Document:

Exhibit 10.16

                  Amended and Restated Secured Credit Agreement
                                      among
                            Maverick Tube Corporation
                                       and
                          Harris Trust And Savings Bank
                                    as Agent
                                       and
                   the Banks from time to time parties hereto
                          Dated as of December 28, 2000

                                Table of Contents
                            Maverick Tube Corporation
                  Amended and Restated Secured Credit Agreement

Section 1.          The Credits.....................................1
   Section 1.1.            The Revolving Credit                     1

   Section 1.2.            The Revolving Notes                      3

   Section 1.3.            Interest Rates                           4

   Section 1.4.            Letter of Credit                         6

   Section 1.5.            Reimbursement Obligations                7

   Section 1.6.            Manner of Borrowing and Rate Selection   8

   Section 1.7.            Participation in the L/Cs                9

   Section 1.8.            The Collateral and Guarantees            9

Section 2.          Fees, Prepayments and Terminations.............11
   Section 2.1.            Commitment Fees                         11

   Section 2.2.            Other Fees                              11

   Section 2.3.            Optional Prepayments                    11

   Section 2.4.            Mandatory Prepayments-Borrowing Base    12

   Section 2.5.            Terminations                            12

   Section 2.6.            Capital Adequacy                        12

Section 3.          Place and Application of Payments..............12

Section 4.          Definitions....................................13
   Section 4.1.            Certain Terms Defined.                  13

   Section 4.2.            Interpretation                          24

   Section 4.3.            Change in Accounting Principles         24

Section 5.          Representations and Warranties.................24
   Section 5.1.            Organization and Qualification          24

   Section 5.2.            Financial Reports                       24

   Section 5.3.            Litigation; Tax Returns; Approvals      25

   Section 5.4.            Regulation U                            25

   Section 5.5.            No Default                              25

   Section 5.6.            ERISA                                   25

   Section 5.7.            Environmental Law                       25

   Section 5.8.            Security Interests                      26

   Section 5.9.            Subsidiaries                            26

   Section 5.10.           Accurate Information                    26

   Section 5.11.           Enforceability                          27

   Section 5.12            Trademarks, Franchises, and Licenses    27

   Section 5.13.           Governmental Authority and Licensing    27

   Section 5.14.           Good Title                              27

   Section 5.15.           Affiliate Transactions                  27

   Section 5.16.           Investment Company;
                              Public Utility Holding Company       27

   Section 5.17.           Other Agreements                        28

   Section 5.18.           Solvency                                28

Section 6.          Conditions Precedent...........................28
   Section 6.1.            General                                 28

   Section 6.2.            Initial Extension of Credit             28

   Section 6.3.            Each Extension of Credit                30

   Section 6.4.            Legal Matters                           30

Section 7.          Covenants......................................30
   Section 7.1.            Maintenance of Property and Business    30

   Section 7.2.            Taxes                                   30

   Section 7.3.            Maintenance of Insurance                31

   Section 7.4.            Financial Reports                       31

   Section 7.5.            Inspection                              32

   Section 7.6.            Consolidation and Merger                32

   Section 7.7.            Transactions with Affiliates            33

   Section 7.8.            Maximum Total Funded Debt Ratios        33

   Section 7.9.            Minimum Adjusted EBITDA                 33

   Section 7.10.           Minimum Consolidated Tangible Net Worth 33

   Section 7.11.           Maximum Leverage Ratio                  33

   Section 7.12.           Minimum Interest Coverage Ratio         33

   Section 7.13.           Restricted Payments                     33

   Section 7.14.           Liens                                   34

   Section 7.15.           Borrowings and Guaranties               35

   Section 7.16.           Investments, Loans, Advances and
                              Acquisitions                         35

   Section 7.17.           Sale of Property                        37

   Section 7.18.           Notice of Suit or Adverse Change
                              in Business or Default               37

   Section 7.19.           ERISA                                   38

   Section 7.20.           Supplemental Performance                38

   Section 7.21.           Use of Proceeds                         38

   Section 7.22.           Compliance with Laws, etc               38

   Section 7.23.           Environmental Covenant                  38

   Section 7.24.           Subsidiaries.                           39

   Section 7.25.           No Changes in Fiscal Year               39

   Section 7.26.           Operating Leases                        39

   Section 7.27.           Change in the Nature of Business        39

   Section 7.28.           Prudential Line of Credit               40

Section 8.          Events of Default and Remedies.................40
   Section 8.1.            Definitions                             40

   Section 8.2.            Remedies for Non-Bankruptcy Defaults    41

   Section 8.3.            Remedies for Bankruptcy Defaults        41

   Section 8.4.            L/Cs                                    42

   Section 8.5.            Expenses                                42

Section 9.          Change in Circumstances Regarding
                       Eurodollar Loans............................42
   Section 9.1.            Change of Law                           42

   Section 9.2.            Unavailability of Deposits or Inability
                              to Ascertain the Adjusted Eurodollar
                              Rate                                 42

   Section 9.3.            Taxes and Increased Costs               42

   Section 9.4.            Funding Indemnity                       43

   Section 9.5.            Lending Branch                          44

   Section 9.6.            Discretion of Bank as to Manner
                              of Funding                           44

Section 10.         The Agent......................................44
   Section 10.1.           Appointment and Powers                  44

   Section 10.2.           Powers                                  44

   Section 10.3.           General Immunity                        44

   Section 10.4.           No Responsibility for Loans,
                              Recitals, etc                        44

   Section 10.5.           Right to Indemnity                      44

   Section 10.6.           Action Upon Instructions of Banks       45

   Section 10.7.           Employment of Agents and Counsel        45

   Section 10.8.           Reliance on Documents; Counsel          45
   Section 10.9.           May Treat Payee as Owner                45

   Section 10.10.          Agent's Reimbursement                   45

   Section 10.11.          Rights as a Lender                      45

   Section 10.12.          Bank Credit Decision                    45

   Section 10.13.          Resignation of Agent                    45

   Section 10.14.          Duration of Agency                      46

   Section 10.15.          Letter of Credit Issuer                 46

   Section 10.16.          Hedging Arrangements                    46

Section 11.         Miscellaneous..................................46
   Section 11.1.           Amendments and Waivers                  46

   Section 11.2.           Waiver of Rights                        47

   Section 11.3.           Several Obligations                     47

   Section 11.4.           Non-Business Day                        47

   Section 11.5.           Survival of Indemnities                 47

   Section 11.6.           Documentary Taxes                       47

   Section 11.7.           Representations                         47

   Section 11.8.           Notices                                 48

   Section 11.9.           Costs and Expenses                      48

   Section 11.10.          Counterparts                            49

   Section 11.11.          Successors and Assigns; Governing
                              Law; Entire Agreement                49

   Section 11.12.          Banks' Obligations Several              49

   Section 11.13.          Severability                            49

   Section 11.14.          Table of Contents and Headings          49

   Section 11.15.          Sharing of Payments                     49

   Section 11.16.          Conflict Among Documents                49

   Section 11.17.          Confidentiality                         50

   Section 11.18.          Participants                            50

   Section 11.19.          Assignment Agreements and Register      50

   Section 11.20.          Excess Interest                         51

   Section 11.21.          Construction                            52

   Section 11.22.          Withholding Taxes                       52

      (a)                  U.S. Withholding Tax Exemptions         52

      (b)                  Inability of Bank to Submit Forms       52

      (c)                  Payment of Additional Amounts           52

   Section 11.23.          Submission to Jurisdiction; Waiver
                              of Jury Trial                        53

                            Maverick Tube Corporation
                  Amended and Restated Secured Credit Agreement

Harris Trust and Savings Bank
Chicago, Illinois

The lenders from time to time parties hereto

Ladies and Gentlemen:

The  undersigned,   Maverick  Tube  Corporation,  a  Delaware  corporation  (the
"Borrower"),  refers to the Secured Credit  Agreement dated as of  September 18,
1998, as amended and currently in effect among the Borrower and certain  lenders
party thereto (such Secured Credit Agreement as so amended is referred to as the
"Previous  Credit  Agreement")  pursuant to which such lenders  agreed to make a
revolving credit available to the Borrower, all as more fully set forth therein.
Each of you is hereinafter  referred to individually as "Bank" and  collectively
as the  "Banks."  Harris Trust and Savings  Bank in its  individual  capacity is
sometimes  referred to herein as "Harris",  and in its capacity as Agent for the
Banks is hereinafter in such capacity called the "Agent." The Borrower  requests
you to  (i) amend  the  Previous  Credit  Agreement  to add a  swingline  credit
facility (the "Swingline")  thereunder and (ii) make certain further  amendments
to the Previous  Credit  Agreement and, for the sake of convenience and clarity,
to  restate  the  Previous  Credit  Agreement  in its  entirety  as so  amended.
Accordingly,  upon your acceptance hereof in the space provided for that purpose
below  and  upon  satisfaction  of the  conditions  precedent  to  effectiveness
hereinafter set forth,  Sections 1  through 11 of the Previous Credit  Agreement
and all of the  Exhibits  thereto  shall be amended  and as so amended  shall be
restated in their entirety to read as follows:

Section 1.           The Credits.

         Section 1.1.    The Revolving  Credit.

a) Subject to all of the terms and conditions hereof, the Banks agree, severally
and not jointly,  to extend a revolving  credit (the "Revolving  Credit") to the
Borrower which may be utilized in the form of loans  (individually  a "Revolving
Credit  Loan" and  collectively  the  "Revolving  Credit  Loans"),  and L/Cs (as
hereinafter  defined).  The aggregate  principal  amount of all Revolving Credit
Loans under the Revolving Credit plus the amount available for drawing under the
L/Cs,  the aggregate  principal  amount of all Swingline  Loans (as  hereinafter
defined)  under the Swingline and the aggregate  principal  amount of all unpaid
Reimbursement Obligations (as hereinafter defined)(collectively,  the "Revolving
Credit  Obligations")  at any time  outstanding  shall not  exceed the lesser of
(i) the Banks' Revolving Credit  Commitments (as hereinafter  defined) in effect
from time to time during the term of this Agreement and (ii) the  Borrowing Base
as determined on the basis of the most recent  Borrowing Base  Certificate.  The
Revolving  Credit shall be available to the  Borrower,  and may be availed of by
the  Borrower  from time to time,  be repaid  (subject  to the  restrictions  on
prepayment  set forth  herein) and used  again,  during the period from the date
hereof to and including January 1, 2004 (the "Termination Date").

(b) The respective  maximum aggregate  principal amounts of the Revolving Credit
at any one time outstanding and the Commitment  Percentage of each Bank, in each
case in effect on the date hereof, are, subject to any reductions, modifications
and increases thereof pursuant hereto, as follows (collectively,  the "Revolving
Credit Commitments" and individually, a "Revolving Credit Commitment"):

         Harris Trust and Savings Bank      $30,000,000.00               37.50%

         Firstar Bank, N.A.                 $25,000,000.00               31.25%

         Bank of America, N.A.              $25,000,000.00               31.25%

         Total                              $80,000,000.00                 100%

(c) Loans under the Revolving  Credit may be  Eurodollar  Loans or Domestic Rate
Loans.  All Loans  under the  Revolving  Credit  shall be made from each Bank in
proportion to its  respective  Revolving  Credit  Commitment as above set forth.
Each  Domestic  Rate Loan shall be in an amount not less than  $250,000  or such
greater  amount which is an integral  multiple of $100,000  and each  Eurodollar
Loan shall be in an amount not less than $1,000,000 or such greater amount which
is an integral multiple of $50,000.

(d) The initial  borrowing under this Agreement shall be in an amount sufficient
to pay all amounts  outstanding  under the Previous Credit Agreement and certain
other working  capital  obligations  of the Borrower.  The Agent shall apply the
proceeds of the initial  borrowing  hereunder to pay all  principal and interest
outstanding under the Previous Credit Agreement.

(e) Swingline Loans under the Revolving Credit (i) Swingline Commitment. Subject
to the terms and  conditions  hereof and in reliance on the  obligations  of the
Banks to Harris  under this  Section 1.1,  Harris  agrees to advance one or more
swingline  loans (each a  "Swingline  Loan") to the  Borrower  from time to time
before the  Termination  Date on a revolving basis up to $5,000,000 in aggregate
principal amount at any time outstanding (the "Swingline Commitment");  provided
that  Harris  shall have no  obligation  to advance  any  Swingline  Loan if the
aggregate  amount of the Revolving Credit  Obligations  would thereby exceed the
Revolving Credit  Commitments then in effect.  All Swingline Loans will be in an
amount  not less than  $100,000  or an  integral  multiple  of $50,000 in excess
thereof.  Swingline  Loans may be repaid and their principal  amount  reborrowed
before the Termination Date,  subject to the terms and conditions  hereof.  Each
Swingline  Loan that bears  interest  based on the Domestic Rate shall mature no
later than five (5) Business  Days after such Loan is made and each Offered Rate
Loan (as  hereinafter  defined)  shall  mature  on the last day of the  Interest
Period  applicable  thereto.  No more  than  five  (5)  Swingline  Loans  may be
outstanding at any time.

All Swingline  Loans made by Harris under the Swingline  shall be evidenced by a
Secured  Swingline  Note of the Borrower (the  "Swingline  Note") payable to the
order of Harris in the amount of its Swingline Commitment, the Swingline Note to
be in the  form  attached  hereto  as  Exhibit B.  Without  regard  to the  face
principal  amount of the Swingline Note, the actual principal amount at any time
outstanding  and owing by the  Borrower  on  account  thereof  during the period
ending  on the  Termination  Date  shall  be the  sum of all  advances  then  or
theretofore made thereon less all principal  payments  actually received thereon
during such period.

Harris may elect that each  Swingline  Loan requested by the Borrower shall bear
interest on the unpaid  principal  amount  thereof from the date such  Swingline
Loan is made until paid in full at either  (a) the rate per annum  (computed  on
the basis of a year of  365/366  days and actual  days  elapsed)  determined  by
adding the Applicable  Margin for Revolving Credit Loans to the Domestic Rate as
in effect from time to time,  or (b) to the extent not greater than the rate per
annum based on the  Domestic  Rate as  specified  in the  immediately  preceding
subsection (a) of this paragraph, the rate per annum (computed on the basis of a
year of 360 days and actual days  elapsed)  quoted to the Borrower by Harris for
the Interest  Period  applicable  thereto (each such Swingline Loan specified in
this  subsection (b)  is  hereinafter  referred to as an "Offered  Rate  Loan");
provided,  however,  that the Borrower understands and agrees that Harris has no
obligation  to quote rates or to make any such  Offered Rate Loan and may refuse
to make any such Offered Rate Loan after  receiving a request  therefor from the
Borrower.  The Borrower acknowledges and agrees that the interest rate quoted by
Harris for any Offered  Rate Loan may not be the best or lowest rate  offered to
other  customers  of  Harris  and may not be the  same  rate  offered  to  other
customers of Harris for loans of similar amounts and maturities, but is the rate
at which  Harris in its sole and  exclusive  discretion  is willing to make such
Offered  Rate  Loan to the  Borrower  for the  specified  amount  and  maturity.
Interest  based on the  Domestic  Rate  shall be payable on the last day of each
month in each year and  interest on all  Offered  Rate Loans shall be payable on
the last day of the Interest Period applicable  thereto.  Upon the occurrence of
an Event of Default  hereunder all Swingline Loans shall bear interest at a rate
per annum  (computed  on the basis of a year of  365/366  days and  actual  days
elapsed)  determined by adding the Applicable  Margin for Revolving Credit Loans
to the  Domestic  Rate as in effect  from time to time plus 2%.  Interest on all
Swingline Loans after default shall be due and payable upon demand.

The Borrower  shall give Harris notice (which may be written or oral,  but which
must be given prior to 11:00 a.m. (Chicago time) of the date (which may, subject
to the immediately preceding parenthetical,  be the date on which such notice is
given)  upon which it requests  that any  Swingline  Loan be made to it),  which
notice shall specify the date on which such  Swingline  Loan is to be made,  the
amount of such  Swingline  Loan and, if such Swingline Loan is elected by Harris
to be an Offered Rate Loan,  the duration of the Interest  Period  applicable to
such Swingline Loan.

(ii) Refunding  Loans.  In its sole and absolute  discretion,  Harris may at any
time, on behalf of the Borrower (which hereby  irrevocably  authorizes Harris to
act on its behalf for such  purpose),  request  each Bank by means of written or
telegraphic notices given no later than 5:00 p.m. (Chicago time) on any Business
Day to make a Domestic Rate Loan under the  Revolving  Credit in an amount equal
to such  Bank's  Commitment  Percentage  of the  amount of the  Swingline  Loans
outstanding  on the date such notice is given.  Unless any of the  conditions of
Section 6.3 are not fulfilled on such date, each Bank shall make the proceeds of
its requested  Domestic Rate Loan available to Harris, in immediately  available
funds, at the principal office of Harris in Chicago,  Illinois, before 3:00 p.m.
(Chicago  time) on the Business Day following the day such notice is given.  The
proceeds of such Domestic Rate Loans shall be  immediately  applied to repay the
outstanding  Swingline  Loans.  The  Borrower  authorizes  Harris to charge  the
Borrower's accounts with Harris (up to the amount available in such accounts) to
pay the amount of any such  outstanding  Swingline  Loans to the extent  amounts
received  from the Banks  are not  sufficient  to repay in full  such  Swingline
Loans.

(iii) Participations. If any Bank refuses or otherwise fails to make a Revolving
Credit  Loan when  requested  by Harris  pursuant  to  Section 1.1(e)(ii)  above
(because the  conditions in Section 6.3  are not satisfied or  otherwise),  such
Bank will, by the time and in the manner such Revolving  Credit Loan was to have
been funded to Harris,  purchase from Harris an undivided participating interest
in the  outstanding  Swingline  Loans  in an  amount  equal  to  its  Commitment
Percentage of the  aggregate  principal  amount of Swingline  Loans that were to
have been repaid with such Revolving Credit Loans. Each Bank that so purchases a
participation  in a Swingline  Loan shall  thereafter be entitled to receive its
Commitment  Percentage  of each payment of principal  received on the  Swingline
Loan and of interest received thereon accruing from the date such Bank funded to
Harris its participation in such Loan; provided,  however, in the event any such
payment  (or portion  thereof)  received by Harris is required to be returned to
the Borrower or to a trustee, receiver,  liquidator,  custodian or other Person,
such Bank will return to Harris any portion thereof previously distributed to it
by  Harris.  The  obligation  of the  Banks  to  Harris  shall be  absolute  and
unconditional  and shall not be  affected or impaired by any Event of Default or
Potential Default which may then be continuing hereunder.

Section 1.2.  The Revolving  Notes. All Revolving Credit Loans made by each Bank
under its Revolving  Credit  Commitment,  shall be evidenced by a single Secured
Revolving  Credit Note of the  Borrower  substantially  in the form of Exhibit A
hereto  (individually,  a "Revolving Note" and together,  the "Revolving Notes")
payable  to the  order  of each  Bank in the  principal  amount  of such  Bank's
Revolving Credit Commitment,  but the aggregate principal amount of indebtedness
evidenced  by such  Revolving  Note at any time  shall be, and the same is to be
determined by, the aggregate principal amount of all Revolving Credit Loans made
by such  Bank  to the  Borrower  pursuant  hereto  on or  prior  to the  date of
determination  less  the  aggregate  amount  of  principal  repayments  on  such
Revolving Credit Loans received by or on behalf of such Bank on or prior to such
date of  determination.  Each  Revolving Note shall be dated as of the execution
date of this Agreement,  shall be delivered  concurrently herewith, and shall be
expressed to mature on the Termination  Date and to bear interest as provided in
Section 1.3  hereof.  Each Bank  shall  record on its books or  records  or on a
schedule to its Revolving Note the amount of each Revolving  Credit Loan made by
it  hereunder,  whether each  Revolving  Credit Loan is a Domestic  Rate Loan or
Eurodollar  Loan, and, with respect to Eurodollar  Loans,  the interest rate and
Interest Period applicable  thereto,  and all payments of principal and interest
and the principal balance from time to time outstanding,  provided that prior to
any transfer of such  Revolving  Note all such amounts  shall be recorded on the
schedule to such Revolving Note. The record thereof, whether shown on such books
or  records or on the  schedule  to the  Revolving  Note,  shall be prima  facie
evidence as to all such amounts; provided, however, that the failure of any Bank
to record, or any mistake in recording,  any of the foregoing shall not limit or
otherwise  affect the  obligation of the Borrower to repay all Revolving  Credit
Loans made hereunder together with accrued interest thereon. Upon the request of
any Bank, the Borrower will furnish a new Revolving Note to such Bank to replace
its outstanding  Revolving Note and at such time the first notation appearing on
the schedule on the reverse side of, or attached to, such  Revolving  Note shall
set forth the aggregate  unpaid  principal amount of Revolving Credit Loans then
outstanding  from such Bank,  and,  with respect to each  Eurodollar  Loan,  the
interest rate and Interest Period applicable thereto.  Such Bank will cancel and
deliver to the Borrower the  outstanding  Revolving  Credit Note upon receipt of
the new Revolving Credit Note.

Section 1.3.  Interest  Rates.  (a) Domestic Rate. Each Domestic Rate Loan shall
bear  interest  (computed  on the  basis of a year of 360 days and  actual  days
elapsed) on the unpaid  principal amount thereof from the date such Loan is made
until maturity (whether by acceleration, upon prepayment or otherwise) at a rate
per annum equal to the sum of the Applicable  Margin plus the Domestic Rate from
time to time in  effect,  payable  quarterly  in arrears on the last day of each
calendar  quarter,  commencing on December 31,  2000 and at maturity (whether by
acceleration, upon prepayment or otherwise).

(b) Eurodollar  Rate. Each Eurodollar Loan shall bear interest  (computed on the
basis of a year of 360 days and actual  days  elapsed)  on the unpaid  principal
amount  thereof  from  the  date  such  Loan is made  until  the last day of the
Interest Period  applicable  thereto or, if earlier,  until maturity (whether by
acceleration  or  otherwise)  at a  rate  per  annum  equal  to  the  sum of the
Applicable Margin plus the Adjusted  Eurodollar Rate, payable on the last day of
each Interest Period applicable thereto and at maturity (whether by acceleration
or  otherwise),  and,  with  respect  to any  Interest  Period  applicable  to a
Eurodollar  Loan in excess of three months,  on the date  occurring  every three
months after the date such Interest Period began and at the end of such Interest
Period;  provided that if on the last day of the Interest  Period  applicable to
any  Eurodollar  Loan the  Borrower  does not prepay such Loan,  such Loan shall
become a Domestic Rate Loan as of the last day of the Interest Period applicable
thereto.

     "Adjusted  Eurodollar Rate" means a rate per annum  determined  pursuant to
     the following formula: Eurodollar Rate   Adjusted Eurodollar Rate
     = 100% - Reserve Percentage

     "Eurodollar Rate" means, for each Interest Period, (a) the LIBOR Index Rate
     for such Interest Period,  if such rate is available,  and (b) if the LIBOR
     Index Rate cannot be  determined,  the  arithmetic  average of the rates of
     interest per annum (rounded upward, if necessary, to the nearest 1/100th of
     1%) at which deposits in  U.S. Dollars  in immediately  available funds are
     offered to the Agent at 11:00 a.m.  (London, England time) two (2) Business
     Days before the  beginning  of such  Interest  Period by three  (3) or more
     major banks in the interbank  eurodollar  market selected by the Bank for a
     period equal to such  Interest  Period and in an amount equal or comparable
     to the applicable  Eurodollar Loan scheduled to be outstanding  during such
     Interest Period.

     "LIBOR  Index Rate"  means,  for any  Interest  Period,  the rate per annum
     (rounded upwards, if necessary,  to the next higher one  hundred-thousandth
     of a percentage  point) for deposits in U.S. Dollars  for a period equal to
     such  Interest  Period,  which  appears  on the  Telerate  Page 3750  as of
     11:00 a.m.  (London,  England time) on the day two (2) Business Days before
     the commencement of such Interest Period.

     "Telerate  Page 3750"  means the display  designated as  "Page 3750" on the
     Telerate  Service  (or such other  page as may  replace  Page 3750  on that
     service or such other  service as may be nominated by the British  Bankers'
     Association as the information vendor for the purpose of displaying British
     Bankers' Association  Interest Settlement Rates for U.S. Dollar  deposits).
     Each  determination  of the  Eurodollar  Rate  made by the  Agent  shall be
     conclusive and binding absent manifest error.

     "Interest Period" means (a) with respect to any Eurodollar Loan, the period
     commencing on, as the case may be, the creation, continuation or conversion
     date with respect to such LIBOR Loan and ending one (1), two (2), three (3)
     or six (6)  months  thereafter as selected by the Borrower in its notice as
     provided  herein and (b) with  respect to any Offered Rate Loan, the period
     used for the  completion  of interest  commencing  on the date the relevant
     Offered  Rate Loan is made and  concluding  on the date one (1) to five (5)
     days  thereafter  as  selected  by the  Borrower  in its notice as provided
     herein;  provided that all of the foregoing provisions relating to Interest
     Periods are subject to the following:

     (i) if any  Interest  Period  would  otherwise  end on a day which is not a
     Business Day, that Interest Period shall be extended to the next succeeding
     Business  Day,  unless in the case of an Interest  Period for a  Eurodollar
     Loan the result of such  extension  would be to carry such Interest  Period
     into another  calendar month in which event such Interest  Period shall end
     on the immediately preceding Business Day;

     (ii) no Interest  Period may extend  beyond the final  maturity date of the
     relevant Notes;

     (iii) the interest  rate to be  applicable  to each Loan for each  Interest
     Period shall apply from and including the first day of such Interest Period
     to but excluding the last day thereof; and

     (iv) no Interest  Period may be selected if after giving effect thereto the
     Borrower  will be unable to make a principal  payment  scheduled to be made
     during such Interest  Period without paying part of a Eurodollar  Loan on a
     date other than the last day of the Interest Period applicable thereto.

     For  purposes of  determining  an Interest  Period,  a month means a period
     starting  on one  day in a  calendar  month  and  ending  on a  numerically
     corresponding  day in the next calendar  month,  provided,  however,  if an
     Interest  Period  begins  on the  last  day of a month  or if  there  is no
     numerically  corresponding  day in the month in which an Interest Period is
     to end,  then such  Interest  Period shall end on the last  Business Day of
     such month.

     "Reserve  Percentage"  means the daily  arithmetic  average maximum rate at
     which reserves (including,  without limitation, any supplemental,  marginal
     and emergency  reserves) are imposed on member banks of the Federal Reserve
     System during the applicable  Interest  Period by the Board of Governors of
     the  Federal  Reserve  System  (or any  successor)  under  Regulation  D on
     "eurocurrency  liabilities"  (as such  term is  defined  in  Regulation D),
     subject to any amendments of such reserve  requirement by such Board or its
     successor,  taking into account any transitional  adjustments  thereto. For
     purposes of this  definition,  the  Eurodollar  Loans shall be deemed to be
     Eurocurrency  liabilities  as defined in  Regulation D  without  benefit or
     credit for any prorations, exemptions or offsets under Regulation D.

     (c) Default  Rate. If any payment of principal or interest on any Revolving
     Credit  Loan  is  not  made  when  due  (including  any  payment  due  upon
     acceleration),  such Loan shall bear  interest  (computed on the basis of a
     year of 360 days and actual days  elapsed)  from the date such  payment was
     due until paid in full, payable on demand, at a rate per annum equal to:

     (i)  with  respect  to any  Domestic  Rate  Loan,  the sum of 2%  plus  the
     Applicable Margin plus the Domestic Rate from time to time in effect; and

     (ii) with respect to any  Eurodollar  Loan,  the sum of 2% plus the rate of
     interest in effect thereon at the time of such default until the end of the
     Interest Period then applicable  thereto,  and,  thereafter,  at a rate per
     annum equal to the sum of 2% plus the  Applicable  Margin plus the Domestic
     Rate from time to time in effect.

     (d) Interest Rate and Commitment Fee Margin  Adjustments.  The margins from
     time to  time  applicable  to the  Revolving  Credit  Loans  in  accordance
     herewith are hereinafter referred to as the "Applicable Margins".

<TABLE>
<CAPTION>
       --------------------------------------------------------------------------------------------------------------

                                                   Summary Pricing Matrix
       --------------------------------------------------------------------------------------------------------------
       --------------------------------------------------------------------------------------------------------------

                             Level I           Level II            Level III           Level IV         Level V
       --------------------------------------------------------------------------------------------------------------
       --------------------------------------------------------------------------------------------------------------

                             Adjusted       Adjusted Total       Adjusted Total     Adjusted Total   Adjusted Total
                           Total Funded   Funded Debt Ratio    Funded Debt Ratio     Funded Debt      Funded Debt
                            Debt Ratio    >1.00x and less than    >2.00x and less     Ratio >2.50x     Ratio >3.00x
                              <1.00x             2.0                 than 2.50x       and <3.0x
       --------------------------------------------------------------------------------------------------------------
       --------------------------------------------------------------------------------------------------------------
       <S>                     <C>               <C>                  <C>           <C>                   <C>
       Domestic Rate             0%               0%                   0%             0%                    0%
       Margin
       --------------------------------------------------------------------------------------------------------------
       --------------------------------------------------------------------------------------------------------------

       Eurodollar Margin       .75%              1.00%                1.25%         1.50%                 1.75%
       --------------------------------------------------------------------------------------------------------------
       --------------------------------------------------------------------------------------------------------------

       Commitment Fee          .20%              .25%                 .25%          .375%                 .375%
       --------------------------------------------------------------------------------------------------------------
</TABLE>

     Not  later  than  ten  Business  Days  after  receipt  by the  Agent of the
     financial  statements  called for by Section 7.4  hereof for the applicable
     quarter, the Agent shall determine the Adjusted Total Funded Debt Ratio for
     the applicable  period and shall promptly notify the Borrower and each Bank
     of such determination and of any change in the Applicable Margins resulting
     therefrom.  Any such change in the Applicable Margins shall be effective as
     of the date the Agent so notifies  the  Borrower  with respect to all Loans
     outstanding on such date, and such new Applicable Margins shall continue in
     effect until the effective  date of the next quarterly  redetermination  in
     accordance with this  Section 1.3(d).  Each  determination  of the Adjusted
     Total Funded Debt Ratio and  Applicable  Margins by the Agent in accordance
     with this Section be conclusive and binding on the Borrower absent manifest
     error or willful misconduct. The Applicable Margins shall first be adjusted
     upon receipt of the  financial  statements  for the fiscal  quarter  ending
     March 31,  2001.  Subject to  subsection (c)  hereof,  from the date hereof
     until the  Applicable  Margins  are first  adjusted  pursuant  hereto,  the
     Applicable  Margin  for  Domestic  Rate Loans  shall be 0%, the  Applicable
     Margin for Eurodollar  Loans shall be 1.50% and the  Applicable  Margin for
     the Commitment Fee shall be 0.375%.

     Section 1.4.  Letter of Credit. (a) Subject to all the terms and conditions
     hereof and satisfaction of all conditions precedent to borrowing under this
     Agreement  and so long as no  Potential  Default  or Event of Default is in
     existence,  at the Borrower's  request Harris shall issue letters of credit
     (individually, an "L/C" and collectively the "L/Cs") for the account of the
     Borrower  in an  aggregate  amount  not to exceed  $5,000,000,  subject  to
     availability  under the  Revolving  Credit,  and the Banks  hereby agree to
     participate therein as more fully described in Section 1.7 hereof. Each L/C
     shall be issued  pursuant to an  application  and  agreement  for letter of
     credit  (individually,   an  "L/C  Agreement"  and  collectively  the  "L/C
     Agreements") in the form of Exhibit C hereto, shall consist of a standby or
     trade letter of credit, shall be in form and substance acceptable to Harris
     and the Banks,  and shall  have an expiry  date not more than one year from
     the date of issuance  thereof,  subject to annual renewals (but in no event
     later than the  Termination  Date).  The aggregate  amount  available to be
     drawn  under all L/Cs issued  pursuant  hereto  shall be deducted  from the
     credit otherwise  available under the Revolving Credit. In consideration of
     the issuance of L/Cs the  Borrower  agrees to pay Harris for the benefit of
     the Banks a fee (the "L/C Participation Fee") in the amount per annum equal
     to the Applicable  Margin for Eurodollar  Loans (computed on the basis of a
     360-day  year and  actual  days  elapsed)  of the face  amount for each L/C
     issued for the account of the Borrower hereunder. In addition, the Borrower
     shall pay Harris (x) a fee (the "L/C Issuance Fee") in the amount per annum
     equal to (i) for  standby L/Cs,  one-eighth of one percent  (0.125%) of the
     stated amount of each standby L/C issued hereunder and (ii) for  commercial
     L/Cs, the customary  issuance fee for commercial L/Cs as may be established
     by Harris from time to time, and (y) such drawing,  negotiation,  amendment
     and  other  administrative  fees  in  connection  with  each  L/C as may be
     established by Harris from time to time (the "L/C Administrative Fee"). All
     L/C Issuance Fees and L/C Participation  Fees shall be payable quarterly in
     arrears  on the  last  day of each  December,  March,  June  and  September
     commencing  December 31,  2000  and on the  Termination  Date,  and all L/C
     Administrative  Fees shall be payable on the date of  issuance  of each L/C
     hereunder and on the date required by Harris.

