Document:

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                                CREDIT AGREEMENT

                                  by and among

                                KELLWOOD COMPANY
                                  as Borrower,

                             BANK OF AMERICA, N.A.,
                      as Administrative Agent and as Lender

                            THE BANK OF NOVA SCOTIA,
                      as Documentation Agent and as Lender

                            THE CHASE MANHATTAN BANK,
                       as Syndication Agent and as Lender,

                                       and

                   THE LENDERS PARTY HERETO FROM TIME TO TIME

                         BANC OF AMERICA SECURITIES LLC,
                         Lead Arranger and Book Manager

                                 August 31, 1999

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                                TABLE OF CONTENTS

                                      Page

                                    ARTICLE I

                              Definitions and Terms

1.1.         Definitions.......................................................2
1.2.         Rules of Interpretation..........................................27

                                   ARTICLE II

                              The Credit Facilities

2.1.         Tranche A Revolving Credit Facility..............................29
2.2.         Tranche B Revolving Credit Facility..............................29
2.3.         Amounts..........................................................29
2.4.         Advances.........................................................30
2.5.         Repayment of Loans...............................................32
2.6.         Reductions.......................................................32
2.7.         Use of Proceeds..................................................33
2.8.         Notes.        ...................................................33

                                   ARTICLE III

                                Letters of Credit

3.1.         Letters of Credit................................................34
3.2.         Reimbursement and Participations.................................34

                                   ARTICLE IV

         Offshore and Eurodollar Funding, Fees, and Payment Conventions

4.1.         Utilization of Offshore Currencies...............................38
4.2.         Interest Rate Options............................................40
4.3.         Conversions and Elections of Subsequent Interest Periods.........40
4.4.         Payment of Interest..............................................41
4.5.         Prepayments of Fixed Rate Loans..................................41
4.6.         Manner of Payment................................................42
4.7.         Fees.............................................................43
4.8.         Pro Rata Payments................................................44
4.9.         Computation of Rates and Fees....................................44

                                        i

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4.10.        Deficiency Advances; Failure to Purchase Participations..........44
4.11.        Intraday Funding.................................................45

                                    ARTICLE V

                             Change in Circumstances

5.1.         Increased Cost and Reduced Return................................46
5.2.         Limitation on Types of Loans.....................................47
5.3.         Illegality.......................................................48
5.4.         Treatment of Affected Loans......................................48
5.5.         Compensation.....................................................49
5.6.         Taxes............................................................49

                                   ARTICLE VI

            Conditions to Making Loans and Issuing Letters of Credit

6.1.         Conditions of Initial Advance....................................52
6.2.         Conditions of Loans and Letters of Credit........................54

                                   ARTICLE VII

                         Representations and Warranties

7.1.         Organization and Authority.......................................56
7.2.         Loan Documents...................................................56
7.3.         Subsidiaries and Stockholders....................................57
7.4.         Ownership Interests..............................................57
7.5.         Financial Condition..............................................57
7.6.         Title to Properties..............................................58
7.7.         Taxes............................................................58
7.8.         Other Agreements.................................................58
7.9.         Litigation.......................................................58
7.10.        Margin Stock.....................................................58
7.11.        Investment Company...............................................59
7.12.        Patents, Etc.....................................................59
7.13.        No Untrue Statement..............................................59
7.14.        No Consents, Etc.................................................59
7.15.        Employee Benefit Plans...........................................59
7.16.        No Default.......................................................61
7.17.        Environmental Laws...............................................61

                                       ii

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7.18.        Employment Matters...............................................61
7.19.        Year 2000 Compliance.............................................61
7.20.        Material Subsidiaries............................................62
7.21.        Insurance.  .....................................................62

                                  ARTICLE VIII

                              Affirmative Covenants

8.1.         Financial Reports, Etc...........................................63
8.2.         Maintain Properties..............................................64
8.3.         Existence, Qualification, Etc....................................64
8.4.         Regulations and Taxes............................................64
8.5.         Insurance........................................................65
8.6.         True Books.......................................................65
8.7.         Year 2000 Compliance.............................................65
8.8.         Right of Inspection..............................................65
8.9.         Observe all Laws.................................................65
8.10.        Governmental Licenses............................................65
8.11.        Covenants Extending to Other Persons.............................66
8.12.        Officer's Knowledge of Default...................................66
8.13.        Suits or Other Proceedings.......................................66
8.14.        Notice of Environmental Complaint or Condition...................66
8.15.        Environmental Compliance.........................................66
8.16.        Employee Benefit Plans...........................................67
8.17.        Continued Operations.............................................67
8.18.        Notices Regarding Material Subsidiaries..........................67

                                   ARTICLE IX

                               Negative Covenants

9.1.         Financial Covenants..............................................69
9.2.         Acquisitions.....................................................69
9.3.         Liens............................................................69
9.4.         Indebtedness.....................................................71
9.5.         Transfer of Assets...............................................72
9.6.         Investments......................................................73
9.7.         Merger or Consolidation..........................................73
9.8.         Restricted Payments..............................................74
9.9.         Transactions with Affiliates.....................................74
9.10.        Compliance with ERISA, the Code and Foreign Benefit Laws.........74
9.11.        Fiscal Year......................................................75
9.12.        Dissolution, etc.................................................75
9.13.        Change in Control................................................75

                                       iii

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9.14.        Restrictive Agreements, etc......................................75
9.15.        Issuance or Sale of Stock by Subsidiaries........................75
9.16.        Sale of Stock in Subsidiaries....................................76

                                    ARTICLE X

                       Events of Default and Acceleration

10.1.        Events of Default................................................77
10.2.        Agent to Act.....................................................80
10.3.        Cumulative Rights................................................80
10.4.        No Waiver........................................................80
10.5.        Allocation of Proceeds...........................................80

                                   ARTICLE XI

                                    The Agent

11.1.        Appointment, Powers, and Immunities..............................82
11.2.        Reliance by Agent................................................82
11.3.        Defaults.........................................................83
11.4.        Rights as Lender.................................................83
11.5.        Indemnification..................................................83
11.6.        Non-Reliance on Agent and Other Lenders..........................84
11.7.        Resignation of Agent.............................................84

                                   ARTICLE XII

                                  Miscellaneous

12.1.        Assignments and Participations...................................85
12.2.        Notices..........................................................87
12.3.        Right of Set-off; Adjustments....................................88
12.4.        Survival.........................................................88
12.5.        Expenses.........................................................88
12.6.        Amendments and Waivers...........................................89
12.7.        Counterparts.....................................................89
12.8.        Termination......................................................89
12.9.        Indemnification; Limitation of Liability.........................90
12.10.       Severability.....................................................91
12.11.       Entire Agreement.................................................91
12.12.       Agreement Controls...............................................91
12.13.       Usury Savings Clause.............................................91
12.14.       Payments.........................................................92
12.15.       GOVERNING LAW; WAIVER OF JURY TRIAL..............................92

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12.16.       Confidentiality..................................................93
12.17.       Special Funding Option...........................................94

EXHIBIT A             Applicable Commitment Percentages......................A-1
EXHIBIT B             Form of Assignment and Acceptance......................B-1
EXHIBIT C             Notice of Appointment (or Revocation) of Authorized
                      Representative.........................................C-1
EXHIBIT D             Form of Borrowing Notice...............................D-1
EXHIBIT E             Form of Interest Rate Selection Notice.................E-1
EXHIBIT F-1           Form of Tranche A Note...............................F-1-1
EXHIBIT F-2           Form of Tranche B Note...............................F-2-1
EXHIBIT G             Form of Opinion of Borrower's Counsel..................G-1
EXHIBIT H             Compliance Certificate.................................H-1
Schedule 1.1          Existing Letters of Credit.............................S-1
Schedule 7.3          Subsidiaries and Investments in Other Persons..........S-2
Schedule 7.5          Indebtedness...........................................S-3
Schedule 7.6          Liens..................................................S-4
Schedule 7.7          Tax Matters............................................S-5
Schedule 7.9          Litigation.............................................S-6
Schedule 7.17         Environmental Matters..................................S-7

                                        v

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                                CREDIT AGREEMENT

         THIS CREDIT AGREEMENT,  dated as of August 31, 1999 (the  "Agreement"),
is made by and among:

         KELLWOOD COMPANY, a Delaware corporation having its principal place of
business in St. Louis, Missouri (the "Borrower"),

         BANK OF AMERICA,  N.A., a national  banking  association  organized and
existing under the laws of the United States, in its capacity as a Lender ("Bank
of America"),  and each other financial  institution  executing and delivering a
signature page hereto and each other financial  institution  which may hereafter
execute and deliver an assignment and acceptance  with respect to this Agreement
pursuant  to  Section  12.1  (hereinafter  such  financial  institutions  may be
referred to individually as a "Lender" or collectively as the "Lenders"),

         BANK OF AMERICA,  N.A., a national  banking  association  organized and
existing under the laws of the United States,  in its capacity as Administrative
Agent for the Lenders (in such capacity,  and together with any successor  agent
appointed in accordance with the terms of Section 11.7, the "Agent");

         THE BANK OF NOVA  SCOTIA,  a bank  governed  by the Bank Act  (Canada),
through its United States division, in its capacity as Documentation Agent, and

         THE CHASE  MANHATTAN BANK, a state bank chartered under the laws of New
York, in its capacity as Syndication Agent;

                              W I T N E S S E T H:
                               -------------------

         WHEREAS,  the Borrower has requested that the Lenders make available to
the Borrower (i) a 364 day revolving credit facility of up to $100,000,000,  the
proceeds of which are to be used for general corporate purposes, working capital
and  Capital  Expenditures  and  (ii)  a  revolving  credit  facility  of  up to
$250,000,000,  the  proceeds  of  which  are to be used  for  general  corporate
purposes, working capital and Capital Expenditures and which shall include (x) a
letter of credit  subfacility of up to  $50,000,000  for the issuance of standby
letters of credit and up to $200,000,000 for the issuance of commercial  letters
of credit and (y) a $20,000,000 sublimit for multicurrency borrowings; and

         WHEREAS,  the  Lenders are  willing to make such  revolving  credit and
letter  of  credit  facilities  available  to the  Borrower  upon the  terms and
conditions set forth herein;

         NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:

                                        1

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                                    ARTICLE I

                              Definitions and Terms

         1.1. Definitions. For the purposes of this Agreement, in addition to
the definitions set forth above, the following terms shall have the respective
meanings set forth below:

                  "Acquisition"  means  the  acquisition  of  (i) a  controlling
         equity interest in another Person (including the purchase of an option,
         warrant or  convertible  or similar  type  security  to acquire  such a
         controlling  interest at the time it becomes  exercisable by the holder
         thereof),  whether by purchase of such equity interest or upon exercise
         of an option or warrant for, or  conversion of  securities  into,  such
         equity interest,  or (ii) assets of another Person which constitute all
         or substantially all of the assets of such Person or of a line or lines
         of business conducted by such Person.

                  "Advance"  means a  borrowing  under the  Tranche A  Revolving
         Credit Facility or the Tranche B Revolving  Credit Facility  consisting
         of a Base Rate Loan or a Eurodollar Rate Loan.

                  "Advance Date Exchange Rate" means, with respect to an Advance
         of a  Tranche  B Loan in an  Offshore  Currency  or a Letter  of Credit
         issued in an Offshore Currency,  the Spot Rate of Exchange for the date
         such  Advance is  originally  made or such  Letter of Credit is issued,
         provided  that,  if such Tranche B Loan is  Continued  for a subsequent
         Interest  Period  pursuant to Sections  4.1 and 4.3,  the Advance  Date
         Exchange  Rate with  respect  to such  Tranche B Loan shall be the Spot
         Rate of Exchange two Business Days  preceding the effective date of the
         latest  Continuation of such Tranche B Loan, and the Dollar  Equivalent
         Amount of such Tranche B Loan shall be adjusted as set forth in Section
         4.1,  and  provided  further,  if such Letter of Credit is issued for a
         term  exceeding  three (3) months,  the Advance Date Exchange Rate with
         respect to such Letter of Credit  shall be the Spot Rate of Exchange on
         the  last  Business  Day  of  each  calendar  quarter  and  the  Dollar
         Equivalent  Amount of such  Letter of Credit  shall be  adjusted as set
         forth in Section 4.1; and provided,  further,  if such Letter of Credit
         is drawn upon, the Advance Date Exchange Rate shall be the Spot Rate of
         Exchange  for the  date of  such  drawing  only  for  the  purposes  of
         repayment  of  Reimbursement  Obligations  and  determining  the Dollar
         Equivalent Amount of such Letter of Credit.

                  "Affiliate"  means any Person (i) which directly or indirectly
         through one or more intermediaries controls, or is controlled by, or is
         under common control with the Borrower; or (ii) which beneficially owns
         or holds 10% or more of any class of the  outstanding  voting stock (or
         in the case of a Person which is not a corporation,  10% or more of the
         equity  interest) of the  Borrower;  or 10% or more of any class of the
         outstanding  voting  stock  (or in the case of a Person  which is not a
         corporation,   10%  or  more  of  the  equity  interest)  of  which  is
         beneficially  owned or held by the Borrower.  The term "control"  means
         the possession, directly or indirectly, of the power to direct or cause
         the  direction  of the  management  and  policies of a Person,  whether
         through ownership of voting stock, by contract or otherwise.

                                        2

<PAGE>

                  "Applicable  Commercial  Letter  of  Credit  Fee"  means  that
         percent  per  annum  set  forth  below  under  the  heading  Applicable
         Commercial  Letter of Credit Fee, which shall be based upon the highest
         Rating existing at the date of  determination as specified in the table
         below:

                                 Rating                    Applicable Commercial
   Tier           S&P          or            Moody's       Letter of Credit Fee
   ----           ---          --            -------       --------------------
     I           >=A-          or             >=A3                0.100%
    II          >=BBB+         or            >=Baa1               0.125%
    III          >=BBB         or            >=Baa2               0.150%
    IV           < BBB         and           < Baa2               0.175%

         The  Applicable  Commercial  Letter of Credit Fee shall be  established
         from time to time based upon the  Ratings in effect  from time to time.
         Any change in the Applicable  Commercial  Letter of Credit Fee due to a
         change in any Rating  shall be  effective on the date of such change in
         such Rating.  In the event of a split  Rating,  the higher Rating shall
         determine the Applicable  Commercial  Letter of Credit Fee. If there is
         no  Rating,  the  Applicable   Commercial  Letter  of  Credit  Fee  and
         Applicable Standby Letter of Credit Fee shall be Tier IV.

                  "Applicable  Commitment  Percentage" means, for each Lender at
         any time, with respect to the Tranche A Revolving Credit Facility,  the
         Tranche B Revolving  Credit Facility and the Letter of Credit Facility,
         a fraction,  the  numerator of which shall be the sum of such  Lender's
         Tranche A Commitment  and Tranche B Commitment  and the  denominator of
         which shall be the sum of the Total Tranche A Commitment  and the Total
         Tranche B Commitment,  which Applicable  Commitment Percentage for each
         Lender as of the  Closing  Date is as set forth in Exhibit A;  provided
         that the  Applicable  Commitment  Percentage  of each  Lender  shall be
         increased or decreased to reflect any  assignments to or by such Lender
         effected in accordance with Section 12.1.

                  "Applicable Issuing Bank" means, with respect to any Letter of
         Credit,  the  Issuing  Bank  which  issued  such  Letter  of  Credit in
         accordance with Article III.

                  "Applicable  Lending  Office"  means,  for each Lender and for
         each  Type of Loan,  the  "Lending  Office"  of such  Lender  (or of an
         affiliate  of such  Lender)  designated  for  such  Type of Loan on the
         signature  pages  hereof or such  other  office of such  Lender  (or an
         affiliate  of such Lender) as such Lender may from time to time specify
         to the Agent and the Borrower by written notice in accordance  with the
         terms  hereof  as the  office by which its Loans of such Type are to be
         made and maintained.

                  "Applicable  Standby  Letter of Credit Fee" means that percent
         per annum set forth in the table  below  under the  heading  Applicable
         Standby Letter of Credit Fee, which shall be

                                        3

<PAGE>

         based on the highest Rating existing at the date of determination as
         specified in the table below:

                                Rating                       Applicable Standby
    Tier          S&P            or           Moody's       Letter of Credit Fee
    ----          ---            --           -------       --------------------
     I            >=A-           or            >=A3                0.275%
    II           >=BBB+          or           >=Baa1               0.400%
    III          >=BBB           or           >=Baa2               0.575%
    IV          (<)BBB           and         (<)Baa2               0.800%

         The Applicable  Standby Letter of Credit Fee shall be established  from
         time to time  based on the  Ratings  in effect  from time to time.  Any
         change in the  Applicable  Standby Letter of Credit Fee due to a change
         in any Rating  shall be  effective  on the date of such  change in such
         Rating.  In the  event  of a split  Rating,  the  higher  Rating  shall
         determine the  Applicable  Standby Letter of Credit Fee. If there is no
         Rating, the Applicable Standby Letter of Credit Fee shall be Tier IV.

                  "Applicable  Tranche A Facility  Fee" means that  percent  per
         annum set forth below under the heading  Applicable  Tranche A Facility
         Fee, which shall be based upon the highest Rating  existing at the date
         of determination as specified in the table below:

                                  Rating                    Applicable Tranche A
    Tier            S&P            or           Moody's         Facility Fee
    ----            ---            --           -------         ------------
     I             >=A-            or            >=A3              0.100%
    II            >=BBB+           or           >=Baa1             0.125%
    III            >=BBB           or           >=Baa2             0.150%
    IV            (<)BBB          and          (<)Baa2             0.175%

         The Applicable Tranche A Facility Fee shall be established from time to
         time based upon the Ratings in effect from time to time.  Any change in
         the  Applicable  Tranche A  Facility  Fee due to a change in any Rating
         shall be effective on the date of such change in such Rating.
          In the event of a split Rating,  the higher Rating shall determine the
         Applicable  Tranche  A  Facility  Fee.  If  there  is  no  Rating,  the
         Applicable Tranche A Facility Fee shall be Tier IV.

                  "Applicable  Tranche B Facility  Fee" means that  percent  per
         annum set forth in the table below under the heading Applicable Tranche
         B Facility Fee, which shall be based on the highest Rating  existing at
         the date of determination as specified in the table below:

                                        4

<PAGE>

                              Rating                       Applicable Tranche B
   Tier           S&P          or            Moody's           Facility Fee
   ----           ---          --            -------           ------------
     I           >=A-          or              >=A3               0.125%
    II          >=BBB+         or             >=Baa1              0.150%
    III          >=BBB         or             >=Baa2              0.175%
    IV          (<)BBB          and          (<)Baa2              0.200%

         The Applicable Tranche B Facility Fee shall be established from time to
         time based on the  Ratings in effect  from time to time.  Any change in
         the  Applicable  Tranche B  Facility  Fee due to a change in any Rating
         shall be effective  on the date of such change in such  Rating.  In the
         event  of a  split  Rating,  the  higher  Rating  shall  determine  the
         Applicable  Tranche  B  Facility  Fee.  If  there  is  no  Rating,  the
         Applicable Tranche B Facility Fee shall be Tier IV.

