Document:

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                                                                  Exhibit 10(29)

                               OPERATING AGREEMENT
                                       OF

                          STRATOSPHERE DEVELOPMENT LLC
                      a Delaware limited-liability company

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                               OPERATING AGREEMENT

                                       OF

                          STRATOSPHERE DEVELOPMENT LLC
                      a Delaware limited-liability company

This Operating Agreement ("Agreement") is made and entered into as of the ____
day of _________, 2000, by and among the undersigned, Stratosphere Corporation,
which constitutes the Stratosphere member ("Stratosphere Member"), Arizona
Charlie's, Inc. which constitutes the Arizona Member ("Arizona Member") and
Fresca, LLC, which constitutes the Fresca, LLC Member ("Fresca Member") of
Stratosphere Development LLC, a Delaware limited-liability company (the
"Company"), and the Company, with reference to the recitals set forth below.

                                 R E C I T A L S

         A. The undersigned Members have caused the Company to be organized
pursuant to the provisions of the Act (as defined below); and

         B. The Members and the Company desire by this Agreement to set forth
their agreement as to the relationship between them and as to the conduct of the
business and the affairs of the Company and its separate Series.

         THEREFORE, in consideration of the mutual covenants, agreements and
promises made herein, the parties hereto agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

         Act. "Act" shall mean the Delaware Limited Liability Company Act.

         Affiliate. "Affiliate" means with respect to a specified Person, any
other Person who or which is (a) a principal of the specified Person, (b)
directly or indirectly controlling, controlled by or under common control with
the specified Person, or (c) any member, director, officer, manager, relative or
spouse of the specified Person. For purposes of this definition, "control",
"controlling", "controlled" mean the right to exercise, directly or indirectly,
more than fifty percent of the voting power of the stockholders, members or
owners and, with respect to any individual, partnership, trust or other entity
or association, or the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of the controlled
entity.

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         Agreement. "Agreement" means this Operating Agreement, as amended from
time to time.

         Certificate."Certificate" means the Certification of Formation of
the Company as filed with the Secretary of the State of Delaware, as amended
from time to time.

         Capital Accounts. "Capital Accounts" means the respective capital
account maintained for each of the Stratosphere Member, Arizona Member and
Fresca Member in accordance with this Agreement and the applicable provisions of
the Code.

         Capital Contribution. "Capital Contribution" means the total amount of
cash and the agreed fair market value (net of liabilities) of any property
contributed at any time to the capital of a Series of the Company by the Member
who is the Member associated with such Series.

         Cash Available for Distribution. "Cash Available For Distribution" in
respect of a Series means an amount equal to the total cash revenues generated
by or received from the operations of that Series (including proceeds from the
sale of assets for the refinancing of any loan attributable to that Series)
which is available in the accounts of the Series less (i) payments on
indebtedness applicable to that Series (including, without limitation, principal
and accrued but unpaid interest, and including loans or advances by the Member
associated with that Series), (ii) payments for operating expenses, capital
improvements, replacements and all other cash expenditures incurred incident to
the normal operation of the business applicable to that Series, and for legal,
accounting, brokerage or similar service fees relating to that Series and (iii)
reasonable reserves in respect of that Series established by the Member
associated with that Series, based on an assessment of the needs of the business
and operations relating to set aside or allocated for working capital, the
payment of debt service, taxes, insurance and other anticipated costs and
expenses incident to the ownership and operation of the business relating to
that Series.

         Code. "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any corresponding United States federal tax statute enacted
after the date of this Agreement. A reference to a specific section of the Code
refers not only to such specific section but also to any corresponding provision
of any United States federal tax statute enacted after the date of this
Agreement, as such specific section or corresponding provision is in effect on
the date of application of the provisions of this Agreement containing such
reference.

         Covered Person. "Covered Person" of a Series means (a) the Member or
any Affiliate of the Member associated with that Series, (b) any officers,
directors, stockholders, members, partners, employees, representatives or agents
of the Member, (c) any office, employee, representative or agent of the Company
acting in furtherance of the business of that Series or its Affiliates, or (d)
any Person who was, at the time of the act

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or omission in question, a Person described in any of the preceding clauses (a)
through (c).

         Fiscal Year. "Fiscal Year" means that calendar year.

         Interest. "Interest" means, the entire ownership interest with respect
to each Series of the Member related to such Series, including the right of the
Member to any and all benefits to which a member may be entitled as provided
under the Act and this Agreement.

         Person. "Person" means a natural person, any form of business or social
organization and any other non-governmental legal entity including, but not
limited to, a corporation, partnership, association, trust, unincorporated
organization, estate or limited-liability company.

         Records Office. "Records Office" means an office of the Company in
Nevada, which may but need not be a place of its business, at which it shall
keep all records identified in NRS Section 86.241, except that none of the lists
required to be maintained pursuant to NRS Section 86.241 need be maintained in
alphabetical order, nor shall the Company be required to maintain at its Records
Office copies of powers of attorney except those relating to the execution of
the Articles and this Agreement.

         Secretary of State. "Secretary of State" means the office of the
Delaware Secretary of State.

         Series. "Series" means one of three Series of interests: the
Stratosphere Series to which the Stratosphere Member is associated, the Arizona
Series to which the Arizona Member is associated and the Fresca Series to which
the Fresca Member is associated.

                                   ARTICLE II

                              INTRODUCTORY MATTERS

         2.1 Registered Office. The registered office of the Company in the
State of Delaware is located at 2711 Centerville Road, Suite 400, Wilmington,
Delaware 19808.

         2.2 Other Offices. The Company may establish and maintain other offices
at any time and at any place or places as the Members may designate or as the
business of the Company may require.

         2.3 Registered Agent. The name and address of the registered agent of
the Company for service of process on the Company in the State of Delaware are
Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington,
Delaware 19808.

         2.4 Purpose. The Company is formed for the object and purpose of, and
the nature of the business to be conducted and promoted by the Company is,
engaging in any lawful act or activity for which limited liability companies may
be formed and engaging

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in any and all activities necessary or incidental to the foregoing. Each Series
may have a similar or separate business purpose from each other Series.

         2.5 Powers of the Company. A Member associated with a Series, shall
have the power and authority to take any and all actions necessary, appropriate,
advisable, convenient or incidental to or for the furtherance of the purpose set
forth in Section 2.4, including, but not limited to, the power and authority to:

                  (a) borrow money and issue evidence of indebtedness, and to
secure the same by a mortgage, pledge or other lien on any or all of the assets
of such Series;

                  (b) conduct its business and operations in any state,
territory, district or possession of the United States or in any foreign country
that may be necessary or convenient to the accomplishment of the purpose of the
Company and/or the Series;

                  (c) acquire, by purchase, lease, contribution of property or
otherwise, and own hold, maintain, finance, improve, lease, sell, convey,
mortgage, transfer, demolish or dispose of any real or personal property that
may be necessary, convenient or incidental to the accomplishment of the purpose
of the Company and that Series.

                  (d) enter into, perform and carry out contracts of any kind,
including without limitation, contracts with any Member or any Affiliate that
are necessary to, in connection with, convenient to, or incidental to the
accomplishment of the purpose of the Company and or such Series.

                  (e) purchase, take, receive, subscribe for or otherwise
acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge or otherwise
dispose of, and otherwise use and deal in and with, shares or other interests in
or obligations of domestic or foreign entities;

                  (f) lend money for any proper purpose, invest and reinvest its
funds and take and hold real and personal property for the payment of funds so
loaned or invested;

                  (g) sue and be sued, complain and defend and participate in
administrative or other proceedings, in its name;

                  (h) appoint employees, agents and officers of the Company
and/or of the Series, and define their duties and fix their compensation to be
paid from such Series;

                  (i) indemnify any person or entity and obtain any and all
types of insurance;

                  (j) cease its activities and cancel its insurance;

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                  (k) negotiate, enter into, renegotiate, extend, renew,
terminate, modify, amend, waiver, execute, acknowledge or take any other action
with respect to any lease, contract or security agreement in respect of any
assets of the Series.

                  (l) pay, collect, compromise, litigate, arbitrate or otherwise
adjust or settle any and all other claims or demands of or against the Company
or in respect of such Series or hold such proceeds against the payment of
contingent liabilities; and

                  (m) make, execute, acknowledge and file any and all documents
or instruments necessary, convenient or incidental to the accomplishment of the
purpose of the Company or such Series.

                                  ARTICLE III

                              CAPITAL CONTRIBUTIONS

         3.1 Initial Capital. The initial capital of a Series shall be the
Capital Contribution of the Member associated with that Series, such Capital
Contribution made in exchange for a 100% ownership and profits interest in such
Series and only in such Series. The Member is not required to make any
additional Capital Contributions.

         3.2 Capital Account of a Series. The Capital Account of a Series shall
be established on the Company's books representing the Member associated with
that Series' Capital Contributions to the Company. The Capital Account of a
Series of the Member associated with such Series shall be credited with the
amount of its Capital Contribution and any such subsequent Capital Contributions
made by such Member upon receipt thereof by the Company.

         3.3 Special Rules With Respect to the Capital Account of a Series.

                  (a) Consideration of Code. Notwithstanding any other provision
of this Agreement, the Capital Account of a Series shall be maintained and
adjusted in accordance with the Code and the Treasury regulations including
Treasury Regulations Section 1.704-1(b)(2)(iv).

                  (b) Time of Adjustment. For purposes of computing the balance
in the Capital Account of a Series, no credit shall be given for any Capital
Contribution which the Member is to make until such Capital Contribution is
actually received with respect of such Series.

                  (c) Intent to Comply with Treasury Regulations. All provisions
of this Agreement relating to the maintenance of the Capital Account of a Series
are intended to comply with Treasury Regulations Section 1.704-1(b), and shall
be interpreted and applied in a manner consistent with such Treasury
Regulations. The applicable Member shall make any appropriate modifications in
the event unanticipated events might

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otherwise cause this Agreement not to comply with Treasury Regulations Section
1.704-1(b).

         3.4 Separate Records. Separate and distinct records shall be maintained
for each Series. The Assets Associated with each Series shall be held and
accounted for separately from the other assets of the other Series.

                                   ARTICLE IV

                               PROFITS AND LOSSES

         4.1 Profits and Losses. Profits and losses in respect of a Series for
any Fiscal Year shall be allocated and credited to the Capital Account of each
Series.

         4.2 Series Separate. The debts, liabilities and obligations incurred,
contracted for or otherwise existing with respect to a particular Series shall
be enforceable against the assets of such Series only, and not against the
assets of the Company generally or any other Series hereof.

                                   ARTICLE V

                                  DISTRIBUTIONS

         5.1 Operating Distributions. Subject to Section 5.2, the Cash Available
For Distribution in respect of a Series shall, at such times as the Member
associated with such Series deems advisable, be distributed to such Member
associated with the Series.

                                   ARTICLE VI

                                   MEMBERSHIP

         6.1 Limitation of Liability. In addition to the procurance of Section
4.3 hereof, no Member shall not be individually liable under a judgment, decree
or order of a court, or in any other manner, for a debt, obligation or liability
of the Company or of any Series except as provided by law or in an agreement
signed by such Member. No Member shall be required to loan any funds to the
Company or in respect of any Series nor shall a Member be required to make any
contribution to the Company in respect of any Series, nor shall the Member be
subject to any liability to the Company or other Member or any third party, as a
result of the Member's negative Capital Account balance in respect of a Series.
However, nothing in this Agreement shall prevent the Member from making secured
or unsecured loans to the Company with respect of a Series.

         6.2 Powers of the Member. Each Member associated with a Series as it
relates to such Series shall have full, exclusive and complete discretion to
manage and control the business and affairs of the Company as it relates to such
Series, to make all decisions affecting the business and affairs of the Company
as it relates to such Series

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and to take all such actions as it deems necessary, appropriate or convenient to
or for the furtherance of the purpose of the Company as it relates to such
Series, including, without limitation, the power and authority to execute all
documents and instruments, perform all duties and powers, and do all things on
behalf of the Company as it relates to such Series in all matters necessary,
desirable, convenient or incidental to the purpose of the Company as it relates
to such Series or to delegate to any other Person (including officers) such
power, authority and duties. The Member is an agent of the Company's business
and the actions of the Member taken in such capacity and in accordance with this
Agreement shall bind the Company with respect of the Series to which such Member
is associated. The Member shall be the sole Person with the power to bind the
Company in respect of the Series to which such Member is associated except and
to the extent that such power is expressly delegated to another Person by the
Member in this Agreement or in writing or by oral communication, and such
delegation shall not cause the Member to cease to be the Member. There shall not
be a "manager" (within the meaning of the Act) of the Company.

         6.3 Election of Officers. Members may from time to time appoint any
individuals as officers with such titles as the Members may deem appropriate.
The initial officer will be: Albo J. Antenucci, Jr., as President. Such officers
shall serve until their successors are duly appointed or until their earlier
removal or resignation. Any officer appointed by the Member may be removed at
any time by the Member and any vacancy in any officer shall be filled by the
Member.

         6.4 Member Approval of Actions by the Officers. Unless otherwise
required by this Agreement, actions and consents of the Members may be
communicated or reflected orally, electronically or in writing, and no action
need be taken at a formal meeting. Notwithstanding any other provision of this
Agreement, no officer shall cause or commit the Company or any Series to do any
of the following without the express written consent of the Member associated
with the Series with respect to which the action is being taken:

                  (a) appoint and remove any other officer;

                  (b) appoint a liquidator upon dissolution;

                  (c) determine indemnification rights as set forth in this
Agreement;

                  (d) sell all or substantially all of the assets of the Company
or of any Series;

                  (e) create any lien, mortgage, pledge or other security
interest on the assets of the Company or of any Series or securing indebtedness
of any third party whether or not for the benefit of the Company or any Series;

                  (f) change the principal office of the Company or establish
any subsidiary offices of the Company;

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                  (g) commence a voluntary case under any bankruptcy, insolvency
or similar law by the Company or any Series;

                  (h) adopt any employee benefit, profit sharing, incentive,
bonus, pension, retirement or option plans; and

                  (i) any action requiring the approval of the Member under the
Act.

         6.5 Transfer of Interest. The Interest of the Member is personal
property, and such Interest may be transferred or assigned, in whole or in part,
in the sole discretion of the Member.

                                  ARTICLE VII

                         DISSOLUTION OF THE COMPANY AND
                       TERMINATION OF A MEMBER'S INTEREST

         7.1 Dissolution. The Company shall be dissolved and its affairs wound
up when all of the Series have been terminated in accordance with the Act.

         7.2 Resignation. The Member may resign or withdraw as a Member
associated with a Series before the dissolution and winding up of the Company.
Subject to applicable law, if the Member resigns or withdraws, the Member will
be entitled to receive, within a reasonable time after resignation or
withdrawal, such consideration for the Interest with the Series as the Member
shall determine in its sole discretion.

         7.3 Distribution on Dissolution and Liquidation. In the event of the
dissolution of the Company for any reason (including the Company's liquidation
within the meaning of Treasury Regulation 1.704-1(b)(2)(ii)(g)) or of a Series
the business of the Company or of a Series shall be continued to the extent
necessary to allow an orderly winding up of its affairs, including the
liquidation and termination of the Company or of the Series pursuant to the
provisions of this Section 7.3 as promptly as practicable thereafter, and each
of the following shall be accomplished:

                  (a) the Member associated with a Series shall elect or appoint
a liquidator for such Series;

                  (b) the liquidator shall cause to be prepared a statement
setting forth the assets and liabilities of the Series as of the date of
dissolution, a copy of which statement shall be furnished to the Member
associated with the Series;

                  (c) the assets of a Series shall be liquidated by the
liquidator as promptly as possible, but in an orderly and businesslike manner;
the liquidator may, in the exercise of its business judgment, determine not to
sell all or any portion of the assets,

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in which event such assets shall be distributed in kind based upon the fair
market value as of the date of such distribution;

                  (d) any profits or losses realized with respect to a Series
upon the sale of its assets shall be recognized and allocated to the Member
associated with such Series;

                  (e) the proceeds of sale and all other assets of the Series
shall be applied and distributed as follows and in the following order of
priority:

                           (i) to the expenses of liquidation;

                           (ii) to the payment of the debts and liabilities of
the Series;

                           (iii) to the setting up of any reserves which the
liquidator shall determine to be reasonably necessary for contingent,
unliquidated or unforeseen liabilities or obligations of the Series or the
Member associated with the Series arising out of or in connection with the
Series. Such reserves shall be held by the liquidator or paid over to a bank or
title company selected by it, to be held by such bank or title company as escrow
holder or liquidator for the purposes of disbursing such reserves to satisfy the
liabilities and obligations described above; and

                           (iv) the balance (including amounts released from any
unnecessary reserves set up pursuant to Section 7.3(e)(iii)), if any, to the
Member associated with the Series.

                                  ARTICLE VIII

                                 INDEMNIFICATION

         8.1 Indemnification. Each Series shall indemnify each Covered Person to
the fullest extent permitted by law.

         8.2 Advance Payment of Expenses. The expenses of the Member and/or
Officers incurred in defending a civil or criminal action, suit or proceeding
shall be paid by the Series with which the Member and/or Officer is associated
as they are incurred and in advance of the final disposition of the action, suit
or proceeding, upon receipt of an undertaking by or on behalf of the Member to
repay the amount if it is ultimately determined by a court of competent
jurisdiction that the Member is not entitled to be indemnified by the Series.

         8.3 Determination of Right to Indemnification. Any indemnification
under Section 8.1, unless ordered by a court or advanced pursuant to Section 8.2
above, must be made by the Series only as authorized in the specific case upon a
determination that indemnification of the Covered Person is proper in the
circumstances. The determination must be made by the Member associated with the
Series or

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         8.4 Assets. Any indemnification under this Article VIII shall be
satisfied solely out of the assets of the Series involved.

                                   ARTICLE IX

                            MISCELLANEOUS PROVISIONS

         9.1 Insurance. A Member associated with a Series may purchase and
maintain insurance, to the extent and in such amounts as the Member shall, in
its sole discretion, deem reasonable, on behalf of Covered Persons of such
Series and such other Persons as the Member shall determine, against any
liability that may be asserted against or expenses that may be incurred by any
such Person in connection with the activities of such Series.

         9.2 Amendments. This Agreement may be amended only by a writing signed
by each Member, provided, however, that any amendments related solely to a
Series may be effected by a writing signed by the Member associated with that
Series.

         9.3 Applicable Law; Jurisdiction. This Agreement, and the rights and
obligations of the parties hereto, shall be interpreted and enforced in
accordance with and governed by the laws of the State of Delaware without regard
to the conflict laws of that State.

         9.4 Interpretation. The headings in this Agreement are inserted for
convenience only and are in no way intended to describe, interpret, define, or
limit the scope, extent or intent of this Agreement or any provisions contained
herein. In the interpretation of this Agreement, the singular may be read as the
plural, and vice versa, the neuter gender as the masculine or feminine, and vice
versa, and the future tense as the past or present, and vice versa, all
interchangeably as the context may require in order to fully effectuate the
intent of the parties and the transactions contemplated herein. Syntax shall
yield to the substance of the terms and provisions hereof.

         9.5 Counterparts and Facsimile Copies. Facsimile copies of this
Agreement, any counterpart of this Agreement or any approval or written consent
of the Member, and facsimile signatures hereon or thereon, shall have the same
force and effect as originals.

         9.6 Waivers. No waiver of any of the provisions of this Agreement shall
be deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver, and n waiver shall
be binding unless evidenced by an instrument in writing and executed by the
party making the waiver.

         9.7 No Third Party Beneficiaries. This Agreement is made solely among
and for the benefit of the Members and the Company and their respective
successors and assigns, and no other Person shall have any rights, interest or
claims hereunder or be entitled to any benefits under or on account of this
Agreement as a third party beneficiary or otherwise.

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         IN WITNESS WHEREOF, this Agreement was executed as of the date
first-above written.

                                   MEMBER and STRATOSPHERE
                                   DEVELOPMENT LLC, a Delaware
                                   limited-liability company

                                   STRATOSPHERE CORPORATION

                                   By: /s/ William F. Bischoff
                                      ------------------------------
                                   Name:   William F. Bischoff
                                        ----------------------------
                                   Title:  Sr. V. P./CEO
                                         ---------------------------

                                   MEMBER and STRATOSPHERE
                                   DEVELOPMENT LLC, a Delaware
                                   limited-liability company

                                   ARIZONA CHARLIES INC.

                                   By: /s/ Ron Lurie
                                      ------------------------------
                                   Name:   Ron Lurie
                                        ----------------------------
                                   Title:  Ex V.P./G.M.
                                         ---------------------------

                                   MEMBER and STRATOSPHERE
                                   DEVELOPMENT LLC, a Delaware
                                   limited-liability company

                                   FRESCA LLC

                                   By: /s/ Don Joshua
                                      ------------------------------
                                   Name:   Don Joshua
                                        ----------------------------
                                   Title:  Executive VP/GM
                                         ---------------------------<PAGE>
                                                                   EXHIBIT 10(K)

                              AMENDED AND RESTATED
                       364-DAY REVOLVING CREDIT AGREEMENT
                                      among
                             POLARIS INDUSTRIES INC.
                                  as Borrower,
                                       AND
                      CERTAIN SUBSIDIARIES OF THE BORROWER
                                 as Guarantors,
                                       AND
                         THE LENDERS IDENTIFIED HEREIN,
                                       AND
                             BANK OF AMERICA, N.A.,
                             as Administrative Agent
                                       AND
                                 U.S. BANK N.A.,
                     as Syndication Agent and Issuing Lender
                            DATED AS OF JUNE 13, 2002

                         BANC OF AMERICA SECURITIES LLC
                      as Sole Book Manager and Co-Arranger
                                 U.S. BANK N.A.
                                 as Co-Arranger

<PAGE>
                                TABLE OF CONTENTS

SECTION 1  DEFINITIONS AND ACCOUNTING TERMS....................................1
         1.1      Definitions..................................................1
         1.2      Computation of Time Periods and Other
                     Definitional Provisions..................................15
         1.3      Accounting Terms............................................15
         1.4      Time........................................................16

SECTION 2  CREDIT FACILITIES..................................................16
         2.1      Loans.......................................................16
         2.2      Letter of Credit Subfacility................................17
         2.3      Continuations and Conversions...............................21
         2.4      Minimum Amounts.............................................21

SECTION 3  GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT.......22
         3.1      Interest....................................................22
         3.2      Place and Manner of Payments................................22
         3.3      Prepayments.................................................22
         3.4      Fees........................................................23
         3.5      Payment in full at Maturity.................................24
         3.6      Computations of Interest and Fees...........................24
         3.7      Pro Rata Treatment..........................................25
         3.8      Sharing of Payments.........................................25
         3.9      Capital Adequacy............................................26
         3.10     Inability To Determine Interest Rate........................26
         3.11     Illegality..................................................26
         3.12     Requirements of Law.........................................27
         3.13     Taxes.......................................................27
         3.14     Compensation................................................29
         3.15     Determination and Survival of Provisions....................30

SECTION 4  GUARANTY...........................................................30
         4.1      Guaranty of Payment.........................................30
         4.2      Obligations Unconditional...................................30
         4.3      Modifications...............................................31
         4.4      Waiver of Rights............................................31
         4.5      Reinstatement...............................................31
         4.6      Remedies....................................................32
         4.7      Limitation of Guaranty......................................32
         4.8      Rights of Contribution......................................32

SECTION 5  CONDITIONS PRECEDENT...............................................32
         5.1      Closing Conditions..........................................32
         5.2      Conditions to All Extensions of Credit......................34

SECTION 6  REPRESENTATIONS AND WARRANTIES.....................................34
         6.1      Organization and Good Standing..............................34
         6.2      Due Authorization...........................................35
         6.3      Enforceable Obligations.....................................35
         6.4      No Conflicts................................................35
         6.5      Consents....................................................35
         6.6      Financial Condition.........................................35

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         6.7      No Material Change..........................................35
         6.8      Disclosure..................................................36
         6.9      No Default..................................................36
         6.10     Litigation..................................................36
         6.11     Taxes.......................................................36
         6.12     Compliance with Law.........................................36
         6.13     Licenses, etc...............................................36
         6.14     Title to Properties.........................................36
         6.15     Insurance...................................................37
         6.16     Use of Proceeds.............................................37
         6.17     Government Regulation.......................................37
         6.18     No Burdensome Restrictions..................................37
         6.19     ERISA.......................................................37
         6.20     Environmental Matters.......................................38
         6.21     Intellectual Property.......................................39
         6.22     Subsidiaries................................................39
         6.23     Solvency....................................................40
         6.24     Indebtedness................................................40
         6.25     Investments; Liens..........................................40
         6.26     Force Majeure...............................................40

SECTION 7  AFFIRMATIVE COVENANTS..............................................40
         7.1      Information Covenants.......................................40
         7.2      Financial Covenants.........................................42
         7.3      Preservation of Existence and Franchises....................43
         7.4      Books and Records...........................................43
         7.5      Compliance with Law.........................................43
         7.6      Payment of Taxes and Other Indebtedness.....................43
         7.7      Insurance...................................................43
         7.8      Maintenance of Property.....................................43
         7.9      Performance of Obligations..................................44
         7.10     Use of Proceeds.............................................44
         7.11     Audits/Inspections..........................................44
         7.12     Additional Credit Parties...................................44

SECTION 8  NEGATIVE COVENANTS.................................................45
         8.1      Indebtedness................................................45
         8.2      Guaranty Obligations........................................46
         8.3      Liens.......................................................46
         8.4      Nature of Business..........................................46
         8.5      Consolidation and Merger....................................46
         8.6      Sale or Lease of Assets.....................................47
         8.7      Sale Leasebacks.............................................47
         8.8      Investments.................................................47
         8.9      Foreign Subsidiaries........................................48
         8.10     Transactions with Affiliates................................48
         8.11     Fiscal Year; Accounting; Organizational Documents...........48
         8.12     No Limitations..............................................48
         8.13     No Other Negative Pledges...................................48
         8.14     Retail Credit Subsidiaries..................................48

SECTION 9  EVENTS OF DEFAULT..................................................48
         9.1      Events of Default...........................................48
         9.2      Acceleration; Remedies......................................51
         9.3      Allocation of Payments After Event of Default...............51

                                       ii
<PAGE>

SECTION 10  AGENCY PROVISIONS.................................................52
         10.1     Appointment.................................................52
         10.2     Delegation of Duties........................................53
         10.3     Exculpatory Provisions......................................53
         10.4     Reliance on Communications..................................53
         10.5     Notice of Default...........................................54
         10.6     Non-Reliance on Administrative Agent and Other Lenders......54
         10.7     Indemnification.............................................54
         10.8     Administrative Agent in Its Individual Capacity.............55
         10.9     Successor Agent.............................................55

SECTION 11  MISCELLANEOUS.....................................................56
         11.1     Notices.....................................................56
         11.2     Right of Set-Off, Automatic Debits..........................56
         11.3     Benefit of Agreement........................................56
         11.4     No Waiver; Remedies Cumulative..............................59
         11.5     Payment of Expenses; Indemnification........................59
         11.6     Amendments, Waivers and Consents............................60
         11.7     Counterparts/Telecopy.......................................60
         11.8     Headings....................................................60
         11.9     Defaulting Lender...........................................61
         11.10    Survival of Indemnification and Representations
                     and Warranties...........................................61
         11.11    Governing Law; Jurisdiction.................................61
         11.12    Waiver of Jury Trial; Waiver of Consequential Damages.......61
         11.13    Severability................................................61
         11.14    Further Assurances..........................................61
         11.15    Confidentiality.............................................61
         11.16    Entirety....................................................62
         11.17    Binding Effect; Continuing Agreement........................62

                                      iii
<PAGE>

                              AMENDED AND RESTATED
                       364-DAY REVOLVING CREDIT AGREEMENT

         THIS AMENDED AND RESTATED 364-DAY REVOLVING CREDIT AGREEMENT (this
"Credit Agreement"), is entered into as of June 13, 2002 among POLARIS
INDUSTRIES INC., a Minnesota corporation (the "Borrower"), certain of the
Subsidiaries of the Borrower (individually a "Guarantor" and collectively the
"Guarantors"), the Lenders (as defined herein), U.S. BANK N.A., as Issuing
Lender, and BANK OF AMERICA, N.A., as Administrative Agent for the Lenders.

                                    RECITALS

         WHEREAS, the Borrower, the Guarantors, the Administrative Agent and the
lenders party thereto entered into that certain 364-Day Revolving Credit
Agreement dated as of June 14, 2001 (as amended, the "Existing Credit
Agreement");

         WHEREAS, the Borrower and the Guarantors have requested that the
Lenders and the Administrative Agent amend and restate the Existing Credit
Agreement in order to provide the Borrower with a new senior credit facility in
an aggregate principal amount of up to $100,000,000; and

         WHEREAS, the Lenders party hereto have agreed to amend and restate the
Existing Credit Agreement and to make the requested senior credit facility
available to the Borrower on the terms and conditions hereinafter set forth.

         NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

                                   SECTION 1

                        DEFINITIONS AND ACCOUNTING TERMS

         1.1      DEFINITIONS.

         As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:

                  "Acceptance Partnership" means Polaris Acceptance, an Illinois
         general partnership.

                  "Acceptance Partnership Agreement" means that certain
         Partnership Agreement, dated as of February 7, 1996, between PAI and
         Transamerica Joint Ventures, Inc., pursuant to which the Acceptance
         Partnership was created, as the same may be amended, restated or
         otherwise modified from time to time.

                  "Acquisition" means the acquisition by any Person of (a) all
         or substantially all of the Capital Stock of another Person, (b) all or
         substantially all of the assets of another Person or (c) all or
         substantially all of a line of business of another Person, in each case
         whether or not involving a merger or consolidation with such other
         Person.

                  "Additional Credit Party" means each Person that becomes a
         Guarantor after the Closing Date, as provided in Section 7.12 or
         otherwise.

                  "Adjusted Eurodollar Rate" means, with respect to Eurodollar
         Loans, the Eurodollar Rate plus the Applicable Percentage.

                  "Adjusted Leverage Ratio" means, as of the last day of each
         fiscal quarter, the ratio of (a) the quotient of (i) the sum of all
         Funded Debt for each day during the period of four fiscal quarters
         ending on

<PAGE>

         such date, divided by (ii) the number of days in such period to (b)
         EBITDA for the period of four fiscal quarters ending on such date.

                  "Administrative Agent" means Bank of America, N.A. (or any
         successor thereto) or any successor administrative agent appointed
         pursuant to Section 10.9.

                  "Affiliate" means, with respect to any Person, any other
         Person directly or indirectly controlling (including but not limited to
         all directors and officers of such Person), controlled by or under
         direct or indirect common control with such Person. A Person shall be
         deemed to control a corporation if such Person possesses, directly or
         indirectly, the power (a) to vote 10% or more of the securities having
         ordinary voting power for the election of directors of such corporation
         or (b) to direct or cause direction of the management and policies of
         such corporation, whether through the ownership of voting securities,
         by contract or otherwise.

                  "Agency Services Address" means Bank of America, N.A., 1850
         Gateway Boulevard, Concord, California, Attn: Credit Services, or such
         other address as may be identified by written notice from the
         Administrative Agent to the Borrower.

                  "Agent-Related Person" means the Administrative Agent
         (including any successor administrative agent), together with its
         Affiliates (including, in the case of Bank of America in its capacity
         as the Administrative Agent, BAS), and their respective officers,
         directors, employees, agents, counsel and attorneys-in-fact.

                  "Applicable Percentage" means the appropriate applicable
         percentages corresponding to the Adjusted Leverage Ratio in effect as
         of the most recent Calculation Date as shown below:

<TABLE>
<CAPTION>
============= ====================== ================== ======================= ================
                                        Applicable       Applicable Percentage    Percentage
  Pricing       Adjusted Leverage     Percentage for     for Letter of Credit     Applicable
   Level              Ratio          Eurodollar Loans            Fees           Percentage for
                                                                                 Facility Fee
------------- ---------------------- ------------------ ----------------------- ----------------
<S>             <C>                  <C>                 <C>                    <C>
     I            < .50 to 1.0             .500%                .500%                .125%
                  -
------------- ---------------------- ------------------ ----------------------- ----------------
                > .50 to 1.0 but
     II           < 1.25 to 1.0            .600%                .600%                .150%
                  -
------------- ---------------------- ------------------ ----------------------- ----------------
                > 1.25 to 1.0 but
    III           < 2.0 to 1.0             .825%                .825%                .175%
                  -
------------- ---------------------- ------------------ ----------------------- ----------------

     IV           > 2.0 to 1.0            1.025%                1.025%               .225%
============= ====================== ================== ======================= ================
</TABLE>

         The Applicable Percentage for Loans, the Letter of Credit Fees and the
         Facility Fees shall, in each case, be determined and adjusted quarterly
         on the date (each a "Calculation Date") five Business Days after the
         date by which the Borrower is required to provide the officer's
         certificate in accordance with the provisions of Section 7.1(c);
         provided that the initial Applicable Percentage for Loans, the Letter
         of Credit Fees and the Facility Fees shall be based on Pricing Level II
         (as shown above) and shall remain at Pricing Level II until the first
         Calculation Date subsequent to the Closing Date and, thereafter, the
         Pricing Level shall be determined by the Adjusted Leverage Ratio
         calculated as of the most recent fiscal quarter end; provided further
         that if the Borrower fails to provide the officer's certificate
         required by Section 7.1(c) on or before the most recent Calculation
         Date, the Applicable Percentage for Loans, the Letter of Credit Fees
         and the Facility Fees from such Calculation Date shall be based on
         Pricing Level IV (and the Borrower may be subject to a default rate of
         interest, if applicable, pursuant to Section 3.1(b)) until such time as
         an appropriate officer's certificate is provided whereupon the Pricing
         Level shall be determined by the then current Adjusted Leverage Ratio.
         Each Applicable Percentage shall be effective from one Calculation Date
         until the next Calculation Date. Any adjustment in the Applicable
         Percentage shall be applicable to all existing Loans and Letters of
         Credit as well as any new Loans made or Letters of Credit issued.

                                       2
<PAGE>
                  "Attorney Costs" means all reasonable fees and disbursements
         of any law firm or other external counsel and the reasonable allocated
         cost of internal legal services and all disbursements of internal
         counsel.

                  "Authorized Officer" means any of the president, chief
         financial officer, vice president of finance, treasurer or assistant
         treasurer of the Borrower.

                  "Bank of America" means Bank of America, N.A. or any successor
         thereto.

                  "Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
         United States Code, as amended, modified, succeeded or replaced from
         time to time.

                  "BAS" means Banc of America Securities LLC.

                  "Base Rate" means, for any day, the rate per annum equal to
         the greater of (a) the Federal Funds Rate in effect on such day plus
         1/2 of 1% or (b) the Prime Rate in effect on such day. If for any
         reason the Administrative Agent shall have determined (which
         determination shall be conclusive absent manifest error) that it is
         unable after due inquiry to ascertain the Federal Funds Rate for any
         reason, including the inability or failure of the Administrative Agent
         to obtain sufficient quotations in accordance with the terms hereof,
         the Base Rate shall be determined without regard to clause (a) of the
         first sentence of this definition until the circumstances giving rise
         to such inability no longer exist. Any change in the Base Rate due to a
         change in the Prime Rate or the Federal Funds Rate shall be effective
         at the opening of business on the day specified in the public
         announcement of such change.

                  "Base Rate Loan" means any Loan bearing interest at a rate
         determined by reference to the Base Rate.

                  "Borrower" means Polaris Industries Inc., a Minnesota
         corporation, together with any successors and permitted assigns.

                  "Business Day" means any day other than a Saturday, a Sunday,
         a legal holiday or a day on which banking institutions are authorized
         or required by law or other governmental action to close in San
         Francisco, California, Dallas, Texas or Chicago, Illinois; provided
         that in the case of Eurodollar Loans, such day is also a day on which
         dealings between banks are carried on in Dollar deposits in the London
         interbank market.

                  "Calculation Date" has the meaning set forth in the definition
         of Applicable Percentage.

                  "Capital Expenditures" means all expenditures of the Borrower
         and its Subsidiaries on a consolidated basis which, in accordance with
         GAAP, would be classified as capital expenditures, including, without
         limitation, Capital Leases.

                  "Capital Lease" means, as applied to any Person, any lease of
         any property (whether real, personal or mixed) by that Person as lessee
         which, in accordance with GAAP, is or should be accounted for as a
         capital lease on the balance sheet of that Person and the amount of
         such obligation shall be the capitalized amount thereof determined in
         accordance with GAAP.

                  "Capital Stock" means (a) in the case of a corporation, all
         classes of capital stock of such corporation, (b) in the case of a
         partnership, partnership interests (whether general or limited), (c) in
         the case of a limited liability company, membership interests and (d)
         any other interest or participation that confers on a Person the right
         to receive a share of the profits and losses of, or distributions of
         assets of, the issuing Person.

                  "Cash Equivalents" means (a) securities issued or directly and
         fully guaranteed or insured by the United States of America or any
         agency or instrumentality thereof (provided that the full faith and
         credit of the United States of America is pledged in support thereof)
         having maturities of not more than twelve months from the date of
         acquisition, (b) Dollar denominated time and demand deposits,
         certificates of deposit and banker's

                                       3
<PAGE>
         acceptances of (i) any Lender, (ii) any domestic commercial bank having
         capital and surplus in excess of $500,000,000 or (iii) any bank whose
         short-term commercial paper rating from S&P is at least A-1 or the
         equivalent thereof or from Moody's is at least P-1 or the equivalent
         thereof (any such bank being an "Approved Bank"), in each case with
         maturities of not more than 270 days from the date of acquisition, (c)
         commercial paper and variable or fixed rate notes issued by any
         Approved Bank (or by the parent company thereof) or any variable rate
         notes issued by, or guaranteed by, any domestic corporation rated A-1
         (or the equivalent thereof) or better by S&P or P-1 (or the equivalent
         thereof) or better by Moody's and maturing within six months of the
         date of acquisition, (d) repurchase agreements with a bank or trust
         company (including any of the Lenders) or recognized securities dealer
         having capital and surplus in excess of $500,000,000 for direct
         obligations issued by or fully guaranteed by the United States of
         America in which the Borrower shall have a perfected first priority
         security interest (subject to no other Liens) and having, on the date
         of purchase thereof, a fair market value of at least 100% of the amount
         of the repurchase obligations, (e) Investments in tax-exempt municipal
         bonds rated AA (or the equivalent thereof) or better by S&P or Aa2 (or
         the equivalent thereof) or better by Moody's and (f) Investments,
         classified in accordance with GAAP as current assets, in money market
         investment programs registered under the Investment Company Act of
         1940, as amended, which are administered by reputable financial
         institutions having capital of at least $500,000,000 and the portfolios
         of which are limited to Investments of the character described in the
         foregoing subdivisions (a) through (e).

                  "Change of Control" means either of the following events:

                           (a) any "person" or "group" (within the meaning of
                  Section 13(d) or 14(d) of the Exchange Act) has become,
                  directly or indirectly, the "beneficial owner" (as defined in
                  Rules 13d-3 and 13d-5 under the Exchange Act), by way of
                  merger, consolidation or otherwise of 25% or more of the
                  Voting Stock of the Borrower on a fully-diluted basis, after
                  giving effect to the conversion and exercise of all
                  outstanding warrants, options and other securities of the
                  Borrower convertible into or exercisable for Voting Stock of
                  the Borrower (whether or not such securities are then
                  currently convertible or exercisable); or

                           (b) during any period of twelve calendar months,
                  individuals who at the beginning of such period constituted
                  the board of directors of the Borrower together with any new
                  members of such board of directors whose elections by such
                  board or board of directors or whose nomination for election
                  by the stockholders of the Borrower was approved by a vote of
                  a majority of the members of such board of directors then
                  still in office who either were directors at the beginning of
                  such period or whose election or nomination for election was
                  previously so approved cease for any reason to constitute a
                  majority of the directors of the Borrower then in office.

                  "Closing Date" means the date hereof.

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

                  "Commitment Percentage" means, for each Lender, the percentage
         identified as its Commitment Percentage on Schedule 1.1(a), as such
         percentage may be modified in connection with any assignment made in
         accordance with the provisions of Section 11.3.

                  "Commitments" means (a) with respect to each Lender, the
         Commitment Percentage of such Lender multiplied by the Revolving
         Committed Amount and (b) with respect to the Issuing Lender, the LOC
         Commitment.

                  "Credit Documents" means this Credit Agreement, the Notes, any
         Joinder Agreement, the LOC Documents, any Notice of Borrowing, and all
         other related agreements and documents issued or delivered hereunder or
         thereunder or pursuant hereto or thereto other than Hedging Agreements.

                                       4
<PAGE>
                  "Credit Exposure" has the meaning set forth in the definition
         of Required Lenders in this Section 1.1.

                  "Credit Parties" means the Borrower and the Guarantors and
         "Credit Party" means any one of them.

                  "Credit Party Obligations" means, without duplication, (a) all
         of the obligations of the Credit Parties to the Lenders (including the
         Issuing Lender) and the Administrative Agent, whenever arising, under
         this Credit Agreement, the Notes, or any of the other Credit Documents
         to which any Credit Party is a party and (b) all liabilities and
         obligations owing from such Credit Party to any Lender, or any
         Affiliate of a Lender, arising under Hedging Agreements.

                  "Default" means any event, act or condition which with notice
         or lapse of time, or both, would constitute an Event of Default.

                  "Defaulting Lender" means, at any time, any Lender that, (a)
         has failed to make a Loan or purchase a Participation Interest required
         pursuant to the terms of this Credit Agreement (but only for so long as
         such Loan is not made or such Participation Interest is not purchased),
         (b) has failed to pay to the Administrative Agent or any Lender an
         amount owed by such Lender pursuant to the terms of this Credit
         Agreement (but only for so long as such amount has not been repaid) or
         (c) has been deemed insolvent or has become subject to a bankruptcy or
         insolvency proceeding or to a receiver, trustee or similar official.

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

                  "Domestic Subsidiary" means each direct and indirect
         Subsidiary of the Borrower that (a) is domiciled or organized under the
         laws of any State of the United States or the District of Columbia or
         (b) maintains the major portion of its assets in the United States of
         America.

                  "EBIT" means, for any period, with respect to the Borrower and
         its Subsidiaries on a consolidated basis, (a) Net Income for such
         period (excluding the effect of any extraordinary or other
         non-recurring gains (including any gain from the sale of property))
         plus (b) an amount which, in the determination of Net Income for such
         period, has been deducted for (i) Interest Expense for such period and
         (ii) total Federal, state, foreign or other income taxes for such
         period.

                  "EBITDA" means, for any period, with respect to the Borrower
         and its Subsidiaries on a consolidated basis, the sum of (a) EBIT for
         such period plus (b) an amount which, in the determination of Net
         Income for such period has been deducted for all depreciation and
         amortization for such period.

                  "Effective Date" means the date on which the conditions set
         forth in Section 5.1 shall have been fulfilled (or waived in the sole
         discretion of the Lenders) and on which the initial Loans shall have
         been made and/or the initial Letters of Credit shall have been issued.

                  "Eligible Assets" means any assets or any business (or any
         substantial part thereof) used or useful in the same or a similar line
         of business as the Borrower and its Subsidiaries are engaged on the
         Closing Date.

                  "Eligible Assignee" means, unless an assignment to such Person
         would result in any increased cost to the Borrower under Section 3.9,
         Section 3.12 or Section 3.13 on the date of such assignment, (a) a
         Lender; (b) an Affiliate of a Lender; and (c) any other Person approved
         by the Administrative Agent, the Issuing Lender and the Borrower (such
         approval not to be unreasonably withheld or delayed); provided that (i)
         the Borrower's consent is not required during the existence and
         continuation of a Default or an Event of Default, (ii) approval by the
         Borrower shall be deemed given if no objection is received by the
         assigning Lender and the Administrative Agent from the Borrower within
         five Business Days after notice of such proposed assignment has been
         delivered to the Borrower; and (iii) neither the Borrower nor an
         Affiliate of the Borrower shall qualify as an Eligible Assignee.

                                       5
<PAGE>
                  "Environmental Claim" means any investigation, written notice,
         violation, written demand, written allegation, action, suit,
         injunction, judgment, order, consent decree, penalty, fine, lien,
         proceeding, or written claim whether administrative, judicial, or
         private in nature arising (a) pursuant to, or in connection with, an
         actual or alleged violation of, any Environmental Law, (b) in
         connection with any Hazardous Material, (c) from any assessment,
         abatement, removal, remedial, corrective, or other response action in
         connection with an Environmental Law or other order of a Governmental
         Authority or (d) from any actual or alleged damage, injury, threat, or
         harm to health, safety, natural resources, or the environment.

                  "Environmental Laws" means any current or future legal
         requirement of any Governmental Authority pertaining to (a) the
         protection of health, safety, and the indoor or outdoor environment,
         (b) the conservation, management, or use of natural resources and
         wildlife, (c) the protection or use of surface water and groundwater or
         (d) the management, manufacture, possession, presence, use, generation,
         transportation, treatment, storage, disposal, release, threatened
         release, abatement, removal, remediation or handling of, or exposure
         to, any hazardous or toxic substance or material or (e) pollution
         (including any release to land surface water and groundwater) and
         includes, without limitation, the Comprehensive Environmental Response,
         Compensation, and Liability Act of 1980, as amended by the Superfund
         Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq., Solid
         Waste Disposal Act, as amended by the Resource Conservation and
         Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984,
         42 USC 6901 et seq., Federal Water Pollution Control Act, as amended by
         the Clean Water Act of 1977, 33 USC 1251 et seq., Clean Air Act of
         1966, as amended, 42 USC 7401 et seq., Toxic Substances Control Act of
         1976, 15 USC 2601 et seq., Hazardous Materials Transportation Act, 49
         USC App. 1801 et seq., Occupational Safety and Health Act of 1970, as
         amended, 29 USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et
         seq., Emergency Planning and Community Right-to-Know Act of 1986, 42
         USC 11001 et seq., National Environmental Policy Act of 1969, 42 USC
         4321 et seq., Safe Drinking Water Act of 1974, as amended, 42 USC
         300(f) et seq., any analogous implementing or successor law, and any
         amendment, rule, regulation, order, or directive issued thereunder.

                  "Equity Issuance" means any issuance for cash by the Borrower
         or any of its Subsidiaries to any Person of (a) shares of its Capital
         Stock or other equity interests, (b) any shares of its Capital Stock or
         other equity interests pursuant to the exercise of options or warrants
         or (c) any shares of its Capital Stock or other equity interests
         pursuant to the conversion of any debt securities to equity; provided
         that "Equity Issuance" shall not include an issuance of equity by such
         Person pursuant to the exercise of employee stock options.

                  "Equity Reserve" has the meaning assigned to such term in the
         Revolving Program Agreement (as defined as of October 15, 2001).

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended, and any successor statute thereto, as interpreted by
         the rules and regulations thereunder, all as the same may be in effect
         from time to time. References to sections of ERISA shall be construed
         also to refer to any successor sections.

                  "ERISA Affiliate" means an entity, whether or not
         incorporated, which is under common control with the Borrower or any
         Subsidiary of the Borrower within the meaning of Section 4001(a)(14) of
         ERISA, or is a member of a group which includes the Borrower or any
         Subsidiary of the Borrower and which is treated as a single employer
         under Sections 414(b), (c), (m) or (o) of the Code.

                  "ERISA Event" means (a) with respect to any Single Employer or
         Multiple Employer Plan, the occurrence of a Reportable Event or the
         substantial cessation of operations (within the meaning of Section
         4062(e) of ERISA); (b) the withdrawal of the Borrower, any Subsidiary
         of the Borrower or any ERISA Affiliate from a Multiple Employer Plan
         during a plan year in which it was a substantial employer (as such term
         is defined in Section 4001(a)(2) of ERISA), or the termination of a
         Multiple Employer Plan; (c) the distribution of a notice of intent to
         terminate or the actual termination of a Plan pursuant to Section
         4041(a)(2) or 4041A of ERISA; (d) the institution of proceedings to
         terminate or the actual termination of any Plan by the PBGC under
         Section 4042 of ERISA; (e) any event or condition which might
         constitute grounds under Section

                                       6
<PAGE>
         4042 of ERISA for the termination of, or the appointment of a trustee
         to administer, any Plan; (f) the complete or partial withdrawal of the
         Borrower, any Subsidiary of the Borrower or any ERISA Affiliate from a
         Multiemployer Plan or notification that a Multiemployer Plan is in
         reorganization; (g) the conditions for imposition of a lien under
         Section 302(f) of ERISA exist with respect to any Plan; or (h) the
         adoption of an amendment to any Plan requiring the provision of
         security to such Plan pursuant to Section 307 of ERISA.

                  "Eurodollar Loan" means a Loan bearing interest based at a
         rate determined by reference to the Eurodollar Rate.

                  "Eurodollar Rate" means, for the Interest Period for each
         Eurodollar Loan comprising part of the same borrowing (including
         conversions, extensions and renewals), a per annum interest rate
         (rounded upwards to the nearest 1/100 of 1%) determined pursuant to the
         following formula:

                  Eurodollar Rate =      London Interbank Offered Rate
                                    ----------------------------------
                                              1 - Eurodollar Reserve Percentage

                  "Eurodollar Reserve Percentage" means for any day, that
         percentage (expressed as a decimal) which is in effect from time to
         time under Regulation D, as such regulation may be amended from time to
         time or any successor regulation, as the maximum reserve requirement
         (including, without limitation, any basic, supplemental, emergency,
         special, or marginal reserves) applicable with respect to Eurocurrency
         liabilities as that term is defined in Regulation D (or against any
         other category of liabilities that includes deposits by reference to
         which the interest rate of Eurodollar Loans is determined), whether or
         not a Lender has any Eurocurrency liabilities subject to such reserve
         requirement at that time. Eurodollar Loans shall be deemed to
         constitute Eurocurrency liabilities and as such shall be deemed subject
         to reserve requirements without benefits of credits for proration,
         exceptions or offsets that may be available from time to time to a
         Lender. The Eurodollar Rate shall be adjusted automatically on and as
         of the effective date of any change in the Eurodollar Reserve
         Percentage.

                  "Event of Default" shall have the meaning given such term in
         Section 9.1.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
         amended, and the rules and regulations promulgated thereunder, as
         amended, modified, succeeded or replaced from time to time.

                  "Existing Credit Agreement" means that certain 364-Day
         Revolving Credit Agreement dated as of June 14, 2001 among the
         Borrower, as borrower, the banks signatory thereto, and Bank of
         America, N.A., as administrative agent, as amended, supplemented,
         extended, renewed, restated or replaced from time to time.

                  "Extension of Credit" means, as to any Lender, the making of a
         Loan by such Lender (or a participation therein by a Lender) or the
         issuance of, or participation in, a Letter of Credit by such Lender.

                  "Facility Fees" means the fees payable to the Lenders pursuant
         to Section 3.4(a).

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

                  "Fee Letter" means that certain letter agreement, dated as of
         May 2, 2002, among the Borrower, BAS and Bank of America.

                                       7
<PAGE>
                  "Foreign Subsidiary" means any Subsidiary of the Borrower that
         is not a Domestic Subsidiary.

                  "Fuji Contract" means that certain Shareholder Agreement,
         dated as of February 3, 1995, between Fuji Heavy Industries, Ltd. and
         the Borrower, providing for the Borrower's acquisition of 40% of the
         shares of Robin Manufacturing U.S.A. Inc.

                  "Funded Debt" means, without duplication, the sum of (a) the
         principal amount of all obligations of the Borrower and its
         Subsidiaries for borrowed money, (b) all purchase money Indebtedness of
         the Borrower and its Subsidiaries, (c) the principal portion of all
         obligations of the Borrower and its Subsidiaries under Capital Leases
         and (d) all drawn but unreimbursed amounts under all letters of credit
         (other than letters of credit supporting trade payables in the ordinary
         course of business) issued for the account of the Borrower or any of
         its Subsidiaries.

                  "GAAP" means generally accepted accounting principles in the
         United States applied on a consistent basis and subject to Section 1.3.

                  "Governmental Authority" means any Federal, state, local,
         provincial or foreign court or governmental agency, authority,
         instrumentality or regulatory body.

                  "Guarantor" means each of the Domestic Subsidiaries of the
         Borrower and each Additional Credit Party, together with their
         successors and assigns.

                  "Guaranty" means the guaranty of the Credit Party Obligations
         provided by the Guarantors pursuant to Section 4.

                  "Guaranty Obligations" means, with respect to any Person,
         without duplication, any obligations (other than endorsements in the
         ordinary course of business of negotiable instruments for deposit or
         collection) guaranteeing any Indebtedness of any other Person in any
         manner, whether direct or indirect, and including without limitation
         any obligation, whether or not contingent, (a) to purchase any such
         Indebtedness or other obligation or any property constituting security
         therefor, (b) to advance or provide funds or other support for the
         payment or purchase of such Indebtedness or obligation or to maintain
         working capital, solvency or other balance sheet condition of such
         other Person (including, without limitation, maintenance agreements,
         comfort letters, take or pay arrangements, put agreements or similar
         agreements or arrangements) for the benefit of the holder of
         Indebtedness of such other Person, (c) to lease or purchase property,
         securities or services primarily for the purpose of assuring the owner
         of such Indebtedness or (d) to otherwise assure or hold harmless the
         owner of such Indebtedness or obligation against loss in respect
         thereof. The amount of any Guaranty Obligation hereunder shall (subject
         to any limitations set forth therein) be deemed to be an amount equal
         to the outstanding principal amount (or maximum principal amount, if
         larger) of the Indebtedness in respect of which such Guaranty
         Obligation is made, or, if less, the maximum amount for which such
         Person may be liable under the terms of the instruments evidencing such
         Guaranty Obligation.

                  "Hazardous Materials" means any substance, material or waste
         defined in or regulated under any Environmental Laws.

                  "Hedging Agreements" means, collectively, interest rate
         protection agreements, foreign currency exchange agreements, commodity
         purchase or option agreements or other interest or exchange rate or
         commodity price hedging agreements, in each case, entered into or
         purchased by a Credit Party.

                  "Indebtedness" of any Person means, without duplication, (a)
         all obligations of such Person for borrowed money, (b) all obligations
         of such Person evidenced by bonds, debentures, notes or similar
         instruments, or upon which interest payments are customarily made, (c)
         all obligations of such Person under conditional sale or other title
         retention agreements relating to property purchased by such Person to
         the extent

                                       8
<PAGE>
         of the value of such property (other than customary reservations or
         retentions of title under agreements with suppliers entered into in the
         ordinary course of business), (d) all obligations, other than
         intercompany items, of such Person issued or assumed as the deferred
         purchase price of property or services purchased by such Person which
         would appear as liabilities on a balance sheet of such Person, (e) all
         Indebtedness of others secured by (or for which the holder of such
         Indebtedness has an existing right, contingent or otherwise, to be
         secured by) any Lien on, or payable out of the proceeds of production
         from, property owned or acquired by such Person, whether or not the
         obligations secured thereby have been assumed, (f) all Guaranty
         Obligations of such Person, (g) the principal portion of all
         obligations of such Person under (i) Capital Leases and (ii) any
         synthetic lease, tax retention operating lease, off-balance sheet loan
         or similar off-balance sheet financing product of such Person where
         such transaction is considered borrowed money indebtedness for tax
         purposes but is classified as an operating lease in accordance with
         GAAP (collectively, "Synthetic Leases"), (h) all obligations of such
         Person to repurchase any securities which repurchase obligation is
         related to the issuance thereof, including, without limitation,
         obligations commonly known as residual equity appreciation potential
         shares, (i) all net obligations of such Person in respect of Hedging
         Agreements, (j) the maximum amount of all performance and standby
         letters of credit issued or bankers' acceptances facilities created for
         the account of such Person and, without duplication, all drafts drawn
         thereunder (to the extent unreimbursed), and (k) the aggregate amount
         of uncollected accounts receivable of such Person subject at such time
         to a sale of receivables (or similar transaction) unless such
         transaction is effected without recourse to such Person. The
         Indebtedness of any Person shall include the Indebtedness of any
         partnership or unincorporated joint venture to the extent such
         Indebtedness is recourse to such Person.

                  "Indemnified Liabilities" has the meaning set forth in Section
         11.5.

                  "Interest Coverage Ratio" means, as of the last day of each
         fiscal quarter, the ratio of (a) EBIT for the period of four fiscal
         quarters ending on such date to (b) Interest Expense for the period of
         four fiscal quarters ending on such date.

                  "Interest Expense" means, for any period, with respect to the
         Borrower and its Subsidiaries on a consolidated basis, all interest
         expense including the interest component under Capital Leases, as
         determined in accordance with GAAP.

                  "Interest Payment Date" means (a) as to Base Rate Loans, the
         last Business Day of each calendar month and the Maturity Date and (b)
         as to Eurodollar Loans, the last day of each applicable Interest Period
         and the Maturity Date and in addition, where the applicable Interest
         Period for a Eurodollar Loan is greater than three months, then also
         the date three months from the beginning of the Interest Period and
         each three months thereafter.

                  "Interest Period" means, as to Eurodollar Loans, a period of
         one, two, three or six months' duration, as the Borrower may elect,
         commencing, in each case, on the date of the borrowing (including
         continuations and conversions thereof); provided, however, (a) if any
         Interest Period would end on a day which is not a Business Day, such
         Interest Period shall be extended to the next succeeding Business Day
         (except that where the next succeeding Business Day falls in the next
         succeeding calendar month, then on the next preceding Business Day),
         (b) no Interest Period shall extend beyond the Maturity Date and (c)
         where an Interest Period begins on a day for which there is no
         numerically corresponding day in the calendar month in which the
         Interest Period is to end, such Interest Period shall end on the last
         Business Day of such calendar month.