     (b) The Agent shall give prompt  telephone,  telex,  or telecopy  notice to
     each Bank of each  issuance  of, or  amendment  to, an L/C  specifying  the
     effective date of the L/C or amendment,  the amount,  the beneficiary,  and
     the expiration  date of the L/C, in each case as established  originally or
     through the relevant amendment, as applicable, the account party or parties
     for the L/C, each Bank's pro rata participation in such L/C and whether the
     Agent has  classified  the L/C as a commercial,  performance,  or financial
     letter of credit for regulatory reporting purposes.

     (c)  Notwithstanding  anything  contained  in  any  L/C  Agreement  to  the
     contrary:  (i) the  Borrower shall pay fees in connection  with each L/C as
     set forth in Section 1.4(a) hereof,  (ii) before the occurrence of an Event
     of Default,  Harris  will not call for the  funding by the  Borrower of any
     amount  under an L/C issued for the  Borrower's  account,  or for any other
     form of collateral  security for the  Borrower's  obligations in connection
     with such L/C,  before  being  presented  with a  drawing  thereunder,  and
     (iii) if  Harris is not timely  reimbursed  for the  amount of any  drawing
     under an L/C on the date such drawing is paid, the Borrower's obligation to
     reimburse  Harris for the amount of such  drawing  shall bear  interest  as
     specified  in  Section 1.5  hereof.  If  Harris  issues  any  L/C  with  an
     expiration date that is  automatically  extended unless Harris gives notice
     that the  expiration  date will not so  extend  beyond  its then  scheduled
     expiration  date,  Harris will give such notice of  non-renewal  before the
     time necessary to prevent such automatic  extension if before such required
     notice date  (i) the  expiration  date of such L/C if so extended  would be
     after the Termination Date, (ii) the Revolving Credit Commitments have been
     terminated, or (iii) an Event of Default exists and the Required Banks have
     given Harris  instructions not to so permit the extension of the expiration
     date of such L/C.

     (d) The Banks shall, ratably in accordance with their respective Commitment
     Percentages,  indemnify  Harris  (to  the  extent  not  reimbursed  by  the
     Borrower) against any cost, expense (including  reasonable counsel fees and
     disbursements),  claim,  demand,  action, loss or liability (except such as
     result from Harris's gross  negligence or willful  misconduct)  that Harris
     may suffer or incur in  connection  with any L/C.  The  obligations  of the
     Banks under this  Section 1.4(d)  and all other  parts of this  Section 1.4
     shall survive termination of this Agreement and of all L/C Agreements,  and
     all  drafts  or other  documents  presented  in  connection  with  drawings
     thereunder.

Section 1.5.  Reimbursement  Obligations.  The Borrower is obligated, and hereby
unconditionally  agrees to pay in immediately  available  funds to the Agent for
the account of Harris and the Banks who are  participating  in the L/Cs the face
amount  of each  draft  drawn  and  presented  under  each L/C  issued by Harris
hereunder  (the  obligation  of  the  Borrower  under  this   Section 1.5  is  a
"Reimbursement  Obligation").  If at any  time  the  Borrower  fails  to pay any
Reimbursement  Obligation  when  due,  the  Borrower  shall  be  deemed  to have
automatically requested a Domestic Rate Loan from the Banks hereunder, as of the
maturity date of such Reimbursement Obligation, the proceeds of which Loan shall
be used to repay such Reimbursement Obligation.  Such Loan shall only be made if
no Potential Default or Event of Default shall exist and upon approval by all of
the Banks, and shall be subject to availability  under the Revolving  Credit. If
such Loan is not made by the Banks for any  reason,  the  unpaid  amount of such
Reimbursement  Obligation shall be due and payable to the Agent for the pro rata
benefit of the Banks upon demand and shall bear interest at the rate of interest
specified in Section 1.3(c)(i) hereof.

Section 1.6.  Manner of Borrowing and Rate Selection.  (a) The Borrower (through
any one of its  Authorized  Representatives)  shall  give  telephonic,  telex or
telecopy  notice to the Agent (which notice,  if  telephonic,  shall be promptly
confirmed in writing) no later than  (i) 11:00 a.m.  (Chicago  time) on the date
the Banks are  requested  to make each  Domestic  Rate Loan under the  Revolving
Credit  and   (ii) 11:00 a.m.   (Chicago  time)  on  the  date  at  least  three
(3) Business  Days prior to the date of each Eurodollar Loan under the Revolving
Credit which the Banks are requested to make. Each such notice shall specify the
date of the Loan  requested  (which shall be a Business Day), the amount of such
Loan,  whether the Loan is to be made available by means of a Domestic Rate Loan
or Eurodollar  Loan and, with respect to Eurodollar  Loans,  the Interest Period
applicable thereto; provided, that in no event shall the principal amount of any
requested  Revolving  Credit  Loan plus the  aggregate  principal  amount of all
Loans, the undrawn face amount of all L/Cs and unpaid Reimbursement  Obligations
outstanding  hereunder exceed the amounts specified in Section 1.1  hereof.  The
Borrower  agrees  that  the  Agent  may rely on any  such  telephonic,  telex or
telecopy notice given by any person who the Agent believes is authorized to give
such notice without the necessity of independent  investigation and in the event
any notice by such means  conflicts with the written  confirmation,  such notice
shall govern if any Bank has acted in reliance thereon.  The Agent shall, on the
day any such notice is received by it, give prompt telephonic, telex or telecopy
(if  telephonic,  to be confirmed in writing  within one Business Day) notice of
the receipt of notice from the  Borrower  hereunder  to each of the Banks (using
its best efforts to give such notice by no later than  1:00 p.m.,  Chicago time,
of the day such notice is received [if received at or before 11:00 a.m., Chicago
time] or by no later than the  morning  of the  following  Business  Day [if not
received prior to 11:00 a.m.,  Chicago time]),  and, if such notice requests the
Banks to make any Eurodollar  Loans,  the Agent shall confirm to the Borrower by
telephonic,  telex or telecopy means, which confirmation shall be conclusive and
binding on the Borrower in the absence of manifest error or willful  misconduct,
the Interest Period and the interest rate applicable thereto promptly after such
rate is determined by the Agent.

(b)  Subject  to the  provisions  of  Section 6  hereof,  the  proceeds  of each
Revolving  Credit Loan shall be made  available to the Borrower at the principal
office of the Agent in Chicago, Illinois, in immediately available funds, on the
date such Loan is requested to be made,  except to the extent a Revolving Credit
Loan represents a refinancing of a Reimbursement  Obligation,  in which case the
proceeds  of such Loan shall be applied to the  payment of the  relevant  unpaid
Reimbursement  Obligation.  Not later than  3:00 p.m.  Chicago time, on the date
specified for any Loan to be made hereunder, each Bank shall make its portion of
such Loan  available  to the  Borrower  in  immediately  available  funds at the
principal office of the Agent,  except as otherwise  provided above with respect
to repaying any outstanding Reimbursement Obligations.

(c)  Unless  the Agent  shall have been  notified  by a Bank prior to  2:00 p.m.
(Chicago time) on the date of a Loan to be made by such Bank (which notice shall
be effective  upon receipt and may be made by telecopy)  that such Bank does not
intend to make the proceeds of such Loan  available to the Agent,  the Agent may
assume that such Bank has made such proceeds available to the Agent on such date
and the Agent may in reliance  upon such  assumption  (but shall not be required
to) make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made  available to the Agent by such Bank, the Agent shall
be  entitled  to receive  such amount on demand from such Bank (or, if such Bank
fails to pay such amount  forthwith  upon such  demand,  to recover such amount,
together with interest  thereon at the rate otherwise  applicable  thereto under
Section 1.3 hereof, from the Borrower) together with interest thereon in respect
of each day  during  the  period  commencing  on the date such  amount  was made
available to the Borrower and ending on the date the Agent recovers such amount,
at a rate per  annum  equal to the  effective  rate  charged  to the  Agent  for
overnight  Federal funds  transactions  with member banks of the Federal Reserve
System for each day, as  determined by the Agent (or, in the case of a day which
is not a Business  Day,  then for the  preceding  Business  Day) (the "Fed Funds
Rate").  Nothing  in this  Section 1.6(c)  shall be deemed to permit any Bank to
breach its obligations to make Loans under the Revolving  Credit or to limit the
Borrower's claims against any Bank for such breach.

Section 1.7.  Participation  in the L/Cs.  Each of the Banks will acquire a risk
participation  in each L/C upon the issuance  thereof ratably in accordance with
its  Commitment  Percentage.  In the event any  Reimbursement  Obligation is not
immediately paid by the Borrower pursuant to Section 1.5  hereof, each Bank will
pay to Harris funds in an amount equal to such Bank's  Commitment  Percentage of
such Reimbursement Obligation. At the election of all of the Banks, such funding
by the  Banks  of an  unpaid  Reimbursement  Obligations  shall  be  treated  as
additional  Revolving  Credit  Loans to the  Borrower  hereunder  rather  than a
purchase  of  participations  by the  Banks  in the  L/C  held  by  Harris.  The
availability  of funds to the  Borrower  under  the  Revolving  Credit  shall be
reduced in an amount equal to the undrawn face amount of the L/C. The obligation
of  the  Banks  to  Harris  under  this   Section 1.7   shall  be  absolute  and
unconditional  and shall not be  affected or impaired by any Event of Default or
Potential  Default which may then be continuing  hereunder.  Harris shall notify
each Bank by telephone of its Commitment Percentage of such unpaid Reimbursement
Obligation.  If such notice has been given to each Bank by 12:00  Noon,  Chicago
time or if Harris is  required  at any time to  return to the  Borrower  or to a
trustee,  receiver,  liquidator,  custodian  or other  Person any portion of any
payment  of any  Reimbursement  Obligation,  each Bank  agrees to pay  Harris in
immediately available and freely transferable funds on the same Business Day its
Commitment Percentage of such Reimbursement  Obligation.  Funds shall be so made
available at the account  designated by Harris in such notice to the Banks. Upon
the election by the Banks to treat such funding as additional  Revolving  Credit
Loans  hereunder  and payment by each Bank,  such Loans  shall bear  interest in
accordance  with  Section 1.3(a)  hereof.  Harris shall share with each Bank its
Commitment Percentage of each payment of a Reimbursement  Obligation (whether of
principal or interest)  and any L/C  Participation  Fee payable by the Borrower.
The L/C  Issuance  Fee and L/C  Administration  Fee shall be solely for  Harris'
account and shall not be shared by the other  Banks.  Any such  amount  shall be
promptly remitted to the Banks when and as received by Harris from the Borrower.

Section 1.8. The Collateral and Guarantees.  (a) Collateral.  The Notes, Hedging
Liability and the other  obligations  of the  Collateral  Parties  hereunder and
under the other Loan  Documents  shall be secured by valid and  perfected  first
liens on, subject to subsection (c) of this  Section 1.8,  (i) all right,  title
and interest of the Borrower and each Domestic Subsidiary in up to 65% of Voting
Equity and 100% of  Non-Voting  Equity of each First  Tier  Foreign  Subsidiary,
whether now owned or hereafter formed or acquired,  and all proceeds thereof and
(ii) all  machinery,   equipment,  inventory,  general  intangibles  (including,
without  limitation,  patents,  trademarks,  copyrights  and other  intellectual
property rights, but in any event excluding applications for trademarks based on
"intent to use") and  accounts  receivable  of the  Borrower  and each  Domestic
Subsidiary, in each instance whether now owned or existing or hereafter acquired
or arising,  and all products and proceeds of the  foregoing  (collectively  the
"Collateral")  and the  Borrower  agrees  that it  will,  and  will  cause  each
Collateral  Party to,  from time to time at the request of the Agent or any Bank
execute and deliver such  documents  and do such acts and things as the Agent or
such Bank may reasonably request in order to provide for or perfect such liens.

(b) Guarantees.  The Notes,  Hedging  Liability and the other obligations of the
Collateral  Parties  hereunder and under the other Loan  Documents  shall at all
times be guaranteed by each existing or hereafter  acquired Domestic  Subsidiary
(and First Tier Foreign  Subsidiary in the event that the Agent does not receive
the evidence specified in subsection (c) of this Section 1.8 upon the occurrence
of the events contemplated therein) pursuant hereto and the Subsidiary Guaranty.

(c) Foreign Security. If following a request by the Agent or otherwise following
a  change  in the  relevant  sections  of the  Code or the  regulations,  rules,
rulings,   notices  or  other  official  pronouncements  issued  or  promulgated
thereunder,  the  Borrower  or, if so  requested  by the Agent,  counsel for the
Borrower reasonably acceptable to the Agent does not within thirty (30) Business
Days after a request (an "Evidence Request") from the Agent deliver evidence, in
form and substance  mutually  satisfactory  to the Agent and the Borrower,  with
respect to any First Tier  Foreign  Subsidiary  which has not already had all of
its stock pledged pursuant to one of more of the Pledge  Agreements,  that (i) a
pledge of more than 66-2/3% of the total combined voting power of all classes of
capital  stock or other equity  interest of such First Tier  Foreign  Subsidiary
entitled to vote,  (ii) the entering into by such First Tier Foreign  Subsidiary
of a security  agreement in substantially the form of the Security Agreement and
(iii) the  entering into by such First Tier Foreign  Subsidiary of a guaranty in
substantially the form of the Subsidiary Guaranty, in any such case would be the
sole cause for the undistributed  earnings of such First Tier Foreign Subsidiary
as determined for Federal income tax purposes to be treated as a deemed dividend
to such First Tier Foreign  Subsidiary's United States parent for Federal income
tax purposes,  then (A) in the case of a failure as reasonably determined by the
Agent to deliver the evidence  described in  clause (i) above  and to the extent
not  otherwise  waived by the Agent,  that  portion  of such First Tier  Foreign
Subsidiary's  outstanding  capital stock not theretofore  pledged  pursuant to a
Pledge  Agreement shall be so pledged to the Agent for the benefit of the Agent,
the Banks and certain  Affiliates of the Banks,  (B) in the case of a failure as
reasonably  determined  by the  Agent  to  deliver  the  evidence  described  in
clause (ii)  above and to the extent  not  otherwise  waived by the Agent,  such
First Tier Foreign  Subsidiary  shall  execute and deliver a security  agreement
substantially in the form of the Security  Agreement  granting the Agent for the
benefit of the Agent,  the Banks and certain  Affiliates of the Banks a security
interest in all of such First Tier Foreign  Subsidiary's  machinery,  equipment,
inventory,   general  intangibles  (including,   without  limitation,   patents,
trademarks,  copyrights  and other  intellectual  property  rights) and accounts
receivable,  in each case  securing the Notes,  Hedging  Liability and all other
obligations  of the  Collateral  Parties  hereunder  and under  the  other  Loan
Documents and (C) in the case of a failure to deliver the evidence  described in
clause (ii) above  and to the extent  not  otherwise  waived by the Agent,  such
First Tier Foreign  Subsidiary shall execute and deliver a Subsidiary  Guaranty,
guaranteeing  the Notes,  Hedging  Liability  and the other  obligations  of the
Collateral  Parties  hereunder and under the other Loan Documents  (x) promptly,
but in any event  within  thirty  (30)  Business  Days after each such  Evidence
Request and (y) to the extent that entering into such pledge, security agreement
or guaranty (1) is permitted by the laws of the applicable foreign  jurisdiction
and (2) is not  restricted by any contract or agreement to which such First Tier
Foreign  Subsidiary is a party (to the extent such  restriction  pre-dates  this
Agreement) and with all documents  delivered  pursuant  hereto to be in form and
substance reasonably satisfactory to the Agent.

(d) Further  Assurances re:  Collateral.  The Borrower agrees that it shall, and
shall cause each of its Subsidiaries to, from time to time at the request of the
Agent or the Required Banks, execute and deliver such documents and do such acts
and things as the Agent or the Required Banks may reasonably request in order to
provide for or perfect or protect the liens on the  Collateral  contemplated  by
this Section 1.8.  In the event the Borrower or any Domestic Subsidiary forms or
acquires any other Domestic  Subsidiary or First Tier Foreign  Subsidiary  after
the date hereof,  the Borrower  shall,  within ten (10) Business Days (or thirty
(30) Business  Days in the case of a Foreign  Subsidiary)  of such  formation or
acquisition,  cause  such newly  formed or  acquired  Subsidiary  (and any other
applicable  Subsidiary  in the  case of  Pledge  Agreements),  to  execute  such
Security  Documents as the Agent may then require,  and the Borrower  shall also
deliver to the Agent,  or cause such  Subsidiary to deliver to the Agent, at the
Borrower's cost and expense, such other instruments, documents, certificates and
opinions reasonably required by the Agent in connection therewith,  in each case
to the extent  contemplated  under  this  Section 1.8  had such newly  formed or
acquired Subsidiary existed as of the date hereof.

(e) Further Assurances re: Guarantees.  Within ten (10) Business Days (or thirty
(30) Business Days in the case of a Foreign  Subsidiary)  after  establishing or
acquiring  any  Domestic  Subsidiary  or First Tier  Foreign  Subsidiary  or any
Subsidiary of the Borrower becoming a Domestic  Subsidiary or First Tier Foreign
Subsidiary,  unless the Required Banks  otherwise  agree or the Borrower  elects
otherwise as set forth in the immediately following sentence, the Borrower shall
(i) cause such Domestic  Subsidiary  (and such First Tier Foreign  Subsidiary in
the  event  that  the  Agent  does  not  receive  the   evidence   specified  in
subsection (c) above upon the occurrence of the events contemplated  therein) to
execute a Subsidiary  Guaranty and  (ii) cause  such Domestic  Subsidiary or, if
applicable,  First Tier Foreign Subsidiary to deliver documentation  relating to
the  authorization  for,  execution  and  delivery  of,  and  validity  of  such
Subsidiary's obligations under the Loan Documents to which it is a party in form
and substance satisfactory to the Required Banks.

Section 2.           Fees, Prepayments and Terminations.

Section 2.1.  Commitment  Fees.  For the  period  from  the date  hereof  to and
including  the  Termination  Date,  or such earlier date on which the  Revolving
Credit is terminated in whole pursuant to Section 2.5 hereof, the Borrower shall
pay to the Agent for the account of the Banks a  commitment  fee with respect to
the Revolving  Credit at the rate per annum  (computed on the basis of a year of
360 days for the actual number of days elapsed) equal to the Applicable  Margin,
of the average daily unused amount of the Banks'  Revolving  Credit  Commitments
hereunder in effect from time to time, all such fees to be payable  quarterly in
arrears on the last day of each  calendar  quarter  commencing  on  December 31,
2000,  unless the Revolving Credit is terminated in whole on an earlier date, in
which event the  commitment  fees for the final period shall be paid on the date
of such earlier termination in whole.

Section 2.2. Other Fees. (a) Agent's Fees. The Borrower shall pay to and for the
sole account of the Agent such fees as the Borrower and the Agent may agree upon
in writing  from time to time.  Such fees shall be in  addition  to any fees and
charges the Agent may be entitled to receive under the other Loan Documents.

(b) Closing Fee. The Borrower shall pay to the Agent for the ratable  account of
the Banks a  closing  fee in an amount  equal to 0.15% of the  Banks'  Revolving
Credit  Commitments  as in  effect on the date  hereof.  All such  closing  fees
payable  pursuant to this  Section  2.2(b)  shall be payable on the date of this
Agreement and shall be non-refundable.

Section 2.3.  Optional Prepayments. (a) The Borrower shall have the privilege of
prepaying  without  premium or penalty  and in whole or in part (but if in part,
then in a minimum  principal  amount of $500,000 or such greater amount which is
an integral  multiple of $100,000)  any Domestic  Rate Loan under the  Revolving
Credit  at any time upon  prior  telex or  telephonic  notice to the Agent on or
before 12:00 Noon (Chicago  time) on the same Business Day.  Except as otherwise
provided in Section  2.3(b)  hereof,  the Borrower may not prepay any Eurodollar
Loan under the Revolving Credit.

(b) The Borrower may prepay any Eurodollar  Loans upon telephonic  notice (which
shall be promptly  confirmed  in writing by  facsimile  communication,  telex or
telegraph)  by no  later  than  11:00 a.m.  (Chicago  time)  on the date of such
prepayment  from the Borrower to the Agent,  such  prepayment  to be made by the
payment of the principal  amount to be prepaid and accrued  interest thereon and
any  compensation  required by  Section 9.4  hereof,  if  applicable;  provided,
however, that any such prepayment shall be in a principal amount of no less than
$500,000 or such greater amount which is an integral  multiple of $100,000,  and
after giving effect to any such prepayment the outstanding  principal  amount of
such Eurodollar  Loans prepaid in part shall not be less than $1,000,000 or such
greater amount which is an integral multiple of $50,000.

(c) Any amount prepaid under the Revolving  Credit may, subject to the terms and
conditions of this Agreement, be borrowed, repaid and borrowed again.

Section 2.4. Mandatory Prepayments-Borrowing Base. The Borrower shall not permit
the Revolving Credit Obligations at any time outstanding to exceed the lesser of
(i) the  Banks'  Revolving  Credit  Commitments  or (ii) the  Borrowing  Base as
determined  on the  basis of the most  recent  Borrowing  Base  Certificate.  In
addition to the  Borrower's  obligations  to pay any  outstanding  Reimbursement
Obligations  as set forth in  Section 1.5  hereof,  the Borrower  will make such
payments  on any  outstanding  Loans  and  Reimbursement  Obligations  which are
necessary  to cure  any  such  excess  within  three  Business  Days  after  the
occurrence  thereof  without  any notice or demand  from the Agent or any of the
Banks,  all of which are  expressly  waived by the  Borrower.  Any amount repaid
under the  Revolving  Credit may,  subject to the terms and  conditions  of this
Agreement, be borrowed, repaid and borrowed again.

Section 2.5.  Terminations. The Borrower shall have the right at any time upon 5
Business  Days' prior  notice to the Banks to  terminate  the  Revolving  Credit
Commitments  in  whole  or in  part  (but  if in part  in a  minimum  amount  of
$5,000,000  or any  integral  multiple  thereof);  provided,  however,  that the
Borrower may not terminate any portion of the Revolving Credit  Commitments that
is in use in the form of Revolving Credit Loans, Swingline Loans,  Reimbursement
Obligations or L/Cs. Each such termination in part shall automatically terminate
each Bank's  Revolving  Credit  Commitment by an amount equal to its  Commitment
Percentage of the amount of the termination of the Revolving Credit.

Section 2.6. Capital Adequacy. If, after the date of this Agreement, any Bank or
the Agent shall have  determined in good faith that the adoption after such date
of any applicable law, rule or regulation  regarding  capital  adequacy,  or any
change  therein  (including,  without  limitation,  any  revision  in the  Final
Risk-Based  Capital  Guidelines of the Board of Governors of the Federal Reserve
System (12 CFR  Part 208,  Appendix A;  12 CFR  Part 225,  Appendix A) or of the
Office of the Comptroller of the Currency (12 CFR Part 3, Appendix A), or in any
other applicable capital rules heretofore adopted and issued by any governmental
authority), or any change in the interpretation or administration thereof by any
governmental  authority,  central  bank or  comparable  agency  charged with the
interpretation  or  administration  thereof,  or  compliance by any Bank (or its
Lending  Office)  with any  request  or  directive  regarding  capital  adequacy
(whether or not having the force of law) of any such authority,  central bank or
comparable  agency,  has or would have the effect of reducing the rate of return
on such Bank's capital,  or on the capital of any corporation  controlling  such
Bank, in each case as a consequence  of its  obligations  hereunder,  to a level
below that which such Bank would have achieved but for such adoption,  change or
compliance  (taking  into  consideration  such Bank's  policies  with respect to
capital  adequacy) by an amount  deemed by such Bank to be  material,  then from
time to time,  within thirty (30) days after demand by such Bank (with a copy to
the  Agent),  the  Borrower  shall pay to such Bank  such  additional  amount or
amounts as will compensate such Bank for such reduction.

Section 3.           Place and Application of Payments.

All  payments of principal  and interest  made by the Borrower in respect of the
Notes  and  Reimbursement  Obligations  and all  fees  payable  by the  Borrower
hereunder,  shall be made to the Agent at its office at 111 West  Monroe Street,
Chicago,  Illinois 60690 and in immediately available funds, prior to 12:00 noon
Chicago  time on the  date of such  payment.  All  such  payments  shall be made
without setoff or counterclaim and without reduction for, and free from, any and
all  present and future  levies,  imposts,  duties,  fees,  charges,  deductions
withholdings, restrictions or conditions of any nature imposed by any government
or any political  subdivision or taxing authority thereof. Any payments received
after 12:00 noon Chicago time (or after the time the Banks may otherwise direct)
shall be deemed received upon the following  Business Day. The Agent shall remit
to each Bank its  proportionate  share of each payment of  principal,  interest,
commitment fees and L/C fees received by the Agent by 12:00 noon Chicago time on
the same day of its receipt  and its  proportionate  share of each such  payment
received  by the  Agent  after  12:00  noon  Chicago  time on the  Business  Day
following  its  receipt by the Agent.  In the event the Agent does not remit any
amount to any Bank when required by the preceding sentence,  the Agent shall pay
to such Bank interest on such amount until paid at a rate per annum equal to the
Fed Funds Rate. The Borrower hereby authorizes the Agent to automatically  debit
its accounts with Harris for any principal, interest and fees when due under any
of the Notes, the L/C Agreements or this Agreement and to transfer the amount so
debited from such account to the Agent for application as herein  provided.  All
proceeds  of  Collateral  shall  be  applied  in  the  manner  specified  in the
applicable Security Documents.

Section 4.           Definitions.

Section 4.1.  Certain Terms Defined.  The terms  hereinafter set forth when used
herein shall have the following meanings:

          "Account  Debtor"  shall  mean  the  person  who  is  obligated  on  a
          Receivable.

          "Adjusted  Consolidated  Funded  Debt" shall mean with  respect to the
          Borrower  all  Funded  Debt  of  the  Borrower  and  its  Subsidiaries
          (excluding in any event  Maverick Tube (Canada)  Inc.,  Prudential and
          their respective  Subsidiaries),  on a consolidated  basis eliminating
          intercompany items.

          "Adjusted EBITDA" shall mean, with reference to any period and without
          duplication,  the sum of (i) Consolidated EBITDA for such period, plus
          (ii) but  only to the extent of  calculating  Adjusted  EBITDA for the
          fiscal quarters of the Borrower  occurring on or before the Borrower's
          fiscal  quarter  ending  June 30,  2001,  EBITDA of Prudential and its
          Subsidiaries  for such period,  plus  (iii) but  only to the extent of
          calculating  Adjusted  EBITDA for the fiscal  quarters of the Borrower
          occurring on or before the Borrower's  fiscal quarter ending  June 30,
          2001, the Fiscal Year 2000 Charges.

          "Adjusted Funded Debt Ratio" shall mean, as of any date the same is to
          be determined,  the ratio of (a) the aggregate  outstanding  principal
          amount of the Adjusted  Consolidated  Funded Debt as of such date,  to
          (b) Maverick  EBITDA for the four  consecutive  fiscal quarters of the
          Borrower then most recently ended.

          "Adjusted  Eurodollar  Rate"  shall  have  the  meaning  specified  in
          Section 1.3(b) hereof.

          "Affiliate"  shall mean any person,  company or business  entity under
          common  control  or having  shareholders  owning at least ten  percent
          (10%) of each  thereof,  whether  such  common  control  be  direct or
          indirect. All of the Borrower's officers,  directors, joint venturers,
          Subsidiaries  and  partners  shall  be  deemed  to be  the  Borrower's
          Affiliates for purposes of this Agreement.

         "Agent" is defined in the first paragraph of this Agreement.

          "Agreement"  shall  mean this  Amended  and  Restated  Secured  Credit
          Agreement as supplemented,  modified, restated or amended from time to
          time.

          "Applicable Margin" shall have the meaning specified in Section 1.3(d)
          hereof.

          "Authorized  Representatives"  shall  mean Gregg  Eisenberg,  Sudhakar
          Kanthamneni,  T. Scott Evans, Pam Boone, Mary Hulsey, Karen Thiel, and
          Delene Rice.

          "Bank" and  "Banks"  shall have the  meanings  specified  in the first
          paragraph of this Agreement.

          "Bill and Hold" shall mean unpaid Receivables  resulting from the sale
          of Inventory  which has not yet been  delivered  to, and is not yet in
          the  process  of  being  delivered  to,  the  Account  Debtor  on such
          Receivables.

         "Borrower" is defined in the first paragraph hereof.

          "Borrowing  Base",  as  determined  on the  basis  of the  information
          contained in the most recent Borrowing Base Certificate, shall mean an
          amount equal to:

               (a) 85% of the amount of Eligible  Receivables  of the  Borrower,
               plus

               (b) 50% of the  amount of  Eligible  Inventory  of the  Borrower,
               provided that in no event shall such amount (the "Gross Inventory
               Amount")  exceed an amount (the "Net Inventory  Amount") equal to
               60% of the sum of the amounts determined  pursuant to clauses (a)
               and (b) of this definition from time to time, plus

               (c) the amount equal to the Gross Inventory  Amount minus the Net
               Inventory  Amount,  provided  that in no event  shall such amount
               exceed  (i) $10,000,000  from the date hereof up to and including
               June 30,  2001,  (ii) $5,000,000  from  July 1,  2001  up to  and
               including   September 30,   2001  and   (iii) $0   at  all  times
               thereafter, plus

               (d) 50% of the net book  value of  Eligible  Equipment,  provided
               that in no event shall such amount  exceed  (i) $25,000,000  from
               the  date  hereof  up  to  and   including   December 31,   2001,
               (ii) $20,000,000  from  January 1,   2002  up  to  and  including
               December 31, 2002 and (iii) $15,000,000 at all times thereafter.

               "Borrowing  Base  Certificate"  shall mean the certificate in the
               form of Exhibit D hereto which is required to be delivered to the
               Banks in accordance with Sections 1.6(a) and 7.4(c) hereof.

               "Business  Day" shall mean any day except  Saturday  or Sunday on
               which banks are open for business in Chicago, Illinois, and, with
               respect to  Eurodollar  Loans,  dealing in United  States  Dollar
               deposits in London, England and Nassau, Bahamas.

               "Capital  Expenditures" for any period means Capital Expenditures
               of the  Borrower  and its  Subsidiaries  during  such  period  as
               defined  and  classified  in  accordance  with GAAP  consistently
               applied.

               "Capitalized  Lease"  shall  mean  any  lease or  obligation  for
               rentals  which is required to be  capitalized  on a  consolidated
               balance sheet of the Borrower and its  Subsidiaries in accordance
               with GAAP.

               "Capitalized  Lease Obligation" shall mean the present discounted
               value of the  rental  obligations  under  any  Capitalized  Lease
               determined on a consolidated basis in accordance with GAAP.

               "CERCLA"  shall mean the  Comprehensive  Environmental  Response,
               Compensation  and  Liability Act of 1980, as amended from time to
               time.

               "Change in Law" shall have the meaning  specified in  Section 9.3
               hereof.

               "Change of Control  Event" shall mean any of (a) the  acquisition
               by  any   "person"   or  "group"  (as  such  terms  are  used  in
               sections 13(d) and 14(d) of the Securities  Exchange Act of 1934,
               as amended) at any time of beneficial ownership of 30% or more of
               the outstanding  capital stock of the Borrower on a fully diluted
               basis or (b) the  failure of  individuals  who are members of the
               board of directors  of the Borrower on the date hereof  (together
               with any new or replacement  directors  whose initial  nomination
               for election was approved by a majority of the directors who were
               either directors on the date hereof or previously so approved) to
               constitute a majority of the board of directors of the Borrower.

