives notice of any unfavorable determination letter from
      the IRS regarding the qualification of a Plan under Section 401(a) of the
      Code, copies of each such letter;

            (iv) within ten (10) Business Days after the filing thereof with the
      IRS, a copy of each funding waiver request filed with respect to any
      Benefit Plan and all communications received by the Borrower or a member
      of the Controlled Group with respect to such request;

            (v) within ten (10) Business Days after receipt by the Borrower or
      any member of the Controlled Group of the PBGC's intention to terminate a
      Benefit Plan or to have a trustee appointed to administer a Benefit Plan,
      copies of each such notice;

            (vi) within ten (10) Business Days after receipt by the Borrower or
      any member of the Controlled Group of a notice from a Multiemployer Plan
      regarding the imposition of withdrawal liability, copies of each such
      notice;

            (vii) within ten (10) Business Days after the Borrower or any member
      of the Controlled Group fails to make a required installment or any other
      required payment under Section 412 of the Code on or before the due date
      for such installment or payment, a notification of such failure;

                                       52
<PAGE>
            (viii)within ten (10) Business Days after the Borrower or any member
      of the Controlled Group knows or has reason to know that (a) a
      Multiemployer Plan has been terminated, (b) the administrator or plan
      sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan,
      or (c) the PBGC has instituted or will institute proceedings under Section
      4042 of ERISA to terminate a Multiemployer Plan; and

            (ix) within fifteen (15) Business Days after the establishment of
      any Foreign Employee Benefit Plan or the commencement of, or obligation to
      commence, contributions to any Foreign Employee Benefit Plan to which the
      Borrower or any Domestic Subsidiary was not previously contributing, where
      the aggregate annual contribution by the Borrower or any Domestic
      Subsidiary to such plan are or could reasonably be expected to exceed
      $1,000,000, notification of such establishment commencement or obligation
      to commence and the amount of such contributions.

      For purposes of this SECTION 7.1(D), the Borrower, any of its Subsidiaries
and any member of the Controlled Group shall be deemed to know all facts known
by the Administrator of any Plan of which the Borrower or any member of the
Controlled Group or such Subsidiary is the plan sponsor.

      (E) LABOR MATTERS. Notify the Agent and the Lenders in writing, promptly
upon the Borrower's learning thereof, of (i) any material labor dispute to which
the Borrower or any of its Subsidiaries may become a party, including, without
limitation, any strikes, lockouts or other disputes relating to such Persons'
plants and other facilities and (ii) any material liability incurred under the
Worker Adjustment and Retraining Notification Act with respect to the closing of
any plant or other facility of the Borrower or any of its Subsidiaries.

      (F) OTHER INDEBTEDNESS. Deliver to the Agent (i) a copy of each notice or
communication regarding potential or actual defaults (including any accompanying
officer's certificate) delivered by or on behalf of the Borrower or any of its
Subsidiaries to the holders of funded Indebtedness pursuant to the terms of the
agreements governing such Indebtedness, such delivery to be made at the same
time and by the same means as such notice or other communication is delivered to
such holders, and (ii) a copy of each notice or other communication regarding
potential or actual defaults received by the Borrower or any of its Subsidiaries
from the from the holders of funded Indebtedness pursuant to the terms of such
Indebtedness, such delivery to be made promptly after such notice or other
communication is received by the Borrower or any such Subsidiary.

      (G) OTHER REPORTS. Deliver or cause to be delivered to the Agent and the
Lenders copies of all financial statements, reports and notices, if any, sent or
made available generally by the Borrower to its securities holders or filed with
the Commission by the Borrower, all press releases made available generally by
the Borrower or any of the Borrower's Subsidiaries to the public concerning
material developments in the business of the Borrower or any such Subsidiary and
all notifications received from the Commission by the Borrower or its
Subsidiaries pursuant to the Securities Exchange Act of 1934 and the rules
promulgated thereunder (other than customary comment letters received in
connection with registration statements or other routine communications between
the Commission and the Borrower).

                                       53
<PAGE>
      (H) ENVIRONMENTAL NOTICES. As soon as possible and in any event within ten
(10) days after receipt by the Borrower or any of its Subsidiaries, a copy of
(i) any notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the Release by the
Borrower, any of its Subsidiaries, or any other Person of any Contaminant into
the environment, and (ii) any notice alleging any violation of any
Environmental, Health or Safety Requirements of Law by the Borrower or any of
its Subsidiaries if, in either case, such notice or claim relates to an event
which could reasonably be expected to have a Material Adverse Effect.

      (I) OTHER INFORMATION. Promptly upon receiving a request therefor from the
Agent or any Lender, prepare and deliver to the Agent and the Lenders such other
information with respect to the Borrower, any of its Subsidiaries or the
Collateral as from time to time may be reasonably requested by the Agent or any
Lender.

      7.2 AFFIRMATIVE COVENANTS.

      (A) CORPORATE EXISTENCE, ETC. Except for mergers permitted pursuant to
SECTION 7.3(I), the Borrower shall, and shall cause each of the Guarantors to,
at all times maintain its corporate existence and preserve and keep, or cause to
be preserved and kept, in full force and effect its rights and franchises
material to its businesses.

      (B) CORPORATE POWERS; CONDUCT OF BUSINESS. The Borrower shall, and shall
cause each of its Subsidiaries to, qualify and remain qualified to do business
in each jurisdiction in which the nature of its business requires it to be so
qualified and where the failure to be so qualified will have or could reasonably
be expected to have a Material Adverse Effect. The Borrower will, and will cause
each Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted.

      (C) COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall cause its
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all Permits necessary for
its operations and maintain such Permits in good standing unless failure to
comply or obtain could not reasonably be expected to have a Material Adverse
Effect.

      (D) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments and
other governmental charges imposed upon it or on any of its properties or assets
or in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and (ii) all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien (other
than a Lien permitted by SECTION 7.3(C)) upon any of the Borrower's or such
Subsidiary's property or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; PROVIDED, HOWEVER, that no such taxes,
assessments and governmental charges referred to in CLAUSE (I) above or claims
referred to in CLAUSE (II) above (and interest, penalties or fines relating
thereto) need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in

                                       54
<PAGE>
conformity with Agreement Accounting Principles shall have been made therefor.
The Borrower will not, nor will it permit any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return with any other
Person other than the consolidated return of the Borrower.

      (E) INSURANCE. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect, insurance policies and programs reflecting coverage that is
reasonably consistent with prudent industry practice.

      (F) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The Borrower
shall permit and cause each of the Borrower's Subsidiaries to permit, any
authorized representative(s) designated by either the Agent or any Lender to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine, audit, check and make copies of their respective
financial and accounting records, books, journals, orders, receipts and any
correspondence and other data relating to their respective businesses or the
transactions contemplated hereby (including, without limitation, in connection
with environmental compliance, hazard or liability), and to discuss their
affairs, finances and accounts with their officers and independent certified
public accountants, all upon reasonable notice and at such reasonable times
during normal business hours, as often as may be reasonably requested; PROVIDED,
that while no Default exists, all of the foregoing shall be at the expense of
the Agent or Lenders, as applicable. The Borrower shall keep and maintain, and
cause each of the Borrower's Subsidiaries to keep and maintain, in all material
respects, proper books of record and account in which entries in conformity with
Agreement Accounting Principles shall be made of all dealings and transactions
in relation to their respective businesses and activities. If a Default has
occurred and is continuing, the Borrower, upon the Agent's request, shall turn
over any such records to the Agent or its representatives.

      (G) ERISA COMPLIANCE. The Borrower shall, and shall cause each of the
Borrower's Subsidiaries to, establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, the Code, all other
applicable laws, and the regulations and interpretations thereunder and the
respective requirements of the governing documents for such Plans, except where
the failure to comply will not or could not reasonably be expected to subject
the Borrower and its Subsidiaries to liability individually or in the aggregate
in excess of $10,000,000.

      (H) MAINTENANCE OF PROPERTY. The Borrower shall cause all property used or
useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this SECTION 7.2(H) shall prevent the
Borrower from discontinuing the operation or maintenance of any of such property
if such discontinuance is, in the judgment of the Borrower, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Agent or the Lenders.

                                       55
<PAGE>
      (I) ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries shall
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance could not reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any of its Subsidiaries shall be the subject of
any proceeding or investigation pertaining to (i) the Release by the Borrower or
any of its Subsidiaries of any Contaminant into the environment or (ii) the
liability of the Borrower or any of its Subsidiaries arising from the Release by
any other Person of any Contaminant into the environment, which, in either case,
has or is reasonably likely to have a Material Adverse Effect.

      (J) USE OF PROCEEDS. The Borrower shall use the proceeds of the Loans to
(i) provide funds for the additional working capital needs and other general
corporate purposes of the Borrower and its Subsidiaries and (ii) fund Permitted
Acquisitions. The Borrower will not, nor will it permit any Subsidiary to, use
any of the proceeds of the Loans to purchase or carry any "Margin Stock" or to
make any Acquisition, other than any Permitted Acquisition pursuant to Section
7.3(G).

      (K) ADDITION OF GUARANTORS; ADDITION OF PLEDGED CAPITAL STOCK. The
Borrower shall cause (i) each Domestic Subsidiary that is, at any time, a
Material Subsidiary, and (ii) each other Domestic Subsidiary necessary for the
Borrower to comply with the requirements set forth in SECTION 7.3(E), to deliver
to the Agent an executed Guaranty Supplement to become a Guarantor under the
Guaranty in the form of EXHIBIT J attached hereto and appropriate corporate
resolutions, opinions and other documentation in form and substance reasonably
satisfactory to the Agent, such Guaranty Supplement and other documentation to
be delivered to the Agent as promptly as possible but in any event within thirty
(30) days of determination that a Subsidiary is a Material Subsidiary or
otherwise needs to be added as a Guarantor. Simultaneously with any Subsidiary
becoming a Guarantor, the Borrower shall (or, if the Capital Stock of such
Subsidiary is owned by another Subsidiary, shall cause such other Subsidiary to)
deliver to the Agent an executed supplement to the Pledge Agreement or a Pledge
Agreement, together with appropriate corporate resolutions, opinions, stock
certificates, UCC filings or amendments and other documentation, in each case in
form and substance reasonably satisfactory to the Agent and the Agent shall be
reasonably satisfied that it has a first priority perfected pledge of all of the
Capital Stock of such Guarantor owned by the Borrower and its Subsidiaries.
Simultaneously with the formation or acquisition of any Material Subsidiary
which is not a Domestic Subsidiary or at any time thereafter that such
non-Domestic Subsidiary is determined to be a Material Subsidiary, the Borrower
shall (or, if the Capital Stock of such Subsidiary is owned by another
Subsidiary, shall cause such other Subsidiary to) deliver to the Agent an
executed Pledge Agreement pursuant to which 65% of each class of the Capital
Stock of such Subsidiary is pledged to the Agent for the benefit of the Holders
of Secured Obligations, together with appropriate corporate resolutions,
opinions, including foreign counsel's opinion, stock certificates, UCC or other
required filings or amendments and other documentation, in each case in form and
substance reasonably satisfactory to the Agent and the Agent shall be reasonably
satisfied that it has a first priority perfected pledge of 65% of each class of
the Capital Stock of such Subsidiary or, if less, such percentage as is owned by
the Borrower and its Subsidiaries.

      (L) ADDITIONAL SECURITY. The Borrower shall cause any Person becoming a
Subsidiary of the Borrower to deliver, within 30 days after its becoming a
Subsidiary, a supplement to the Security Agreement or a security agreement,
together with appropriate corporate resolutions,

                                       56
<PAGE>
opinions, UCC filings or amendments and other documentation, in each case in
form and substance reasonably satisfactory to the Agent and the Agent shall be
reasonably satisfied that it has a first priority perfected security interest in
the assets of such Subsidiary.