                  "Applicable Tranche A Margin" means that percent per annum set
         forth below under the heading Applicable Tranche A Margin,  which shall
         be based upon the highest Rating existing at the date of  determination
         as specified in the table below:

                                   Rating                   Applicable Tranche A
    Tier         S&P             or           Moody's          Margin
    ----         ---             --           -------          ------
     I          >=A-             or            >=A3            0.300%
    II         >=BBB+            or           >=Baa1           0.425%
    III         >=BBB            or           >=Baa2           0.600%
    IV         (<)BBB            and         (<)Baa2           0.825%

         The Applicable  Tranche A Margin shall be established from time to time
         based upon the Ratings in effect  from time to time.  Any change in the
         Applicable  Tranche  A Margin  due to a change in any  Rating  shall be
         effective on the date of such change in such Rating.  In the event of a
         split Rating,  the higher Rating shall determine the Applicable Tranche
         A Margin. If there is no Rating,  the Applicable Tranche A Margin shall
         be Tier IV.

                  "Applicable Tranche B Margin" means that percent per annum set
         forth in the table below under the heading Applicable Tranche B Margin,
         which  shall be based on the  highest  Rating  existing  at the date of
         determination as specified in the table below:

                                        5

<PAGE>

                                  Rating                   Applicable Tranche B
    Tier            S&P             or           Moody's          Margin
    ----            ---             --           -------          ------
     I             >=A-             or            >=A3            0.275%
    II            >=BBB+            or           >=Baa1           0.400%
    III            >=BBB            or           >=Baa2           0.575%
    IV            (<)BBB            and         (<)Baa2           0.800%

         The Applicable  Tranche B Margin shall be established from time to time
         based on the  Ratings  in effect  from time to time.  Any change in the
         Applicable  Tranche  B Margin  due to a change in any  Rating  shall be
         effective on the date of such change in such Rating.  In the event of a
         split Rating,  the higher Rating shall determine the Applicable Tranche
         B Margin. If there is no Rating,  the Applicable Tranche B Margin shall
         be Tier IV.

                  "Applications  and  Agreements  for Letters of Credit"  means,
         collectively, the Applications and Agreements for Letters of Credit, or
         similar  documentation of the Applicable Issuing Bank,  executed by the
         Borrower from time to time and delivered to the Applicable Issuing Bank
         to support the issuance of Letters of Credit.

                  "Assignment  and  Acceptance"  shall  mean an  Assignment  and
         Acceptance in the form of Exhibit B (with blanks  appropriately  filled
         in)  delivered  to the  Agent in  connection  with an  assignment  of a
         Lender's interest under this Agreement pursuant to Section 12.1.

                  "Authorized  Representative" means any of the President, Chief
         Executive Officer, Vice President Finance-Chief Financial Officer, Vice
         President  Controller,  Vice President  Treasurer or General Counsel of
         the Borrower, or any other officer expressly designated by the Board of
         Directors of the Borrower (or the appropriate committee thereof) or any
         other Authorized  Representative as an Authorized Representative of the
         Borrower,  as set forth from time to time in a certificate  in the form
         of Exhibit C.

                  "Bank of America" means Bank of America, N.A. and its
         successors.

                  "BAS" means Banc of America Securities LLC and its successors.

                  "Base Rate"  means,  for any day,  the rate per annum equal to
         the higher of (i) the Federal  Funds Rate for such day plus one-half of
         one percent  (0.5%) and (ii) the Prime Rate for such day. Any change in
         the Base Rate due to a change in the Prime  Rate or the  Federal  Funds
         Rate shall be  effective  on the  effective  date of such change in the
         Prime Rate or Federal Funds Rate.

                  "Base Rate Loan"  means a Loan for which the rate of  interest
         is determined by reference to the Base Rate.

                                        6

<PAGE>

                  "Base Rate  Refunding  Loan" means a Base Rate Loan made under
         the  Tranche B  Revolving  Credit  Facility  to  satisfy  Reimbursement
         Obligations arising from a drawing under a Letter of Credit.

                  "Board"  means the Board of Governors  of the Federal  Reserve
         System (or any successor body).

                  "Borrower's  Account"  means a demand  deposit  account at The
         National  Bank  of  Chicago  or any  successor  account  with a  Lender
         designated by the Borrower.

                  "Borrowing Notice" means the notice delivered by an Authorized
         Representative  in  connection  with an  Advance  under  the  Tranche A
         Revolving  Credit Facility or the Tranche B Revolving  Credit Facility,
         in the form of Exhibit D.

                  "Business  Day"  means,  (i) except as  expressly  provided in
         clauses (ii),  (iii) and (iv), any day which is not a Saturday,  Sunday
         or a day on which  banks in the  States of New York and North  Carolina
         are  authorized or obligated by law,  executive  order or  governmental
         decree to be  closed,  (ii) with  respect  to the  selection,  funding,
         interest rate,  payment,  and Interest  Period of any  Eurodollar  Rate
         Loan, any day which is a Business Day, as described above, and on which
         the  relevant   international   financial  markets  are  open  for  the
         transaction  of business  contemplated  by this  Agreement  and foreign
         exchange  transactions  in  London,  England,  New  York,  New York and
         Charlotte,  North  Carolina,  (iii)  with  respect  to  the  selection,
         funding,  interest rate,  payment and Interest  Period for any Offshore
         Rate Loan  denominated  in Euros,  any day which is a  Business  Day as
         described  in clause (ii) above,  and on which  TARGET  (Trans-European
         Automated  Real-time Gross  settlement  Express Transfer system) or any
         successor  thereto is scheduled to be open for business,  and (iv) with
         respect to the selection,  funding, interest rate, payment and Interest
         Period for any Offshore  Rate Loan not  denominated  in Euros,  any day
         which is a Business Day as described in clause (ii) above, and on which
         the  relevant  Funding  Bank is open for the  transaction  of  business
         contemplated  by this  Agreement and on which  dealings in the relevant
         Offshore  Currency are carried on in the  applicable  offshore  foreign
         exchange  interbank market in which  disbursement of or payment in such
         Offshore Currency will be made or received hereunder.

                  "Capital Expenditures" means, with respect to the Borrower and
         its Subsidiaries,  for any period the sum of (without  duplication) (i)
         all  expenditures  (whether paid in cash or accrued as  liabilities) by
         the Borrower or any Subsidiary  during such period for items that would
         be classified as "property,  plant or equipment" or comparable items on
         the  consolidated  balance sheet of the Borrower and its  Subsidiaries,
         including  without  limitation  all  transactional  costs  incurred  in
         connection  with  such   expenditures   provided  the  same  have  been
         capitalized, excluding, however, the amount of any Capital Expenditures
         paid for with  proceeds of casualty  insurance  as evidenced in writing
         and  submitted to the Agent  together with any  compliance  certificate
         delivered  pursuant to Section  8.1(a) or (b), and (ii) with respect to
         any Capital  Lease  entered  into by the  Borrower or its  Subsidiaries
         during such period,  the present value of the lease  payments due under
         such Capital Lease over the term

                                        7

<PAGE>

         of such Capital  Lease  applying a discount  rate equal to the interest
         rate  provided  in such lease (or in the  absence of a stated  interest
         rate,  that rate used in the  preparation  of the financial  statements
         described in Section 8.1(a)), all the foregoing in accordance with GAAP
         applied on a Consistent Basis.

                  "Capital Leases" means all leases which have been or should be
         capitalized  in  accordance  with GAAP as in  effect  from time to time
         including Statement No. 13 of the Financial  Accounting Standards Board
         and any successor thereof.

                  "Change of Control" means, at any time any "person" or "group"
         (each as used in Sections  13(d)(3) and  14(d)(2) of the Exchange  Act)
         either (A) becomes the "beneficial  owner" (as defined in Rule 13d-3 of
         the Exchange Act ), directly or indirectly, of Voting Securities of the
         Borrower  (or  securities  convertible  into or  exchangeable  for such
         Voting  Securities)  representing  50% or more of the  combined  voting
         power of all Voting  Securities  of the  Borrower  (on a fully  diluted
         basis) or (B) otherwise  has the ability,  directly or  indirectly,  to
         elect a majority of the board of directors of the Borrower.

                  "Closing  Date" means the date as of which this  Agreement  is
         executed  by the  Borrower,  the Lenders and the Agent and on which the
         conditions set forth in Section 6.1 have been satisfied.

                  "Code"  means the Internal  Revenue Code of 1986,  as amended,
         and any regulations promulgated thereunder.

                  "Commercial  Letter of Credit" means (i) a documentary  letter
         of credit  issued by an Issuing Bank pursuant to Article III hereof for
         the account of the  Borrower or jointly for the account of the Borrower
         and a  Designated  Subsidiary,  which  letter of credit is  secured  by
         documents and (ii) the Existing Commercial Letters of Credit.

                  "Commercial  Letter of Credit  Commitment" means, with respect
         to each Lender, the obligation of such Lender to acquire Participations
         in  respect   of   Commercial   Letters  of  Credit  and  the   related
         Reimbursement  Obligations  up to an  aggregate  amount at any one time
         outstanding equal to such Lender's Applicable  Commitment Percentage of
         the Total  Commercial  Letter of Credit  Commitment  as the same may be
         increased or decreased from time to time pursuant to this Agreement.

                  "Commercial  Letter of Credit  Outstandings"  means, as of any
         date of determination, the aggregate Dollar Equivalent Amount available
         to be drawn under all Commercial  Letters of Credit plus  Reimbursement
         Obligations then outstanding arising from Commercial Letters of Credit.

                  "Consistent  Basis" in  reference to the  application  of GAAP
         means the accounting  principles observed in the period referred to are
         comparable in all material respects to those applied in the preparation
         of the audited  financial  statements of the Borrower referred to as of
         the Closing Date in Section 7.5(a).

                                        8

<PAGE>

                  "Consolidated  EBITDA" means, with respect to the Borrower and
         its  Subsidiaries  for any  Four-Quarter  Period  ending on the date of
         computation thereof, the sum of, without duplication,  (i) Consolidated
         Net  Income  less  all  Non-cash  Income,  (ii)  Consolidated  Interest
         Expense, (iii) taxes on income, (iv) amortization, (v) depreciation and
         (vi) all other Non- cash  Expenses,  all  determined on a  consolidated
         basis in accordance with GAAP applied on a Consistent Basis.

                  "Consolidated  Indebtedness"  means all Indebtedness for Money
         Borrowed of the  Borrower and its  Subsidiaries,  all  determined  on a
         consolidated  basis,  including  amounts  outstanding  under  Permitted
         Receivables Securitizations.

                  "Consolidated  Interest Coverage Ratio" means, with respect to
         the Borrower and its Subsidiaries for any Four-Quarter Period ending on
         the date of computation  thereof,  the ratio of (a) Consolidated EBITDA
         for such  period  less  Capital  Expenditures  for such  period  to (b)
         Consolidated Interest Expense for such period.

                  "Consolidated  Interest  Expense"  means,  with respect to any
         period of  computation  thereof,  the  gross  interest  expense  of the
         Borrower and its  Subsidiaries,  including  without  limitation (i) the
         current  amortized  portion of debt discounts to the extent included in
         gross interest expense,  (ii) the current amortized portion of all fees
         (including  fees  payable in respect  of any Rate  Hedging  Obligation)
         payable in connection with the incurrence of Indebtedness to the extent
         included  in gross  interest  expense  and  (iii)  the  portion  of any
         payments made in connection  with Capital Leases  allocable to interest
         expense, all determined on a consolidated basis in accordance with GAAP
         applied on a Consistent Basis.

                  "Consolidated   Leverage  Ratio"means,   as  of  the  date  of
         computation  thereof,  the  ratio  of  (i)  Consolidated   Indebtedness
         (determined  as at such  date)  to (ii)  Consolidated  EBITDA  (for the
         Four-Quarter  Period ending on (or most  recently  ended prior to) such
         date) provided,  however,  that with respect to an Acquisition  that is
         accounted  for as a "purchase"  under GAAP,  for the four  Four-Quarter
         Periods   ending  next   following   the  date  of  such   Acquisition,
         Consolidated EBITDA shall be determined on a historical pro forma basis
         as if such Acquisition had been consummated as a "pooling of interests"
         under  GAAP   notwithstanding   the  elimination  of  the  "pooling  of
         interests" accounting method under GAAP.

                  "Consolidated Net Income" means, for any period of computation
         thereof,  the gross  revenues  from  operations of the Borrower and its
         Subsidiaries  (including  payments  received  by the  Borrower  and its
         Subsidiaries   of  (i)  interest   income,   and  (ii)   dividends  and
         distributions  made in the  ordinary  course  of  their  businesses  by
         Persons in which investment is permitted pursuant to this Agreement and
         not  related  to  an  extraordinary  event),  less  all  operating  and
         non-operating  expenses of the Borrower and its Subsidiaries  including
         taxes on income,  all determined on a consolidated  basis in accordance
         with  GAAP  applied  on a  Consistent  Basis;  but  excluding  (for all
         purposes other than  compliance with Section 9.1(a) hereof ) as income:
         (i)  net  gains  and  net  losses  on the  sale,  conversion  or  other
         disposition  of  capital  assets,  (ii) net gains and net losses on the
         acquisition, retirement, sale or other

                                        9

<PAGE>

         disposition  of capital  stock and other  securities of the Borrower or
         its  Subsidiaries,  (iii) net gains and net losses on the collection of
         proceeds of life  insurance  policies,  (iv) any write-up of any asset,
         and (v) any  other net gain or  credit  of an  extraordinary  nature as
         determined in accordance with GAAP applied on a Consistent Basis.

                  "Consolidated  Net Tangible  Assets" means,  as of any date on
         which the amount thereof is to be  determined,  the total amount of all
         assets  of  the  Borrower  and  its  Subsidiaries  (less  depreciation,
         depletion  and other  properly  deductible  valuation  reserves)  after
         deducting, without duplication, the sum of (i) goodwill, patents, trade
         names,  trademarks,  copyrights,   franchises,   experimental  expense,
         organization expense, unamortized debt discount and expense, the excess
         of cost of shares  acquired over book value of related  assets and such
         other  assets as are  properly  classified  as  "intangible  assets" in
         accordance with GAAP; and (ii) all deferred assets and prepaid expenses
         (except such  prepaid  taxes that are  properly  classified  as current
         assets),  including prepaid insurance and prepaid taxes,  determined in
         accordance with GAAP.

                  "Consolidated  Shareholders'  Equity" means, as of any date on
         which the amount thereof is to be determined,  the sum of the following
         in  respect  of the  Borrower  and its  Subsidiaries  (determined  on a
         consolidated  basis):  (i) the amount of issued and  outstanding  share
         capital,  plus  (ii) the  amount  of  additional  paid-in  capital  and
         retained  earnings  (or, in the case of a deficit,  minus the amount of
         such  deficit),   plus  (iii)  the  amount  of  any  foreign   currency
         translation adjustment (if positive, or, if negative,  minus the amount
         of such translation adjustment),  minus (iv) the amount of any treasury
         stock,  all  as  determined  in  accordance  with  GAAP  applied  on  a
         Consistent Basis.

                  "Consolidated  Tangible  Net Worth"  means,  as of any date on
         which  the   amount   thereof   is  to  be   determined,   Consolidated
         Shareholders'  Equity  minus  (without  duplication  of  deductions  in
         respect of items  already  deducted in arriving at surplus and retained
         earnings)  (i)  all  reserves  (other  than  contingency  reserves  not
         allocated to any  particular  purpose),  including  without  limitation
         reserves  for  depreciation,  depletion,  amortization,   obsolescence,
         deferred income taxes,  insurance and inventory  valuation and (ii) the
         net book value of assets which would be treated as  intangible  assets,
         such as (without limitation) goodwill (whether  representing the excess
         of cost over book value of assets  acquired or otherwise),  capitalized
         expenses,  unamortized debt discount and expense, consignment inventory
         rights, patents,  trademarks,  trade names, copyrights,  franchises and
         licenses,  all as determined on a consolidated basis in accordance with
         GAAP applied on a Consistent Basis.

                  "Contingent Obligation"means,  as to any Person, any direct or
         indirect  liability  of that Person with  respect to any  Indebtedness,
         lease, dividend, guaranty, letter of credit or other obligation (each a
         "primary  obligation")  of  another  Person  (the  "primary  obligor"),
         whether or not  contingent,  (a) to purchase,  repurchase  or otherwise
         acquire any such primary obligation or any property constituting direct
         or indirect security  therefor,  or (b) to advance or provide funds (i)
         for the payment or discharge of any such primary obligation, or (ii) to
         maintain  working  capital or equity capital of the primary  obligor in
         respect of any such

                                       10

<PAGE>

         primary  obligation  or otherwise to maintain the net worth or solvency
         or any balance  sheet item,  level of income or financial  condition of
         such  primary  obligor,  or (c) to  purchase  property,  securities  or
         services  primarily  for the purpose of assuring  the owner of any such
         primary  obligation  of the ability of the primary  obligor  thereof to
         make payment of such primary obligation,  or (d) otherwise to assure or
         hold harmless the owner of any such primary  obligation against loss or
         failure or inability to perform in respect  thereof.  The amount of any
         Contingent  Obligation  shall be deemed  to be an  amount  equal to the
         stated or determinable  amount of the primary  obligation in respect of
         which  such  Contingent  Obligation  is  made  or,  if  not  stated  or
         determinable,  the maximum reasonably  anticipated liability in respect
         thereof.

                  "Continue", "Continuation", and "Continued" shall refer to the
         continuation  pursuant  to  Section  4.1 or  Section  4.3  hereof  of a
         Eurodollar  Rate Loan or an Offshore Rate Loan from one Interest Period
         to the next Interest Period.

                  "Convert",  "Conversion",  and  "Converted"  shall  refer to a
         conversion  pursuant to Section 4.3 of one Type of Loan  denominated in
         Dollars into another Type of Loan denominated in Dollars.

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

                  "Default Rate" means (i) with respect to each  Eurodollar Rate
         Loan, until the end of the Interest Period applicable  thereto,  a rate
         of two percent (2%) above the Eurodollar  Rate applicable to such Loan,
         and  thereafter  at a rate of  interest  per annum  which  shall be two
         percent (2%) above the Base Rate,  (ii) with  respect to each  Offshore
         Rate Loan, until the end of the Interest Period applicable  thereto,  a
         rate of two percent (2%) above the  Offshore  Rate  applicable  to such
         Loan, and thereafter at a rate of interest per annum which shall be two
         percent  (2%)  above the Base  Rate,  (iii)  with  respect to Base Rate
         Loans,  Reimbursement  Obligations,  fees, and other amounts payable in
         respect of Obligations, a rate of interest per annum which shall be two
         percent (2%) above the Base Rate and (iv) in any case, the maximum rate
         permitted by applicable law, if lower.

                  "Designated  Subsidiary"  means  any of the  Subsidiaries  set
         forth on Schedule 1.1 hereto and any additional  Subsidiaries which the
         Borrower  may  hereafter  designate  in  writing  to the  Agent and the
         Lenders.

                  "Dollar  Equivalent  Amount" means, (a) the amount denominated
         in  Dollars  and (b) with  respect  to a  specified  Offshore  Currency
         amount,  the amount of Dollars into which the Offshore  Currency amount
         would be converted,  based on (i) the applicable  Advance Date Exchange
         Rate in the case of  Advances  and  Continuations  and (ii) on the Spot
         Rate of Exchange in all other instances.

                  "Dollars" and the symbol "$" means dollars  constituting legal
         tender for the payment of public and private debts in the United States
         of America.