               "Code" shall mean the Internal Revenue Code of 1986, as amended.

               "Collateral"  shall mean the collateral  security provided to the
               Agent for the  benefit  of the  Banks  pursuant  to the  Security
               Documents.

               "Collateral   Party"  shall  mean  each  of  the  Borrower,   the
               Guarantors,   the  Pledgors   and  each  other  party   providing
               Collateral from time to time.

               "Commitment"  shall mean a  Revolving  Credit  Commitment  or the
               Swingline  Commitment of any Bank, and  "Commitments"  shall mean
               the Revolving  Credit  Commitment  and Swingline  Commitment of a
               Bank or Banks.

               "Commitment  Percentage"  shall  mean,  at any time and as to any
               Bank, the percentage of the Revolving Credit  Commitments then in
               effect  represented by such Bank's Revolving Credit Commitment as
               then in effect or, if the Revolving Credit  Commitments have been
               terminated or expired,  the  percentage  held by such Bank of the
               aggregate  principal  amount of all  Revolving  Credit Loans then
               outstanding.

               "Consolidated  EBITDA" shall mean,  with reference to any period,
               Consolidated Net Income for such period plus all amounts deducted
               in arriving at such  Consolidated Net Income amount in respect of
               (a) Consolidated   Interest   Expense  for  such   period,   plus
               (b) foreign,  federal,  state  and  local  income  taxes for such
               period, plus (c) all amounts properly charged for depreciation of
               fixed assets and  amortization  of intangible  assets during such
               period on the books of the Borrower and its Subsidiaries.

               "Consolidated Interest Expense" shall mean, with reference to any
               period,  the  sum  of all  interest  charges  (including  imputed
               interest charges with respect to Capitalized  Lease  Obligations,
               all  amortization of debt discount and expense),  of the Borrower
               and its Subsidiaries for such period determined on a consolidated
               basis in accordance with GAAP consistently applied.

               "Consolidated  Net  Income"  shall  mean  the net  income  of the
               Borrower and its Subsidiaries,  all as determined and computed on
               a  consolidated   basis  in  accordance  with  GAAP  consistently
               applied.

               "Consolidated Net Worth" shall mean the sum of all capital stock,
               preferred  stock,  capital  in excess  of par value and  retained
               earnings,  in each  case of the  Borrower  and its  Subsidiaries,
               determined  on a  consolidated  basis in  accordance  with  GAAP,
               consistently applied.

               "Consolidated  Tangible  Net  Worth"  shall  mean  the sum of all
               capital stock,  preferred  stock,  capital in excess of par value
               and retained earnings,  less the amount of goodwill and all other
               Intangible  Assets and  Deferred  Charges  (other  than  Deferred
               Charges for income  taxes) of the Borrower and its  Subsidiaries,
               determined  on a  consolidated  basis in  accordance  with  GAAP,
               consistently applied.

               "Debt" of any Person  shall mean as of any time the same is to be
               determined,  the aggregate of (i) all  liabilities,  reserves and
               any other  items which would be  classified  as a liability  on a
               balance  sheet in  accordance  with  GAAP,  (ii) all  guaranties,
               endorsements  (other  than  any  liability  arising  out  of  the
               endorsement  of items for deposit or  collection  in the ordinary
               course of business) and other  contingent  obligations in respect
               of,  or  any  obligations  to  purchase  or  otherwise   acquire,
               indebtedness  of  others,   (iii) all   reimbursement  and  other
               obligations  with  respect  to  letters  of credit  and  banker's
               acceptances,  (iv) the  aggregate  amount  of  rentals  or  other
               consideration  payable under all leases and other  agreements for
               the use, acquisition or retention of real or personal property of
               a nature  such that  payments  due  thereunder  may under GAAP in
               effect on the date hereof be  included in a balance  sheet of the
               lessee, and (v) all  indebtedness and liabilities  secured by any
               lien or any  security  interest on any Property or assets of such
               person,  whether  or  not  the  same  would  be  classified  as a
               liability  on  a  balance   sheet,   but  excluding  all  general
               contingency  reserves and reserves for deferred  income taxes and
               investment credit, and with respect to Debt of the Borrower,  all
               computed and determined on a consolidated  basis for the Borrower
               and its Subsidiaries  after the elimination of intercompany items
               in  accordance  with  GAAP  consistent  with  those  used  in the
               preparation  of  the  audit  report  referred  to in  Section 5.2
               hereof.

               "Deferred  Charges"  shall mean all items which are classified as
               deferred charges in accordance with GAAP consistently applied, on
               a basis consistent with the principles reflected in the financial
               statements referred to in Section 5.2 hereof.

               "Domestic  Rate"  shall  mean  for any day the  rate of  interest
               announced  by Harris  from  time to time as its prime  commercial
               rate in effect on such day,  with any change in the Domestic Rate
               resulting  from a  change  in said  prime  commercial  rate to be
               effective  as of the date of the  relevant  change in said  prime
               commercial  rate (the "Harris Prime Rate"),  provided that if the
               rate per annum  determined  by  adding  0.5% to the rate at which
               Harris would offer to sell federal funds in the interbank  market
               on or about  10:00 a.m.  (Chicago time) on any day (the "Adjusted
               Fed Funds  Rate")  shall be higher than the Harris  Prime Rate on
               such day, the Domestic  Rate for such day and for any  succeeding
               day which is not a Business Day shall be such  Adjusted Fed Funds
               Rate. The  determination of the Adjusted Fed Funds Rate by Harris
               shall be final and conclusive  provided  Harris has acted in good
               faith in connection therewith.

               "Domestic  Rate Loan"  shall mean a  Revolving  Credit Loan which
               bears interest as provided in Section 1.3(a) hereof.

               "Domestic   Subsidiary"  shall  mean  each  Subsidiary  which  is
               organized  under the laws of the United  States of America or any
               State thereof.

               "EBITDA" shall mean, with reference to any period, Net Income for
               such  period  plus all  amounts  deducted in arriving at such Net
               Income amount in respect of (i) Interest Expense for such period,
               plus (ii) foreign, federal, state and local income taxes for such
               period,  plus (iii) all amounts properly charged for depreciation
               of fixed assets and amortization of intangible assets during such
               period.

               "Eligible  Equipment"  shall mean any  machinery and equipment of
               the  Borrower and the  Guarantors  in which the Agent has a first
               priority perfected security interest and which the Banks in their
               reasonable  judgment deem to be  acceptable  for inclusion in the
               Borrowing Base;  provided that in no event shall any machinery or
               equipment be deemed Eligible Equipment unless all representations
               and warranties  set forth in the Security  Documents with respect
               to such  machinery  or  equipment  are true and  correct and such
               machinery or equipment:

               (a) is an asset of the applicable  Collateral  Party in each case
               to  which  it  has  good  and  marketable  title  and  is  freely
               assignable and is not subject to any lease or similar arrangement
               permitting a third party's use or possession of such machinery or
               equipment;

               (b) when not in use or under  repair in each case in the ordinary
               course of  business  as  presently  conducted,  is located at the
               applicable Collateral Party's facilities set forth as of the date
               hereof on  Schedule  A to the  Security  Agreement  or such other
               locations  as are  approved  in writing by the Agent and,  in the
               case of facilities  owned by such  Collateral  Party subject to a
               mortgage  or  deed of  trust  or  facilities  not  owned  by such
               Collateral Party,  which are at times subject to mortgagee and/or
               landlord waiver agreements in form and substance  satisfactory to
               the Collateral Party;

               (c) is used or  usable  in the  conduct  of the  business  of the
               Borrower  and is not  obsolete,  and is in good  repair,  working
               order and condition  (ordinary  wear and tear excepted) free from
               any defects which might adversely affect the market value thereof
               in any material respect;

               (d) does not consist of office equipment,  furniture, fixtures or
               transportation equipment; and

               (e) is not  attached  to real  estate  in such a manner  that the
               machinery or equipment may become a fixture.

               "Eligible Inventory" shall mean any Inventory of the Borrower and
               the Guarantors in which the Agent has a first priority  perfected
               security  interest which the Banks in their  reasonable  judgment
               deem to be acceptable  for inclusion in the Borrowing  Base,  and
               which complies with each of the following requirements:

               (a) It consists  of any  material in the form of raw pipe or tube
               and finished drawn over mandrill pipe or tube, which are in first
               class  condition and are suitable for sale in the ordinary course
               of the Borrower's  business or coil steel or couplings  which are
               in first-class condition, are in the form in which they were when
               originally  acquired by the Borrower or applicable  Guarantor and
               are  suitable for use in the  production  of  Borrower's  or such
               Guarantor's finished goods Inventory;

               (b)  It   substantially   conforms  to  the  Borrower's  or  such
               Guarantor's advertised or represented specifications,  applicable
               government  standards and regulations and other quality standards
               and has not been determined by the Banks to be  unacceptable  due
               to age, type, variety, quality, quantity, or location;

               (c) All warranties of the Borrower or applicable Guarantor in the
               Loan Documents are true and correct with respect thereto;

               (d) It is owned by the Borrower or applicable Guarantor;

               (e) It has been identified to the Agent in the manner  prescribed
               by the Banks pursuant to the Security Documents;

               (f) It is  either  (i) located  at a  location  disclosed  to and
               approved  by the Agent and the  Banks,  and if  requested  by the
               Agent or any Bank, any Person (other than the Borrower) owning or
               controlling such location shall have waived all right,  title and
               interest in and to such Inventory in a manner satisfactory to the
               Agent  and such  Bank or  (ii) in  transit  between  any two such
               locations and has not been in transit for more than (A) four days
               if it has been shipped by truck, (B) fourteen days if it has been
               shipped by rail or (C) 30 days if it has been shipped by barge;

               (g) If it is evidenced by a negotiable warehouse receipt or other
               negotiable  document of title,  such receipt or document of title
               has been  endorsed  in blank or to the order of the Agent and has
               been delivered to the Agent or its trustee or bailee; and

               (h) It does not constitute Restricted Inventory.

               "Eligible  Receivables" shall mean any Receivable of the Borrower
               or  any  Guarantor  in  which  the  Agent  has a  first  priority
               perfected  security  interest which the Banks in their reasonable
               judgment  deem to be  acceptable  for  inclusion in the Borrowing
               Base, and which complies with each of the following requirements:

               (a) It arises out of a bona fide sale of Inventory which has been
               delivered  to, or is in the  process  of being  delivered  to the
               Account  Debtor  on said  Receivable  in the  ordinary  course of
               Borrower's or such Guarantor's  business,  in the case of payment
               terms,  and  otherwise  in the  ordinary  course of  business  on
               ordinary trade terms;

               (b) All  warranties of the Borrower or such Guarantor in the Loan
               Documents are true and correct with respect thereto;

               (c) It has been identified to the Banks in the manner required by
               the Banks; (d) It is evidenced by an invoice dated not later than
               the date of shipment to the Account Debtor thereunder;

               (e) It has not  remained  unpaid in whole or in part more than 60
               days from and after  its due date or more than  90 days  from and
               after its invoice date;

               (f)  It is  net of  (i) any  credit  or  allowance  given  by the
               Borrower or such  Guarantor to such  Account  Debtor and (ii) any
               rebate given by the Borrower or such  Guarantor to any party when
               the Borrower or such Guarantor has accrued such rebate;

               (g) It is not  owing by an  Account  Debtor  who  (i) has  become
               insolvent,  (ii) is the subject of any  bankruptcy,  arrangement,
               reorganization  proceedings  or other  proceedings  for relief of
               debtors or  (iii) has  admitted  its  inability  to pay its debts
               generally or has stopped paying its debts generally;

               (h) If, other than with  respect to a  Receivable  arising out of
               the sale of Restricted  Inventory,  the Account  Debtor is also a
               supplier  to or creditor of the  Borrower  or a  Guarantor,  then
               either  (i) that  Account  Debtor  shall  have  entered  into  an
               agreement  with or for the  benefit of the Banks with  respect to
               the waiver of rights of setoff which is  acceptable  to the Banks
               or  (ii) 120%  of the amount owed at such time by the Borrower or
               the  applicable   Guarantor  to  that  Account  Debtor  shall  be
               subtracted from the amount of the Receivable;

               (i) The Account  Debtor is not  principally  located  outside the
               continental  United States unless (A) such  Receivable is secured
               by an  irrevocable  letter of credit issued by a commercial  Bank
               which is acceptable to the Banks or the Banks are satisfied  that
               all filings  have been made and actions  taken as are required by
               the Banks in connection  therewith as a result of the location of
               such  Account  Debtor  or  (B)  the  Account  Debtor  thereon  is
               principally  located in Canada and either (i) the  Administrative
               Agent shall have made such filings and taken such other action as
               may be  necessary  for it to  obtain  a first  priority  security
               interest therein under applicable  Canadian law without regard to
               any filings made in any State of the United  States,  or (ii) the
               Administrative  Agent shall have  received an opinion of Canadian
               counsel  satisfactory in form and substance to the Administrative
               Agent to the  effect  that the  Administrative  Agent's  security
               interest in such  Receivables  is perfected by filings made under
               the applicable state's version of the Uniform Commercial Code;

               (j) It is not  owing  by the  United  States  of  America  or any
               department,  agency or  instrumentality  thereof unless the Banks
               shall  have  received  evidence  satisfactory  to  the  Banks  of
               compliance with the Assignment of Claims Act;

               (k) Such  Receivable is not subject to any dispute,  counterclaim
               or defense asserted by the Account Debtor thereunder;

               (l) The  Account  Debtor  has not  failed to pay within the times
               specified in subsection (e) above 50% or more in aggregate amount
               of all its Receivables on which it is the Account Debtor;

               (m) The Account Debtor is not an Affiliate of the Borrower or any
               Guarantor;

               (n) The  Receivable  does not arise from a "sale or return," or a
               "sale on  approval"  of  Inventory  or a "Bill and Hold"  sale of
               Inventory; and

               (o) If the  Account  Debtor is located in the State of New Jersey
               or the State of Minnesota,  Borrower or the applicable  Guarantor
               (i) has filed and has effective (A) in respect of Account Debtors
               located  in the  State  of  New  Jersey,  a  Notice  of  Business
               Activities  Report with the New Jersey  Division of Taxation  for
               the then  current  year or  (B) in  respect  of  Account  Debtors
               located in the State of Minnesota,  a Minnesota Business Activity
               Report  with the  Minnesota  Department  of Revenue  for the then
               current year, as  applicable,  or (ii) is  otherwise  exempt from
               such reporting requirements under the laws of such State(s).

               "Environmental   Laws"  shall  have  the  meaning   specified  in
               Section 5.7(a) hereof.

               "ERISA" shall mean the Employee Retirement Income Security Act of
               1974, as amended.

               "Eurodollar  Loan"  means a  Revolving  Credit  Loan which  bears
               interest as provided in Section 1.3(b) hereof.

               "Eurodollar   Rate"   shall  have  the   meaning   specified   in
               Section 1.3(b) hereof.

               "Event of Default"  shall mean any event or condition  identified
               as such in Section 8.1 hereof.

               "Executive  Officer" shall mean,  with respect to the Borrower or
               any Subsidiary,  any of the Chairman,  Chief  Executive  Officer,
               Chief Financial  Officer or any Vice President of the Borrower or
               such  Subsidiary.  "Exposure" shall mean, as to any Bank, the sum
               (without  duplication) of such Bank's (a) unused Revolving Credit
               Commitment,  if any,  (b) outstanding  Revolving Credit Loans, if
               any, (c) Commitment  Percentage of the outstanding  Reimbursement
               Obligations, if any, (d) outstanding L/Cs, if any, (e) Commitment
               Percentage  of the  unused  Swingline  Commitment,  if  any,  and
               (f) Commitment  Percentage of the outstanding Swingline Loans, if
               any.

               "Fed  Funds   Rate"   shall  have  the   meaning   specified   in
               Section 1.6(c) hereof.

               "First  Tier  Foreign  Subsidiary"  shall  mean,  at any  date of
               determination,  each Foreign Subsidiary with respect to which any
               one or more of the Borrower and its  Domestic  Subsidiaries  owns
               directly more than 50%, in the aggregate, of the Voting Equity of
               such Foreign  Subsidiary;  provided that  Maverick  International
               shall not be deemed to be a First Tier Foreign Subsidiary so long
               as the  representations  contained in  Section 5.9(b)  hereof are
               true  and  correct  and  the  Borrower  is  in  compliance   with
               Section 7.1(c) hereof.

               "Fiscal Year 2000 Charges" shall mean non-recurring restructuring
               charges  incurred by the Borrower  during the  Borrower's  fiscal
               year  ending  December 31,  2000 in an  aggregate  amount  not to
               exceed (a) $13,000,000 for purposes of determining the Borrower's
               Adjusted EBITDA,  and  (b) $7,200,000 for purposes of determining
               the Maverick EBITDA.

               "Foreign  Subsidiary"  shall mean each  Subsidiary  that is not a
               Domestic Subsidiary.

               "Funded  Debt" of any  Person  shall  mean all  indebtedness  for
               borrowed money of such Person, whether classified as long-term or
               short-term under GAAP.

               "GAAP" shall mean generally  accepted  accounting  principles set
               forth from time to time in the opinions and pronouncements of the
               Accounting   Principles  Board  and  the  American  Institute  of
               Certified Public Accountants and statements and pronouncements of
               the  Financial  Accounting  Standards  Board  (or  agencies  with
               similar functions of comparable  stature and authority within the
               U.S.  accounting   profession),   which  are  applicable  to  the
               circumstances as of the date of determination and consistent with
               the  audited  consolidated   financial  statements  described  in
               Section 5.2 hereof.

               "Gross  Inventory   Amount"  is  defined  in  the  definition  of
               Borrowing Base in this Section 4.1.

               "Guarantors"  shall  mean (i)  Maverick  Tube  L.P.,  a  Delaware
               limited  partnership,  and  Maverick  Investment  Corporation,  a
               Delaware   corporation  and  (ii) any  other  Subsidiary  of  the
               Borrower that executes the Subsidiary  Guaranty,  and "Guarantor"
               shall mean any of the Guarantors.

               "Harris" shall have the meaning  specified in the first paragraph
               of this Agreement.

               "Hedging  Liability"  shall mean the liability of the Borrower or
               any  Subsidiary  to any of the Banks,  or any  Affiliates of such
               Banks, in respect of any interest rate swap agreements,  interest
               rate cap agreements,  interest rate collar  agreements,  interest
               rate floor agreements, interest rate exchange agreements, foreign
               currency  contracts,  currency swap  contracts,  or other similar
               interest rate or currency hedging arrangements as the Borrower or
               such  Subsidiary may from time to time enter into with any one or
               more of the Banks party to this Agreement or their Affiliates.

               "Intangible  Assets" shall mean amortizable loan costs,  business
               acquisition costs, license agreements,  trademarks,  trade names,
               patents,   capitalized  research  and  development,   proprietary
               products (the results of past research and development treated as
               long term assets and excluded from  Inventory),  goodwill and all
               other assets which would be classified as intangible  assets (all
               determined in accordance with GAAP consistently applied).

               "Interest  Coverage Ratio" shall mean, as of any date the same is
               to be determined,  the ratio of (a) Adjusted  EBITDA for the four
               consecutive  fiscal  quarters of the Borrower  then most recently
               ended less the amount of capital  expenditures  (as  defined  and
               classified in accordance  with GAAP  consistently  applied but in
               any  event  including  the  liability  of the  Borrower  and  its
               Subsidiaries  in  respect  of  Capitalized  Leases)  expended  or
               incurred by the  Borrower  and its  Subsidiaries  during the same
               period,  to (b) Consolidated  Interest Expense paid or payable in
               cash during such period.

               "Interest  Expense" shall mean, with reference to any period, the
               sum of all interest charges  (including  imputed interest charges
               with   respect  to   Capitalized   Lease   Obligations   and  all
               amortization  of debt discount and expense) of any Person and its
               Subsidiaries for such period  determined in accordance with GAAP,
               consistently applied.

               "Interest   Period"   shall  have  the   meaning   specified   in
               Section 1.3(b) hereof.

               "Inventory"  shall  mean  all raw  materials,  work  in  process,
               finished goods,  and goods held for sale or lease or furnished or
               to be furnished  under contracts of service in which the Borrower
               or any Subsidiary now has or hereafter acquires any right.

               "L/C" shall have the meaning set forth in Section 1.4 hereof.

               "L/C  Agreement"  shall have the meaning set forth in Section 1.4
               hereof.  "Loan" shall mean a Revolving Credit Loan or a Swingline
               Loan,  and the  term  "Loans"  shall  mean any two or more of the
               foregoing.

               "Loan  Documents"  shall  mean  this  Agreement  and  any and all
               exhibits hereto,  the Notes,  the L/C Agreements,  the Subsidiary
               Guaranty and, if applicable, the Security Documents.

               "Maverick  EBITDA" shall mean,  with  reference to any period and
               without  duplication,  the sum of (i) EBITDA for the Borrower and
               its  Subsidiaries  (excluding in any event Maverick Tube (Canada)
               Inc.,  Prudential  and their  respective  Subsidiaries)  for such
               period, plus (ii)but only to the extent of calculating  Maverick
               EBITDA for the fiscal  quarters of the  Borrower  occurring on or
               before the Borrower's  fiscal quarter ending  June 30,  2001, the
               Fiscal Year 2000 Charges.

               "Maverick  International" shall mean Maverick Tube International,
               Inc.,  a  Subsidiary  organized  and  existing  under the laws of
               Barbados.

               "Net Income" shall mean,  with  reference to any period,  the net
               income (or net loss) of any Person and its  Subsidiaries for such
               period as computed on a  consolidated  basis in  accordance  with
               GAAP, and, without  limiting the foregoing,  after deduction from
               gross income of all expenses and reserves, including reserves for
               all  taxes  on  or  measured  by  income,   but   excluding   any
               extraordinary  profits  and  also  excluding  any  taxes  on such
               profits.

               "Net Inventory  Amount" is defined in the definition of Borrowing
               Base in this Section 4.1.

               "Non-Voting  Equity" shall mean issued and outstanding  shares of
               each  class of  capital  stock or other  ownership  interest  not
               entitled   to  vote   (within   the   meaning   of  Tres.   Reg.,
               Section 1.956-2(c)(2).

               "Note" shall mean a Revolving  Credit Note or the Swingline  Note
               and "Notes" shall mean any two or more of the foregoing.

               "Offered Rate Loan" is defined in Section 1.1(e) hereof.

               "Person"   shall   mean  and   include   any   individual,   sole
               proprietorship, partnership, joint venture, trust, unincorporated
               organization,   association,  corporation,  institution,  entity,
               party or government (whether national,  federal,  state,  county,
               city, municipal, or otherwise, including, without limitation, any
               instrumentality, division, agency, body or department thereof).

               "PBGC" shall mean the Pension Benefit Guaranty Corporation.

               "Plan" shall mean any employee benefit plan covering any officers
               or employees of the Borrower or any  Subsidiary,  any benefits of
               which are, or are required to be, guaranteed by the PBGC.

               "Pledge  Agreements" shall mean (i) that certain Pledge Agreement
               dated  as of  even  date  herewith  and  (ii) each  other  pledge
               agreement  (or  analogous  instrument),  in each  case  among the
               Borrower and certain of its  Subsidiaries  and the Agent, as each
               of the same may be amended,  modified,  supplemented  or restated
               from time to time.

               "Pledgor" shall mean each Person that pledges any equity interest
               under any of the Pledge Agreements.

               "Potential Default" shall mean any event or condition which, with
               the lapse of time, or giving of notice, or both, would constitute
               an Event of Default.

               "Previous  Credit  Agreement"  is  defined  in  the  introductory
               paragraph hereof.

               "Property"  shall mean all assets  and  properties  of any nature
               whatsoever,  whether  real or personal,  tangible or  intangible,
               including without limitation intellectual property.

               "Prudential"  shall mean  Prudential  Steel Ltd.,  a  corporation
               organized under the laws of the Province of Alberta,  Canada, and
               a Subsidiary of the Borrower.

               "Receivables"   shall  mean  all   accounts,   contract   rights,
               instruments,  documents, chattel paper and general intangibles in
               which  the  Borrower  or any  Subsidiary  now  has  or  hereafter
               acquires any right.

               "Reimbursement   Obligation"   has  the  meaning   specified   in
               Section 1.5 hereof.

               "Rentals"  shall mean and include all fixed rents  (including  as
               such all  payments  which the lessee is  obligated to make to the
               lessor on  termination of the lease or surrender of the property)
               payable by the Borrower or a  Subsidiary,  as lessee or sublessee
               under  a lease  of  real  or  personal  property,  but  shall  be
               exclusive of any amounts required to be paid by the Borrower or a
               Subsidiary  (whether  or not  designated  as rents or  additional
               rents) on account of maintenance,  repairs,  insurance, taxes and
               similar  charges.  Fixed  rents under any  so-called  "percentage
               leases"  shall be  computed  solely on the  basis of the  minimum
               rents,  if any,  required to be paid by the lessee  regardless of
               sales volume or gross  revenues.  Capitalized  Lease  Obligations
               shall be excluded from the definition of Rentals for all purposes
               hereunder  other  than  the  use of  the  term  "rentals"  in the
               definitions   of   Capitalized   Lease  and   Capitalized   Lease
               Obligations.

               "Required  Banks"  shall  mean  any  Bank or  Banks  which in the
               aggregate hold 51% of the aggregate unpaid  principal  balance of
               the  Loans  and  Reimbursement  Obligations  or,  if no  Loans or
               Reimbursement  Obligations are outstanding hereunder, any Bank or
               Banks  in  the  aggregate  having  51% of  the  Revolving  Credit
               Commitments.

               "Reserve   Percentage"   shall  have  the  meaning  specified  in
               Section 1.3(b) hereof.

               "Restricted  Inventory"  shall  mean  any  Inventory  sold by the
               Borrower  or any  Subsidiary  and for which sale the  Borrower of
               such Subsidiary has received  payment but which Inventory has not
               yet been  delivered  to,  and is not yet in the  process of being
               delivered to, in each case as classified in deferred  revenues in
               accordance  with  GAAP,  the  customer  who  has  purchased  such
               Inventory.

               "Restricted   Payments"  shall  have  the  meaning  specified  in
               Section 7.15 hereof.

               "Revolving   Credit"   shall  have  the  meaning   specified   in
               Section 1.1(a) hereof.

               "Revolving Credit Commitment" and "Revolving Credit  Commitments"
               shall have the meanings specified in Section 1.1(b) hereof.

               "Revolving  Credit Loan" and "Revolving  Credit Loans" shall have
               the meanings specified in Section 1.1(a) hereof.

               "Revolving Credit  Obligations"  shall have the meaning specified
               in Section 1.1(a) hereof.

               "Revolving  Note" or  "Revolving  Notes"  shall have the meanings
               specified in Section 1.2 hereof.

               "Security Agreement" shall mean the Amended and Restated Security
               Agreement  dated as of even  date  herewith  from  the  Borrower,
               certain of the Collateral  Parties and the Agent, as the same may
               be amended, modified, supplemented or restated from time to time.

               "Security  Documents"  shall  mean the  Security  Agreement,  the
               Pledge   Agreements  and  any  other   agreements  and  financing
               statements  now  or  hereafter  executed  and  delivered  by  the
               Borrower  or  any  other  Collateral  Party  in  respect  of  the
               Collateral.

               "Subsidiary"  shall mean any corporation or other entity at least
               a majority  of the  outstanding  voting  stock of which is at the
               time owned  directly or  indirectly  by the  Borrower  and/or its
               Subsidiaries,  unless any reference to "Subsidiary"  specifically
               refers to ownership by another Person.

               "Subsidiary  Guaranty"  shall mean (i) that  certain  Amended and
               Restated  Guaranty  Agreement dated as of even date herewith from
               certain  of the  Guarantors  to the  Banks  and  (ii) each  other
               guaranty from one or more of the Guarantors,  as each of the same
               may be supplemented,  modified,  restated or amended from time to
               time.

               "Swingline"  shall  have  the  meaning  specified  in  the  first
               paragraph hereof.

               "Swingline  Commitment"  shall  have  the  meaning  specified  in
               Section 1.1(e) hereof.

               "Swingline  Loan"  shall have the  meaning  specified  in Section
               1.1(e) hereof.

               "Swingline  Note"  shall have the  meaning  specified  in Section
               1.1(e) hereof.

               "Termination   Date"   shall  have  the   meaning  set  forth  in
               Section 1.1(a) hereof.

               "Total Capitalization" shall mean the sum of (a) the Consolidated
               Net Worth, plus (b) Total Consolidated Funded Debt.

               "Total  Consolidated  Funded Debt" shall mean with respect to the
               Borrower all Funded Debt of the Borrower and its Subsidiaries, on
               a consolidated basis eliminating intercompany items.

               "Total  Funded Debt Ratio" shall mean, as of any date the same is
               to be  determined,  the ratio of  (a) the  aggregate  outstanding
               principal amount of the Total Consolidated Funded Debt as of such
               date,  to  (b) Adjusted  EBITDA for the four  consecutive  fiscal
               quarters of the Borrower then most recently ended.

               "Voting Equity" shall mean the issued and  outstanding  shares of
               each class of capital stock or other ownership interests entitled
               to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2).

Section 4.2.  Interpretation.   Capitalized  terms  defined  elsewhere  in  this
Agreement shall,  unless otherwise  specified,  have the meanings so ascribed to
them in all provisions of this Agreement.  The foregoing definitions are equally
applicable  to both the  singular  and plural  forms of the terms  defined.  All
references to time of day herein are references to Chicago, Illinois time unless
otherwise specifically  provided.  Where the character or amount of any asset or
liability  or item of income or  expense is  required  to be  determined  or any
consolidation  or other  accounting  computation  is required to be made for the
purposes  of this  Agreement,  it shall be done in  accordance  with GAAP except
where such  principles  are  inconsistent  with the specific  provisions of this
Agreement.

Section 4.3.  Change  in  Accounting  Principles.  If,  after  the  date of this
Agreement,  there  shall  occur  any  change  in  GAAP  from  those  used in the
preparation of the financial  statements  referred to in Section 5.2  hereof and
such  change  shall  result in a change  in the  method  of  calculation  of any
financial  covenant,  standard  or term  found  in this  Agreement,  either  the
Borrower  or the  Required  Banks may by  notice to the Banks and the  Borrower,
respectively, require that the Banks and the Borrower negotiate in good faith to
amend such covenants, standards, and term so as equitably to reflect such change
in accounting  principles,  with the desired  result being that the criteria for
evaluating the financial condition of the Borrower and its Subsidiaries shall be
the same as if such  change had not been made.  No delay by the  Borrower or the
Required  Banks in  requiring  such  negotiation  shall  limit their right to so
require such a  negotiation  at any time after such a change in GAAP.  Until any
such covenant, standard, or term is amended in accordance with this Section 4.3,
financial  covenants shall be computed and determined in accordance with GAAP in
effect  prior to such change in GAAP.  Without  limiting the  generality  of the
foregoing,  the Borrower  shall neither be deemed to be in  compliance  with any
financial  covenant  hereunder nor out of compliance with any financial covenant
hereunder  if such state of  compliance  or  noncompliance,  as the case may be,
would not  exist but for the  occurrence  of a change in  accounting  principles
after the date hereof.

Section 5.           Representations and Warranties.

The Borrower represents and warrants to the Banks as follows:

Section 5.1.  Organization and Qualification. The Borrower is duly organized and
validly existing under the laws of the State of Delaware,  has full and adequate
corporate  power to carry on its business as now conducted,  is duly licensed or
qualified in all  jurisdictions  wherein the nature of its  activities  requires
such  licensing  or  qualifying,  except  where the failure to be so licensed or
qualified would not have a material  adverse effect on the condition,  financial
or otherwise, of the Borrower, has full right, power and authority to enter into
this Agreement and the other Loan Documents to which it is a party,  to make the
borrowings  herein  provided for and encumber its assets as collateral  security
therefor,  to execute  and issue the Notes in evidence  thereof,  and to perform
each and all of the matters and things herein and therein provided for; and this
Agreement  does not, nor does the  performance  or observance by the Borrower of
any of the matters or things  provided for in this  Agreement and the other Loan
Documents, contravene any provision of law or any charter or by-law provision or
any covenant,  indenture or agreement of or judgment, order or decree applicable
to or affecting the Borrower or any of its Property.