                  "Investment" in any Person means (a) the acquisition (whether
         for cash, property, services, assumption of Indebtedness, securities or
         otherwise, but excluding Capital Expenditures and acquisitions of
         inventory in the ordinary course of business) of assets, shares of
         Capital Stock, bonds, notes, debentures, partnership, joint ventures or
         other ownership interests or other securities of such other Person or
         (b) any deposit with, or advance, loan or other extension of credit to,
         such Person (other than deposits made in connection with the lease or
         purchase of equipment, inventory or other assets in the ordinary course
         of business) or (c) any other capital contribution to or investment in
         such Person, including, without limitation,

                                       9
<PAGE>
         any Guaranty Obligation (including any support for a letter of credit
         issued on behalf of such Person) incurred for the benefit of such
         Person.

                  "Issuing Lender" means U.S. Bank N.A. (or any successor
         thereto).

                  "Issuing Lender Fees" has the meaning set forth in Section
         3.4(c).

                  "Joinder Agreement" means a Joinder Agreement substantially in
         the form of Exhibit 7.12.

                  "Lender" means any of the Persons identified as a "Lender" on
         the signature pages hereto, and any Eligible Assignee which may become
         a Lender by way of assignment in accordance with the terms hereof,
         together with their successors and permitted assigns.

                  "Lending Office" means, as to any Lender, the office or
         offices of such Lender described as such on Schedule 1.1(a), or such
         other office or offices as a Lender may from time notify to the
         Borrower and the Administrative Agent.

                  "Letter of Credit" means any letter of credit issued for the
         account of the Borrower by the Issuing Lender pursuant to Section 2.2,
         as such letter of credit may be amended, modified, extended, renewed or
         replaced.

                  "Leverage Ratio" means, as of the last day of each fiscal
         quarter, the ratio of (a) Funded Debt on such date to (b) EBITDA for
         the period of four fiscal quarters ending on such date.

                  "Lien" means any mortgage, pledge, hypothecation, assignment,
         deposit arrangement, security interest, encumbrance, lien (statutory or
         otherwise), preference, priority or charge of any kind, including,
         without limitation, any agreement to give any of the foregoing, any
         conditional sale or other title retention agreement, and any lease in
         the nature thereof.

                  "Loan" or "Loans" means the Loans (or a portion of any Loan),
         individually or collectively, as appropriate, made to the Borrower
         pursuant to Section 2.1.

                  "LOC Commitment" means the commitment of the Issuing Lender to
         issue Letters of Credit for the account of the Borrower in an aggregate
         face amount any time outstanding (together with the amounts of any
         unreimbursed drawings thereon) of up to the LOC Committed Amount.

                  "LOC Committed Amount" means ZERO DOLLARS ($0).

                  "LOC Documents" means, with respect to any Letter of Credit,
         such Letter of Credit, any amendments thereto, any documents delivered
         in connection therewith, any application therefor, and any agreements,
         instruments, guarantees or other documents (whether general in
         application or applicable only to such Letter of Credit) governing or
         providing for (a) the rights and obligations of the parties concerned
         or at risk or (b) any collateral security for such obligations.

                  "LOC Obligations" means, at any time, the sum, without
         duplication, of (a) the maximum amount which is, or at any time
         thereafter may become, available to be drawn under Letters of Credit
         then outstanding, assuming compliance with all requirements for
         drawings referred to in such Letters of Credit plus (b) the aggregate
         amount of all drawings under Letters of Credit honored by the Issuing
         Lender but not theretofore reimbursed.

                  "LOC Participants" means the Lenders.

                                       10
<PAGE>
                  "London Interbank Offered Rate" means, with respect to any
         Eurodollar Loan for the Interest Period applicable thereto, the rate of
         interest per annum (rounded upwards to the nearest 1/100 of 1%)
         appearing on Telerate Page 3750 (or any successor page) as the London
         interbank offered rate for deposits in Dollars at approximately 11:00
         A.M. (London time) two Business Days prior to the first day of such
         Interest Period for a term comparable to such Interest Period;
         provided, however, if more than one rate is specified on Telerate Page
         3750, the applicable rate shall be the arithmetic mean of all such
         rates. If, for any reason, such rate is not available, the term "London
         Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan
         for the Interest Period applicable thereto, the rate of interest per
         annum (rounded upwards to the nearest 1/100 of 1%) appearing on Reuters
         Screen LIBO Page as the London interbank offered rate for deposits in
         Dollars at approximately 11:00 A.M. (London time) two Business Days
         prior to the first day of such Interest Period for a term comparable to
         such Interest Period; provided, however, if more than one rate is
         specified on Reuters Screen LIBO Page, the applicable rate shall be the
         arithmetic mean of all such rates.

                  "Mandatory Borrowing" has the meaning set forth in Section
         2.2(e).

                  "Material Adverse Effect" means a material adverse effect on
         (a) the business, assets, liabilities (actual or contingent),
         operations, condition (financial or otherwise) or prospects of the
         Borrower and its Subsidiaries taken as a whole, (b) the ability of the
         Borrower, or of the Credit Parties taken as a whole, to perform its or
         their obligations under this Credit Agreement or any of the other
         Credit Documents, or (c) the validity or enforceability of this Credit
         Agreement or any of the other Credit Documents, or the material rights
         and remedies of the Lenders hereunder or thereunder taken as a whole.

                  "Maturity Date" means June 12, 2003.

                  "Moody's" means Moody's Investors Service, Inc., or any
         successor or assignee of the business of such company in the business
         of rating securities.

                  "Multiemployer Plan" means a Plan which is a multiemployer
         plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.

                  "Multiple Employer Plan" means a Plan covered by Title IV of
         ERISA (other than a Multiemployer Plan) in which the Borrower, any
         Subsidiary of the Borrower or any ERISA Affiliate and at least one
         employer other than the Borrower, any Subsidiary of the Borrower or any
         ERISA Affiliate are contributing sponsors.

                  "Multi-Year Credit Agreement" means that certain Multi-Year
         Revolving Credit Agreement, dated as of June 14, 2001, among the
         Borrower, the Guarantors, the Administrative Agent, as administrative
         agent, and the lenders party thereto, as amended, modified,
         supplemented, extended, renewed, restated or replaced from time to
         time.

                  "Net Cash Proceeds" means the aggregate cash proceeds received
         from an Equity Issuance net of (a) reasonably identifiable transaction
         costs payable to third parties, and (b) actual taxes paid or payable
         with respect to such proceeds.

                  "Net Income" means, for any period, the net income after taxes
         for such period of the Borrower and its Subsidiaries on a consolidated
         basis, as determined in accordance with GAAP.

                  "Net Worth" means, as of any date, the shareholder's equity or
         net worth of the Borrower and its Subsidiaries, on a consolidated
         basis, as determined in accordance with GAAP.

                  "Note" or "Notes" means the promissory notes of the Borrower
         in favor of each of the Lenders evidencing the Loans provided pursuant
         to Section 2.1, individually or collectively, as appropriate, as such
         promissory notes may be amended, modified, supplemented, extended,
         renewed or replaced from time to time and as evidenced in the form of
         Exhibit 2.1(e).

                                       11
<PAGE>
                  "Notice of Borrowing" means a request by the Borrower for a
         Loan, in the form of Exhibit 2.1(b).

                  "Notice of Continuation/Conversion" means a request by the
         Borrower to continue an existing Eurodollar Loan to a new Interest
         Period or to convert a Eurodollar Loan to a Base Rate Loan or a Base
         Rate Loan to a Eurodollar Loan, in the form of Exhibit 2.3.

                  "PAI" means Polaris Acceptance, Inc., a Minnesota corporation.

                  "Participation Interest" means the Extension of Credit by a
         Lender by way of a purchase of a participation in Letters of Credit or
         LOC Obligations as provided in Section 2.2 or in any Loans as provided
         in Section 3.8.

                  "PBGC" means the Pension Benefit Guaranty Corporation
         established pursuant to Subtitle A of Title IV of ERISA and any
         successor thereto.

                  "Permitted Acquisition" means an Acquisition by a Credit Party
         or any of its Subsidiaries for consideration no greater than the fair
         market value of the Capital Stock or property acquired; provided that
         (a) the property acquired (or the property of the Person acquired) in
         such Acquisition constitutes Eligible Assets (or goodwill associated
         therewith), (b) in the case of an Acquisition of the Capital Stock of
         another Person, the board of directors (or other comparable governing
         body) of such other Person shall have duly approved such Acquisition,
         (c) if the aggregate consideration to be paid for such Acquisition
         equals or exceeds $25,000,000 (including, without limitation, the
         amount of any Indebtedness assumed in connection with such
         Acquisition), the Borrower shall have delivered to the Administrative
         Agent, prior to the closing of such Acquisition, a certificate of an
         Authorized Officer of the Borrower (i) providing calculations on a pro
         forma basis of each of the financial covenants set forth in Section 7.2
         by giving effect to such Acquisition both (A) as of the actual date of
         such Acquisition and (B) as of the first day of the most recently ended
         fiscal quarter, which calculations shall demonstrate that, as of each
         such date, the Credit Parties are or would have been in compliance with
         all of the financial covenants set forth in Section 7.2 and (ii) both
         before and after giving effect to such Acquisition, no Default or Event
         of Default exists, (d) the representations and warranties made by the
         Credit Parties in any Credit Document shall be true and correct in all
         material respects at and as if made as of the date of such Acquisition
         (after giving effect thereto) except to the extent such representations
         and warranties expressly relate to an earlier date, (e) subsequent to
         March 31, 2001, (i) the aggregate consideration paid and Investments
         made with respect to all Acquisitions (including, without limitation,
         Indebtedness assumed in connection with such Acquisitions) shall not
         exceed $300,000,000 and (ii) the aggregate amount of Indebtedness
         assumed in connection with all Acquisitions shall not exceed
         $150,000,000, (f) if such Acquisition involves the formation of a new
         Subsidiary of the Borrower, such Subsidiary shall comply with Section
         7.12 and (g) such Acquisition is undertaken in accordance with all
         laws, rules, regulations, orders, writs, judgments, injunctions,
         decrees and awards to which any party to such Acquisition may be
         subject.

                  "Permitted Investments" means Investments which are, without
         duplication, (a) cash or Cash Equivalents, (b) trade accounts
         receivable created, acquired or made in the ordinary course of business
         and payable or dischargeable in accordance with customary trade terms,
         (c) inventory, raw materials and general intangibles acquired in the
         ordinary course of business, (d) Investments by a Credit Party in
         another Credit Party, (e) Permitted Acquisitions, (f) travel advances
         to management personnel and employees in the ordinary course of
         business, (g) Investments existing as of the Closing Date and set forth
         on Schedule 8.8, (h) additional Investments in Foreign Subsidiaries
         that do not exceed $25,000,000 in the aggregate subsequent to June 13,
         2001, (i) additional Investments made pursuant to the Fuji Contract or
         pursuant to an expansion of the engine manufacturing facility
         contemplated thereby that do not exceed $10,000,000 in the aggregate
         subsequent to June 13, 2001, (j) in accordance with Section 8.2, the
         existing Investments as of June 14, 2001 set forth on Schedule 8.2(d)
         plus additional Investments in the form of capital contributions by PAI
         in Acceptance Partnership (or by the Borrower in PAI to make such
         capital contributions) in an amount not to exceed

                                       12
<PAGE>
         $10,000,000 in the aggregate subsequent to June 13, 2001; it being
         understood that the Borrower may not have or make any Investments in
         Acceptance Partnership or PAI that constitute Guaranty Obligations
         (other than the obligation regarding capital contributions as set forth
         herein), (k) Investments in the Equity Reserve as required under the
         Revolving Program Agreement and (l) additional Investments (in addition
         to those set forth above) not to exceed, in the aggregate, $12,500,000
         subsequent to June 13, 2001.

                  "Permitted Liens" means (a) Liens securing Credit Party
         Obligations, (b) Liens for taxes not yet due or Liens for taxes being
         contested in good faith by appropriate proceedings for which adequate
         reserves determined in accordance with GAAP have been established (and
         as to which the property subject to any such Lien is not yet subject to
         foreclosure, sale, collection, levy or loss on account thereof), (c)
         Liens in respect of property imposed by law arising in the ordinary
         course of business such as materialmen's, mechanics', warehousemen's,
         carrier's, landlords' and other nonconsensual statutory Liens which are
         not yet due and payable or which are being contested in good faith by
         appropriate proceedings for which adequate reserves determined in
         accordance with GAAP have been established (and as to which the
         property subject to any such Lien is not yet subject to foreclosure,
         sale or loss on account thereof), (d) Liens (other than Liens imposed
         under ERISA) consisting of pledges or deposits made in the ordinary
         course of business to secure payment of worker's compensation
         insurance, unemployment insurance, pensions or social security
         programs, (e) Liens arising from good faith deposits in connection with
         or to secure performance of tenders, bids, leases, government
         contracts, performance and return-of-money bonds and other similar
         obligations incurred in the ordinary course of business (other than
         obligations in respect of the payment of borrowed money), (f) Liens
         arising from good faith deposits in connection with or to secure
         performance of statutory obligations and surety and appeal bonds, (g)
         easements, rights-of-way, restrictions (including zoning restrictions),
         matters of plat, minor defects or irregularities in title and other
         similar charges or encumbrances not, in any material respect, impairing
         the use of the encumbered property for its intended purposes, (h)
         judgment Liens that would not constitute an Event of Default, (i) Liens
         in connection with Indebtedness permitted by Sections 8.1(d), (j) Liens
         arising by virtue of any statutory or common law provision relating to
         banker's liens, rights of setoff or similar rights as to deposit
         accounts or other funds maintained with a creditor depository
         institution, (k) Liens existing on the date hereof and identified on
         Schedule 8.3 and any renewals and extensions thereof not otherwise
         prohibited by this Credit Agreement; provided that, with respect to
         Liens identified on Schedule 8.3, (i) no such Lien shall extend to any
         property other than the property subject thereto on the Closing Date
         and (ii) the principal amount of the Indebtedness secured by such Liens
         shall not be increased and (l) Liens on the Equity Reserve.

                  "Person" means any individual, partnership, joint venture,
         firm, corporation, limited liability company, association, trust or
         other enterprise (whether or not incorporated), or any Governmental
         Authority.

                  "Plan" means any employee benefit plan (as defined in Section
         3(3) of ERISA) which is covered by ERISA and with respect to which the
         Borrower, any Subsidiary of the Borrower or any ERISA Affiliate is (or,
         if such plan were terminated at such time, would under Section 4069 of
         ERISA be deemed to be) an "employer" within the meaning of Section 3(5)
         of ERISA.

                  "Polaris Participation Fee Shortfall" has the meaning assigned
         to such term in the Revolving Program Agreement (as defined as of
         October 15, 2001).

                  "Polaris Participation Fee Shortfall Obligations" means (a)
         actual amounts paid or deducted from the Equity Reserve in connection
         with any Polaris Participation Fee Shortfall plus (b) amounts in the
         Equity Reserve.

                  "Prime Rate" means the per annum rate of interest established
         from time to time by the Administrative Agent at its principal office
         in Charlotte, North Carolina (or such other principal office of the
         Administrative Agent as communicated in writing to the Borrower and the
         Lenders) as its Prime Rate. Any change in the interest rate resulting
         from a change in the Prime Rate shall become effective as of 12:01 a.m.
         of the Business Day on which each change in the Prime Rate is announced
         by the Administrative Agent. The Prime Rate is a

                                       13
<PAGE>
         reference rate used by the Administrative Agent in determining interest
         rates on certain loans and is not intended to be the lowest rate of
         interest charged on any extension of credit to any debtor.

                  "Real Property" has the meaning given thereto in Section 6.20.

                  "Regulation A, D, T, U or X" means Regulation A, D, T, U or X,
         respectively, of the Board of Governors of the Federal Reserve System
         as from time to time in effect and any successor to all or a portion
         thereof.

                  "Reportable Event" means any of the events set forth in
         Section 4043(c) of ERISA, other than those events as to which the
         notice requirement has been waived by regulation or by the PBGC.

                  "Required Lenders" means Lenders whose aggregate Credit
         Exposure (as hereinafter defined) constitutes more than 50% of the
         Credit Exposure of all Lenders at such time; provided, however, that if
         any Lender shall be a Defaulting Lender at such time then there shall
         be excluded from the determination of Required Lenders the aggregate
         principal amount of Credit Exposure of such Lender at such time. For
         purposes hereof, the term "Credit Exposure" as applied to each Lender
         shall mean (a) at any time prior to the termination of the Commitments,
         the sum of the Commitment Percentage of such Lender multiplied by the
         Revolving Committed Amount and (b) at any time after the termination of
         the Commitments, the sum of (i) the principal balance of the
         outstanding Loans of such Lender plus (ii) such Lender's Participation
         Interests in the face amount of the outstanding Letters of Credit.

                  "Requirement of Law" means, as to any Person, the articles or
         certificate of incorporation and by-laws or other organizational or
         governing documents of such Person, and any law, treaty, rule or
         regulation or final, non-appealable determination of an arbitrator or a
         court or other Governmental Authority, in each case applicable to or
         binding upon such Person or to which any of its material property is
         subject.

                  "Revolving Committed Amount" means ONE HUNDRED MILLION DOLLARS
         ($100,000,000) or such lesser amount to which the Revolving Committed
         Amount may be reduced pursuant to Section 2.1(d).

                  "Revolving Program Agreement" means that certain Revolving
         Program Agreement entered into as of October 15, 2001 by and between
         Household Bank (SB), N.A., a national banking association, and Polaris
         Sales Inc., a Minnesota corporation.

                  "S&P" means Standard & Poor's Ratings Services, a division of
         The McGraw-Hill Companies, Inc. or any successor or assignee of the
         business of such division in the business of rating securities.

                  "Securities Act" means the Securities Act of 1933, as amended,
         and the rules and regulations promulgated thereunder, as amended,
         modified, succeeded or replaced from time to time.

                  "Single Employer Plan" means any Plan which is covered by
         Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
         Employer Plan.

                  "Solvent" means, with respect to any Person as of a particular
         date, that on such date (a) such Person is able to pay its debts and
         other liabilities, contingent obligations and other commitments as they
         mature in the normal course of business, (b) such Person does not
         intend to, and does not believe that it will, incur debts or
         liabilities beyond such Person's ability to pay as such debts and
         liabilities mature in their ordinary course, (c) such Person is not
         engaged in a business or a transaction, and is not about to engage in a
         business or a transaction, for which such Person's assets would
         constitute unreasonably small capital after giving due consideration to
         the prevailing practice in the industry in which such Person is engaged
         or is to engage, (d) the fair value of the assets of such Person is
         greater than the total amount of liabilities, including, without
         limitation, contingent liabilities, of such Person and (e) the present
         fair saleable value of the assets of such Person is not less than the
         amount that will be required to pay the probable liability of such
         Person on its debts

                                       14
<PAGE>
         as they become absolute and matured. In computing the amount of
         contingent liabilities at any time, it is intended that such
         liabilities will be computed at the amount which, in light of all the
         facts and circumstances existing at such time, represents the amount
         that can reasonably be expected to become an actual or matured
         liability.

                  "Subsidiary" means, as to any Person, (a) any corporation more
         than 50% of whose stock of any class or classes having by the terms
         thereof ordinary voting power to elect a majority of the directors of
         such corporation (irrespective of whether or not at the time, any class
         or classes of such corporation shall have or might have voting power by
         reason of the happening of any contingency) is at the time owned by
         such Person directly or indirectly through Subsidiaries, and (b) any
         partnership, association, joint venture or other entity in which such
         person directly or indirectly through Subsidiaries has more than a 50%
         equity interest at any time.

                  "Synthetic Leases" has the meaning set forth in the definition
         of Indebtedness in this Section 1.1.

                  "Tangible Net Worth" means, as of any date, Net Worth less the
         book value of those assets on the balance sheet of the Borrower and its
         Subsidiaries, on a consolidated basis, that would, in accordance with
         GAAP, be treated as intangibles, it being understood that deferred tax
         assets do not constitute intangible assets under GAAP.

                  "Total Assets" means all items that in accordance with GAAP
         would be classified as assets of the Borrower and its Subsidiaries on a
         consolidated basis.

                  "Total Commitment" means the sum of (a) the Revolving
         Committed Amount plus (b) the total committed amount under the
         Multi-Year Credit Agreement, in each case as such amounts may be
         reduced pursuant to the terms of this Credit Agreement and the
         Multi-Year Credit Agreement, respectively.

                  "Total Utilization" means, as of any date, the sum of the
         principal amounts of (a) Loans outstanding under this Credit Agreement
         on such date plus (b) LOC Obligations outstanding under this Credit
         Agreement on such date plus (c) loans outstanding under the Multi-Year
         Credit Agreement on such date plus (d) the sum, without duplication, of
         the stated amounts of all letters of credit outstanding on such date
         under the Multi-Year Credit Agreement plus all drawn but unreimbursed
         amounts on such date under such letters of credit.

                  "Utilization Fees" means the fees payable to the Lenders
         pursuant to Section 3.4(b).

                  "Voting Stock" means all classes of the Capital Stock of such
         Person then outstanding and normally entitled to vote in the election
         of directors (or similar governing authority).

         1.2      COMPUTATION OF TIME PERIODS AND OTHER DEFINITIONAL PROVISIONS.

         For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.

         1.3      ACCOUNTING TERMS.

         Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements delivered pursuant to Section 5.1(d));
provided,

                                       15
<PAGE>

however, if (a) the Borrower shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto or (b) the Administrative
Agent or the Required Lenders shall so object in writing within 30 days after
delivery of such financial statements, then such calculations shall be made on a
basis consistent with GAAP as in effect as of the date of the most recent
financial statements delivered by the Borrower to the Lenders to which no such
objection shall have been made.

         1.4      TIME.

         All references to time herein shall be references to Eastern Standard
Time or Eastern Daylight time, as the case may be, unless specified otherwise.

                                   SECTION 2

                               CREDIT FACILITIES

         2.1      LOANS.

                  (a)   Loan Commitment. Subject to the terms and conditions set
         forth herein, including but not limited to Section 5.2, each Lender
         severally agrees to make revolving loans (each a "Loan" and
         collectively the "Loans") to the Borrower, in Dollars, at any time and
         from time to time, during the period from and including the Effective
         Date to but not including the Maturity Date (or such earlier date if
         the Revolving Committed Amount has been terminated as provided herein);
         provided, however, that (i) the sum of the aggregate amount of Loans
         outstanding plus the aggregate amount of LOC Obligations outstanding
         shall not exceed the Revolving Committed Amount and (ii) with respect
         to each individual Lender, the Lender's pro rata share of outstanding
         Loans plus such Lender's pro rata share of outstanding LOC Obligations
         shall not exceed such Lender's Commitment Percentage of the Revolving
         Committed Amount. Subject to the terms of this Credit Agreement
         (including Section 3.3), the Borrower may borrow, repay and reborrow
         Loans.

                  (b)   Method of Borrowing for Loans. By no later than
         11:00 a.m. (i) on the date of the requested borrowing of Loans that
         will be Base Rate Loans or (ii) three Business Days prior to the date
         of the requested borrowing of Loans that will be Eurodollar Loans, the
         Borrower shall provide telephonic notice to the Administrative Agent,
         followed promptly by a written Notice of Borrowing in the form of
         Exhibit 2.1(b) (which may be submitted by telecopy), each of such
         telephonic notice and such written Notice of Borrowing setting forth
         (A) the amount requested, (B) whether such Loans shall accrue interest
         at the Base Rate or the Adjusted Eurodollar Rate, (C) with respect to
         Loans that will be Eurodollar Loans, the Interest Period applicable
         thereto and (D) certification that the Borrower has complied in all
         respects with Section 5.2. All Loans made on the Effective Date shall
         be Base Rate Loans. Thereafter, all or any portion of such Loans may be
         converted into Eurodollar Loans in accordance with Section 2.3

                  (c)   Funding of Loans. Upon receipt of a Notice of Borrowing,
         the Administrative Agent shall promptly inform the Lenders as to the
         terms thereof. Each Lender shall make its Commitment Percentage of the
         requested Loans available to the Administrative Agent by 1:00 p.m. on
         the date specified in the Notice of Borrowing by deposit, in Dollars,
         of immediately available funds at the Agency Services Address. The
         amount of the requested Loans will then be made available to the
         Borrower by the Administrative Agent as directed by the Borrower, to
         the extent the amount of such Loans are made available to the
         Administrative Agent.

                  No Lender shall be responsible for the failure or delay by any
         other Lender in its obligation to make Loans hereunder; provided,
         however, that the failure of any Lender to fulfill its obligations
         hereunder shall not relieve any other Lender of its obligations
         hereunder. Unless the Administrative Agent shall have been notified by
         any Lender prior to the date of any such Loan that such Lender does not
         intend to make available to the Administrative Agent its portion of the
         Loans to be made on such date, the Administrative Agent may assume

                                       16
<PAGE>

         that such Lender has made such amount available to the Administrative
         Agent on the date of such Loans, and the Administrative Agent in
         reliance upon such assumption, may (in its sole discretion but without
         any obligation to do so) make available to the Borrower a corresponding
         amount. If such corresponding amount is not in fact made available to
         the Administrative Agent, the Administrative Agent shall be able to
         recover such corresponding amount from such Lender. If such Lender does
         not pay such corresponding amount upon the Administrative Agent's
         demand therefor, the Administrative Agent will promptly notify the
         Borrower, and the Borrower shall immediately pay such corresponding
         amount to the Administrative Agent. The Administrative Agent shall also
         be entitled to recover from such Lender or the Borrower, as the case
         may be, interest on such corresponding amount in respect of each day
         from the date such corresponding amount was made available by the
         Administrative Agent to the Borrower to the date such corresponding
         amount is recovered by the Administrative Agent at a per annum rate
         equal to (i) from the Borrower at the applicable rate for such Loan
         pursuant to the Notice of Borrowing or (ii) from such Lender, at a rate
         per annum equal to, during the period to but excluding the date two
         Business Days after demand therefor, the Federal Funds Rate, and,
         thereafter, the Base Rate plus two percent (2%) per annum.

                  (d) Reductions of Revolving Committed Amount. Upon at least
         three Business Days' prior written notice, the Borrower shall have the
         right to permanently reduce, without premium or penalty, all or part of
         the aggregate unused amount of the Revolving Committed Amount at any
         time or from time to time; provided that (i) each partial reduction
         shall be in an aggregate amount at least equal to $5,000,000 and in
         integral multiples of $1,000,000 above such amount and (ii) no
         reduction shall be made which would reduce the Revolving Committed
         Amount to an amount less than the aggregate amount of outstanding Loans
         plus the aggregate amount of outstanding LOC Obligations. Any reduction
         in (or termination of) the Revolving Committed Amount pursuant to this
         Section 2.1(d) shall be permanent and may not be reinstated. The
         Administrative Agent shall immediately notify the Lenders of any
         reduction in the Revolving Committed Amount pursuant to this Section
         2.1(d).

                  (e) Notes. The Loans made by each Lender shall be evidenced by
         a duly executed promissory note of the Borrower to each Lender in
         substantially the form of Exhibit 2.1(e).

         2.2      LETTER OF CREDIT SUBFACILITY.

                  (a) Issuance. Subject to the terms and conditions hereof and
         of the LOC Documents, if any, and any other terms and conditions which
         the Issuing Lender may reasonably require (so long as such terms and
         conditions do not impose any financial obligation on or require any
         Lien (not otherwise contemplated by this Credit Agreement) to be given
         by any Credit Party or conflict with any obligation of, or detract from
         any action which may be taken by, any Credit Party or their
         Subsidiaries under this Credit Agreement), the Issuing Lender agrees,
         in reliance upon the agreements of the other Lenders set forth in this
         Section 2.2, from time to time upon request, in its reasonable
         discretion, to issue (from the Effective Date to the Maturity Date and
         in a form reasonably acceptable to the Issuing Lender), in Dollars, and
         the LOC Participants shall participate in, Letters of Credit for the
         account of the Borrower; provided, however, that (i) the aggregate
         amount of LOC Obligations shall not at any time exceed the LOC
         Committed Amount, (ii) the sum of the aggregate amount of LOC
         Obligations outstanding plus Loans outstanding shall not exceed the
         Revolving Committed Amount and (iii) with respect to each individual
         LOC Participant, the LOC Participant's pro rata share of outstanding
         Loans plus its pro rata share of outstanding LOC Obligations shall not
         exceed such LOC Participant's Commitment Percentage of the Revolving
         Committed Amount. The Issuing Lender may require the issuance and
         expiry date of each Letter of Credit to be a Business Day. Each Letter
         of Credit shall be either (A) a standby letter of credit issued to
         support the obligations (including pension or insurance obligations),
         contingent or otherwise, of the Borrower or any of its Subsidiaries, or
         (B) a commercial letter of credit in respect of the purchase of goods
         or services by the Borrower or any of its Subsidiaries in the ordinary
         course of business. No Letter of Credit shall have an expiry date
         beyond the Maturity Date. Each Letter of Credit shall comply with the
         related LOC Documents.