      (M) INVENTORY IN LEASED LOCATIONS. The Borrower shall, and shall cause
each of its Subsidiaries to use reasonable commercial efforts to deliver to
Agent, within 90 days from the Effective Date, landlord lien waivers for all
inventory and equipment located in or on property leased by the Borrower and/or
its Subsidiaries in form and substance reasonably acceptable to Agent in its
sole discretion.

      7.3 NEGATIVE COVENANTS.

      (A) INDEBTEDNESS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:

            (i) The Obligations;

            (ii) Permitted Existing Indebtedness and Permitted Refinancing
      Indebtedness;

            (iii) (A) the Indebtedness evidenced by the Senior Subordinated
      Notes and (B) other unsecured subordinated indebtedness incurred by the
      Borrower (including in connection with any Permitted Acquisition) that (x)
      does not have a stated maturity before the Termination Date in effect as
      of the date such indebtedness is incurred, (y) has terms that are no more
      restrictive than the terms of this Agreement and the other Loan Documents,
      and (z) is subordinated to the Obligations on terms at least as favorable
      to the Lenders as the terms set forth on SCHEDULE 7.3 attached hereto,
      with such changes thereto as may be agreed to by the Agent (such
      Indebtedness under CLAUSES (A) and (B) being referred to herein
      collectively as "PERMITTED SUBORDINATED INDEBTEDNESS");

            (iv) Indebtedness in respect of obligations secured by Customary
      Permitted Liens;

            (v) Indebtedness constituting Contingent Obligations in respect of
      Indebtedness otherwise permitted hereunder;

            (vi) Indebtedness arising from intercompany loans from the Borrower
      to any Controlled Subsidiary or from any Subsidiary to the Borrower or any
      Controlled Subsidiary; PROVIDED that in each case such Indebtedness is
      subordinated upon terms satisfactory to the Agent to the obligations of
      the Borrower and its Subsidiaries with respect to the Obligations;

            (vii) Guaranties by the Borrower of Indebtedness permitted to be
      incurred by any Subsidiary;

            (viii) Indebtedness in respect of Hedging Obligations permitted
      under SECTION 7.3(Q);

                                       57
<PAGE>
            (ix) Secured or unsecured purchase money Indebtedness (including
      Capitalized Leases) incurred by the Borrower or any of its Subsidiaries
      after the Original Closing Date (including, as a result of the assumption
      of any such Indebtedness in connection with a Permitted Acquisition) to
      finance the acquisition of fixed assets, if (A) at the time of such
      incurrence, no Default or Unmatured Default has occurred and is continuing
      or would result from such incurrence, (B) such Indebtedness has a
      scheduled maturity and is not due on demand, (C) such Indebtedness does
      not exceed the lower of the fair market value or the cost of the
      applicable fixed assets on the date acquired, (D) such Indebtedness does
      not exceed in the aggregate at any time an amount equal to the sum of (i)
      $10,000,000 PLUS (b) an amount equal to 1.5% of consolidated revenues of
      the Borrower and its Subsidiaries for each fiscal year, commencing with
      the fiscal year ending December 31, 1997, (E any Lien securing such
      Indebtedness is permitted under SECTION 7.3(c) and (F) such Indebtedness
      is incurred in compliance with CLAUSE (XV) below (such Indebtedness being
      referred to herein as "PERMITTED PURCHASE MONEY INDEBTEDNESS");

            (x) Indebtedness with respect to surety, appeal and performance
      bonds obtained by the Borrower or any of its Subsidiaries in the ordinary
      course of business;

            (xi) Indebtedness arising under the Guaranty;

            (xii) Indebtedness (including, without limitation, reimbursement
      obligations in connection with letters of credit issued in connection
      therewith) incurred by the Borrower or any of its Subsidiaries (or assumed
      in connection with a Permitted Acquisition) consisting of tax-advantaged
      industrial revenue bond, industrial development bond or other similar
      financings; PROVIDED the aggregate amount of such Indebtedness shall not
      at any time exceed $40,000,000;

            (xiii)Indebtedness incurred in connection with the Receivables
      Purchase Documents; PROVIDED the aggregate amount of such Indebtedness
      shall not at any time exceed $100,000,000 and; PROVIDED FURTHER that in
      any event the Borrower shall concurrently reduce the Revolving Credit
      Obligations by an amount equal to the amount of such Indebtedness (which
      reduction shall have no impact, however, on the Aggregate Commitment);

            (xiv) Indebtedness incurred in connection with the Securitization
      Facility or any new securitization facility in excess of that referred to
      in SECTION 7.3(A) (XIII) immediately above; provided the aggregate amount
      of such Indebtedness shall not at any time exceed $50,000,000 and;
      provided further that in any event (A) the Borrower shall concurrently
      reduce the Revolving Credit Obligations and the Aggregate Commitment by an
      amount equal to the amount of such Indebtedness and (B) the Indebtedness
      shall be approved by the Required Lenders;

            (xv) Other Indebtedness (other than working capital financing)
      existing at a New Subsidiary at the time of the Permitted Acquisition
      thereof (but not incurred in connection or in anticipation of such
      Permitted Acquisition) the outstanding principal balance of which does not
      exceed ten percent (10%) of the book value of the assets

                                       58
<PAGE>
      acquired as a result of such Permitted Acquisition and such Indebtedness
      is incurred in compliance with the provisions of CLAUSE (XV) below; and

            (xvi) Other Indebtedness in addition to that referred to elsewhere
      in this SECTION 7.3(A) incurred by the Borrower provided that (A) the
      aggregate amount of such other Indebtedness together with the aggregate
      amount of Permitted Purchase Money Indebtedness and Indebtedness incurred
      under CLAUSE (XV) above shall not at any time exceed $50,000,000; (B) the
      aggregate amount of such other Indebtedness which is secured by a Lien
      permitted under the terms of this Agreement together with the aggregate
      amount of secured Permitted Purchase Money Indebtedness and secured
      Indebtedness incurred under CLAUSE (XV) above shall not at any time exceed
      $25,000,000; and (C) no Default or Unmatured Default shall have occurred
      and be continuing at the date of such incurrence or would result
      therefrom.

      (B) SALES OF ASSETS. Neither the Borrower nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any property
(including the stock of any Subsidiary), whether now owned or hereafter
acquired, or any income or profits therefrom, or enter into any agreement to do
so, except:

            (i) Sales of inventory in the ordinary course of business;

            (ii) The disposition in the ordinary course of business of equipment
      that is obsolete, excess or no longer useful in the Borrower's or its
      Subsidiaries' business;

            (iii) Permitted Receivables Transfers; and

            (iv) Sales, assignments, transfers, leases, conveyances or other
      dispositions of other assets (including sales of stock of a Subsidiary) if
      such transaction (A) is for consideration consisting of at least 80% of
      cash, (B) is for not less than Fair Value, and (C) when combined with all
      such other transactions (each such transaction being valued at book value)
      (i) during the immediately preceding twelve-month period, represents the
      disposition of not greater than two percent (2.0%) of the Borrower's
      Consolidated Tangible Assets at the end of the fiscal year immediately
      preceding that in which such transaction is proposed to be entered into,
      and (ii) during the period from the Original Closing Date to the date of
      such proposed transaction, represents the disposition of not greater than
      twenty percent (20.0%) of the Borrower's Consolidated Tangible Assets at
      the end of the fiscal year immediately preceding that in which such
      transaction is proposed to be entered into;

provided that no agreements supplemental to this Agreement entered into for the
purpose of adding to or modifying this Subsection 7.3(b) or changing in any
manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder, shall be effective without the consent of Lenders whose Pro
Rata Shares, in the aggregate, are equal to or greater than eighty percent
(80%).

      (C) LIENS. Neither the Borrower nor any of its Subsidiaries shall directly
or indirectly create, incur, assume or permit to exist any Lien on or with
respect to any of their respective property or assets except:

                                       59
<PAGE>
            (i) Permitted Existing Liens;

            (ii) Customary Permitted Liens;

            (iii) Purchase money Liens (including the interest of a lessor under
      a Capitalized Lease and Liens to which any property is subject at the time
      of the Borrower's acquisition thereof) securing Permitted Purchase Money
      Indebtedness; provided that such Liens shall not apply to any property of
      the Borrower or its Subsidiaries other than that purchased or subject to
      such Capitalized Lease;

            (iv) Liens securing Indebtedness assumed in connection with a
      Permitted Acquisition and permitted pursuant to CLAUSE (XII) or CLAUSE
      (XIII) of SECTION 7.3(A); provided that such Liens shall not apply to any
      property of the Borrower or its Subsidiaries other than that purchased or
      directly financed in connection with such Indebtedness;

            (v) Liens securing the Obligations or Secured Obligations; and

            (vi) Liens arising under the Receivables Purchase Documents; and

            (vii) Liens (other than on the stock of any Subsidiaries) securing
      other obligations not exceeding $25,000,000 in the aggregate at any time
      outstanding.

      In addition, neither the Borrower nor any of its Subsidiaries shall become
a party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Agent for the benefit of itself and Lenders, as
collateral for the Obligations; PROVIDED that any agreement, note, indenture or
other instrument in connection with Liens permitted pursuant to CLAUSES (I),
(III) and (iv) above may prohibit the creation of a Lien in favor of the Agent
for the benefit of itself and the Lenders on the items of property subject to
such Lien and; PROVIDED FURTHER that the Receivables Purchase Documents may
prohibit the creation of a Lien in favor of the Agent for the benefit of the
Holders of Secured Obligations on the assets of Metals Receivables Corporation
and on the Receivables Interests being sold or transferred by the Originators
pursuant to the Receivables Purchase Documents.

      (D) INVESTMENTS. Except to the extent permitted pursuant to PARAGRAPH (G)
below, neither the Borrower nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:

            (i) Investments in Cash Equivalents;

            (ii) Permitted Existing Investments in an amount not greater than
      the amount thereof on the Original Closing Date;

            (iii) Investments in trade receivables or received in connection
      with the bankruptcy or reorganization of suppliers and customers and in
      settlement of delinquent obligations of, and other disputes with,
      customers and suppliers arising in the ordinary course of business;

                                       60
<PAGE>
            (iv) Investments consisting of deposit accounts maintained by the
      Borrower or its Subsidiaries in the ordinary course of business in
      connection with its cash management system;

            (v) Investments consisting of non-cash consideration from a sale,
      assignment, transfer, lease, conveyance or other disposition of property
      permitted by SECTION 7.3(B);

            (vi) Investments consisting of intercompany loans from any
      Subsidiary to the Borrower or any other Subsidiary permitted by SECTION
      7.3(A)(VI);

            (vii) Investments in any Controlled Subsidiary of the Borrower;

            (viii) Investments constituting Permitted Acquisitions;

            (ix) Investments in Metals Receivables Corporation required in
      connection with the Receivables Purchase Documents; and

            (x) Investments in addition to those referred to elsewhere in this
      SECTION 7.3(D) in an amount not to exceed $1,000,000 in the aggregate at
      any time outstanding;

      PROVIDED, HOWEVER, that the Investments described in CLAUSES (V), (viii)
and (X) above shall not be permitted if either a Default or Unmatured Default
shall have occurred and be continuing on the date thereof or would result
therefrom.

      (E) NON-GUARANTOR SUBSIDIARIES OR NON-PLEDGED SUBSIDIARIES. The Borrower
shall not permit the total assets of the Subsidiaries which are not Guarantors
or the Capital Stock of which is not pledged (excluding therefrom all items that
are treated as intangibles under Agreement Accounting Principles) to be equal to
or greater than ten percent (10%) of Consolidated Tangible Assets. For purposes
of this SECTION 7.3(E),with respect to non-Domestic Subsidiaries where only 65%
of the Capital Stock is pledged, thirty five percent (35%) of such Subsidiaries'
Consolidated Tangible Assets shall be included in the calculation of the ten
percent (10%) amount set forth above.