Section 5.2.  Financial Reports.  The Borrower  heretofore has delivered to each
Bank (a) a copy of the annual audit report of the Borrower and its  Subsidiaries
as of September 30, 1999 and (b) a copy of the annual audit report of Prudential
and its  Subsidiaries  as of December 31,  1999. Such financial  statements have
been prepared in accordance with GAAP (in the case of the annual audit report of
the Borrower and its Subsidiaries) and generally accepted accounting  principles
as in effect in Canada (in the case of the annual audit report of Prudential and
its  Subsidiaries),  on a basis  consistent,  except as otherwise noted therein,
with that of the previous fiscal year or period and fairly reflect the financial
position of the Borrower and Prudential as of the applicable dates thereof,  and
the results of their respective  operations for the periods covered thereby.  To
the  best  knowledge  of  the  Executive  Officers  of  the  Borrower  and  each
Subsidiary,  the Borrower and its  Subsidiaries  have no significant  contingent
liabilities   (determined  in  accordance  with  generally  accepted  accounting
principles  consistently  applied)  other than as  indicated  on said  financial
statements  and since  (i) September 30,  1999 (in the case of the  Borrower and
each of its Subsidiaries other than Prudential) and  (ii) December 31,  1999 (in
the case of  Prudential),  there  has been no  material  adverse  change  in the
condition,  financial or otherwise,  of the Borrower or any  Subsidiary,  except
those disclosed in writing to the Banks prior to the date of this Agreement.

Section 5.3.  Litigation; Tax Returns; Approvals. There is no litigation,  labor
controversy or governmental proceeding pending, nor to the best knowledge of the
Executive Officers of the Borrower and each Subsidiary  threatened,  against the
Borrower or any  Subsidiary  which if adversely  determined  would result in any
material  adverse  change  in the  properties,  business  or  operations  of the
Borrower or any Subsidiary. All United States federal income tax returns for the
Borrower and its  Subsidiaries  required to be filed have been filed on a timely
basis,  and all amounts  required to be paid as shown by said  returns have been
paid. Except for the Internal Revenue Service audits for the fiscal years of the
Borrower ended September 30, 1997,  September 30,  1998 and September 30,  1999,
there are no pending or, to the best knowledge of the Executive  Officers of the
Borrower and each  Subsidiary,  threatened  objections  to or  controversies  in
respect of the United States  federal income tax returns of the Borrower and its
Subsidiaries for any fiscal year. No authorization,  consent, license, exemption
or filing or registration with any court or governmental  department,  agency or
instrumentality,  is or will be  necessary to the valid  execution,  delivery or
performance by the Borrower of the Loan Documents to which it is a party.

Section 5.4. Regulation U. Neither the Borrower nor any Subsidiary is engaged in
the  business  of  extending  credit for the purpose of  purchasing  or carrying
margin  stock  (within the meaning of  Regulation U of the Board of Governors of
the Federal  Reserve  System)  and no part of the  proceeds of any Loan or other
extension of credit hereunder will be used to purchase or carry any margin stock
or to extend credit to others for such a purpose.

Section 5.5.  No Default.  The  Borrower is in full  compliance  with all of the
terms and conditions of the Loan Documents, and no Potential Default or Event of
Default is existing under this Agreement.

Section 5.6.  ERISA.  The Borrower and its Subsidiaries are in compliance in all
material  respects  with ERISA to the extent  applicable  to it and  neither the
Borrower nor any  Subsidiary  has  received any notice to the contrary  from the
PBGC or any other  governmental  entity or  agency.  No steps have been taken to
terminate any Plan, and no contribution failure has occurred with respect to any
Plan  sufficient  to give  rise to a lien  under  Section 302(f)  of  ERISA.  No
condition  exists or event or transaction  has occurred with respect to any Plan
which might result in the  incurrence  by the Borrower or any  Subsidiary of any
material liability, fine or penalty. Neither the Borrower nor any Subsidiary has
any  contingent  liability with respect to any  post-retirement  benefit under a
Plan,  other than  liability for  continuation  coverage  described in Part 6 of
Title I of ERISA.

Section 5.7.  Environmental  Law.  (a) Except  as  disclosed  on  Exhibit H,  no
Executive  Officer of the Borrower nor any Executive Officer of a Subsidiary has
received any notice to the effect,  or has any  knowledge,  that its Property or
operations  are not in  compliance  with any of the  requirements  of applicable
federal,  state  and  local  environmental,   health  and  safety  statutes  and
regulations  ("Environmental  Laws") or are the  subject of any federal or state
investigation  evaluating  whether any remedial action is needed to respond to a
release of any  hazardous  substances  as  defined  in the  CERCLA or  petroleum
products  or  crude  oil  or  any  fraction  thereof  (collectively   "Hazardous
Substances") into the environment, which non-compliance or remedial action could
have a material adverse effect on the business, operations,  Property, assets or
conditions (financial or otherwise) of the Borrower or any Subsidiary;

     (b) there have been no releases of Hazardous Substances at, on or under any
     Property  now or  previously  owned or leased by the Borrower or any of its
     Subsidiaries  that, singly or in the aggregate,  have, or may reasonably be
     expected to have, a material  adverse  effect on the  financial  condition,
     operations,  assets, business,  Properties or prospects of the Borrower and
     its Subsidiaries;

     (c) there are no underground storage tanks, active or abandoned,  including
     petroleum  storage tanks, on or under any Property now or previously  owned
     or leased by the Borrower or any of its Subsidiaries that, singly or in the
     aggregate,  have, or may reasonably be expected to have, a material adverse
     effect on the financial condition, operations, assets, business, Properties
     or prospects of the Borrower and its Subsidiaries;

     (d) neither the Borrower nor any  Subsidiary has directly  transported,  or
     received any notice or has any knowledge  that they have directly  arranged
     for the transportation  of, any Hazardous  Substances to any location which
     is listed or proposed for listing on the National  Priorities List pursuant
     to  CERCLA,  on the  CERCLIS or on any  similar  state list or which is the
     subject  of  federal,   state  or  local   enforcement   actions  or  other
     investigations  which may lead to material  claims  against the Borrower or
     such Subsidiary  thereof for any remedial work, damage to natural resources
     or personal injury, including claims under CERCLA; and

     (e) except as disclosed on  ExhibitH no  conditions  exist at, on or under
     any Property now owned or leased by the Borrower or any Subsidiary, and the
     Borrower has no  knowledge  that any  conditions  exist at, on or under any
     Property  previously  owned or leased by the  Borrower  or any  Subsidiary,
     which,  with the  passage of time,  or the giving of notice or both,  would
     give rise to liability under any  Environmental Law which may reasonably be
     expected to have, a material  adverse  effect on the  financial  condition,
     operations,  assets, business,  Properties or prospects of the Borrower and
     its Subsidiaries.

Section 5.8.  Security  Interests.  There are no  security  interests,  liens or
encumbrances  on any of the assets or Property of the Borrower or any Subsidiary
except the security interests,  liens and charges which are now existing and are
permitted by Section 7.14 of this Agreement.

Section 5.9.  Subsidiaries.  (a) As  of the date  hereof,  the  Borrower's  only
Subsidiaries are identified on Exhibit E  hereof.  Each of said  Subsidiaries is
duly  organized and validly  existing  under the laws of the state or country of
its  incorporation,  has  full  and  adequate  corporate  power  to carry on its
business as now  conducted,  is duly licensed or qualified to do business in all
jurisdictions  wherein the nature of its  activities  requires such licensing or
qualification  except when the failure to be so licensed or qualified  would not
have a material adverse effect on the condition, financial or otherwise, of such
Subsidiary. Each Guarantor has full right, power and authority to enter into the
Subsidiary  Guaranty,  to guaranty the payment of the  Borrower's  indebtedness,
obligations and liabilities to the Agent and the Banks,  and to perform each and
all of the matters and things therein provided for; and the Subsidiary  Guaranty
does not, nor does the  performance or observance by any Guarantor of any of the
matters or things  provided for therein,  contravene any provision of law or any
charter, partnership agreement or by-law provision or any covenant, indenture or
agreement  of or  judgment,  order or  decree  applicable  to or  affecting  any
Guarantor or any of their respective Property.

     (b) Maverick  International does not (i) own any assets having an aggregate
     net book value in excess of $1,000,000, (ii) have any liabilities in excess
     of $1,000,000 and (iii) engage in any business or operations other than the
     business and operations  engaged in by Maverick  International  on the date
     hereof  (namely,  acting as a foreign  sales  corporation  and  owning  and
     operating foreign sales corporations).

Section 5.10.  Accurate Information. No information, exhibit or report furnished
by  the  Borrower  or any  Subsidiary  to  the  Banks  in  connection  with  the
negotiation  or  performance  of  the  Loan  Documents   contains  any  material
misstatement  of fact or omits to state a material fact or any fact necessary to
make  the  statements   contained   therein  not  misleading  in  light  of  the
circumstances in which made. The financial projections furnished by the Borrower
to the Banks  contain  reasonable  projections  as of the date  hereof of future
results  of  operations   and  financial   position  of  the  Borrower  and  its
Subsidiaries.

Section 5.11. Enforceability. This Agreement, when executed and delivered by the
Borrower,  will  be a  legal,  valid  and  binding  agreement  of the  Borrower,
enforceable against it in accordance with its terms, except as may be limited by
(i) bankruptcy,  insolvency, reorganization,  fraudulent transfer, moratorium or
other  similar  laws or  judicial  decisions  for the  relief of  debtors or the
limitation of creditors' rights  generally;  and (ii) any  equitable  principles
relating to or  limiting  the rights of  creditors  generally  or any  equitable
remedy which may be granted to cure any defaults;  and the Notes, the other Loan
Documents and any other instrument or agreement  required  hereunder has been so
authorized and, when executed and delivered,  will be similarly  valid,  binding
and  enforceable,  except  as  may be  limited  by  (i) bankruptcy,  insolvency,
reorganization,  fraudulent  transfer,  moratorium  or  other  similar  laws  or
judicial  decisions  for the relief of debtors or the  limitation  of creditors'
rights generally;  and (ii) any equitable principles relating to or limiting the
rights of creditors  generally or any  equitable  remedy which may be granted to
cure any defaults;  and the Subsidiary Guaranty,  when executed and delivered by
each Guarantor,  will be a legal, valid and binding agreement of such Guarantor,
enforceable against it in accordance with its terms, except as may be limited by
(i) bankruptcy,  insolvency, reorganization,  fraudulent transfer, moratorium or
other  similar  laws or  judicial  decisions  for the  relief of  debtors or the
limitation of creditors' rights  generally;  and (ii) any  equitable  principles
relating to or  limiting  the rights of  creditors  generally  or any  equitable
remedy which may be granted to cure any defaults.

Section 5.12.  Trademarks,  Franchises,  and  Licenses.  The  Borrower  and  its
Subsidiaries  own,  possess,  or have the  right to use all  necessary  patents,
licenses,  franchises,  trademarks, trade names, trade styles, copyrights, trade
secrets,  know how and  confidential  commercial and proprietary  information to
conduct their  businesses  as now  conducted,  without  known  conflict with any
patent,  license,  franchise,  trademark,  trade name, trade style, copyright or
other proprietary right of any other Person.

Section 5.13.  Governmental  Authority  and  Licensing.  The  Borrower  and  its
Subsidiaries have received all material licenses,  permits, and approvals of all
Federal, state, local, and foreign governmental  authorities,  if any, necessary
to conduct their businesses.  No investigation or proceeding which, if adversely
determined,  could  reasonably  be expected to result in revocation or denial of
any material license, permit, or approval is pending or, to the knowledge of the
Borrowers, threatened.

Section 5.14.  Good  Title.  The  Borrower  and its  Subsidiaries  have good and
defensible title (or valid leasehold  interests) to their assets as reflected on
the most recent consolidated  balance sheet of the Borrower and its Subsidiaries
furnished to the Agent and the Banks (except for sales of assets in the ordinary
course of business),  subject to no liens or security  interests other than such
thereof as are permitted by Section 7.14 hereof.

Section 5.15. Affiliate Transactions. Neither the Borrower nor any Subsidiary is
a party to any contracts or agreements  with any of its  Affiliates on terms and
conditions  which are less  favorable  to the Borrower or such  Subsidiary  than
would be usual and customary in similar contracts or agreements  between Persons
not affiliated with each other.

Section 5.16.  Investment Company;  Public Utility Holding Company.  Neither the
Borrower nor any Subsidiary is an "investment company" or a company "controlled"
by an "investment  company" within the meaning of the Investment  Company Act of
1940, as amended,  or a "public utility  holding  company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.

Section 5.17.  Other  Agreements.  Neither the Borrower nor any Subsidiary is in
default under the terms of any material  covenant,  indenture or agreement of or
affecting such Person or any of its Property.

Section 5.18. Solvency.  The Borrower and its Subsidiaries are solvent,  able to
pay their  debts as they  become due,  and have  sufficient  capital to carry on
their business and all businesses in which they are about to engage.

Section 6.           Conditions Precedent.

The obligation of the Banks to make any Loan pursuant hereto or to issue any L/C
shall be subject to the following conditions precedent:

Section 6.1. General. The Agent shall have received the notice of borrowings and
request for any L/C hereinabove provided for.

Section 6.2.  Initial  Extension  of  Credit.  Prior  to the  initial  extension
hereunder, the following conditions precedent shall have been satisfied:

     (a) the Borrower  shall have  delivered to the Agent for the benefit of the
     Banks in sufficient counterparts for distribution to the Banks:

          (i) the Notes;

          (ii) the fully executed  Subsidiary Guaranty requested by the Agent to
          be delivered on the date hereof;

          (iii) to the extent not otherwise  waived in writing by the Agent, the
          fully executed Pledge  Agreements,  Security  Agreement and such legal
          opinions,  financing  statements and other  instruments  and documents
          relating thereto as the Agent may request  together with  (i) original
          stock   certificates  or  other  similar   instruments  or  securities
          representing all of the issued and outstanding shares of capital stock
          or other equity  interests of each Domestic  Subsidiary and First Tier
          Foreign Subsidiary as of the date hereof and (ii) stock powers for the
          Collateral  consisting  of the stock or other equity  interest in each
          such Subsidiary executed in blank and undated;

          (iv) evidence of insurance  required by Section 7.3  hereof and by the
          Security Documents showing the Agent as loss payee thereunder pursuant
          to an endorsement acceptable to the Agent;

          (v) a good standing  certificate  or  certificate of existence for the
          Borrower  and each  Guarantor  dated as of the  date no  earlier  than
          December 1,  2000  from the  office of the  secretary  of state of the
          states of their respective organization;

          (vi) copies of the  Certificate  of  Incorporation  or  Certificate of
          Limited  Partnership,  and all amendments thereto, of the Borrower and
          each Guarantor, certified by the office of the applicable secretary of
          state as of the date no earlier than December 1, 2000;

          (vii) copies of the By-Laws or Limited Partnership Agreement,  and all
          amendments  thereto,  of the Borrower and each Guarantor  certified as
          true, correct and complete on the date hereof by the Secretary of each
          Guarantor;

          (viii)  copies,  certified by the Secretary or Assistant  Secretary of
          the  Borrower  and  each  Guarantor,   of  resolutions  regarding  the
          transactions contemplated by this Agreement, duly adopted by the Board
          of Directors of the Borrower  and each  Guarantor,  respectively,  and
          satisfactory in form and substance to the Agent;

          (ix) the  favorable  written  opinions of counsel for the Borrower and
          the Guarantors in form and substance satisfactory to the Agent and its
          legal counsel; and

          (x) an  incumbency  signature  certificate  for the  Borrower and each
          Guarantor satisfactory in form and substance to the Agent.

          (b) the Agent shall have received such evaluations and  certifications
          as it may reasonably  require  (including a Borrowing Base Certificate
          on a  consolidated  and  consolidating  basis for the Borrower and its
          Subsidiaries  and compliance  certificate in the forms attached hereto
          as Exhibits D and F containing  calculations of the Borrowing Base and
          compliance  calculations of the financial  covenants as of the date of
          this Agreement,  a consolidated and consolidating balance sheet of the
          Borrower and its  Subsidiaries  and the  Borrower's  consolidated  and
          consolidating  statement of projections for the following three fiscal
          years in  scope  and  substance  acceptable  to the  Agent in order to
          satisfy  itself  as to the  value  of the  Collateral,  the  financial
          condition  of the  Borrower  and its  Subsidiaries,  and  the  lack of
          material contingent liabilities of the Borrower and its Subsidiaries;

          (c)  the  Agent  shall  have  received  financing  statement,  tax and
          judgment lien search results  against the Property of the Borrower and
          each Subsidiary evidencing the absence of liens on its Property except
          as permitted by Section 7.14 hereof;

          (d) all indebtedness  issued and outstanding under the Previous Credit
          Agreement  shall  have  been  repaid in full and the  Previous  Credit
          Agreement shall have been terminated and cancelled;

          (e)  except as  previously  disclosed  to the Banks in the  Borrower's
          financial  statements  for the period  ending  September 30,  1999 and
          Prudential's  financial  statements for the period ending December 31,
          1999, no material  adverse change shall have occurred in the financial
          condition,  operations  or  Properties  of  (i) the  Borrower  and its
          Subsidiaries  since  September 30,  2000 and  (ii) Prudential  and its
          Subsidiaries since December 31, 1999;

          (f) the  Agent  shall  have  received  and  approved  as to  form  and
          substance  copies  certified by the Borrower of all of the instruments
          and documents  applicable to the line of credit currently available to
          Prudential  by Royal  Bank of  Canada  and any  other  line of  credit
          available to Prudential on the date hereof;

          (g) the Agent shall have  received  evidence  satisfactory  to it that
          Adjusted EBITDA for the four fiscal quarter period ended September 30,
          2000 is not less than $40,000,000; and

          (h) the Agent shall have received such other agreements,  instruments,
          documents,  certificates  and  opinions  as the Agent  may  reasonably
          request.

Section 6.3. Each Extension of Credit. As of the time of the making of each Loan
and the issuance of the L/C hereunder:

          (a) each of the  representations and warranties set forth in Section 5
          hereof  shall be and remain true and  correct as of said time,  except
          that the  representations  and warranties made under Section 5.2 shall
          be deemed to refer to the most recent financial  statements  furnished
          to the Banks pursuant to Section 7.4 hereof;

          (b) the Borrower shall be in full compliance with all of the terms and
          conditions  hereof, and no Potential Default or Event of Default shall
          have occurred and be continuing; and

          (c) after giving  effect to the  requested  extension of credit and to
          each  Loan  that has been  made and  each L/C  issued  hereunder,  the
          aggregate  principal amount of all Revolving  Credit  Obligations then
          outstanding  shall not exceed the Banks' Revolving Credit  Commitments
          then in effect;

          and the request by the Borrower  for any Loan or L/C  pursuant  hereto
          shall be and constitute a warranty to the foregoing effects.

Section 6.4. Legal Matters.  All legal,  tax and regulatory  matters incident to
the execution and delivery of the Loan Documents  shall be  satisfactory to each
of the Banks and their legal counsel.

Section 7.           Covenants.

          It is  understood  and  agreed  that so long  as  credit  is in use or
          available  under this  Agreement or any amount  remains  unpaid on any
          Note, Reimbursement  Obligation or L/C remains outstanding,  except to
          the extent compliance in any case or cases is waived in writing by the
          Required Banks:

          Section 7.1.  Maintenance of Property and Business.  (a) The  Borrower
          will, and will cause each  Subsidiary to, keep and maintain all of its
          Properties necessary or useful in its business in good condition,  and
          make all necessary renewals, replacements,  additions, betterments and
          improvements thereto; provided,  however, that nothing in this Section
          shall prevent the Borrower or any Subsidiary  from  discontinuing  the
          operating  and   maintenance   of  any  of  its   properties  if  such
          discontinuance  is, in the judgment of the Borrower,  desirable in the
          conduct  of its  business  and  not  disadvantageous  in any  material
          respect to the Banks as holders of the Revolving Notes.

          (b) The Borrower will, and will cause each Subsidiary to, preserve and
          maintain its  existence,  except as otherwise  provided in Section 7.6
          hereof.  The  Borrower  shall,  and shall  cause each  Subsidiary  to,
          preserve and keep in force and effect all material licenses,  permits,
          franchises, approvals, patents, trademarks, trade names, trade styles,
          copyrights  and  other  proprietary  rights  necessary  to the  proper
          conduct of its business.

          (c) The Borrower will not permit Maverick International to (i) own any
          assets  having an  aggregate  net book value in excess of  $1,000,000,
          (ii) incur any liabilities in excess of $1,000,000 and (iii) engage in
          any business or  operations  other than the  business  and  operations
          engaged  in by  Maverick  International  on the date  hereof  (namely,
          acting  as a foreign  sales  corporations  and  owning  and  operating
          foreign sales corporations).

          Section 7.2.  Taxes. The Borrower will, and will cause each Subsidiary
          to, duly pay and discharge  all taxes,  rates,  assessments,  fees and
          governmental charges upon or against the Borrower or any Subsidiary or
          against its Properties in each case before the same becomes delinquent
          and before  penalties accrue thereon unless and to the extent that the
          same is being  contested in good faith and by appropriate  proceedings
          which  prevent  enforcement  of the matter under  contest and adequate
          reserves,  determined in accordance  with GAAP  consistently  applied,
          have been established with respect thereto.

          Section 7.3.  Maintenance  of Insurance.  The Borrower  will, and will
          cause each Subsidiary to, maintain insurance with insurers  recognized
          as financially sound and reputable by prudent business persons in such
          forms and  amounts  and  against  such risks as is usually  carried by
          companies engaged in similar business and owning similar properties in
          the same  general  areas  in which  the  Borrower  or such  Subsidiary
          operates.  The Agent shall be named as loss payee under any  insurance
          policies which relate to the  Collateral.  The Borrower  shall, at the
          Agent's or any Bank's  request,  provide  copies to the Agent and each
          Bank of all insurance  policies and other  materials  related  thereto
          maintained by the Borrower and its Subsidiaries.

          Section 7.4. Financial Reports. The Borrower will, and will cause each
          Subsidiary  to,  maintain a system of accounting  in  accordance  with
          sound  accounting  practice and will furnish promptly to the Banks and
          their duly authorized  representatives such information respecting the
          business and financial  condition of the Borrower and its Subsidiaries
          as may from time to time be requested and,  without any request,  will
          furnish each Bank:

          (a) as soon as  available,  and in any event within  45 days after the
          close of each monthly  period of the Borrower which is also the end of
          a fiscal quarter of the Borrower and within 30 days after the close of
          each  other  monthly  fiscal  period  of the  Borrower  (i) a  copy of
          consolidated  balance  sheets and profit and loss  statements  for the
          Borrower and its Subsidiaries (for such monthly period and the year to
          date)  for such  period  of such  Borrower  and for the  corresponding
          periods of the preceding fiscal year, and  (ii) consolidating  balance
          sheets  and  profit  and loss  statements  for the  Borrower  and each
          Subsidiary  for the year to date,  and (iii) in  respect of each month
          which is also the end of a fiscal  quarter of the Borrower,  a copy of
          the  Borrower's  10-Q  for  such  period,  all in  reasonable  detail,
          prepared by the Borrower and certified by the chief financial  officer
          of the Borrower;

          (b) as soon as  available,  and in any event  within 90 days after the
          close of each fiscal year of the Borrower,  a copy of the audit report
          for  such  year  and  accompanying  financial  statements,   including
          consolidated   balance   sheets,    reconciliations   of   change   in
          stockholders'  equity,  profit and loss  statements  and statements of
          cash  flows  for  the  Borrower  and  its   Subsidiaries   showing  in
          comparative  form the  figures  for the  previous  fiscal  year of the
          Borrower,  all in reasonable  detail,  accompanied by the  unqualified
          opinion of Ernst & Young LLP or other independent  public  accountants
          of  nationally  recognized  standing  selected  by  the  Borrower  and
          satisfactory to each Bank;

          (c) within 30 days after the last day of each month,  a Borrowing Base
          Certificate  in  the  form  of  Exhibit D  hereto,   setting  forth  a
          computation of the Borrowing Base on a consolidated and  consolidating
          basis for the Borrower and its  Subsidiaries as of the last day of the
          period covered  thereby,  certified as correct by the Borrower's chief
          financial  officer,   and  certifying  that  the  signer  thereof  has
          re-examined the terms and provisions of the Loan Documents and that to
          the best of his knowledge and belief, no Potential Default or Event of
          Default has  occurred  or, if any such  Potential  Default or Event of
          Default has occurred,  setting forth the description of such Potential
          Default or Event of Default and specifying  the action,  if any, taken
          by the Borrower to remedy the same;

          (d) within  45 days after the last day of each month which is also the
          end of a fiscal  quarter of the  Borrower and within 30 days after the
          last day of each other month, an accounts  receivable  aging report in
          the form of Exhibit G attached hereto;

          (e) within  45 days after the last day of each month which is also the
          end of a fiscal  quarter of the  Borrower and within 30 days after the
          last day of each other month, a Compliance  Certificate in the form of
          Exhibit F attached hereto,  prepared and signed by the chief financial
          officer of the Borrower;

          (f)  (i) within  30 days prior to the last day of each  fiscal year of
          the Borrower,  a copy of the Borrower's  preliminary  operating budget
          for the immediately  following  fiscal year and (ii) upon the approval
          by the  Borrower's  board of directors but in any event within 60 days
          after the last day of each fiscal year of the Borrower,  a copy of the
          borrower's final operating budget for the immediately following fiscal
          year;

          (g) promptly upon their becoming available, copies of all registration
          statements and regular  periodic  reports,  if any, which the Borrower
          shall have filed with the  Securities  and Exchange  Commission or any
          governmental agency substituted  therefor,  or any national securities
          exchange,  including copies of the Borrower's form 10-K annual report,
          including  financial  statements  audited  by  Ernst &  Young or other
          independent  public  accountants  of  nationally  recognized  standing
          selected by the Borrower and reasonably  satisfactory  to the Required
          Banks,  its form 10-Q quarterly  report to the Securities and Exchange
          Commission  and any Form 8-K filed by the Borrower with the Securities
          and Exchange Commission; and

          (h)  promptly  upon the  mailing  thereof to the  shareholders  of the
          Borrower generally,  copies of all financial  statements,  reports and
          proxy statements so mailed.

          Section 7.5.  Inspection.  The  Borrower  shall,  and shall cause each
          Subsidiary to, permit the Banks, by their  representatives and agents,
          to  inspect  any of the  Properties,  corporate  books  and  financial
          records of the  Borrower  and each  Subsidiary,  to  examine  and make
          copies of the books of  accounts  and other  financial  records of the
          Borrower and its Subsidiaries and to discuss the affairs, finances and
          accounts of the Borrower and its Subsidiaries  with, and to be advised
          as to the same by, its  officers  at such times and  intervals  as the
          Banks may request. So long as no Potential Default or Event of Default
          shall have occurred and be  continuing,  the Borrower shall pay to the
          Banks from time to time upon demand an amount sufficient to compensate
          the Banks for their fees,  charges and expenses in connection with two
          field audits of the Collateral  per year for the Borrower.  During the
          existence of any Event of Default or Potential Default,  the Banks may
          perform more than two field  audits in each  calendar  year,  with all
          fees,  charges and  expenses of the Banks  associated  therewith to be
          paid by the Borrower.

          Section 7.6. Consolidation and Merger. The Borrower will not, and will
          not  permit  any  Subsidiary  to,  consolidate  with or merge into any
          Person,  or permit any other Person to merge into it, or acquire (in a
          transaction  analogous  in  purpose  or effect to a  consolidation  or
          merger) all or  substantially  all of the Property or capital stock of
          any other Person, unless:

          (a) the Borrower or Subsidiary  shall be the  surviving  entity of any
          such merger;

          (b) the Person  merging  into or being  acquired by the  Borrower or a
          Subsidiary  shall be in the same or a related  line of business as the
          Borrower or one or more of its Subsidiaries;

          (c) no  Potential  Default or Event of Default  shall exist  before or
          after giving effect to such merger; and

          (d)  the  aggregate   consideration  paid  by  the  Borrower  and  its
          Subsidiaries in all such mergers and  acquisitions and all investments
          and acquisitions  permitted by Sections 7.16(j)  and (k) hereof in any
          12-month period, shall not exceed $5,000,000.

          Section 7.7.  Transactions with Affiliates. The Borrower will not, and
          will not  permit  any  Subsidiary  to,  enter  into  any  transaction,
          including without limitation, the purchase, sale, lease or exchange of
          any Property,  or the rendering of any service,  with any Affiliate of
          the  Borrower  except in the  ordinary  course of and  pursuant to the
          reasonable  requirements of the Borrower's  business and upon fair and
          reasonable  terms no less favorable to the Borrower or such Subsidiary
          than would be obtained in a comparable arm's-length transaction with a
          Person not an Affiliate of the Borrower.

          Section 7.8. Funded Debt Ratios. (a) The Borrower will not at any time
          permit its Total Funded Debt Ratio to exceed 3.25 to 1.

          (b) The Borrower will not at any time permit its Adjusted  Funded Debt
          Ratio  to  exceed  3.35  to 1  at  December 31,  2000  and  3.25  to 1
          thereafter.

          Section 7.9. Minimum Adjusted EBITDA. The Borrower will not permit its
          Adjusted  EBITDA  for the  four  consecutive  fiscal  quarters  of the
          Borrower  ending on the dates  specified  as  follows  to be less than
          (i) $40,000,000 as of September 30,  2000 and  (ii) $45,000,000  as of
          December 31, 2000.

          Section 7.10.  Minimum  Consolidated  Tangible Net Worth. The Borrower
          will  maintain  Consolidated  Tangible Net Worth in an amount not less
          than  (a) $204,000,000  at all  times  from  the date  hereof  through
          December 31,  2000 and (b) at all times during each fiscal  quarter of
          the  Borrower  thereafter,  in an  amount  not less  than the  Minimum
          Required Amount.  For the purposes hereof,  the term "Minimum Required
          Amount"  shall  mean an  amount  equal to the sum of  (i) the  Minimum
          Required  Amount  required to be maintained by the Borrower during the
          immediately  preceding fiscal quarter, plus (ii) 75% of the Borrower's
          Consolidated  Net  Income  (but not less than  zero)  for such  fiscal
          quarter then ended.

          Section 7.11. Maximum Leverage Ratio. The Borrower will not permit the
          ratio  of  its   Total   Consolidated   Funded   Debt  to  its   Total
          Capitalization to exceed 0.5 to 1 at any time.

          Section 7.12. Minimum Interest Coverage Ratio. The Borrower, as of the
          close of each fiscal quarter of the Borrower specified below, will not
          permit its Interest  Coverage  Ratio to be less than (i) 1.15 to 1 for
          the Borrower's fiscal quarter ended December 31,  2000, (ii) 2.00 to 1
          for the Borrower's fiscal quarter ended March 31,  2001 and (iii) 2.50
          to 1 for each fiscal quarter of the Borrower ending thereafter.

          Section 7.13.  Restricted Payments.  The Borrower will not (a) declare
          or pay any dividends on any class of stock, (b) directly or indirectly
          purchase,  redeem or  otherwise  acquire or retire any of its  capital
          stock,  or (c) make any  distribution  of any kind or  character  with
          respect  to its  capital  stock;  provided,  however,  in each case no
          Potential  Default  or Event of  Default  shall  then  exist or result
          therefrom the Borrower may pay cash  dividends on its common stock and
          may  purchase its capital  stock in an  aggregate  amount for all such
          dividends  and  purchases  in each  fiscal  year of the  Borrower  not
          exceeding the lesser of a  (a) $6,000,000  and (b) 50% of Consolidated
          Net Income for the most recently completed fiscal year.