                                       17

<PAGE>

                  (b) Notice and Reports. The request for the issuance of a
         Letter of Credit shall be submitted to the Issuing Lender at least
         three Business Days prior to the requested date of issuance. The
         Issuing Lender will, at least quarterly and more frequently upon
         request, provide to the Administrative Agent for dissemination to the
         Lenders a report specifying the Letters of Credit which are then issued
         and outstanding. The Issuing Lender will further provide to the
         Administrative Agent, promptly upon request, copies of the Letters of
         Credit and the other LOC Documents.

                  (c) Participations. Each LOC Participant, upon issuance of a
         Letter of Credit, shall be deemed to have purchased without recourse a
         risk participation from the Issuing Lender in such Letter of Credit and
         each LOC Document related thereto and the rights and obligations
         arising thereunder and any collateral relating thereto, in each case in
         an amount equal to its Commitment Percentage of the obligations under
         such Letter of Credit, and shall absolutely, unconditionally and
         irrevocably assume, as primary obligor and not as surety, and be
         obligated to pay to the Issuing Lender therefor and discharge when due,
         its Commitment Percentage of the obligations arising under such Letter
         of Credit. Without limiting the scope and nature of each LOC
         Participant's participation in any Letter of Credit, to the extent that
         the Issuing Lender has not been reimbursed as required hereunder or
         under any such Letter of Credit, each such LOC Participant shall pay to
         the Issuing Lender its Commitment Percentage of such unreimbursed
         drawing in same day funds on the day of notification by the Issuing
         Lender of an unreimbursed drawing pursuant to the provisions of
         subsection (d) or (e) hereof. The obligation of each LOC Participant to
         so reimburse the Issuing Lender shall be absolute and unconditional and
         shall not be affected by the occurrence of a Default, an Event of
         Default or any other occurrence or event. Any such reimbursement shall
         not relieve or otherwise impair the obligation of the Borrower or any
         other Credit Party to reimburse the Issuing Lender under any Letter of
         Credit, together with interest as hereinafter provided.

                  (d) Reimbursement. In the event of any drawing under any
         Letter of Credit, the Issuing Lender will promptly notify the Borrower.
         Unless the Borrower shall immediately notify the Issuing Lender of its
         intent to otherwise reimburse the Issuing Lender, the Borrower shall be
         deemed to have requested a Loan at the Base Rate in the amount of the
         drawing, the proceeds of which will be used to satisfy the
         reimbursement obligations. The Borrower shall reimburse the Issuing
         Lender on the day of drawing under any Letter of Credit either with the
         proceeds of such Loan obtained hereunder or otherwise in same day funds
         as provided herein or in the LOC Documents. The Borrower's
         reimbursement obligations hereunder shall be absolute and unconditional
         under all circumstances irrespective of (but without waiver of) any
         rights of set-off, counterclaim or defense to payment the applicable
         account party or the Borrower may claim or have against the Issuing
         Lender, the Administrative Agent, the Lenders, the beneficiary of the
         Letter of Credit drawn upon or any other Person, including without
         limitation, any defense based on any failure of the applicable account
         party, the Borrower or any other Credit Party to receive consideration
         or the legality, validity, regularity or unenforceability of the Letter
         of Credit. The Issuing Lender will promptly notify the LOC Participants
         of the amount of any unreimbursed drawing and each LOC Participant
         shall promptly pay to the Issuing Lender, in Dollars and in immediately
         available funds, the amount of such LOC Participant's Commitment
         Percentage of such unreimbursed drawing. Such payment shall be made on
         the day such notice is received by such Lender from the Issuing Lender
         if such notice is received at or before 12:00 Noon, otherwise such
         payment shall be made at or before 2:00 p.m. on the Business Day next
         succeeding the day such notice is received. If such LOC Participant
         does not pay such amount to the Issuing Lender in full upon such
         request, such LOC Participant shall, on demand, pay to the Issuing
         Lender interest on the unpaid amount during the period from the date
         the LOC Participant received the notice regarding the unreimbursed
         drawing until such LOC Participant pays such amount to the Issuing
         Lender in full at a rate per annum equal to, if paid within two
         Business Days of the date of drawing, the Federal Funds Rate and
         thereafter at a rate equal to the Base Rate. Each LOC Participant's
         obligation to make such payment to the Issuing Lender, and the right of
         the Issuing Lender to receive the same, shall be absolute and
         unconditional, shall not be affected by any circumstance whatsoever and
         without regard to the termination of this Credit Agreement or the
         Commitments hereunder, the existence of a Default or Event of Default
         or the acceleration of the obligations hereunder and shall be made
         without any offset, abatement, withholding or reduction whatsoever.
         Simultaneously with the making of each such payment by a LOC
         Participant to the Issuing Lender, such LOC Participant shall,
         automatically and without any further action on

                                       18

<PAGE>

         the part of the Issuing Lender or such LOC Participant, acquire a
         participation in an amount equal to such payment (excluding the portion
         of such payment constituting interest owing to the Issuing Lender) in
         the related unreimbursed drawing portion of the LOC Obligation and in
         the interest thereon and in the related LOC Documents, and shall have a
         claim against the Borrower and the other Credit Parties with respect
         thereto.

                  (e) Repayment with Loans. On any day on which the Borrower
         shall have requested, or been deemed to have requested, a Loan
         borrowing to reimburse a drawing under a Letter of Credit (as set forth
         in clause (d) above), the Administrative Agent shall give notice to the
         Lenders that a Loan has been requested or deemed requested in
         connection with a drawing under a Letter of Credit, in which case a
         Loan borrowing comprised solely of Base Rate Loans (each such
         borrowing, a "Mandatory Borrowing") shall be immediately made from all
         Lenders (without giving effect to any termination of the Commitments
         pursuant to Section 9.2) pro rata based on each Lender's respective
         Commitment Percentage and the proceeds thereof shall be paid directly
         to the Issuing Lender for application to the respective LOC
         Obligations. Each Lender hereby irrevocably agrees to make such Loans
         immediately upon any such request or deemed request on account of each
         such Mandatory Borrowing in the amount and in the manner specified in
         the preceding sentence and on the same such date notwithstanding (i)
         the amount of Mandatory Borrowing may not comply with the minimum
         amount for borrowings of Loans otherwise required hereunder, (ii)
         whether any conditions specified in Section 5.2 are then satisfied,
         (iii) whether a Default or Event of Default then exists, (iv) failure
         of any such request or deemed request for Loans to be made by the time
         otherwise required hereunder, (v) the date of such Mandatory Borrowing,
         or (vi) any reduction in the Revolving Committed Amount or any
         termination of the Commitments. In the event that any Mandatory
         Borrowing cannot for any reason be made on the date otherwise required
         above (including, without limitation, as a result of the commencement
         of a proceeding under the Bankruptcy Code with respect to the Borrower
         or any other Credit Party), then each such Lender hereby agrees that it
         shall forthwith fund (as of the date the Mandatory Borrowing would
         otherwise have occurred, but adjusted for any payments received from
         the Borrower on or after such date and prior to such purchase) its
         Participation Interest in the outstanding LOC Obligations in accordance
         with the terms of subsection (d) above; provided, further, that in the
         event any Lender shall fail to fund its Participation Interest on the
         day the Mandatory Borrowing would otherwise have occurred, then the
         amount of such Lender's unfunded Participation Interest therein shall
         bear interest payable to the Issuing Lender upon demand, at the rate
         equal to, if paid within two Business Days of such date, the Federal
         Funds Rate, and thereafter at a rate equal to the Base Rate.

                  (f) Modification and Extension. The issuance of any
         supplement, modification, amendment, renewal, or extensions to any
         Letter of Credit shall, for purposes hereof, be treated in all respects
         the same as the issuance of a new Letter of Credit hereunder.

                  (g) Uniform Customs and Practice. The Issuing Lender may have
         the Letters of Credit be subject to The Uniform Customs and Practice
         for Documentary Credits, including the International Chamber of
         Commerce decision by the Commission on Banking Technique and Practice
         of April 6, 1998 regarding the European Single Currency (euro), (the
         "UCP") or the International Standby Practices 1998 (the "ISP98"), in
         either case as published as of the date of issue by the International
         Chamber of Commerce, in which case the UCP or the ISP98, as applicable,
         may be incorporated therein and deemed in all respects to be a part
         thereof.

                  (h)      Responsibility of Issuing Lender.

                           (i) It is expressly understood and agreed as between
                  the Lenders that the obligations of the Issuing Lender
                  hereunder to the LOC Participants are only those expressly set
                  forth in this Credit Agreement and that the Issuing Lender
                  shall be entitled to assume that the conditions precedent set
                  forth in Section 5.2 have been satisfied unless it shall have
                  acquired actual knowledge that any such condition precedent
                  has not been satisfied; provided, however, that nothing set
                  forth in this Section 2.2 shall be deemed to prejudice the
                  right of any LOC Participant to recover from the Issuing
                  Lender any amounts made available by such LOC Participant to
                  the Issuing Lender pursuant to this Section 2.2 in the event
                  that it is determined by a court of competent jurisdiction
                  that the payment with respect

                                       19

<PAGE>

                  to a Letter of Credit constituted gross negligence or willful
                  misconduct on the part of the Issuing Lender.

                           (ii) The Issuing Lender shall be under no obligation
                  to issue any Letter of Credit if (a) any order, judgment or
                  decree of any Governmental Authority or arbitrator shall by
                  its terms purport to enjoin or restrain the Issuing Lender
                  from issuing such Letter of Credit, (b) any Requirement of Law
                  applicable to the Issuing Lender or any request or directive
                  (whether or not having the force of law) from any Governmental
                  Authority with jurisdiction over the Issuing Lender shall
                  prohibit, or request that the Issuing Lender refrain from, the
                  issuance of letters of credit generally or such Letter of
                  Credit in particular or shall impose upon the Issuing Lender
                  with respect to such Letter of Credit any restriction, reserve
                  or capital requirement (for which the Issuing Lender is not
                  otherwise compensated hereunder) not in effect on the Closing
                  Date, or shall impose upon the Issuing Lender any unreimbursed
                  loss, cost or expense which was not applicable on the Closing
                  Date and which the Issuing Lender in good faith deems material
                  to it, or (c) the issuance of such Letter of Credit would
                  violate one or more policies of the Issuing Lender.

                  (i) Conflict with LOC Documents. In the event of any conflict
         between this Credit Agreement and any LOC Document, this Credit
         Agreement shall govern.

                  (j) Indemnification of Issuing Lender.

                           (i) In addition to its other obligations under this
                  Credit Agreement, the Credit Parties hereby agree to protect,
                  indemnify, pay and save the Issuing Lender harmless from and
                  against any and all claims, demands, liabilities, damages,
                  losses, costs, charges and expenses (including reasonable
                  Attorney Costs) that the Issuing Lender may incur or be
                  subject to as a consequence, direct or indirect, of (A) the
                  issuance of any Letter of Credit or (B) the failure of the
                  Issuing Lender 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
                  "Government Acts").

                           (ii) As between a Credit Party and the Issuing
                  Lender, such Credit Party shall assume all risks of the acts,
                  omissions or misuse of any Letter of Credit by the beneficiary
                  thereof. The Issuing Lender shall not be responsible for
                  (except in the case of (A), (B) and (C) below if the Issuing
                  Lender has actual knowledge to the contrary): (A) 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 any Letter of Credit, even if
                  it should in fact prove to be in any or all respects invalid,
                  insufficient, inaccurate, fraudulent or forged; (B) the
                  validity or sufficiency of any instrument transferring or
                  assigning or purporting to transfer or assign any Letter of
                  Credit or the rights or benefits thereunder or proceeds
                  thereof, in whole or in part, that may prove to be invalid or
                  ineffective for any reason; (C) errors, omissions,
                  interruptions or delays in transmission or delivery of any
                  messages, by mail, cable, telegraph, telex or otherwise,
                  whether or not they be in cipher; (D) errors in interpretation
                  of technical terms; (E) any loss or delay in the transmission
                  or otherwise of any document required in order to make a
                  drawing under a Letter of Credit or of the proceeds thereof;
                  and (F) any consequences arising from causes beyond the
                  control of the Issuing Lender, including, without limitation,
                  any Government Acts. None of the above shall affect, impair,
                  or prevent the vesting of the Issuing Lender's rights or
                  powers hereunder.

                           (iii) In furtherance and extension and not in
                  limitation of the specific provisions hereinabove set forth,
                  any action taken or omitted by the Issuing Lender, under or in
                  connection with any Letter of Credit or the related
                  certificates, if taken or omitted in good faith, shall not put
                  the Issuing Lender under any resulting liability to the
                  Borrower or any other Credit Party. It is the intention of the
                  parties that this Credit Agreement shall be construed and
                  applied to protect and indemnify the Issuing Lender against
                  any and all risks involved in the issuance of the Letters of

                                       20

<PAGE>

                  Credit, all of which risks are hereby assumed by the Borrower,
                  including, without limitation, any and all risks of the acts
                  or omissions, whether rightful or wrongful, of any present or
                  future Government Acts. The Issuing Lender shall not, in any
                  way, be liable for any failure by the Issuing Lender or anyone
                  else to pay any drawing under any Letter of Credit as a result
                  of any Government Acts or any other cause beyond the control
                  of the Issuing Lender.

                           (iv) Nothing in this subsection (j) is intended to
                  limit the reimbursement obligation of the Credit Parties
                  contained in this Section 2.2. The obligations of the Credit
                  Parties under this subsection (j) shall survive the
                  termination of this Credit Agreement. No act or omission of
                  any current or prior beneficiary of a Letter of Credit shall
                  in any way affect or impair the rights of the Issuing Lender
                  to enforce any right, power or benefit under this Credit
                  Agreement.

                           (v) Notwithstanding anything to the contrary
                  contained in this subsection (j), the Credit Parties shall
                  have no obligation to indemnify the Issuing Lender in respect
                  of any liability incurred by the Issuing Lender arising solely
                  out of the gross negligence or willful misconduct of the
                  Issuing Lender, as determined by a court of competent
                  jurisdiction.

                  (k) Designation of other Persons as Account Parties.
         Notwithstanding anything to the contrary set forth in this Credit
         Agreement, including without limitation Section 2.2(a) hereof, a Letter
         of Credit issued hereunder may contain a statement to the effect that
         such Letter of Credit is issued for the account of a Subsidiary of the
         Borrower; provided that notwithstanding such statement, the Borrower
         shall be the actual account party for all purposes of this Credit
         Agreement for such Letter of Credit and such statement shall not affect
         the Borrower's reimbursement obligations hereunder with respect to such
         Letter of Credit.

         2.3      CONTINUATIONS AND CONVERSIONS.

         Subject to the terms below, the Borrower shall have the option, on any
Business Day, to continue existing Eurodollar Loans for a subsequent Interest
Period, to convert Base Rate Loans into Eurodollar Loans or to convert
Eurodollar Loans into Base Rate Loans. By no later than 11:00 a.m. (a) on the
date of the requested conversion of a Eurodollar Loan to a Base Rate Loan or (b)
three Business Days prior to the date of the requested continuation of a
Eurodollar Loan or conversion of a Base Rate Loan to a Eurodollar Loan, the
Borrower shall provide telephonic notice to the Administrative Agent, followed
promptly by a written Notice of Continuation/Conversion, in the form of Exhibit
2.3 setting forth (i) whether the Borrower wishes to continue or convert such
Loans and (ii) if the request is to continue a Eurodollar Loan or convert a Base
Rate Loan to a Eurodollar Loan, the Interest Period applicable thereto.
Notwithstanding anything herein to the contrary, (A) except as provided in
Section 3.11, Eurodollar Loans may only be continued or converted into Base Rate
Loans on the last day of the Interest Period applicable thereto, (B) Eurodollar
Loans may not be continued nor may Base Rate Loans be converted into Eurodollar
Loans during the existence and continuation of a Default or an Event of Default
and (C) any request to continue a Eurodollar Loan that fails to comply with the
terms hereof or any failure to request a continuation of a Eurodollar Loan at
the end of an Interest Period shall constitute a conversion to a Base Rate Loan
on the last day of the applicable Interest Period.

         2.4      MINIMUM AMOUNTS.

         Each request for a borrowing, conversion or continuation shall be
subject to the requirements that (a) each Eurodollar Loan shall be in a minimum
amount of $5,000,000 and in integral multiples of $1,000,000 in excess thereof,
(b) each Base Rate Loan shall be in a minimum amount of the lesser of $5,000,000
(and integral multiples of $1,000,000 in excess thereof) or the remaining amount
available under the Revolving Committed Amount and (c) no more than ten (10)
Eurodollar Loans shall be outstanding hereunder at any one time. For the
purposes of this Section 2.4, all Eurodollar Loans with the same Interest
Periods that begin and end on the same date shall be considered as one
Eurodollar Loan, but Eurodollar Loans with different Interest Periods, even if
they begin on the same date, shall be considered as separate Eurodollar Loans.

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<PAGE>

                                   SECTION 3

          GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

         3.1      INTEREST.

                  (a) Interest Rate. Subject to Section 3.1(b), all Base Rate
         Loans shall accrue interest at the Base Rate and all Eurodollar Loans
         shall accrue interest at the Adjusted Eurodollar Rate.

                  (b) Default Rate of Interest. Upon the occurrence, and during
         the continuation, of an Event of Default, the principal of and, to the
         extent permitted by law, interest on the Loans and any other amounts
         owing hereunder or under the other Credit Documents (including without
         limitation fees and expenses) shall bear interest, payable on demand,
         at a per annum rate equal to 2% plus the rate which would otherwise be
         applicable (or if no rate is applicable, then the Base Rate plus two
         percent (2%) per annum).

                  (c) Interest Payments. Interest on Loans shall be due and
         payable in arrears on each Interest Payment Date. If an Interest
         Payment Date falls on a date which is not a Business Day, such Interest
         Payment Date shall be deemed to be the next succeeding Business Day,
         except that in the case of Eurodollar Loans where the next succeeding
         Business Day falls in the next succeeding calendar month, then on the
         next preceding Business Day.

         3.2      PLACE AND MANNER OF PAYMENTS.

         All payments of principal, interest, fees, expenses and other amounts
to be made by a Credit Party under this Credit Agreement shall be made
unconditionally and without any setoff, deduction, counterclaim, defense,
recoupment or withholding of any kind and received not later than 2:00 p.m. on
the date when due, in Dollars and in immediately available funds, by the
Administrative Agent at the Agency Services Address. Payments received after
such time shall be deemed to have been received on the next Business Day. The
Borrower shall, at the time it makes any payment under this Credit Agreement,
specify to the Administrative Agent the Loans, Letters of Credit, fees or other
amounts payable by the Borrower hereunder to which such payment is to be applied
(and in the event that it fails to specify, or if such application would be
inconsistent with the terms hereof, the Administrative Agent shall, subject to
Section 3.7, distribute such payment to the Lenders in such manner as the
Administrative Agent may reasonably deem appropriate). The Administrative Agent
will distribute such payments to the Lenders on the same Business Day if any
such payment is received at or before 2:00 p.m.; otherwise the Administrative
Agent will distribute such payment to the Lenders on the next succeeding
Business Day. Whenever any payment hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and fees for the period
of such extension), except that, in the case of Eurodollar Loans, if the
extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day.

         3.3      PREPAYMENTS.

                  (a) Voluntary Prepayments. The Borrower shall have the right
         to prepay Loans in whole or in part from time to time without premium
         or penalty; provided, however, that (i) Eurodollar Loans may only be
         prepaid on three Business Days' prior written notice to the
         Administrative Agent and any prepayment of Eurodollar Loans will be
         subject to Section 3.14, (ii) each such partial prepayment of
         Eurodollar Loans shall be in the minimum principal amount of $5,000,000
         and integral multiples of $1,000,000 and (iii) each such partial
         prepayment of Base Rate Loans shall be in the minimum principal amount
         of $5,000,000 and integral multiples of $1,000,000. Amounts prepaid
         pursuant to this Section 3.3(a) shall be applied as the Borrower may
         elect; however, if the Borrower fails to specify, such prepayment will
         be applied in the manner set forth in Section 3.3(c) below.

                                       22

<PAGE>

                  (b) Mandatory Prepayments. If at any time the sum of the
         aggregate amount of Loans outstanding plus LOC Obligations outstanding
         exceeds the Revolving Committed Amount, the Borrower shall immediately
         make a principal payment to the Administrative Agent in the manner and
         in an amount such that the sum of the aggregate amount of Loans
         outstanding plus LOC Obligations outstanding is less than or equal to
         the Revolving Committed Amount.

                  (c) Application of Prepayments. All amounts paid pursuant to
         Section 3.3(a), if the Borrower has not otherwise elected an
         application of such amounts, and all amounts required to be prepaid
         pursuant to Section 3.3(b) shall be applied first to Loans and second
         to a cash collateral account in respect of LOC Obligations. Within the
         parameters of the applications set forth above, prepayments shall be
         applied first to Base Rate Loans and then to Eurodollar Loans in direct
         order of Interest Period maturities. All prepayments hereunder shall be
         subject to Section 3.14.

         3.4      FEES.

                  (a) Facility Fees. In consideration of the Revolving Committed
         Amount being made available by the Lenders hereunder, the Borrower
         agrees to pay to the Administrative Agent, for the pro rata benefit of
         each Lender (based on such Lender's Commitment Percentage of the
         Revolving Committed Amount), a per annum fee equal to the Applicable
         Percentage for Facility Fees (the "Facility Fees"). The Facility Fees
         shall commence to accrue on the Effective Date and shall be due and
         payable in arrears on the last Business Day of each fiscal quarter of
         the Borrower (as well as on the Maturity Date and on any date that the
         Revolving Committed Amount is reduced) for the immediately preceding
         fiscal quarter (or portion thereof), beginning with the first of such
         dates to occur after the Closing Date.

                  (b)      Utilization Fees.

                           (i) For each day after the Effective Date that Total
                  Utilization exceeds an amount equal to thirty-three percent
                  (33%) of the Total Commitment but is less than or equal to
                  fifty percent (50%) of the Total Commitment, the Borrower
                  shall pay to the Administrative Agent, for the pro rata
                  benefit of each Lender (based on such Lender's Commitment
                  Percentage), a per annum fee equal to (A) .125% multiplied by
                  (B) the sum of the principal amount of Loans outstanding on
                  such day plus the principal amount of LOC Obligations
                  outstanding on such day.

                           (ii) For each day after the Effective Date that Total
                  Utilization exceeds an amount equal to fifty percent (50%) of
                  the Total Commitment, the Borrower shall pay to the
                  Administrative Agent, for the pro rata benefit of each Lender
                  (based on such Lender's Commitment Percentage), a per annum
                  fee equal to (A) .250% multiplied by (B) the sum of the
                  principal amount of Loans outstanding on such day plus the
                  principal amount of LOC Obligations outstanding on such day
                  (such fees, together with the fees described in paragraph
                  (b)(i) above, the "Utilization Fees").

                           (iii) The Utilization Fees, if any, shall commence to
                  accrue on the Effective Date and shall be due and payable in
                  arrears on the last Business Day of each fiscal quarter of the
                  Borrower (as well as on the Maturity Date, on any date that
                  the Revolving Committed Amount is reduced and on any date that
                  the commitments of the lenders under the Multi-Year Credit
                  Agreement are reduced) for the immediately preceding fiscal
                  quarter (or portion thereof), beginning with the first of such
                  dates to occur after the Closing Date.

                  (c)      Letter of Credit Fees.

                           (i) Letter of Credit Fees. In consideration of the
                  issuance of Letters of Credit hereunder, the Borrower agrees
                  to pay to the Administrative Agent, for the pro rata benefit
                  of each Lender (based on each Lender's Commitment Percentage),
                  a per annum fee (the "Letter of Credit Fees") equal to the
                  Applicable Percentage for the Letter of Credit Fees on the
                  average daily maximum

                                       23

<PAGE>

                  amount available to be drawn under each such Letter of Credit
                  from the date of issuance to the date of expiration. The
                  Letter of Credit Fees will be payable in arrears on the last
                  Business Day of each fiscal quarter of the Borrower (as well
                  as on the Maturity Date) for the immediately preceding fiscal
                  quarter (or portion thereof), beginning with the first of such
                  dates to occur after the Closing Date.

                           (ii) Issuing Lender Fees. In addition to the Letter
                  of Credit Fees payable pursuant to subsection (i) above, the
                  Borrower shall pay to the Issuing Lender for its own account,
                  without sharing by the other Lenders, (A) the customary,
                  incidental and/or out of pocket charges from time to time to
                  the Issuing Lender for its services in connection with the
                  issuance, amendment, payment, transfer, administration,
                  cancellation and conversion of, and drawings under, Letters of
                  Credit and (B) a letter of credit fronting fee of 0.15% per
                  annum of the face amount of each Letter of Credit
                  (collectively, the "Issuing Lender Fees").

                  (d) Other Fees. The Borrower agrees to pay (i) to the
         Administrative Agent, for its own account, an annual fee and (ii) to
         the Administrative Agent, for the account of each of the Lenders,
         upfront fees on the Closing Date, in each case in accordance with the
         terms of the Fee Letter.

         3.5      PAYMENT IN FULL AT MATURITY.

         On the Maturity Date, the entire outstanding principal balance of all
Loans and all LOC Obligations, together with accrued but unpaid interest and all
other sums owing with respect thereto, shall be due and payable in full, unless
accelerated sooner pursuant to Section 9.

         3.6      COMPUTATIONS OF INTEREST AND FEES.

                  (a) Except for Base Rate Loans that are based upon the Prime
         Rate, in which case interest shall be computed on the basis of the
         actual number of days elapsed over a year of 365 or 366 days, as the
         case may be, all computations of interest and fees hereunder shall be
         made on the basis of the actual number of days elapsed over a year of
         360 days. Interest shall accrue from and include the date of borrowing
         (or continuation or conversion) but exclude the date of payment.

                  (b) It is the intent of the Lenders and the Credit Parties to
         conform to and contract in strict compliance with applicable usury law
         from time to time in effect. All agreements between the Lenders and the
         Credit Parties are hereby limited by the provisions of this paragraph
         which shall override and control all such agreements, whether now
         existing or hereafter arising and whether written or oral. In no way,
         nor in any event or contingency (including but not limited to
         prepayment or acceleration of the maturity of any obligation), shall
         the interest taken, reserved, contracted for, charged, or received
         under this Credit Agreement, under the Notes or otherwise, exceed the
         maximum nonusurious amount permissible under applicable law. If, from
         any possible construction of any of the Credit Documents or any other
         document, interest would otherwise be payable in excess of the maximum
         nonusurious amount, any such construction shall be subject to the
         provisions of this paragraph and such documents shall be automatically
         reduced to the maximum nonusurious amount permitted under applicable
         law, without the necessity of execution of any amendment or new
         document. If any Lender shall ever receive anything of value which is
         characterized as interest on the Loans under applicable law and which
         would, apart from this provision, be in excess of the maximum
         nonusurious amount, an amount equal to the amount which would have been
         excessive interest shall, without penalty, be applied to the reduction
         of the principal amount owing on the Loans and not to the payment of
         interest, or refunded to the Borrower or the other payor thereof if and
         to the extent such amount which would have been excessive exceeds such
         unpaid principal amount of the Loans. The right to demand payment of
         the Loans or any other Indebtedness evidenced by any of the Credit
         Documents does not include the right to accelerate the payment of any
         interest which has not otherwise accrued on the date of such demand,
         and the Lenders do not intend to charge or receive any unearned
         interest in the event of such demand. All interest paid or agreed to be
         paid to the Lenders with respect to the Loans shall, to the extent
         permitted by applicable law, be amortized, prorated, allocated, and
         spread throughout the full stated term (including any renewal or
         extension) of the Loans so that

                                       24

<PAGE>

         the amount of interest on account of such Indebtedness does not exceed
         the maximum nonusurious amount permitted by applicable law.