                                       11

<PAGE>

                  "Eligible Assignee" means (i) a Lender, (ii) an affiliate of a
         Lender, and (iii) any other Person approved by the Agent and, unless an
         Event  of  Default  has  occurred  and is  continuing  at the  time any
         assignment is effected in accordance  with Section 12.1,  the Borrower,
         such  approval  not to be  unreasonably  withheld  (provided  that  the
         incurrence by the Borrower of additional  costs pursuant to Section 5.6
         as a result of such assignment  shall constitute a reasonable basis for
         withholding  such consent) or delayed by the Borrower and such approval
         to be deemed  given by the  Borrower  (in the  absence of notice to the
         contrary,  effective  upon  receipt)  within five  Business  Days after
         notice of such proposed  assignment  has been provided by the assigning
         Lender to the Borrower;  provided,  however,  that neither the Borrower
         nor an affiliate of the Borrower shall qualify as an Eligible Assignee.

                  "Eligible  Securities" means the following obligations and any
         other obligations previously approved in writing by the Agent:

                           (a)      Government Securities;

                           (b)  obligations of any  corporation  organized under
                  the laws of any state of the United States of America or under
                  the laws of any other nation,  payable in the United States of
                  America,  expressed to mature not later than 92 days following
                  the date of issuance  thereof and rated in an investment grade
                  rating category by S&P and Moody's;

                           (c)  interest  bearing  demand  or time  deposits  or
                  certificates of deposit maturing within one year from the date
                  of  issuance  thereof  and  issued by a bank or trust  company
                  organized  under the laws of the United States or of any state
                  thereof   having   capital   surplus  and  undivided   profits
                  aggregating  at least  $400,000,000  and  being  rated  "A" or
                  better by S&P or "A" or better by Moody's;

                           (d)      Repurchase Agreements;

                           (e)      Municipal Obligations;

                           (f)      Pre-Refunded Municipal Obligations;

                           (g)   shares  of  mutual   funds   which   invest  in
                  obligations described in paragraphs (a) through (f) above, the
                  shares of which  mutual  funds are at all times rated "AAA" by
                  S&P or Aaa Moody's;

                           (h) tax-exempt or taxable  adjustable  rate preferred
                  stock  issued  by a Person  having a rating  of its long  term
                  unsecured  debt of "A" or  better by S&P or "A-3" or better by
                  Moody's; and

                           (i)   asset-backed    remarketed    certificates   of
                  participation  representing a fractional undivided interest in
                  the assets of a trust,  which  certificates are rated at least
                  "A-1" by S&P and "P-1" by Moody's.

                                       12

<PAGE>

                  "Employee  Benefit Plan" means (i) any employee  benefit plan,
         including any Pension Plan, within the meaning of Section 3(3) of ERISA
         which (A) is  maintained  for  employees  of the Borrower or any of its
         ERISA  Affiliates,  or any  Subsidiary or is assumed by the Borrower or
         any of its ERISA  Affiliates,  or any Subsidiary in connection with any
         Acquisition or (B) has at any time been maintained for the employees of
         the Borrower, any current or former ERISA Affiliate,  or any Subsidiary
         and (ii) any plan,  arrangement,  understanding or scheme maintained by
         the  Borrower or any  Subsidiary  that  provides  retirement,  deferred
         compensation,  employee or retiree medical or life insurance, severance
         benefits or any other benefit  covering any employee or former employee
         and which is administered under any Foreign Benefit Law or regulated by
         any Governmental Authority other than the United States of America.

                  "EMU  Legislation"  means (a) a Treaty on European  Union (the
         Treaty of Rome of March 25, 1957, as amended by the Single European Act
         1986 and the  Maastricht  Treaty  (which  was signed at  Maastricht  on
         February  1, 1992 and came into  force on  November  1,  1993)) and (b)
         legislative   measures  of  the  European  Council  (including  without
         limitation  European  Council  regulations)  for the  introduction  of,
         changeover  to or  operation  of the Euro,  in each case as  amended or
         supplemented from time to time.

                  "Environmental  Laws"  means  any  federal,   state  or  local
         statute, law, ordinance, code, rule, regulation,  order, decree, permit
         or license regulating,  relating to, or imposing liability or standards
         of  conduct  concerning,   any  environmental  matters  or  conditions,
         environmental protection or conservation, including without limitation,
         the Comprehensive  Environmental  Response,  Compensation and Liability
         Act of 1980, as amended;  the Superfund  Amendments and Reauthorization
         Act of 1986, as amended; the Resource Conservation and Recovery Act, as
         amended;  the Toxic Substances  Control Act, as amended;  the Clean Air
         Act, as amended;  the Clean  Water Act, as amended;  together  with all
         regulations  promulgated  thereunder,  and  any  other  "Superfund"  or
         "Superlien" law.

                  "ERISA" means the Employee  Retirement  Income Security Act of
         1974, as amended from time to time,  and any successor  statute and all
         rules and regulations promulgated thereunder.

                  "ERISA  Affiliate",  as  applied  to the  Borrower,  means any
         Person or trade or business which is a member of a group which is under
         common  control with the Borrower,  who together with the Borrower,  is
         treated as a single  employer  within the meaning of Section 414(b) and
         (c) of the Code.

                  "Euro"  and "e" each  means  the  single  official  non-legacy
         currency  denominated as the Euro and constituting legal tender for the
         payment of public and private debts in the Participating Member States.

                  "Eurodollar  Rate  Loan"  means a Loan for  which  the rate of
         interest is determined by reference to the Eurodollar Rate.

                                       13

<PAGE>

                  "Eurodollar Rate" means the interest rate per annum calculated
         according to the following formula:

          Eurodollar  =          Interbank Offered Rate           +   Applicable
                        ---------------------------------------
           Rate                 1-  Reserve Requirement                 Margin

                  "Event of Default" means any of the  occurrences  set forth as
such in Section 10.1.

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
         amended, and the regulations promulgated thereunder.

                  "Existing  Commercial Letters of Credit" means the documentary
         letters of credit issued by Bank of America, The Bank of Nova Scotia or
         Mercantile  Bank of St.  Louis  N.A.  prior  to the  Closing  Date  and
         remaining  outstanding as of the Closing Date, all as more particularly
         described on Schedule 1.1 attached hereto.

                  "Existing   Credit   Agreement"   means  that  certain  Credit
         Agreement dated as of May 31, 1996 by and among the Borrower,  The Bank
         of Nova Scotia, as administrative  agent and syndication agent, Bank of
         America  National Trust and Savings  Association  (now known as Bank of
         America),  as documentation agent, and the other lenders party thereto,
         as amended, modified, supplemented or restated as of the Closing Date.

                  "Existing Indebtedness" means the Indebtedness of the Borrower
         outstanding as of the Closing Date under the Existing Credit Agreement.

                  "Existing  Letters of Credit"  means the  Existing  Commercial
         Letters of Credit and the Existing Standby Letters of Credit.

                  Existing  Standby Letters of Credit" means the Standby letters
         of  credit  issued  by Bank of  America,  The  Bank of Nova  Scotia  or
         Mercantile  Bank of St.  Louis  N.A.  prior  to the  Closing  Date  and
         remaining  outstanding as of the Closing Date, all as more particularly
         described on Schedule 1.1 attached hereto.

                  "Facility  Termination  Date"  means  such  date as all of the
         following shall have occurred:  (a) the Borrower shall have permanently
         terminated  the Tranche A Revolving  Credit  Facility and the Tranche B
         Revolving  Credit  Facility  by  payment  in  full  of  all  Tranche  A
         Outstandings, Tranche B Outstandings and Letter of Credit Outstandings,
         together with all accrued and unpaid interest  thereon,  except for the
         undrawn   portion  of  Letters  of  Credit  as  have  been  fully  cash
         collateralized  in a  manner  consistent  with  the  terms  of  Section
         10.1(B),  (b)  all  Tranche  A  Commitments,   Tranche  B  Commitments,
         Commercial  Letter of Credit  Commitments  and Standby Letter of Credit
         Commitments shall have terminated or expired and (c) the Borrower shall
         have fully,  finally and  irrevocably  paid and  satisfied  in full all
         Obligations   (other  than   Obligations   consisting   of   continuing
         indemnities and other  Contingent  Obligations of the Borrower that may
         be owing to the Lenders  pursuant to the Loan  Documents  and expressly
         survive termination of this Agreement).

                                       14

<PAGE>

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

                  "Fiscal Year" means a fiscal period of not more than 12 months
         of the  Borrower  and its  Subsidiaries  which as of the  Closing  Date
         commences  on May 1 of each  calendar  year and ends on April 30 of the
         next calendar year.

                  "Fixed Rate Loan" means a Eurodollar Rate Loan or an Offshore
         Rate Loan.

                  "Foreign  Benefit  Law"  means any  applicable  statute,  law,
         ordinance,  code,  rule,  regulation,  order or decree  of any  foreign
         nation  or  any  province,  state,  territory,  protectorate  or  other
         political  subdivision  thereof  regulating,  relating  to, or imposing
         liability  or  standards of conduct  concerning,  any Employee  Benefit
         Plan.

                  "Four-Quarter  Period" means a period of four full consecutive
         fiscal quarters of the Borrower and its Subsidiaries, taken together as
         one accounting period.

                  "Funding  Bank"  means  any  banking  institution  (which  may
         include any  Lender)  approved  by the Agent  located  within a country
         whose  currency  has  been  approved  by  the  Lenders  as an  Offshore
         Currency;  provided that in the case of the Euro,  the Funding Bank may
         be located in any Participating Member State.

                  "GAAP" or "Generally  Accepted  Accounting  Principles"  means
         generally  accepted  accounting  principles,  being those principles of
         accounting  set forth in  pronouncements  of the  Financial  Accounting
         Standards   Board,   the  American   Institute   of  Certified   Public
         Accountants,  or which have other substantial authoritative support and
         are applicable in the circumstances as of the date of a report.

                  "Government   Securities"  means  direct  obligations  of,  or
         obligations  the timely  payment of principal and interest on which are
         fully and unconditionally guaranteed by, the United States of America.

                  "Governmental   Authority"  shall  mean  any  Federal,  state,
         municipal,  national  or  other  governmental  department,  commission,
         board,   bureau,   court,   agency  or   instrumentality  or  political
         subdivision  thereof  or any entity or  officer  exercising  executive,
         legislative,  judicial,  regulatory or  administrative  functions of or
         pertaining to any government or any court, in

                                       15

<PAGE>

         each case whether  associated  with a state of the United  States,  the
         United States, or a foreign entity or government.

                  "Hazardous   Material"   means  and  includes  any  pollutant,
         contaminant,  or  hazardous,  toxic or  dangerous  waste,  substance or
         material    (including   without   limitation    petroleum    products,
         asbestos-containing  materials  and lead),  the  generation,  handling,
         storage,  transportation,  disposal,  treatment,  release, discharge or
         emission of which is subject to any Environmental Law.

                  "Indebtedness"  means as to any Person,  without  duplication,
         (a) all  Indebtedness  for Money Borrowed of such Person,  (b) all Rate
         Hedging Obligations of such Person, and (c) all Contingent  Obligations
         of such Person.

                  "Indebtedness  for Money  Borrowed"  means with respect to any
         Person,  without duplication,  (a) all indebtedness in respect of money
         borrowed,  including without limitation,  all obligations under Capital
         Leases,  the deferred  purchase price of any property or services,  and
         payment  and  reimbursement  obligations  in respect  of surety  bonds,
         standby letters of credit, and clean bankers'  acceptances,  whether or
         not matured, evidenced by a promissory note, bond, debenture or similar
         written  obligation for the payment of money  (including  reimbursement
         agreements   and   conditional   sales  or  similar   title   retention
         agreements),  (b) all indebtedness  secured by any Lien on any property
         or  asset  owned  or held by such  Person  regardless  of  whether  the
         indebtedness  secured thereby shall have been assumed by such Person or
         is non-recourse to the credit of such Person, and (c) Standby Letter of
         Credit  Outstandings,  other than trade  payables and accrued  expenses
         incurred in the ordinary course of business.

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

                                       16

<PAGE>

                  "Interest  Period" means, (a) for each Eurodollar Rate Loan, a
         period  commencing  on the date  such  Eurodollar  Rate Loan is made or
         Converted or Continued and ending,  at the  Borrower's  option,  on the
         date one, two, three or six months  thereafter as notified to the Agent
         by the Authorized  Representative  in accordance  with the terms hereof
         and (b) for each  Offshore  Rate Loan, a period  commencing on the date
         such  Offshore  Rate  Loan is  made or  Continued  and  ending,  at the
         Borrower's option, on the date one, two, three or six months thereafter
         as notified to the Agent by the Authorized Representative in accordance
         with the terms hereof; provided that,

                            (i) if an Interest Period for a Eurodollar Rate Loan
                  or  Offshore  Rate  Loan  would  end on a day  which  is not a
                  Business Day,  such  Interest  Period shall be extended to the
                  next  Business  Day  (unless  such  extension  would cause the
                  applicable  Interest Period to end in the succeeding  calendar
                  month,  in which case such  Interest  Period  shall end on the
                  next preceding Business Day);

                           (ii) any  Interest  Period  which  begins on the last
                  Business Day of a calendar  month (or on a day for which there
                  is no numerically  corresponding  day in the calendar month at
                  the  end of  such  Interest  Period)  shall  end  on the  last
                  Business Day of a calendar month; and

                           (iii) Interest Periods in different  lettered clauses
                  of this  definition  shall be deemed to be different  Interest
                  Periods even if they are coterminous.

                  "Interest  Rate  Selection  Notice"  means the written  notice
         delivered  by an  Authorized  Representative  in  connection  with  the
         election of a subsequent  Interest  Period for any Eurodollar Rate Loan
         or Offshore  Rate Loan or the  Conversion of any  Eurodollar  Rate Loan
         into a Base  Rate Loan or the  Conversion  of any Base Rate Loan into a
         Eurodollar Rate Loan, in the form of Exhibit E.

                  "Issuing  Bank" means any Lender,  as selected by the Borrower
         and thereafter any Lender which is successor to any of the foregoing as
         an issuer of Letters of Credit under Article III.

                  "LC Account Agreement" means the LC Account Agreement dated as
         of the date hereof  between  the  Borrower  and the Agent,  as amended,
         modified or supplemented from time to time.

                  "Letter of Credit" means a Standby Letter of Credit or a
         Commercial Letter of Credit.

                  "Letter of Credit  Facility"  means the facility  described in
         Article  III hereof  providing  for the  issuance by any of the Issuing
         Banks  for the  account  of the  Borrower  of  Letters  of Credit in an
         aggregate stated amount at any time outstanding not exceeding the Total
         Letter   of   Credit   Commitment   minus   outstanding   Reimbursement
         Obligations.

                                       17

<PAGE>

                  "Letter  of  Credit  Outstandings"  means,  as of any  date of
         determination,  the sum of Commercial Letter of Credit Outstandings and
         Standby Letter of Credit Outstandings.

                  "Lien" means any interest in property  securing any obligation
         owed to, or a claim by, a Person other than the owner of the  property,
         whether such interest is based on the common law,  statute or contract,
         and including but not limited to the lien or security  interest arising
         from a mortgage, encumbrance,  pledge, security agreement,  conditional
         sale or trust receipt or a lease,  consignment or bailment for security
         purposes.  For the  purposes of this  Agreement,  the  Borrower and any
         Subsidiary shall be deemed to be the owner of any property which it has
         acquired or holds subject to a conditional  sale  agreement,  financing
         lease, or other arrangement pursuant to which title to the property has
         been retained by or vested in some other Person for security purposes.

                  "Loans" means, collectively, the Tranche A Loans and the
         Tranche B Loans.

                  "Loan  Documents"  means this  Agreement,  the  Notes,  the LC
         Account  Agreement,  the  Applications  and  Agreements  for  Letter of
         Credit, and all other instruments and documents heretofore or hereafter
         executed  or  delivered  to or in favor of any  Lender  or the Agent in
         connection with the Loans made and transactions contemplated under this
         Agreement,  as the same may be amended,  supplemented  or replaced from
         the time to time.

                  "Material  Adverse Effect" means a material  adverse effect on
         (i) the  business,  properties,  operations,  prospects  or  condition,
         financial or otherwise,  of the Borrower and its Material Subsidiaries,
         taken as a whole,  (ii) the  ability of the  Borrower to pay or perform
         its obligations,  liabilities and indebtedness under the Loan Documents
         as such payment or performance becomes due in accordance with the terms
         thereof,  or (iii) the rights,  powers and remedies of the Agent or any
         Lender  under  any  Loan   Document  or  the   validity,   legality  or
         enforceability thereof.

                  "Material  Subsidiary"  means:  (a) each Subsidiary  listed on
         Schedule  7.3  hereto  which  is  designated  therein  as  a  "Material
         Subsidiary";  (b) any  Subsidiary  that the  Borrower  designates  as a
         "Material  Subsidiary"  by  updating  Schedule  7.3 hereto in a written
         notice delivered (which may be by facsimile  transmission) to the Agent
         from time to time; and (c) any Subsidiary  which is acquired or created
         or  party  to a  merger  or  some  other  corporate  reorganization  or
         otherwise  acquires all or  substantially  all of the assets of another
         Person  following  the  Closing  Date and  meets  any of the  following
         conditions:

                           (i) the  assets  of such  Subsidiary  (valued  at the
                  greater  of  book  or  fair  market)  as at  the  end  of  the
                  immediately preceding Fiscal Year exceed $1,000,000,

                           (ii) the aggregate  sum of all assets  (valued at the
                  greater  of book  or fair  market)  of such  Subsidiary,  when
                  combined  with the assets of all other  Subsidiaries  which do
                  not otherwise  qualify as "Material  Subsidiaries"  under this
                  definition during the 3-year period immediately  preceding the
                  date of such determination, exceeds $1,000,000, or

                                       18

<PAGE>

                           (iii) the portion of  Consolidated  Net Income of the
                  Borrower and its  Subsidiaries  which were contributed by such
                  Subsidiary  during  the  immediately   preceding  Fiscal  Year
                  exceeds $1,000,000.

                  "Moody's" means Moody's Investors Service, Inc.

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

                  "Municipal  Obligations" means general  obligations issued by,
         and supported by the full taxing  authority of, any state of the United
         States of America or of any municipal  corporation or other public body
         organized  under  the laws of any such  state  which  are  rated in the
         highest investment rating category by both S&P and Moody's.

                  "Non-cash  Expenses" means all expenses which will not require
         the utilization of cash or other assets for their satisfaction.

                  "Non-cash  Income"  means all  items of  income  which are not
         expected  to be  realized  in  cash  or  other  comparable  assets  for
         utilization by the Borrower and its Subsidiaries in the ordinary course
         of business.

                  "Notes"  means,  collectively,  the  Tranche  A Notes  and the
         Tranche B Notes.

                  "Obligations"   means   the   obligations,   liabilities   and
         Indebtedness  of the  Borrower  with respect to (i) the  principal  and
         interest on the Loans as evidenced by the Notes, (ii) the Reimbursement
         Obligations  and  otherwise  in respect of the  Letters of Credit,  and
         (iii) the payment and performance of all other obligations, liabilities
         and  Indebtedness  of the  Borrower  to the  Lenders,  the Agent or BAS
         hereunder,  under any one or more of the other Loan  Documents  or with
         respect to the Loans.