      (F) RESTRICTED PAYMENTS. Neither the Borrower nor any of its Subsidiaries
shall declare or make any Restricted Payment, except:

            (i) the defeasance, redemption, repurchase or prepayment of any
      Permitted Subordinated Indebtedness (other than the Senior Subordinated
      Notes) with the net cash proceeds of Permitted Refinancing Indebtedness;

            (ii) the defeasance, redemption, repurchase or prepayment of any
      Permitted Subordinated Indebtedness (other than the Senior Subordinated
      Notes) PROVIDED the aggregate amount so defeased, redeemed, repurchased or
      prepaid after the Original Closing Date shall not exceed an amount equal
      to ten percent (10%) of the Aggregate Commitment;

                                       61
<PAGE>
            (iii) where the consideration therefor consists solely of Equity
      Interests (but excluding Disqualified Stock) of the Borrower or its
      Subsidiaries provided no Change of Control would occur as a result
      thereof; and

            (iv) cash dividends or distributions on the Capital Stock of the
      Borrower PROVIDED (A) for the fiscal quarter ending December 31, 2000, the
      amount of such dividends shall not exceed $1,100,000; (B) for each fiscal
      quarter thereafter, in the event the quarterly Base EBITDA exceeds
      $35,000,000 during subsequent quarters, the amount of the dividend for
      such quarter shall not exceed $1,100,000; and (C) the aggregate amount of
      such dividends shall not exceed $4,500,000 in any twelve (12) month
      period; and

PROVIDED, HOWEVER, that the Restricted Payments described in clauses (i), (ii),
(iii), (iv) and (v) above shall not be permitted if either a Default shall have
occurred and be continuing at the date of declaration or payment thereof or
would result therefrom.

      (G) CONDUCT OF BUSINESS; SUBSIDIARIES; ACQUISITIONS.

            (I) LINES OF BUSINESS. Neither the Borrower nor any of its
      Subsidiaries shall engage in any business other than the businesses
      engaged in by the Borrower on the Original Closing Date and any business
      or activities which are substantially similar, related or incidental
      thereto.

            (II) DOMESTIC AND FOREIGN SUBSIDIARIES.

                  (A) DOMESTIC SUBSIDIARIES. The Borrower may create, acquire
            and/or capitalize any Subsidiary (a "NEW SUBSIDIARY") after the date
            hereof pursuant to any transaction that is permitted by or not
            otherwise prohibited by this Agreement; provided that upon the
            creation or acquisition of each New Subsidiary, the Borrower shall
            cause each New Subsidiary that is both a Domestic Subsidiary and a
            Material Subsidiary to promptly deliver to the Agent an executed
            counterpart of a Guaranty Supplement to become a Guarantor under the
            Guaranty in the form of EXHIBIT J attached hereto and appropriate
            corporate resolutions, opinions and other documentation in form and
            substance satisfactory to the Agent, and all New Subsidiaries that
            are Material Subsidiaries shall be Controlled Subsidiaries.

                  (B) FOREIGN SUBSIDIARIES. The Borrower shall deliver an
            agreement evidencing the pledge, to the Agent, for the benefit of
            the Holders of Secured Obligations of 65% of the Capital Stock of
            each Material Subsidiary that is not a Domestic Subsidiary, within
            sixty (60) days after such Subsidiary has become a Material
            Subsidiary, together, in each such case, with corporate resolutions,
            opinions of counsel, stock certificates, stock powers and such other
            corporate documentation as the Agent may reasonably request, all in
            form and substance reasonably satisfactory to the Agent; PROVIDED,
            HOWEVER, in the event that any such Material Foreign Subsidiary is
            wholly-owned by a Domestic Subsidiary, in connection with which all
            of the requirements of this CLAUSE (II) have been

                                       62
<PAGE>
            satisfied and the activities of which are limited to owning the
            Capital Stock of its Subsidiaries, then, the Agent, at its option,
            may waive the requirement for the pledge of such foreign Material
            Subsidiary's Capital Stock under this CLAUSE (II); and PROVIDED
            FURTHER, HOWEVER, in the event that more than one Subsidiary within
            a commonly controlled group of Subsidiaries constitutes a Material
            Subsidiary which is not a Domestic Subsidiary, then only the Capital
            Stock of the "parent" or "controlling" Subsidiary shall be required
            to be pledged. If at any time any non-Domestic Material Subsidiary
            shall issue or cause to be issued Capital Stock, or warrants or
            options with respect to its Capital Stock, such that the aggregate
            amount of the Capital Stock, if any, of such Material Foreign
            Subsidiary pledged to the Agent for the benefit of the Holders of
            Secured Obligations is less than 65% of all of the outstanding
            Capital Stock thereof, the Borrower shall (i) promptly notify the
            Agent of such deficiency and (ii) deliver or cause to be delivered
            any agreements, instruments, certificates and other documents as the
            Agent may reasonably request all in a form and substance reasonably
            satisfactory to the Agent in order to cause all of the Capital Stock
            of such non-Domestic Material Subsidiary (but not in excess of 65%
            of all of the outstanding Capital Stock thereof) to be pledged to
            the Agent for the benefit of the Holders of Secured Obligations. In
            the event that the Borrower or any Guarantor causes or permits any
            foreign Material Subsidiary that is not a Guarantor to, directly or
            indirectly, guarantee the payment of any Indebtedness of the
            Borrower or any Guarantor then the Borrower will (i) simultaneously
            deliver, or cause to be delivered, an agreement evidencing the
            pledge, to the Agent, for the benefit of the Holders of Secured
            Obligations, of all of the Capital Stock of such non-Domestic
            Material Subsidiary, (ii) simultaneously cause such non-Domestic
            Material Subsidiary to execute and deliver to the Agent a Guaranty
            Supplement pursuant to which it agrees to be bound by the terms and
            provisions of the Subsidiary Guaranty (whereupon such Subsidiary
            shall become a "Guarantor" under this Agreement), and (iii) deliver
            and cause such Subsidiaries to deliver corporate resolutions,
            opinions of counsel, stock certificates, stock powers, UCC financing
            statements with respect to the Capital Stock added as additional
            Collateral and such other corporate documentation as the Agent may
            reasonably request, all in form and substance reasonably
            satisfactory to the Agent.

            (III) ACQUISITIONS. The Borrower shall not make any Acquisitions,
      other than Acquisitions meeting the following requirements (each such
      Acquisition constituting a "PERMITTED ACQUISITION"):

                  (A) no Default or Unmatured Default shall have occurred and be
            continuing or would result from such Acquisition or the incurrence
            of any Indebtedness in connection therewith;

                  (B) in the case of an Acquisition of Equity Interests of an
            entity, such Acquisition shall be of at least ninety percent (90%)
            of the Equity Interests of such entity;

                                       63
<PAGE>
                  (C) the businesses being acquired shall be substantially
            similar, related or incidental to the businesses or activities
            engaged in by the Borrower and its Subsidiaries on the Original
            Date;

                  (D) the Indebtedness incurred by the Borrower to the Seller as
            part of the consideration therefor (other than Indebtedness assumed
            in connection therewith and permitted pursuant to CLAUSES (IX),
            (xii) or (XIII) of SECTION 7.3(A)) shall be Permitted Subordinated
            Indebtedness under Section 7.3(A);

                  (E) prior to each such Acquisition, the Borrower shall deliver
            to the Agent and the Lenders a certificate from one of the
            Authorized Officers, (1) calculating the purchase price and EBITDA
            for purposes of clause (h) below; and (2) certifying that after
            giving effect to such Acquisition and the incurrence of any
            Indebtedness hereunder and permitted by Section 7.3(A) in connection
            therewith, on a pro forma basis, as if the Acquisition and such
            incurrence of Indebtedness had occurred on the first day of the
            twelve-month period ending on the last day of the Borrower's most
            recently completed fiscal quarter, the Borrower would have been in
            compliance with all of the covenants contained in this Agreement,
            including, without limitation, the financial covenants set forth in
            Section 7.4;

                  (F) the purchase is consummated pursuant to a negotiated
            acquisition agreement on a non-hostile basis;

                  (G) after giving effect to such Acquisition, the
            representations and warranties set forth in ARTICLE VI hereof shall
            be true and correct in all material respects on and as of the date
            of such Acquisition with the same effect as though made on and as of
            such date; and

                  (H) the written consent of the Required Lenders shall have
            been obtained in connection with any Acquisition if the aggregate
            purchase price (including, without limitation or duplication, cash,
            stock, Indebtedness assumed (net of any cash acquired) and
            transaction related contractual payments, including amounts payable
            under non-compete, consulting or similar agreements (valuing all
            non-cash consideration at Fair Value)) (the "PURCHASE PRICE") is
            equal to or greater than $3,000,000;

PROVIDED the aggregate Purchase Price of all Acquisitions shall not exceed
$30,000,000 during the term hereof.

With respect to any Acquisition where the target entity's assets are equal to or
greater than five percent (5.0%) of the Borrower's and its Subsidiaries'
consolidated assets, the Borrower shall (i) have obtained (and shall have based
the calculations set forth above on) historical audited financial statements for
the target and/or reviewed unaudited financial statements for the target for a
period of not less than two years, obtained from the seller or provided by
independent certified public accountants retained for the purposes of such
Acquisition, broken down by fiscal quarter in the Borrower's reasonable
judgment, copies of which shall be provided to the Agent and the Lenders and
(ii) at the request of the Required Lenders (such request not to be made

                                       64
<PAGE>
more frequently than once in any fiscal quarter) provide such financial
information as shall be reasonably acceptable to the Agent and the Required
Lenders demonstrating the Borrower's pro forma compliance with the covenants
after taking into account such Acquisition and the incurrence of any
Indebtedness in connection therewith.

      (H) TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. Neither the Borrower
nor any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any holder or
holders of any of the Equity Interests of the Borrower, or with any Affiliate of
the Borrower which is not its Subsidiary, on terms that are less favorable to
the Borrower or any of its Subsidiaries, as applicable, than those that might be
obtained in an arm's length transaction at the time from Persons who are not
such a holder or Affiliate, except for (i) Permitted Receivables Transfers and
(ii) Restricted Payments permitted by SECTION 7.3(F).

      (I) RESTRICTION ON FUNDAMENTAL CHANGES. Neither the Borrower nor any of
its Subsidiaries shall enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Borrower's or any such
Subsidiary's business or property, whether now or hereafter acquired, except (i)
transactions permitted under SECTIONS 7.3(B) or 7.3(G) (II) the merger of a
Subsidiary of the Borrower into a Person acquired in connection with a Permitted
Acquisition; and (iii) the merger of a wholly-owned Subsidiary of the Borrower
with and into the Borrower; PROVIDED, HOWEVER, (A) with respect to any such
permitted mergers involving any Guarantor, the surviving corporation in the
merger shall also be or become a Guarantor; and (B) after the consummation of
any such transaction, the Borrower shall be in compliance with the provisions of
SECTIONS 7.2(K) and 7.3(E).

      (J) SALES AND LEASEBACKS. Other than the lease transactions in effect on
the Effective Date, neither the Borrower nor any of its Subsidiaries shall
become liable, directly, by assumption or by Contingent Obligation, with respect
to any lease, whether an operating lease or a Capitalized Lease, of any property
(whether real or personal or mixed) (i) which it or one of its Subsidiaries sold
or transferred or is to sell or transfer to any other Person, or (ii) which it
or one of its Subsidiaries intends to use for substantially the same purposes as
any other property which has been or is to be sold or transferred by it or one
of its Subsidiaries to any other Person in connection with such lease, unless
(A) the sale involved is not prohibited under SECTION 7.3(B), (B) the lease does
not involve Indebtedness prohibited under SECTION 7.3(A), (C) the aggregate
amount of the obligations incurred by the Borrower and its Subsidiaries after
the Effective Date in connection with each sale-leaseback transaction does not
exceed $5,000,000, (D) all proceeds from sale-leaseback transactions shall be
applied to the principal of all outstanding Loans and (E) in the event that the
aggregate amount of proceeds from sale-leaseback transactions exceeds
$25,000,000, the Aggregate Commitment shall be reduced by an amount equal to the
aggregate proceeds from the sale-leaseback transactions in excess of
$25,000,000; provided, however, that the Borrower's Subsidiary, Metals USA
Carbon Flat Rolled, Inc., may become liable with respect to the proposed
sale-leaseback transaction with United Trust Fund Limited Partnership involving
the real property located at 8815 Mississippi Avenue, Houston, Texas, upon the
terms previously disclosed to the Agent including a purchase price of
approximately $5,600,000, and provided further that such $5,600,000
sale-leaseback transaction complies with SUBSECTION

                                       65
<PAGE>
7.3(J)(A), (B) and (D) above and shall reduce the aggregate proceeds available
under SUBSECTION 7.3(J)(E) above.