          Section 7.14.  Liens.  The Borrower  will not, and will not permit any
          Subsidiary to, pledge, mortgage or otherwise encumber or subject to or
          permit to exist upon or be subjected  to any lien,  charge or security
          interest of any kind  (including any  conditional  sale or other title
          retention  agreement and any lease in the nature  thereof),  on any of
          its  Properties  of any kind or  character  at any  time  owned by the
          Borrower or any Subsidiary, other than:

          (a) liens, pledges or deposits for worker's compensation, unemployment
          insurance,  old age benefits or social  security  obligations,  taxes,
          assessments,  statutory  obligations  or other similar  charges,  good
          faith deposits made in connection with tenders, contracts or leases to
          which  the  Borrower  or a  Subsidiary  is a party or  other  deposits
          required to be made in the ordinary  course of  business,  provided in
          each case the  obligation  secured is not overdue  or, if overdue,  is
          being contested in good faith by appropriate  proceedings and adequate
          reserves have been provided  therefor in accordance with GAAP and that
          the obligation is not for borrowed  money,  customer  advances,  trade
          payables, or obligations to agricultural producers;

          (b) the pledge of assets for the purpose of securing an appeal or stay
          or discharge in the course of any legal proceedings, provided that the
          aggregate  amount of liabilities of the Borrower and all  Subsidiaries
          so secured by a pledge of property permitted under this subsection (b)
          including  interest and  penalties  thereon,  if any,  shall not be in
          excess of $2,500,000 at any one time outstanding;

          (c) liens, pledges,  mortgages,  security interests,  or other charges
          granted  to  the  Agent  to  secure  the  Notes,   Hedging  Liability,
          Reimbursement  Obligations,  the L/Cs and other amounts  payable under
          the Loan Documents;

          (d) liens,  pledges,  mortgages,  security  interests or other charges
          existing  on the  date  hereof  and set  forth on  Exhibit I  attached
          hereto;

          (e)  liens,   pledges,   mortgages,   security   interests  and  other
          encumbrances  on Property which secure only  indebtedness  incurred to
          finance the  acquisition  of such  Property (but only to the extent of
          the fair market  value of such  Property  and not  including  purchase
          money security interests in Inventory);

          (f) liens for property taxes and assessments or  governmental  charges
          or levies which are not yet due and payable;

          (g) liens  incidental  to the conduct of business or the  ownership of
          Properties and assets (including  warehousemen's  liens,  grower liens
          and attorneys' liens and statutory landlords' liens) or other liens of
          like general  nature  incurred in the ordinary  course of business and
          not in connection with the borrowing of money,  provided in each case,
          the  obligation  secured  is not  overdue  or,  if  overdue,  is being
          contested in good faith by appropriate  actions or proceedings and for
          which adequate reserves, determined in accordance with GAAP, have been
          established;

          (h)  minor  survey  exceptions  or minor  encumbrances,  easements  or
          reservations,  or rights of others for  rights-of-way,  utilities  and
          other similar purposes,  or zoning or other restrictions as to the use
          of  real  properties,  which  are  necessary  for the  conduct  of the
          activities of the Borrower and its  Subsidiaries or which  customarily
          exist on properties of corporations  engaged in similar activities and
          similarly  situated  and which do not in any event  materially  impair
          their use in the  operation  of the  business of the  Borrower and its
          Subsidiaries;

          (i) mortgages,  liens and  encumbrances  on the Borrower's real estate
          and equipment  securing only Funded Debt permitted by  Section 7.15(f)
          hereof; and

          (j) purchase money security interests in Restricted  Inventory so long
          as the aggregate value of the Restricted  Inventory so encumbered does
          not at any time exceed $5,000,000.

          Section 7.15.  Borrowings and  Guaranties.  The Borrower will not, and
          will not permit any Subsidiary  to, issue,  incur,  assume,  create or
          have  outstanding any  indebtedness  for borrowed money  (including as
          such all  indebtedness  representing  the deferred  purchase  price of
          Property and all indebtedness, obligations and liabilities relating to
          bankers  acceptances and letters of credit) or customer advances,  nor
          be or  remain  liable,  whether  as  endorser,  surety,  guarantor  or
          otherwise,  for or in respect of any liability or  indebtedness of any
          other Person, other than:

          (a)  indebtedness  of the Borrower  arising  under or pursuant to this
          Agreement or the other Loan Documents;

          (b) the liability of the Borrower and its Subsidiaries  arising out of
          the endorsement for deposit or collection of commercial paper received
          in the ordinary course of business;

          (c) indebtedness of the Borrower and its Subsidiaries  existing on the
          date hereof and set forth on  Exhibit J  attached  hereto,  other than
          indebtedness under the Previous Credit Agreement;

          (d) trade payables of the Borrower and its Subsidiaries arising in the
          ordinary course of the Borrower's and its Subsidiaries' business;

          (e) indebtedness of the Subsidiaries to the Borrower;

          (f) Funded Debt in an aggregate  principal  amount of up to $8,000,000
          with  respect to bonds or notes or other  secured  indebtedness  to be
          guaranteed by the Arkansas  Development and Finance  Authority  and/or
          the Arkansas Industrial Development  Corporation and any refundings or
          refinancings thereof;

          (g)  indebtedness  of the Borrower and the Domestic  Subsidiaries  not
          otherwise permitted by this Section 7.15,  provided that the aggregate
          principal amount of all such indebtedness outstanding at any time does
          not exceed $3,000,000;

          (h) indebtedness of the Guarantors to the Borrower and indebtedness of
          the  Guarantors  to the  Agent  and the  Banks  under  the  Subsidiary
          Guaranty;

          (i)  indebtedness  in an  aggregate  principal  amount  not to  exceed
          Canadian  $40,000,000 to the extent  incurred by Prudential to finance
          its  working  capital  needs  so  long  as the  terms  and  conditions
          applicable to such  indebtedness  are  acceptable to the Agent and the
          Required Banks; and

          (j)  guarantees  by the  Borrower  or any  of its  Subsidiaries  in an
          aggregate principal amount not in excess of $5,000,000.

          Section 7.16.  Investments,  Loans,  Advances  and  Acquisitions.  The
          Borrower  will not,  and will not permit any  Subsidiary  to,  make or
          retain  any  investment   (whether  through  the  purchase  of  stock,
          obligations,  capital  contributions or otherwise) in or make any loan
          or  advance  to, any other  Person,  or  acquire  substantially  as an
          entirety the Property or business of any other Person, other than:

          (a)  investments in  certificates  of deposit having a maturity of two
          years  or less  issued  by any  Bank  and  which  are held by the Bank
          issuing the same;

          (b)  investments  in  commercial  paper rated P1 by Moody's  Investors
          Services,  Inc.  or A1 by  Standard  and Poor's  Corporation  maturing
          within 270 days of the date of issuance thereof;

          (c) loans or advances in the usual and ordinary  course of business to
          officers,  directors  and  employees  for expenses  (including  moving
          expenses related to a transfer) incidental to carrying on the business
          of the Borrower or any Subsidiary of the Borrower;

          (d)  investments  shown on the  financial  statements  referred  to in
          Section 5.2 in existing Subsidiaries;

          (e) advances to the Borrower's  foreign sales corporations made in the
          ordinary course of the Borrower's  business in an aggregate  principal
          amount outstanding at any time of up to $100,000;

          (f) marketable obligations issued, guarantied, or fully insured by the
          United States of America, or those for which the full faith and credit
          of the  United  States of  America is  pledged  for the  repayment  of
          principal and interest thereof;  provided that such obligations have a
          final maturity of no more than two years from the date acquired by the
          Borrower;

          (g) marketable obligations issued,  guarantied or fully insured by any
          agency,   instrumentality,   or   corporation  of  the  United  States
          established or to be  established  by the Congress,  for the which the
          credit of such agency, instrumentality,  or corporation is pledged for
          the  repayment of the principal  and interest  thereof;  provided that
          such  obligations  have a final maturity of no more than one year from
          the date acquired by the Borrower; and

          (h) any  investments  listed from time to time on the  "working  list"
          maintained  by Harris  Trust  and  Savings  Bank or Harris  Investment
          Management, Inc., acting as a fiduciary agent;

          (i) loans,  advances and  guaranties  not otherwise  permitted by this
          Section 7.16,  provided that the  aggregate  amount of all such loans,
          advances  and  guaranties  outstanding  at any time  does  not  exceed
          $5,000,000;

          (j) other  investments  in and  acquisitions  (other than by merger or
          consolidation)  substantially  as  an  entirety  of  the  Property  or
          business  of any Person or a majority  of the  capital  stock or other
          equity interests of any other Person, provided that:

          (i) such Person  shall be in the same or a related line of business as
          the Borrower or one or more Subsidiaries;

          (ii) the board of directors  (or  equivalent  governing  body) of such
          Person  shall  have  given  its prior  effective  written  consent  or
          approval of such acquisition;

          (iii) no Potential  Default or Event of Default  shall exist before or
          after giving effect to such acquisition; and

          (iv) the  aggregate  consideration  paid in  connection  with all such
          investments  and  acquisitions,  all mergers  permitted by Section 7.6
          hereof   and   all   investments   and   acquisitions   permitted   by
          Section 7.16(k)  hereof,  does not exceed  $5,000,000  in any 12-month
          period;

          (k) investments in and  acquisitions of less than all or substantially
          all of the  Property  or  business  of any  Person  or of less  than a
          majority of the capital  stock or other equity  interests of any other
          Person, provided that:

          (i) such Person  shall be in the same or a related line of business as
          the Borrower or one or more Subsidiaries;

          (ii) the Board of Directors  (or  equivalent  governing  body) of such
          Person  shall  have  given  its prior  effective  written  consent  or
          approval of such acquisition;

          (iii) no Potential  Default or Event of Default  shall exist before or
          after giving effect to such acquisition; and

          (iv) the  aggregate  consideration  paid in  connection  with all such
          investments and acquisitions, all mergers permitted by Section 7.6 and
          all investments and acquisitions permitted by 7.16(j) hereof, does not
          exceed $5,000,000 in any 12-month period;

          (l) investments in and loans and advances to the Guarantors; and

          (m)  (i) investments  existing  on the date hereof in  Prudential  and
          (ii) additional  investments,  loans and advances to  Prudential in an
          aggregate principal amount not in excess of $1,000,000 at any one time
          outstanding.

          Notwithstanding anything contained in this 7.16 to the contrary, other
          than  as  specified  in  Section 7.16(m)  above,  the  sum of  (i) all
          investments  by the Borrower or any Guarantor in,  (ii) all  loans and
          advances by the Borrower or any Guarantor to, and (iii) all guarantees
          by the Borrower or any Guarantor of indebtedness of, any Subsidiary of
          the Borrower which is not a Guarantor shall not aggregate an amount in
          excess of $1,000,000 at any one time outstanding.

          Section 7.17.  Sale of Property.  The  Borrower  will not and will not
          permit any Subsidiary to, sell, lease,  assign,  transfer or otherwise
          dispose  of  (whether  in one  transaction  or in a series of  related
          transactions)  all or a  material  part of its  Property  to any other
          Person;  provided,  however,  that so long as no Event of  Default  or
          Potential Default has occurred and is continuing or would result after
          giving effect thereto, the Borrower and its Subsidiaries may make:

          (a) sales of its Inventory in the ordinary course of business; and

          (b) sales or leases of its surplus, obsolete or worn-out machinery and
          equipment.

          For purposes of this Section, "material part" shall mean 5% or more of
          the  book  value  of all of the  property  of  the  Borrower  and  its
          Subsidiaries.

          Section 7.18. Notice of Suit or Adverse Change in Business or Default.
          The Borrower shall,  as soon as possible,  and in any event within ten
          (10) days after it learns of the following, give written notice to the
          Agent and each Bank of (i) any material proceeding(s) being instituted
          or  threatened  to be  instituted  by or against  the  Borrower or any
          Subsidiary in any federal, state, local or foreign court or before any
          commission  or  other  regulatory  body  (federal,   state,  local  or
          foreign),  (ii) any material adverse change in the business,  Property
          or condition,  financial or otherwise (including,  without limitation,
          any material loss or  depreciation  in the value of the Collateral) of
          the  Borrower,  and (iii) the  occurrence of any Potential  Default or
          Event of Default.

          Section 7.19. ERISA. The Borrower will, and will cause each Subsidiary
          to, promptly pay and discharge all obligations and liabilities arising
          under ERISA of a character which if unpaid or unperformed is likely to
          result in the  imposition  of a lien  against any of its  Property and
          will promptly notify the Agent and each Bank of (i) the  occurrence of
          any  reportable  event (as defined in ERISA) which might result in the
          termination by the PBGC of any Plan,  (ii) receipt  of any notice from
          PBGC  of its  intention  to  seek  termination  of any  such  Plan  or
          appointment  of  a  trustee  therefor,   and  (iii) its  intention  to
          terminate or withdraw  from any Plan.  The Borrower will not, and will
          not permit any  Subsidiary  to,  terminate  any such Plan or  withdraw
          therefrom  unless it shall be in compliance  with all of the terms and
          conditions of this  Agreement  after giving effect to any liability to
          PBGC resulting from such termination or withdrawal.

          Section 7.20.  Supplemental  Performance.  The Borrower will, and will
          cause  each  Subsidiary  to,  at any time and from  time to time  upon
          request of any Bank take or cause to be taken any action and  execute,
          acknowledge,   deliver  or  record  any  further  documents,  security
          agreements  or other  instruments  which  such Bank in its  discretion
          deems necessary to carry out the purposes of the Loan Documents.

          Section 7.21.  Use of Proceeds. The Borrower shall use the proceeds of
          each Loan and other extensions of credit hereunder only (a) to pay the
          Borrower's indebtedness under the Previous Credit Agreement and (b) so
          long as such use of proceeds is not otherwise  prohibited by the terms
          hereof  and such use would not  otherwise  cause the  occurrence  of a
          Potential  Default  or an  Event  of  Default  hereunder,  for  proper
          corporate purposes of the Borrower.

          Section 7.22.  Compliance  with Laws, etc. The Borrower will, and will
          cause each of its  Subsidiaries  to,  comply in all material  respects
          with  all  applicable  laws,  rules,   regulations  and  orders,  such
          compliance  to  include  (without   limitation)  the  maintenance  and
          preservation of its corporate existence and qualification as a foreign
          corporation except where the failure to be so qualified would not have
          a material adverse effect on the condition, financial or otherwise, of
          Borrower or any Subsidiary.

          Section 7.23.  Environmental  Covenant.  The Borrower  will,  and will
          cause each of its Subsidiaries to,

          (a) use and operate all of its facilities and Properties in compliance
          with all  Environmental  Laws where the  failure to do so could have a
          material adverse effect on the condition,  financial or otherwise,  of
          the Borrower or any of its Subsidiaries,  keep all necessary  permits,
          approvals, certificates, licenses and other authorizations relating to
          environmental  matters  in effect and  remain in  material  compliance
          therewith,  and handle all hazardous  materials in material compliance
          with all applicable Environmental Laws;

          (b) immediately notify the Agent and each Bank and provide copies upon
          receipt  of all  written  claims,  complaints,  notices  or  inquiries
          relating to the condition of its facilities and Property or compliance
          with  Environmental  Laws, and shall  promptly,  but in no event later
          than 45 days (or, if such actions or proceedings  are capable of being
          cured but not within 45 days, then, in no event later than 105 days so
          long as Borrower  continues to  diligently  proceed to cure) after the
          occurrence of such actions or proceedings, cure and have dismissed, to
          the reasonable  satisfaction of the Banks, any actions and proceedings
          relating to compliance with Environmental Laws; and

          (c) provide such information and certifications which the Agent or any
          Bank may reasonably  request from time to time to evidence  compliance
          with this Section 7.23.

          Section 7.24. Subsidiaries.

          (a) No  Restriction.  The Borrower  shall not and shall not permit any
          Subsidiary  directly or  indirectly  to create or  otherwise  cause or
          suffer to exist or become  effective  any  consensual  encumbrance  or
          restriction  of any  kind on the  ability  of any  Subsidiary  (or the
          Borrower,  in the case of  subsections (v)  and (vii) of this Section)
          to: (i) pay  dividends or make any other  distribution  on any of such
          Subsidiary's  capital  stock or other  equity  interests  owned by the
          Borrower or any Subsidiary of the Borrower;  (ii) pay any indebtedness
          owed to the  Borrower  or any other  Subsidiary;  (iii) make  loans or
          advances to the Borrower or any other Subsidiary; (iv) transfer any of
          its  Property  or assets  to the  Borrower  or any  other  Subsidiary;
          (v) merge  or  consolidate  with or into  the  Borrower  or any  other
          Subsidiary of the Borrower;  (vi) guaranty the payment when due of the
          Borrower's  indebtedness,  obligations and liabilities to the Agent or
          the Banks;  or  (vii) grant  to the Agent for the benefit of the Banks
          liens and security  interests on such  Subsidiary's  or the Borrower's
          assets to secure the  payment of the  Borrower's  and the  Guarantors'
          indebtedness,  obligations and  liabilities  under the Loan Documents;
          provided that (1) the  foregoing shall not apply to  restrictions  and
          conditions  imposed  by law or by this  Agreement,  (2) the  foregoing
          shall not apply to  restrictions  and conditions  existing on the date
          hereof  identified  on Exhibit K  (but shall apply to any extension or
          renewal of, or any amendment or  modification  expanding the scope of,
          any such restriction or condition),  (3) the foregoing shall not apply
          to customary  restrictions  and  conditions  contained  in  agreements
          relating to the sale of a Subsidiary pending such sale,  provided such
          restrictions and conditions apply only to the Subsidiary that is to be
          sold and such sale is  permitted  hereunder,  (4) clause (vii)  of the
          foregoing shall not apply to restrictions or conditions imposed by any
          agreement relating to secured indebtedness permitted by this Agreement
          if such restrictions or conditions apply only to the Property securing
          such  indebtedness  and  (5) clause (vii)  of the foregoing  shall not
          apply  to  customary   provisions   in  leases  and  other   contracts
          restricting the assignment thereof.

          (b) Maintenance.  The Borrower shall not assign, sell or transfer, nor
          shall it permit any Subsidiary to issue, assign, sell or transfer, any
          shares of capital stock of a Subsidiary;  provided,  however, that the
          foregoing shall not operate to prevent  (a) Liens on the capital stock
          of  Subsidiaries  granted  to  the  Agent  pursuant  to  the  Security
          Documents,  (b) the  issuance,  sale and transfer to any person of any
          shares of capital  stock of a  Subsidiary  solely  for the  purpose of
          qualifying,  and to the extent  legally  necessary  to  qualify,  such
          person as a  director  of such  Subsidiary,  and  (c) any  transaction
          permitted by Section 7.6 above.

          (c)  Formation.  Promptly  upon the  formation or  acquisition  of any
          Subsidiary,  the Borrower shall provide the Agent and the Banks notice
          thereof and timely comply with the requirements of Section 1.8 hereof.

          Section 7.25.  No Changes in Fiscal Year.  The Borrower shall not, nor
          shall it permit any  Subsidiary  to,  change its fiscal  year from its
          present basis.

          Section 7.26.  Operating  Leases.  The Borrower will not, and will not
          permit any Subsidiary to, enter into any rental  agreement or lease as
          lessee of real or personal property, which is not a Capitalized Lease,
          if the aggregate of annual Rentals  payable under all such  agreements
          or leases  would  exceed  $4,000,000  during  any  fiscal  year of the
          Borrower.

          Section 7.27.  Change in the Nature of Business.  The  Borrower  shall
          not, nor shall it permit any  Subsidiary to, engage in any business or
          activity  if as a result the  general  nature of the  business  of the
          Borrower or any  Subsidiary  would be changed in any material  respect
          from the  general  nature of the  business  engaged in by it as of the
          date hereof.

          Section 7.28.  Prudential Line of Credit.  Prudential  shall,  and the
          Borrower shall cause Prudential to, maintain at all times an unsecured
          demand line of credit  (which may be availed by Prudential in the form
          of loans and/or  letters of credit) in an aggregate  principal  amount
          not  more  than  Canadian  $40,000,000  and on  terms  and  conditions
          satisfactory to the Agent and the Required Banks.

Section 8.           Events of Default and Remedies.

          Section 8.1.  Definitions.  Any  one or more  of the  following  shall
          constitute an Event of Default:

          (a) Default in the payment when due of any principal of or interest on
          any Note,  whether at the stated  maturity  thereof or as  required by
          Section 2.4 hereof or at any other time provided in this Agreement, or
          of any Reimbursement Obligation, or of any fee or other amount payable
          by the Borrower pursuant to this Agreement, which default, in the case
          of  default  in the  payment  when due of any  interest  on any  Note,
          continues for five days after the due date therefor;

          (b) Default in the observance or performance of any covenant set forth
          in  Sections 7.3,  7.5, 7.6, 7.8, 7.9, 7.10,  7.11,  7.12, 7.13, 7.14,
          7.15,  7.16,  7.17,  7.20,  7.24, 7.25, 7.26, 7.27 and 7.28 inclusive,
          hereof,  or of any  provision of any Security  Document  requiring the
          maintenance of insurance on the Collateral  subject thereto or dealing
          with the use or remittance of proceeds of such Collateral;

          (c) Default in the observance or  performance  of any other  covenant,
          condition,  agreement  or  provision  hereof or any of the other  Loan
          Documents and such default shall  continue for 30 days after the first
          to occur of  (i) the  Borrower's  knowledge  thereof  or  (ii) written
          notice thereof to the Borrower by the Agent or any Bank;

          (d)  Default  shall  occur under any  evidence  of  indebtedness  in a
          principal amount exceeding  $2,000,000 issued or assumed or guaranteed
          by the Borrower or any Subsidiary, or under any mortgage, agreement or
          other similar instrument under which the same may be issued or secured
          and such default  shall  continue for a period of time  sufficient  to
          permit the  acceleration  of  maturity of any  indebtedness  evidenced
          thereby or outstanding or secured thereunder;

          (e) Any  representation  or warranty made by the Borrower herein or in
          any Loan Document or in any statement or  certificate  furnished by it
          pursuant hereto or thereto,  proves untrue in any material  respect as
          of the date made or deemed made pursuant to the terms hereof;

          (f) Any judgment or judgments,  writ or writs,  or warrant or warrants
          of attachment,  or any similar process or processes,  other than those
          fully covered by insurance in a manner  acceptable to the Banks, in an
          aggregate  amount in excess of  $2,000,000  shall be  entered or filed
          against  the  Borrower  or any  Subsidiary  or  against  any of  their
          respective Property or assets and remain unstayed and undischarged for
          a period of 60 days from the date of its entry;

          (g) Any  reportable  event (as  defined  in ERISA)  which  constitutes
          grounds for the  termination of any Plan or for the appointment by the
          appropriate United States District Court of a trustee to administer or
          liquidate any such Plan, shall have occurred and be continuing  thirty
          (30) days after written notice to such effect shall have been given to
          the Borrower by any Bank; or any such Plan shall be  terminated;  or a
          trustee shall be appointed by the  appropriate  United States District
          Court to  administer  any such Plan; or the Pension  Benefit  Guaranty
          Corporation shall institute proceedings to administer or terminate any
          such Plan;

          (h)  The   Borrower  or  any   Subsidiary   shall   (i) have   entered
          involuntarily against it an order for relief under the Bankruptcy Code
          of 1978,  as amended,  (ii) admit  in writing its inability to pay, or
          not pay, its debts  generally as they become due or suspend payment of
          its   obligations,   (iii) make  an  assignment  for  the  benefit  of
          creditors,  (iv) apply  for,  seek,  consent to, or acquiesce  in, the
          appointment of a receiver, custodian, trustee, conservator, liquidator
          or similar  official for it or any  substantial  part of its property,
          (v) file a petition seeking relief or institute any proceeding seeking
          to have entered  against it an order for relief  under the  Bankruptcy
          Code of 1978,  as amended,  to  adjudicate  it  insolvent,  or seeking
          dissolution,  winding up,  liquidation,  reorganization,  arrangement,
          marshalling  of assets,  adjustment or  composition of it or its debts
          under any law relating to bankruptcy,  insolvency or reorganization or
          relief of debtors or fail to file an answer or other pleading  denying
          the material  allegations of any such proceeding  filed against it, or
          (vi) fail  to  contest  in good faith any  appointment  or  proceeding
          described in Section 8.1(i) hereof;

          (i) A custodian, receiver, trustee, conservator, liquidator or similar
          official  shall be appointed for the Borrower or any Subsidiary or any
          substantial part of its respective Property, or a proceeding described
          in  Section 8.1(h)(v)  shall be instituted against any Borrower or any
          Subsidiary and such  appointment  continues  undischarged  or any such
          proceeding continues undismissed or unstayed for a period of 60 days;

          (j) Any  Guarantor  shall  breach,  repudiate,  disavow  or purport to
          terminate its  obligations  under the Subsidiary  Guaranty or any part
          thereof,  or the Subsidiary Guaranty or any part thereof shall for any
          reason not be the legal, valid and binding obligation of any Guarantor
          Subsidiary;

          (k) Royal Bank of Canada or any other applicable  lender shall for any
          reason  suspend,  terminate,  cancel or otherwise cease to maintain in
          full  force  and  effect  its  unsecured  demand  line  of  credit  to
          Prudential  in an aggregate  principal  amount not more than  Canadian
          $40,000,000 and on terms and conditions  satisfactory to the Agent and
          the Required Banks and such suspension,  termination,  cancellation or
          cessation  continues  for 30 days  after  written  notice  thereof  to
          Prudential, the Borrower or any other Subsidiary; or

                   (l)     a Change of Control Event shall occur.

          Section 8.2.  Remedies for Non-Bankruptcy  Defaults. When any Event of
          Default,  other than an Event of Default described in  subsections (h)
          and (i) of Section 8.1  hereof,  has occurred and is  continuing,  the
          Agent,  if  directed  by any of the Banks,  shall  give  notice to the
          Borrower and take any or all of the following  actions:  (i) terminate
          the  remaining  Revolving  Credit  Commitments  hereunder  on the date
          (which may be the date  thereof)  stated in such notice,  (ii) declare
          the  principal  of and the  accrued  interest  on the Notes and unpaid
          Reimbursement   Obligations  to  be  forthwith  due  and  payable  and
          thereupon  the Notes and unpaid  Reimbursement  Obligations  including
          both principal and interest,  shall be and become  immediately due and
          payable without further demand, presentment,  protest or notice of any
          kind, and  (iii) proceed to foreclose against any Collateral under any
          of the  Security  Documents,  take any action or  exercise  any remedy
          under any of the Loan  Documents or exercise any other action,  right,
          power or remedy  permitted  by law. Any Bank may exercise the right of
          set  off  with  regard  to any  deposit  accounts  or  other  accounts
          maintained by the Borrower with any of the Banks.

          Section 8.3.  Remedies  for  Bankruptcy  Defaults.  When any  Event of
          Default described in  subsections (h) or (i) of Section 8.1 hereof has
          occurred and is continuing,  then the Notes shall  immediately  become
          due and payable without presentment,  demand, protest or notice of any
          kind,  and the  obligation  of the  Banks  to  extend  further  credit
          pursuant to any of the terms hereof shall immediately terminate.

          Section 8.4. L/Cs. Promptly following the acceleration of the maturity
          of the Notes pursuant to Section 8.2 or 8.3 hereof, the Borrower shall
          immediately  pay to the  Agent for the  benefit  of the Banks the full
          undrawn face amount of all then outstanding L/Cs. The Agent shall hold
          all such funds and proceeds thereof as additional  collateral security
          for the  obligations  of the  Borrower  to the  Banks  under  the Loan
          Documents.  The amount paid under any L/C for which the  Borrower  has
          not  reimbursed  the Banks shall bear  interest  from the date of such
          payment at the default rate of interest specified in Section 1.3(c)(i)
          hereof.

          Section 8.5.  Expenses.  The  Borrower  agrees to pay to the Agent and
          each Bank, and any other holder of any Note outstanding hereunder, all
          expenses reasonably incurred or paid by the Agent and such Bank or any
          such holder,  including reasonable attorneys' fees and court costs, in
          connection with any Potential Default or Event of Default hereunder or
          in connection with the enforcement of any of the Loan Documents.

Section 9.           Change in Circumstances Regarding Eurodollar Loans.

          Section 9.1.  Change of Law.  Notwithstanding  any other provisions of
          this  Agreement or any Note, if at any time after the date hereof with
          respect to Eurodollar  Loans,  any Bank shall  determine in good faith
          that  any  change  in   applicable   law  or   regulation  or  in  the
          interpretation  thereof  makes it  unlawful  for such  Bank to make or
          continue  to  maintain  any  Eurodollar  Loan or to give effect to its
          obligations  as  contemplated  hereby,  such Bank shall  promptly give
          notice  thereof  to the  Borrower  to such  effect,  and  such  Bank's
          obligation to make or relend any such affected  Eurodollar Loans under
          this Agreement shall terminate until it is no longer unlawful for such
          Bank to make or maintain such affected Loan. The Borrower shall prepay
          the outstanding  principal amount of any such affected Eurodollar Loan
          made to it,  together with all interest  accrued thereon and all other
          amounts  due  and  payable  to the  Banks  under  Section 9.4  of this
          Agreement,  on the  earlier  of the  last day of the  Interest  Period
          applicable  thereto  and the first day on which it is illegal for such
          Bank to have such Loans outstanding;  provided,  however, the Borrower
          may then elect to borrow the principal amount of such affected Loan by
          means of another type of Revolving  Credit Loan  available  hereunder,
          subject to all of the terms and conditions of this Agreement.

          Section 9.2.  Unavailability of Deposits or Inability to Ascertain the
          Adjusted Eurodollar Rate.  Notwithstanding any other provision of this
          Agreement or any Note to the contrary, if prior to the commencement of
          any Interest Period any Bank shall determine  (i) that deposits in the
          amount of any  Eurodollar  Loan  scheduled to be  outstanding  are not
          available  to  it  in  the  relevant   market  or  (ii) by  reason  of
          circumstances  affecting the relevant market,  adequate and reasonable
          means do not exist for ascertaining the Adjusted Eurodollar Rate, then
          the Agent shall  promptly give  telephonic or telex notice  thereof to
          the  Borrower  and the Banks (such notice to be confirmed in writing),
          and the  obligation of the Banks to make any such  Eurodollar  Loan in
          such  amount  and for  such  Interest  Period  shall  terminate  until
          deposits in such amount and for the  Interest  Period  selected by the
          Borrower shall again be readily  available in the relevant  market and
          adequate  and  reasonable  means exist for  ascertaining  the Adjusted
          Eurodollar  Rate.  Upon the giving of such  notice,  the  Borrower may
          elect to either  (i) pay or prepay,  as the case may be, such affected
          Loan, subject to the provisions of Section 9.4 hereof or (ii) reborrow
          such affected Loan as another type of Revolving  Credit Loan available
          hereunder, subject to all terms and conditions of this Agreement.

          Section 9.3.   Taxes  and  Increased   Costs.   With  respect  to  any
          outstanding  Eurodollar  Loans,  if any Bank shall  determine  in good
          faith that any change in any  applicable  law,  treaty,  regulation or
          guideline (including, without limitation, Regulation D of the Board of
          Governors  of the  Federal  Reserve  System)  or any new law,  treaty,
          regulation or guideline, or any interpretation of any of the foregoing
          by any governmental  authority charged with the administration thereof
          or any  central  bank or other  fiscal,  monetary  or other  authority
          having  jurisdiction  over  such  Bank or its  lending  branch  or the
          Eurodollar Loans contemplated by this Agreement (whether or not having
          the force of law) ("Change in Law") shall:

          (a) impose, modify or deem applicable any reserve,  special deposit or
          similar requirements against assets held by, or deposits in or for the
          account  of,  or  Loans  by,  or any  other  acquisition  of  funds or
          disbursements  by,  such Bank  (other  than  reserves  included in the
          determination of the Adjusted Eurodollar Rate);

          (b) subject such Bank,  any  Eurodollar  Loan,  or any Note to any tax
          (including,   without   limitation,   any   United   States   interest
          equalization  tax or  similar  tax  however  named  applicable  to the
          acquisition  or  holding  of  debt  obligations  and any  interest  or
          penalties  with  respect  thereto),   duty,  charge,  stamp  tax,  fee
          deduction or withholding in respect of this Agreement,  any Eurodollar
          Loan,  or any Note except such taxes as may be measured by the overall
          net  income of such Bank or its  lending  branch  and  imposed  by the
          jurisdiction,   or  any  political  subdivision  or  taxing  authority
          thereof,  in which  such  Bank's  principal  executive  office  or its
          lending branch is located or in which the Bank has nexus;

          (c) change the basis of taxation of payments of principal and interest
          due from the Borrower to such Bank  hereunder or under any Note (other
          than by a change in  taxation of the overall net income of such Bank);
          or

          (d) impose on such Bank any penalty with  respect to the  foregoing or
          any other condition  regarding this Agreement,  its disbursement,  any
          Eurodollar Loan, or any Note;

          and such Bank shall  determine in good faith that the result of any of
          the  foregoing is to increase the cost (whether by incurring a cost or
          adding to a cost) to such Bank of making or maintaining any Eurodollar
          Loan  hereunder  or to reduce  the  amount of  principal  or  interest
          received by such Bank,  then the Borrower  shall pay to such Bank from
          time to time as specified by such Bank such additional amounts as such
          Bank shall determine are sufficient to compensate and indemnify it for
          such increased cost or reduced amount.  If any Bank makes such a claim
          for  compensation,  it shall  provide to the  Borrower  a  certificate
          setting forth such increased cost or reduced amount as a result of any
          event  mentioned  herein  specifying  such  Change  in Law,  and  such
          certificate  shall be conclusive and binding on the Borrower as to the
          amount  thereof  except  in the  case of  manifest  error  or  willful
          misconduct.  Upon the  imposition  of any such cost,  the Borrower may
          prepay any affected Loan,  subject to the  provisions of  Sections 2.3
          and 9.4 hereof.