                  "Offshore  Currency"  means the Euro,  Japanese yen, Hong Kong
         dollars,  and any other freely available currency notified to the Agent
         upon not less than ten (10) Business Days' prior written notice that in
         the opinion of all the Lenders,  in their sole  discretion,  is at such
         time freely traded in the offshore  interbank  foreign exchange markets
         and is freely  transferable  and convertible into Dollars in the United
         States currency market.

                  "Offshore Currency  Equivalent Amount" means with respect to a
         specified  Offshore Currency and a specified Dollar amount,  the amount
         of such  Offshore  Currency  into which  such  Dollar  amount  would be
         converted, based on the applicable Advance Date Exchange Rate.

                  "Offshore Letter of Credit" means a Letter of Credit issued in
         an Offshore Currency.

                                       19

<PAGE>

                  "Offshore  Rate" means the interest rate per annum  calculated
         according to the following formula:

            Offshore  =          Interbank Offered Rate           +   Applicable
                        ---------------------------------------
             Rate               1-  Reserve Requirement                 Margin

         The Offshore  Rate shall be adjusted  automatically  as to all Offshore
         Rate Loans then  outstanding  as of the effective date of any change in
         the Reserve Requirement.

                  "Offshore  Rate  Loan"  means a Tranche B Loan in an  Offshore
         Currency that bears interest based on an Offshore Rate.

                  "Operating  Documents"  means with respect to any corporation,
         limited liability company,  partnership,  limited partnership,  limited
         liability  partnership  or other  legally  authorized  incorporated  or
         unincorporated  entity, the bylaws,  operating  agreement,  partnership
         agreement,  limited partnership agreement or other applicable documents
         relating to the operation, governance or management of such entity.

                  "Organizational Action" means with respect to any corporation,
         limited liability company,  partnership,  limited partnership,  limited
         liability  partnership  or other  legally  authorized  incorporated  or
         unincorporated  entity,  any corporate,  organizational  or partnership
         action (including any required shareholder,  member or partner action),
         or other similar official action, as applicable, taken by such entity.

                  "Organizational   Documents"   means   with   respect  to  any
         corporation,    limited   liability   company,   partnership,   limited
         partnership,  limited liability partnership or other legally authorized
         incorporated or unincorporated  entity,  the articles of incorporation,
         certificate of incorporation, articles of organization,  certificate of
         limited  partnership  or other  applicable  organizational  or  charter
         documents relating to the creation of such entity.

                  "Outstandings" means, collectively, at any date, the Letter of
         Credit  Outstandings,  the  Tranche A  Outstandings  and the  Tranche B
         Outstandings on such date.

                  "Participating  Member  State" means each  country  which from
         time to time becomes a  Participating  Member State as described in EMU
         Legislation.

                  "Participation"  means,  (i) with respect to any Lender (other
         than the Applicable Issuing Bank) and a Letter of Credit, the extension
         of credit  represented by the participation of such Lender hereunder in
         the liability of the Applicable  Issuing Bank in respect of a Letter of
         Credit issued by the  Applicable  Issuing Bank in  accordance  with the
         terms hereof.

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

                  "Pension Plan" means any employee  pension benefit plan within
         the meaning of Section 3(2) of ERISA, other than a Multiemployer  Plan,
         which is subject to the provisions

                                       20

<PAGE>

         of  Title  IV of ERISA or  Section  412 of the  Code and  which  (i) is
         maintained for employees of the Borrower or any of its ERISA Affiliates
         or is  assumed  by the  Borrower  or any of  its  ERISA  Affiliates  in
         connection with any Acquisition or (ii) has at any time been maintained
         for the  employees  of the  Borrower  or any  current  or former  ERISA
         Affiliate.

                  "Permitted  Receivables   Securitization"  means  non-recourse
         (other than by reason of violation of  representations  and warranties)
         sales and  assignments  of accounts  receivable  of the Borrower or its
         Subsidiaries  to one or more special  purpose  entities,  in connection
         with the  issuance of  obligations  by such  special  purpose  entities
         secured by such accounts, so long as (i) the obligations issued by such
         special purpose entities shall not exceed  $75,000,000 in the aggregate
         and (ii) the  proceeds of the  issuance of which  obligations  shall be
         made  available  to the Borrower or its  Subsidiaries  at such rates of
         advance,  and the obligations  issued by such special purpose  entities
         shall  bear such  rates or rates of  interest,  and be  subject to such
         other terms and conditions, all as shall be acceptable to the Agent and
         the Required Lenders which approval shall not be unreasonably  withheld
         or delayed.

                  "Person"  means  an  individual,   partnership,   corporation,
         limited  liability  company,  limited  liability  partnership,   trust,
         unincorporated organization, association, joint venture or a government
         or agency or political subdivision thereof.

                  "Pre-Refunded  Municipal Obligations" means obligations of any
         state of the United States of America or of any  municipal  corporation
         or other public body  organized  under the laws of any such state which
         are  rated,  based on the  escrow,  in the  highest  investment  rating
         category by both S&P and Moody's and which have been irrevocably called
         for  redemption and advance  refunded  through the deposit in escrow of
         Government  Securities  or  other  debt  securities  which  are (i) not
         callable at the option of the issuer  thereof  prior to maturity,  (ii)
         irrevocably pledged solely to the payment of all principal and interest
         on such  obligations  as the same  becomes due and (iii) in a principal
         amount and bear such rate or rates of interest  as shall be  sufficient
         to pay in full all principal of, interest, and premium, if any, on such
         obligations  as the  same  becomes  due  as  verified  by a  nationally
         recognized firm of certified public accountants.

                  "Prime Rate" means the per annum rate of interest  established
         from time to time by Bank of America as its prime rate,  which rate may
         not be the lowest  rate of  interest  charged by Bank of America to its
         customers.

                  "Principal  Office"  means  the  principal  office  of Bank of
         America,  presently located at 101 North Tryon Street,  15th Floor, NC1
         001-15-04, Charlotte, North Carolina 28255, Attention: Agency Services,
         or such  other  office  and  address as the Agent may from time to time
         designate.

                  "Rate  Adjustment  Payment" shall have the meaning assigned to
         such term in Section 4.1(b).

                                       21

<PAGE>

                  "Rate Hedging Obligations" means, without duplication, any and
         all obligations (valued in accordance with GAAP applied on a Consistent
         Basis)  of  the  Borrower  or  any  Subsidiary,   whether  absolute  or
         contingent and howsoever and whensoever created, arising,  evidenced or
         acquired (including all renewals,  extensions and modifications thereof
         and substitutions therefor), under (i) any and all agreements,  devices
         or arrangements designed to protect at least one of the parties thereto
         from the  fluctuations  of interest  rates,  exchange  rates or forward
         rates  applicable  to such  party's  assets,  liabilities  or  exchange
         transactions,  including,  but not  limited to,  Dollar-denominated  or
         cross-currency  interest rate  exchange  agreements,  forward  currency
         exchange agreements, interest rate cap or collar protection agreements,
         forward rate  currency or interest  rate  options,  puts,  warrants and
         those commonly known as interest rate "swap" agreements, (ii) all other
         "derivative  instruments"  as defined in FASB 133 and which are subject
         to the  reporting  requirements  of FASB  133,  and  (iii)  any and all
         cancellations,  buybacks, reversals, terminations or assignments of any
         of the foregoing.

                  "Rating"  means the  rating of senior,  unsecured,  non-credit
         enhanced  Indebtedness  for Money Borrowed of the Borrower in effect at
         any time, which rating is made by either of S&P or Moody's.

                  "Regulation D" means Regulation D of the Board as the same may
         be amended or supplemented from time to time.

                  "Reimbursement   Obligation"  shall  mean  at  any  time,  the
         obligation  of the  Borrower  with  respect  to any Letter of Credit to
         reimburse the Applicable  Issuing Bank and the Lenders to the extent of
         their   respective   Participations   (including  the  receipt  by  the
         Applicable  Issuing  Bank of  proceeds  of Loans  pursuant  to  Section
         2.4(d)) for amounts  theretofore  paid by the  Applicable  Issuing Bank
         pursuant to a drawing under such Letter of Credit.

                  "Related  L/C  Documents"  shall have the meaning  assigned to
         such term in Section 3.2(i)(i).

                  "Repurchase  Agreement" means a repurchase  agreement  entered
         into  with  any  financial   institution   whose  debt  obligations  or
         commercial  paper are rated "A" by either of S&P or Moody's or "A-1" by
         S&P or "P-1" by Moody's.

                  "Required Lenders" means, as of any date, Lenders on such date
         having Credit Exposures (as defined below) aggregating more than 50% of
         the  aggregate  Credit  Exposures of all the Lenders on such date.  For
         purposes of the preceding sentence, the amount of the "Credit Exposure"
         of each Lender shall be equal at all times (a) other than following the
         occurrence and during the  continuance  of an Event of Default,  to the
         sum of its  Tranche A  Commitment  and  Tranche B  Commitment,  and (b)
         following  the  occurrence  and during the  continuance  of an Event of
         Default,  to the  sum of (i) the  aggregate  principal  amount  of such
         Lender's Applicable  Commitment  Percentage of Tranche A Outstandings ,
         (ii)  the  aggregate  principal  amount  of  such  Lender's  Applicable
         Commitment Percentage of Tranche B

                                       22

<PAGE>

         Outstandings,   plus  (ii)  the  amount  of  such  Lender's  Applicable
         Commitment Percentage of Letter of Credit Outstandings;  provided that,
         for the purpose of this  definition  only, (A) if any Lender shall have
         failed to fund its  Applicable  Commitment  Percentage  of any Advance,
         then the Tranche A Commitment or Tranche B Commitment,  as the case may
         be, of such Lender  shall be deemed  reduced by the amount it so failed
         to fund for so long as such failure  shall  continue and such  Lender's
         Credit  Exposure  attributable  to such failure shall be deemed held by
         any Lender  making more than its  Applicable  Commitment  Percentage of
         such  Advance to the extent it covers such  failure,  (B) if any Lender
         shall have failed to pay to the Applicable Issuing Bank upon demand its
         Applicable  Commitment  Percentage  of any drawing  under any Letter of
         Credit resulting in an outstanding Reimbursement Obligation (whether by
         funding its Participation  therein or otherwise),  such Lender's Credit
         Exposure  attributable  to all Letter of Credit  Outstandings  shall be
         deemed to be held by the respective Applicable Issuing Banks until such
         Lender shall pay such deficiency amount to the Applicable  Issuing Bank
         to whom such  deficiency  is owed  together  with  interest  thereon as
         provided in Section 4.10.

                  "Reserve  Requirement" means, at any time, the maximum rate at
         which reserves (including,  without limitation, any marginal,  special,
         supplemental,  or emergency  reserves)  are  required to be  maintained
         under regulations issued from time to time by the Board of Governors of
         the Federal  Reserve  System (or any  successor) by member banks of the
         Federal Reserve System against "Eurocurrency liabilities" (as such term
         is used in Regulation D). Without limiting the effect of the foregoing,
         the Reserve Requirement shall reflect any other reserves required to be
         maintained  by such member  banks with  respect to (i) any  category of
         liabilities   which  includes   deposits  by  reference  to  which  the
         Eurodollar  Rate or  Offshore  Rate is to be  determined,  or (ii)  any
         category  of  extensions  of  credit  or  other  assets  which  include
         Eurodollar  Rate Loans or Offshore Rate Loans.  The Eurodollar Rate and
         Offshore  Rate  shall  be  adjusted  automatically  on  and  as of  the
         effective date of any change in the Reserve Requirement.

                  "Restricted   Payment"   means  (a)  any   dividend  or  other
         distribution, direct or indirect, on account of any shares of any class
         of stock of  Borrower  or any of its  Subsidiaries  (other  than  those
         payable  or  distributable  solely to the  Borrower)  now or  hereafter
         outstanding,  except a dividend  payable solely in shares of a class of
         stock to the holders of that  class;  (b) any  redemption,  conversion,
         exchange,  retirement or similar payment, purchase or other acquisition
         for value,  direct or indirect,  of any shares of any class of stock of
         the Borrower or any of its  Subsidiaries  (other than those  payable or
         distributable solely to the Borrower) now or hereafter outstanding; (c)
         any  payment  made to  retire,  or to  obtain  the  surrender  of,  any
         outstanding warrants,  options or other rights to acquire shares of any
         class of stock of Borrower or any of its  Subsidiaries now or hereafter
         outstanding;  and (d) any  issuance  and sale of  capital  stock of any
         Subsidiary of the Borrower (or any option,  warrant or right to acquire
         such stock) other than to the Borrower or a Wholly-owned Subsidiary.

                  "S&P" means  Standard & Poor's  Ratings  Group,  a division of
         McGraw-Hill.

                                       23

<PAGE>

                  "Spot Rate of Exchange"  means (i) in  determining  the Dollar
         Equivalent  Amount of a specified  Offshore  Currency  amount as of any
         date,  the spot rate of exchange  determined by the Agent in accordance
         with its usual procedures for the purchase by the Agent of Dollars with
         such Offshore Currency at approximately  10:00 A.M. on the Business Day
         that  is two  (2)  Business  Days  prior  to  such  date,  and  (ii) in
         determining  the  Offshore  Currency  Equivalent  Amount of a specified
         Dollar amount on any date,  the spot  exchange  rate  determined by the
         Agent in accordance  with its usual  procedures for the purchase by the
         Agent of such  Offshore  Currency with Dollars at  approximately  10:00
         A.M. on the Business  Day that is two (2)  Business  Days prior to such
         date.

                  "Standby Letter of Credit" means (i) a letter of credit issued
         by an Issuing  Bank  pursuant  to Article III hereof for the account of
         the  Borrower  or  jointly  for  the  account  of  the  Borrower  and a
         Designated Subsidiary in favor of a Person advancing credit or securing
         an  obligation  on behalf of the  Borrower or on behalf of the Borrower
         and a Subsidiary and (ii) the Existing Standby Letters of Credit.

                  "Standby Letter of Credit  Commitment"  means, with respect to
         each Lender, the obligation of such Lender to acquire Participations in
         respect of Standby  Letters  of Credit  and the  related  Reimbursement
         Obligations up to an aggregate amount at any one time outstanding equal
         to such Lender's Applicable  Commitment Percentage of the Total Standby
         Letter of Credit  Commitment  as the same may be increased or decreased
         from time to time pursuant to this Agreement.

                  "Standby Letter of Credit  Outstandings" means, as of any date
         of  determination,  the aggregate Dollar Equivalent Amount available to
         be drawn  under  all  Standby  Letters  of  Credit  plus  Reimbursement
         Obligations then outstanding arising from Standby Letters of Credit.

                  "Subsequent  Participant"  means each  country that adopts the
         Euro as its lawful currency after January 1, 1999.

                  "Subsidiary"  means any  corporation  or other entity in which
         more than 50% of its outstanding  Voting Securities or more than 50% of
         all equity  interests is owned  directly or  indirectly by the Borrower
         and/or by one or more of the Borrower's Subsidiaries.

                  "Termination  Event" means: (i) a "Reportable Event" described
         in Section 4043 of ERISA and the regulations  issued thereunder (unless
         the notice  requirement has been waived by applicable  regulation);  or
         (ii) the  withdrawal  of the  Borrower  or any ERISA  Affiliate  from a
         Pension  Plan  during  a plan  year  in  which  it  was a  "substantial
         employer" as defined in Section  4001(a)(2) of ERISA or was deemed such
         under Section  4062(e) of ERISA;  or (iii) the termination of a Pension
         Plan,  the filing of a notice of intent to  terminate a Pension Plan or
         the  treatment  of a Pension  Plan  amendment  as a  termination  under
         Section  4041 of  ERISA;  or (iv) the  institution  of  proceedings  to
         terminate  a  Pension  Plan by the  PBGC;  or (v) any  other  event  or
         condition which would constitute grounds under Section 4042(a) of ERISA
         for the  termination of, or the appointment of a trustee to administer,
         any Pension

                                       24

<PAGE>

         Plan; or (vi) the partial or complete withdrawal of the Borrower or any
         ERISA Affiliate from a Multiemployer Plan; or (vii) the imposition of a
         Lien  pursuant to Section  412 of the Code or Section 302 of ERISA;  or
         (viii) any event or condition  which results in the  reorganization  or
         insolvency of a  Multiemployer  Plan under Section 4241 or Section 4245
         of ERISA, respectively; or (ix) any event or condition which results in
         the termination of a Multiemployer Plan under Section 4041A of ERISA or
         the institution by the PBGC of proceedings to terminate a Multiemployer
         Plan under  Section 4042 of ERISA;  or (x) any event or condition  with
         respect to any Employee  Benefit Plan which is regulated by any Foreign
         Benefit Law that results in the  termination  of such Employee  Benefit
         Plan or the  revocation of such Employee  Benefit  Plan's  authority to
         operate under the applicable Foreign Benefit Law.

                  "Total  Commercial  Letter  of  Credit  Commitment"  means the
         Dollar Equivalent Amount not to exceed $200,000,000.

                  "Total Letter of Credit Commitment" means the sum of the Total
         Commercial  Letter of Credit Commitment and the Total Standby Letter of
         Credit Commitment.

                  "Total Offshore Currency  Sublimit" means, with respect to the
         principal amount of Loans and Letters of Credit outstanding in Offshore
         Currencies, the Dollar Equivalent Amount of $20,000,000.

                  "Total Standby Letter of Credit  Commitment"  means the Dollar
         Equivalent Amount not to exceed $50,000,000.

                  "Total Tranche A Commitment" means a principal amount equal to
         $100,000,000,  as reduced from time to time in accordance  with Section
         2.6.

                  "Total Tranche B Commitment" means a principal amount equal to
         $250,000,000,  as reduced from time to time in accordance  with Section
         2.6.

                  "Tranche A Commitment" means, with respect to each Lender, the
         obligation of such Lender to make Tranche A Loans to the Borrower up to
         an aggregate principal amount at any one time outstanding equal to such
         Lender's  Applicable  Commitment  Percentage  of the  Total  Tranche  A
         Commitment.

                  "Tranche A Loans" means any  borrowing  pursuant to an Advance
         under the Tranche A Revolving Credit Facility.

                  "Tranche A Notes" means, collectively, the promissory notes of
         the Borrower  evidencing  Tranche A Loans executed and delivered to the
         Lenders as  provided  in Section  2.8(a)  substantially  in the form of
         Exhibit F-1, with appropriate insertions as to amounts, dates and names
         of Lenders.

                                       25

<PAGE>

                  "Tranche   A   Outstandings"   means,   as  of  any   date  of
         determination,  the aggregate  principal  amount of all Tranche A Loans
         then outstanding.

                  "Tranche  A  Revolving  Credit  Facility"  means the  facility
         described in Section 2.1(a) hereof  providing for Loans to the Borrower
         by the  Lenders in the  aggregate  principal  amount of up to the Total
         Tranche A Commitment.

                  "Tranche A Stated Termination Date" means August 28, 2000.

                  "Tranche A  Termination  Date"  means (i) the Tranche A Stated
         Termination  Date or (ii)  such  earlier  date  of  termination  of the
         Lenders' obligations pursuant to Section 10.1 upon the occurrence of an
         Event of  Default,  or (iii)  such  earlier  date as the  Borrower  may
         voluntarily  and permanently  terminate the Tranche A Revolving  Credit
         Facility  by payment in full of all  Tranche A  Outstandings,  together
         with all accrued and unpaid interest thereon.

                  "Tranche B Commitment" means, with respect to each Lender, the
         obligation of such Lender to make Tranche B Loans to the Borrower up to
         an aggregate principal amount at any one time outstanding equal to such
         Lender's  Applicable  Commitment  Percentage  of the  Total  Tranche  B
         Commitment.