      (K) MARGIN REGULATIONS. Neither the Borrower nor any of its Subsidiaries,
shall use all or any portion of the proceeds of any credit extended under this
Agreement to purchase or carry Margin Stock.

      (L) ERISA. The Borrower shall not

            (i) engage, or permit any of its Subsidiaries to engage, in any
      prohibited transaction described in Sections 406 of ERISA or 4975 of the
      Code for which a statutory or class exemption is not available or a
      private exemption has not been previously obtained from the DOL;

            (ii) permit to exist any accumulated funding deficiency (as defined
      in Sections 302 of ERISA and 412 of the Code), with respect to any Benefit
      Plan, whether or not waived;

            (iii) fail, or permit any Controlled Group member to fail, to pay
      timely required contributions or annual installments due with respect to
      any waived funding deficiency to any Benefit Plan;

            (iv) terminate, or permit any Controlled Group member to terminate,
      any Benefit Plan which would result in any liability of the Borrower or
      any Controlled Group member under Title IV of ERISA;

            (v) fail to make any contribution or payment to any Multiemployer
      Plan which the Borrower or any Controlled Group member may be required to
      make under any agreement relating to such Multiemployer Plan, or any law
      pertaining thereto;

            (vi) fail, or permit any Controlled Group member to fail, to pay any
      required installment or any other payment required under Section 412 of
      the Code on or before the due date for such installment or other payment;
      or

            (vii) amend, or permit any Controlled Group member to amend, a Plan
      resulting in an increase in current liability for the plan year such that
      the Borrower or any Controlled Group member is required to provide
      security to such Plan under Section 401(a)(29) of the Code,

except where such transactions, events, circumstances, or failures will not have
or is not reasonably likely to subject the Borrower and its Subsidiaries to
liability individually or in the aggregate in excess of $10,000,000.

      (M) ISSUANCE OF EQUITY INTERESTS. The Borrower shall not issue any Equity
Interests if as a result of such issuance a Change of Control shall occur. None
of the Borrower's Subsidiaries shall issue any Equity Interests other than to
the Borrower.

                                       66
<PAGE>
      (N) CORPORATE DOCUMENTS. Neither the Borrower nor any of its Subsidiaries
shall amend, modify or otherwise change any of the terms or provisions in any of
their respective constituent documents as in effect on the Effective Date hereof
in any manner adverse in any material respect to the interests of the Lenders,
without the prior written consent of the Required Lenders.

      (O) FISCAL YEAR. Neither the Borrower nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from a
period consisting of the 12-month period ending on December 31 of each calendar
year.

      (P) SUBSIDIARY COVENANTS. Except to the extent required in the Receivables
Transfer Documents, the Borrower will not, and will not permit any Subsidiary
to, create or otherwise cause to become effective any consensual encumbrance or
restriction of any kind on the ability of any Subsidiary to pay dividends or
make any other distribution on its stock, or make any other Restricted Payment,
pay any Indebtedness or other Obligation owed to the Borrower or any other
Subsidiary, make loans or advances or other Investments in the Borrower or any
other Subsidiary, or sell, transfer or otherwise convey any of its property to
the Borrower or any other Subsidiary.

      (Q) HEDGING OBLIGATIONS. The Borrower shall not and shall not permit any
of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar agreements entered into by the Borrower or a
Subsidiary pursuant to which the Borrower or such Subsidiary has hedged its
actual interest rate, foreign currency or commodity exposure.

      (R) OTHER INDEBTEDNESS. The Borrower shall not amend, modify or
supplement, or permit any Subsidiary to amend, modify or supplement (or consent
to any amendment, modification or supplement of), the Senior Subordinated Notes,
the Indenture or any other document, agreement or instrument evidencing the
Senior Subordinated Notes (or any replacements, substitutions or renewals
thereof) or pursuant to which the Senior Subordinated Notes are issued, or make
any payment required as a result of such an amendment, modification or
supplement, where such amendment, modification or supplement provides for the
following or which has any of the following effects:

            (i) increases the overall principal amount of the Senior
      Subordinated Notes or increases the amount of any single scheduled
      installment of principal or interest;

            (ii) shortens or accelerates the date upon which any installment of
      principal or interest becomes due or adds any additional mandatory
      redemption provisions;

            (iii) shortens the final maturity date of the Senior Subordinated
      Notes or otherwise accelerates the amortization schedule with respect
      thereto;

            (iv) increases the rate of interest accruing on the Senior
      Subordinated Notes;

            (v) provides for the payment of additional fees or increases
      existing fees;

                                       67
<PAGE>
            (vi) amends or modifies any financial or negative covenant (or
      covenant which prohibits or restricts the Borrower or a Subsidiary of the
      Borrower from taking certain actions) in a manner which is more onerous or
      more restrictive to the Borrower (or any Subsidiary of the Borrower) or
      which is otherwise materially adverse to the Borrower and/or the Lenders
      or, in the case of adding covenants, which places additional restrictions
      on the Borrower (or a Subsidiary of the Borrower) or which requires the
      Borrower or any such Subsidiary to comply with more restrictive financial
      ratios or which requires the Borrower to better its financial performance
      from that set forth in the existing financial covenants; or

            (vii) amends, modifies or adds any affirmative covenant in a manner
      which, when taken as a whole, is materially adverse to the Borrower and/or
      the Lenders.

      (S) AMENDMENT OF RECEIVABLES PURCHASE DOCUMENTS. The Borrower shall not,
and shall not permit any of its Subsidiaries to, agree to or enter into any
amendment, restatement or other modification of the Receivables Purchase
Documents, or substitute or replace the Receivables Purchase Documents with
another receivables securitization facility, that would (i) increase the maximum
principal amount of Indebtedness to be incurred thereunder to an amount in
excess of $100,000,000 other than in compliance with SECTION 7.3(A) (XIV); (ii)
accelerate any scheduled amortization date; (iii) increase the recourse
obligations of the Borrower or any of its Subsidiaries (other than Metals
Receivables Corporation) in any material respect; (iv) impose net worth
covenants for Metals Receivables Corporation that are materially more stringent
than those originally contained in the Receivables Purchase Documents or
materially more stringent than in comparable structured finance transactions;
(v) materially decrease the cash consideration to be paid to any Originator on
account of any Permitted Receivables Transfers; or (vi) materially increase the
amount of discount, yield or interest payable thereunder.

      7.4 FINANCIAL COVENANTS. The Borrower shall comply with the following:

      (A) FIXED CHARGE COVERAGE RATIO. The Borrower shall maintain a ratio
("FIXED CHARGE COVERAGE RATIO") of (i) the sum of (A) Base EBITDA, minus (B)
Restricted Payments made pursuant to Section 7.3(f)(v) to (ii) Interest Expense
in each case for the Borrower and its consolidated Subsidiaries of at least:

      2.35 to 1.00 for the fiscal quarter ending September 30, 2000;

      2.00 to 1.00 for the fiscal quarter ending December 31, 2000;

      1.80 to 1.00 for each fiscal quarter commencing with the fiscal quarter
      ending March 31, 2001 through the fiscal quarter ending June 30, 2001;

      1.95 to 1.00 for the fiscal quarter ending September 30, 2001;

      2.10 to 1.00 for the fiscal quarter ending December 31, 2001; and

      2.20 to 1.00 for each fiscal quarter thereafter.

                                       68
<PAGE>
In each case the Fixed Charge Coverage Ratio shall be determined as of the last
day of each fiscal quarter for the four-quarter period ending on such day. For
purposes of the calculation of Interest Expense, such amount shall be calculated
for any such period by including only the actual amount for the applicable
period ending on such day.

      (B) TOTAL DEBT TO EBITDA RATIO. The Borrower shall not at any time permit
the ratio (the "LEVERAGE RATIO") of (i) Total Debt of the Borrower and its
consolidated Subsidiaries to (ii) EBITDA of the Borrower and its consolidated
Subsidiaries, to be greater than:

      5.15 to 1.00 for the fiscal quarter ending September 30, 2000;

      5.20 to 1.00 for the fiscal quarter ending December 31, 2000;

      5.75 to 1.00 for the fiscal quarter ending March 31, 2001;

      5.90 to 1.00 for the fiscal quarter ending June 30, 2001;

      5.20 to 1.00 for the fiscal quarter ending September 30, 2001;

      4.80 to 1.00 for the fiscal quarter ending December 31, 2001; and

      4.50 to 1.00 for each fiscal quarter thereafter.

The Leverage Ratio shall be calculated, in each case, determined as of the last
day of each fiscal quarter based upon (i) for Total Debt, Total Debt as of the
last day of each such fiscal quarter; and (ii) for EBITDA, EBITDA for the
twelve-month period ending on such day, calculated as set forth in the
definition thereof.

      (C) MINIMUM CONSOLIDATED NET WORTH. The Borrower shall not permit its
Consolidated Net Worth at any time to be less than the sum of (i) $325,000,000
PLUS (ii) fifty percent (50%) of Net Income (if positive) calculated separately
for each fiscal quarter ending after September 30, 2000, PLUS (iii) seventy-five
percent (75%) of the adjustment to stockholder's equity made in connection with
the issuance of any Capital Stock.

      (D) SENIOR DEBT TO EBITDA RATIO. The Borrower shall not at any time permit
the ratio of (i) Total Debt of the Borrower and its Consolidated Subsidiaries
minus Permitted Subordinated Indebtedness of the Borrower to (ii) EBITDA of the
Borrower and its Consolidated Subsidiaries, to be greater than:

      3.50 to 1.00 for each fiscal quarter commencing with the fiscal quarter
      ending September 30, 2000 through the fiscal quarter ending December 31,
      2000;

      3.60 to 1.00 for the fiscal quarter ending March 31, 2001;

      3.70 to 1.00 for the fiscal quarter ending June 30, 2001;

      3.20 to 1.00 for the fiscal quarter ending September 30, 2001; and

      3.00 to 1.00 for each fiscal quarter thereafter.

                                       69
<PAGE>
Such ratio shall be calculated, in each case, determined as of the last day of
each fiscal quarter based upon (i) for Total Debt and Permitted Subordinated
Indebtedness, Total Debt and Permitted Subordinated Indebtedness as of the last
day of each such fiscal quarter; and (ii) for EBITDA, EBITDA for the
twelve-month period ending on such day, calculated as set forth in the
definition thereof.

      (E) QUARTERLY BASE EBITDA. The Borrower shall not permit its Base EBITDA
at any time to be less than (i) $18,500,000 for each fiscal quarter commencing
with the fiscal quarter ending September 30, 2000 through the fiscal quarter
ending December 31, 2000; (ii) $23,000,000 for the fiscal quarter ending March
31, 2001; (iii) $27,000,000 for the fiscal quarter ending June 30, 2001; (iv)
$24,000,000 for the fiscal quarter ending September 30, 2001; (v) $22,500,000
for the fiscal quarter ending December 31, 2001; and (vi) $25,000,000 for each
fiscal quarter thereafter.

      (F) CAPITAL EXPENDITURES. The Borrower will not, nor will it permit any
Subsidiary to, expend, or be committed to expend, for Capital Expenditures in
the acquisition of fixed assets, during any fiscal year, beginning with fiscal
year 2001, on a non-cumulative basis except as provided herein, in the aggregate
for the Borrower and its Subsidiaries, in excess of $30,000,000.