         3.7      PRO RATA TREATMENT.

         Except to the extent otherwise provided herein:

                  (a) Loans. Each Loan borrowing (including, without limitation,
         each Mandatory Borrowing), each payment or prepayment of principal of
         any Loan, each payment of fees (other than the Issuing Lender Fees
         retained by the Issuing Lender for its own account and the
         Administrative Fees retained by the Administrative Agent for its own
         account), each reduction of the Revolving Committed Amount, and each
         conversion or continuation of any Loan, shall (except as otherwise
         provided in Section 3.11) be allocated pro rata among the relevant
         Lenders in accordance with the respective Commitment Percentages of
         such Lenders (or, if the Commitments of such Lenders have expired or
         been terminated, in accordance with the respective principal amounts of
         the outstanding Loans and Participation Interests of such Lenders);
         provided that, if any Lender shall have failed to pay its applicable
         pro rata share of any Loan, then any amount to which such Lender would
         otherwise be entitled pursuant to this subsection (a) shall instead be
         payable to the Administrative Agent until the share of such Loan not
         funded by such Lender has been repaid; provided further, that in the
         event any amount paid to any Lender pursuant to this subsection (a) is
         rescinded or must otherwise be returned by the Administrative Agent,
         each Lender shall, upon the request of the Administrative Agent, repay
         to the Administrative Agent the amount so paid to such Lender, with
         interest for the period commencing on the date such payment is returned
         by the Administrative Agent until the date the Administrative Agent
         receives such repayment at a rate per annum equal to, during the period
         to but excluding the date two Business Days after such request, the
         Federal Funds Rate, and thereafter, the Base Rate plus two percent (2%)
         per annum; and

                  (b) Letters of Credit. Each payment of unreimbursed drawings
         in respect of LOC Obligations shall be allocated to each LOC
         Participant pro rata in accordance with its Commitment Percentage;
         provided that, if any LOC Participant shall have failed to pay its
         applicable pro rata share of any drawing under any Letter of Credit,
         then any amount to which such LOC Participant would otherwise be
         entitled pursuant to this subsection (b) shall instead be payable to
         the Issuing Lender until the share of such unreimbursed drawing not
         funded by such Lender has been repaid; provided further, that in the
         event any amount paid to any LOC Participant pursuant to this
         subsection (b) is rescinded or must otherwise be returned by the
         Issuing Lender, each LOC Participant shall, upon the request of the
         Issuing Lender, repay to the Administrative Agent for the account of
         the Issuing Lender the amount so paid to such LOC Participant, with
         interest for the period commencing on the date such payment is returned
         by the Issuing Lender until the date the Issuing Lender receives such
         repayment at a rate per annum equal to, during the period to but
         excluding the date two Business Days after such request, the Federal
         Funds Rate, and thereafter, the Base Rate plus two percent (2%) per
         annum.

         3.8      SHARING OF PAYMENTS.

         The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan, unreimbursed drawing with respect to any LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly pay in cash or purchase
from the other Lenders a participation in such Loans, LOC Obligations, and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such

                                       25

<PAGE>

payment shall, by payment in cash or a repurchase of a participation
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Lender whose payment
shall have been rescinded or otherwise restored. The Borrower agrees that any
Lender so purchasing such a participation may, to the fullest extent permitted
by law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such participation as fully as if such Lender were
a holder of such Loan, LOC Obligation or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or the Administrative Agent shall fail to remit to any other
Lender an amount payable by such Lender or the Administrative Agent to such
other Lender pursuant to this Credit Agreement on the date when such amount is
due, such payments shall be made together with interest thereon for each date
from the date such amount is due until the date such amount is paid to the
Administrative Agent or such other Lender at a rate per annum equal to the
Federal Funds Rate. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 3.8 applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders under this Section 3.8 to share in the benefits of any
recovery on such secured claim.

         3.9      CAPITAL ADEQUACY.

                  (a) If, after the date thereof, the adoption or the becoming
         effective of, or any change in, any law, rule or regulation or other
         Requirement of Law regarding capital adequacy or any change therein or
         in the interpretation thereof, or compliance by any Lender (or its
         Lending Office) therewith, has or would have the effect of reducing the
         rate of return on the capital or assets of such Lender or any
         corporation controlling such Lender as a consequence of such Lender's
         obligations hereunder (taking into consideration its policies with
         respect to capital adequacy and such Lender's desired return on
         capital), then from time to time within 10 days of demand of such
         Lender setting forth in reasonable detail such change in law and the
         calculation of such reduced rate of return (with a copy of such demand
         to the Administrative Agent), the Borrower shall pay to such Lender
         such additional amounts as will compensate such Lender for such
         reduction.

                  (b) The Borrower shall not be required to compensate a Lender
         pursuant to this Section 3.9 for any additional amounts incurred more
         than 180 days prior to the date that such Lender notifies the Borrower
         of the change in law giving rise to such additional amounts and of such
         Lender's intention to claim compensation therefor.

         3.10     INABILITY TO DETERMINE INTEREST RATE.

         If the Administrative Agent determines (which determination shall be
conclusive and binding upon the Borrower) in connection with any request for a
Eurodollar Loan or a conversion to or continuation thereof that (a) Dollar
deposits are not being offered to banks in the applicable offshore Dollar market
for the applicable amount and Interest Period of such Eurodollar Loan, (b)
adequate and reasonable means do not exist for determining the Eurodollar Rate
for such Eurodollar Loan, or (c) the Eurodollar Rate for such Eurodollar Loan
does not adequately and fairly reflect the cost to the Lenders of funding such
Eurodollar Loan, the Administrative Agent will promptly notify the Borrower and
all the Lenders. Thereafter, the obligation of the Lenders to make or maintain
Eurodollar Loans shall be suspended until the Administrative Agent revokes such
notice. Upon receipt of such notice, the Borrower may revoke any pending Notice
of Borrowing or Notice of Continuation/Conversion with respect to Eurodollar
Loans or, failing that, will be deemed to have converted such request into a
request for a borrowing of or conversion into a Base Rate Loan in the amount
specified therein. The Administrative Agent will withdraw such determination
pursuant to this Section 3.10 promptly as circumstances allow and no such
suspension shall affect the Eurodollar Rate for any Eurodollar Loan outstanding
at the time such suspension is imposed.

         3.11     ILLEGALITY.

         If any Requirement of Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Loans, then, on

                                       26

<PAGE>

notice thereof by such Lender to the Borrower through the Administrative Agent,
any obligation of such Lender to make or continue Eurodollar Loans or to convert
Base Rate Loans to Eurodollar Loans shall be suspended until such Lender
notifies the Administrative Agent and the Borrower that the circumstances giving
rise to such determination no longer exist. Upon receipt of such notice, the
Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), convert all Eurodollar Loans of such Lender to Base Rate Loans, either
on the last day of the Interest Period thereof, if such Lender may lawfully
continue to maintain such Eurodollar Loans to such day, or immediately, if such
Lender may not lawfully continue to maintain such Eurodollar Loans. Upon any
such conversion, the Borrower shall also pay interest on the amount so
converted, together with any amounts due with respect thereto pursuant to
Section 3.14. Each Lender agrees to designate a different Lending Office if such
designation will avoid the need for such notice and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such Lender.

         3.12     REQUIREMENTS OF LAW.

                  (a) If, after the date hereof, as a result of the introduction
         of or any change in, or in the interpretation of, any Requirement of
         Law, or a Lender's compliance therewith, there shall be any increase in
         the cost to such Lender of agreeing to make or making, funding or
         maintaining Eurodollar Loans or (as the case may be) issuing or
         participating in Letters of Credit, or a reduction in the amount
         received or receivable by such Lender in connection with any of the
         foregoing (excluding for purposes of this subsection (a) any such
         increased costs or reduction in amount resulting from (i) Taxes or
         Other Taxes (as to which Section 3.13 shall govern) and (ii) reserve
         requirements utilized in the determination of the Eurodollar Rate),
         then from time to time, within 10 days of demand of such Lender (with a
         copy of such demand to the Administrative Agent), the Borrower shall
         pay to such Lender such additional amounts as will compensate such
         Lender for such increased cost or reduction in yield.

                  (b) Each Lender shall promptly notify the Borrower and the
         Administrative Agent of any event of which it has knowledge, occurring
         after the date hereof, which will entitle such Lender to compensation
         pursuant to this Section 3.12 and will designate a different Lending
         Office if such designation will avoid the need for, or reduce the
         amount of, such compensation and will not, in the reasonable judgment
         of such Lender, be otherwise materially disadvantageous to it. Any
         Lender claiming compensation under this Section 3.12 shall furnish to
         the Borrower and the Administrative Agent a statement setting forth in
         reasonable detail the additional amount or amounts to be paid to it
         hereunder which shall be conclusive absent manifest error.

                  (c) The Borrower shall not be required to compensate a Lender
         pursuant to this Section 3.12 for any increased costs or reductions
         incurred more than 180 days prior to the date that such Lender notifies
         the Borrower of the change of law giving rise to such increased costs
         or reductions and of such Lender's intention to claim compensation
         therefor.

         3.13     TAXES.

                  (a) Any and all payments by a Credit Party to or for the
         account of the Administrative Agent or any Lender under any Credit
         Document shall be made free and clear of and without deduction for any
         and all present or future income, stamp or other taxes, duties, levies,
         imposts, deductions, assessments, fees, withholdings or similar
         charges, and all liabilities with respect thereto, but excluding, in
         the case of the Administrative Agent and each Lender, taxes imposed on
         or measured by its net income, and franchise taxes imposed on it (in
         lieu of net income taxes), by the jurisdiction (or any political
         subdivision thereof) under the laws of which the Administrative Agent
         or such Lender, as the case may be, is organized or maintains its
         Lending Office (all such non-excluded taxes, duties, levies, imposts,
         deductions, assessments, fees, withholdings or similar charges, and
         liabilities being hereinafter referred to as "Taxes"). If a Credit
         Party shall be required by any Requirement of Law to deduct any Taxes
         from or in respect of any sum payable under any Credit Document to the
         Administrative Agent or any Lender, (i) the sum payable shall be
         increased as necessary so that after making all required deductions
         (including deductions applicable to

                                       27

<PAGE>

         additional sums payable under this Section 3.13(a)), the Administrative
         Agent and such Lender receives an amount equal to the sum it would have
         received had no such deductions been made, (ii) such Credit Party shall
         make such deductions, (iii) such Credit Party shall pay the full amount
         deducted to the relevant taxation authority or other authority in
         accordance with applicable Requirements of Law, and (iv) within 30 days
         after the date of such payment, such Credit Party shall furnish to the
         Administrative Agent (which shall forward the same to such Lender) the
         original or a certified copy of a receipt evidencing payment thereof.
         Notwithstanding the foregoing, no additional sums shall be payable
         pursuant to this Section 3.13(a) with respect to Taxes (A) that are
         attributable to a Lender's failure to comply with Section 3.13(e) or
         (B) that are United States withholding taxes imposed on amounts payable
         to such Lender at the time the Lender becomes a party to this Credit
         Agreement.

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

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

                  (d) Each Credit Party agrees to indemnify the Administrative
         Agent and each Lender for (i) the full amount of Taxes and Other Taxes
         (including any Taxes or Other Taxes imposed or asserted by any
         jurisdiction on amounts payable under this Section 3.13(d)) paid by the
         Administrative Agent and such Lender, (ii) amounts payable under
         Section 3.13(c) and (iii) any liability (including penalties, interest
         and expenses) arising therefrom or with respect thereto, in each case
         whether or not such Taxes or Other Taxes were correctly or legally
         imposed or asserted by the relevant Governmental Authority.

                  (e) Each Lender that is a "foreign corporation, partnership or
         trust" within the meaning of the Code shall deliver to the
         Administrative Agent, prior to receipt of any payment subject to
         withholding under the Code (or after accepting an assignment of an
         interest herein), two duly signed completed copies of either IRS Form
         W-8BEN or any successor thereto (relating to such Lender and entitling
         it to an exemption from, or reduction of, withholding tax on all
         payments to be made to such Lender by a Credit Party pursuant to this
         Agreement) or IRS Form W-8ECI or any successor thereto (relating to all
         payments to be made to such Lender by a Credit Party pursuant to this
         Agreement) or such other evidence satisfactory to the Borrower and the
         Administrative Agent that such Lender is entitled to an exemption from,
         or reduction of, U.S. withholding tax. Thereafter and from time to
         time, each such Lender shall (i) promptly submit to the Administrative
         Agent such additional duly completed and signed copies of one of such
         forms (or such successor forms as shall be adopted from time to time by
         the relevant United States taxing authorities) as may then be available
         under then current United States laws and regulations to avoid, or such
         evidence as is satisfactory to the Borrower and the Administrative
         Agent of any available exemption from or reduction of, United States
         withholding taxes in respect of all payments to be made to such Lender
         by a Credit Party pursuant to this Agreement, (ii) promptly notify the
         Agent of any change in circumstances which would modify or render
         invalid any claimed exemption or reduction, and (iii) take such steps
         as shall not be materially disadvantageous to it, in the reasonable
         judgment of such Lender, and as may be reasonably necessary (including
         the re-designation of its Lending Office) to avoid any Requirement of
         Law that the Credit Parties make any deduction or withholding for taxes
         from amounts payable to such Lender. If such Lender fails to deliver
         the above forms or other documentation, then the Administrative Agent
         may withhold from any interest payment to such Lender an amount
         equivalent to the applicable withholding tax imposed by Sections 1441
         and 1442 of the Code, without reduction. If any Governmental Authority
         asserts

                                       28

<PAGE>

         that the Administrative Agent did not properly withhold any tax or
         other amount from payments made in respect of such Lender, such Lender
         shall indemnify the Administrative Agent therefor, including all
         penalties and interest, any taxes imposed by any jurisdiction on the
         amounts payable to the Administrative Agent under this Section 3.13(e),
         and costs and expenses (including Attorney Costs) of the Administrative
         Agent. The obligation of the Lenders under this Section 3.13(e) shall
         survive the payment of all Obligations and the resignation or
         replacement of the Administrative Agent.

                  (f) For any period with respect to which a Lender required to
         do so has failed to provide the Borrower and the Administrative Agent
         with the appropriate form pursuant to Section 3.13(e) (unless such
         failure is due to a change in treaty, law or regulation occurring
         subsequent to that date on which a form originally was required to be
         provided), such Lender shall not be entitled to indemnification under
         Section 3.13(a) or 3.13(b) with respect to Taxes imposed by the United
         States of America; provided however, that should a Lender that is
         otherwise exempt from withholding tax become subject to Taxes because
         of its failure to deliver a form required hereunder, the Borrower shall
         take such steps as such Lender shall reasonably request to assist such
         Lender to recover such Taxes.

                  (g) If any Credit Party is required to pay any additional
         amounts to or for the account of any Lender pursuant to this Section
         3.13, then such Lender shall use reasonable efforts to change the
         jurisdiction of its Lending Office so as to eliminate or reduce any
         such additional payment which may thereafter accrue if such change, in
         the judgment of such Lender, is not otherwise materially
         disadvantageous to such Lender.

                  (h) If the Administrative Agent or any Lender receives a
         refund with respect to Taxes paid by the Borrower that, in the good
         faith judgment of such Lender, is allocable to such payment, the
         Administrative Agent or such Lender, respectively, shall promptly pay
         the amount of such refund, together with any other amounts paid by the
         Borrower in connection with such refunded Taxes to the extent such
         other amounts are received by the Administrative Agent or such Lender,
         to the Borrower, net of all out-of-pocket expenses of such Lender
         incurred in obtaining such refund, provided, however, that the Borrower
         agrees to promptly return such refund and such other amounts to the
         Administrative Agent or such Lender, as applicable, if it receives
         notice from the Administrative Agent or such Lender that the
         Administrative Agent or such Lender is required to repay such refund to
         the applicable taxing authority. The Administrative Agent and each
         Lender agrees that it will contest such Taxes or liabilities if the
         Administrative Agent or such Lender determined, in its reasonable
         judgment, that it would not be disadvantaged or prejudiced as a result
         of such contest.

         3.14     COMPENSATION.

         Upon the written demand of any Lender, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:

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

                  (b) any failure by the Borrower (for a reason other than the
         failure of such Lender to make a Eurodollar Loan) to prepay, borrow,
         continue or convert any Eurodollar Loan on the date or in the amount
         previously requested or notified by the Borrower.

The amount each such Lender shall be compensated pursuant to this Section 3.14
shall include (a) any loss incurred by such Lender in connection with the
re-employment of funds prepaid, repaid, not borrowed or paid, as the case may
be, and the amount of such loss shall be the excess, if any, of (i) interest or
other cost to such Lender of the deposit or other source of funding used to make
any such Eurodollar Loan over (ii) the interest earned (or to be earned) by such
Lender upon the re-lending or other re-employment of the amount of such
Eurodollar Loan for the

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remainder of its respective Interest Period plus (b) any other loss of
anticipated profits and any loss or expense arising from the liquidation or
re-employment of funds obtained by it to maintain such Loan or from fees payable
to terminate the deposits from which such funds were obtained plus (c) $250 plus
(d) any reasonable out-of-pocket expenses (including Attorney Costs) incurred
and reasonably attributable thereto. Any Lender claiming compensation under this
Section 3.14 shall furnish to the Borrower and the Administrative Agent a
statement setting forth in reasonable detail the calculations of amounts to be
paid hereunder, and the Borrower shall not be required to compensate a Lender
pursuant to this Section 3.14 for any such loss, cost or expense incurred more
than 180 days prior to the date that such Lender notifies the Borrower of the
incurrence of such loss, cost or expense.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.14, each Lender may deem that it funded each Eurodollar Loan made
by it at the Eurodollar Rate for such Eurodollar Loan by a matching deposit or
other borrowing in the applicable offshore Dollar interbank market for a
comparable amount and for a comparable period, whether or not such Eurodollar
Loan was in fact so funded.

         3.15     DETERMINATION AND SURVIVAL OF PROVISIONS.

         All determinations by the Administrative Agent or a Lender of amounts
owing under Sections 3.9 through 3.14, inclusive, shall, absent manifest error,
be conclusive and binding on the parties hereto. In determining such amount, the
Administrative Agent or such Lender may use any reasonable averaging and
attribution methods. Section 3.9 through 3.14, inclusive, shall survive the
termination of this Credit Agreement and the payment of all Credit Party
Obligations.

                                   SECTION 4

                                    GUARANTY

         4.1      GUARANTY OF PAYMENT.

         Subject to Section 4.7 below, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Lender, each Affiliate of
Lender that enters into a Hedging Agreement and the Administrative Agent the
prompt payment of the Credit Party Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration or otherwise) and
the timely performance of all other obligations under the Credit Documents and
such Hedging Agreements. This Guaranty is a guaranty of payment and not of
collection and is a continuing guaranty and shall apply to all Credit Party
Obligations whenever arising.

         4.2      OBLIGATIONS UNCONDITIONAL.

         The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents or the Hedging Agreements, or any
other agreement or instrument referred to therein, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor. Each Guarantor agrees that this Guaranty may be enforced by
the Lenders without the necessity at any time of resorting to or exhausting any
other security or collateral and without the necessity at any time of having
recourse to the Notes or any other of the Credit Documents or any collateral, if
any, hereafter securing the Credit Party Obligations or otherwise and each
Guarantor hereby waives the right to require the Lenders to proceed against the
Borrower or any other Person (including a co-guarantor) or to require the
Lenders to pursue any other remedy or enforce any other right. Each Guarantor
further agrees that it shall have no right of subrogation, indemnity,
reimbursement or contribution against the Borrower or any other Guarantor of the
Credit Party Obligations for amounts paid under this Guaranty until such time as
the Lenders (and any Affiliates of Lenders entering into Hedging Agreements)
have been paid in full, all Commitments under the Credit Agreement have been
terminated and no Person or Governmental Authority shall have any right to
request any return or reimbursement of funds from the Lenders in connection with
monies received under the Credit Documents. Each Guarantor further agrees that
nothing contained herein shall prevent the Lenders from

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<PAGE>

suing on the Notes or any of the other Credit Documents or any of the Hedging
Agreements or foreclosing its security interest in or Lien on any collateral, if
any, securing the Credit Party Obligations or from exercising any other rights
available to it under this Credit Agreement, the Notes, any other of the Credit
Documents, or any other instrument of security, if any, and the exercise of any
of the aforesaid rights and the completion of any foreclosure proceedings shall
not constitute a discharge of any of any Guarantor's obligations hereunder; it
being the purpose and intent of each Guarantor that its obligations hereunder
shall be absolute, independent and unconditional under any and all
circumstances. Neither any Guarantor's obligations under this Guaranty nor any
remedy for the enforcement thereof shall be impaired, modified, changed or
released in any manner whatsoever by an impairment, modification, change,
release or limitation of the liability of the Borrower or by reason of the
bankruptcy or insolvency of the Borrower. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Credit Party
Obligations and notice of or proof of reliance of by the Administrative Agent or
any Lender upon this Guarantee or acceptance of this Guarantee. The Credit Party
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guarantee. All dealings between the Borrower and any of the
Guarantors, on the one hand, and the Administrative Agent and the Lenders, on
the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Guarantee. The Guarantors further agree to all
rights of set-off and automatic debits as set forth in Section 11.2.

         4.3      MODIFICATIONS.

         Each Guarantor agrees that (a) all or any part of the collateral, if
any, now or hereafter held for the Credit Party Obligations, if any, may be
exchanged, compromised or surrendered from time to time; (b) the Lenders shall
not have any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the Credit
Party Obligations or the properties subject thereto; (c) the time or place of
payment of the Credit Party Obligations may be changed or extended, in whole or
in part, to a time certain or otherwise, and may be renewed or accelerated, in
whole or in part; (d) the Borrower and any other party liable for payment under
the Credit Documents may be granted indulgences generally; (e) any of the
provisions of the Notes or any of the other Credit Documents may be modified,
amended or waived; (f) any party (including any co-guarantor) liable for the
payment thereof may be granted indulgences or be released; and (g) any deposit
balance for the credit of the Borrower or any other party liable for the payment
of the Credit Party Obligations or liable upon any security therefor may be
released, in whole or in part, at, before or after the stated, extended or
accelerated maturity of the Credit Party Obligations, all without notice to or
further assent by such Guarantor, which shall remain bound thereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence or release.

         4.4      WAIVER OF RIGHTS.

         Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Credit Party Obligations, or the
Lenders' subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; and (e) all other notices to which
such Guarantor might otherwise be entitled.

         4.5      REINSTATEMENT.

         The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable Attorney Costs) incurred by
the Administrative Agent or such Lender in connection with such rescission or
restoration, including

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<PAGE>

any such costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, fraudulent transfer or similar
payment under any bankruptcy, insolvency or similar law.

         4.6      REMEDIES.

         The Guarantors agree that, as between the Guarantors, on the one hand,
and the Administrative Agent and the Lenders, on the other hand, the Credit
Party Obligations may be declared to be forthwith due and payable as provided in
Section 9 (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors.

         4.7      LIMITATION OF GUARANTY.

         Notwithstanding any provision to the contrary contained herein or in
any of the other Credit Documents, to the extent the obligations of any
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state or otherwise and including,
without limitation, the Bankruptcy Code).

         4.8      RIGHTS OF CONTRIBUTION.

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

                                   SECTION 5

                              CONDITIONS PRECEDENT

         5.1      CLOSING CONDITIONS.

         The obligation of the Lenders to enter into this Credit Agreement and
make the initial Extension of Credit is subject to satisfaction (or waiver) of
the following conditions:

                  (a) Executed Credit Documents. Receipt by the Administrative
         Agent of duly executed copies of: (i) this Credit Agreement; (ii) the
         Notes; and (iii) all other Credit Documents, each in form and substance
         reasonably acceptable to the Lenders in their sole discretion.

                  (b) Authority Documents. Receipt by the Administrative Agent
         of the following with respect to each Credit Party:

                           (i) Organizational Documents. Copies of the articles
                  or certificates of incorporation or other organizational
                  documents of each Credit Party certified to be true and
                  complete as of a recent date by the appropriate Governmental
                  Authority of the state or other jurisdiction of its formation
                  and certified by a secretary or assistant secretary of such
                  Credit Party to be true and correct as of the Closing Date.

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<PAGE>

                           (ii) Bylaws. A copy of the bylaws or other governing
                  documents of each Credit Party certified by a secretary or
                  assistant secretary of such Credit Party to be true and
                  correct as of the Closing Date.

                           (iii) Resolutions. Copies of resolutions of the Board
                  of Directors or other governing body of each Credit Party
                  approving and adopting the Credit Documents to which it is a
                  party, the transactions contemplated therein and authorizing
                  execution and delivery thereof, certified by a secretary or
                  assistant secretary of such Credit Party to be true and
                  correct and in full force and effect as of the Closing Date.

                           (iv) Good Standing. Copies of certificates of good
                  standing, existence or its equivalent with respect to each
                  Credit Party certified as of a recent date by the appropriate
                  Governmental Authority of the state or other jurisdiction of
                  its formation and, without duplication, the State of
                  Minnesota.

                           (v) Incumbency. An incumbency certificate of each
                  Credit Party certified by a secretary or assistant secretary
                  of such Credit Party to be true and correct as of the Closing
                  Date.

                  (c) Opinion of Counsel. Receipt by the Administrative Agent of
         opinions reasonably satisfactory to the Administrative Agent, addressed
         to the Administrative Agent on behalf of the Lenders and dated as of
         the Closing Date.

                  (d) Financial Statements. Receipt by the Lenders of (i) the
         annual consolidated financial statements (including balance sheets,
         income statements and cash flow statements) of the Borrower and its
         Subsidiaries for the fiscal year 2001 audited by independent public
         accountants of recognized national standing, together with the
         "management letter" submitted by such accountants in connection with
         such financial statements, (ii) the consolidated financial statements
         (including balance sheets, income statements and cash flow statements)
         of the Borrower and its Subsidiaries for the fiscal quarter ended March
         31, 2002 and (iii) such other financial information regarding the
         Borrower and its Subsidiaries as the Administrative Agent or a Lender
         may request.

                  (e) Consents. Receipt by the Administrative Agent of evidence
         that all necessary governmental, shareholder and third party consents
         and approvals, if any, have been received and no condition or
         Requirement of Law exists which would reasonably be likely to restrain,
         prevent or impose any material adverse conditions on the transactions
         contemplated hereby.

                  (f) Officer's Certificates. The Administrative Agent shall
         have received a certificate or certificates executed by an Authorized
         Officer of the Borrower as of the Closing Date stating that (i) the
         Credit Parties and each of their Subsidiaries are in compliance with
         all existing material financial obligations, (ii) no action, suit,
         investigation or proceeding is pending or, to the knowledge of any
         Credit Party, threatened in any court or before any arbitrator or
         Governmental Authority that purports to affect the Credit Parties, any
         of their Subsidiaries or any transaction contemplated by the Credit
         Documents, if such action, suit, investigation or proceeding would have
         or would reasonably be expected to have a Material Adverse Effect,
         (iii) all governmental, shareholder and third party consents and
         approvals, if any, with respect to the Credit Documents and the
         transactions contemplated thereby have been obtained, (iv) the
         financial statements and information delivered to the Administrative
         Agent on or before the Closing Date were prepared in good faith and in
         accordance with GAAP and (v) immediately after giving effect to this
         Credit Agreement, the other Credit Documents and all the transactions
         contemplated herein or therein to occur on such date, (A) each Credit
         Party and each of their Subsidiaries is Solvent, (B) no Default or
         Event of Default exists, (C) all representations and warranties
         contained herein and in the other Credit Documents are true and correct
         in all material respects, and (D) the Credit Parties are in compliance
         with each of the financial covenants set forth in Section 7.2,
         including calculation thereof as of March 31, 2002 and have set forth
         the current Adjusted Leverage Ratio.

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<PAGE>

                  (g) Other Indebtedness. Receipt by the Administrative Agent of
         evidence satisfactory to it that all of the Indebtedness of the Credit
         Parties under the Existing Credit Agreement has been paid in full (or
         will be paid in full with the proceeds of the initial Loans made
         herein) and all obligations in connection therewith have been
         terminated.

                  (h) Fees and Expenses. Payment by the Credit Parties of all
         fees and expenses owed by them to the Administrative Agent or the
         Lenders, including, without limitation, as set forth in the Fee Letter.

                  (i) Other. Receipt by the Lenders of such other documents,
         instruments, agreements or information as reasonably and timely
         requested by any Lender.

         5.2      CONDITIONS TO ALL EXTENSIONS OF CREDIT.

         In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans nor shall the Issuing Lender be
required to issue or extend a Letter of Credit unless:

                  (a) Notice. (i) In the case of any new Loan, the Borrower
         shall have delivered a Notice of Borrowing, duly executed and
         completed, by the time specified in Section 2.1 and (ii) in the case of
         any Letter of Credit, the Borrower shall have delivered to the Issuing
         Lender an appropriate request for issuance in accordance with the
         provisions of Section 2.2.

                  (b) Representations and Warranties. The representations and
         warranties made by the Credit Parties in any Credit Document are true
         and correct in all material respects at and as if made as of such date
         except to the extent they expressly and exclusively relate to an
         earlier date.

                  (c) No Default. No Default or Event of Default shall exist and
         be continuing either prior to or after giving effect thereto.

                  (d) Availability. Immediately after giving effect to the
         making of such Loan (and the application of the proceeds thereof) or to
         the issuance of such Letter of Credit, as the case may be, the sum of
         the principal amount of Loans outstanding plus LOC Obligations
         outstanding shall not exceed the Revolving Committed Amount.

The delivery of each Notice of Borrowing and each request for a Letter of Credit
shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in subsections (b), (c), and (d) above.