                  "Tranche B Loans" means any  borrowing  pursuant to an Advance
         under the Tranche B Revolving Credit Facility.

                  "Tranche B Notes" means, collectively, the promissory notes of
         the Borrower  evidencing  Tranche B Loans executed and delivered to the
         Lenders as  provided  in Section  2.8(b)  substantially  in the form of
         Exhibit F-2, with appropriate insertions as to amounts, dates and names
         of Lenders

                  "Tranche   B   Outstandings"   means   as  of  any   date   of
         determination,  the aggregate  principal  amount of all Tranche B Loans
         then outstanding.

                  "Tranche  B  Revolving  Credit  Facility"  means the  facility
         described in Section 2.1(b) hereof  providing for Loans to the Borrower
         by the  Lenders in the  aggregate  principal  amount of up to the Total
         Tranche B Commitment.

                  "Tranche B Stated Termination Date" means August 30, 2002.

                  "Tranche B  Termination  Date"  means (i) the Tranche B Stated
         Termination  Date or (ii)  such  earlier  date  of  termination  of the
         Lenders' obligations pursuant to Section 10.1 upon the occurrence of an
         Event of  Default,  or (iii)  such  earlier  date as the  Borrower  may
         voluntarily  and permanently  terminate the Tranche B Revolving  Credit
         Facility by payment in full of all Tranche B Outstandings and Letter of
         Credit  Outstandings,  together  with all accrued  and unpaid  interest
         thereon, and the cancellation or cash  collateralization  acceptable to
         the Applicable Issuing Bank of all Letters of Credit.

                                       26

<PAGE>

                  "Type"  shall mean any type of Loan  (i.e.,  a Base Rate Loan,
         Offshore Rate Loan or Eurodollar Rate Loan).

                  "Voting  Securities" means shares of capital stock issued by a
         corporation,  or equivalent  interests in any other Person, the holders
         of which are ordinarily,  in the absence of contingencies,  entitled to
         vote for the  election  of  directors  (or persons  performing  similar
         functions)  of such  Person,  even if the  right  so to vote  has  been
         suspended by the happening of such a contingency.

                  "Wholly-owned  Subsidiary"  means  any  Subsidiary  all of the
         issued and outstanding Voting Securities (other than shares required as
         directors'  qualifying shares) of which is owned by the Borrower and/or
         one or more of its Wholly-owned Subsidiaries.

                  "Year 2000 Compliant" means all computer applications that are
         material to the  Borrower's  or any of its  Subsidiaries'  business and
         operations  will  on  a  timely  basis  be  able  to  perform  properly
         date-sensitive  functions  involving  all dates on and after January 1,
         2000.

                  "Year 2000 Problem" means the risk that computer  applications
         used  by the  Borrower  or any of  its  Subsidiaries  (including  those
         affected by information received from its suppliers and vendors) may be
         unable to  recognize  and  perform  properly  date-sensitive  functions
         involving certain dates on and after January 1, 2000.

         1.2.     Rules of Interpretation.

                  (a) All accounting terms not specifically defined herein shall
         have the meanings  assigned to such terms and shall be  interpreted  in
         accordance with GAAP applied on a Consistent Basis.

                  (b) Each term  defined in  Articles  1, 8 or 9 of the New York
         Uniform  Commercial  Code shall have the meaning given  therein  unless
         otherwise  defined  herein,  except  to the  extent  that  the  Uniform
         Commercial Code of another  jurisdiction is controlling,  in which case
         such terms shall have the meaning given in the Uniform  Commercial Code
         of the applicable jurisdiction.

                  (c) The  headings,  subheadings  and  table of  contents  used
         herein or in any other Loan  Document  are solely  for  convenience  of
         reference  and  shall not  constitute  a part of any such  document  or
         affect the meaning, construction or effect of any provision thereof.

                  (d) Except as otherwise expressly provided,  references in any
         Loan  Document to articles,  sections,  paragraphs,  clauses,  annexes,
         appendices,   exhibits  and  schedules  are   references  to  articles,
         sections,  paragraphs,   clauses,  annexes,  appendices,  exhibits  and
         schedules in or to such Loan Document.

                  (e) All  definitions  set forth  herein  or in any other  Loan
         Document shall apply to the singular as well as the plural form of such
         defined term, and all references to the

                                       27

<PAGE>

         masculine  gender  shall  include  reference  to the feminine or neuter
         gender, and vice versa, as the context may require.

                  (f) When used herein or in any other Loan Document, words such
         as "hereunder", "hereto", "hereof" and "herein" and other words of like
         import  shall,  unless the context  clearly  indicates to the contrary,
         refer to the whole of the applicable document and not to any particular
         article, section, subsection, paragraph or clause thereof.

                  (g) References to "including" means including without limiting
         the generality of any description preceding such term, and for purposes
         hereof the rule of ejusdem  generis  shall not be applicable to limit a
         general  statement,  followed  by or  referable  to an  enumeration  of
         specific matters, to matters similar to those specifically mentioned.

                  (h)  Except as  otherwise  expressly  provided,  all dates and
         times of day  specified  herein  shall refer to such dates and times at
         Charlotte, North Carolina.

                  (i) Whenever  interest rates or fees are  established in whole
         or in part by reference to a numerical  percentage expressed as "___%",
         such arithmetic  expression shall be interpreted in accordance with the
         convention that 1% = 100 basis points.

                  (j)  Each of the  parties  to the  Loan  Documents  and  their
         counsel have reviewed and revised, or requested (or had the opportunity
         to  request)  revisions  to,  the  Loan  Documents,  and  any  rule  of
         construction  that  ambiguities are to be resolved against the drafting
         party shall be inapplicable in the construing and interpretation of the
         Loan Documents and all exhibits, schedules and appendices thereto.

                  (k) Any  reference  to an officer of the Borrower or any other
         Person by  reference  to the title of such  officer  shall be deemed to
         refer to each other officer of such Person, however titled,  exercising
         the same or substantially similar functions.

                  (l) All  references  to any  agreement or document as amended,
         modified or supplemented,  or words of similar effect,  shall mean such
         document  or  agreement,  as the case may be, as  amended,  modified or
         supplemented  from  time to time  only as and to the  extent  permitted
         therein and in the Loan Documents.

                  (m) For all purposes of this  Agreement  (but not for purposes
         of the  preparation  of any  financial  statements  delivered  pursuant
         hereto),  the  equivalent  in any  Offshore  Currency  of an  amount in
         Dollars,  and the  equivalent  in Dollars  of an amount in an  Offshore
         Currency, shall be determined as set forth in the definitions of Dollar
         Equivalent   Amount  and  Offshore  Currency   Equivalent   Amount,  as
         applicable.

                                       28

<PAGE>

                                   ARTICLE II

                              The Credit Facilities

         2.1.  Tranche A  Revolving  Credit  Facility.  Subject to the terms and
conditions of this Agreement,  each Lender  severally agrees to make Advances in
Dollars to the Borrower under the Tranche A Revolving  Credit Facility from time
to time from the Closing Date until the Tranche A Termination Date on a pro rata
basis as to the total borrowing  requested by the Borrower on any day determined
by such Lender's  Applicable  Commitment  Percentage up to but not exceeding the
Tranche A Commitment of such Lender,  provided,  however,  that the Lenders will
not be required  and shall have no  obligation  to make any such  Advance (i) so
long as a Default or an Event of Default has occurred and is  continuing or (ii)
if the Agent has  accelerated the maturity of any of the Notes as a result of an
Event of Default;  provided  further,  however,  that  immediately  after giving
effect to each such  Advance,  the  amount of Tranche A  Outstandings  shall not
exceed the Total  Tranche A  Commitment.  Within  such limits and subject to the
other terms and conditions of this Agreement, the Borrower may borrow, repay and
reborrow  under the Tranche A Revolving  Credit  Facility on a Business Day from
the Closing Date until, but (as to borrowings and  reborrowings)  not including,
the Tranche A Termination Date.

         2.2.  Tranche B  Revolving  Credit  Facility.  Subject to the terms and
conditions of this Agreement,  each Lender  severally agrees to make Advances in
Dollars or an Offshore  Currency (as specified in the  Borrowing  Notice) to the
Borrower  under the Tranche B Revolving  Credit  Facility from time to time from
the Closing Date until the Tranche B Termination  Date on a pro rata basis as to
the total  borrowing  requested  by the Borrower on any day  determined  by such
Lender's  Applicable  Commitment  Percentage  up to but not  exceeding  a Dollar
Equivalent  Amount equal to the Tranche B Commitment  of such Lender,  provided,
however,  that the Lenders will not be required and shall have no  obligation to
make any such  Advance  (i) so long as a  Default  or an  Event of  Default  has
occurred and is continuing or (ii) if the Agent has  accelerated the maturity of
any of the Notes as a result of an Event of Default;  provided further, however,
that  immediately  after  giving  effect to each such  Advance,  (x) the  Dollar
Equivalent Amount of Tranche B Outstandings  plus Letter of Credit  Outstandings
shall not exceed the Total  Tranche B Commitment  and (y) the Dollar  Equivalent
Amount  of  Tranche  B  Outstandings  in  Offshore  Currencies  plus the  Dollar
Equivalent Amount of Letter of Credit  Outstandings in Offshore Currencies shall
not exceed the Total Offshore Currency Sublimit.  Within such limits and subject
to the other terms and  conditions of this  Agreement,  the Borrower may borrow,
repay and reborrow under the Tranche B Revolving  Credit  Facility on a Business
Day from the Closing Date until,  but (as to borrowings  and  reborrowings)  not
including,  the  Tranche  B  Termination  Date.  Tranche  B  Loans  in  Offshore
Currencies shall be limited to Offshore Rate Loans.

         2.3.  Amounts.  (a) Except as  otherwise  permitted by the Lenders from
time to time, the amount of Tranche A Outstandings  shall not exceed at any time
the Total Tranche A Commitment, and, in the event there shall be outstanding any
such excess,  the Borrower shall  immediately make such payments and prepayments
as shall be necessary to comply with this  restriction.  Each Advance  under the
Tranche  A  Revolving  Credit  Facility  shall  be in  an  amount  of  at  least
$5,000,000, and, if greater than $5,000,000, an integral multiple of $1,000,000.

                                       29

<PAGE>

          (b) Except as  otherwise  permitted  by the Lenders from time to time,
(i) the Dollar Equivalent Amount of Tranche B Outstandings plus Letter of Credit
Outstandings  shall not exceed at any time the Total Tranche B  Commitment,  and
(ii) the Dollar Equivalent Amount of Tranche B Loans in Offshore Currencies plus
the  Dollar  Equivalent  Amount of Letter of  Credit  Outstandings  in  Offshore
Currencies  shall not exceed the Total Offshore  Currency  Sublimit,  and in the
event there  shall be  outstanding  any such  excess,  the  Borrower  shall,  in
accordance  with the  requirements  of  Section  4.1(c),  immediately  make such
payments and  prepayments  or cash  collateralizations  as shall be necessary to
comply with this restriction.  Each Advance under the Tranche B Revolving Credit
Facility,  other  than Base Rate  Refunding  Loans,  shall be in an amount of at
least  $5,000,000  (or the Dollar  Equivalent  Amount  thereof  in any  Offshore
Currency),  and, if greater than $5,000,000,  an integral multiple of $1,000,000
(or the Dollar Equivalent Amount thereof in any Offshore Currency).

         2.4. Advances.  (a) An Authorized  Representative  shall give the Agent
(i) at least three (3)  Business  Days'  irrevocable  telephonic  notice of each
Fixed  Rate  Loan  (whether   representing   an  additional   borrowing  or  the
Continuation of a borrowing hereunder or the Conversion of a borrowing hereunder
from a Base Rate Loan to a  Eurodollar  Rate Loan) prior to 11:00 A.M.  and (ii)
irrevocable  telephonic  notice of each Base  Rate  Loan  (other  than Base Rate
Refunding  Loans to the extent the same are effected  without notice pursuant to
Section 2.4(d) and whether representing an additional borrowing hereunder or the
Conversion of a borrowing  hereunder from a Eurodollar  Rate Loan to a Base Rate
Loans) prior to 11:00 A.M. on the day of such  proposed  Loan.  Each such notice
shall be effective  upon receipt by the Agent,  shall  specify the amount of the
borrowing,  whether  the  borrowing  is under  the  Tranche A  Revolving  Credit
Facility or the Tranche B Revolving Credit Facility, the Type of Loan (Base Rate
or  Eurodollar  Rate if such Loan is requested in Dollars,  or Offshore  Rate if
such Loan is requested in an Offshore  Currency),  the date of  borrowing,  if a
Fixed Rate Loan, the Interest  Period to be used in the computation of interest,
and if such Loan is requested in an Offshore Currency,  the Offshore Currency in
which the Loan is to be made.  The Authorized  Representative  shall provide the
Agent  written  confirmation  of each  such  telephonic  notice in the form of a
Borrowing  Notice  or  Interest  Rate  Selection  Notice  (as  applicable)  with
appropriate insertions but failure to provide such confirmation shall not affect
the  validity of such  telephonic  notice.  Notice of receipt of such  Borrowing
Notice or Interest Rate Selection  Notice, as the case may be, together with the
amount of each Lender's  portion of an Advance  requested  thereunder,  shall be
provided  by the  Agent  to  each  Lender  by  telefacsimile  transmission  with
reasonable  promptness,  but (provided the Agent shall have received such notice
by 11:00 A.M.) not later than 1:00 P.M.  on the same day as the Agent's  receipt
of such notice.

         (b) At  approximately  11:00 A.M. two (2) Business  Days  preceding the
date specified for each Advance under the Tranche B Revolving Credit Facility in
an Offshore  Currency,  the Agent shall determine the Advance Date Exchange Rate
and the  applicable  Offshore  Rate.  Not later than 11:45 A.M. two (2) Business
Days preceding the date specified for each Advance under the Tranche B Revolving
Credit  Facility in an Offshore  Currency,  the Agent shall provide the Borrower
and each  Lender  notice  by  telefacsimile  transmission  of the  Advance  Date
Exchange Rate applicable to such Advance,  and the applicable  Offshore Currency
Equivalent Amount and Dollar Equivalent Amount of such Tranche B Loan or Tranche
B Loans and the applicable Offshore Rate.

                                       30

<PAGE>

         (c) (i) In the case of Advances in Dollars, not later than 2:00 P.M. on
the date  specified  for each  borrowing  under  Section 2.1 or 2.2, each Lender
shall,  pursuant to the terms and subject to the  conditions of this  Agreement,
make  the  amount  of the  Advance  or  Advances  to be made  by it on such  day
available  by wire  transfer  to the Agent in the amount of its pro rata  share,
determined  according to such Lender's Applicable  Commitment  Percentage of the
Tranche  A Loan(s)  or  Tranche  B  Loan(s)  to be made on such  day.  Such wire
transfer shall be directed to the Agent at the Principal  Office and shall be in
the form of Dollars  constituting  immediately  available  funds.  The amount so
received by the Agent by 2:00 P.M. shall, subject to the terms and conditions of
this  Agreement,  be made  available  to the  Borrower  on such day  (subject to
receipt by 2:00 P.M.) by  delivery  of the  proceeds  thereof to the  Borrower's
Account or otherwise as shall be directed in the applicable  Borrowing Notice by
the Authorized Representative and reasonably acceptable to the Agent.

         (ii) In the case of Advances in an  Offshore  Currency,  not later than
10:00 A.M.  (local  time of the  Funding  Bank) on the date  specified  for each
borrowing  under  Section  2.2,  each  Lender  shall,  pursuant to the terms and
subject to the  conditions of this  Agreement,  make the amount of the Tranche B
Loan(s) to be made by it on such day available to the Borrower at the applicable
Funding Bank in the applicable  Offshore  Currency,  to the account of the Agent
with the Funding Bank. The amount so received by the Funding Bank shall, subject
to the terms and conditions of the Loan Documents and upon  instruction from the
Agent to the Funding Bank of the same day or  immediately  preceding  day but no
later than 10:00 A.M.  (local time of the Funding  Bank),  be made  available in
such  Offshore  Currency to the  Borrower by delivery of the  Offshore  Currency
Equivalent  Amount of such  Advance to the  Borrower's  account with the Funding
Bank.

         (d)  Notwithstanding  the  foregoing,  if a drawing  is made  under any
Letter of Credit,  such drawing is honored by the  Applicable  Issuing Bank, and
the Borrower shall not on the same day fully  reimburse the  Applicable  Issuing
Bank in respect of such drawing from other funds available to the Borrower,  (i)
provided that the conditions to making a Tranche B Loan as herein provided shall
then be satisfied,  the Reimbursement Obligation arising from such drawing shall
be paid to the Applicable  Issuing Bank by the Agent without the  requirement of
notice to or from the Borrower from  immediately  available funds which shall be
advanced as a Base Rate Refunding  Loan to the Agent at its Principal  Office by
each Lender under the Tranche B Revolving Credit Facility in a Dollar Equivalent
Amount  equal  to  such  Lender's  Applicable   Commitment  Percentage  of  such
Reimbursement Obligation,  and (ii) if the conditions to making a Tranche B Loan
as herein  provided shall not then be satisfied,  each of the Lenders shall fund
by payment to the Agent (for the benefit of the Applicable  Issuing Bank) at its
Principal Office in immediately available funds the purchase from the Applicable
Issuing Bank of their  respective  Participations  in the related  Reimbursement
Obligation based on their respective  Applicable  Commitment  Percentages of the
Total Letter of Credit Commitment. If a drawing is presented under any Letter of
Credit in accordance  with the terms  thereof and the Borrower  shall not on the
same day reimburse the Applicable  Issuing Bank in respect thereof,  then notice
of such drawing or payment shall be provided promptly by the Applicable  Issuing
Bank to the Agent and the Agent shall provide notice to each Lender by telephone
or telefacsimile  transmission.  If notice to the Lenders of a drawing under any
Letter of Credit is given by the Agent at or before  12:00 noon on any  Business
Day,  each  Lender  shall  either  make a Base Rate  Refunding  Loan or fund the
purchase of its Participation as specified above in the

                                       31

<PAGE>

Dollar Equivalent Amount of such Lender's  Applicable  Commitment  Percentage of
such  drawing or payment  and shall pay such amount to the Agent for the account
of the Applicable Issuing Bank (i) at the Principal Office in Dollars or (ii) at
the applicable Funding Bank in the applicable Offshore Currency, as the case may
be, and in any event,  in  immediately  available  funds before 2:30 P.M. on the
same  Business  Day.  If such  notice to the Lenders is given by the Agent after
12:00 noon on any  Business  Day,  each Lender  shall either make such Base Rate
Refunding  Loan or fund such  purchase  before 12:00 noon on the next  following
Business Day.