                                   ARTICLE 8

                                    DEFAULTS

      8.1 DEFAULTS. Each of the following occurrences shall constitute a Default
under this Agreement:

      (A) FAILURE TO MAKE PAYMENTS WHEN DUE. The Borrower shall (i) fail to pay
when due any of the Obligations consisting of principal with respect to the
Loans or (ii) shall fail to pay within three (3) Business Days of the date when
due any of the other Obligations under this Agreement or the other Loan
Documents.

      (B) BREACH OF CERTAIN COVENANTS. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under:

            (I) SECTION 7.1(I) or 7.2(B) and such failure shall continue
      unremedied for fifteen (15) days;

            (II) SECTIONS 7.1(A), 7.2(C), 7.2(D), 7.2(E), 7.2(G) and including
      7.2(I) and such failure shall continue unremedied for five (5) Business
      Days; or

            (iii) Sections 7.1(B), 7.2(A), 7.2(F), 7.2(J), 7.3 or 7.4.

      (C) BREACH OF REPRESENTATION OR WARRANTY. Any representation or warranty
made or deemed made by the Borrower to the Agent or any Lender herein or by the
Borrower or any of its Subsidiaries in any of the other Loan Documents or in any
written statement or certificate at any time given by any such Person pursuant
to any of the Loan Documents shall be false or misleading in any material
respect on the date as of which made (or deemed made).

                                       70
<PAGE>
      (D) OTHER DEFAULTS. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered by
PARAGRAPHS (A), (B) or (C) of this SECTION 8.1), or the Borrower or any of its
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Loan Documents, and such default shall continue
for thirty (30) days after the occurrence thereof.

      (E) DEFAULT AS TO OTHER INDEBTEDNESS. The Borrower or any of its
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to the Senior Subordinated Notes or any other Indebtedness the outstanding
principal amount of which Indebtedness is in excess of $10,000,000; or any
breach, default or event of default shall occur, or any other condition shall
exist under any instrument, agreement, the Indenture or any other indenture
pertaining to any such Indebtedness, if the effect thereof is to cause an
acceleration, mandatory redemption, a requirement that the Borrower offer to
purchase such Indebtedness or other required repurchase of such Indebtedness, or
permit the holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such Indebtedness;
or any such Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or otherwise
repurchased by the Borrower or any of its Subsidiaries (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof.

      (F) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

            (i) An INVOLUNTARY case shall be commenced against the Borrower or
      any of the Borrower's Subsidiaries and the petition shall not be
      dismissed, stayed, bonded or discharged within sixty (60) days after
      commencement of the case; or a court having jurisdiction in the premises
      shall enter a decree or order for relief in respect of the Borrower or any
      of the Borrower's Subsidiaries in an involuntary case, under any
      applicable bankruptcy, insolvency or other similar law now or hereinafter
      in effect; or any other similar relief shall be granted under any
      applicable federal, state, local or foreign law.

            (ii) A DECREE or order of a court having jurisdiction in the
      premises for the appointment of a receiver, liquidator, sequestrator,
      trustee, custodian or other officer having similar powers over the
      Borrower or any of the Borrower's Subsidiaries or over all or a
      substantial part of the property of the Borrower or any of the Borrower's
      Subsidiaries shall be entered; or an interim receiver, trustee or other
      custodian of the Borrower or any of the Borrower's Subsidiaries or of all
      or a substantial part of the property of the Borrower or any of the
      Borrower's Subsidiaries shall be appointed or a warrant of attachment,
      execution or similar process against any substantial part of the property
      of the Borrower or any of the Borrower's Subsidiaries shall be issued and
      any such event shall not be stayed, dismissed, bonded or discharged within
      sixty (60) days after entry, appointment or issuance.

      (G) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Borrower or
any of the Borrower's Subsidiaries shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent to the entry of

                                       71
<PAGE>
an order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, (iii) consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property, (iv) make any assignment for the
benefit of creditors or (v) take any corporate action to authorize any of the
foregoing.

      (H) JUDGMENTS AND ATTACHMENTS. Any money judgment(s), writ or warrant of
attachment, or similar process against the Borrower or any of its Subsidiaries
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $5,000,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any proposed sale
thereunder.

      (I) DISSOLUTION. Any order, judgment or decree shall be entered against
the Borrower or any of its Subsidiaries decreeing its involuntary dissolution or
split up and such order shall remain undischarged and unstayed for a period in
excess of sixty (60) days; or the Borrower or any of its Subsidiaries shall
otherwise dissolve or cease to exist except as specifically permitted by this
Agreement.

      (J) LOAN DOCUMENTS; FAILURE OF SECURITY. At any time, for any reason, (i)
any Loan Document as a whole that materially affects the ability of the Agent,
or any of the Lenders to enforce the Obligations or enforce their rights against
the Collateral ceases to be in full force and effect or the Borrower or any of
the Borrower's Subsidiaries party thereto seeks to repudiate its obligations
thereunder or the Liens intended to be created thereby are, or the Borrower or
any such Subsidiary seeks to render such Liens, invalid or unperfected, or (ii)
any Lien on the Capital Stock of any Material Subsidiary shall, at any time, for
any reason, be invalidated or otherwise cease to be in full force and effect, or
such Lien shall not have the priority contemplated by this Agreement or the Loan
Documents.

      (K) TERMINATION EVENT. Any Termination Event occurs which is reasonably
likely to subject the Borrower or any of its Subsidiaries to liability
individually or in the aggregate in excess of $10,000,000.

      (L) WAIVER OF MINIMUM FUNDING STANDARD. If the plan administrator of any
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and any Lender believes the
substantial business hardship upon which the application for the waiver is based
could reasonably be expected to subject either the Borrower or any Controlled
Group member to liability individually or in the aggregate in excess of
$1,000,000.

      (M) CHANGE OF CONTROL. A Change of Control shall occur.

      (N) HEDGING AGREEMENTS. Nonpayment by the Borrower or any Subsidiary of
any obligation under any contract with respect to Hedging Obligations entered
into by the Borrower or such Subsidiary with any Lender (or Affiliate thereof)
or the breach by the Borrower or Subsidiary of any other term, provision or
condition contained in any agreement and such nonpayment or breach shall
continue for ten (10) days after the occurrence thereof.

                                       72
<PAGE>
      (O) GUARANTOR DEFAULT OR REVOCATION. Any Guaranty shall fail to remain in
full force or effect or any action shall be taken by the Borrower or any
Subsidiary to discontinue or to assert the invalidity or unenforceability of any
Guaranty, or any Guarantor shall fail to comply with any of the terms or
provisions of any Guaranty to which it is a party, or any Guarantor denies that
it has any further liability under any Guaranty to which it is a party, or gives
notice to such effect.

      (P) FAILURE OF SUBORDINATION. The subordination provisions of the
documents and instruments evidencing the Senior Subordinated Notes or any other
Permitted Subordinated Indebtedness in an individual or aggregate principal
amount outstanding in excess of $10,000,000 shall, at any time, be invalidated
or otherwise cease to be in full force and effect.

      (Q) DEFAULT AS TO SECURITIZATION FACILITY. The occurrence of any event
that would allow the holders of the indebtedness evidenced by the Securitization
Facility to accelerate the indebtedness evidenced thereby.

      A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with SECTION 9.3.

                                   ARTICLE 9

                      ACCELERATION, DEFAULTING LENDERS;

                        WAIVERS, AMENDMENTS AND REMEDIES

      9.1 TERMINATION OF COMMITMENTS; ACCELERATION. If any Default described in
SECTION 8.1(F) or 8.1(G) occurs with respect to the Borrower, the obligations of
the Lenders to make Loans hereunder and the obligation of the Agent to issue
Letters of Credit hereunder shall automatically terminate and the Obligations
shall immediately become due and payable without any election or action on the
part of the Agent or any Lender. If any other Default occurs, the Required
Lenders may terminate or suspend the obligations of the Lenders to make Loans
hereunder and the obligation of the Issuing Banks to issue Letters of Credit
hereunder, or declare the Obligations to be due and payable, or both, whereupon,
after written notice to the Borrower, the Obligations shall become immediately
due and payable, without presentment, demand, protest or other notice of any
kind, all of which the Borrower expressly waives.

      9.2 DEFAULTING LENDER. In the event that any Lender fails to fund its Pro
Rata Share of any Advance requested or deemed requested by the Borrower, which
such Lender is obligated to fund under the terms of this Agreement (the funded
portion of such Advance being hereinafter referred to as a "NON PRO RATA LOAN"),
until the earlier of such Lender's cure of such failure and the termination of
the Commitments, the proceeds of all amounts thereafter repaid to the Agent by
the Borrower and otherwise required to be applied to such Lender's share of all
other Obligations pursuant to the terms of this Agreement shall be advanced to
the Borrower by the Agent on behalf of such Lender to cure, in full or in part,
such failure by such Lender, but shall nevertheless be deemed to have been paid
to such Lender in satisfaction of such other Obligations. Notwithstanding
anything in this Agreement to the contrary:

                                       73
<PAGE>
            (i) the foregoing provisions of this SECTION 9.2 shall apply only
      with respect to the proceeds of payments of Obligations and shall not
      affect the conversion or continuation of Loans pursuant to SECTION 2.8;

            (ii) any such Lender shall be deemed to have cured its failure to
      fund its Pro Rata Share of any Advance at such time as an amount equal to
      such Lender's original Pro Rata Share of the requested principal portion
      of such Advance is fully funded to the Borrower, whether made by such
      Lender itself or by operation of the terms of this SECTION 9.2, and
      whether or not the Non Pro Rata Loan with respect thereto has been repaid,
      converted or continued;

            (iii) amounts advanced to the Borrower to cure, in full or in part,
      any such Lender's failure to fund its Pro Rata Share of any Advance ("CURE
      Loans") shall bear interest at the rate applicable to Floating Rate Loans
      in effect from time to time, and for all other purposes of this Agreement
      shall be treated as if they were Floating Rate Loans;

            (iv) regardless of whether or not a Default has occurred or is
      continuing, and notwithstanding the instructions of the Borrower as to its
      desired application, all repayments of principal which, in accordance with
      the other terms of this Agreement, would be applied to the outstanding
      Floating Rate Loans shall be applied FIRST, ratably to all Floating Rate
      Loans constituting Non Pro Rata Loans, SECOND, ratably to Floating Rate
      Loans other than those constituting Non Pro Rata Loans or Cure Loans and,
      THIRD, ratably to Floating Rate Loans constituting Cure Loans;

            (v) for so long as and until the earlier of any such Lender's cure
      of the failure to fund its Pro Rata Share of any Advance and the
      termination of the Commitments, the term "Required Lenders" for purposes
      of this Agreement shall mean Lenders (excluding all Lenders whose failure
      to fund their respective Pro Rata Shares of such Advance have not been so
      cured) whose Pro Rata Shares represent at least fifty-one percent (51%) of
      the aggregate Pro Rata Shares of such Lenders; and

            (vi) for so long as and until any such Lender's failure to fund its
      Pro Rata Share of any Advance is cured in accordance with SECTION 9.2(II),
      (A) such Lender shall not be entitled to any commitment fees with respect
      to its Commitment and (B) such Lender shall not be entitled to any letter
      of credit fees, which commitment fees and letter of credit fees shall
      accrue in favor of the Lenders which have funded their respective Pro Rata
      Share of such requested Advance, shall be allocated among such performing
      Lenders ratably based upon their relative Commitments, and shall be
      calculated based upon the average amount by which the aggregate
      Commitments of such performing Lenders exceeds the sum of (I) the
      outstanding principal amount of the Loans owing to such performing
      Lenders, PLUS (II) the outstanding Reimbursement Obligations owing to such
      performing Lenders, PLUS (III) the aggregate participation interests of
      such performing Lenders arising pursuant to SECTION 3.5 with respect to
      undrawn and outstanding Letters of Credit.