          Section 9.4.  Funding Indemnity. (a) In the event any Bank shall incur
          any loss, cost, expense or premium (including, without limitation, any
          loss of profit and any loss,  cost,  expense or  premium  incurred  by
          reason of the liquidation or  re-employment of deposits or other funds
          acquired by such Bank to fund or maintain any  Eurodollar  Loan or the
          relending or  reinvesting  of such deposits or amounts paid such Bank)
          as a result of:

          (i) any payment or  prepayment  of a  Eurodollar  Loan on a date other
          than the last day of the then applicable Interest Period;

          (ii) any failure by the Borrower to borrow any Eurodollar  Loan on the
          date specified in the notice given pursuant to Section 1.6 hereof; or

          (iii) the occurrence of any Event of Default;

          then,  upon the demand of such Bank,  the  Borrower  shall pay to such
          Bank such amount as will  reimburse  such Bank for such loss,  cost or
          expense.

          (b) If any Bank makes a claim for compensation under this Section 9.4,
          it shall  provide to the  Borrower  a  certificate  setting  forth the
          amount of such loss,  cost or expense  in  reasonable  detail and such
          certificate  shall be conclusive and binding on the Borrower as to the
          amount thereof except in the case of manifest error.

          Section 9.5.  Lending Branch.  Each Bank may, at its option,  elect to
          make, fund or maintain its Eurodollar Loans hereunder at the branch or
          office  specified  opposite its signature on the signature page hereof
          or such other of its branches or offices as such Bank may from time to
          time elect, subject to the provisions of Section 1.6(b) hereof.

          Section 9.6.   Discretion   of  Bank   as  to   Manner   of   Funding.
          Notwithstanding any provision of this Agreement to the contrary,  each
          Bank shall be entitled to fund and  maintain its funding of all or any
          part of its  Loans in any  manner  it sees  fit,  it being  understood
          however,  that for the purposes of this  Agreement all  determinations
          hereunder  (including  determinations for the purposes of Section 9.4)
          shall be made as if the Banks had actually  funded and maintained each
          Eurodollar  Loan during each Interest Period for such Loan through the
          purchase  of  deposits  in the  relevant  interbank  market  having  a
          maturity corresponding to such Interest Period and bearing an interest
          rate equal to the Adjusted Eurodollar Rate for such Interest Period.

Section 10.          The Agent.

          Section 10.1. Appointment and Powers. Harris Trust and Savings Bank is
          hereby  appointed  by the  Banks as Agent  under  the Loan  Documents,
          including but not limited to the Security Documents, wherein the Agent
          shall hold a security interest for the benefit of the Banks, solely as
          the Agent of the Banks, and each of the Banks  irrevocably  authorizes
          the Agent to act as the Agent of such Bank. The Agent agrees to act as
          such upon the express conditions contained in this Agreement.

          Section 10.2.  Powers.  The Agent  shall  have and may  exercise  such
          powers  hereunder  as are  specifically  delegated to the Agent by the
          terms  of  the  Loan  Documents,  together  with  such  powers  as are
          incidental  thereto.  The Agent  shall have no  implied  duties to the
          Banks,  nor any  obligation  to the Banks to take any action under the
          Loan  Documents  except any action  specifically  provided by the Loan
          Documents to be taken by the Agent.

          Section 10.3.  General  Immunity.  Neither  the  Agent  nor any of its
          directors,  officers, agents or employees shall be liable to the Banks
          or any Bank for any action  taken or omitted to be taken by it or them
          under the Loan Documents or in connection  therewith except for its or
          their own gross negligence or willful misconduct.

          Section 10.4.  No Responsibility for Loans,  Recitals,  etc. The Agent
          shall not (i) be  responsible to the Banks for any recitals,  reports,
          statements,  warranties  or  representations  contained  in  the  Loan
          Documents or furnished pursuant thereto,  (ii) be  responsible for the
          value, worth,  payment or collection of any Loans hereunder,  (iii) be
          bound to ascertain or inquire as to the  performance  or observance of
          any of the terms of the Loan  Documents,  or  (iv) be  responsible  to
          determine  or  verify  the  existence,  eligibility  or  value  of any
          Collateral,  or the correctness of any Borrowing Base Certificate.  In
          addition,  neither the Agent nor its counsel shall be  responsible  to
          the  Banks  for the  enforceability  or  validity  of any of the  Loan
          Documents.

          Section 10.5. Right to Indemnity. The Banks hereby indemnify the Agent
          for any actions  taken in  accordance  with this  Section 10,  and the
          Agent  shall be fully  justified  in failing or  refusing  to take any
          action  hereunder,  unless  it  shall  first  be  indemnified  to  its
          satisfaction  by the Banks pro rata against any and all  liability and
          expense  which may be incurred by it by reason of taking or continuing
          to take any such action,  other than any liability which may arise out
          of Agent's gross negligence or willful misconduct.

          Section 10.6.  Action Upon  Instructions  of Banks.  The Agent agrees,
          upon the written  request of the Banks, to take any action of the type
          specified in the Loan  Documents  as being within the Agent's  rights,
          duties,  powers or  discretion.  The Agent shall in all cases be fully
          protected  in acting,  or in  refraining  from  acting,  hereunder  in
          accordance  with written  instructions  signed by the Banks,  and such
          instructions  and any action taken or failure to act pursuant  thereto
          shall be binding on all of the Banks and on all  holders of any of the
          Notes. In the absence of a request by the Banks,  the Agent shall have
          authority, in its sole discretion,  to take or not to take any action,
          unless the Loan Documents  specifically  require the consent of all of
          the Banks.

          Section 10.7.  Employment of Agents and Counsel. The Agent may execute
          any of its duties as Agent hereunder by or through employees,  agents,
          and attorneys-in-fact and shall not be answerable to the Banks, except
          as to money or securities received by it or its authorized agents, for
          the  default or  misconduct  of any such  agents or  attorneys-in-fact
          selected by it in good faith and with reasonable care. The Agent shall
          be  entitled  to advice and opinion of legal  counsel  concerning  all
          matters pertaining to the duties of the agency hereby created.

          Section 10.8.  Reliance on Documents; Counsel. Absent gross negligence
          or willful  misconduct,  the Agent  shall be entitled to rely upon any
          Note,  notice,  consent,  certificate,  affidavit,  letter,  telegram,
          statement,  paper or document believed by it to be genuine and correct
          and to have been signed or sent by the proper person or persons,  and,
          in  respect  to legal  matters,  upon  the  opinion  of legal  counsel
          selected by the Agent.

          Section 10.9.  May Treat Payee as Owner.  The Agent may deem and treat
          the payee of any Note as the owner  thereof  for all  purposes  hereof
          unless  and  until a  written  notice of the  assignment  or  transfer
          thereof shall have been filed with the Agent.  Any request,  authority
          or  consent  of any  person,  firm or  corporation  who at the time of
          making such request or giving such  authority or consent is the holder
          of any such Note shall be  conclusive  and  binding on any  subsequent
          holder,  transferee  or assignee of such Note or of any Note issued in
          exchange therefor.

          Section 10.10.  Agent's  Reimbursement.  Each Bank agrees to reimburse
          the Agent pro rata in accordance  with its  Commitment  Percentage for
          any reasonable  out-of-pocket expenses (including fees and charges for
          field audits) not  reimbursed by the Borrower  (a) for which the Agent
          is entitled to  reimbursement by the Borrower under the Loan Documents
          and (b) for  any other  reasonable  expenses  incurred by the Agent on
          behalf of the Banks,  in connection with the  preparation,  execution,
          delivery, administration and enforcement of the Loan Documents.

          Section 10.11.  Rights as a Lender.  With  respect to its  commitment,
          Loans made by it, the L/C issued by it and the Notes issued to it, the
          Agent shall have the same rights and powers  hereunder as any Bank and
          may  exercise  the same as though it were not the Agent,  and the term
          "Bank" or "Banks"  shall,  unless  the  context  otherwise  indicates,
          include  the Agent in its  individual  capacity.  The Agent may accept
          deposits  from,  lend  money to, and  generally  engage in any kind of
          banking  or trust  business  with the  Borrower  as if it were not the
          Agent.

          Section 10.12.  Bank Credit Decision.  Each Bank  acknowledges that it
          has,  independently  and without  reliance upon the Agent or any other
          Bank and based on the financial  statements referred to in Section 5.2
          and such other documents and information as it has deemed appropriate,
          made its own  credit  analysis  and  decision  to enter  into the Loan
          Documents. Each Bank also acknowledges that it will, independently and
          without  reliance  upon the Agent or any other  Bank 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 the Loan Documents.

          Section 10.13.  Resignation of Agent.  Subject to the appointment of a
          successor  Agent,  the Agent may  resign as Agent for the Banks  under
          this Agreement and the other Loan Documents at any time by sixty days'
          notice in writing to the Banks.  Such  resignation  shall take  effect
          upon appointment of such successor.  The Banks shall have the right to
          appoint a  successor  Agent who shall be entitled to all of the rights
          of, and vested with the same powers as, the  original  Agent under the
          Loan  Documents.  In the event a  successor  Agent shall not have been
          appointed  within the sixty day period  following the giving of notice
          by the Agent, the Agent may appoint its own successor.  Resignation by
          the Agent  shall not affect or impair  the  rights of the Agent  under
          Sections 10.5  and 10.10 hereof with respect to all matters  preceding
          such  resignation.  Any  successor  Agent must be a  national  banking
          association or a Bank chartered in any State of the United States.

          Section 10.14.   Duration  of  Agency.   The  agency   established  by
          Section 10.1  hereof shall  continue,  and  Sections 10.1  through and
          including  this  Section 10.14  shall remain in full force and effect,
          until the Notes and all other amounts due  hereunder  and  thereunder,
          including without limitation all Reimbursement Obligations, shall have
          been paid in full and the Banks'  commitments  to extend  credit to or
          for the benefit of the Borrower shall have terminated or expired.

          Section 10.15.  Letter of Credit Issuer. Harris shall act on behalf of
          the Banks  with  respect  to any L/C  issued  by it and the  documents
          associated  therewith.  Harris  shall  have  all of the  benefits  and
          immunities  (i) provided  to the Agent in this Section 10 with respect
          to any acts taken or omissions  suffered by Harris in connection  with
          L/Cs issued by it or proposed to be issued by it and the  Applications
          pertaining  to such L/Cs as fully as if the term  "Agent",  as used in
          this  Section 10,  included  Harris  with  respect  to  such  acts  or
          omissions and (ii) as  additionally  provided in this  Agreement  with
          respect to Harris in such capacity.

          Section 10.16.  Hedging Arrangements.  By virtue of a Bank's execution
          of this Agreement or an assignment agreement pursuant to Section 11.19
          hereof,  as the case may be, any  Affiliate of such Bank with whom the
          Borrower  has entered  into an agreement  creating  Hedging  Liability
          shall be deemed a Bank party hereto for purposes of any reference in a
          Loan  Document to the  parties for whom the Agent is acting,  it being
          understood  and agreed that the rights and benefits of such  Affiliate
          under the Loan Documents consist exclusively of such Affiliate's right
          to share in payments and  collections  out of the  Collateral  and the
          Loan Documents as more fully set forth in other provisions hereof.

Section 11.          Miscellaneous.

          Section 11.1. Amendments and Waivers. Any term, covenant, agreement or
          condition of this Agreement may be amended only by a written amendment
          executed by the  Borrower,  the  Required  Banks and, if the rights or
          duties of the Agent are affected  thereby,  the Agent,  or  compliance
          therewith  only may be waived  (either  generally  or in a  particular
          instance and either  retroactively or prospectively),  if the Borrower
          shall have obtained the consent in writing of the Required  Banks and,
          if the rights or duties of the Agent are affected thereby,  the Agent,
          provided,  however,  that (1)  without  the  consent in writing of the
          holders of all outstanding Notes and unpaid Reimbursement  Obligations
          and  the  issuer  of the  L/Cs,  or all  Banks  if no  Note  or L/C is
          outstanding,  no such amendment or waiver shall  (a) change the amount
          or postpone the date of payment of any  scheduled  payment or required
          prepayment  of  principal  of any of the Notes or  reduce  the rate or
          extend the time of payment of interest on any of the Notes,  or reduce
          the amount of principal  thereof,  or modify any of the  provisions of
          any of the Notes with  respect to the payment or  prepayment  thereof,
          (b) give to any Note any  preference  over any other Notes,  (c) amend
          the  definition  of  Required  Banks,  (d) alter,  modify or amend the
          provisions of this Section 11.1,  (e) change the amount or term of any
          of the Banks' Revolving Credit  Commitments,  Swingline  Commitment or
          the fees required under  Section 2.1  hereof (it being understood that
          waivers or modifications of covenants, conditions or Events of Default
          shall not constitute a change in  Commitments),  (f) alter,  modify or
          amend the provisions of Section 6 of this Agreement, (g) alter, modify
          or amend any Bank's right hereunder to consent to any action, make any
          request or give any notice,  (h) change  the  advance  rates under the
          Borrowing  Base,  or  (i) release  any  Collateral  under the Security
          Documents,  unless such release is permitted  or  contemplated  by the
          Loan Documents; (2) without the consent of the Agent no such amendment
          or waiver  shall  affect  the  rights of the  Agent  under  Section 10
          hereof;  and  (3) without  the consent of Harris no such  amendment or
          waiver  shall amend  Sections 1.1,  1.2,  1.3,  1.4,  1.5,  1.6 or 1.7
          hereof.  Any such amendment or waiver shall apply equally to all Banks
          and the holders of any of the Notes and Reimbursement  Obligations and
          shall be binding  upon them,  upon each future  holder of any Note and
          Reimbursement  Obligation  and upon the Borrower,  whether or not such
          Note shall have been marked to indicate such  amendment or waiver.  No
          such  amendment or waiver shall extend to or affect any obligation not
          expressly amended or waived.

          Section 11.2. Waiver of Rights. No delay or failure on the part of the
          Agent or any Bank or on the part of the  holder or holders of any Note
          or  Reimbursement  Obligation  in the  exercise  of any power or right
          shall  operate  as a waiver  thereof,  nor as an  acquiescence  in any
          Potential Default or Event of Default, nor shall any single or partial
          exercise of any power or right preclude any other or further  exercise
          thereof,  or the exercise of any other power or right,  and the rights
          and remedies  hereunder  of the Agent,  the Banks and of the holder or
          holders  of any Notes are  cumulative  to, and not  exclusive  of, any
          rights or remedies which any of them would otherwise have.

          Section 11.3.  Several  Obligations.  The  commitments  of each of the
          Banks hereunder shall be the several  obligations of each Bank and the
          failure  on the  part  of any  one or more  of the  Banks  to  perform
          hereunder   shall  not  affect  the  obligation  of  the  other  Banks
          hereunder,  provided that nothing herein  contained  shall relieve any
          Bank from any  liability  for its failure to so perform.  In the event
          that any one or more of the Banks shall fail to perform its commitment
          hereunder,  all  payments  thereafter  received  by the  Agent  on the
          principal of Loans and Reimbursement  Obligations  hereunder,  whether
          from any Collateral or otherwise, shall be distributed by the Agent to
          the Banks  making  such  additional  Loans  ratably  as among  them in
          accordance with the principal  amount of additional Loans made by them
          until such additional  Loans shall have been fully paid and satisfied,
          and all payments on account of interest  shall be applied as among all
          the Banks ratably in accordance  with the amount of interest  owing to
          each of the  Banks  as of the  date of the  receipt  of such  interest
          payment.

          Section 11.4.  Non-Business  Day.  (a) If any payment of  principal or
          interest  on any  Domestic  Rate Loan shall fall due on a day which is
          not a  Business  Day,  interest  at the rate such  Loan  bears for the
          period prior to maturity  shall  continue to accrue on such  principal
          from the stated due date thereof to and including the next  succeeding
          Business Day on which the same is payable.

          (b) If any payment of  principal  or interest on any  Eurodollar  Loan
          shall fall due on a day which is not a Business  Day, the payment date
          thereof shall be extended to the next date which is a Business Day and
          the  Interest  Period  for such Loan  shall be  accordingly  extended,
          unless as a result  thereof  any  payment  date would fall in the next
          calendar  month,  in which  case such  payment  date shall be the next
          preceding Business Day.

          Section 11.5.   Survival  of  Indemnities.  All  indemnities  and  all
          provisions   relative  to   reimbursement  to  the  Banks  of  amounts
          sufficient  to  protect  the  yield  to  the  Banks  with  respect  to
          Eurodollar Loans, including,  but not limited to, Sections 9.3 and 9.4
          hereof,  shall  survive  the  termination  of this  Agreement  and the
          payment of the Notes.

          Section 11.6.  Documentary  Taxes.  Although  the  Borrower  is of the
          opinion that no documentary or similar taxes are payable in respect to
          this  Agreement  or the Notes,  Borrower  agrees that it will pay such
          taxes,  including interest and penalties,  in the event any such taxes
          are assessed  irrespective of when such assessment is made and whether
          or not any credit is then in use or available hereunder.

          Section 11.7. Representations. All representations and warranties made
          herein or in  certificates  given  pursuant  hereto shall  survive the
          execution and delivery of this  Agreement and of the Notes,  and shall
          continue in full force and effect with respect to the date as of which
          they  were  made  and as  reaffirmed  on the  date of each  borrowing,
          request  for  L/C and as long  as any  credit  is in use or  available
          hereunder.

          Section 11.8. Notices. Unless otherwise expressly provided herein, all
          communications provided for herein shall be in writing or by telex and
          shall be  deemed to have been  given or made when  served  personally,
          when an answer  back is  received  in the case of notice by telex or 2
          days  after  the  date  when  deposited  in  the  United  States  mail
          (registered,  if to  Borrower)  addressed  if  to  Borrower  to  16401
          Swingley  Ridge  Road,  Suite  700,   Chesterfield,   Missouri  63017,
          Attention:  Vice President  Finance;  if to the Agent or Harris at 111
          West Monroe  Street,  Chicago,  Illinois  60690,  Attention:  Emerging
          Majors West; and if to any of the Banks,  at the address for each Bank
          set forth  under its  signature  hereon;  or at such other  address as
          shall be  designated  by any party hereto in a written  notice to each
          other party pursuant to this Section 11.8.

          Section 11.9.  Costs and Expenses.  (a) The Borrower  agrees to pay on
          demand all  reasonable  out-of-pocket  costs and expenses of the Agent
          and  each  Bank  in  connection  with  the  negotiation,  preparation,
          execution  and  delivery  of this  Agreement,  the Notes and the other
          instruments  and documents to be delivered  hereunder or in connection
          with the  transactions  contemplated  hereby,  including  the fees and
          expenses  of Chapman  and Cutler,  special  counsel to the Agent;  all
          reasonable  out-of-pocket  costs  and  expenses  of the  Agent and the
          reasonable out-of-pocket costs and expenses of each Bank (including in
          each case  attorneys'  fees and expenses)  incurred in connection with
          any  consents  or waivers  hereunder  or  amendments  hereto,  and all
          reasonable out-of-pocket costs and expenses (including attorneys' fees
          and expenses),  if any,  incurred by the Agent, the Banks or any other
          holders of a Note or any  Reimbursement  Obligation in connection with
          the  enforcement  of  this  Agreement  or  the  Notes  and  the  other
          instruments  and  documents  to be delivered  hereunder.  The Borrower
          agrees to indemnify and save harmless the Banks and the Agent from any
          and all liabilities,  losses, costs and expenses incurred by the Banks
          or the Agent in connection with any action, suit or proceeding brought
          against  the Agent or any Bank by any Person  which  arises out of the
          transactions  contemplated  or financed hereby or by the Notes, or out
          of any  action  or  inaction  by the  Agent or any Bank  hereunder  or
          thereunder,  except  for  such  thereof  as is  caused  by  the  gross
          negligence or willful misconduct of the party indemnified.

          (b) Without  limiting the  generality of the  foregoing,  the Borrower
          unconditionally agrees to forever indemnify, defend and hold harmless,
          the Agent and each Bank,  and  covenants  not to sue for any claim for
          contribution  against,  the Agent or any Bank for any damages,  costs,
          loss or expense, including without limitation,  response,  remedial or
          removal costs, arising out of any of the following:  (i) any presence,
          release,  threatened  release or  disposal of any  hazardous  or toxic
          substance or petroleum by the Borrower or any  Subsidiary or otherwise
          occurring on or with respect to their  respective  Property,  (ii) the
          operation or  violation of any  Environmental  Law,  whether  federal,
          state, or local, and any regulations  promulgated  thereunder,  by the
          Borrower or any  Subsidiary or otherwise  occurring on or with respect
          to their respective  Property,  (iii) any claim for personal injury or
          property  damage in connection  with the Borrower or any Subsidiary or
          otherwise  occurring on or with respect to their respective  Property,
          and (iv) the inaccuracy or breach of any environmental representation,
          warranty  or  covenant  by the  Borrower  made  herein  or in any loan
          agreement,   promissory  note,  mortgage,   deed  of  trust,  security
          agreement or any other  instrument or document  evidencing or securing
          any indebtedness,  obligations or liabilities of the Borrower owing to
          the Agent or any Bank or setting forth terms and conditions applicable
          thereto or otherwise relating thereto, except for damages arising from
          the Agent's or such Bank's  willful  misconduct  or gross  negligence.
          This indemnification shall survive the payment and satisfaction of all
          indebtedness, obligations and liabilities of the Borrower owing to the
          Agent and the Banks and the termination of this  Agreement,  and shall
          remain in force beyond the  expiration  of any  applicable  statute of
          limitations  and payment or  satisfaction  in full of any single claim
          under this indemnification. This indemnification shall be binding upon
          the  successors  and  assigns of the  Borrower  and shall inure to the
          benefit  of  Agent  and the  Banks  and  their  respective  directors,
          officers,  employees,  agents,  and  collateral  trustees,  and  their
          successors and assigns.

          (c) The provisions of this  Section 11.9  shall survive payment of the
          Notes and Reimbursement  Obligations and the termination of the Banks'
          Commitments hereunder.

          Section 11.10.  Counterparts.  This  Agreement  may be executed in any
          number of counterparts and all such counterparts  taken together shall
          be deemed to constitute  one and the same  instrument.  One or more of
          the Banks may execute a separate  counterpart of this Agreement  which
          has also been  executed  by the  Borrower,  and this  Agreement  shall
          become  effective  as and  when  Borrower  and all of the  Banks  have
          executed this  Agreement or a counterpart  thereof and lodged the same
          with the Agent.

          Section 11.11.   Successors  and  Assigns;   Governing   Law;   Entire
          Agreement.  This Agreement  shall be binding upon the Borrower and the
          Banks and their respective  successors and assigns, and shall inure to
          the benefit of the  Borrower  and each of the Banks and the benefit of
          their  respective  successors  and assigns,  including any  subsequent
          holder of any Note or Reimbursement Obligation. This Agreement and the
          rights  and  duties  of the  parties  hereto  shall be  construed  and
          determined  in  accordance  with  the laws of the  State of  Illinois,
          except  conflict of laws  principles.  This Agreement  constitutes the
          entire understanding of the parties with respect to the subject matter
          hereof and any prior agreements, whether written or oral, with respect
          thereto are superseded  hereby. The Borrower may not assign any of its
          rights or obligations  hereunder without the written consent of all of
          the Banks.

          Section 11.12.  Banks'  Obligations  Several.  The  obligations of the
          Banks hereunder are several and not joint.  Nothing  contained in this
          Agreement  and no action taken by the Banks  pursuant  hereto shall be
          deemed to  constitute  the  Banks a  partnership,  association,  joint
          venture or other entity.

          Section 11.13.  Severability.  In the event that any term or provision
          hereof is determined to be unenforceable  or illegal,  it shall deemed
          severed   herefrom   to   the   extent   of  the   illegality   and/or
          unenforceability  and all other provisions hereof shall remain in full
          force and effect.

          Section 11.14.  Table of Contents and Headings.  The table of contents
          and section  headings in this  Agreement  are for  reference  only and
          shall not affect the construction of any provision hereof.

          Section 11.15.  Sharing of Payments.  Each Bank agrees with each other
          Bank that if such Bank shall  receive and retain any payment,  whether
          by  set-off  or   application   of  deposit   balances  or   otherwise
          ("Set-Off"),  on any Loan,  Reimbursement  Obligation  or other amount
          outstanding  under this  Agreement  in excess of its ratable  share of
          payments on all Loans,  Reimbursement  Obligations  and other  amounts
          then outstanding to the Banks,  then such Bank shall purchase for cash
          at face value,  but without  recourse,  ratably from each of the other
          Banks such amount of the Loans and  Reimbursement  Obligations held by
          each such other Bank (or  interest  therein) as shall be  necessary to
          cause  such Bank to share such  excess  payment  ratably  with all the
          other Banks;  provided,  however, that if any such purchase is made by
          any Bank,  and if such excess  payment or part  thereof is  thereafter
          recovered from such  purchasing  Bank, the related  purchases from the
          other Banks shall be rescinded ratably and the purchase price restored
          as to the portion of such  excess  payment so  recovered,  but without
          interest.  Each  Bank's  ratable  share of any such  Set-Off  shall be
          determined by the proportion  that the aggregate  principal  amount of
          Loans and Reimbursement  Obligations then due and payable to such Bank
          bears  to  the  total   aggregate   principal   amount  of  Loans  and
          Reimbursement Obligations then due and payable to all the Banks.

          Section 11.16.  Conflict Among Documents. In the event of any conflict
          between the terms hereof and the terms of any Loan Document other than
          the L/C Agreement,  the terms of such other Loan Document shall govern
          as to the  provision  in  conflict  and in the  event of any  conflict
          between the terms hereof and the terms of the L/C Agreement, the terms
          of this Agreement shall govern as to the provision in conflict.

          Section 11.17.  Confidentiality. Each Bank agrees (on behalf of itself
          and  its  affiliates,   directors,  officers,  employees,  agents  and
          representatives)  to use reasonable  precautions to keep confidential,
          in accordance with its customary procedures for handling  confidential
          information  of this  nature  and in  accordance  with  safe and sound
          banking practices, any non-public information supplied to such Bank by
          the  Borrower or any of its  Subsidiaries  pursuant to this  Agreement
          which  is   identified  to  such  Banks  by  any  of  such,  as  being
          confidential at the time the same is delivered to such Bank; provided,
          however,  that nothing contained in this Section 11.17  shall prohibit
          or limit the disclosure by any Bank of any such information (i) to the
          extent required by any statute, rule, regulation, subpoena or judicial
          process,   (ii) to  any  governmental  or  regulatory   agency  having
          jurisdiction  over such  Bank,  (iii) to  any  professional  advisors,
          including  counsel  and  accountants,  for any Bank,  (iv) to any bank
          examiners or auditors,  (v) in connection with any litigation to which
          any Bank is a party,  (vi) in  connection  with the enforcement of any
          Bank's rights and remedies under this  Agreement,  any of the Notes or
          any  of  the  other  Loan   Documents  or  (vii) to  any  assignee  or
          participant of any Bank (or  prospective  assignee or  participant) so
          long as such  assignee  or  participant  (or  prospective  assignee or
          participant)   first   executes   and   delivers   to   such   Bank  a
          confidentiality   agreement   in   substantially   the  form  of  this
          Section 11.17  and such Bank  delivers to the  Borrower a copy of such
          executed  confidentiality  agreement; and provided further, that in no
          event shall any Bank be obligated or required to return any  materials
          furnished  to such Bank by the  Borrower  or any of its  Subsidiaries,
          hereunder.  Notwithstanding  the  foregoing,  no Bank  shall  have any
          liability to the Borrower or to any of its  Subsidiaries  or to any of
          their shareholders, partners, directors, officers, employees or agents
          by reason of, or in any way claimed to be related  to, any  disclosure
          by  such  Bank  (or  any  of  its  affiliates,   directors,  officers,
          employees,  agents or representatives) of any information with respect
          to the Borrower or any of its Subsidiaries  except as the same results
          from the  gross  negligence  or  willful  misconduct  of such  Bank as
          determined by a court of competent jurisdiction.

          Section 11.18. Participants. Each Bank shall have the right at its own
          cost  to  grant  participations  (to  be  evidenced  by  one  or  more
          agreements or certificates of  participation) in the Loans made and/or
          Reimbursement Obligations, participations in L/Cs, Swingline Loans and
          Commitment  held by such Bank at any time and from time to time to one
          or more other Persons;  provided that (i) no such participation  shall
          relieve  any  Bank of any of its  obligations  under  this  Agreement,
          (ii) no  such  participant  shall  have any direct  rights  under this
          Agreement except as provided in this Section 11.18, and no Agent shall
          have  any  obligation  or  responsibility  to  such  participant.  Any
          agreement  pursuant  to which  such  participation  is  granted  shall
          provide  that the  granting  Bank  shall  retain  the sole  right  and
          responsibility  to enforce the  obligations of the Borrower under this
          Agreement and the other Loan Documents including,  without limitation,
          the right to  approve  any  amendment,  modification  or waiver of any
          provision  of the Loan  Documents,  except  that  such  agreement  may
          provide that such Bank will not agree to any  modification,  amendment
          or waiver of the Loan  Documents  that  would  reduce the amount of or
          postpone  any fixed date for payment of any  Obligation  in which such
          participant  has an interest.  Any party to which such a participation
          has  been  granted  shall  have  the  benefits  of   Section 9.3   and
          Section 9.4  hereof,  up to an amount not  exceeding  the amount  that
          would   otherwise   have  been  payable  to  the  Bank  who  sold  the
          participation  interest to such party. The Borrower and each Guarantor
          authorizes  each Bank to disclose to any  participant  or  prospective
          participant   under  this   Section 11.18   any   financial  or  other
          information pertaining to the Borrower or any Guarantor.

          Section 11.19. Assignment Agreements and Register. (a) Each Bank shall
          have the right at any time,  with the prior  consent of the Agent and,
          so long as no  Event of  Default  then  exists,  the  Borrower  (which
          consent of the Borrower shall not be  unreasonably  withheld) to sell,
          assign,  transfer  or  negotiate  all or any  part of its  rights  and
          obligations under the Loan Documents  (including,  without limitation,
          the  indebtedness  evidenced by the Notes then held by such  assigning
          Bank, together with an equivalent percentage of its obligation to make
          Loans  and  participate  in L/Cs) to one or more  commercial  banks or
          other  financial  institutions  or investors,  provided  that,  unless
          otherwise agreed to by the Agent,  such assignment shall be of a fixed
          percentage  (and  not by  its  terms  of  varying  percentage)  of the
          assigning  Bank's  rights and  obligations  under the Loan  Documents;
          provided,   however,  that  in  order  to  make  any  such  assignment
          (i) unless  the assigning  Bank is assigning all of its Exposure,  the
          assigning  Bank  shall  retain at least  $5,000,000  in its  Exposure,
          (ii) the  assignee  Bank shall have  Exposure of at least  $5,000,000,
          (iii) each such assignment  shall be evidenced by a written  agreement
          (in form and  substance  acceptable  to the  Agent)  executed  by such
          assigning  Bank,  such  assignee  Bank or  Banks,  the Agent  and,  if
          required as provided above, the Borrower,  and (iv) the assigning Bank
          shall  pay  to  the  Agent  a   processing   fee  of  $3,500  and  any
          out-of-pocket  attorneys'  fees and expenses  incurred by the Agent in
          connection with any such assignment agreement. Any such assignee shall
          become a Bank for all  purposes  hereunder to the extent of the rights
          and  obligations  under the Loan Documents it assumes with an Exposure
          in the  amounts  set  forth  in  such  assignment  agreement  and  the
          assigning Bank shall be released from its  obligations,  and will have
          released  its rights,  under the Loan  Documents to the extent of such
          assignment.  The address for notices to such assignee Bank shall be as
          specified in the assignment  agreement  executed by it.  Promptly upon
          the effectiveness of any such assignment agreement, the Borrower shall
          execute and deliver  replacement  Notes to the  assignee  Bank and the
          assigning  Bank in the  respective  amounts of their  Commitments  (or
          assigned principal amounts,  as applicable) after giving effect to the
          reduction  occasioned by such assignment (all such Notes to constitute
          "Notes" for all purposes of the Loan Documents), and the assignee Bank
          shall thereafter surrender to the Borrower its old Notes. The Borrower
          authorizes  each Bank to  disclose  to any  purchaser  or  prospective
          purchaser  of an interest in the Loans and  Reimbursement  Obligations
          owed to it or its  applicable  Commitment  under  this  Section or any
          financial  or other  information  pertaining  to the  Borrower  or any
          Subsidiary.