                                   SECTION 6

                         REPRESENTATIONS AND WARRANTIES

         The Credit Parties hereby represent to the Administrative Agent and
each Lender that:

         6.1      ORGANIZATION AND GOOD STANDING.

         Each Credit Party (a) is either a partnership, a corporation or a
limited liability company duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) is duly qualified
and in good standing as a foreign organization and authorized to do business in
every other jurisdiction where its ownership or operation of property or the
conduct of its business would require it to be qualified, in good standing and
authorized, unless the failure to be so qualified, in good standing or
authorized would not have or would not reasonably be expected to have a Material
Adverse Effect and (c) has the power and authority to own and operate its
properties and to carry on its business as now conducted and as currently
proposed to be conducted.

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<PAGE>

         6.2      DUE AUTHORIZATION.

         Each Credit Party (a) has the power and authority to execute, deliver
and perform this Credit Agreement and the other Credit Documents to which it is
a party and to incur the obligations herein and therein provided for and (b) has
duly taken all necessary action to authorize, and is duly authorized, to
execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party.

         6.3      ENFORCEABLE OBLIGATIONS.

         Each Credit Party has duly executed this Credit Agreement and each
other Credit Document to which such Credit Party is a party and this Credit
Agreement and such other Credit Documents constitute legal, valid and binding
obligations of such Credit Party enforceable against such Credit Party in
accordance with their respective terms, except as may be limited by bankruptcy
or insolvency laws or similar laws affecting creditors' rights generally or by
general equitable principles.

         6.4      NO CONFLICTS.

         Neither the execution and delivery of the Credit Documents to which it
is a party, nor the consummation of the transactions contemplated herein and
therein, nor the performance of or compliance with the terms and provisions
hereof and thereof by a Credit Party will (a) violate, contravene or conflict
with any provision of such Credit Party's organizational documents, (b) violate,
contravene or conflict with any Requirement of Law (including, without
limitation, Regulations T, U or X), order, writ, judgment, injunction, decree,
license or permit applicable to such Credit Party, (c) violate, contravene or
conflict with contractual provisions of, or cause an event of default under, any
indenture, loan agreement, mortgage, deed of trust, contract or other agreement
or instrument to which such Credit Party is a party or by which it or its
properties may be bound, or (d) result in or require the creation of any Lien
upon or with respect to the properties of such Credit Party.

         6.5      CONSENTS.

         Except for consents, approvals and authorizations which have been
obtained, no consent, approval, authorization or order of, or filing,
registration or qualification with, any Governmental Authority, equity owner or
third party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the other
Credit Documents, or the consummation of any transaction contemplated herein or
therein by such Credit Party.

         6.6      FINANCIAL CONDITION.

         The financial statements delivered to the Administrative Agent and the
Lenders pursuant to Section 5.1(d) and Sections 7.1(a) and (b): (a) have been
prepared in accordance with GAAP and (b) present fairly the consolidated
financial condition, results of operations and cash flows of the Borrower and
its Subsidiaries as of such date and for such periods. Since December 31, 2001,
there has been no sale, transfer or other disposition by the Borrower or any of
its Subsidiaries of any material part of the business or property of the
Borrower and its Subsidiaries, taken as a whole, or purchase or other
acquisition by any such Person of any business or property (including any
Capital Stock of any other Person) material in relation to the consolidated
financial condition of the Borrower and its Subsidiaries, taken as a whole, in
each case, which, is not (i) reflected in the most recent financial statements
delivered to the Lenders pursuant to Section 5.1(d) and Section 7.1 or in
the notes thereto or (ii) otherwise permitted by the terms of this Credit
Agreement and communicated to the Administrative Agent and the Lenders.

         6.7      NO MATERIAL CHANGE.

         Since December 31, 2001, there has been no development or event
relating to or affecting any Credit Party or any of its Subsidiaries which has
had or would reasonably be expected to have a Material Adverse Effect.

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<PAGE>

         6.8      DISCLOSURE.

         Neither this Credit Agreement, nor any other Credit Document, nor any
financial statements delivered to the Administrative Agent or the Lenders nor
any other document, certificate or statement furnished to the Administrative
Agent or the Lenders by or on behalf of any Credit Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.

         6.9      NO DEFAULT.

         No Credit Party nor any of its Subsidiaries is in default under any
contract, lease, loan agreement, indenture, mortgage, security agreement or
other agreement or obligation to which it is a party or by which any of its
properties is bound, which default has had or would reasonably be expected to
have a Material Adverse Effect.

         6.10     LITIGATION.

         There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, any Credit Party or any of its Subsidiaries or with respect
to its properties or revenues which (a) purport to affect or pertain to this
Credit Agreement or the other Credit Documents or the transactions contemplated
herein and therein or (b) would have or would reasonably be expected to have a
Material Adverse Effect.

         6.11     TAXES.

         Each Credit Party and each of its Subsidiaries has filed, or caused to
be filed, all material tax returns (federal, state, local and foreign) required
to be filed and has paid (a) all amounts of taxes shown thereon to be due
(including interest and penalties) and (b) all other material taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (i) which are not yet delinquent or (ii) that are being contested in good
faith and by proper proceedings, and against which adequate reserves are being
maintained in accordance with GAAP. No Credit Party is aware of any proposed
material tax assessments against any Credit Party or any of its Subsidiaries.

         6.12     COMPLIANCE WITH LAW.

         Each Credit Party and each of its Subsidiaries is in compliance with
all material Requirements of Law (including, without limitation, Environmental
Laws and ERISA) and all material orders, writs, injunctions and decrees
applicable to it, or to its properties.

         6.13     LICENSES, ETC.

         Each Credit Party and each of its Subsidiaries has obtained, and holds
in full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way,
intellectual property rights and other rights, consents and approvals which are
necessary for the operation of its business as presently conducted, except for
such exceptions as would not have or would not reasonably be expected to have a
Material Adverse Effect.

         6.14     TITLE TO PROPERTIES.

         Each Credit Party, and each of its Subsidiaries, is the owner of, and
has good and marketable title to, or has a valid license or lease to use, all of
its properties and assets (except for minor defects in title, licenses or leases
that do not materially interfere with its ability to conduct its business or to
utilize its properties or assets for their intended purposes) and none of such
properties or assets is subject to any Liens other than Permitted Liens.

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<PAGE>

         6.15     INSURANCE.

         The properties of each Credit Party and each of its Subsidiaries are
insured with financially sound and reputable insurance companies that are not
Affiliates of the Borrower, in such amounts, with such deductibles and covering
such risks, as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Credit Parties
or their Subsidiaries operate.

         6.16     USE OF PROCEEDS.

         The proceeds of the Loans will be used solely for the purposes
specified in Section 7.10. No proceeds of the Loans will be used for the
Acquisition of another Person unless such Acquisition is a Permitted
Acquisition.

         6.17     GOVERNMENT REGULATION.

                  (a) No part of the Letters of Credit or proceeds of the Loans
         will be used, directly or indirectly, for the purpose of purchasing or
         carrying any "margin stock" within the meaning of Regulation U, or for
         the purpose of purchasing or carrying or trading in any securities. No
         Indebtedness being reduced or retired out of the proceeds of the Loans
         was or will be incurred for the purpose of purchasing or carrying any
         margin stock within the meaning of Regulation U or any "margin
         security" within the meaning of Regulation T. "Margin stock" within the
         meaning of Regulation U does not constitute more than 25% of the value
         of the consolidated assets of the Borrower and its Subsidiaries. None
         of the transactions contemplated by the Credit Documents (including,
         without limitation, the direct or indirect use of the proceeds of the
         Loans) will violate or result in a violation of (i) the Securities Act,
         (ii) the Exchange Act or (iii) Regulations T, U or X.

                  (b) No Credit Party nor any of its Subsidiaries is subject to
         regulation under the Public Utility Holding Company Act of 1935, the
         Federal Power Act or the Investment Company Act of 1940, each as
         amended.

         6.18     NO BURDENSOME RESTRICTIONS.

         No Credit Party nor any of its Subsidiaries is a party to any agreement
or instrument or subject to any other obligation or any charter or corporate
restriction or any provision of any applicable law, rule or regulation which,
individually or in the aggregate, would have or would reasonably be expected to
have a Material Adverse Effect.

         6.19     ERISA.

         Except as would not result in or would not reasonably be expected to
result in a Material Adverse Effect:

                  (a) (i) No ERISA Event has occurred, and, to the best
         knowledge of the Credit Parties, each of their Subsidiaries and each
         ERISA Affiliate, no event or condition has occurred or exists as a
         result of which any ERISA Event could reasonably be expected to occur,
         with respect to any Plan; (ii) no "accumulated funding deficiency," as
         such term is defined in Section 302 of ERISA and Section 412 of the
         Code, whether or not waived, has occurred with respect to any Plan and
         no application for a funding waiver or an extension of any amortization
         period pursuant to Section 412 of the Code has been made with respect
         to any Plan; (iii) each Plan has been maintained, operated, and funded
         in compliance with its own terms and in material compliance with the
         provisions of ERISA, the Code, and any other applicable federal or
         state laws; (iv) each Plan that is intended to qualify under Section
         401(a) of the Code has received a favorable determination letter from
         the IRS or an application for such a letter is currently being
         processed by the IRS with respect thereto and, to the best knowledge of
         the Credit Parties, each of their Subsidiaries and each ERISA
         Affiliate, nothing has occurred which would prevent, or cause the loss
         of, such qualification; and (v) no Lien in favor or the PBGC or a Plan
         has arisen or is reasonably likely to arise on account of any Plan.

                                       37
<PAGE>

                  (b) The actuarial present value of all "benefit liabilities"
         (as defined in Section 4001(a)(16) of ERISA), whether or not vested,
         under each Single Employer Plan, as of the last annual valuation date
         prior to the date on which this representation is made or deemed made
         (determined, in each case, in accordance with Financial Accounting
         Standards Board Statement 87, utilizing the actuarial assumptions used
         in such Plan's most recent actuarial valuation report), did not exceed
         as of such valuation date the fair market value of the assets of such
         Plan allocated to such accrued liabilities.

                  (c) No Credit Party nor any Subsidiary of a Credit Party nor
         any ERISA Affiliate has incurred, or, to the best of each such party's
         knowledge, is reasonably expected to incur, any liability under Title
         IV of ERISA with respect to any Single Employer Plan, or any withdrawal
         liability under ERISA to any Multiemployer Plan or Multiple Employer
         Plan. No Credit Party nor any Subsidiary of a Credit Party nor any
         ERISA Affiliate would become subject to any withdrawal liability under
         ERISA if any such party were to withdraw completely from all
         Multiemployer Plans and Multiple Employer Plans as of the valuation
         date most closely preceding the date on which this representation is
         made or deemed made. No Credit Party nor any Subsidiary of a Credit
         Party nor any ERISA Affiliate has received any notification that any
         Multiemployer Plan is in reorganization (within the meaning of Section
         4241 of ERISA), is insolvent (within the meaning of Section 4245 of
         ERISA), or has been terminated (within the meaning of Title IV of
         ERISA), and no Multiemployer Plan is, to the best of each such Person's
         knowledge, reasonably expected to be in reorganization, insolvent, or
         terminated. No Credit Party nor any Subsidiary of a Credit Party nor
         any ERISA Affiliate has engaged in a transaction that could be subject
         to Sections 4069 or 4212(c) of ERISA.

                  (d) No prohibited transaction (within the meaning of Section
         406 of ERISA or Section 4975 of the Code) or breach of fiduciary
         responsibility has occurred with respect to a Plan which has subjected
         or may subject a Credit Party, any Subsidiary of a Credit Party or any
         ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
         502(l) of ERISA or Section 4975 of the Code, or under any agreement or
         other instrument pursuant to which a Credit Party, any Subsidiary of a
         Credit Party or any ERISA Affiliate has agreed or is required to
         indemnify any person against any such liability. There are no pending
         or, to the best knowledge of the Credit Parties, each of their
         Subsidiaries and each ERISA Affiliate, threatened claims, actions or
         lawsuits, or action by any Governmental Authority, with respect to any
         Plan that could reasonably be expected to have a Material Adverse
         Effect.

                  (e) No Credit Party nor any Subsidiary of a Credit Party nor
         any ERISA Affiliate has any material liability with respect to
         "expected post-retirement benefit obligations" within the meaning of
         the Financial Accounting Standards Board Statement 106. Each Plan that
         is a welfare plan (as defined in Section 3(1) of ERISA) to which
         Sections 601-609 of ERISA and Section 4980B of the Code apply has been
         administered in compliance in all material respects with such sections.

         6.20 ENVIRONMENTAL MATTERS.

                  (a) Except as would not result in or would not reasonably be
         expected to result in a Material Adverse Effect:

                           (i) Each of the real properties owned, leased or
                  operated by a Credit Party or any of its Subsidiaries (the
                  "Real Properties") and all operations at the Real Properties
                  are in compliance with all applicable Environmental Laws, and
                  there is no violation of any Environmental Law with respect to
                  the Real Properties or the businesses operated by the Credit
                  Parties or any of their Subsidiaries (the "Businesses"), and
                  there are no conditions relating to the Businesses or Real
                  Properties that would reasonably be expected to give rise to
                  liability under any applicable Environmental Laws.

                           (ii) No Credit Party has received any written notice
                  of, or inquiry from any Governmental Authority regarding, any
                  violation, alleged violation, non-compliance, liability or
                  potential liability regarding Hazardous Materials or
                  compliance with Environmental Laws with regard

                                       38

<PAGE>

                  to any of the Real Properties or the Businesses, nor, to the
                  knowledge of a Credit Party or any of its Subsidiaries, is any
                  such notice being threatened.

                           (iii) Hazardous Materials have not been transported
                  or disposed of from the Real Properties, or generated,
                  treated, stored or disposed of at, on or under any of the Real
                  Properties or any other location, in each case by, or on
                  behalf or with the permission of, a Credit Party or any of its
                  Subsidiaries in a manner that would give rise to liability
                  under any applicable Environmental Laws.

                           (iv) No judicial proceeding or governmental or
                  administrative action is pending or, to the knowledge of a
                  Credit Party or any of its Subsidiaries, threatened, under any
                  Environmental Law to which a Credit Party or any of its
                  Subsidiaries is or will be named as a party, nor are there any
                  consent decrees or other decrees, consent orders,
                  administrative orders or other orders, or other administrative
                  or judicial requirements outstanding under any Environmental
                  Law with respect to a Credit Party or any of its Subsidiaries,
                  the Real Properties or the Businesses.

                           (v) There has been no release (including, without
                  limitation, disposal) or threat of release of Hazardous
                  Materials at or from the Real Properties, or arising from or
                  related to the operations of a Credit Party or any of its
                  Subsidiaries in connection with the Real Properties or
                  otherwise in connection with the Businesses where such release
                  constituted a violation of, or would give rise to liability
                  under, any applicable Environmental Laws.

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

                           (vii) No Credit Party, nor any of its Subsidiaries,
                  has assumed any liability of any Person (other than another
                  Credit Party, or one of its Subsidiaries) under any
                  Environmental Law.

                  (b) The Credit Parties have adopted procedures that are
         designed to (i) ensure that each Credit Party, any of its operations
         and each of the Real Properties complies with applicable Environmental
         Laws and (ii) minimize any liabilities or potential liabilities that
         each Credit Party, any of its operations and each of the Real
         Properties may have under applicable Environmental Laws.

         6.21 INTELLECTUAL PROPERTY.

         Each Credit Party and each of its Subsidiaries owns, or has the legal
right to use, all patents, trademarks, tradenames, copyrights, technology,
know-how and processes (the "Intellectual Property") necessary for each of them
to conduct its business as currently conducted, except where failure to own or
have such legal right to use would not have or would not reasonably be expected
to have a Material Adverse Effect. No claim has been asserted and is pending by
any Person challenging or questioning the use of any Intellectual Property owned
by any Credit Party or any of its Subsidiaries or that any Credit Party or any
of its Subsidiaries has a right to use or the validity or effectiveness of any
such Intellectual Property, nor does any Credit Party or any of its Subsidiaries
have knowledge of any such claim, and, to the knowledge of the Credit Parties
and their Subsidiaries, the use of any Intellectual Property by the Credit
Parties and their Subsidiaries does not infringe on the rights of any Person,
except for such claims and infringements that in the aggregate, would not have
or would not reasonably be expected to have a Material Adverse Effect.

         6.22 SUBSIDIARIES.

         Set forth on Schedule 6.22 is a complete and accurate list of all
Subsidiaries of each Credit Party. Schedule 6.22 may be updated from time to
time by the Borrower by giving written notice thereof to the Administrative
Agent.

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<PAGE>

         6.23 SOLVENCY.

         Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.

         6.24 INDEBTEDNESS.

         The Credit Parties and their Subsidiaries have no Indebtedness except
(a) as set forth on Schedule 6.24 and (b) as otherwise permitted by Section 8.1.

         6.25 INVESTMENTS; LIENS.

         All Investments of each Credit Party and its Subsidiaries are Permitted
Investments. All Liens on the property or assets of the Credit Parties and their
Subsidiaries are Permitted Liens.

         6.26 FORCE MAJEURE.

         Since the date of the financial statements delivered in accordance with
Section 5.1(d) or, if later, the date of the most recent financial statements
delivered in accordance with Section 7.1(a) or Section 7.1(b), no event or
condition has occurred that results from fire or other casualty, strike, lockout
or other labor disruption, embargo, sabotage, confiscation, condemnation, riot,
civil disturbance, activity of armed forces or act of God that has had or would
reasonably be expected to have a Material Adverse Effect.

                                   SECTION 7

                             AFFIRMATIVE COVENANTS

         Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest and fees and other obligations then due and payable hereunder,
have been paid in full and the Commitments and Letters of Credit hereunder shall
have terminated:

         7.1 INFORMATION COVENANTS.

         The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent:

                  (a) Annual Financial Statements. As soon as available, and in
         any event within 90 days after the close of each fiscal year of the
         Borrower, a consolidated balance sheet and income statement of the
         Borrower and its Subsidiaries, as of the end of such fiscal year,
         together with related consolidated statements of operations, retained
         earnings, changes in shareholders' equity and cash flows for such
         fiscal year, setting forth in comparative form consolidated figures for
         the preceding fiscal year, all such consolidated financial information
         described above to be in reasonable form and detail and audited by
         independent certified public accountants of recognized national
         standing reasonably acceptable to the Administrative Agent and whose
         opinion shall be to the effect that such financial statements have been
         prepared in accordance with GAAP and shall not be limited as to the
         scope of the audit or qualified in any manner.

                  (b) Quarterly Financial Statements. As soon as available, and
         in any event within 45 days after the close of each of the first three
         fiscal quarters of the Borrower, an unaudited consolidated balance
         sheet and income statement of the Borrower and its Subsidiaries, as of
         the end of such fiscal quarter, together with related consolidated
         statements of operations and consolidated statements of retained
         earnings and of cash flows for such fiscal quarter in each case setting
         forth in comparative form consolidated figures for the corresponding
         period of the preceding fiscal year, all such financial information
         described above to be in reasonable form and detail and reasonably
         acceptable to the Administrative Agent, and accompanied by a
         certificate of an

                                       40

<PAGE>

         Authorized Officer of the Borrower to the effect that such quarterly
         financial statements fairly present in all material respects the
         consolidated financial condition of the Borrower and its Subsidiaries
         and have been prepared in accordance with GAAP, subject to changes
         resulting from audit and normal year-end audit adjustments.

                  (c) Officer's Certificate. At the time of delivery of the
         financial statements provided for in Sections 7.1(a) and 7.1(b) above,
         a certificate of an Authorized Officer of the Borrower substantially in
         the form of Exhibit 7.1(c), (i) demonstrating compliance with the
         financial covenants contained in Section 7.2 by calculation thereof as
         of the end of each such fiscal period, (ii) demonstrating compliance
         with any other terms of this Credit Agreement as reasonably requested
         by the Administrative Agent, (iii) stating that no Default or Event of
         Default exists, or if any Default or Event of Default does exist,
         specifying the nature and extent thereof and what action the Borrower
         proposes to take with respect thereto and (iv) calculating the Adjusted
         Leverage Ratio as of the end of such fiscal period.

                  (d) Annual Business Plan and Budgets. Within 90 days after the
         end of each fiscal year of the Borrower, an annual business plan and
         budget (including budgeted Capital Expenditures) of the Borrower and
         its Subsidiaries on a consolidated basis containing, among other
         things, pro forma financial projections for the next fiscal year
         (including income statements, balance sheets and cash flow statements).

                  (e) Reports. Promptly upon transmission or receipt thereof,
         (a) copies of any filings and registrations with, and reports to or
         from, the Securities and Exchange Commission, or any successor agency,
         and copies of all financial statements, proxy statements, notices and
         reports as a Credit Party or any of its Subsidiaries shall send to its
         shareholders generally and (b) upon the written request of the
         Administrative Agent, all reports and written information to and from
         the United States Environmental Protection Agency, or any state or
         local agency responsible for environmental matters, the United States
         Occupational Safety and Health Administration, or any state or local
         agency responsible for health and safety matters, or any successor
         agencies or authorities concerning environmental, health or safety
         matters.

                  (f) Accountant's Certificate. Within the period for delivery
         of the annual financial statements provided in Section 7.1(a), a
         certificate of the accountants conducting the annual audit stating that
         they have reviewed this Credit Agreement and stating further whether,
         in the course of their audit, they have become aware that the Borrower
         is not in compliance with any of the affirmative or negative covenants
         set forth in Section 7 or Section 8 of this Credit Agreement, insofar
         as such covenants relate to accounting matters or are calculated based
         upon audited financial information.

                  (g) Auditor's Reports. Promptly upon receipt thereof, a copy
         of any other report or "management letter" submitted or presented by
         independent accountants to any Credit Party or any of its Subsidiaries
         in connection with any annual, interim or special audit of the books of
         such Person.

                  (h) Notices. Upon a Credit Party obtaining knowledge thereof,
         the Borrower will give written notice to the Administrative Agent
         promptly (and in any event within two Business Days) of (a) the
         occurrence of an event or condition consisting of a Default or Event of
         Default, specifying the nature and existence thereof and what action
         the Borrower proposes to take with respect thereto, (b) the occurrence
         of any of the following with respect to any Credit Party or any of its
         Subsidiaries (i) the pendency or commencement of any litigation,
         arbitration or governmental proceeding against a Credit Party or any of
         its Subsidiaries which, if adversely determined, would have or would
         reasonably be expected to have a Material Adverse Effect, (ii) material
         non-compliance with, or the institution of any proceedings against a
         Credit Party or any of its Subsidiaries with respect to, or the receipt
         of written notice by such Person of potential liability or
         responsibility for violation, or alleged violation of, any Requirement
         of Law (including, without limitation, Environmental Laws) the
         violation of which would have or would reasonably be expected to have a
         Material Adverse Effect and (iii) non-compliance with any contractual
         obligation of a Credit Party or any of its Subsidiaries which would
         have or would reasonably be expected to have a Material Adverse Effect
         and (c) any change to the financial information used to calculate the
         Adjusted Leverage Ratio for the most recently occurring Calculation
         Date that

                                       41

<PAGE>

         would have the effect of changing the existing Pricing Level pursuant
         to the definition of "Applicable Percentage" set forth in Section 1.1.

                  (i) ERISA. Upon a Credit Party, any Subsidiary of a Credit
         Party or any ERISA Affiliate obtaining knowledge thereof, such Person
         shall give written notice to the Administrative Agent and each of the
         Lenders promptly (and in any event within two Business Days) of: (i)
         any event or condition, including, but not limited to, any Reportable
         Event, that constitutes, or might reasonably lead to, an ERISA Event;
         (ii) with respect to any Multiemployer Plan, the receipt of notice as
         prescribed in ERISA or otherwise of any withdrawal liability assessed
         against a Credit Party, any Subsidiary of a Credit Party or any ERISA
         Affiliate, or of a determination that any Multiemployer Plan is in
         reorganization or insolvent (both within the meaning of Title IV of
         ERISA); (iii) the failure to make full payment on or before the due
         date (including extensions) thereof of all amounts which a Credit
         Party, any Subsidiary of a Credit Party or any ERISA Affiliate is
         required to contribute to each Plan pursuant to its terms and as
         required to meet the minimum funding standard set forth in ERISA and
         the Code with respect thereto; or (iv) any change in the funding status
         of any Plan that could have a Material Adverse Effect; in each case
         together with a description of any such event or condition or a copy of
         any such notice and a statement by an Authorized Officer of the
         Borrower briefly setting forth the details regarding such event,
         condition, or notice, and the action, if any, which has been or is
         being taken or is proposed to be taken by such Person with respect
         thereto. Promptly upon request, the Credit Parties shall furnish the
         Administrative Agent and the Lenders with such additional information
         concerning any Plan as may be reasonably requested, including, but not
         limited to, copies of each annual report/return (Form 5500 series), as
         well as all schedules and attachments thereto required to be filed with
         the Department of Labor and/or the Internal Revenue Service pursuant to
         ERISA and the Code, respectively, for each "plan year" (within the
         meaning of Section 3(39) of ERISA).

                  (j) Environmental. During the existence of an Event of
         Default, and upon the written request of Administrative Agent, the
         Credit Parties will furnish or cause to be furnished to the
         Administrative Agent, at the Credit Parties' expense, a report of an
         environmental assessment of reasonable scope, form and depth,
         including, where appropriate, invasive soil or groundwater sampling, by
         a consultant reasonably acceptable to the Administrative Agent
         regarding any release or threat of release of Hazardous Materials on
         any property owned, leased or operated by a Credit Party and the
         compliance by the Credit Parties with Environmental Laws. If the Credit
         Parties fail to deliver such an environmental report within
         seventy-five (75) days after receipt of such written request, then the
         Administrative Agent may arrange for same, and the Credit Parties
         hereby grant to the Administrative Agent and its representatives access
         to the Real Properties and a license of a scope reasonably necessary to
         undertake such an assessment (including, where appropriate, invasive
         soil or groundwater sampling). The reasonable cost of any assessment
         arranged for by the Administrative Agent pursuant to this provision
         will be payable by the Credit Parties on demand.

                  (k) Other Information. With reasonable promptness upon any
         such request, such other information regarding the business, properties
         or financial condition of the Credit Parties and their Subsidiaries as
         the Administrative Agent may reasonably request.

         7.2 FINANCIAL COVENANTS.

                  (a) Tangible Net Worth. Tangible Net Worth shall at all times
         be greater than or equal to the sum of (i) $150,000,000 plus (ii) 25%
         of Net Income (without deduction for losses) earned for each fiscal
         quarter of the Borrower (beginning with the quarter ending September
         30, 2001) including the most recent fiscal quarter ending prior to the
         date of determination plus (iii) 50% of the amount of Net Cash Proceeds
         from any Equity Issuance occurring from June 14, 2001 to the last day
         of the most recent fiscal quarter ending prior to the date of
         determination.

                  (b) Leverage Ratio. The Leverage Ratio, as of the last day of
         each fiscal quarter of the Borrower, shall be less than or equal to
         2.25 to 1.0.

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<PAGE>

                  (c) Interest Coverage Ratio. The Interest Coverage Ratio, as
         of the last day of each fiscal quarter of the Borrower, shall be
         greater than or equal to 4.0 to 1.0.

         7.3 PRESERVATION OF EXISTENCE AND FRANCHISES.

         Each of the Credit Parties will, and will cause its Subsidiaries to, do
all things necessary to preserve and keep in full force and effect its existence
and all material rights, franchises, intellectual property and authority except
as permitted by Section 8.5.

         7.4 BOOKS AND RECORDS.

         Each of the Credit Parties will, and will cause its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with GAAP (including the establishment and maintenance of appropriate reserves).

         7.5 COMPLIANCE WITH LAW.

         Each of the Credit Parties will, and will cause its Subsidiaries to,
comply with all material Requirements of Law, and all material restrictions
imposed by all Governmental Authorities, applicable to it and its property
(including, without limitation, Environmental Laws and ERISA).

         7.6 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.

         Each of the Credit Parties will, and will cause its Subsidiaries to,
pay, settle or discharge (a) all material taxes, assessments and governmental
charges or levies imposed upon it, or upon its income or profits, or upon any of
its properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) all of its other
Indebtedness as it shall become due (to the extent such repayment is not
otherwise prohibited by this Credit Agreement); provided, however, that a Credit
Party shall not be required to pay any such tax, assessment, charge, levy, claim
or Indebtedness which is being contested in good faith by appropriate
proceedings and as to which adequate reserves therefor have been established in
accordance with GAAP, unless the failure to make any such payment (i) would give
rise to an immediate right to foreclose or collect on a Lien securing such
amounts or (ii) would have or would reasonably be expected to have a Material
Adverse Effect.