      9.3 AMENDMENTS. Subject to the provisions of this ARTICLE IX, the Required
Lenders (or the Agent with the consent in writing of the Required Lenders) and
the Borrower may enter

                                       74
<PAGE>
into agreements supplemental hereto for the purpose of adding or modifying any
provisions to the Loan Documents or changing in any manner the rights of the
Lenders or the Borrower hereunder or waiving any Default hereunder; PROVIDED,
HOWEVER, that no such supplemental agreement shall, without the consent of
Lenders whose Pro Rata Shares, in the aggregate, are equal to or greater than
sixty-six and two-thirds percent (66-2/3%) permit the ratio of (i) Total Debt of
the Borrower and its Consolidated Subsidiaries MINUS Permitted Subordinated
Indebtedness of the Borrower to (ii) EBITDA of the Borrower and its Consolidated
Subsidiaries, to be greater than 3.25 to 1.00; PROVIDED, FURTHER, HOWEVER, that
no such supplemental agreement shall, without the consent of each Lender
affected thereby:

            (i) Postpone or extend the Termination Date or any other date fixed
      for any payment of principal of, or interest on, the Loans, the
      Reimbursement Obligations or any fees or other amounts payable to such
      Lender (except with respect to (A) any modifications of the provisions
      relating to prepayments of Loans and other Obligations and (B) a waiver of
      the application of the default rate of interest pursuant to Section 2.9
      hereof);

            (ii) Reduce the principal amount of any Loans or L/C Obligations, or
      reduce the rate or extend the time of payment of interest or fees thereon;

            (iii) Reduce the percentage specified in the definition of Required
      Lenders or any other percentage of Lenders specified to be the applicable
      percentage in this Agreement to act on specified matters;

            (iv) Increase the amount of the Commitment of any Lender hereunder;

            (v) Permit the Borrower to assign its rights under this Agreement;

            (vi) Amend this SECTION 9.3;

            (vii) Other than in connection with a transaction permitted under
      the terms of the Agreement release any guarantor of the Obligations;

            (viii) Other than in connection with a transaction permitted under
      the terms of the Agreement, release all or substantially all of the
      Collateral; or

            (ix) Amend the terms of SECTION 12.2.

      No amendment of any provision of this Agreement relating to (i) the Agent
shall be effective without the written consent of the Agent, (ii) Swing Line
Loans shall be effective without the written consent of the Swing Line Bank and
(iii) Letters of Credit shall be effective without the written consent of the
Issuing Banks. The Agent may waive payment of the fee required under SECTION
13.3(B) without obtaining the consent of any of the Lenders.

      9.4 PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to

                                       75
<PAGE>
satisfy the conditions precedent to such Loan or issuance of such Letter of
Credit shall not constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further exercise thereof
or the exercise of any other right, and no waiver, amendment or other variation
of the terms, conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by the Lenders required pursuant to SECTION 9.3,
and then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Agent and the Lenders until the Obligations have been
paid in full.

                                   ARTICLE 10

                               GENERAL PROVISIONS

      10.1 SURVIVAL OF REPRESENTATIONS. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.

      10.2 GOVERNMENTAL REGULATION. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.

      10.3 PERFORMANCE OF OBLIGATIONS. The Borrower agrees that the Agent may,
but shall have no obligation to (i) at any time, pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or threatened
against any Collateral and (ii) after the occurrence and during the continuance
of a Default, make any other payment or perform any act required of the Borrower
under any Loan Document or take any other action which the Agent in its
discretion deems necessary or desirable to protect or preserve the Collateral or
enhance the likelihood of repayment of the Obligations. The Agent shall use its
reasonable efforts to give the Borrower and the Lenders notice of any action
taken under this SECTION 10.3 prior to the taking of such action or promptly
thereafter provided the failure to give such notice shall not affect the
Borrower's or Lenders' obligations in respect thereof. The Borrower agrees to
pay the Agent, upon demand, the principal amount of all funds advanced by the
Agent under this SECTION 10.3, together with interest thereon at the rate from
time to time applicable to Floating Rate Loans from the date of such advance
until the outstanding principal balance thereof is paid in full. If the Borrower
fails to make payment in respect of any such advance under this SECTION 10.3
within one (1) Business Day after the date the Borrower receives written demand
therefor from the Agent, the Agent shall promptly notify each Lender and each
Lender agrees that it shall thereupon make available to the Agent, in Dollars in
immediately available funds, the amount equal to such Lender's Pro Rata Share of
such advance. If such funds are not made available to the Agent by such Lender
within one (1) Business Day after the Agent's demand therefor, the Agent will be
entitled to recover any such amount from such Lender together with interest
thereon at the Federal Funds Effective Rate for each day during the period
commencing on the date of such demand and ending on the date such amount is
received. The failure of any Lender to make available to the Agent its Pro Rata
Share of any such unreimbursed advance under this SECTION 10.3 shall neither
relieve any other Lender of its obligation hereunder to make available to the
Agent such other Lender's Pro Rata Share of such advance on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Agent. All

                                       76
<PAGE>
outstanding principal of, and interest on, advances made under this SECTION 10.3
shall constitute Obligations for purposes hereof.

      10.4 HEADINGS. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.

      10.5 ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent and the Lenders and supersede all
prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.

      10.6 SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.

      10.7 EXPENSES; INDEMNIFICATION.

      (A) EXPENSES. The Borrower shall reimburse the Agent for any reasonable
costs, internal charges and out-of-pocket expenses (including reasonable
attorneys' and paralegals' fees and time charges of attorneys and paralegals for
the Agent, which attorneys and paralegals may be employees of the Agent) paid or
incurred by the Agent in connection with the preparation, negotiation,
execution, delivery, syndication, review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees to reimburse the
Agent and the Lenders for any costs, internal charges and out-of-pocket expenses
(including attorneys' and paralegals' fees and time charges of attorneys and
paralegals for the Agent and the Lenders, which attorneys and paralegals may be
employees of the Agent or the Lenders) paid or incurred by the Agent or any
Lender in connection with the collection of the Obligations and enforcement of
the Loan Documents. In addition to expenses set forth above, at a time when a
Default exists, the Borrower agrees to reimburse the Agent, promptly after the
Agent's request therefor, for (i) each audit or other business analysis
performed by or for the benefit of the Lenders in connection with this Agreement
or the other Loan Documents and (ii) servicing (including collecting) the
receivables of the Borrower and its Subsidiaries in an amount equal to the
Agent's then reasonable and customary charges for each person employed to
perform such audit, analysis or receivables servicing, plus all costs and
expenses (including without limitation, travel expenses) incurred by the Agent
in the performance of such audit, analysis or receivables servicing. Agent shall
provide the Borrower with a detailed statement of all reimbursements requested
under this SECTION 10.7(A).

      (B) INDEMNITY. The Borrower further agrees to defend, protect, indemnify,
and hold harmless the Agent and each and all of the Lenders and each of their
respective Affiliates, and each of such Agent's, Lender's, or Affiliate's
respective officers, directors, employees, attorneys and agents (including,
without limitation, those retained in connection with the satisfaction or

                                       77
<PAGE>
attempted satisfaction of any of the conditions set forth in ARTICLE V)
(collectively, the "INDEMNITEES") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses of any kind or nature whatsoever (including, without limitation,
the fees and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of:

            (i) this Agreement, the other Loan Documents or any of the
      Transaction Documents (as defined in the Amended and Restated Credit
      Agreement), or any act, event or transaction related or attendant thereto
      or to the Initial Acquisitions(as defined in the Amended and Restated
      Credit Agreement), any Permitted Acquisition (as defined in the Amended
      and Restated Credit Agreement), the Mergers(as defined in the Amended and
      Restated Credit Agreement), the Public Offerings (as defined in the
      Amended and Restated Credit Agreement) or the Related Transactions (as
      defined in the Amended and Restated Credit Agreement), the making of the
      Loans, and the issuance of and participation in Letters of Credit
      hereunder, the management of such Loans or Letters of Credit, the use or
      intended use of the proceeds of the Loans or Letters of Credit hereunder,
      or any of the other transactions contemplated by the Transaction Documents
      (as defined in the Amended and Restated Credit Agreement); or

            (ii) any liabilities, obligations, responsibilities, losses,
      damages, personal injury, death, punitive damages, economic damages,
      consequential damages, treble damages, intentional, willful or wanton
      injury, damage or threat to the environment, natural resources or public
      health or welfare, costs and expenses (including, without limitation,
      attorney, expert and consulting fees and costs of investigation,
      feasibility or remedial action studies), fines, penalties and monetary
      sanctions, interest, direct or indirect, known or unknown, absolute or
      contingent, past, present or future relating to violation of any
      Environmental, Health or Safety Requirements of Law arising from or in
      connection with the past, present or future operations of the Borrower,
      its Subsidiaries or any of their respective predecessors in interest, or,
      the past, present or future environmental, health or safety condition of
      any respective property of the Borrower or its Subsidiaries, the presence
      of asbestos-containing materials at any respective property of the
      Borrower or its Subsidiaries or the Release or threatened Release of any
      Contaminant into the environment (collectively, the "INDEMNIFIED
      MATTERS");

      PROVIDED, HOWEVER, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused by or resulting from (y) a
dispute among the Lenders or a dispute between any Lender and the Agent, or (z)
the willful misconduct or Gross Negligence of such Indemnitee or breach of
contract by such Indemnitee with respect to the Loan Documents, in each case, as
determined by the final non-appealed judgment of a court of competent
jurisdiction. If the undertaking to indemnify, pay and hold harmless set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrower shall contribute the maximum portion which it
is permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.

                                       78
<PAGE>
      (C) WAIVER OF CERTAIN CLAIMS; SETTLEMENT OF CLAIMS. The Borrower further
agrees to assert no claim against any of the Indemnitees on any theory of
liability for consequential, special, indirect, exemplary or punitive damages.
No settlement shall be entered into by the Borrower or any if its Subsidiaries
with respect to any claim, litigation, arbitration or other proceeding relating
to or arising out of the transactions evidenced by this Agreement, the other
Loan Documents or in connection with the Initial Acquisitions, any Permitted
Acquisition, the Mergers (as defined in the Amended and Restated Credit
Agreement), the Public Offerings (as defined in the Amended and Restated Credit
Agreement) or Related Transactions (as defined in the Amended and Restated
Credit Agreement) (whether or not the Agent or any Lender or any Indemnitee is a
party thereto) unless such settlement releases all Indemnitees from any and all
liability with respect thereto.

      (D) SURVIVAL OF AGREEMENTS. The obligations and agreements of the Borrower
under this SECTION 10.7 shall survive the termination of this Agreement.

      10.8 NUMBERS OF DOCUMENTS. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.

      10.9 ACCOUNTING. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles.

      10.10 SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.

      10.11 NONLIABILITY OF LENDERS. The relationship between the Borrower and
the Lenders and the Agent shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations.

      10.12 GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT, ANY
LENDER, OR ANY INDEMNITEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE
STATE OF NEW YORK.

      10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.

                                       79
<PAGE>
      (a) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF
THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.

      (b) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE AGENT, ANY LENDER OR
ANY INDEMNITEE SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS
PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL
JURISDICTION OVER THE BORROWER OR (2) ENFORCE A JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).

      (c) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL SERVICE OF ANY
PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY WRITS,
PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING THEREOF BY
THE AGENT OR THE LENDERS BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE BORROWER ADDRESSED AS PROVIDED HEREIN. NOTHING HEREIN SHALL IN ANY WAY BE
DEEMED TO LIMIT THE ABILITY OF THE AGENT OR THE LENDERS TO SERVE ANY SUCH WRITS,
PROCESS OR SUMMONSES IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW THE
BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY
JURISDICTION SET FORTH ABOVE.

      (d) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT

                                       80
<PAGE>
EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.

      (e) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING OF ANY BOND OTHERWISE
REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS OR
PROCEEDING TO REALIZE ON THE COLLATERAL ENFORCE ANY JUDGMENT OR OTHER COURT
ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE,
TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT.