         2.5.  Repayment of Loans.  The principal  amount of each Tranche A Loan
shall be due and  payable to the Agent for the benefit of each Lender in full on
the Tranche A Termination Date, or earlier as specifically  provided herein. The
principal  amount of each  Tranche B Loan shall be due and  payable to the Agent
for the  benefit of each Lender in full on the Tranche B  Termination  Date,  or
earlier as specifically provided herein. The principal amount of any Loan may be
prepaid in whole or in part on any Business  Day,  together with any amounts due
and payable  pursuant to Section 5.5, upon (a) at least three (3) Business Days'
irrevocable  telephonic  notice  in the case of each  Fixed  Rate  Loan  from an
Authorized  Representative  (effective upon receipt) to the Agent prior to 11:00
A.M. and (b)  irrevocable  telephonic  notice in the case of each Base Rate Loan
from an Authorized Representative (effective upon receipt) to the Agent prior to
11:00 A.M. on the day of such proposed repayment. The Authorized  Representative
shall provide the Agent written  confirmation of each such telephonic notice but
failure to provide  such  confirmation  shall not  effect the  validity  of such
telephonic notice. All prepayments of Tranche A Loans made by the Borrower shall
be in the amount of  $5,000,000  or such  greater  amount  which is an  integral
multiple of $1,000,000,  or the amount equal to all Tranche A  Outstandings,  or
such other amount as necessary to comply with Section 2.3(a). All prepayments of
Tranche B Loans made by the Borrower shall be in the Dollar Equivalent Amount of
$5,000,000  or such  greater  Dollar  Equivalent  Amount  which  is an  integral
multiple of $1,000,000,  or the amount equal to all Tranche B  Outstandings,  or
such other amount as necessary to comply with Section 2.3(b).

         2.6.  Reductions.  (a) The Borrower shall, by notice from an Authorized
Representative,  have the right from time to time but not more  frequently  than
once each calendar  month,  upon not less than three (3) Business  Days' written
notice to the Agent,  effective  upon  receipt,  to reduce  the Total  Tranche A
Commitment.  The Agent shall give each  Lender,  within one (1)  Business Day of
receipt of such notice, telefacsimile notice, or telephonic notice (confirmed in
writing),  of such  reduction.  Each such  reduction  shall be in the  aggregate
amount of $5,000,000 or such greater amount which is in an integral  multiple of
$1,000,000,  or the  entire  remaining  Total  Tranche A  Commitment,  and shall
permanently  reduce the Total Tranche A Commitment.  Each reduction of the Total
Tranche A Commitment  shall be  accompanied by payment of the Tranche A Loans to
the  extent  that the  Tranche  A  Outstandings  exceeds  the  Total  Tranche  A
Commitment  after giving  effect to such  reduction,  together  with accrued and
unpaid interest on the amounts prepaid.

         (b) The Borrower  shall,  by notice from an Authorized  Representative,
have the right from time to time but not more frequently than once each calendar
month,  upon not less than three (3) Business Days' written notice to the Agent,
effective upon receipt, to reduce the Total Tranche B Commitment;  provided that
the  Borrower  may not reduce the Total  Tranche B  Commitment  to less than the
Dollar  Equivalent  Amount of Letter of Credit  Outstandings at the time of such
reduction.

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<PAGE>

The Agent shall give each Lender, within one (1) Business Day of receipt of such
notice,  telefacsimile  notice, or telephonic notice (confirmed in writing),  of
such  reduction.  Each  such  reduction  shall  be in the  aggregate  amount  of
$5,000,000  or  such  greater  amount  which  is  in  an  integral  multiple  of
$1,000,000,  or the  entire  remaining  Total  Tranche B  Commitment,  and shall
permanently  reduce the Total Tranche B Commitment.  Each reduction of the Total
Tranche B Commitment  shall be  accompanied by payment of the Tranche B Loans to
the extent  that the Dollar  Equivalent  Amount of Tranche B  Outstandings  plus
Letter of Credit  Outstandings  exceeds  the Total  Tranche B  Commitment  after
giving effect to such  reduction,  together with accrued and unpaid  interest on
the amounts prepaid.

         2.7.  Use of Proceeds.  The proceeds of the Loans made  pursuant to the
Tranche A Revolving  Credit Facility and the Tranche B Revolving Credit Facility
hereunder  shall be used by the Borrower for general  working  capital needs and
other  lawful  corporate  purposes,  including  the making of  Acquisitions  and
Capital Expenditures permitted hereunder.

         2.8.     Notes.

         (a)  Tranche A Notes.  Tranche  A Loans  made by each  Lender  shall be
evidenced  by the  Tranche A Note  payable  to the  order of such  Lender in the
respective amount of its Applicable Commitment Percentage of the Total Tranche A
Commitment, which Tranche A Note shall be dated the Closing Date or a later date
pursuant to an Assignment and Acceptance and shall be duly  completed,  executed
and delivered by the Borrower.

         (b)  Tranche  B Note.  Tranche  B Loans  made by each  Lender  shall be
evidenced  by the  Tranche B Note  payable  to the  order of such  Lender in the
respective amount of its Applicable Commitment Percentage of the Total Tranche B
Commitment, which Tranche B Note shall be dated the Closing Date or a later date
pursuant to an Assignment and Acceptance and shall be duly  completed,  executed
and delivered by the Borrower.

                                       33

<PAGE>

                                   ARTICLE III

                                Letters of Credit

         3.1. Letters of Credit. Each Issuing Bank agrees,  subject to the terms
and  conditions  of this  Agreement,  upon request of the Borrower to issue from
time to time for the account of the Borrower,  or jointly for the account of the
Borrower and a Designated  Subsidiary,  Letters of Credit upon  delivery to such
Issuing  Bank of an  Application  and  Agreement  for Letter of Credit  relating
thereto in form and content acceptable to such Issuing Bank; provided,  that (i)
no Issuing  Bank shall be obligated to issue any Letter of Credit if it has been
notified by the Agent or has actual knowledge that a Default or Event of Default
has occurred and is continuing,  (ii) the Dollar Equivalent Amount of Commercial
Letter of Credit  Outstandings  shall not exceed the Total Commercial  Letter of
Credit  Commitment,  (iii) the Dollar  Equivalent  Amount of  Standby  Letter of
Credit  Outstandings  shall  not  exceed  the  Total  Standby  Letter  of Credit
Commitment, and (iv) no Letter of Credit shall be issued if, after giving effect
thereto,  (a) the Dollar Equivalent Amount of Letter of Credit Outstandings plus
Tranche B  Outstandings  shall exceed the Total  Tranche B Commitment or (b) the
Dollar Equivalent  Amount of Tranche B Outstandings in Offshore  Currencies plus
Letter of Credit  Outstandings  in Offshore  Currencies  shall  exceed the Total
Offshore  Currency  Sublimit.  Each  Letter of Credit  shall be issued  upon the
irrevocable  written request of the Borrower received by the Applicable  Issuing
Bank three  Business  Days prior to the  proposed  Date of  Issuance;  provided,
however,  that if a  request  is  received  via the  Applicable  Issuing  Bank's
electronic  letter of credit  system on any Business  Day, such Letter of Credit
shall be issued on the next succeeding  Business Day on or prior to the hour the
request was received on the  preceding  Business  Day. No Letter of Credit shall
have an expiry date  (including  all rights of the  Borrower or any  beneficiary
named in such  Letter of Credit to require  renewal) or payment  date  occurring
later than the  earlier to occur of one year after the date of its  issuance  or
the  seventh  Business  Day  prior to the  Tranche  B Stated  Termination  Date;
provided, however, that Commercial Letters of Credit may have an expiration date
of up to 120 days  after the  Tranche B Stated  Termination  Date so long as the
Borrower shall, on the Tranche B Stated  Termination Date, deposit cash with the
Agent in the  Dollar  Equivalent  Amount  of the  Commercial  Letter  of  Credit
Outstandings as collateral  security for the repayment of any future drawings or
repayments  under such Letters of Credit,  and such amounts shall be held by the
Agent pursuant to the terms of the LC Account Agreement.

         3.2.     Reimbursement and Participations.

                  (a) The Borrower hereby  unconditionally  agrees to pay to the
Applicable  Issuing Bank  immediately  on demand at the office of the Applicable
Issuing  Bank,  in the case of Letters of Credit  issued in Dollars,  and at the
Funding Bank,  in the case of Letters of Credit issued in an Offshore  Currency,
all amounts required to pay all drafts drawn or purporting to be drawn under the
Letters of Credit  (which shall include  Advances  under the Tranche B Revolving
Credit  Facility  if  permitted  by  Section  2.2) and all  reasonable  expenses
incurred by the Applicable Issuing Bank in connection with the Letters of Credit
issued by it, and in any event and without  demand to place in possession of the
Applicable  Issuing  Bank  (which  shall  include  Advances  under the Tranche B
Revolving  Credit Facility if permitted by Section 2.2) sufficient  funds to pay
all debts and  liabilities  arising  under any  Letter of Credit  issued by such
Issuing Bank. Each Issuing Bank agrees to give

                                       34

<PAGE>

the Borrower  prompt  notice of any request for a draw under a Letter of Credit.
The Applicable Issuing Bank may charge any account the Borrower may have with it
for any and all  amounts  the  Applicable  Issuing  Bank pays  under a Letter of
Credit,  plus charges and reasonable  expenses as from time to time agreed to by
the  Applicable  Issuing  Bank and the  Borrower;  provided  that to the  extent
permitted by Section  2.4(d),  amounts shall be paid first  pursuant to Advances
under the Tranche B Revolving  Credit  Facility.  The Borrower agrees to pay the
Applicable Issuing Bank interest on any Reimbursement  Obligations not paid when
due hereunder at the Default Rate.

                  (b) Each  Issuing Bank shall  immediately  notify the Agent of
any  Letter of Credit  issued  by such  Issuing  Bank.  In  accordance  with the
provisions of Section 2.4(d), the Applicable Issuing Bank shall notify the Agent
of any drawing under any Letter of Credit promptly  following the receipt by the
Applicable Issuing Bank of such drawing.

                  (c) Each Lender (other than the Applicable Issuing Bank) shall
automatically  acquire  on the date of  issuance  thereof,  or with  respect  to
Existing Letters of Credit on the Closing Date, a Participation in the liability
of the Applicable  Issuing Bank in respect of each Letter of Credit in an amount
equal to such Lender's Applicable Commitment  Percentage of such liability,  and
to the extent that the Borrower is obligated to pay the Applicable  Issuing Bank
under  Section  3.2(a),  each Lender  (other than the  Applicable  Issuing Bank)
thereby shall absolutely,  unconditionally  and irrevocably assume, and shall be
unconditionally  obligated to pay to the Applicable Issuing Bank, its Applicable
Commitment Percentage of the liability of the Applicable Issuing Bank under such
Letter of Credit in the manner and with the effect provided in Section 2.4(c).

                  (d) Simultaneously with the making of each payment by a Lender
to the  Applicable  Issuing  Bank  pursuant to Section  2.4(c)(ii),  such Lender
shall,  automatically  and  without  any  further  action  on  the  part  of the
Applicable  Issuing Bank or such Lender,  acquire a  Participation  in an amount
equal to such  payment  (excluding  the portion  thereof  constituting  interest
accrued  prior  to the  date  the  Lender  made  its  payment)  in  the  related
Reimbursement  Obligation  of the  Borrower.  Each  Lender's  obligation to make
payment to the Agent for the account of the Applicable  Issuing Bank pursuant to
Section 2.4(c) and Section 3.2(c),  and the right of the Applicable Issuing Bank
to receive the same, shall be absolute and unconditional,  shall not be affected
by any circumstance whatsoever and shall be made without any offset,  abatement,
withholding  or reduction  whatsoever.  In the event the Lenders have  purchased
Participations in any  Reimbursement  Obligation as set forth above, then at any
time  payment  (in  fully  collected,   immediately  available  funds)  of  such
Reimbursement  Obligation,  in whole or in part,  is received by the  Applicable
Issuing Bank from the Borrower,  the Applicable  Issuing Bank shall promptly pay
to each Lender an amount equal to its Applicable  Commitment  Percentage of such
payment from the Borrower.

                  (e) Promptly following the end of each week, each Issuing Bank
shall  deliver to the Agent a notice  describing  the  aggregate  daily  undrawn
amount of all  Letters  of Credit  for each day of such  week,  including,  with
respect to each  Letter of Credit  issued in an  Offshore  Currency  the date of
issuance thereof and the applicable  Offshore Currency.  The Agent shall deliver
to each  Lender a report on a monthly  basis of the  aggregate  Letter of Credit
Outstandings at the end of each month.  Upon the request of any Lender from time
to time, the Applicable Issuing Bank shall deliver

                                       35

<PAGE>

to the Agent, and the Agent shall deliver to such Lender,  any other information
reasonably  requested  by such  Lender  with  respect  to each  Letter of Credit
outstanding.

                  (f) The issuance by the Applicable Issuing Bank of each Letter
of Credit shall,  in addition to the  conditions  precedent set forth in Article
VI, be subject to the conditions  that such Letter of Credit be in such form and
contain such terms as shall be reasonably satisfactory to the Applicable Issuing
Bank consistent with the then current practices and procedures of the Applicable
Issuing Bank with respect to similar  letters of credit,  and the Borrower shall
have executed and delivered such other  instruments  and agreements  relating to
such  Letters of Credit as the  Applicable  Issuing  Bank shall have  reasonably
requested  consistent  with such  practices and  procedures  and shall not be in
conflict  with any of the express  terms herein  contained and to the extent any
such conflict exists,  the terms of this Agreement shall govern.  All Letters of
Credit  shall be issued  pursuant  to and  subject to the  Uniform  Customs  and
Practice  for  Documentary  Credits,  1993  revision,  International  Chamber of
Commerce  Publication No. 500 or, if the Applicable  Issuing Bank shall elect by
express reference in an affected Letter of Credit, the International  Chamber of
Commerce International Standby Practices commonly referred to as "ISP98", or any
subsequent amendment or revision of either thereof.

                  (g) The Borrower agrees that the Applicable  Issuing Bank may,
in its sole discretion, accept or pay, as complying with the terms of any Letter
of Credit, any drafts or other documents  otherwise in order which may be signed
or  issued by an  administrator,  executor,  trustee  in  bankruptcy,  debtor in
possession,  assignee  for  the  benefit  of  creditors,  liquidator,  receiver,
attorney  in fact or other  legal  representative  of a party who is  authorized
under such Letter of Credit to draw or issue any drafts or other documents.

                  (h) Without  limiting  the  generality  of the  provisions  of
Section  12.9,  the Borrower  hereby  agrees to indemnify  and hold harmless the
Applicable  Issuing  Bank,  each other Lender and the Agent from and against any
and all claims and damages, losses,  liabilities,  reasonable costs and expenses
which the Applicable  Issuing Bank, such other Lender or the Agent may incur (or
which may be claimed  against the Applicable  Issuing Bank, such other Lender or
the  Agent) by any Person by reason of or in  connection  with the  issuance  or
transfer  of or payment  or failure to pay under any Letter of Credit;  provided
that the Borrower  shall not be required to  indemnify  the  Applicable  Issuing
Bank,  any  other  Lender  or  the  Agent  for  any  claims,  damages,   losses,
liabilities, costs or expenses to the extent, but only to the extent, (i) caused
by the willful  misconduct or gross negligence of the party to be indemnified or
(ii)  caused by the  failure  of the  Applicable  Issuing  Bank to pay under any
Letter of Credit after the  presentation to it of a request for payment strictly
complying  with the terms and  conditions of such Letter of Credit,  unless such
payment  is  prohibited  by any law,  regulation,  court  order or  decree.  The
indemnification  and hold  harmless  provisions  of this  Section  3.2(h)  shall
survive  repayment of the  Obligations,  occurrence of the Tranche B Termination
Date and expiration or termination of this Agreement.

                  (i) Without limiting Borrower's rights as set forth in Section
3.2(h),  the obligation of the Borrower to immediately  reimburse the Applicable
Issuing  Bank for  drawings  made under  Letters  of Credit  and the  Applicable
Issuing  Bank's right to receive such payment  shall be absolute,  unconditional
and irrevocable, and such obligations of the Borrower shall be performed

                                       36

<PAGE>

strictly in  accordance  with the terms of this  Agreement  and such  Letters of
Credit and the related Application and Agreement for any Letter of Credit, under
all circumstances whatsoever, including the following circumstances:

                           (i) any lack of  validity  or  enforceability  of the
                  Letter of Credit,  the  obligation  supported by the Letter of
                  Credit or any other agreement or instrument  relating  thereto
                  (collectively, the "Related LC Documents");

                           (ii) any  amendment or waiver of or any consent to or
                  departure from all or any of the Related LC Documents;

                           (iii) the  existence  of any claim,  setoff,  defense
                  (other  than the  defense of payment  in  accordance  with the
                  terms of this  Agreement)  or other  rights which the Borrower
                  may have at any time against any beneficiary or any transferee
                  of a Letter of Credit (or any persons or entities for whom any
                  such  beneficiary or any such  transferee may be acting),  the
                  Agent, the Lenders or any other Person,  whether in connection
                  with the Loan  Documents,  the  Related  LC  Documents  or any
                  unrelated transaction;

                           (iv) any breach of contract or other dispute  between
                  the Borrower and any beneficiary or any transferee of a Letter
                  of  Credit  (or  any  persons  or   entities   for  whom  such
                  beneficiary or any such transferee may be acting),  the Agent,
                  the Lenders or any other Person;

                           (v)  any  draft,  statement  or  any  other  document
                  presented  under the  Letter of Credit  proving  to be forged,
                  fraudulent,   invalid  or  insufficient   (except  any  draft,
                  statement or other document which is insufficient on its face)
                  in any  respect  or any  statement  therein  being  untrue  or
                  inaccurate in any respect whatsoever;

                           (vi)  any   delay,   extension   of  time,   renewal,
                  compromise  or other  indulgence  or  modification  granted or
                  agreed to by the Agent,  with or without notice to or approval
                  by the  Borrower in respect of any of  Borrower's  Obligations
                  under this Agreement; or

                           (vii) any other circumstance or happening whatsoever,
                  whether or not similar to any of the foregoing.

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<PAGE>

                                   ARTICLE IV

         Offshore and Eurodollar Funding, Fees, and Payment Conventions

         4.1. Utilization of Offshore Currencies. (a) Each request for a Tranche
B Loan or  Letter  of  Credit  in an  Offshore  Currency  shall  constitute  the
Borrower's request for (i) a Tranche B Loan or Letter of Credit, as the case may
be, of the  Dollar  Equivalent  Amount of the  amount of the  Offshore  Currency
specified  in such  Borrowing  Notice or request for a Letter of Credit and (ii)
such  Tranche  B Loan or  Letter  of  Credit,  as the  case  may be,  to be made
available by the Lenders or the applicable  Issuing Bank, as the case may be, to
or for the account of the Borrower in the Offshore Currency Equivalent Amount of
such Dollar Equivalent Amount. The principal amount outstanding on any Tranche B
Loan made in an Offshore  Currency  shall be recorded in the Agent's  records in
Dollars as if the  Tranche B Loan had  initially  been made in  Dollars,  in the
Dollar Equivalent Amount of such Tranche B Loan, as reduced from time to time by
the Dollar  Equivalent  Amount of any  principal  payments  with respect to such
Tranche B Loan. The principal amount  outstanding on any Letter of Credit issued
in an  Offshore  Currency  shall be recorded in the  Applicable  Issuing  Bank's
records in Dollars as if the Letter of Credit had been  issued in Dollars in the
Dollar  Equivalent  Amount  of such  Letter of  Credit,  as such  amount  may be
adjusted as provided in the definition of "Advance Date Exchange Rate".  For the
purposes of determining the maximum amount of Tranche B Outstandings  hereunder,
it is intended by the parties  that all Tranche B Loans shall be the  functional
equivalent  of Tranche B Loans made and repaid in Dollars  and shall be included
in such determination based on their Dollar Equivalent Amount as determined from
time to time as set forth herein.  For the purposes of  determining  the maximum
amount of Letter of Credit Outstandings and Tranche B Outstandings hereunder, it
is intended by the parties  that all Letters of Credit  shall be the  functional
equivalent of Letters of Credit made and repaid in Dollars and shall be included
in such determination based on their Dollar Equivalent Amount as determined from
time to time as set forth herein.  It is recognized  that some Lenders may elect
to record Offshore Rate Loans in Offshore  Currencies.  The Agent shall maintain
records (which records,  with respect to Letters of Credit,  shall be based upon
information  furnished to the Agent by the Issuing Banks) sufficient to identify
at any time (i) the  Advance  Date  Exchange  Rate with  respect  to, and Dollar
Equivalent Amount of, each Tranche B Loan and each Letter of Credit issued in an
Offshore Currency and (ii) the portion of Tranche B Outstandings attributable to
each Advance.