         7.7 INSURANCE.

         Each of the Credit Parties will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance
(including liability, casualty and business interruption insurance) with
reputable national companies that are not Affiliates of the Borrower, in such
amounts, covering such risks and liabilities and with such deductibles and
self-insurance retentions as are in accordance with normal industry practice;
provided that the Borrower may maintain a program of self-insurance with respect
to products liability and worker's compensation liability.

         7.8 MAINTENANCE OF PROPERTY.

         Each of the Credit Parties will, and will cause its Subsidiaries to,
maintain and preserve its properties and equipment in good repair, working order
and condition, normal wear and tear and damages from casualty excepted, and will
make, or cause to be made, in such properties and equipment from time to time
all repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.

                                       43
<PAGE>

         7.9 PERFORMANCE OF OBLIGATIONS.

         Each of the Credit Parties will, and will cause its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material contracts, agreements, indentures, mortgages, security agreements or
other debt instruments to which it is a party or by which it or its properties
may be bound.

         7.10 USE OF PROCEEDS.

         The Credit Parties will use the proceeds of the Loans solely (a) to
repay Indebtedness of the Borrower as identified in Section 5.1(g), (b) to
provide working capital for the Borrower and (c) for general corporate purposes
of the Borrower. The Borrower will use the Letters of Credit solely for the
purposes set forth in Section 2.2(a).

         7.11 AUDITS/INSPECTIONS.

         Upon reasonable notice and during normal business hours, at the Credit
Parties' expense, each Credit Party will, and will cause each of its
Subsidiaries to, permit representatives appointed by the Administrative Agent or
any Lender, including, without limitation, independent accountants, agents,
attorneys and appraisers to visit and inspect such Credit Party's or
Subsidiary's property, including its books and records, its accounts receivable
and inventory, its facilities and its other business assets, and to make
photocopies or photographs thereof and to write down and record any information
such representative obtains and shall permit the Administrative Agent, any
Lender or its representatives to investigate and verify the accuracy of
information provided to the Administrative Agent or the Lenders and to discuss
all such matters with the officers, employees and representatives of the Credit
Parties and/or their Subsidiaries; provided however that, unless an Event of
Default shall exist and be continuing, the Administrative Agent and the Lenders
shall not, in the aggregate, exercise their rights under this Section 7.11 more
than two times during any calendar year and only one such time shall be at the
Credit Parties' expense. Notwithstanding the foregoing, no information protected
by an attorney-client privilege shall be required to be disclosed pursuant to
this Section 7.11; provided however that in the event any Credit Party claims
that any materials requested for review, investigation or discussion by the
Administrative Agent or any Lender, or any of its representatives pursuant to
this Section 7.11 is protected by an attorney-client privilege, then such Credit
party shall (a) provide the Administrative Agent or such Lender with a
reasonably acceptable basis for the assertion of the privilege, (b) remove or
redact only those portions of the materials deemed to be privileged and (c)
reasonably cooperate with the Administrative Agent or such Lender to determine a
method by which the information which the Administrative Agent or such Lender
reasonably deemed necessary to review, investigate or discuss may be obtained by
the Administrative Agent in an alternative method which will not jeopardize any
attorney-client privilege.

         7.12 ADDITIONAL CREDIT PARTIES.

         At the time any Person becomes a Domestic Subsidiary, the Borrower
shall so notify the Administrative Agent and promptly thereafter (but in any
event within 30 days) shall cause such Person to (a) execute a Joinder Agreement
in substantially the same form as Exhibit 7.12, (b) deliver such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including, without limitation, certified resolutions and
other organizational and authorizing documents of such Person and favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above), all in form, content and scope reasonably satisfactory to
the Administrative Agent and (c) update such schedules to the Credit Agreement
as appropriate to reflect the joinder of such new Domestic Subsidiary.

                                       44
<PAGE>

                                   SECTION 8

                               NEGATIVE COVENANTS

         Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest, fees and other obligations then due and payable hereunder, have
been paid in full and the Commitments and Letters of Credit hereunder shall have
terminated:

         8.1 INDEBTEDNESS.

         Subject to Section 8.2, no Credit Party will, nor will it permit any of
its Subsidiaries to, contract, create, incur, assume or permit to exist any
Indebtedness, other than:

                  (a) Indebtedness arising under (i) this Credit Agreement and
         the other Credit Documents and (ii) the Multi-Year Credit Agreement and
         the documents, instruments and agreements executed in connection
         therewith;

                  (b) Indebtedness in respect of current accounts payable and
         accrued expenses incurred in the ordinary course of business and to the
         extent not current, accounts payable and accrued expenses that are
         subject to bona fide dispute and against which adequate reserves have
         been established in accordance with GAAP;

                  (c) Indebtedness owing by a Credit Party to another Credit
         Party;

                  (d) purchase money Indebtedness (including Capital Leases) to
         finance the purchase of fixed assets (including equipment); provided
         that (i) the sum of (A) the total amount of all such Indebtedness
         outstanding for the Credit Parties and their Subsidiaries plus (B) the
         aggregate amount of Synthetic Leases outstanding pursuant to clause (e)
         below shall not exceed an aggregate principal amount of $30,000,000 at
         any one time outstanding; (ii) such Indebtedness when incurred shall
         not exceed the purchase price of the asset(s) financed; and (iii) no
         such Indebtedness shall be refinanced for a principal amount in excess
         of the principal balance outstanding thereon at the time of such
         refinancing;

                  (e) Indebtedness comprised of Synthetic Leases; provided that
         the sum of (i) the total amount of all such Indebtedness for the Credit
         Parties and their Subsidiaries outstanding plus (ii) the aggregate
         amount of purchase money Indebtedness outstanding pursuant to clause
         (d) above shall not exceed an aggregate principal amount of $30,000,000
         at any one time outstanding.

                  (f) Indebtedness owing by a Foreign Subsidiary to another
         Foreign Subsidiary or to a Credit Party;

                  (g) Indebtedness of the Foreign Subsidiaries in addition to
         clause (f) above in an amount not to exceed $25,000,000 in the
         aggregate at any one time outstanding;

                  (h) reimbursement obligations with respect to draws under
         letters of credit issued to (i) provide for, or to ensure, the payment
         of the purchase prices of goods acquired by a Credit Party or any of
         its Subsidiaries or (ii) support obligations of a Credit Party or any
         of its Subsidiaries provided that such reimbursement obligations are
         paid in full on the dates the financial institutions that issued such
         letters of credit pay the draws;

                  (i) Guaranty Obligations permitted by Section 8.2;

                  (j) Indebtedness evidenced by Hedging Agreements entered into
         in the ordinary course of business and not for speculative purposes;

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                  (k) Indebtedness set forth on Schedule 6.24; and

                  (l) other unsecured Funded Debt of a Credit Party; provided
         that the principal amount of such unsecured Funded Debt, if deemed
         included in the calculation of the Leverage Ratio as of the last day of
         the most recently ended fiscal quarter, would not cause the Leverage
         Ratio to exceed 2.25 to 1.0 on such date.

         8.2 GUARANTY OBLIGATIONS.

         Notwithstanding anything in Section 8.1 to the contrary, no Credit
Party will, nor will it permit its Subsidiaries to contract, create, incur,
assume or permit to exist any Guaranty Obligation other than:

                  (a) the obligation of such Person to purchase the property of
         another Person from a creditor of such other Person who has repossessed
         such property as a result of a default by such other Person under a
         dealer floor-plan financing arrangement with such creditor, pursuant to
         those repurchase agreements existing on the Closing Date as set forth
         on Schedule 8.2(a);

                  (b) Guaranty Obligations of any Subsidiary of the Borrower
         with respect to any Hedging Agreement entered into by the Borrower with
         a Lender or an Affiliate of a Lender;

                  (c) Guaranty Obligations of any Subsidiary of the Borrower
         with respect to any letter of credit that is issued by a Lender or an
         Affiliate of a Lender for the account of the Borrower;

                  (d) the liability, or potential liability, of (i) PAI as a
         general partner of Acceptance Partnership and (ii) the Borrower and PAI
         consisting of obligations to make capital contributions, in an amount
         not to exceed the sum of (A) the existing obligations as of June 14,
         2001 set forth on Schedule 8.2(d) plus (B) an additional $10,000,000
         incurred during the term of this Credit Agreement; and

                  (e) obligations under the Revolving Program Agreement;
         provided that the Polaris Participation Fee Shortfall Obligations shall
         not exceed $20,000,000, in the aggregate, at any one time; and

                  (f) other Guaranty Obligations of the Credit Parties in an
         aggregate amount not to exceed $10,000,000.

         8.3 LIENS.

         No Credit Party will, nor will it permit its Subsidiaries to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, other than Permitted Liens.

         8.4 NATURE OF BUSINESS.

         No Credit Party will, nor will it permit its Subsidiaries to, alter the
character of its business from that conducted as of the Effective Date or engage
in any business other than the business conducted as of the Effective Date and
activities which are substantially similar or related thereto.

         8.5 CONSOLIDATION AND MERGER.

         No Credit Party will, nor will it permit any Subsidiary to, enter into
any transaction of merger or consolidation or liquidate, wind up or dissolve
itself, or suffer any such liquidation, wind-up or dissolution; provided that a
Credit

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Party or a Subsidiary of a Credit Party may merge or consolidate with or
into another Person if the following conditions are satisfied:

                  (a) the Administrative Agent is given prior written notice of
         such action;

                  (b) if the merger or consolidation involves a Credit Party,
         the surviving entity of such merger or consolidation shall either (i)
         be such Credit Party or (ii) be a Subsidiary of the Borrower and
         expressly assumes in writing all of the obligations of such Credit
         Party under the Credit Documents; provided that if the transaction is
         between the Borrower and another Person, the Borrower must be the
         surviving entity;

                  (c) the Credit Parties execute and deliver such documents,
         instruments and certificates as the Administrative Agent may request;

                  (d) immediately after giving effect to such transaction, no
         Default or Event of Default shall have occurred and be continuing; and

                  (e) the Borrower delivers to the Administrative Agent an
         officer's certificate and an opinion of counsel stating that such
         consolidation or merger, and any written agreement entered into in
         connection therewith, comply with this Section 8.5.

         8.6 SALE OR LEASE OF ASSETS.

         No Credit Party will, nor will it permit its Subsidiaries to, convey,
sell, lease, transfer or otherwise voluntarily dispose of, in one transaction or
a series of transactions, all or any part of its business or assets whether now
owned or hereafter acquired, including, without limitation, inventory,
receivables, equipment, real property interests (whether owned or leasehold) and
securities, other than a sale, lease, transfer or other disposal (a) by a Credit
Party of any or all of its assets to another Credit Party; (b) of inventory in
the ordinary course of business; (c) of obsolete, slow-moving, idle or worn-out
assets no longer used or useful in the business of such Credit Party or the
trade-in of equipment for equipment in better condition or of better quality;
(d) which constitutes a Permitted Investment in the ordinary course of business;
(e) by PAI of its partnership interest in Acceptance Partnership if required by
Section 3.4 of the Acceptance Partnership Agreement (without regard to any
amendment of such section); (f) of accounts receivable pursuant to the financing
contracts set forth on Schedule 8.6 or any replacement arrangement with the same
economic effect; and (g) of assets of the Credit Parties and their Subsidiaries
after the Closing Date, in addition to those permitted above in this Section
8.6; provided that (i) the transfer is for fair market value, (ii) no Default or
Event of Default exists either prior to or after giving effect thereto and (iii)
after giving effect thereto, the aggregate amount of all such transfers,
calculated on a net book value basis, does not exceed ten percent (10%) of Total
Assets, as determined on the last day of the most recently ended fiscal year of
the Borrower.

         8.7 SALE LEASEBACKS.

         No Credit Party will, nor will it permit its Subsidiaries to, directly
or indirectly become or remain liable as lessee or as guarantor or other surety
with respect to any lease of any property (whether real or personal or mixed),
whether now owned or hereafter acquired, (a) which such Credit Party or its
Subsidiary has sold or transferred or is to sell or transfer to any other Person
other than a Credit Party or (b) which such Credit Party or its Subsidiary
intends to use for substantially the same purpose as any other property which
has been sold or is to be sold or transferred by such Credit Party to any Person
in connection with such lease, other than such transactions permitted by the
Lenders.

         8.8 INVESTMENTS.

         No Credit Party will, nor will it permit its Subsidiaries to, make or
permit to exist any Investments except for Permitted Investments.

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         8.9 FOREIGN SUBSIDIARIES.

         No Credit Party will, nor will it permit its Subsidiaries to, permit
the aggregate amount of assets owned by the Foreign Subsidiaries, at any time,
to constitute more than fifteen percent (15%) of Total Assets.

         8.10 TRANSACTIONS WITH AFFILIATES.

         No Credit Party will, nor will it permit its Subsidiaries to, enter
into any transaction or series of transactions, whether or not in the ordinary
course of business, with any officer, director, shareholder, Subsidiary or
Affiliate other than the normal compensation, indemnification and reimbursement
of expenses of officers, employees and directors and transactions on terms and
conditions substantially as favorable as would be obtainable in a comparable
arm's-length transaction with a Person other than an officer, director,
shareholder, Subsidiary or Affiliate.

         8.11 FISCAL YEAR; ACCOUNTING; ORGANIZATIONAL DOCUMENTS.

         No Credit Party will, nor will it permit its Subsidiaries to, (a)
change its fiscal year, (b) change its accounting procedures, except as a result
of changes in GAAP and in accordance with Section 1.3 or (c) in any manner that
would reasonably be likely to adversely affect the rights of the Lenders, change
its organizational or governing documents.

         8.12 NO LIMITATIONS.

         No Credit Party will, nor will it permit its Subsidiaries to, directly
or indirectly, create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any such Person to (a) pay dividends or make any other
distribution on any of such Person's Capital Stock, (b) pay any Indebtedness
owed to any other Credit Party, (c) make loans or advances to any other Credit
Party or (d) transfer any of its property to any other Credit Party, except for
encumbrances or restrictions existing under or by reason of (i) customary
non-assignment provisions in any lease governing a leasehold interest and (ii)
this Credit Agreement and the other Credit Documents.

         8.13 NO OTHER NEGATIVE PLEDGES.

         No Credit Party will, nor will it permit its Subsidiaries to, enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation
except as set forth in the Credit Documents.

         8.14 PAI ASSETS.

         No Credit Party will, nor will it permit any Subsidiary to, allow PAI
to own any assets other than equity interests in Acceptance Partnership and
dividends or other distributions derived therefrom; provided that PAI shall
transfer any such dividends or distributions to Polaris Industries Inc. or the
Borrower within 15 Business Days of receipt.

                                   SECTION 9

                               EVENTS OF DEFAULT

         9.1 EVENTS OF DEFAULT.

         An Event of Default shall exist upon the occurrence, and during the
continuation, of any of the following specified events (each an "Event of
Default"):

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<PAGE>

                  (a) Payment. Any Credit Party shall default in the payment (i)
         when due of any principal of any of the Loans or any reimbursement
         obligation arising from drawings under Letters of Credit or (ii) within
         three Business Days of when due of any interest on the Loans or any
         fees or other amounts owing hereunder, under any of the other Credit
         Documents or in connection herewith.

                  (b) Representations. Any representation, warranty or statement
         made or deemed to be made by any Credit Party herein, in any of the
         other Credit Documents, or in any statement or certificate delivered or
         required to be delivered pursuant hereto or thereto shall prove untrue
         in any material respect on the date as of which it was made or deemed
         to have been made.

                  (c) Covenants. Any Credit Party shall:

                           (i) default in the due performance or observance of
                  any term, covenant or agreement contained in Sections 7.2,
                  7.3, 7.5, 7.10, 7.11 or 7.12 or Section 8 inclusive;

                           (ii) default in the due performance or observance by
                  it of any term, covenant or agreement contained in Section 7.1
                  and such default shall continue unremedied for a period of
                  five Business Days; or

                           (iii) default in the due performance or observance by
                  it of any term, covenant or agreement (other than those
                  referred to in subsections (a), (b) or (c)(i) or (ii) of this
                  Section 9.1) contained in this Credit Agreement and such
                  default shall continue unremedied for a period of at least 30
                  days after the earlier of the President, Chief Executive
                  Officer, Chief Financial Officer or Treasurer of the Borrower
                  becoming aware of such default or notice thereof given by the
                  Administrative Agent.

                  (d) Other Credit Documents. (i) Any Credit Party shall default
         in the due performance or observance of any term, covenant or agreement
         in any of the other Credit Documents and such default shall continue
         unremedied for a period of at least 30 days after the earlier of an
         officer of a Credit Party becoming aware of such default or notice
         thereof given by the Administrative Agent, (ii) any Credit Document
         shall fail to be in full force and effect or any Credit Party shall so
         assert or (iii) any Credit Document shall fail to give the
         Administrative Agent and/or the Lenders the liens, rights, powers and
         privileges purported to be created by such Credit Document.

                  (e) Guaranties. The guaranty given by the Credit Parties
         hereunder or by any Additional Credit Party or any provision thereof
         shall cease to be in full force and effect, or any Guarantor or any
         Person acting by or on behalf of such Guarantor shall deny or disaffirm
         such Guarantor's obligations under such guaranty or such Guarantor
         shall default in the due payment or performance of such guaranty.

                  (f) Bankruptcy, etc. The occurrence of any of the following
         with respect to a Credit Party or any of its Subsidiaries (i) a court
         or governmental agency having jurisdiction in the premises shall enter
         a decree or order for relief in respect of a Credit Party or any of its
         Subsidiaries in an involuntary case under any applicable bankruptcy,
         insolvency or other similar law now or hereafter in effect, or appoint
         a receiver, liquidator, assignee, custodian, trustee, sequestrator,
         administrator or similar official of a Credit Party or any of its
         Subsidiaries or for any substantial part of its property or ordering
         the winding up or liquidation of, or an administrator in respect of,
         its affairs; or (ii) an involuntary case under any applicable
         bankruptcy, insolvency or other similar law now or hereafter in effect
         is commenced against a Credit Party or any of its Subsidiaries and such
         petition remains unstayed and in effect for a period of 60 consecutive
         days; or (iii) a Credit Party or any of its Subsidiaries shall commence
         a voluntary case under any applicable bankruptcy, insolvency or other
         similar law now or hereafter in effect, or consent to the entry of an
         order for relief in an involuntary case under any such law, or consent
         to the appointment or taking possession by a receiver, liquidator,
         assignee, custodian, trustee, sequestrator, administrator or similar
         official of such Person or any substantial part of its property or make
         any general assignment for the benefit of creditors; or (iv) a Credit
         Party or any of its Subsidiaries shall

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<PAGE>

         fail generally, or shall admit in writing its inability, to pay its
         debts as they become due or any action shall be taken by such Person in
         furtherance of any of the aforesaid purposes.

                  (g) Defaults under Other Agreements.

                           (i) A Credit Party or any of its Subsidiaries shall
                  default in the due performance or observance (beyond any
                  applicable grace period with respect thereto) of any material
                  obligation or condition of any contract or lease to which it
                  is a party, including, but not limited to, any Hedging
                  Agreement; or

                           (ii) With respect to any Indebtedness in excess of
                  $10,000,000 (other than Indebtedness outstanding under this
                  Credit Agreement) of a Credit Party or any of its Subsidiaries
                  (A) such Person shall (x) default in any payment (beyond the
                  applicable grace period with respect thereto, if any) with
                  respect to any such Indebtedness, or (y) default (after giving
                  effect to any applicable grace period) in the observance or
                  performance relating to such Indebtedness or contained in any
                  instrument or agreement evidencing, securing or relating
                  thereto, or any other event or condition shall occur or
                  condition exist, the effect of which default or other event or
                  condition is to cause, or permit, the holder or holders of
                  such Indebtedness (or trustee or agent on behalf of such
                  holders, if any) to require (determined without regard to
                  whether any notice or lapse of time is required) any such
                  Indebtedness to become due prior to its stated maturity; or
                  (B) any such Indebtedness shall be declared due and payable,
                  or required to be prepaid other than by a regularly scheduled
                  required prepayment prior to the stated maturity thereof; or
                  (C) any such Indebtedness shall mature and remain unpaid.

                  (h) Judgments. One or more judgments, orders, or decrees shall
         be entered against any one or more of the Credit Parties and their
         Subsidiaries involving a liability of $10,000,000 or more, in the
         aggregate, (to the extent not paid or covered by insurance provided by
         a carrier who has acknowledged coverage) and such judgments, orders or
         decrees (i) are the subject of any enforcement proceeding commenced by
         any creditor or (ii) shall continue unsatisfied, undischarged and
         unstayed for a period ending on the first to occur of (A) the last day
         on which such judgment, order or decree becomes final and unappealable
         or (B) 60 days.

                  (i) ERISA. The occurrence of any of the following events or
         conditions: (i) any "accumulated funding deficiency," as such term is
         defined in Section 302 of ERISA and Section 412 of the Code, whether or
         not waived, shall exist with respect to any Plan, or any Lien shall
         arise on the assets of a Credit Party, any Subsidiary of a Credit Party
         or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA
         Event shall occur with respect to a Single Employer Plan, which is, in
         the reasonable opinion of the Administrative Agent, likely to result in
         the termination of such Plan for purposes of Title IV of ERISA; (iii)
         an ERISA Event shall occur with respect to a Multiemployer Plan or
         Multiple Employer Plan, which is, in the reasonable opinion of the
         Administrative Agent, likely to result in (A) the termination of such
         Plan for purposes of Title IV of ERISA, or (B) a Credit Party, any
         Subsidiary of a Credit Party or any ERISA Affiliate incurring any
         liability in connection with a withdrawal from, reorganization of
         (within the meaning of Section 4241 of ERISA), or insolvency (within
         the meaning of Section 4245 of ERISA) of such Plan; (iv) any prohibited
         transaction (within the meaning of Section 406 of ERISA or Section 4975
         of the Code) or breach of fiduciary responsibility shall occur which
         may subject a Credit Party, any Subsidiary of a Credit Party or any
         ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
         502(l) of ERISA or Section 4975 of the Code, or under any agreement or
         other instrument pursuant to which a Credit Party, any Subsidiary of a
         Credit Party or any ERISA Affiliate has agreed or is required to
         indemnify any Person against any such liability; or (v) a Credit Party,
         any Subsidiary of a Credit Party or any ERISA Affiliate fails to pay
         when due, after the expiration of any applicable grace period, any
         installment payment with respect to its withdrawal liability under
         Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount
         in excess of $500,000.

                  (j) Multi-Year Credit Agreement. An Event of Default shall
         occur under the Multi-Year Credit Agreement.

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<PAGE>

                  (k) Ownership. There shall occur a Change of Control.

                  (l) Condemnation. All or substantially all of the property of
         a Credit Party or any of its Subsidiaries shall become subject to a
         condemnation, taking or other appropriation action by any Governmental
         Authority.

         9.2 ACCELERATION; REMEDIES.

         Upon the occurrence and during the continuation of an Event of Default,
the Administrative Agent may or shall, upon the request and direction of the
Required Lenders, take the following actions without prejudice to the rights of
the Administrative Agent or any Lender to enforce its claims against the Credit
Parties, except as otherwise specifically provided for herein:

                  (a) Termination of Commitments. Declare the Commitments
         terminated whereupon the Commitments shall be immediately terminated.

                  (b) Acceleration of Loans. Declare the unpaid principal of and
         any accrued interest in respect of all Loans, any reimbursement
         obligations arising from drawings under Letters of Credit and any and
         all other Indebtedness or obligations of any and every kind owing by a
         Credit Party to any of the Lenders under the Credit Documents to be due
         whereupon the same shall be immediately due and payable without
         presentment, demand, protest or other notice of any kind, all of which
         are hereby waived by the Credit Parties.

                  (c) Cash Collateral. Direct the Borrower to pay (and the
         Borrower agrees that upon receipt of such notice, or upon the
         occurrence of an Event of Default under Section 9.1(f), they will
         immediately pay) to the Administrative Agent additional cash, to be
         held by the Administrative Agent, for the benefit of the Lenders, in a
         cash collateral account as additional security for the LOC Obligations
         in respect of subsequent drawings under all then outstanding Letters of
         Credit in an amount equal to the maximum aggregate amount which may be
         drawn under all Letters of Credits then outstanding.

                  (d) Enforcement of Rights. Enforce any and all rights and
         interests created and existing under the Credit Documents, including,
         without limitation, all rights and remedies against a Guarantor and all
         rights of set-off.

Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, all accrued
interest in respect thereof, all accrued and unpaid fees and other indebtedness
or obligations owing to the Lenders hereunder shall immediately become due and
payable without the giving of any notice or other action by the Administrative
Agent or the Lenders, which notice or other action is expressly waived by the
Credit Parties.

Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate "creditor" holding
a separate "claim" within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.

         9.3 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.

         Notwithstanding any other provisions of this Credit Agreement, after
the occurrence and during the continuation of an Event of Default, all amounts
collected or received by the Administrative Agent or any Lender on account of
amounts outstanding under any of the Credit Documents shall be paid over or
delivered as follows:

                  FIRST, to the payment of all reasonable out-of-pocket costs
         and expenses (including without limitation reasonable Attorney Costs)
         of the Administrative Agent or any of the Lenders in connection with
         enforcing the rights of the Lenders under the Credit Documents, pro
         rata as set forth below;

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<PAGE>

                  SECOND, to payment of any fees owed to the Administrative
         Agent, the Issuing Lender or any Lender, pro rata as set forth below;

                  THIRD, to the payment of all accrued interest payable to the
         Lenders hereunder, pro rata as set forth below;

                  FOURTH, to the payment of the outstanding principal amount of
         the Loans and unreimbursed drawings under Letters of Credit, and to the
         payment or cash collateralization of the outstanding LOC Obligations,
         pro rata as set forth below;

                  FIFTH, to all other obligations which shall have become due
         and payable under the Credit Documents and not repaid pursuant to
         clauses "FIRST" through "FOURTH" above;

                  SIXTH, to any principal amounts outstanding under Hedging
         Agreements between a Credit Party and a Lender or Affiliate of a
         Lender, pro rata as set forth below; and

                  SEVENTH, to the payment of the surplus, if any, to whoever may
         be lawfully entitled to receive such surplus.

In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans, and
LOC Obligations held by such Lender bears to the aggregate then outstanding
Loans and LOC Obligations, or, in the case of clause "SIXTH" above, the
proportion of then outstanding obligations under Hedging Agreements) of amounts
available to be applied; and (c) to the extent that any amounts available for
distribution pursuant to clause "FOURTH" above are attributable to the issued
but undrawn amount of outstanding Letters of Credit, such amounts shall be held
by the Administrative Agent in a cash collateral account and applied (i) first,
to reimburse the Issuing Lender from time to time for any drawings under such
Letters of Credit and (ii) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses "FOURTH" and
"FIFTH" above in the manner provided in this Section 9.3.

                                   SECTION 10

                               AGENCY PROVISIONS

         10.1 APPOINTMENT.

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

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<PAGE>

                  (b) The Issuing Lender shall act on behalf of the Lenders with
         respect to any Letters of Credit issued by it and the documents
         associated therewith until such time (and except for so long) as the
         Administrative Agent may agree at the request of the Required Lenders
         to act for the Issuing Lender with respect thereto; provided, however,
         that the Issuing Lender shall have all of the benefits and immunities
         (i) provided to the Administrative Agent in this Section 10 with
         respect to any acts taken by or omissions of the Issuing Lender in
         connection with Letters of Credit issued by it or proposed to be issued
         by it and the application and agreements for letters of credit
         pertaining to the Letters of Credit as fully as if the term
         "Administrative Agent" as used in this Section 10 included the Issuing
         Lender with respect to such acts or omissions, and (ii) as additionally
         provided herein with respect to the Issuing Lender.

                  (c) U.S. Bank N.A., in its capacity as Syndication Agent shall
         have no duties or obligations whatsoever under this Credit Agreement or
         the other Credit Documents.

         10.2 DELEGATION OF DUTIES.

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

         10.3 EXCULPATORY PROVISIONS.

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

         10.4 RELIANCE ON COMMUNICATIONS.

                  (a) The Administrative Agent shall be entitled to rely, and
         shall be fully protected in relying, upon any writing, communication,
         signature, resolution, representation, notice, consent, certificate,
         affidavit, letter, telegram, facsimile, telex or telephone message,
         statement or other document or conversation believed by it to be
         genuine and correct and to have been signed, sent or made by the proper
         Person or Persons, and upon advice and statements of legal counsel
         (including counsel to any Credit Party), independent accountants and
         other experts selected by the Administrative Agent. The Administrative
         Agent may deem and treat each Lender as the owner of its interests
         hereunder for all purposes unless a written notice of assignment,
         negotiation or transfer thereof shall have been delivered to the
         Administrative Agent in accordance with Section 11.3(b). The
         Administrative Agent shall be fully justified in failing or refusing to
         take any action under any Credit Document unless it shall first receive
         such advice or concurrence of the Required Lenders as it deems
         appropriate and, if it so requests, it shall first be indemnified to
         its satisfaction by the Lenders against any and all liability and
         expense which may be incurred by it by reason of taking or continuing
         to take any such action. The Administrative Agent shall in all cases be
         fully protected in acting, or in refraining from acting, under this
         Credit Agreement or any other Credit Document in accordance with a
         request or consent of the Required Lenders or all the Lenders, if
         required hereunder, and such request and

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<PAGE>

         any action taken or failure to act pursuant thereto shall be binding
         upon all the Lenders and participants, and their respective successors
         and assigns. Where this Credit Agreement expressly permits or prohibits
         an action unless the Required Lenders otherwise determine, the
         Administrative Agent shall, and in all other instances, the
         Administrative Agent may, but shall not be required to, initiate any
         solicitation for the consent or a vote of the Lenders.