      (f) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY
HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF
THIS SECTION 10.13, WITH ITS COUNSEL.

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

      10.15 SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. The Borrower agrees that
any and all claims of the Borrower against any Guarantor, any endorser or any
other guarantor of all or any part of the Obligations, or against any of its
properties, including, without limitation, pursuant to the any intercompany
Indebtedness permitted under SECTION 7.3(A)(VI), shall be subordinate and
subject in right of payment to the prior payment, in full and in cash, of all
Obligations. Notwithstanding any right of the Borrower to ask, demand, sue for,
take or receive any payment from any Guarantor, all rights, liens and security
interests of the Borrower, whether now or hereafter arising and howsoever
existing, in any assets of any Guarantor shall be and are subordinated to the
rights, if any, of the Lenders and the Agent in those assets. The Borrower shall
have no right to possession of any such asset or to foreclose upon any such
asset, whether by judicial action or otherwise, unless and until all of the
Obligations shall have been paid in full in cash and satisfied and all financing
arrangements under this Agreement and the other Loan Documents between the
Borrower and the Agent and the Lenders have been terminated. If, during the
continuance of a Default, all or any part of the assets of any Guarantor, or the
proceeds thereof, are subject to any distribution, division or application to
the creditors of any Guarantor, whether partial or complete, voluntary or
involuntary, and whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding, then, and in any such event, any payment or distribution of any kind
or character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any indebtedness of any Guarantor
to the Borrower, including, without limitation, pursuant to the any intercompany
Indebtedness permitted under SECTION 7.3(A)(VI)

                                       81
<PAGE>
("INTERCOMPANY INDEBTEDNESS") shall be paid or delivered directly to the Agent
for application on any of the Obligations, due or to become due, until such
Obligations shall have first been paid in full in cash and satisfied; PROVIDED,
HOWEVER, ordinary course payments or distributions made by any Guarantor to the
Borrower shall be required to be paid or delivered to the Agent only upon the
Agent's request. The Borrower irrevocably authorizes and empowers the Agent to
demand, sue for, collect and receive every such payment or distribution and give
acquittance therefor and to make and present for and on behalf of the Borrower
such proofs of claim and take such other action, in the Agent's own name or in
the name of the Borrower or otherwise, as the Agent may deem necessary or
advisable for the enforcement of this SECTION 10.15. The Agent may vote such
proofs of claim in any such proceeding, receive and collect any and all
dividends or other payments or disbursements made thereon in whatever form the
same may be paid or issued and apply the same on account of any of the
Obligations. Should any payment, distribution, security or instrument or
proceeds thereof be received by the Borrower upon or with respect to the
Intercompany Indebtedness during the continuance of a Default and prior to the
satisfaction of all of the Obligations and the termination of all financing
arrangements under this Agreement and the other Loan Documents between the
Borrower and the Agent and the Lenders, the Borrower shall receive and hold the
same in trust, as trustee, for the benefit of the Agent and the Lenders and
shall forthwith deliver the same to the Agent, for the benefit of the Agent and
the Lenders, in precisely the form received (except for the endorsement or
assignment of the Borrower where necessary), for application to any of the
Obligations, due or not due, and, until so delivered, the same shall be held in
trust by the Borrower as the property of the Agent and the Lenders; PROVIDED,
HOWEVER, ordinary course payments or distributions made by any Guarantor to the
Borrower shall be required to be paid or delivered to the Agent only upon the
Agent's request. If the Borrower fails to make any such endorsement or
assignment to the Agent, the Agent or any of its officers or employees are
irrevocably authorized to make the same. The Borrower agrees that until the
Obligations have been paid in full in cash and satisfied and all financing
arrangements under this Agreement and the other Loan Documents between the
Borrower and the Agent and the Lenders have been terminated, the Borrower will
not assign or transfer to any Person (other than the Agent) any claim the
Borrower has or may have against any Guarantor.

      10.16 USURY NOT INTENDED. It is the intent of the Borrower and each Lender
in the execution and performance of this Agreement and the other Loan Documents
to contract in strict compliance with applicable usury laws, including conflicts
of law concepts, governing the Advances of each Lender including such applicable
laws of the State of Texas and the United States of America from time-to-time in
effect. In furtherance thereof, the Lenders and the Borrower stipulate and agree
that none of the terms and provisions contained in this Agreement or the other
Loan Documents shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a rate
in excess of the Maximum Rate and that for purposes hereof "interest" shall
include the aggregate of all charges which constitute interest under such laws
that are contracted for, charged or received under this Agreement; and in the
event that, notwithstanding the foregoing, under any circumstances the aggregate
amounts taken, reserved, charged, received or paid on the Advances, include
amounts which by applicable law are deemed interest which would exceed the
Maximum Rate, then such excess shall be deemed to be a mistake and each Lender
receiving same shall credit the same on the principal of its Notes (or if such
Notes shall have been paid in full, refund said excess to the Borrower). In the
event that the maturity of the Notes are accelerated by reason of any election
of the holder

                                       82
<PAGE>
thereof resulting from any Default under this Agreement or otherwise, or in the
event of any required or permitted prepayment, then such consideration that
constitutes interest may never include more than the Maximum Rate and excess
interest, if any, provided for in this Agreement or otherwise shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited on the applicable Notes (or, if the
applicable Notes shall have been paid in full, refunded to the Borrower of such
interest). In determining whether or not the interest paid or payable under any
specific contingencies exceeds the Maximum Rate, the Borrower and the Lenders
shall to the maximum extent permitted under applicable law amortize, prorate,
allocate and spread in equal parts during the period of the full stated term of
the Notes all amounts considered to be interest under applicable law at any time
contracted for, charged, received or reserved in connection with the
Obligations. The provisions of this Section shall control over all other
provisions of this Agreement or the other Loan Documents which may be in
apparent conflict herewith.

      10.17 BUSINESS LOANS. The Borrower warrants and represents that the Loans
evidenced by the Notes are and shall be for business, commercial, investment or
other similar purposes and not primarily for personal, family, household or
agricultural use, as such terms are used in Chapter One ("CHAPTER ONE") of the
Texas Credit Code. At all such times, if any, as Chapter One shall establish a
Maximum Rate, the Maximum Rate shall be the "indicated rate ceiling" (as such
term is defined in Chapter One) from time to time in effect.

                                   ARTICLE 11
                                    THE AGENT

      11.1 APPOINTMENT; NATURE OF RELATIONSHIP. Bank One, NA is appointed by the
Lenders as the Agent hereunder and under each other Loan Document, and each of
the Lenders irrevocably authorizes the Agent (for so long as the Agent remains
in such capacity under this Agreement) to act as the contractual representative
of such Lender with only the rights and duties expressly set forth herein and in
the other Loan Documents. The Agent agrees to act as such contractual
representative upon the express conditions contained in this ARTICLE XI.
Notwithstanding the use of the defined term "Agent," it is expressly understood
and agreed that the Agent shall not have any fiduciary responsibilities to any
Lender by reason of this Agreement and that the Agent is merely acting as the
representative of the Lenders with only those duties as are expressly set forth
in this Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not assume any fiduciary duties
to any of the Lenders, (ii) is a "representative" of the Lenders within the
meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting as
an independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders agrees to assert no claim against the Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of which claims each
Lender waives.

11.2 POWERS. The Agent shall have and may exercise such powers under the Loan
Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties or fiduciary duties to the Lenders, or any
obligation to the Lenders to take any action hereunder or

                                       83
<PAGE>
under any of the other Loan Documents except any action specifically provided by
the Loan Documents required to be taken by the Agent.

      11.3 GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen solely from (i) the Gross Negligence or
willful misconduct of such Person or (ii) breach of contract by such Person with
respect to the Loan Documents.

      11.4 NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, COLLATERAL, RECITALS,
ETC. Neither the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in ARTICLE V, except receipt of items
required to be delivered solely to the Agent; (iv) the existence or possible
existence of any Default or (v) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in connection
therewith. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or in any of the other Loan
Documents, for the perfection or priority of any of the Liens on any of the
Collateral, or for the execution, effectiveness, genuineness, validity,
legality, enforceability, collectibility, or sufficiency of this Agreement or
any of the other Loan Documents or the transactions contemplated thereby, or for
the financial condition of any guarantor of any or all of the Obligations, the
Borrower or any of its Subsidiaries.

      11.5 ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders (or any other percentage of Lenders specified to be the
applicable percentage in this Agreement or any other Loan Document to act on
specified matters), and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.

      11.6 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorney-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.

                                       84
<PAGE>
      11.7 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.

      11.8 THE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have arisen
solely from the Gross Negligence or willful misconduct of the Agent.

      11.9 RIGHTS AS A LENDER. With respect to its Commitment, Loans made by it
and the Notes issued to it, the Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may exercise the
same as through it were not the Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Subsidiaries in which such Person is not prohibited
hereby from engaging with any other Person.

      11.10 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.

      11.11 SUCCESSOR AGENT. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower, and the Agent may be removed at
any time with or without cause by written notice received by the Agent from the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty days
after the retiring Agent's giving notice of resignation, then the retiring Agent
may appoint, on behalf of the Borrower and the Lenders, a successor Agent.
Notwithstanding anything herein to the

                                       85
<PAGE>
contrary, so long as no Default has occurred and is continuing, each such
successor Agent shall be subject to approval by the Borrower, which approval
shall not be unreasonably withheld. Such successor Agent shall be a commercial
bank having capital and retained earnings of at least $50,000,000. Upon the
acceptance of any appointment as the Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents. After any retiring Agent's resignation hereunder as
Agent, the provisions of this ARTICLE XI shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent hereunder and under the other Loan Documents.

      11.12 COLLATERAL DOCUMENTS.

      (a) Each Lender authorizes the Agent to enter into the Security Documents
and each of the other Collateral documents contemplated thereby (collectively,
the "COLLATERAL DOCUMENTS") to which it is a party and to take all action
contemplated by such documents. Each Lender agrees that no Holder of Secured
Obligations (other than the Agent) shall have the right individually to seek to
realize upon the security granted by any Collateral Document, it being
understood and agreed that such rights and remedies may be exercised solely by
the Agent for the benefit of the Holders of Secured Obligations upon the terms
of the Collateral Documents.

      (b) In the event that any Collateral is hereafter pledged by any Person as
collateral security for the Obligations, the Agent is hereby authorized to
execute and deliver on behalf of the Holders of Secured Obligations any Loan
Documents necessary or appropriate to grant and perfect a Lien on such
Collateral in favor of the Agent on behalf of the Holders of Secured
Obligations.

      (c) The Lenders hereby authorize the Agent, at its option and in its
discretion, to (y) release any Lien granted to or held by the Agent upon any
Collateral and/or (z) release any Guarantor from its obligations under the
Guaranty (i) upon termination of the Commitments and payment and satisfaction of
all of the Obligations at any time arising under or in respect of this Agreement
or the Loan Documents or the transactions contemplated hereby or thereby; (ii)
in connection with any transaction permitted by, but only in accordance with,
the terms of the applicable Loan Document; or (iii) in connection with any
transaction approved, authorized or ratified in writing by the Required Lenders,
unless such release is required to be approved by all of the Lenders hereunder.
Upon request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this SECTION 11.12(C).

      (d) Upon any sale or transfer of assets constituting Collateral which is
permitted pursuant to the terms of any Loan Document, or consented to in writing
by the Required Lenders or all of the Lenders, as applicable, or consummation of
any transaction involving the sale of all or substantially all of the assets of
a Guarantor and upon at least five Business Days' prior written request by the
Borrower, the Agent shall (and is hereby irrevocably authorized by the Lenders
to) execute such documents as may be necessary to evidence the release of the
Liens granted to the Agent for the benefit of the Holders of Secured Obligations
herein or pursuant hereto upon the Collateral that was sold or transferred or
evidence the release of the applicable

                                       86
<PAGE>
Guarantor from its obligations under the Guaranty; PROVIDED, HOWEVER, that (i)
the Agent shall not be required to execute any such document on terms which, in
the Agent's opinion, would expose the Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Secured Obligations any other Guarantor's
obligations under the Guaranty or any Liens upon (or obligations of the Borrower
or any Subsidiary in respect of) all interests retained by the Borrower or any
Subsidiary, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral.