         (b) The Borrower may elect to Continue an Offshore  Rate Loan  pursuant
to the terms of Section  4.3(b) and subject to the  conditions set forth in this
Section 4.1(b).  In the event an Offshore Rate Loan is Continued,  such election
to Continue the Offshore  Rate Loan shall be treated as an Advance and the Agent
shall notify the Borrower and the Lenders of the new Advance Date  Exchange Rate
(determined as provided in the definition thereof),  the Interest Period and the
rate for such Continued  Offshore Rate Loan. The Lenders shall each be deemed to
have made an Advance to the Borrower of its Applicable  Commitment Percentage of
each  Tranche B Loan in an Offshore  Currency  and the Agent shall apply the new
Advance  Date  Exchange  Rate for such new  Interest  Period  to such  Continued
Offshore  Currency  Equivalent  Amount to  determine  the new Dollar  Equivalent
Amount  of such  Tranche  B Loan and shall  adjust  its books and the  Tranche B
Outstandings.  In the event that such  adjustment  with  respect to a  Continued
Tranche B Loan would cause (i) the total Dollar  Equivalent  Amount of Tranche B
Outstandings plus Letter of Credit

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<PAGE>

Outstandings  to exceed the Total  Tranche B Commitment or (ii) the total Dollar
Equivalent  Amount of Tranche B Loans in  Offshore  Currencies  plus  Letters of
Credit  issued in  Offshore  Currencies  to exceed the Total  Offshore  Currency
Sublimit,  the  Borrower  shall,  immediately  on the  effective  date  of  such
Continuation,  repay (a "Rate Adjustment Payment") the portion of such Tranche B
Loan  (applying  the new Advance Date Exchange  Rate)  necessary to ensure that,
giving  effect  to the  Continuation  of the  Tranche  B Loan,  (x)  the  Dollar
Equivalent   Amount  of  all  Tranche  B  Outstandings  plus  Letter  of  Credit
Outstandings  does not exceed the Total Tranche B Commitment  and (y) the Dollar
Equivalent  Amount of all Tranche B  Outstandings  in Offshore  Currencies  plus
Letters of Credit in  Offshore  Currencies  does not  exceed the Total  Offshore
Currency Sublimit; provided, however, that the Borrower shall not be required to
pay any additional  compensation  pursuant to Section 5.5 with respect to a Rate
Adjustment  Payment if such Rate Adjustment  Payment is made  immediately on the
effective date of the Continuation  giving rise to such Rate Adjustment  Payment
and no notice of such Rate  Adjustment  Payment shall be required.  If the Agent
does not receive an Interest Rate Selection  Notice giving notice of election of
the duration of an Interest  Period or  Continuation of an Offshore Rate Loan by
the time  prescribed in Section 2.4(a) or 4.3(b),  as  applicable,  the Borrower
shall be deemed to have  elected  to repay such  Offshore  Rate Loan and if such
Offshore  Rate  Loan is not  repaid on the last day of the  applicable  Interest
Period, together with accrued interest thereon, such Offshore Rate Loan shall be
converted to a Base Rate Loan in the Dollar  Equivalent  Amount of such Offshore
Rate Loan.  The Borrower shall not be entitled to elect to Continue any Offshore
Rate  Loan  if a  Default  or  Event  of  Default  shall  have  occurred  and be
continuing.

         (c) In the event a Letter of Credit  issued in an Offshore  Currency is
for a term  exceeding  three (3)  months,  the Dollar  Equivalent  Amount of the
corresponding Letter of Credit Outstandings shall be recalculated as of the last
Business  Day of each fiscal  quarter of the Borrower and the Agent shall notify
the Borrower and the Lenders of the new Advance Date Exchange  Rate  (determined
as  provided in the  definition  thereof)  for such Letter of Credit.  The Agent
shall apply the new  Advance  Date  Exchange  Rate to  determine  the new Dollar
Equivalent  Amount of such  Letter of Credit and shall  adjust its books and the
Letter of Credit Outstandings. In the event that such adjustment with respect to
a Letter of Credit causes (x) the Dollar  Equivalent  Amount of Letter of Credit
Outstandings  plus  Tranche  B  Outstandings  to  exceed  the  Total  Tranche  B
Commitment  or (y) the Dollar  Equivalent  Amount of Tranche B  Outstandings  in
Offshore Currencies plus Letter of Credit Outstandings in Offshore Currencies to
exceed the Total Offshore Currency Sublimit, the Borrower shall immediately make
such payments and prepayments of Tranche B Loans as shall be necessary to comply
with the terms of Section 2.3(b). In the event that such adjustment with respect
to a Letter of Credit does not violate  either of the foregoing  clauses (x) and
(y) but does cause (i) the total Dollar  Equivalent Amount of Standby Letters of
Credit to exceed  the Total  Standby  Letter of Credit  Commitment,  or (ii) the
total Dollar  Equivalent  Amount of  Commercial  Letters of Credit to exceed the
Total Commercial  Letter of Credit  Commitment,  the Borrower shall  immediately
deposit cash with the Agent in the Dollar  Equivalent Amount of Letter of Credit
Outstandings  which  violate  either  of the  foregoing  clauses  (i) or (ii) as
collateral security for the repayment of any future drawings or repayments under
such Letters of Credit,  and such amounts shall be held by the Agent pursuant to
the terms of the LC Account Agreement.

                                       39

<PAGE>

         (d) Without  prejudice  and in addition to any method of  conversion or
rounding  prescribed  by any EMU  Legislation  and without  prejudice to (i) the
liabilities  for  Indebtedness  of the  Borrower to the Lenders  (including  the
Issuing Banks) under or pursuant to this Agreement or (ii) each Lender's Tranche
B  Commitment,  any  reference  in this  Agreement  to a minimum  amount  (or an
integral multiple thereof) in a national currency of a Subsequent Participant to
be paid to or by the Agent  shall  immediately,  upon it  becoming a  Subsequent
Participant,  be replaced by a reference to such reasonably comparable amount in
the Euro unit as the Agent may determine  based on the applicable  exchange rate
of such national currency for the Euro.

         (e) The Agent may from time to time  further  modify  the terms of, and
practices contemplated by, this Agreement with respect to the Euro to the extent
the Agent determines, in its reasonable discretion,  that such modifications are
necessary or convenient to reflect new laws,  regulations,  customs or practices
developed in connection with the Euro. The Agent may effect such  modifications,
and this  Agreement  shall be deemed so  amended,  without  the  consent  of the
Borrower  or  Lenders  to the  extent  such  modifications  are  not  materially
disadvantageous to the Borrowers and the Lenders, upon notice thereto.

         4.2.  Interest Rate Options.  Loans  denominated in Dollars may be Base
Rate Loans or Eurodollar Rate Loans.  Tranche B Loans denominated in an Offshore
Currency shall be limited to Offshore Rate Loans. Fixed Rate Loans and Base Rate
Loans may be outstanding at the same time and, so long as no Default or Event of
Default  shall have  occurred and be  continuing,  the  Borrower  shall have the
option  to  elect  (i) in the case of Loans  made in  Dollars,  the Type of Loan
(subject to the first  sentence of this Section 4.2),  (ii) in the case of Fixed
Rate Loans, the duration of the initial and any subsequent  Interest Periods and
(iii) to Convert or Continue  Loans made in Dollars in accordance  with Sections
2.4(a) and 4.3, as applicable (Tranche B Loans made in Offshore Currencies being
subject  to  Section  4.1(b));  provided,   however,  (a)  there  shall  not  be
outstanding at any one time Fixed Rate Loans having more than ten (10) different
Interest  Periods,  (b) no  Eurodollar  Rate Loan under the  Tranche A Revolving
Credit  Facility shall have an Interest Period that extends beyond the Tranche A
Stated Termination Date and (c) no Fixed Rate Loan under the Tranche B Revolving
Credit  Facility shall have an Interest Period that extends beyond the Tranche B
Stated  Termination Date. If the Agent does not receive a Borrowing Notice or an
Interest Rate  Selection  Notice giving notice of election of the duration of an
Interest Period or of Conversion of any Base Rate Loan to a Eurodollar Rate Loan
or  Continuation  of a Fixed Rate Loan by the time prescribed by Sections 2.4(a)
and  4.3,  as  applicable,  (x) in the case of Loans  that  are  denominated  in
Dollars,  the Borrower shall be deemed to have elected to obtain or Convert such
Loan to (or Continue such Loan as) a Base Rate Loan until the Borrower  notifies
the Agent in  accordance  with Section 4.3 and (y) in the case of Offshore  Rate
Loans,  Section 4.1(b) shall apply.  The Borrower shall not be entitled to elect
or Continue  any Loan as or Convert any Loan into a Fixed Rate Loan if a Default
or Event of Default shall have occurred and be continuing.

         4.3. Conversions and Elections of Subsequent Interest Periods.  Subject
to the  limitations  set forth in the  definition  of  "Interest  Period" and in
Section 4.2 and Article V, the Borrower may:

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<PAGE>

         (a) upon  delivery of  telephonic  notice to the Agent  (which shall be
irrevocable) on or before 11:00 A.M. on any Business Day, Convert any Eurodollar
Rate Loan to a Base Rate Loan on the last day of the  Interest  Period  for such
Eurodollar Rate Loan; and

         (b) provided  that no Default or Event of Default  shall have  occurred
and be continuing,  upon delivery of telephonic notice to the Agent (which shall
be  irrevocable  on or before 11:00 A.M.  three (3) Business  Days' prior to the
date of such Conversion or Continuation:

                  (i) elect a subsequent Interest Period for any Fixed Rate Loan
         to begin on the last day of the then current  Interest  Period for such
         Fixed Rate Loan  (subject to Section 4.1 with  respect to any  Offshore
         Rate Loan); or

                  (ii) Convert any Base Rate Loan to a  Eurodollar  Rate Loan on
         any Business Day.

Each such notice shall be effective upon receipt by the Agent, shall specify the
amount of the Fixed Rate Loan affected, the Type of Loan, and, if a Continuation
as or Conversion  into a Fixed Rate Loan, the Interest  Period to be used in the
computation of interest.  The Authorized  Representative shall provide the Agent
written  confirmation of each such telephonic  notice in the form of a Borrowing
Notice or  Interest  Rate  Selection  Notice (as  applicable)  with  appropriate
insertions  but  failure  to  provide  such  confirmation  shall not  affect the
validity of such telephonic  notice.  Notice of receipt of such Borrowing Notice
or Interest Rate Selection  Notice, as the case may be, shall be provided by the
Agent to each Lender by telefacsimile  transmission with reasonable  promptness,
but (provided the Agent shall have received such notice by 11:00 A.M.) not later
than 3:00 P.M. on the same day as the Agent's  receipt of such notice.  All such
Continuations  or  Conversions  of Loans shall be effected pro rata based on the
Applicable Commitment Percentages of the Lenders.

         4.4.  Payment of  Interest.  The  Borrower  shall pay  interest  on the
outstanding and unpaid  principal  amount of each Loan,  commencing on the first
date of such Loan until such Loan shall be repaid,  at the applicable  Base Rate
or Fixed Rate as designated by the Borrower in the related  Borrowing  Notice or
Interest Rate Selection Notice or as otherwise provided  hereunder.  Interest on
each Loan shall be paid on the earlier of (a) in the case of any Base Rate Loan,
quarterly in arrears of the last Business Day of each January,  April,  July and
October, commencing on October 31, 1999, until the Tranche A Termination Date in
the case of Tranche A Loans and the  Tranche B  Termination  Date in the case of
Tranche B Loans,  at which date the entire  principal  amount of and all accrued
interest on the Loans  shall be paid in full,  (b) in the case of any Fixed Rate
Loan, on last day of the applicable Interest Period for such Fixed Rate Loan and
if such Interest Period extends for more than three (3) months,  at intervals of
three (3)  months  after the first  day of such  Interest  Period,  and (c) upon
payment in full of the related  Loan;  provided,  however,  that if any Event of
Default shall occur and be continuing,  all amounts outstanding  hereunder shall
bear interest thereafter until paid in full at the Default Rate.

         4.5.  Prepayments  of Fixed Rate  Loans.  Other than a Rate  Adjustment
Payment made on the  applicable  date of  Continuation  pursuant to Section 4.1,
whenever  any  payment  of  principal  shall  be made  in  respect  of any  Loan
hereunder,  whether at  maturity,  on  acceleration,  by optional  or  mandatory
prepayment or as otherwise required or permitted hereunder, with the effect that
any

                                       41

<PAGE>

Fixed  Rate Loan  shall be  prepaid in whole or in part prior to the last day of
the  Interest  Period  applicable  to such  Fixed  Rate  Loan,  such  payment of
principal shall be accompanied by the additional  payment,  if any,  required by
Section 5.5.

         4.6. Manner of Payment.  (a) The principal amount of Outstandings shall
be due and  payable to the Agent for the  benefit of each  Lender in full on the
Tranche A  Termination  Date in the case of  Tranche  A Loans and the  Tranche B
Termination Date in the case of Tranche B Loans and Letters of Credit or earlier
as  specifically  provided  herein.  Such principal  amount shall be recorded in
Dollars as set forth in Section 4.1.  The  repayment  of such  principal  amount
shall be made in Dollars if the Loan was made in  Dollars.  If the Loan was made
in an Offshore  Currency,  the portion of the Outstandings  attributable to each
Advance  (or the  Continuation  thereof)  shall be repaid  in the same  Offshore
Currency  as such  Advance.  If the Letter of Credit  was issued in an  Offshore
Currency,  the Reimbursement  Obligations  arising thereunder shall be repaid in
the same  Offshore  Currency  in which  such  Letter of Credit  was  issued  and
drawings  thereunder  were  made.  Each  payment  of  principal  (including  any
prepayment)  and payment of interest and fees, and any other amount  required to
be paid by or on behalf of the Borrower to the Lenders,  the Applicable  Issuing
Bank or the Agent with respect to any Loan,  Letter of Credit,  or Reimbursement
Obligation, shall be made to the Agent (i) in the case of Loans made in Dollars,
at the Principal Office in Dollars, (ii) in the case of Letters of Credit issued
in Dollars, at the office of the Applicable Issuing Bank in Dollars and (iii) in
the case of Loans made or Letters of Credit  issued in Offshore  Currencies,  in
the same  Offshore  Currency at the  applicable  Funding  Bank, in each case, in
immediately  available  funds without  condition or deduction or for any setoff,
recoupment,  deduction or  counterclaim  on or before 12:30 P.M. (local time for
the  Funding  Bank in the case of Loans  made or  Letters  of  Credit  issued in
Offshore  Currencies)  on the date such payment is due. The Borrower  shall give
the Agent not less than one (1) Business Day prior written notice of any payment
of  principal,  such notice to be given  prior to 11:00 A.M.  and to specify the
date such payment  will be made and the Loan to which  payment  relates.  In the
case of Loans made in Dollars,  the Agent may,  but shall not be  obligated  to,
debit the amount of such payment from any one or more ordinary  deposit accounts
of the Borrower with the Agent.

         (b) Any payment made by or on behalf of the  Borrower  that is not made
both (i) in Dollars in the case of Loans  made and  Letters of Credit  issued in
Dollars  or in the  required  Offshore  Currency  in the case of Loans  made and
Letters of Credit issued in an Offshore Currency,  and in immediately  available
funds and (ii) prior to 12:30 P.M.  (local time for the Funding Bank in the case
of Loans made or Letters of Credit  issued in Offshore  Currencies)  on the date
such payment is to be made shall constitute a non-conforming  payment.  Any such
non-conforming payment shall not be deemed to be received until the later of (x)
the time such funds become  available  funds and (y) the next  Business Day. Any
non-conforming payment may constitute or become a Default or Event of Default as
otherwise provided herein. Interest shall continue to accrue at the Default Rate
on any principal or fees as to which no payment or a  non-conforming  payment is
made from the date such  amount was due and  payable  until the later of (A) the
date such funds become available funds or (B) the next Business Day.

         (c) In the event that any payment  hereunder  or under any of the Notes
becomes due and payable on a day other than a Business  Day,  then such due date
shall be extended to the next

                                       42

<PAGE>

succeeding  Business  Day unless  provided  otherwise  under the  definition  of
"Interest  Period";  provided,  however,  that interest shall continue to accrue
during the period of any such extension; and provided further,  however, that in
no event  shall any such due date be extended  beyond the Tranche A  Termination
Date in the case of Tranche A Loans and the  Tranche B  Termination  Date in the
case of Tranche B Loans or Letters of Credit.

         4.7. Fees. (a) Tranche A Facility Fee. For the period  beginning on the
Closing Date and ending on the Tranche A Termination  Date, the Borrower  agrees
to pay to the  Agent,  for the pro rata  benefit of the  Lenders  based on their
Applicable  Commitment  Percentages,  a  Tranche  A  facility  fee  equal to the
Applicable  Tranche A Facility Fee multiplied by the Total Tranche A Commitment.
Such fees  shall be due in  arrears on the last  Business  Day of each  January,
April,  July and  October  commencing  October  31, 1999 to and on the Tranche A
Termination Date.  Notwithstanding the foregoing, so long as any Lender fails to
make  available  any portion of its Tranche A Commitment  when  requested,  such
Lender  shall not be entitled  to receive  payment of its pro rata share of such
fee until such Lender shall make available such portion.

         (b) Tranche B Facility  Fee.  For the period  beginning  on the Closing
Date and ending on the Tranche B Termination Date, the Borrower agrees to pay to
the Agent,  for the pro rata  benefit of the Lenders  based on their  Applicable
Commitment Percentages, a Tranche B facility fee equal to the Applicable Tranche
B Facility Fee multiplied by the average daily amount by which the Total Tranche
B Commitment exceeds Commercial Letter of Credit  Outstandings.  Such fees shall
be due in arrears on the last  Business  Day of each  January,  April,  July and
October  commencing  October 31, 1999 to and on the Tranche B Termination  Date.
Notwithstanding the foregoing, so long as any Lender fails to make available any
portion of its Tranche B  Commitment  when  requested,  such Lender shall not be
entitled to receive  payment of its pro rata share of such fee until such Lender
shall make available such portion.

         (c) Commercial  Letter of Credit  Facility Fees. The Borrower shall pay
to the Agent,  for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a fee on the average daily aggregate amount available to
be drawn on each outstanding  Commercial Letter of Credit at a rate equal to the
Applicable  Commercial Letter of Credit Fee. Such fees shall be due with respect
to each Commercial Letter of Credit quarterly in arrears on the last day of each
January, April, July and October, the first such payment to be made on the first
such date occurring after the date of issuance of a Commercial Letter of Credit.