          (b) Any Bank may at any time  pledge or grant a security  interest  in
          all or any  portion  of its  rights  under  this  Agreement  to secure
          obligations  of such  Bank,  including  any such  pledge or grant to a
          Federal  Reserve  Bank,  and this Section  shall not apply to any such
          pledge or grant of a security  interest;  provided that no such pledge
          or grant of a security  interest  shall release a Bank from any of its
          obligations  hereunder or substitute any such pledgee or secured party
          for such Bank as a party hereto; provided further,  however, the right
          of any such pledgee or grantee  (other than any Federal  Reserve Bank)
          to  further  transfer  all or any  portion  of the  rights  pledged or
          granted to it, whether by means of foreclosure or otherwise,  shall be
          at all times subject to the terms of this Agreement.

          (c) The  Agent,  on  behalf of the  Borrower,  shall  maintain  at its
          address  referred  to  in  Section 11.8  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  Banks  and  each
          Commitment  of, and principal  amount of the Loans owing to, each Bank
          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 Agent and the Banks may treat each Person whose name
          is recorded in the  Register as a Bank  hereunder  for all purposes of
          this Agreement.  The Register shall be available for inspection by the
          Borrower or any Bank at any reasonable time and from time to time upon
          reasonable  prior  notice.  Upon  its  receipt  of an  assignment  and
          acceptance  executed by an assigning  Bank and an assignee,  the Agent
          shall,  if such  assignment  and  acceptance has been completed and is
          acceptable  to the  Agent  in  form  and  substance,  (a) accept  such
          assignment  and  acceptance,   (b) record  the  information  contained
          therein in the  Register  and (c) give  prompt  notice  thereof to the
          Borrower.

          Section 11.20.  Excess Interest.  Notwithstanding any provision to the
          contrary  contained  herein or in any  other  Loan  Document,  no such
          provision  shall  require the payment or permit the  collection of any
          amount  of  interest  in  excess of the  maximum  amount  of  interest
          permitted by applicable law to be charged for the use or detention, or
          the forbearance in the collection,  of all or any portion of the Loans
          or other  obligations  outstanding  under this  Agreement or any other
          Loan Document ("Excess Interest").  If any Excess Interest is provided
          for, or is adjudicated to be provided for, herein or in any other Loan
          Document,  then in such event (a) the provisions of this Section shall
          govern and control,  (b) neither  the  Borrower  nor any  guarantor or
          endorser shall be obligated to pay any Excess Interest, (c) any Excess
          Interest that the Agent or any Bank may have received hereunder shall,
          at the option of the Agent,  be  (i) applied  as a credit  against the
          then outstanding  principal amount of the aggregate Exposure hereunder
          and accrued  and unpaid  interest  thereon  (not to exceed the maximum
          amount permitted by applicable law), (ii) refunded to the Borrower, or
          (iii) any combination of the foregoing,  (d) the interest rate payable
          hereunder  or under any other  Loan  Document  shall be  automatically
          subject to reduction to the maximum lawful contract rate allowed under
          applicable usury laws (the "Maximum Rate"), and this Agreement and the
          other  Loan  Documents  shall be  deemed to have  been,  and shall be,
          reformed  and  modified  to reflect  such  reduction  in the  relevant
          interest  rate,  and  (e) neither  the Borrower  nor any  guarantor or
          endorser  shall have any action  against the Agent or any Bank for any
          damages  whatsoever  arising out of the payment or  collection  of any
          Excess Interest.  Notwithstanding the foregoing,  if for any period of
          time interest on any component of the aggregate Exposure is calculated
          at the  Maximum  Rate  rather  than the  applicable  rate  under  this
          Agreement,  and thereafter  such applicable rate becomes less than the
          maximum Rate, the rate of interest  payable on the aggregate  Exposure
          shall  remain at the Maximum  Rate until the Banks have  received  the
          amount of interest  which such Banks would have  received  during such
          period on the  aggregate  Exposure  had the rate of interest  not been
          limited to the Maximum Rate during such period.

          Section 11.21.  Construction. Nothing contained herein shall be deemed
          or construed to permit any act or omission  which is prohibited by the
          terms of any Security Document, the covenants and agreements contained
          herein being in addition to and not in substitution  for the covenants
          and agreements contained in the Security Documents.

       Section 11.22.    Withholding Taxes.

          (a) U.S.  Withholding Tax  Exemptions.  Each Bank that is not a United
          States person (as such term is defined in  Section 7701(a)(30)  of the
          Code) shall submit to the Borrower and the Agent on or before the date
          the initial Loan is made  hereunder  or, if later,  the date such Bank
          becomes a Bank hereunder,  two duly completed and signed copies of (i)
          either  Form  W-8BEN  (relating  to such  Bank and  entitling  it to a
          complete  exemption from  withholding on all amounts to be received by
          such Bank,  including fees,  pursuant to this Agreement and the Loans)
          or Form W-8ECI  (relating  to all amounts to be received by such Bank,
          including  fees,   pursuant  to  this  Agreement  and  the  Loans  and
          Reimbursement  Obligations)  of the  United  States  Internal  Revenue
          Service or (ii) solely if such Bank is claiming  exemption from United
          States withholding tax under Section 871(h) or 881(c) of the Code with
          respect  to  payments  of  "portfolio  interest",  a Form  W-8,  and a
          certificate  representing that such Bank is not a bank for purposes of
          Section 881(c)  of the Code, is not a 10-percent  shareholder  (within
          the meaning of  Section 871(h)(3)(B)  of the Code) of the Borrower and
          is not a  controlled  foreign  corporation  related  to  the  Borrower
          (within the meaning of  Section 864(d)(4) of the Code) (or in the case
          of any such form, such successor form as shall be adopted from time to
          time by the  Internal  Revenue  Service.  Thereafter  and from time to
          time,  each such Bank shall  submit to the Borrower and the 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 be (i) notified by
          the  Borrower  or  Agent  to  such  Bank  and  (ii)   required   under
          then-current  United  States  law or  regulations  to avoid or  reduce
          United States  withholding taxes on payments in respect of all amounts
          to be  received  by  such  Bank,  including  fees,  pursuant  to  this
          Agreement or the Loans and Reimbursement Obligations. Upon the request
          of the Borrower or Agent, each Bank that is a United States person (as
          such term is defined in  Section 7701(a)(30) of the Code) shall submit
          to the Borrower a  certificate  to the effect that it is such a United
          States person.

          (b) Inability of Bank to Submit Forms.  If any Bank  determines,  as a
          result of any change in applicable  law,  regulation or treaty,  or in
          any official application or interpretation  thereof, that it is unable
          to submit to the  Borrower any form or  certificate  that such Bank is
          obligated to submit pursuant to subsection (a) of this  Section 11.22,
          or that such Bank is  required  to withdraw or cancel any such form or
          certificate  previously  submitted  or any  such  form or  certificate
          otherwise become  ineffective or inaccurate,  such Bank shall promptly
          notify the  Borrower and Agent of such fact and the Bank shall to that
          extent not be  obligated to provide any such form or  certificate  and
          will  be  entitled  to  withdraw  or  cancel  any  affected   form  or
          certificate, as applicable.

          (c) Payment of  Additional  Amounts.  If, as a result of any change in
          applicable law,  regulation or treaty, or in any official  application
          or  interpretation  thereof  after the date of this  Agreement  or, if
          later,  the date a Bank  becomes a Bank  hereunder,  the  Borrower  is
          required by law or regulation to make any  deduction,  withholding  or
          backup  withholding  of any  taxes,  levies,  imposts,  duties,  fees,
          liabilities  or similar  charges of the United States of America,  any
          possession or territory of the United States of America (including the
          Commonwealth  of Puerto Rico) or any area subject to the  jurisdiction
          of the United States of America ("U.S.  Taxes") from any payments to a
          Bank  in  respect  of  Loans  or  Reimbursement  Obligations  then  or
          thereafter outstanding,  or other amounts owing hereunder,  the amount
          payable by the Borrower will be increased to the amount  which,  after
          deduction from such increased  amount of all U.S. Taxes required to be
          withheld or deducted  therefrom,  will yield the amount required under
          this Agreement to be payable with respect  thereto;  provided that the
          Borrower shall not be required to pay any additional  amount  pursuant
          to this  subsection  (c) to any Bank that (i) is not, on the date this
          Agreement  is executed  by such Bank or, if later,  the date such Bank
          became a Bank  hereunder,  either  (x) entitled  to submit Form W-8BEN
          relating to such Bank and  entitling it to a complete  exemption  from
          withholding  on all  amounts to be  received  by such Bank,  including
          fees,  pursuant  to this  Agreement  and the Loans  and  Reimbursement
          Obligations,  Form  W-8ECI  relating  to all amounts to be received by
          such Bank,  including  fees,  pursuant to this Agreement and the Loans
          and  Reimbursement  Obligations  or Form W-8 relating to such Bank and
          entitling it to a complete  exemption from  withholding on all amounts
          to be  received  by  such  Bank,  including  fees,  pursuant  to  this
          Agreement and the Loans and Reimbursement Obligations (or, in any such
          case,  such  successor  forms as shall be adopted from time to time by
          the Internal Revenue  Service),  or (y) a U.S. person (as such term is
          defined in  Section 7701(a)(30)  of the Code),  or (ii) has  failed to
          submit any form or  certificate  that it was required to file pursuant
          to  subsection  (a) of this  Section 12.18  and entitled to file under
          applicable  law, or (iii) is no longer entitled to submit Form W-8BEN,
          Form  W-8ECI  or Form W-8 as a result of any  change in  circumstances
          other than a change in applicable law,  regulation or treaty or in any
          official  application or  interpretation  thereof.  If the Borrower is
          required to pay  additional  amounts to or for the account of any Bank
          pursuant  to the  subsection  (c),  then such  Bank will  agree to use
          reasonable  efforts  to  change  the  jurisdiction  of its  applicable
          lending  office  so as to  eliminate  or  reduce  any such  additional
          payment which may thereafter accrue if such change, in the judgment of
          such Bank, is not otherwise  disadvantageous  to such Bank.  Within 30
          days after the Borrower's payment of any such U.S. Taxes, the Borrower
          shall deliver to the Agent,  for the account of the relevant  Bank(s),
          originals or certified copies of official tax receipts evidencing such
          payment.  The  obligations of the Borrower  under this  subsection (c)
          shall  survive  the  payment  in full of the Loans  and  Reimbursement
          Obligations and the termination of the Commitments. If any Bank or the
          Agent  determines it has received or been granted a credit  against or
          relief or remission for, or repayment of, any taxes paid or payable by
          it because of any U.S.  Taxes paid by the  Borrower  and  evidenced by
          such a tax receipt,  such Bank or Agent shall, to the extent it can do
          so without  prejudice  to the  retention of the amount of such credit,
          relief,  remission or  repayment,  pay to the Borrower  such amount as
          such Bank or Agent  determines is  attributable  to such  deduction or
          withholding  and  which  will  leave  such Bank or Agent  (after  such
          payment) in no better or worse  position than it would have been in if
          the  Borrower  had  not  been  required  to  make  such  deduction  or
          withholding.  Nothing in this Agreement shall interfere with the right
          of each Bank and the Agent to  arrange  its tax  affairs  in  whatever
          manner it thinks fit nor oblige any Bank or the Agent to disclose  any
          information  relating  to  its  tax  affairs  or any  computations  in
          connection with such taxes.

          Section 11.23.  Submission to Jurisdiction;  Waiver of Jury Trial. The
          Borrower hereby submits to the nonexclusive jurisdiction of the United
          States District Court for the Northern District of Illinois and of any
          Illinois  State court  sitting in the City of Chicago for  purposes of
          all legal  proceedings  arising out of or relating to this  Agreement,
          the other Loan Documents or the  transactions  contemplated  hereby or
          thereby.  The  Borrower  irrevocably  waives,  to the  fullest  extent
          permitted by law, any objection  which it may now or hereafter have to
          the laying of the venue of any such proceeding brought in such a court
          and any claim  that any such  proceeding  brought  in such a court has
          been brought in an  inconvenient  forum.  The Borrower,  the Agent and
          each Bank hereby  irrevocably waive any and all right to trial by jury
          in any  legal  proceeding  arising  out  of or  relating  to any  Loan
          Document or the transactions contemplated thereby.

                                            [Signature Pages to Follow]

          Upon your acceptance hereof in the manner  hereinafter set forth, this
          Agreement shall be a contract between us for the purposes  hereinabove
          set forth.

         Dated as of December 28, 2000.

Maverick Tube Corporation
By /s/ Gregg Eisenber
Its President and CEO

Accepted and Agreed to as of the day and year last above written.

Harris Trust and Savings Bank, individually and as Agent

By /s/ Haig C. Garabedian
Its Vice President

Address: 111 West Monroe Street
Chicago, Illinois 60690
Attention: Emerging Majors West

Firstar Bank, N.A.

By /s/ David Higbee
Its Vice President

Address: ___________________
___________________
Attention: ___________________

Bank of America, N.A.

By /s/ Mike Murphy
Its Vice President

Address: ___________________
___________________
Attention: ___________________

Exhibit A
Maverick Tube Corporation
Secured
Revolving Credit Note

December 28, 2000

          For Value Received,  the  undersigned,  Maverick Tube  Corporation,  a
          Delaware  corporation (the "Borrower") promises to pay to the order of
          ___________________________ (the "Lender") on the Termination Date (as
          defined in the Credit Agreement  referred to below),  at the principal
          office of Harris  Trust and  Savings  Bank in Chicago,  Illinois,  the
          principal sum of  _________________________________  or, if less,  the
          aggregate  unpaid  principal amount of all Revolving Credit Loans made
          by the Lender to the Borrower under the Revolving  Credit provided for
          under the Credit Agreement  hereinafter mentioned and remaining unpaid
          on the  Termination  Date,  together  with  interest on the  principal
          amount of each  Revolving  Credit  Loan from time to time  outstanding
          hereunder  at the  rates,  and  payable in the manner and on the dates
          specified in said Credit Agreement.

          The Lender  shall record on its books or records or on the schedule to
          this  Note  which  is a part  hereof  the  principal  amount  of  each
          Revolving Credit Loan made under the Revolving Credit, all payments of
          principal  and interest and the  principal  balances from time to time
          outstanding; provided that prior to the transfer of this Note all such
          amounts shall be recorded on the schedule  attached to this Note.  The
          record  thereof,  whether  shown on such  books or  records  or on the
          schedule to this Note,  shall be prima  facie  evidence as to all such
          amounts  absent  manifest  error  or  willful  misconduct;   provided,
          however,  that the failure of the Lender to record,  or any mistake in
          recording,  any of the foregoing  shall not limit or otherwise  affect
          the  obligation  of the Borrower to repay all  Revolving  Credit Loans
          made  under the  Revolving  Credit,  together  with  accrued  interest
          thereon.

          This Note is one of the  Revolving  Notes  referred  to in and  issued
          under that certain Amended and Restated Secured Credit Agreement dated
          as of December 28,  2000, among the Borrower, Harris Trust and Savings
          Bank, as Agent,  and the banks named therein,  as amended from time to
          time (the "Credit Agreement"), and this Note and the holder hereof are
          entitled to all of the benefits  and security  provided for thereby or
          referred to  therein,  including  without  limitation  the  collateral
          security  provided  pursuant to the Security  Documents (as defined in
          the  Credit  Agreement),   to  which  Credit  Agreement  and  Security
          Documents  reference  is  hereby  made for a  statement  thereof.  All
          defined  terms  used in this  Note,  except  terms  otherwise  defined
          herein,  shall have the same meaning as such terms have in said Credit
          Agreement.

          Prepayments may be made on any Revolving  Credit Loan evidenced hereby
          and this Note (and the Revolving Credit Loans evidenced hereby) may be
          declared  due  prior to the  expressed  maturity  thereof,  all in the
          events,  on the terms and in the manner as provided for in said Credit
          Agreement and the Security Documents.

         The undersigned hereby waives presentment for payment and demand.

          This Note is governed by and shall be construed in accordance with the
          internal laws of the State of Illinois.

Maverick Tube Corporation

By
Its___________________________________________________

                                    Exhibit B
                            Maverick Tube Corporation
                             Secured Swingline Note
                                                               December 28, 2000

For Value  Received,  the  undersigned,  Maverick Tube  Corporation,  a Delaware
corporation  (the  "Borrower"),  hereby  promises  to pay to the order of Harris
Trust and Savings Bank (the "Bank"), at the principal office of Harris Trust and
Savings Bank in Chicago,  Illinois, the aggregate unpaid principal amount of all
Swingline  Loans made by the Bank to the  Borrower  under the  Credit  Agreement
hereinafter  mentioned in the amounts and payable in the manner and on the dates
specified in said Credit  Agreement,  together  with  interest on the  principal
amount of each  Swingline  Loan from time to time  outstanding  hereunder at the
rates,  and  payable  in the manner and on the dates  specified  in said  Credit
Agreement.

The Bank shall  record on its books or records or on the  schedule  to this Note
which is a part hereof the principal amount of each Swingline Loan made by it to
the Borrower under the Credit Agreement,  all payments of principal and interest
thereon and the principal balances from time to time outstanding;  provided that
prior to the  transfer  of this Note all such  amounts  shall be  recorded  on a
schedule attached to this Note. The record thereof,  whether shown on such books
or records or on the schedule to this Note,  shall be prima facie evidence as to
all such amounts absent manifest error;  provided,  however, that the failure of
the Bank to record any of the foregoing shall not limit or otherwise  affect the
obligation  of the Borrower to repay all  Swingline  Loans made under the Credit
Agreement, together with accrued interest thereon.

This Note is the  Swingline  Note  referred to in and issued  under that certain
Amended and Restated  Secured Credit  Agreement dated as of  December 28,  2000,
among the Borrower, Harris Trust and Savings Bank, as Agent, and the Banks named
therein, as amended from time to time (the "Credit Agreement") and this Note and
the holder hereof are entitled to all of the benefits and security  provided for
thereby or referred to therein,  including  without  limitation  the  collateral
security provided to the Security Document (as defined in the Credit Agreement),
to which Credit Agreement and Security Documents  reference is hereby made for a
statement  thereof.  All defined terms used in this Note, except terms otherwise
defined  herein,  shall have the same  meaning as such terms have in said Credit
Agreement.

Prepayments may be made, and are sometimes required to be made, on any Swingline
Loan evidenced  hereby and this Note (and the Swingline Loans evidenced  hereby)
may be declared due prior to the expressed maturity thereof,  all in the events,
on the terms and in the manner as provided for in said Credit  Agreement and the
Security Documents.

The undersigned hereby waives presentment for payment and demand.

This Note is governed by and shall be construed in accordance  with the internal
laws of the State of Illinois.

Maverick Tube Corporation

By
Its___________________________________________________

                                    Exhibit C

                        Application for Letter of Credit

                                  See Attached

                                    Exhibit D

                            Maverick Tube Corporation
                           Borrowing Base Certificate
                          as of _______________, 20___
                                ($000's omitted)

To:      Harris Trust and Savings Bank
         as Agent under the Amended and
         Restated Secured Credit Agreement
         hereinafter mentioned

Pursuant  to the terms of that  certain  Amended  and  Restated  Secured  Credit
Agreement  (the   "Agreement")   dated  as  of  December 28,   2000,  among  the
undersigned,  Maverick Tube Corporation (the "Borrower"),  you, individually and
as Agent  thereunder,  and the other Banks  signatories  thereto,  the  Borrower
delivers to you the following  computation of the Borrowing  Base, as defined in
Section 4.1  of the  Agreement,  as of the  computation  date noted  above.  The
Borrower certifies that the following computation of the Borrowing Base was made
in accordance  with  Section 4.1 of the Agreement and that as of the last day of
the  preceding  computation  period the Borrower has  re-examined  the terms and
provisions  of the  Agreement  and the  Security  Documents  (as  defined in the
Agreement)  and that to the  best of its  knowledge  and  belief,  no  Potential
Default or Event of Default has  occurred or, if any such  Potential  Default or
Event of Default has occurred,  a description of such Potential Default or Event
of Default and the action,  if any, taken by the Borrower to remedy the same are
specified                                                           hereinbelow:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________.

        Status of Accounts Receivable, Machinery, Equipment and Inventory
                              as of _______________

1.       Total Accounts Receivable at                    $____________
         __________________

         Less Ineligibles
         (Including over 90 days from invoice or
         60 days from due date, contra offsets,
         affiliate and subsidiary sales,
         consignment sales, returned, rejected and
         repossessed goods, Bill and Hold and
         other ineligibles as per definition of
         Eligible Receivables.)                          $____________

2.       Net Accounts Receivable                         $____________

3.       85% of Net Accounts Receivable                            $____________

4.       Total Value of Eligible Inventory                         $____________

5.       50% of Value of Eligible Inventory*                       $____________

6.       Gross Inventory Amount minus
         Net Inventory Amount                                      $____________

7.       Line 6 cannot exceed**                                    $____________

8.       Total Value of Eligible Equipment                         $____________

9.       50% of Value of Eligible Equipment***                     $____________

10.      Total Borrowing Base (add lines
         3, 5, 7 and 9)                                            $____________

11.      Loans and Reimbursement
         Obligations outstanding as of
         status report date                                        $____________

12.      Undrawn amount of L/Cs outstanding
         as of status report date                                  $____________

13.      Total outstanding as of status
         report date (add lines 11 and 12)                         $____________

14.      Excess (shortfall) Collateral
         (subtract line 13 from line 10)                           $____________

* Not to  exceed  an  amount  equal to 60% of the sum of lines 3, 5 and 7 at any
time.
** Not to exceed an amount equal to (i) $10,000,000 from December 28, 2000 to
June 30, 2001,  (ii) $5,000,000  from July 1, 2001 to September 30,  2001 and
(iii) $0  at  all  times  thereafter.
***Not  to  exceed  an  amount  equal  to (i) $25,000,000 from December 28, 2000
to December 30,  2001,  (ii) $20,000,000 from January 1,  2002 to December 30,
2002 and  (iii) $15,000,000  at all times
thereafter.

Maverick Tube Corporation

By
Its___________________________________________________

                                    Exhibit E
                            Schedule of Subsidiaries

                    Name          State of Organization  Percentage of Ownership

Maverick Tube International, Inc.    Barbados                     100%

Maverick Investment Corporation      Delaware                     100%

Maverick Tube, L.P.                  Delaware                     100%

Maverick Tube (Canada) Inc.          Alberta                      100%

Maverick Exchangeco                  Nova Scotia                  100%
(Nova Scotia) ULC

Prudential Steel Ltd.                Alberta                      100%

Prudential Industries, Inc.          Delaware                     100%

Prudential Steel, Inc.               Washington                   100%

Longview Holding Corporation         Washington                   100%

*    Maverick Tube, L.P. is a limited  partnership in which Maverick  Investment
     Corporation, as sole limited partner, has a 95% ownership and the Borrower,
     as sole general partner, has a 5% ownership interest.
**   100% owned by Maverick Tube (Canada) Inc.
***  100% owned by Prudential Steel Ltd.
**** 100% owned by Prudential Industries, Inc.

                                    Exhibit F
                            Maverick Tube Corporation
                             Compliance Certificate

This  Compliance  Certificate  is furnished to Harris Trust and Savings Bank and
the  lenders  from  time to time  party  to the  hereinafter  defined  Agreement
(collectively,  the  "Banks")  and Harris  Trust and Savings  Bank as agent (the
"Agent") for the Banks,  pursuant to that certain  Amended and Restated  Secured
Credit  Agreement  dated as of  December 28,  2000,  by and among  Maverick Tube
Corporation,  a Delaware  corporation (the "Borrower"),  the Agent and the Banks
(the  "Agreement").  Unless  otherwise  defined  herein,  the terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.

The Undersigned Hereby Certifies That:

1. I am the duly elected chief financial officer of the Borrower;

2. I have reviewed the terms of the Agreement and I have made, or have caused to
be made  under  my  supervision,  a  detailed  review  of the  transactions  and
conditions of the Borrower during the accounting  period covered by the attached
financial statements sufficient for me to provide this Certificate;

3. The  examinations  described in paragraph 2 did not  disclose,  and I have no
knowledge  of, the  existence  of any  condition  or event which  constitutes  a
Potential  Default  or Event of Default  during or at the end of the  accounting
period  covered by the attached  financial  statements or as of the date of this
Certificate, except as set forth below; and

4.  If  attached   financial   statements  are  being   furnished   pursuant  to
Section 7.4(a) of the Agreement, Schedule 1 attached hereto sets forth financial
data  and  computations   evidencing  the  Borrower's  compliance  with  certain
covenants  of the  Agreement,  all of which  data  and  computations  are  true,
complete and correct.

Described  below are the  exceptions,  if any, to  paragraph  3 by  listing,  in
detail,  the nature of the  condition or event,  the period  during which it has
existed and the action which the  Borrower  has taken,  is taking or proposes to
take     with     respect     to    each     such     condition     or    event:
____________________________________________________

____________________________________________________

The  foregoing  certifications,  together  with the  computations  set  forth in
Schedule 1 hereto and the financial  statements  delivered with this Certificate
in support  hereof,  are made and delivered  this ________ day of  ____________,
20__.

                                              __________________________________

                                   Schedule 1

                            To Compliance Certificate
                            Maverick Tube Corporation

                           Compliance Calculations for

   Amended and Restated Secured Credit Agreement Dated as of December 28, 2000

                     Calculations as of ___________, ______

Section 7.8(a).  Maximum Total Funded Debt Ratio

(a)      Total Consolidated Funded Debt                            $____________
(b)      Adjusted EBITDA                                           $____________
(c)      Ratio of Line (a) to Line (b)                                   __ to 1
(d)      Total Funded Debt Ratio for such period shall not
          be greater than 3.25 to 1

         Compliance....................Yes ______    No _____

Section 7.8(b).  Maximum Adjusted Funded Debt Ratio

(a)      Adjusted Consolidated Funded Debt                         $____________
(b)      Maverick EBITDA                                           $____________
(c)      Ratio of Line (a) to Line (b)                                  ___ to 1
(d)      Adjusted  Funded Debt Ratio for such period shall
         not be greater than 3.35 to 1 at  December 31,  2000 and
         thereafter 3.25 to 1

         Compliance....................Yes ______    No _____

Section 7.9.  Minimum Adjusted EBITDA

(a)      Consolidated Net Income of Borrower                  $_______________
(b)      Consolidated Interest Expense of Borrower            $_______________
(c)      Depreciation of Borrower                             $_______________
(d)      Amortization of Borrower                             $_______________
(e)      Net Income of Prudential                             $_______________
(f)      Interest Expense of Prudential                       $_______________
(g)      Depreciation of Prudential                           $_______________
(h)      Amortization of Prudential                           $_______________
(i)      Fiscal Year 2000 Charges (if applicable)             $_______________
(j)      Adjusted EBITDA for relevant period
         (a) + (b) + (c) + (d) + (e) + (f) +
         (g) + (h) + (i)                                       $______________
(k)      Adjusted EBITDA for such period shall
         not be less than                                      $_______________

         Compliance....................Yes ______    No _____

         Section 7.10.  Minimum Consolidated Tangible Net Worth

(a)      Capital Stock                                        $_______________
(b)      Preferred Stock                                      $_______________
(c)      Capital in Excess of Par Value                       $_______________
(d)      Retained Earnings                                    $_______________
(e)      Intangible Assets                                    $_______________
(f)      Tangible Net Worth (a) +(b) +(c)+(d) -(e)            $_____________
(g)      Tangible Net Worth during such period shall
          not be less than                                    $_____________

         Compliance....................Yes ______    No _____

Section 7.11.  Maximum Leverage Ratio

(a)      Total Consolidated Funded Debt                       $_______________
(b)      Consolidated Stockholders Equity                     $_______________
(c)      Total Capitalization  (a) + (b)                      $_______________
(d)      Leverage Ratio             (a)/(c)                         _____ to 1
(e)      Leverage Ratio for such period
          shall not be greater than 0.5 to 1

         Compliance...................Yes _____    No ______

Section 7.12.  Minimum Interest Coverage Ratio

(a)      Adjusted EBITDA
          (period ended ________________)                        $____________
(b)      Capital Expenditures                                    $____________
(c)      (a) - (b)                                               $____________
(d)      Cash Consolidated Interest Expense
         (period ended _________)
                                                                 $____________
(e)      Interest Coverage Ratio
         (period ended _________)                    (c)/(d)       ___________
(f)      Interest Coverage Ratio for such
         period shall not be Less than                            _______ to 1

         Compliance....................Yes ______    No _____

Section 7.26.  Operating Leases

(a)      Operating leases (beginning of
         current fiscal year to date)                         $_______________
(b)      Operating leases for such fiscal
         year shall not be greater than                       $_______________

         Compliance...................Yes _____    No ______

                                    Exhibit G
                            Maverick Tube Corporation
                        Accounts Receivable Aging Report
                            as of ____________, 20__
                                ($000's omitted)

To:      Harris Trust and Savings Bank as Agent
         under the Amended and Restated Secured
         Credit Agreement hereinafter mentioned

Pursuant  to the terms of that  certain  Amended  and  Restated  Secured  Credit
Agreement (the "Agreement") dated as of December 28, 2000, among the undersigned
(the "Borrower"), you, individually and as Agent thereunder, and the other Banks
signatories  thereto,  the  Borrower  delivers  to you  the  following  accounts
receivable  aging report,  as of the computation  date noted above. The Borrower
certifies  that as of the last  day of the  preceding  month  the  Borrower  has
re-examined the terms and provisions of the Agreement and the Security Documents
(as defined in the  Agreement) and that to the best of its knowledge and belief,
no Potential  Default or Event of Default has occurred or, if any such Potential
Default  or Event of Default  has  occurred,  a  description  of such  Potential
Default or Event of Default and the  action,  if any,  taken by the  Borrower to
remedy         the        same        are         specified         hereinbelow:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________.

Receivable Aging As Of:
         (By Invoice Date)

Current  ____%                    $_________
1-30                              ____               _________
31-60                             ____               _________
61-90                             ____               _________
Over 90  ____                       _________
Total Receivables                 100.0%             _________

                                         Current                        Prior
Ineligible Determination:                 Month                         Month

Over 90 Days Past Due.................$_________                      $________
Bill and Hold......................... _________                       ________
Credit Reasons........................ _________                       ________
Contra................................ _________                       ________
Dispute............................... _________                       ________
Government............................ _________                       ________
Foreign................................_________                       ________
Related................................_________                       ________
Tainted (Other Customers).............._________                       ________
Other.................................._________                       ________
Total Ineligibles......................$________                      $________

The Borrower agrees to furnish such additional information as the Agent or Banks
shall require with respect to the Accounts.  The Banks may additionally  require
the Borrower to deliver to the Banks such lists,  descriptions  and designations
of Inventory of the Borrower as may be required to identify the nature,  extent,
value and location of the Borrower's Inventory.

The information above, to the best of the Borrower's  knowledge and belief, Does
Not  contain any untrue  statement  of  material  fact or omit a material  fact,
either  individually  or in aggregate,  that would make the  information  or any
attached exhibits misleading.

Maverick Tube Corporation

By:
Its:________________________________________________

                                    Exhibit H
                            Environmental Disclosure

1. Seller and the Pennsylvania  Department of Environmental  Protection  entered
into a Consent Order and Agreement dated  September  29, 1995 under which Seller
agreed to  investigate  environmental  conditions  at the  entire  Beaver  Falls
facility.  Seller  compiled  the  results of its  investigation  into a Baseline
Environmental  Report which it submitted to DEP in August 1997. Seller submitted
a Groundwater  Environmental  Baseline Report to DEP in May 1998. As of the date
of this  Agreement,  Seller and DEP are working on a revised  consent  order and
agreement  which will  incorporate  the results of Seller's  investigations  and
define  Seller's  cleanup  obligations,  if any,  which are  necessary to obtain
liability  protection  under the Pennsylvania  Land Recycling and  Environmental
Remediation Standards Act.