                                   ARTICLE 12
                            SETOFF; RATABLE PAYMENTS

      12.1 SETOFF. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.

      12.2 RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
SECTIONS 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.

      12.3 APPLICATION OF PAYMENTS. Subject to the provisions of SECTION 9.2,
(i) prior to the occurrence of a Default, the Agent shall apply all payments and
prepayments in respect of the Obligations in such order as shall be specified by
the Borrower and (ii) after the occurrence of a Default, the Agent shall, unless
otherwise specified at the direction of the Required Lenders which direction
shall be consistent with the last sentence of this SECTION 12.3, apply all
payments and prepayments in respect of any Obligations and all proceeds of
Collateral in the following order:

      (a) first, to pay interest on and then principal of any portion of the
Loans which the Agent may have advanced on behalf of any Lender for which the
Agent has not then been reimbursed by such Lender or the Borrower;

      (b) second, to pay interest on and then principal of any advance made
under Section 10.3 for which the Agent has not then been paid by the Borrower or
reimbursed by the Lenders;

                                       87
<PAGE>
      (c) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;

      (d) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the Issuing Banks;

      (e) fifth, to pay interest due in respect of Swing Line Loans;

      (f) sixth, to pay interest due in respect of Loans (other than Swing Line
Loans) and L/C Obligations;

      (g) seventh, to the ratable payment or prepayment of principal outstanding
on Swing Line Loans;

      (h) eighth, to the ratable payment or prepayment of principal outstanding
on Loans (other than Swing Line Loans) and Reimbursement Obligations in such
order as the Agent may determine in its sole discretion;

      (i) ninth, to provide required cash collateral, if required pursuant to
Section 3.10 and

      (j) tenth, to the ratable payment of all other Obligations.

Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans (other than Swing Line Loans) shall be applied FIRST, to repay
outstanding Floating Rate Loans, and THEN to repay outstanding Eurodollar Rate
Loans with those Eurodollar Rate Loans which have earlier expiring Interest
Periods being repaid prior to those which have later expiring Interest Periods.
The order of priority set forth in CLAUSE (II) of this SECTION 12.3 and the
related provisions of this Agreement are set forth solely to determine the
rights and priorities of the Agent, the Swing Line Bank, and the Issuing Banks
as among themselves. The order of priority set forth in CLAUSES (D) through (J)
of this SECTION 12.3 may at any time and from time to time be changed by the
Required Lenders without necessity of notice to or consent of or approval by the
Borrower, or any other Person; provided, that the order of priority of payments
in respect of Swing Line Loans may be changed only with the prior written
consent of the Swing Line Bank. The order of priority set forth in CLAUSES (A)
through (C) of this Section 12.3 may be changed only with the prior written
consent of the Agent.

      12.4 RELATIONS AMONG LENDERS.

      (a) Except with respect to the exercise of set-off rights of any Lender in
accordance with SECTION 12.1, the proceeds of which are applied in accordance
with this Agreement, and except as set forth in the second sentence of CLAUSE
(B) below, each Lender agrees that it will not take any action, nor institute
any actions or proceedings, against the Borrower or any other obligor hereunder
or with respect to any Collateral or any Loan Document, without the prior
written consent of the Required Lenders or, as may be provided in this Agreement
or the other Loan Documents, at the direction of the Agent.

                                       88
<PAGE>
      (b) The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Agent) authorized to act for, any other Lender. Notwithstanding the
foregoing, and subject to SECTION 12.2, any Lender shall have the right to
enforce on an unsecured basis the payment of the principal of and interest on
any Loan made by it after the date such principal or interest has become due and
payable pursuant to the terms of this Agreement.

                                   ARTICLE 13
                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

      13.1 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with SECTION 13.3 hereof. Notwithstanding CLAUSE (II) of this SECTION 13.1, any
Lender may at any time, without the consent of the Borrower or the Agent, assign
all or any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; PROVIDED, HOWEVER, that no such assignment shall release the
transferor Lender from its obligations hereunder. The Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until such
payee complies with SECTION 13.3 hereof in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the transfer is filed
with the Agent. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.

      13.2 PARTICIPATIONS.

      (A) PERMITTED PARTICIPANTS; EFFECT. Subject to the terms set forth in this
SECTION 13.2, any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("PARTICIPANTS") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender, any L/C
Interest of such Lender or any other interest of such Lender under the Loan
Documents on a pro rata or non-pro rata basis. Notice of such participation to
the Agent shall be required prior to any participation becoming effective with
respect to a Participant which is not a Lender or an Affiliate of a Lender. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall remain
unchanged, such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, such Lender shall remain the
holder of any such Note for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and the Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under the Loan Documents except that, for
purposes of ARTICLE IV hereof, the Participants shall be entitled to the same
rights as if they were Lenders.

                                       89
<PAGE>
      (B) VOTING RIGHTS. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan or Commitment in which such Participant has an
interest which requires the consent of all of the affected Lenders pursuant to
the terms of SECTION 9.3.

      (C) BENEFIT OF SETOFF. The Borrower agrees that each Participant shall be
deemed to have the right of setoff provided in SECTION 12.1 hereof in respect to
its participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, provided that each Lender shall retain the
right of setoff provided in SECTION 12.1 hereof with respect to the amount of
participating interests sold to each Participant except to the extent such
Participant exercises its right of setoff. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided in
SECTION 12.1 hereof, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with SECTION 12.2 as if each Participant were a Lender.

      13.3 ASSIGNMENTS.

      (A) PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("PURCHASERS") all or a portion of its rights and
obligations under this Agreement (including, without limitation, its Commitment,
all Loans owing to it, all of its participation interests in existing Letters of
Credit, and its obligation to participate in additional Letters of Credit
hereunder) in accordance with the provisions of this SECTION 13.3. Each
assignment shall be of a constant, and not a varying, ratable percentage of all
of the assigning Lender's rights and obligations under this Agreement. Such
assignment shall be effected through an Assignment Agreement substantially in
the form of EXHIBIT A hereto and shall not be permitted hereunder unless such
assignment is either for all of such Lender's rights and obligations under the
Loan Documents or, without the prior written consent of the Agent, involves
Loans and Commitments in an aggregate amount of at least $5,000,000. The consent
of the Agent and, prior to the occurrence of a Default or Unmatured Default, the
Borrower (which consent, in each such case, shall not be unreasonably withheld),
shall be required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate thereof. Notwithstanding the
foregoing, any Lender may at any time, without the consent of the Borrower or
the Agent, assign all or any portion of its rights under this Agreement and its
Notes to a Federal Reserve Bank; PROVIDED, HOWEVER, that no such assignment
shall release the transferor Lender from its obligations hereunder.

      (B) EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent of a notice of
assignment, substantially in the form attached as APPENDIX I to EXHIBIT A hereto
(a "NOTICE OF ASSIGNMENT"), together with any consent required by SECTION
13.3(A) hereof, and (ii) payment of a $3,500 fee to the Agent for processing
such assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. The Notice of Assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment, Loans and L/C Obligations under the
applicable assignment agreement are "plan assets" as defined under ERISA and
that the rights and interests of the

                                       90
<PAGE>
Purchaser in and under the Loan Documents will not be "plan assets" under ERISA.
On and after the effective date of such assignment, such Purchaser, if not
already a Lender, shall for all purposes be a Lender party to this Agreement and
any other Loan Documents executed by the Lenders and shall have all the rights
and obligations of a Lender under the Loan Documents, to the same extent as if
it were an original party hereto, and no further consent or action by the
Borrower, the Lenders or the Agent shall be required to release the transferor
Lender with respect to the percentage of the Aggregate Commitment, Loans and
Letter of Credit participations assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this SECTION 13.3(B),
the transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that replacement Notes are issued to such transferor Lender and
new Notes or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their Commitments, as adjusted
pursuant to such assignment.

      (C) THE REGISTER. The Agent shall maintain at its address referred to in
SECTION 14.1 a copy of each Commitment and Acceptance delivered pursuant to
SECTION 2.4(B) and each Assignment Agreement delivered to and accepted by it
pursuant to this SECTION 13.3 and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Commitment of and
principal amount of the Loans owing to, each Lender from time to time and
whether such Lender is an original Lender, became a Lender pursuant to SECTION
2.4(B) or the assignee of another Lender pursuant to an assignment under this
SECTION 13.3. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower and each of its
Subsidiaries, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.

      13.4 CONFIDENTIALITY. Subject to SECTION 13.5, the Agent and the Lenders
shall hold all nonpublic information obtained pursuant to the requirements of
this Agreement and identified as such by the Borrower in accordance with such
Person's customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
may make disclosure reasonably required by a prospective Transferee in
connection with the contemplated participation or assignment or as required or
requested by any Governmental Authority or representative thereof or pursuant to
legal process and shall require any such Transferee to agree (and require any of
its Transferees to agree) to comply with this SECTION 13.4. In no event shall
the Agent or any Lender be obligated or required to return any materials
furnished by the Borrower; PROVIDED, HOWEVER, each prospective Transferee shall
be required to agree that if it does not become a participant or assignee it
shall return all materials furnished to it by or on behalf of the Borrower in
connection with this Agreement.

      13.5 DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries and the Collateral; provided that
prior to any such disclosure, such prospective Transferee shall agree to
preserve in accordance with SECTION 13.4 the confidentiality of any confidential
information described therein.

                                       91
<PAGE>
                                   ARTICLE 14
                                     NOTICES

      14.1 GIVING NOTICE. Except as otherwise permitted by SECTION 2.11 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).

      14.2 CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.

                                   ARTICLE 15
                                  COUNTERPARTS

      This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders
and each party has notified the Agent by telex or telephone, that it has taken
such action.

                                   ARTICLE 16
                           LIMITED WAIVER OF DEFAULTS

      The Lenders hereby waive any Defaults under SECTIONS 7.4(A), 7.4(B),
7.4(C), 7.4(D) and 8.1(E) of the Amended and Restated Credit Agreement,
provided, however, that the waivers contained in this ARTICLE 16 shall relate
only to Defaults under such Section occurring during the period from July 1,
2000 through and including October 31, 2000. This waiver is limited solely to
the purposes and to the extent provided herein and shall not be construed to be
a waiver, except as specifically provided in ARTICLE 16 of this Agreement, (i)
of any term, condition or provision of that Agreement, or (ii) of any Default
other than those described in this ARTICLE 16 of this Agreement or that has or
may have occurred or occurs after the date hereof under any Section of this
Agreement, including those described in SECTION 7.4(A), 7.4(B), 7.4(C), 7.4(D)
and 8.1(E) of this Agreement.

                                       92
<PAGE>
      IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the Effective Date.

                                    METALS USA, INC., as the Borrower

                                    By:    S/S TERRY L. FREEMAN

                                    Terry L. Freeman, Vice President and
                                    Chief Accounting Officer

                                    Address:

                                    3 Riverway
                                    Suite 600
                                    Houston, TX  77056

                                    Attention:  Vice President and Chief
                                    Accounting Officer
                                    Telephone No.: 713/965-0990
                                    Facsimile No.:   713/965-0067

                                    BANK ONE, NA
                                    (FORMERLY KNOWN AS THE FIRST NATIONAL BANK
                                    OF CHICAGO), Individually as a Lender and as
                                    Agent

                                    By:    /S/ GREG SMOTHERS

                                    Title: Vice President

                                    Address:

                                    910 Travis
                                    Houston, Texas  77002
                                    Attention:  Greg W. Smothers
                                    Telephone No.:  713/751-3838
                                    Facsimile No.:  713/751-6777

                                       93

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]