                  (b) For purposes of determining compliance with the conditions
         specified in Section 5.1, each Lender that has signed this Credit
         Agreement shall be deemed to have consented to, approved or accepted or
         to be satisfied with, each document or other matter either sent by the
         Administrative Agent to such Lender for consent, approval, acceptance
         or satisfaction, or required thereunder to be consented to or approved
         by or acceptable or satisfactory to a Lender.

         10.5 NOTICE OF DEFAULT.

         The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Credit Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be reasonably directed by the Required Lenders in
accordance with Section 9.2; provided, however, that unless and until the
Administrative Agent has received any such direction, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.

         10.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.

         Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Credit Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person or any other Lender and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Credit Parties and their respective
Affiliates, and all applicable bank or other regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Credit Agreement and to extend credit to the Borrower hereunder. Each Lender
also represents that it will, independently and without reliance upon any
Agent-Related Person or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Credit Agreement and the other Credit Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Credit Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person, it being understood that the Administrative Agent shall forward to the
Lenders information it receives pursuant to Section 7.1.

         10.7 INDEMNIFICATION.

         Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand each Agent-Related Person (to the extent
not reimbursed by or on behalf of any Credit Party and without

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limiting the obligation of any Credit Party to do so), pro rata, and hold
harmless each Agent-Related Person from and against any and all Indemnified
Liabilities incurred by it; provided, however, that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Agent-Related Person's gross negligence or
willful misconduct; it being understood that no action taken in accordance with
the directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 10.7. Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Credit Agreement, any other Credit Document, or any document contemplated
by or referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Credit Parties. The
undertaking in this Section 10.7 shall survive termination of the Commitments,
the payment of all Obligations hereunder and the resignation or replacement of
the Administrative Agent.

         10.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.

         Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Administrative Agent or the
Issuing Lender hereunder and without notice to or consent of the Lenders. The
Lenders acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding any Credit Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Credit Party or such Affiliate) and that the Administrative Agent
shall be under no obligation to provide such information to them. With respect
to its Loans, Bank of America shall have the same rights and powers under this
Credit Agreement as any other Lender and may exercise such rights and powers as
though it were not the Administrative Agent or the Issuing Lender, and the terms
"Lender" and "Lenders" include Bank of America in its individual capacity.

         10.9 SUCCESSOR AGENT.

         The Administrative Agent may resign as Administrative Agent upon 30
days' notice to the Lenders. If the Administrative Agent resigns under this
Credit Agreement, the Required Lenders shall appoint from among the Lenders a
successor administrative agent for the Lenders which successor administrative
agent (such appointment, absent the existence of an Event of Default, to be
subject to the consent of the Borrower, which consent of the Borrower shall not
be unreasonably withheld or delayed). If no successor administrative agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and the Borrower, a successor administrative agent from among the Lenders. Upon
the acceptance of its appointment as successor administrative agent hereunder,
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor administrative agent and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 10 and Sections 11.5 and
11.10 shall continue to inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Credit Agreement.
If no successor administrative agent has accepted appointment as Administrative
Agent by the date which is 30 days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.

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                                   SECTION 11

                                 MISCELLANEOUS

         11.1 NOTICES.

         Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid (or subject to an invoice arrangement) to a reputable
national overnight air courier service, or (d) the third Business Day following
the day on which the same is sent by certified or registered mail, postage
prepaid, in each case to the respective parties at the address or telecopy
numbers set forth on Schedule 11.1, or at such other address as such party may
specify by written notice to the other parties hereto.

         11.2 RIGHT OF SET-OFF, AUTOMATIC DEBITS.

                  (a) In addition to any rights now or hereafter granted under
         applicable law or otherwise, and not by way of limitation of any such
         rights, upon the occurrence of an Event of Default and the commencement
         of remedies described in Section 9.2, each Lender is authorized at any
         time and from time to time, without presentment, demand, protest or
         other notice of any kind (all of which rights being hereby expressly
         waived), to set-off and to appropriate and apply any and all deposits
         (general or special) and any other indebtedness at any time held or
         owing by such Lender (including, without limitation, branches, agencies
         or Affiliates of such Lender wherever located) to or for the credit or
         the account of any Credit Party against obligations and liabilities of
         such Credit Party to the Lenders hereunder, under the Notes, the other
         Credit Documents or otherwise, irrespective of whether the
         Administrative Agent or the Lenders shall have made any demand
         hereunder and although such obligations, liabilities or claims, or any
         of them, may be contingent or unmatured, and any such set-off shall be
         deemed to have been made immediately upon the occurrence of an Event of
         Default even though such charge is made or entered on the books of such
         Lender subsequent thereto. The Credit Parties hereby agree that any
         Person purchasing a participation in the Loans and Commitments
         hereunder pursuant to Sections 11.3(e) or 3.8 may exercise all rights
         of set-off with respect to its participation interest as fully as if
         such Person were a Lender hereunder.

                  (b) In addition to clause (a) above, with respect to any
         principal or interest payment, fee, or any other cost or expense
         (including Attorney Costs), due and payable to the Administrative Agent
         or the Lenders under the Credit Documents, the Credit Parties hereby
         irrevocably authorize and direct the Administrative Agent to debit any
         deposit account of the Credit Parties with the Administrative Agent (as
         one of the Lenders) in an amount such that the aggregate amount debited
         from all such deposit accounts does not exceed such payment, fee, or
         other cost or expense. If there are insufficient funds in such deposit
         accounts to cover the amount of the payment, fee, other cost or expense
         then due, such debits will be reversed (in whole or in part, in the
         Administrative Agent's sole discretion) and such amount not debited
         shall be deemed to be unpaid. No such debit under this Section 11.2(b)
         shall be deemed a set-off.

         11.3 BENEFIT OF AGREEMENT.

                  (a) Generally. This Credit Agreement shall be binding upon and
         inure to the benefit of and be enforceable by the respective successors
         and assigns of the parties hereto; provided that none of the Credit
         Parties may assign and transfer any of its interests (except as
         permitted by Section 8.5 or 8.6) without the prior written consent of
         the Lenders; and provided further that the rights of each Lender to
         transfer, assign or grant participations in its rights and/or
         obligations hereunder shall be limited as set forth below in this
         Section 11.3.

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<PAGE>

                  (b) Assignments. Each Lender may assign to one or more
         Eligible Assignees all or a portion of its rights and obligations under
         this Credit Agreement (including, without limitation, all or a portion
         of its Loans, its Notes, and its Commitment); provided, however, that:

                           (i) each such assignment shall be to an Eligible
                  Assignee;

                           (ii) except (A) in the case of an assignment to
                  another Lender, (B) in the case of an assignment of all of a
                  Lender's rights and obligations under this Credit Agreement,
                  or (C) with the consent of the Administrative Agent and the
                  Borrower, any such partial assignment shall be in an amount at
                  least equal to $5,000,000 (or, if less, the remaining amount
                  of the Commitment of such assigning Lender) or an integral
                  multiple of $1,000,000 in excess thereof;

                           (iii) each such assignment by a Lender shall be of a
                  constant, and not varying, percentage of all of its rights and
                  obligations under this Credit Agreement and the Notes; and

                           (iv) the parties to such assignment shall execute and
                  deliver to the Administrative Agent for its acceptance an
                  Assignment Agreement in substantially the form of Exhibit
                  11.3(b), together with a processing fee from the assignor of
                  $3,500.

         Upon execution, delivery, and acceptance of such Assignment Agreement,
         the assignee thereunder shall be a party hereto and, to the extent of
         such assignment, have the obligations, rights, and benefits of a Lender
         hereunder and the assigning Lender shall, to the extent of such
         assignment, relinquish its rights and be released from its obligations
         under this Credit Agreement. Upon the consummation of any assignment
         pursuant to this Section 11.3(b), the assignor, the Administrative
         Agent and the Borrower shall make appropriate arrangements so that, if
         required, new Notes are issued to the assignor and the assignee. If the
         assignee is not incorporated under the laws of the United States of
         America or a state thereof, it shall deliver to the Borrower and the
         Administrative Agent certification as to exemption from deduction or
         withholding of taxes in accordance with Section 3.13.

         By executing and delivering an assignment agreement in accordance with
         this Section 11.3(b), the assigning Lender thereunder and the assignee
         thereunder shall be deemed to confirm to and agree with each other and
         the other parties hereto as follows: (A) such assigning Lender warrants
         that it is the legal and beneficial owner of the interest being
         assigned thereby free and clear of any adverse claim and the assignee
         warrants that it is an Eligible Assignee; (B) except as set forth in
         clause (A) above, such assigning Lender makes no representation or
         warranty and assumes no responsibility with respect to any statements,
         warranties or representations made in or in connection with this Credit
         Agreement, any of the other Credit Documents or any other instrument or
         document furnished pursuant hereto or thereto, or the execution,
         legality, validity, enforceability, genuineness, sufficiency or value
         of this Credit Agreement, any of the other Credit Documents or any
         other instrument or document furnished pursuant hereto or thereto or
         the financial condition of any Credit Party or the performance or
         observance by any Credit Party of any of its obligations under this
         Credit Agreement, any of the other Credit Documents or any other
         instrument or document furnished pursuant hereto or thereto; (C) such
         assignee represents and warrants that it is legally authorized to enter
         into such assignment agreement; (D) such assignee confirms that it has
         received a copy of this Credit Agreement, the other Credit Documents
         and such other documents and information as it has deemed appropriate
         to make its own credit analysis and decision to enter into such
         assignment agreement; (E) such assignee will independently and without
         reliance upon the Administrative Agent, such assigning Lender 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 Credit Agreement and the
         other Credit Documents; (F) such assignee appoints and authorizes the
         Administrative Agent to take such action on its behalf and to exercise
         such powers under this Credit Agreement or any other Credit Document as
         are delegated to the Administrative Agent by the terms hereof or
         thereof, together with such powers as are reasonably incidental
         thereto; and (G) such assignee agrees that it will perform in
         accordance with their terms all the obligations which by the terms of
         this Credit Agreement and the other Credit Documents are required to be
         performed by it as a Lender.

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<PAGE>

                  (c) Register. The Administrative Agent shall maintain a copy
         of each Assignment Agreement delivered to and accepted by it and a
         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 (the "Register"). The entries in the Register
         shall be conclusive and binding for all purposes, absent manifest
         error, and the Borrower, the Administrative Agent and the Lenders may
         treat each Person whose name is recorded in the Register as a Lender
         hereunder for all purposes of this Credit 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.

                  (d) Acceptance. Upon its receipt of an Assignment Agreement
         executed by the parties thereto, together with any Note subject to such
         assignment and payment of the processing fee, the Administrative Agent
         shall, if such Assignment Agreement has been completed and is in
         substantially the form of Exhibit 11.3(b), (i) accept such Assignment
         Agreement, (ii) record the information contained therein in the
         Register and (iii) give prompt notice thereof to the parties thereto.

                  (e) Participations. Each Lender may sell participations to one
         or more Persons in all or a portion of its rights, obligations or
         rights and obligations under this Credit Agreement (including all or a
         portion of its Commitment and its Loans); provided, however, that (i)
         such Lender's obligations under this Credit Agreement shall remain
         unchanged, (ii) such Lender shall remain solely responsible to the
         other parties hereto for the performance of such obligations, (iii) the
         participant shall be entitled to the benefit of the yield protection
         provisions contained in Sections 3.9 through 3.15, inclusive, and of
         the right of set-off contained in Section 11.2, (iv) the Borrower shall
         continue to deal solely and directly with such Lender in connection
         with such Lender's rights and obligations under this Credit Agreement,
         and (v) such Lender shall retain the sole right to enforce the
         obligations of the Borrower relating to its Loans and its Notes and to
         approve any amendment, modification, or waiver of any provision of this
         Credit Agreement (other than amendments, modifications, or waivers
         decreasing the amount of principal of or the rate at which interest is
         payable on such Loans or Notes, extending any scheduled principal
         payment date or date fixed for the payment of interest on such Loans or
         Notes, extending its Commitment or releasing the Borrower or all or
         substantially all of the Guarantors from its or their respective
         obligations under the Credit Documents).

                  (f) Unrestricted Assignments. Notwithstanding any other
         provision set forth in this Credit Agreement, any Lender may at any
         time assign and pledge all or any portion of its Loans and its Notes to
         any Federal Reserve Bank as collateral security pursuant to Regulation
         A and any Operating Circular issued by such Federal Reserve Bank. No
         such assignment shall release the assigning Lender from its obligations
         hereunder.

                  (g) Information. Any Lender may furnish any information
         concerning the Credit Parties or any of their Subsidiaries in the
         possession of such Lender from time to time to assignees and
         participants (including prospective assignees and participants),
         subject, however, to the provisions of Section 11.15.

                  (h) SPC's. Notwithstanding anything to the contrary contained
         herein, any Lender, (a "Granting Lender") may grant to a special
         purpose funding vehicle (an "SPC") the option to fund all or any part
         of any Loan that such Granting Lender would otherwise be obligated to
         fund pursuant to this Credit Agreement; provided that (i) nothing
         herein shall constitute a commitment by any SPC to fund any Loan, (ii)
         if an SPC elects not to exercise such option or otherwise fails to fund
         all or any part of such Loan, the Granting Lender shall be obligated to
         fund such Loan pursuant to the terms hereof, (iii) no SPC shall have
         any voting rights pursuant to Section 11.6 (all such voting rights
         shall be retained by the Granting Lenders) and (iv) with respect to
         notices, payments and other matters hereunder, the Credit Parties, the
         Administrative Agent and the Lenders shall not be obligated to deal
         with an SPC, but may limit their communications and other dealings
         relevant to such SPC to the applicable Granting Lender. The funding of
         a Loan by an SPC hereunder shall utilize the Loan Commitment of the
         Granting Lender to the same extent that, and as if, such Loan were
         funded by such Granting Lender. Each party hereto hereby agrees that no
         SPC shall be liable for

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<PAGE>
         any indemnity or payment under this Credit Agreement for which a Lender
         would otherwise be liable for so long as, and to the extent, the
         Granting Lender provides such indemnity or makes such payment. In
         furtherance of the foregoing, each party hereto hereby agrees (which
         agreements shall survive termination of this Credit Agreement) that,
         prior to the date that is one year and one day after the payment in
         full of all outstanding commercial paper or other senior indebtedness
         of any SPC, it will not institute against, or join any other Person in
         instituting against, such SPC any bankruptcy, reorganization,
         arrangement, insolvency or liquidation proceedings under the laws of
         the United States or any State thereof. Notwithstanding anything to the
         contrary contained in this Credit Agreement, any SPC may disclose on a
         confidential basis any non-public information relating to its funding
         of Loans to any rating agency, commercial paper dealer or provider of
         any surety or guarantee to such SPC. This clause (h) may not be amended
         without the prior written consent of each Granting Lender, all or any
         part of whose Loan is being funded by an SPC at the time of such
         amendment.

         11.4 NO WAIVER; REMEDIES CUMULATIVE.

         No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Borrower or any Credit
Party and the Administrative Agent or any Lender shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein are cumulative
and not exclusive of any rights or remedies which the Administrative Agent or
any Lender would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.

         11.5 PAYMENT OF EXPENSES; INDEMNIFICATION.

         The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs
and expenses of (i) the Agent-Related Persons in connection with (A) the
negotiation, preparation, execution and delivery and syndication of this Credit
Agreement and the other Credit Documents and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
expenses of Moore & Van Allen, special counsel to the Administrative Agent) and
(B) any amendment, waiver or consent relating hereto and thereto including, but
not limited to, any such amendments, waivers or consents resulting from or
related to any work-out, renegotiation or restructure relating to the
performance by the Credit Parties under this Credit Agreement, and (ii) the
Agent-Related Persons and the Lenders in connection with (A) enforcement of the
Credit Documents and the documents and instruments referred to therein,
including, without limitation, in connection with any such enforcement, the
reasonable Attorneys' Costs of the Administrative Agent and each of the Lenders
and (B) any bankruptcy or insolvency proceeding of any Credit Party or any of
its Subsidiaries and (b) indemnify the Agent-Related Persons and each Lender,
its officers, directors, employees, representatives, counsel and agents from and
hold each of them harmless against any and all losses, liabilities, claims,
damages or expenses incurred by any of them as a result of, or arising out of,
or in any way related to, or by reason of, any investigation, litigation or
other proceeding (whether or not such Agent-Related Person or any Lender is a
party thereto) related to the entering into and/or performance of any Credit
Document or the use of proceeds of any Loans (including other extensions of
credit) hereunder or the consummation of any other transactions contemplated in
any Credit Document, including, without limitation, reasonable Attorneys' Costs
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified or from the material
breach by the Person to be indemnified of its obligations under the Credit
Documents ) (all of the foregoing, collectively, "Indemnified Liabilities"). The
agreements in this Section 11.5 shall survive the termination of the Commitments
and the repayment of the Credit Party Obligations.

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<PAGE>

         11.6 AMENDMENTS, WAIVERS AND CONSENTS.

         Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the then Credit Parties; provided
that no such amendment, change, waiver, discharge or termination shall without
the consent of all the Lenders:

                  (a) extend the Maturity Date, or postpone or extend the time
         for any payment or prepayment of principal;

                  (b) reduce the rate or extend the time of payment of interest
         (other than as a result of waiving the applicability of any
         post-default increase in interest rates) thereon or fees hereunder;

                  (c) reduce or waive the principal amount of any Loan;

                  (d) increase or extend the Commitment of a Lender (it being
         understood and agreed that a waiver of any Default or Event of Default
         or a waiver of any mandatory reduction in the Commitments shall not
         constitute a change in the terms of any Commitment of any Lender);

                  (e) release the Borrower from its obligations or consent to
         the assignment or transfer by the Borrower of any of its rights and
         obligations under (or in respect of) the Credit Documents or release
         all or substantially all of the Guarantors from their respective
         obligations under the Credit Documents;

                  (f) amend, modify or waive any provision of this Section 11.6
         or Section 3.4(a), 3.4(b), 3.4(c)(i), 3.7, 3.8, 9.1(a), 11.2, 11.3 or
         11.5; or

                  (g) reduce any percentage specified in, or otherwise modify,
         the definition of Required Lenders.

Notwithstanding the above, (i) no provisions of Section 10 may be amended or
modified without the consent of the Administrative Agent and (ii) no provisions
of Section 2.2 may be amended or modified without the consent of the Issuing
Lender.

Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans or the
Letters of Credit, and each Lender acknowledges that the provisions of Section
1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set
forth herein and (y) the Required Lenders may consent to allow a Credit Party to
use cash collateral in the context of a bankruptcy or insolvency proceeding.

         11.7 COUNTERPARTS/TELECOPY.

         This Credit Agreement may be executed in any number of counterparts,
each of which where so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. Delivery of executed
counterparts by telecopy shall be as effective as an original and shall
constitute a representation that an original will be delivered.

         11.8 HEADINGS.

         The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.

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         11.9 DEFAULTING LENDER.

         Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.

         11.10 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND WARRANTIES.

         All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Credit Agreement,
the making of the Loans, the issuance of the Letters of Credit and the repayment
of the Loans, LOC Obligations and other obligations and the termination of the
Commitments hereunder.

         11.11 GOVERNING LAW; JURISDICTION.

         THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Each Credit Party irrevocably consents to the service of process in any action
or proceeding with respect to this Credit Agreement or any other Credit Document
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address for notices pursuant to Section 11.1, such service
to become effective 10 days after such mailing. Nothing herein shall affect the
right of a Lender to serve process in any other manner permitted by law.

         11.12 WAIVER OF JURY TRIAL; WAIVER OF CONSEQUENTIAL DAMAGES.

         EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY. Each Credit Party agrees not to assert any
claim against the Administrative Agent, the Issuing Lenders, any Lender, any of
their Affiliates, or any of their respective directors, officers, employees,
attorneys or agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to any of
the transactions contemplated herein.

         11.13 SEVERABILITY.

         If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

         11.14 FURTHER ASSURANCES.

         The Credit Parties agree, upon the request of the Administrative Agent,
to promptly take such actions, as reasonably requested, as is necessary to carry
out the intent of this Credit Agreement and the other Credit Documents.

         11.15 CONFIDENTIALITY.

         Each Lender agrees that it will use its reasonable best efforts to keep
confidential and to cause any representative designated under Section 7.11 to
keep confidential any non-public information from time to time supplied to it
under any Credit Document; provided, however, that nothing herein shall prevent
the disclosure of any such information to (a) the extent a Lender in good faith
believes such disclosure is required by Requirement of Law, (b) counsel for a
Lender or to its accountants, (c) bank examiners or auditors or comparable
Persons, (d) any Affiliate of a Lender, (e) any other Lender, or any assignee,
transferee or participant, or any potential assignee, transferee or participant,
of all or any portion of any Lender's rights under this Credit Agreement who is
notified of the confidential

                                       61
<PAGE>

nature of the information or (f) any other Person in connection with any
litigation to which any one or more of the Lenders is a party. No Lender shall
have any obligation under this Section 11.15 to the extent any such information
becomes available on a non-confidential basis from a source other than a Credit
Party or that any information becomes publicly available other than by a breach
of this Section 11.15 by any Lender or representative thereof.

         11.16 ENTIRETY.

         This Credit Agreement together with the other Credit Documents and the
Fee Letter represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.

         11.17 BINDING EFFECT; CONTINUING AGREEMENT.

                  (a) This Credit Agreement shall become effective at such time
         when all of the conditions set forth in Section 5.1 have been satisfied
         or waived by the Lenders and it shall have been executed by the
         Borrower, the Guarantors and the Administrative Agent, and the
         Administrative Agent shall have received copies hereof (telefaxed or
         otherwise) which, when taken together, bear the signatures of each
         Lender, and thereafter this Credit Agreement shall be binding upon and
         inure to the benefit of the Borrower, the Guarantors, the
         Administrative Agent and each Lender and their respective successors
         and assigns. Upon this Credit Agreement becoming effective, the
         Existing Credit Agreement shall be deemed terminated and the Credit
         Parties and the lenders party to the Existing Credit Agreement shall no
         longer have any obligations thereunder (other than those obligations in
         the Existing Credit Agreement that expressly survive the termination of
         the Existing Credit Agreement).

                  (b) This Credit Agreement shall be a continuing agreement and
         shall remain in full force and effect until all Loans, LOC Obligations,
         interest, fees and other Credit Party Obligations have been paid in
         full and all Commitments and Letters of Credit have been terminated.
         Upon termination, the Credit Parties shall have no further obligations
         (other than the indemnification provisions that survive) under the
         Credit Documents; provided that should any payment, in whole or in
         part, of the Credit Party Obligations be rescinded or otherwise
         required to be restored or returned by the Administrative Agent or any
         Lender, whether as a result of any proceedings in bankruptcy or
         reorganization or otherwise, then the Credit Documents shall
         automatically be reinstated and all amounts required to be restored or
         returned and all costs and expenses incurred by the Administrative
         Agent or any Lender in connection therewith shall be deemed included as
         part of the Credit Party Obligations.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       62
<PAGE>

         Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.

BORROWER:
                                POLARIS INDUSTRIES INC.,
                                a Minnesota corporation

                                By:      /s/  Michael W. Malone
                                   --------------------------------------------
                                Name:    Michael W. Malone
                                Title:   Chief Financial Officer, Secretary and
                                         Vice President-Finance

<PAGE>
                   Signature Page to Polaris Industries Inc.
                 Amended and Restated 364-Day Credit Agreement

GUARANTORS:           POLARIS REAL ESTATE CORPORATION OF
                      IOWA, INC., a Delaware corporation

                      POLARIS REAL ESTATE CORPORATION,
                      a Delaware corporation

                      POLARIS ACCEPTANCE INC.,
                      a Minnesota corporation

                      POLARIS SALES INC., a Minnesota corporation

                      POLARIS DIRECT INC., a Minnesota corporation

                      POLARIS INDUSTRIES INC., a Delaware corporation

                      POLARIS INDUSTRIES MANUFACTURING LLC,
                      a Minnesota limited liability company

                      By:      /s/  Michael W. Malone
                         ---------------------------------------------
                      Name:    Michael W. Malone
                      Title:   Chief Financial Officer, Treasurer, Secretary and
                               Vice President-Finance of each of the foregoing
                               entities

AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT
<PAGE>
                   Signature Page to Polaris Industries Inc.
                 Amended and Restated 364-Day Credit Agreement

ADMINISTRATIVE AGENT:      BANK OF AMERICA, N.A.,
                              as Administrative Agent

                              By:      /s/  Anne Brooke Lazorik
                                 --------------------------------
                              Name:    Anne Brooke Lazorik
                                   ------------------------------
                              Title:   Agency Management Officer
                                    -----------------------------

AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT
<PAGE>

                   Signature Page to Polaris Industries Inc.
                 Amended and Restated 364-Day Credit Agreement

LENDERS:                        BANK OF AMERICA, N.A.,
                                as a Lender

                                By:    /s/ Matthew Reilly
                                   --------------------------
                                Name:  Matthew Reilly
                                     ------------------------
                                Title: Vice - President
                                      -----------------------

AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT

<PAGE>
                   Signature Page to Polaris Industries Inc.
                 Amended and Restated 364-Day Credit Agreement

                               U.S. BANK N.A., individually in its capacity
                               as a Lender and in its capacity as Issuing Lender

                               By:      /s/  Karen E. Weathers
                                  ------------------------------------
                               Name:    Karen E. Weathers
                                    ----------------------------------
                               Title:   Vice President
                                     ---------------------------------

AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT

<PAGE>
                   Signature Page to Polaris Industries Inc.
                 Amended and Restated 364-Day Credit Agreement

                                KEYBANK NATIONAL ASSOCIATION

                                By:      /s/  Thomas J. Purcell
                                   -------------------------------------
                                Name:    Thomas J. Purcell
                                     -----------------------------------
                                Title:   Senior Vice President
                                      ----------------------------------

AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT

<PAGE>
                   Signature Page to Polaris Industries Inc.
                 Amended and Restated 364-Day Credit Agreement

                                M&I MARSHALL & ILSLEY BANK

                                By:    /s/ Doug Pudvah
                                   ------------------------------
                                Name:  Doug Pudvah
                                     ----------------------------
                                Title: Vice President
                                      ---------------------------

                                By:    /s/ John Howard
                                   ------------------------------
                                Name:  John Howard
                                     ----------------------------
                                Title: Senior Vice President
                                      ---------------------------

AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT

<PAGE>
                   Signature Page to Polaris Industries Inc.
                 Amended and Restated 364-Day Credit Agreement

                                COMERICA BANK

                                By:    /s/ Timothy O'Rourke
                                   ------------------------------
                                Name:  Timothy O'Rourke
                                     ----------------------------
                                Title: Vice President
                                      ---------------------------

AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT

<PAGE>
                   Signature Page to Polaris Industries Inc.
                 Amended and Restated 364-Day Credit Agreement

                                BANCA NAZIONALE DEL LAVORO S.p.A.

                                By:    /s/ Franco DiMario
                                   ------------------------------
                                Name:  Franco DiMario
                                     ----------------------------
                                Title: Vice President
                                      ---------------------------

                                By:     /s/  Leonardo Valentini
                                   ------------------------------
                                Name:   Leonardo Valentini
                                     ----------------------------
                                Title:  First Vice President
                                      ---------------------------

AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT

<PAGE>
                   Signature Page to Polaris Industries Inc.
                 Amended and Restated 364-Day Credit Agreement

                                WELLS FARGO BANK, NATIONAL ASSOCIATION

                                By:      /s/  Mark H. Halldorson
                                   -------------------------------
                                Name:    Mark H. Halldorson
                                     -----------------------------
                                Title:   Assistant Vice President
                                      ----------------------------

                                By:      /s/  Chad M. Kortgard
                                   -------------------------------
                                Name:    Chad M. Kortgard
                                     -----------------------------
                                Title:   Assistant Vice President
                                      ----------------------------

AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT

<PAGE>
                   Signature Page to Polaris Industries Inc.
                 Amended and Restated 364-Day Credit Agreement

                                THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                CHICAGO BRANCH

                                By:     /s/ Patrick McCue
                                   -------------------------------
                                Name:   Patrick McCue
                                     -----------------------------
                                Title:  Vice President & Manager
                                      ----------------------------

AMENDED AND RESTATED
364-DAY CREDIT AGREEMENT

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