2. Seller currently has NPDES Permit Number PA020583 to discharge stormwater and
treated  processed   wastewater  to  the  Beaver  River.   Seller  is  currently
negotiating  approval to discharge  processed  wastewater through conveyances in
the Borough of West  Mayfield and the City of Beaver Falls into the Beaver Falls
sewage treatment plants.

3. See also the audit report  entitled  "Environmental  Compliance  Audit,  Main
Plant,  PMAC,  Ltd.,  Beaver Falls,  Pennsylvania"  prepared by SE Technologies,
Inc.,  performed  in March and April,  1998 for  Seller  and listed on  Schedule
5.6(a) to the Asset Purchase Agreement.

4. Asbestos or asbestos-containing materials are located in furnace and transite
panels in the  facilities  and  asbestos or  asbestos-containing  materials  are
potentially located in the roof of the south mill.

5. Letter  dated April  14, 1998,  from  Solicitor  of Borough of West  Mayfield
notifying  Seller of requirement that additional  tap-ins be granted.  By letter
dated July 28, 1998, the DEP approved the West Mayfield sewage facility planning
module for discharge from the Facilities.

                                                     Exhibit I

                                                    7.14. Liens

       No.                                             Secured Party/Lessor

        1.         Forum Financial Group, Inc.

        2.         Associates Commercial Corporation

        3.         Hyster Credit Company

        4.         ICX Corporation

        5.         Texas Central Bank, N.A. as Assignee from Forum
                    Financial Group, Inc.

        6.         Mirex Corporation

        7.         IKON Office Solutions - Cannon Division

        8.         Computer Sales International, Inc.

        9.         Siemens Credit Corporation

       10.         C. Jim Stewart & Stevenson, Inc.

       11.         Texas Copy Systems, Inc.

       12.         Hoss Equipment

       13.         Safeco Credit Co., Inc.

       14.         Associates Leasing, Inc.

       15.         C.I.T. Leasing Corporation

The property  subject to liens of the secured  party/lessors  above  consists of
specific leased  mechanical,  electronic and computer equipment and, in the case
of  C.I.T.  Leasing  Corporation  a leased  1986  Beechcraft  King Air Model 300
aircraft, serial number FA-111, Number N510WR.

                                    Exhibit J
                               7.15. Indebtedness

                 Name                  Date   Original Principal     Collateral

Beaver    County    Corporation    for June 2000  $250,000       Pickle House in
Economic Development BDF Term Loan                                  Pennsylvania

Beaver    County    Corporation    for June 2000  $250,000       Pickle House in
Economic Development EZ-BDF Term Loan                               Pennsylvania

                                    Exhibit K

                           7.24. Special Restrictions

Under the Credit Facility Agreement dated  December 27,  2000 between Royal Bank
of Canada and  Prudential,  Prudential  is prohibited  form  declaring or paying
dividends to any entity,  including the  Borrower,  if such payment would reduce
consolidated shareholders equity of Prudential to below Canadian $145,000,000.Exhibit 10.17
                                                          Y.P. (Yvonne) Sugimoto
                                                            Royal Bank of Canada
Senior Account Manager                                   Business Banking Centre
                                               11th Floor, 335 - 8th Avenue S.W.
                                                        Calgary, Alberta T2P 1C9

                                                                 Transit:  08829
                                                            Tel.: (403) 292-3896
                                                             Fax: (403) 292-3154

December 27, 2000

Prudential Steel Ltd.
1800, 140 - 4th Avenue S.W.
Calgary, Alberta
T2P 3N3

Attention:    Mr. Fred Rea
Vice President - Finance

Dear Sirs:

Re:      Credit Facilities

Further to our  discussions,  we are pleased to confirm the  availability of the
credit facilities  described in this letter (the "Credit Facility"),  subject to
the following  terms and  conditions.  Should you find the  following  terms and
conditions  of the Credit  Facility  to be  acceptable,  please  acknowledge  by
signing and  returning  the  duplicate  copy of this letter by December 29, 2000
after which date our offer will expire.

The Credit Facility described below is in addition to the undernoted  facilities
which are governed by separate agreements:

                                            Royal Bank Leases $ 300,000

BORROWER:                  Prudential Steel Ltd. (the "Borrower")

LENDER: Royal Bank of Canada (the "Bank") through its branch of account ("Branch
of Account") at Main Branch, Calgary, Alberta, T2P 1 C9.

AMOUNT:                    Segment 1)

$40,000,000 or the equivalent amount in US Dollars is available by way of:

                           Prime Based Loans;
     US Base Rate Loans;
     LIBOR Loans;
     Bankers' Acceptances; and
     Letters of Credit.

                           Segment 2)

                           $1,350,000 is available by way of FEF Contracts.

PURPOSE:                   Segment 1)

General operating and corporate purposes, provided that the Borrowings shall not
be used to acquire  shares of any  corporation  unless the board of directors of
such  corporation  has  approved  such  acquisition  or unless the  Borrower has
provided  the Bank  with  prior  notice  thereof  and the Bank has  advised  the
Borrower  that  the Bank  does not have a  conflict  of  interest  in  providing
Borrowings for such purpose.

                           Segment 2)

                           Foreign Exchange transactions.

INTEREST
RATES:                     Segment 1)

                           Prime Based Loans: Prime + 0% per annum.
                           US Base Rate Loans: USBR + 0% per annum.
                           LIBOR Loans: LIBOR + 1/2% per 360 day period.

                           All Segments

The  Borrower  shall pay the Bank  interest on all Prime Based Loans and US Base
Rate Loans in the  currency in which such loans are  denominated.  The  Borrower
shall pay such interest monthly in arrears at the applicable rates per annum set
out above  calculated on a daily basis on the  outstanding  amount of such loans
and based on the  actual  number of days  elapsed  in the  period for which such
interest  is  payable.  Such  interest  shall be payable on the last day of each
month or on such  other day in each month as may be  specified  by the Bank from
time to time. The Borrower shall pay interest in US Dollars at the rates per 360
day period set forth above on the amount of each LIBOR Loan. Such interest shall
be payable on each LIBOR  Interest Date  applicable to such LIBOR Loan and shall
be  calculated  on the basis of the actual number of days elapsed in the portion
of the  applicable  LIBOR  Interest  Period for which such  interest  is payable
divided by 360.  The yearly rates of interest to which the rates  determined  in
accordance with the foregoing  provisions of this paragraph are equivalent,  are
the rates so determined  multiplied by the actual number of days in the calendar
year  commencing  on the first day of the  period  for which  such  interest  is
payable and divided by 360.

The Borrower shall pay interest on all overdue  amounts  outstanding  under this
Agreement  at a rate per  annum  equal to USBR  plus 2% in  respect  of  amounts
outstanding  in US  Dollars  and at a rate per annum  equal to Prime  plus 2% in
respect of amounts outstanding in Canadian Dollars,  such interest to be payable
monthly in arrears on the last day of each month.  All  interest  payable  under
this Agreement shall be payable both before and after default,  demand, maturity
and judgment.

ACCEPTANCE
FEES:                      Segment 1)

RBPAF minus 1/2% per 365 day period.

The  Borrower  shall pay to the Bank  acceptance  fees in  Canadian  Dollars  in
advance  at the rate  set  forth  above  at the  time of issue of each  Bankers'
Acceptance.  Acceptance  fees  shall be  calculated  on the face  amount  of the
Bankers'  Acceptance issued and based upon the number of days in the term of the
Bankers' Acceptance issued.

LETTER OF
CREDIT FEES:               Segment 1)

                           Scheduled Rates.

Letter of Credit fees are payable to the Bank at the scheduled rates of the Bank
from time to time in effect  on the date of issue in the  currency  in which the
Letter of Credit is  issued.  The  Letter of Credit  fee shall be based upon the
amount of the Letter of Credit issued and  calculated on the number of days that
the Letter of Credit is to be outstanding.

FEES:                      Segment 1)

The Borrower shall pay to the Bank, by way of a credit facility revolvement fee,
the amount of Cdn.  $125 per month,  payable  on the last  Business  Day of each
month during the term of this agreement.

NOTICE  REQUIREMENTS:  The  Borrower  agrees that the Bank may from time to time
establish  reasonable  notice  requirements  for  obtaining  advances and making
repayments hereunder.

REPAYMENT: All amounts outstanding under this Credit Facility including the face
amount of all Letters of Credit and Bankers'  Acceptances  are payable on demand
and  the  following  repayment  provisions  are  in  addition  to  (and  not  in
substitution for) the Bank's right to make such demand.

Operating Credit Facility Segment

Segment 1) is a revolving operating credit facility. The Borrower authorizes the
Bank to advance  and repay  Prime  Based Loans and US Base Rate Loans in minimum
amounts of $100,000 and US $100,000  respectively  in order to cover  overdrafts
and utilize deposits in account #315-710-4 and 400-313-3 respectively or in such
operating  deposit  accounts of the Borrower as may be specified by the Borrower
to the Bank from time to time.

SPECIAL

PROVISIONS:  The Special Provisions  contained in Schedule "A" attached
hereto form part of this Agreement.

EVIDENCE OF  INDEBTEDNESS:  The Bank shall maintain on the records of the Branch
of Account accounts  evidencing the Borrower's  liability to the Bank in respect
of amounts  outstanding  by the Borrower to the Bank under this  Agreement.  The
Bank shall record the amounts  outstanding  under this  Agreement,  all payments
made from time to time in respect thereof and all other amounts  becoming due to
the Bank under this Agreement  which remain unpaid when due. The Bank's accounts
constitute,  in the  absence of  manifest  error,  prima  facie  evidence of the
indebtedness  of the  Borrower  to the  Bank  pursuant  to this  Agreement.  The
Borrower authorizes and directs the Bank to automatically  debit, by mechanical,
electronic  or manual  means,  the bank accounts of the Borrower for all amounts
payable  under this  Agreement,  including  but not limited to the  repayment of
principal  and the payment of interest,  fees and all charges for the keeping of
such bank account.

PREPAYMENTS:  Subject to any  provisions to the contrary  which are contained in
this Agreement or any other agreement  entered into by the Borrower with respect
to amounts outstanding hereunder, amounts outstanding may be prepaid at any time
without penalty.

COVENANTS:  The Borrower,  by accepting this Agreement,  covenants with the Bank
that: (a) it will pay duly and  punctually  all amounts due  hereunder;  it will
deliver  to the  Bank  such  financial  and  other  information  as the Bank may
reasonably  request  from  time  to time  including,  but not  limited  to,  the
following:

audited annual  financial  statements of the Borrower within 120 days after each
fiscal  year  end or,  if the  Borrower  has any  Subsidiaries,  audited  annual
consolidated  financial  statements  of the Borrower  within 120 days after each
fiscal year end;

if the Borrower has any Subsidiaries,  unaudited annual unconsolidated financial
statements of the Borrower (and such other major Subsidiaries of the Borrower as
may be  specified  by the Bank from time to time)  within  120 days  after  each
fiscal year end;

unaudited  quarterly  financial  statements of the Borrower within 60 days after
each fiscal  quarter end or, if the  Borrower  has any  Subsidiaries,  unaudited
quarterly consolidated financial statements of the Borrower within 60 days after
each  fiscal  quarter  end;  if the  Borrower  has any  Subsidiaries,  unaudited
quarterly  unconsolidated  financial  statements of the Borrower (and such other
major  Subsidiaries of the Borrower as may be specified by the Bank from time to
time) within 60 days after each fiscal quarter end;

quarterly Compliance Certificate within 60 days after each fiscal quarter end;

quarterly aged list of accounts  receivable owing to the Borrower within 25 days
after each  quarter  end,  such list to be  certified  by the Borrower as to its
accuracy and to be in form and substance satisfactory to the Bank;

quarterly statement of inventory owned by the Borrower within 25 days after each
quarter end,  such  statement to be certified by the Borrower as to its accuracy
and to be in form and substance satisfactory to the Bank; and

such income and cash flow forecasts as may be produced by the Borrower from time
to time;

it will  promptly  pay when due all  business,  income and other taxes  properly
levied  on  its  operations  and  property  and  remit  all  statutory  employee
deductions when due;

it will insure and keep insured all  properties  customarily  insured by persons
carrying  on a similar  business  in similar  locations  or owning or  operating
similar  properties,  against  loss or  damage  by fire  and from  other  causes
customarily insured against by similar persons;

it will advise the Bank  forthwith  of any default by the Borrower or any of its
Subsidiaries in the repayment of any indebtedness for borrowed money;

it will  maintain  its  corporate  existence as a validly  subsisting  corporate
entity;

except for  Permitted  Financial  Assistance,  the Borrower will not provide any
Financial  Assistance to any of its Associates;  including,  but not limited, to
Maverick Tube Corporation;

except for Permitted Dispositions,  it will not and will not allow or permit its
Subsidiaries to sell,  transfer or otherwise dispose of any part of its property
or assets; and

except for Permitted  Encumbrances,  the Borrower will not and will not allow or
permit any of its Subsidiaries to grant,  create,  assume or suffer to exist any
Lien affecting any of its properties,  assets or other rights, whether now owned
or hereafter acquired; and

the Borrower and its subsidiaries  will not, in any fiscal year,  declare or pay
dividends,  to  any  entity  including,   but  not  limited  to,  Maverick  Tube
Corporation  if such payment would reduce  consolidated  shareholders  equity to
below C$145,000,000; and

except  for  Permitted  Debt,  the  Borrower  will not and will  not  allow  its
Subsidiaries to incur additional interest bearing debt.

All covenants contained herein shall remain in force for the benefit of the Bank
at all times before,  on and after the making of advances  hereunder  and/or the
taking of security pursuant hereto.  Upon the request of the Borrower,  the Bank
shall  (at the sole cost of the  Borrower)  execute  and  deliver  such  further
assurances as may  reasonably be necessary to give full effect to the provisions
of  paragraphs  (h) and (i) of this  Section of the  Agreement  which permit the
Borrower  to  grant  or  create  Permitted  Encumbrances  and to make  Permitted
Dispositions.

ENVIRONMENTAL  PROVISIONS:  The Borrower  confirms  that it has disclosed to the
Bank all  environmental  matters  which  could  have a  material  effect  on the
financial  condition or  operations  of the Borrower and its  subsidiaries.  The
Borrower  will keep the Bank fully  informed of all such matters and will comply
(and  will  ensure  its  subsidiaries  comply)  in all  material  respects  with
applicable environmental laws and any environmental permits which may govern its
operations.  The Bank  shall have the right to make good  faith  inquiries  with
governmental agencies regarding environmental matters affecting the Borrower and
its subsidiaries and, upon reasonable notice to the Borrower,  the Bank (and its
consultants)  shall have the right to enter the premises of the Borrower and its
subsidiaries  to carry out such  environmental  reviews  as the Bank in its sole
discretion deems advisable.

PERFORMANCE  OF  COVENANTS:  If the  Borrower  fails  to  perform  any  covenant
hereunder,  the Bank may, in its sole discretion,  perform any such covenant and
expend such money as may be necessary for purposes thereof. Any such expenditure
so made by the Bank  shall be repaid by the  Borrower  on demand  and shall bear
interest at the rate and in the manner set forth  hereunder for overdue  amounts
from the date the Bank makes such  expenditure  until and including the date the
Bank is repaid.

COLLATERAL
SECURITY:                  Existing Security:

The Bank acknowledges that it presently holds the following  documentation which
the Borrower  hereby  acknowledges  is held by the Bank in connection  with this
Credit Facility:

                           Segment 1)

- Bankers'  Acceptances  Services Agreement supported by Resolution of the Board
of Directors respecting Jumbo Bankers' Acceptances.

CONDITIONS PRECEDENT:  The obligation of the Bank to make available any advances
under the Credit Facility is conditional  upon the receipt in form and substance
satisfactory to the Bank of: (b) a duly executed copy of this Agreement.

The obligation of the Bank to make  available the Credit  Facility is subject to
the Bank being satisfied, at the time of advance, that a material adverse change
in the financial  condition or operation of the Borrower has not occurred,  that
the  Borrower  is not in  default  hereunder,  and  that no stay of  proceedings
against the Borrower or its property is then in effect.

RESERVE  INDEMNITY:  The  Borrower  shall  reimburse  the Bank that amount which
compensates the Bank for any additional cost or reduction in income caused by an
imposition,  implementation or increase of reserves, capital adequacy or similar
requirement  against assets or liabilities held by the Bank,  deposits in or for
the account of the Bank, loans made by the Bank, bankers'  acceptances  accepted
by the Bank,  letters of credit issued by the Bank,  commitments  by the Bank to
fund loans or any acquisition by the Bank of funds for loans made by the Bank.

GENERAL  INDEMNITY:  The Borrower shall  indemnify the Bank from and against all
losses, damages, expenses and liabilities which the Bank may sustain or incur as
a  consequence  of any  default  by the  Borrower  under any  provision  of this
Agreement or as a consequence of any environmental matter,  whether existent now
or  in  the  future,   which  affects  the  property  of  the  Borrower  or  its
subsidiaries.

PAYMENTS:  References  herein to "$" means  Canadian  Dollars and  references to
"US$" means US Dollars. All payments hereunder are payable for value on the date
on which they are due.

RENEWAL:  The Credit  Facility is available from time to time at the Bank's sole
discretion and is subject to review by the Bank at any time.

EXPENSES:  All legal costs,  fees and expenses  incurred in connection  with the
preparation,  negotiation,  documentation  and operation of the Credit Facility,
including the enforcement of the Bank's rights under each document  delivered in
connection  with the Credit  Facility  will be for the account of the  Borrower.

OTHER CREDIT  FACILITIES:  The Borrower  confirms  that,  except for this Credit
Facility,  there are at the present time no other credit facilities available to
the Borrower from the Bank.

We very much appreciate the opportunity to continue our  relationship  with your
company.

Yours truly,

ROYAL BANK OF CANADA

/s/ Y.P. Sugimoto
Y.P. Sugimoto
Senior Account Manager
Agreed to and Accepted this 28 day of December 2000

PRUDENTIAL STEEL LTD.

Per: /s/ Fred Rea

Title: V.P. and CFO

Per:

Title:

                               SPECIAL PROVISIONS

                  PROVISIONS APPLICABLE TO BANKERS' ACCEPTANCES

The  term  "Bankers'  Acceptances"  means  bankers  acceptances  denominated  in
Canadian  Dollars which are issued by the Borrower and accepted by the Bank. The
term "RBPAF"  means the annual rate  announced  from time to time by the Bank as
its reference rate then in effect for determining  fees on bankers'  acceptances
accepted by the Bank in Canada.  Bankers'  Acceptances;  shall have a term of at
least  thirty  (30) days and not more than one  hundred  and  eighty  (180) days
excluding  days of grace.  Two business days prior written notice for the issue,
the reissue  and the method of  repayment  on maturity of a Bankers'  Acceptance
shall be given by the  Borrower  to the Bank and must be received by the Bank by
no later than 10:00 a.m. on the stipulated notice date. If the Borrower fails to
give  notification  to the  Bank  of  the  method  of  repayment  of a  Bankers'
Acceptance in accordance with the notice  requirements  set out above,  then the
Borrower shall be deemed to have converted the Bankers'  Acceptance into a Prime
Based Loan on the maturity date of the applicable Bankers' Acceptance.

                     PROVISIONS APPLICABLE TO FEF CONTRACTS

The term "FEF Contracts" means foreign exchange forward  contracts  entered into
from time to time by the Borrower with the Bank. For purposes of determining the
amount  available  from time to time under  Segment 3) of this Credit  Facility,
amounts  outstanding by way of FEF Contracts  shall be deemed to be 10% (or such
other  percentage  as may be specified by the Bank from time to time) of amounts
payable  from  time to time  on the  settlement  dates  applicable  to such  FEF
Contracts.  Except as set  forth in this  paragraph,  the  terms and  conditions
applicable to each FEF Contract  shall be determined  without  reference to this
Agreement  other  than  the  section  of this  Agreement  entitled  Evidence  of
Indebtedness.

                   PROVISIONS APPLICABLE TO LETTERS OF CREDIT

The term  "Letters of Credit'  means letters of credit issued by the Bank at the
request  of the  Borrower.  Letters  of Credit  shall not be issued for a period
longer than one year without the prior  consent of the Bank.  Prior to utilizing
the Credit Facility by obtaining a Letter of Credit,  the Borrower shall deliver
to the Bank a  written  Letter  of  Credit  application  in form  and  substance
satisfactory  to the  Bank.  Each  such  application  shall be  executed  by the
authorized  signing  officers of the Borrower and delivered to the Bank at least
one  business  day  prior to the date on which  the  Letter  of  Credit is to be
issued.

                      PROVISIONS APPLICABLE TO LIBOR LOANS

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

"Banking  Day"  means a day which is both a  business  day in the city where the
Branch of Account is located  and a day on which  dealings  in US Dollars may be
carried on by and between banks in the London, England interbank market;

"LIBOR" means,  with respect to each LIBOR Interest Period applicable to a LIBOR
Loan,  the rate of  interest  based on a 360 day year,  at which  the  Bank,  in
accordance with its normal practice, would be prepared to offer to leading banks
in the  London  interbank  market  for  delivery  on the first day of such LIBOR
Interest  Period for a period equal to each such LIBOR Interest  Period based on
the  number  of days  comprised  therein,  deposits  in US  Dollars  of  amounts
comparable  to the amount of such LIBOR Loan,  at or about  10:00 a.m.  (Toronto
time) two (2) Banking Days prior to a drawdown date or a conversion  date as the
case may be, for the initial LIBOR  Interest  Period,  and  thereafter,  two (2)
Banking Days prior to the first day of each successive LIBOR Interest Period;

"LIBOR  Interest Date" means the last day of each LIBOR  Interest  Period and if
the Borrower  selects a LIBOR Interest Period for a period longer than 3 months,
the LIBOR  Interest  Date  shall be the date  falling  every 3 months  after the
beginning  of such  LIBOR  Interest  Period  and on the last  day of such  LIBOR
Interest Period;

"LIBOR  Interest  Period" means with respect to a LIBOR Loan the initial  period
(subject  to  availability)  of  approximately  3 months,  6 months or 12 months
commencing with the date on which a LIBOR Loan is made or on which another basis
of  borrowing is  converted  into a LIBOR Loan and ending on the LIBOR  Interest
Date  failing  on the last  day of the  applicable  LIBOR  Interest  Period  and
thereafter  (subject to availability)  each successive period of approximately 3
months,  6 months or 12  months  commencing  on the last day of the  immediately
prior LIBOR Interest Period; and

"LIBOR Loans" means LIBOR rate based loans in US Dollars made by the Bank to the
Borrower.

Drawdowns  and/or  rollovers of LIBOR Loans are subject to the notice  provision
set out below  and the  availability  to the Bank of US  Dollars  in the  London
interbank  market for the LIBOR Interest Period and for the amount of LIBOR Loan
requested.

The  Borrower  may select  LIBOR  Interest  Periods of 3,6 and 12 months.  Three
Banking Days prior to the drawdown of LIBOR Loans,  conversion  into LIBOR Loans
or the expiration of each LIBOR Interest  Period,  the Borrower shall select and
notify the Bank of the next LIBOR Interest  Period  applicable.  If the Borrower
fails to select and notify the Bank of the LIBOR Interest Period applicable, the
Borrower  shall be deemed to have  converted  the LIBOR Loan into a US Base Rate
Loan.

All  repayments or  prepayments  of LIBOR Loans shall be made on the last day of
the applicable LIBOR Interest Period.  The Borrower shall reimburse the Bank for
any  loss,  costs or  expenses  incurred  as a result of  currency  conversions,
accelerations,  repayments or prepayments relative to LIBOR Loans effected other
than on the last day of a LIBOR Interest  Period  applicable to the amount being
converted, accelerated, repaid or prepaid.

If, at any time during the term of this Agreement,  the Bank  determines,  which
determination is final, conclusive and binding upon the Borrower, that:

adequate and fair means do not exist for  ascertaining the rate of interest on a
LIBOR Loan;

the costs to the Bank of  making,  funding  or  maintaining  the LIBOR  Loan are
increased or the income receivable by the Bank is reduced;

the making of a LIBOR Loan has become  impracticable  by reason of circumstances
which materially or adversely affect the London interbank market; or

deposits in US Dollars  are not  available  to the Bank in the London  interbank
market  in  sufficient  amounts  in the  ordinary  course  of  business  for the
applicable period to make, fund or maintain the LIBOR Loan during such period;

then, the Bank shall  promptly  notify the Borrower by written  notice,  and the
Borrower  shall within five (5) business  days of receipt of such notice  notify
the Bank as to the substitute  basis of borrowing  pursuant to this Agreement it
has selected. If such notice is not given by the Borrower, the Borrower shall be
deemed to have given notice to the Bank to convert the LIBOR Loan into a US Base
Rate Loan.

If it  should  become  unlawful  or  prohibited  for  the  Bank to  perform  its
obligations  under this Agreement with respect to LIBOR Loans,  the Bank may, by
written  notice to the  Borrower  terminate  the Bank's  obligations  under this
Agreement  with respect to LIBOR Loans and the Borrower  shall prepay such LIBOR
Loans together with all accrued but unpaid  interest as may be applicable to the
date of payment or convert the LIBOR Loan into another  basis of  borrowing  and
the  Borrower's  right to  borrow  by way of  LIBOR  Loan  shall  be  terminated
forthwith.

Minimum  initial  drawdown on LIBOR Loans  shall be US $500,000  and  additional
multiples of US $250,000.

                   PROVISIONS APPLICABLE TO PRIME BASED LOANS

The term "Prime Based  Loans"  means Prime rate based loans in Canadian  Dollars
made by the Bank to the  Borrower.  The term  "Prime"  means the annual  rate of
interest  announced  from time to time by the Bank as being its  reference  rate
then in effect for  determining  interest  rates on Canadian  Dollar  commercial
loans in Canada.

                   PROVISIONS APPLICABLE TO US BASE RATE LOANS

The term "US Base Rate Loans"  means USBR rate based loans in US Dollars made by
the Bank to the  Borrower.  The term  "USBR"  means the annual  rate of interest
announced  by the Bank  from time to time as being  its  reference  rate then in
effect for  determining  interest  rates on US Dollar  commercial  loans made in
Canada.

SCHEDULE "A" TO A LETTER AGREEMENT DATED DECEMBER 19,2000
BETWEEN ROYAL BANK OF CANADA AND PRUDENTIAL STEEL LTD.

SCHEDULE "B" TO A LETTER AGREEMENT DATED DECEMBER 19,2000
BETWEEN PRUDENTIAL STEEL LTD. AS BORROWER
AND ROYAL BANK OF CANADA AS LENDER

                                   DEFINITIONS

Associate  means an  associate,  as defined  in the  Business  Corporations  Act
(Alberta).

Compliance Certificate means a Compliance Certificate, substantially in the form
attached hereto as Schedule C, duly completed and executed by the Borrower.

Financial  Assistance means providing or agreeing to provide (either directly or
indirectly)  financial assistance to any person (including,  without limitation,
financial assistance by way of a loan,  guarantee,  equity  contribution,  share
purchase or credit support arrangement).

Permitted Debt: means the Prudential Steel Inc US Bank  US$10,000,000  revolving
line of credit which is to be reduced to US$5,000,000 on, or before, January 31,
2001.

Permitted Dispositions:  means:

a) the sale of products or services by the Borrower and its  Subsidiaries in the
ordinary  course of business to persons  other than  Affiliates of the Borrower;
and

b) the sale or disposition by the Borrower or its  Subsidiaries  of assets which
are obsolete or no longer  useful for their  intended  purpose to persons  other
than Affiliates of the Borrower.

Permitted Encumbrances:  means, in respect of the Borrower:

a) liens for taxes,  assessments  or  governmental  charges which are not due or
delinquent,  or the  validity of which the  Borrower or any of its  Subsidiaries
shall be contesting in good faith;  provided that  enforcement  proceedings have
not yet commenced or a stay of  enforcement is in effect and the outcome of such
contest could not reasonably be expected to involve any appreciable risk of loss
of any material part of the property of the Borrower and its Subsidiaries  taken
as a whole;

b) the lien of any judgment  rendered,  or claim filed,  against the Borrower or
any of  its  Subsidiaries  which  the  Borrower  or  such  Subsidiary  shall  be
contesting in good faith;  provided that  enforcement  proceedings  have not yet
commenced or a stay of  enforcement is in effect and the outcome of such contest
could not reasonably be expected to involve any appreciable  risk of loss of any
material  part of the property of the Borrower and its  Subsidiaries  taken as a
whole;

c) liens,  privileges  or other  charges  imposed  or  permitted  by law such as
carriers'  liens',  builders'  liens',  material  mean  liens and  other  liens,
privileges  or other  charges of a similar  nature which  relate to  obligations
which are not due or delinquent;

d)  undetermined  or  inchoate  liens  arising  in the  ordinary  course  of and
incidental  to  construction  or  current  operations  which have not been filed
pursuant to law against the Borrower or any of its  Subsidiaries,  in respect of
which no steps or proceedings to enforce such lien have been initiated and which
relate to obligations which are not due or delinquent;

e)  easements,  rights-of-way,  servitudes,  zoning or other  similar  rights or
restrictions in respect of land held by the Borrower or any of its  Subsidiaries
(including,  without  limitation,  rights-of-way  and  servitudes  for railways,
sewers,  drains,  pipe lines, gas and water mains,  electric light and power and
telephone or telegraph or cable television  conduits,  poles,  wires and cables)
which,  either alone or in the aggregate,  do not detract from the value of such
land or  materially  impair  its use in the  operation  of the  business  of the
Borrower or any such Subsidiary; and

f) Liens,  other than those  referred to above in this  definition  of Permitted
Encumbrances,  on property and assets having an aggregate  book value not at any
time in excess of Cdn. $2,500,000.

Permitted Financial Assistance:  means:

a) a cash payment for goods and services which is made in the ordinary course of
business by the  Borrower to any of its  Associates;  provided the amount of any
such payment is not greater than the fair market value of the goods and services
for which such payment is made; and

b) financial assistance will not at any time be in excess of an aggregate amount
of U.S.  $7,500,000  which will include a maximum of US$5,000,000  million to be
made  available  to  Prudential  Steel Inc and maximum  US$2,500,000  to be made
available to Maverick Tube Corporation et al. In addition, the Lender will allow
the  Borrower  to advance to a maximum of  US$5,000,000  million to its  parent,
Maverick Tube  Corporation,  and repayment will be made before December 31, 2000
to comply to covenant cap of US$7,500,00 million.

Subsidiary:  means a  subsidiary,  as defined in the Business  Corporations  Act
(Alberta).

SCHEDULE "C" TO A LETTER AGREEMENT DATED MAY 15, 1997
BETWEEN PRUDENTIAL STEEL LTD. AS BORROWER
AND ROYAL BANK OF CANADA AS LENDER

                             COMPLIANCE CERTIFICATE

I, , of the City of Calgary,  in the  Province of Alberta  hereby  certify in my
corporate (and not in my personal) capacity as follows:

1. That I am the [President or Chief Financial Officer] of Prudential Steel Ltd.
(the "Borrower");

2. That this Certificate applies to the fiscal quarter ending , 19;

3. That I am  familiar  with and have  examined  the  provisions  of the  credit
facility letter agreement (the "Letter Agreement") dated May 15,1997 between the
Borrower  and Royal Bank of Canada which  provides for a Credit  Facility to the
Borrower and I have made  reasonable  investigations  of  corporate  records and
inquiries  of other  officers  and senior  personnel  of the  Borrower as I have
deemed necessary for purposes of this certificate;

4. That  based on the  foregoing,  the  Borrower  is not in breach of nor has it
breached any provision of the Letter  Agreement  and no condition,  event or act
has occurred thereunder which with the giving of notice or the lapse of time, or
both, would constitute a default under the Letter Agreement.

5. That all capitalized terms used in this certificate have the same meanings as
in the Letter Agreement.

WITNESS MY HAND AND THE CORPORATE  SEAL OF Prudential  Steel Ltd. at the City of
Calgary, in the Province of Alberta this day of , 19.

PRUDENTIAL STEEL LTD.

By:_______________________
Title

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