         (d) Standby  Letter of Credit  Facility Fees. The Borrower shall pay to
the Agent,  for the pro rata  benefit of the Lenders  based on their  Applicable
Commitment Percentages, a fee on the average daily aggregate amount available to
be drawn on each  outstanding  Standby  Letter of Credit at a rate  equal to the
Applicable  Standby Letter of Credit Fee. Such fees shall be due with respect to
each  Letter of Credit  quarterly  in arrears  on the last day of each  January,
April,  July and  October,  the first such  payment to be made on the first such
date occurring after the date of issuance of a Standby Letter of Credit.

         (e) Letter of Credit  Fronting and  Administrative  Fees.  The Borrower
shall pay to the  Applicable  Issuing Bank a fronting  fee of 0.125  percent per
annum (0.125%) on the aggregate

                                       43

<PAGE>

amount available to be drawn on each outstanding  Standby Letter of Credit, such
fee to be payable  quarterly in arrears  with respect to each Standby  Letter of
Credit on the dates  established  in Section 4.7(d) for the payment of Letter of
Credit facility fees with respect to such Standby Letter of Credit. The Borrower
shall also pay to each Applicable Issuing Bank such administrative fee and other
fees,  if any, in  connection  with the Letters of Credit in such amounts and at
such times as the Applicable Issuing Bank and the Borrower shall agree from time
to time.

         (f)  Agent  Fees.  The  Borrower  agrees to pay to the  Agent,  for the
Agent's  individual  account,  an annual  Agent's fee, such fee to be payable in
such  amounts and at such dates as from time to time  agreed to by the  Borrower
and Agent in writing.

         4.8. Pro Rata Payments.  Except as otherwise specified herein, (a) each
payment on account of the principal of and interest on Loans, the fees described
in Section 4.7(a),  (b), (c) and (d), and Reimbursement  Obligations as to which
the  Lenders  have  funded   their   respective   Participations   which  remain
outstanding,  shall be made to the Agent for the account of the Lenders pro rata
based  on  their  Applicable  Commitment  Percentages,  and (b) the  Agent  will
promptly,  and in no event later than two (2) Business  Days  following  receipt
thereof,  distribute  to the Lenders in  immediately  available  funds  payments
received in fully collected immediately available funds from the Borrower.

         4.9.  Computation  of  Rates  and  Fees.  Except  as may  be  otherwise
expressly  provided,  (a)  interest  on Base Rate Loans shall be computed on the
basis of a year of 365/366  days and  calculated  for the actual of days elapsed
and (b) all other  interest  rates  (including  each Fixed Rate and the  Default
Rate)  and  fees  shall  be  computed  on the  basis  of a year of 360  days and
calculated for actual days elapsed.

         4.10.  Deficiency  Advances;  Failure to  Purchase  Participations.  No
Lender shall be responsible  for any default of any other Lender with respect to
such other Lender's  obligation to make any Loan or Advance hereunder or to fund
its purchase of any Participation  hereunder nor shall the Tranche A Commitment,
Tranche B Commitment,  Commercial  Letter of Credit Commitment or Standby Letter
of Credit  Commitment  of any Lender  hereunder be increased as a result of such
default of any other Lender. Without limiting the generality of the foregoing or
the  provisions  of Section  4.11, in the event any Lender shall fail to advance
funds to the Borrower as herein provided,  the Agent may in its discretion,  but
shall not be obligated to, advance under the  applicable  Note in its favor as a
Lender  all or any  portion  of such  amount or  amounts  (each,  a  "deficiency
advance")  and shall  thereafter  be entitled to  payments of  principal  of and
interest on such deficiency  advance in the same manner and at the same interest
rate or rates to which such other  Lender  would have been  entitled had it made
such Advance under its Note; provided that, (i) such defaulting Lender shall not
be entitled to receive  payments of principal,  interest or fees with respect to
such deficiency  advance  (together with interest  thereon as provided in clause
(ii)) until such  deficiency  advance shall be paid by such Lender and (ii) upon
payment to the Agent from such other Lender of the entire  outstanding amount of
each such deficiency advance, together with accrued and unpaid interest thereon,
from  the  most  recent  date or dates  interest  was  paid to the  Agent by the
Borrower on each Loan  comprising  the  deficiency  advance at the Federal Funds
Rate,  then such payment shall be credited  against the  applicable  Note of the
Agent in full payment of such deficiency advance and

                                       44

<PAGE>

such  Borrower  shall be deemed to have  borrowed the amount of such  deficiency
advance from such other Lender as of the most recent date or dates,  as the case
may be, upon which any payments of interest were made by such Borrower  thereon.
In the event any Lender shall fail to fund its purchase of a Participation after
notice from the Applicable Issuing Bank, such Lender shall pay to the Applicable
Issuing Bank, such amount on demand, together with interest at the Federal Funds
Rate on the amount so due from the date of such notice to the date such purchase
price is received by the Applicable Issuing Bank.

         4.11.  Intraday  Funding.  Without  limiting the  provisions of Section
4.10,  unless the  Borrower or any Lender has  notified the Agent not later than
12:00 Noon of the  Business  Day before the date any payment  (including  in the
case of Lenders any Advance) to be made by it is due, that it does not intend to
remit such payment,  the Agent may, in its discretion,  assume that the Borrower
or each  Lender,  as the case may be, has timely  remitted  such  payment in the
manner  required  hereunder and may, in its discretion and in reliance  thereon,
make available such payment (or portion  thereof) to the Person entitled thereto
as otherwise  provided  herein.  If such payment was not in fact remitted to the
Agent in the manner required hereunder, then:

                  (i) if the Borrower  failed to make such payment,  each Lender
         shall forthwith on demand repay to the Agent the amount of such assumed
         payment made available to such Lender,  together with interest  thereon
         in respect of each day from and including the date such amount was made
         available by the Agent to such Lender to the date such amount is repaid
         to the Agent at the Federal Funds Rate.

                  (ii) if any  Lender  failed  to made such  payment,  the Agent
         shall be entitled to recover such  corresponding  amount forthwith upon
         the  Agent's  demand  therefor,  the Agent  shall  promptly  notify the
         Borrower, and the Borrower shall promptly pay such corresponding amount
         to the  Agent in  immediately  available  funds  upon  receipt  of such
         demand.  The Agent also shall be entitled  to recover  interest on such
         corresponding  amount  in  respect  of each  day  from  the  date  such
         corresponding amount was made available by the Agent to the Borrower to
         the date such corresponding  amount is recovered by the Agent, (A) from
         such Lender at a rate per annum equal to the daily  Federal  Funds Rate
         or (B) from the  Borrower,  at a rate per annum  equal to the  interest
         rate applicable to the Loan which includes such  corresponding  amount.
         Until the Agent shall recover such  corresponding  amount together with
         interest  thereon,   such  corresponding   amount  shall  constitute  a
         deficiency  advance within the meaning of Section 4.10.  Nothing herein
         shall be deemed to relieve  any Lender from its  obligation  to fulfill
         its commitments hereunder or to prejudice any rights which the Agent or
         the  Borrower may have against any Lender as a result of any default by
         such Lender hereunder.

                                       45

<PAGE>

                                    ARTICLE V

                             Change in Circumstances

         5.1.     Increased Cost and Reduced Return.

         (a) If, after the date  hereof,  the  adoption of any  applicable  law,
rule, or regulation,  or any change in any applicable  law, rule, or regulation,
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 Lender or any
Issuing Bank (or their respective  Applicable  Lending Offices) with any request
or directive  (whether or not having the force of law) of any such  Governmental
Authority, central bank, or comparable agency:

                         (i) shall subject such Lender or Issuing Bank (or their
         respective  Applicable  Lending  Offices)  to any tax,  duty,  or other
         charge  with  respect  to  any  Fixed  Rate  Loans,  its  Note,  or its
         obligation to make Fixed Rate Loans,  or its  obligation to participate
         in any Offshore Letters of Credit,  or in the case of any Issuing Bank,
         its obligation to issue or maintain any Offshore Letter of Credit or of
         funding any drawing under any Offshore Letter of Credit,  or change the
         basis of taxation of any amounts payable to such Lender or Issuing Bank
         (or their respective  Applicable  Lending Offices) under this Agreement
         or its Note in respect of any Fixed  Rate  Loans or its  obligation  to
         participate  in any Offshore  Letters of Credit,  or in the case of any
         Issuing Bank, its  obligation to issue or maintain any Offshore  Letter
         of Credit or of funding any drawing under any Offshore Letter of Credit
         (other than taxes  imposed on the overall net income or gross  receipts
         of such Lender or Issuing Bank by the jurisdiction in which such Lender
         or Issuing Bank has its  principal  office or such  Applicable  Lending
         Office);

                        (ii)  shall  impose,  modify,  or  deem  applicable  any
         reserve,  special deposit,  assessment,  or similar  requirement (other
         than the  Reserve  Requirement  utilized  in the  determination  of the
         Eurodollar  Rate and the Offshore  Rate)  relating to any extensions of
         credit or other assets of, or any deposits with or other liabilities or
         commitments  of,  such  Lender or  Issuing  Bank (or  their  respective
         Applicable Lending Offices), including the Tranche A Commitment and the
         Tranche B Commitment of such Lender hereunder; or

                       (iii)  shall  impose on such  Lender or Issuing  Bank (or
         their respective Applicable Lending Offices) or on the London (or other
         applicable  offshore)  interbank  market any other condition  affecting
         this  Agreement or its Note or any Offshore  Letter of Credit or any of
         such extensions of credit or liabilities or commitments;

and the result of any of the foregoing is to increase the cost to such Lender or
Issuing  Bank (or  their  respective  Applicable  Lending  Offices)  of  making,
Converting  into,  Continuing,  or  maintaining  any Loans or to reduce  any sum
received  or  receivable  by such  Lender or Issuing  Bank (or their  respective
Applicable Lending Offices) under this Agreement or its Note with respect to any
Fixed Rate Loans or any Offshore Letters of Credit,  then the Borrower shall pay
to such  Lender  or  Issuing  Bank on demand  such  amount  or  amounts  as will
compensate such Lender or Issuing Bank for such

                                       46

<PAGE>

increased cost or reduction;  provided, that the Borrower shall not be obligated
to reimburse any Lender or Issuing Bank for any cost  incurred  pursuant to this
Section 5.1 more than 120 days prior to notice to the Borrower of the incurrence
of such cost except that if any change or  compliance  requirement  described in
this Section 5.1 shall have a  retroactive  application,  the Borrower  shall be
obligated to make such reimbursement with respect to such retroactive effect, if
such  Lender  shall  give the  Borrower  notice  thereof  within 30 days of such
Lender's  having  notice  thereof.  If  any  Lender  or  Issuing  Bank  requests
compensation  by the Borrower  under this Section  5.1(a),  the Borrower may, by
notice to such Lender or such Issuing  Bank (with a copy to the Agent),  suspend
the obligation of such Lender to make or Continue Loans of the Type with respect
to which such  compensation is requested,  or to Convert Loans of any other Type
into  Loans of such  Type,  until the  event or  condition  giving  rise to such
request  ceases to be in effect (in which  case the  provisions  of Section  5.4
shall be  applicable)  and suspend the  obligation of such Issuing Bank to issue
Offshore  Letters of Credit with  respect to which  compensation  is  requested;
provided  that no such  suspensions  shall  affect  the right of such  Lender or
Issuing Bank to receive the compensation so requested.

         (b) If,  after the date  hereof,  any Lender or Issuing Bank shall have
determined  that  the  adoption  of any  applicable  law,  rule,  or  regulation
regarding  capital  adequacy or any change therein or in the  interpretation  or
administration  thereof  by  any  Governmental   Authority,   central  bank,  or
comparable agency charged with the interpretation or administration  thereof, or
any request or directive  regarding  capital adequacy (whether or not having the
force of law) of any such  governmental  authority,  central bank, or comparable
agency,  has or would  have the  effect  of  reducing  the rate of return on the
capital  of such  Lender or Issuing  Bank or any  corporation  controlling  such
Lender or Issuing  Bank as a  consequence  of such  Lender's  or Issuing  Bank's
obligations  hereunder to a level below that which such Lender,  Issuing Bank or
corporation  could have  achieved but for such  adoption,  change,  request,  or
directive  (taking  into  consideration  its  policies  with  respect to capital
adequacy),  then from time to time upon  demand the  Borrower  shall pay to such
Lender or Issuing Bank such additional amount or amounts as will compensate such
Lender or Issuing Bank for such reduction.

         (c) Each Lender and Issuing Bank shall promptly notify the Borrower and
the  Agent of any  event of which it has  knowledge,  occurring  after  the date
hereof,  which will entitle  such Lender or such  Issuing  Bank to  compensation
pursuant to this Section 5.1 and will designate a different  Applicable  Lending
Office if such  designation  will  avoid the need for,  or reduce the amount of,
such  compensation  and will not, in the judgment of such Lender or such Issuing
Bank,  be otherwise  disadvantageous  to it. Any Lender or Issuing Bank claiming
compensation  under this Section 5.1 shall furnish to the Borrower and the Agent
a  statement  setting  forth the  additional  amount or amounts to be paid to it
hereunder  which  shall be  conclusive  in the  absence of  manifest  error.  In
determining  such  amount,  such Lender or Issuing  Bank may use any  reasonable
averaging and attribution methods.

         5.2.  Limitation on Types of Loans.  If on or prior to the first day of
any Interest Period for any Fixed Rate Loan:

                                       47

<PAGE>

                  (a)  the  Agent  determines  (which   determination  shall  be
         conclusive)  that by reason of  circumstances  affecting  the  relevant
         market, adequate and reasonable means do not exist for ascertaining the
         Fixed Rate for such Interest Period; or

                  (b) the Required Lenders determine (which  determination shall
         be  conclusive)  and  notify  the Agent  that the  Fixed  Rate will not
         adequately  and fairly reflect the cost to the Lenders of funding Fixed
         Rate Loans for such Interest Period;

then the Agent shall give the Borrower  prompt  notice  thereof  specifying  the
relevant Type of Loans and the relevant amounts or periods,  and so long as such
condition  remains in effect,  the Lenders  shall be under no obligation to make
additional Loans of such Type,  Continue Loans of such Type, or to Convert Loans
of any other Type into Loans of such Type and the  Borrower  shall,  on the last
day(s) of the then current Interest  Period(s) for the outstanding  Loans of the
affected Type,  either prepay such Loans or Convert such Loans into another Type
of Loan in accordance with the terms of this Agreement.

         5.3. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes  unlawful  for any Lender or Issuing  Bank or their
respective  Applicable  Lending  Offices to make,  maintain,  or fund Fixed Rate
Loans  hereunder  or for any  Issuing  Bank to issue or  maintain  any  Offshore
Letters of Credit or of funding any drawing under any Offshore Letter of Credit,
then such Lender or Issuing Bank shall promptly notify the Borrower  thereof and
such  Lender's  obligation  to make or Continue  Fixed Rate Loans and to Convert
other Types of Loans into Fixed Rate Loans shall be suspended until such time as
such Lender may again make,  maintain,  and fund Fixed Rate Loans (in which case
the  provisions  of Section 5.4 shall be  applicable)  and such  Issuing  Bank's
obligation to issue any such Offshore Letters of Credit shall be suspended until
such time as such  Issuing  Bank may  again  issue and  maintain  such  Offshore
Letters of Credit affected by such illegality.

         5.4.  Treatment of Affected  Loans.  If the obligation of any Lender to
make a Fixed Rate Loan or to  Continue,  or to  Convert  Loans of any other Type
into,  Loans of a particular Type shall be suspended  pursuant to Section 5.1 or
5.3 hereof  (Loans of such Type being herein  called  "Affected  Loans" and such
Type being herein called the "Affected  Type"),  such  Lender's  Affected  Loans
shall be automatically  Converted into Base Rate Loans in the Dollar  Equivalent
Amount of such  Affected  Loans on the last day(s) of the then current  Interest
Period(s)  for  Affected  Loans (or,  in the case of a  Conversion  required  by
Section  5.3  hereof,  on such  earlier  date as such  Lender may specify to the
Borrower  with a copy to the Agent)  and,  unless and until  such  Lender  gives
notice as provided below that the circumstances  specified in Section 5.1 or 5.3
hereof that gave rise to such Conversion no longer exist:

                  (a) to the extent that such Lender's  Affected Loans have been
         so  Converted,  all payments and  prepayments  of principal  that would
         otherwise be applied to such Lender's  Affected  Loans shall be applied
         instead to its Base Rate Loans; and

                  (b) all Loans that would  otherwise  be made or  Continued  by
         such Lender as Loans of the  Affected  Type shall be made or  Continued
         instead as Base Rate Loans, and all Loans

                                       48

<PAGE>

         of such  Lender that would  otherwise  be  Converted  into Loans of the
         Affected Type shall be Converted instead into (or shall remain as) Base
         Rate Loans.

If such Lender gives notice to the Borrower  (with a copy to the Agent) that the
circumstances  specified  in  Section  5.1 or 5.3  hereof  that gave rise to the
Conversion  of such  Lender's  Affected  Loans  pursuant to this  Section 5.4 no
longer exist (which such Lender  agrees to do promptly  upon such  circumstances
ceasing  to  exist)  at a time  when  Loans of the  Affected  Type made by other
Lenders are  outstanding,  such Lender's Base Rate Loans shall be  automatically
(i) in the case of Affected Loans originally made in Dollars, Converted and (ii)
in the  case of  Affected  Loans  originally  made in an  Alternative  Currency,
converted into the Alternative  Currency  Equivalent Amount, on the first day(s)
of the next  succeeding  Interest  Period(s) for such  outstanding  Loans of the
Affected Type, to the extent necessary so that, after giving effect thereto, all
Loans held by the Lenders  holding Loans of the Affected Type and by such Lender
are held pro rata (as to principal  amounts,  Types,  currency  denomination and
Interest Periods) in accordance with their respective  Tranche A Commitments and
Tranche B Commitments.

         5.5.  Compensation.  Upon the request of any Lender, the Borrower shall
pay to such  Lender  such  amount  or  amounts  as shall be  sufficient  (in the
reasonable  opinion of such  Lender) to  compensate  it for any loss,  cost,  or
expense (including loss of anticipated profits) incurred by it as a result of:

                  (a) any payment,  prepayment,  or  Conversion  of a Fixed Rate
         Loan for any reason (including, without limitation, the acceleration of
         the Loans  pursuant to Section  10.1) on a date other than the last day
         of the Interest Period for such Loan; or

                  (b) any  failure by the  Borrower  for any reason  (including,
         without limitation, the failure of any condition precedent specified in
         Article VI to be satisfied) to borrow,  Convert,  Continue, or prepay a
         Fixed   Rate  Loan  on  the  date  for  such   borrowing,   Conversion,
         Continuation,  or  prepayment  specified  in  the  relevant  notice  of
         borrowing,   prepayment,   Continuation,   or  Conversion   under  this
         Agreement.

         5.6.  Taxes.  (a) Any and all  payments  by the  Borrower to or for the
account of any Lender or the Agent  hereunder  or under any other Loan  Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions,  charges or withholdings, and
all liabilities with respect thereto,  excluding, in the case of each Lender and
the Agent,  taxes  imposed on its income or its receipts,  and  franchise  taxes
imposed on it, by the  jurisdiction  under the laws of which such Lender (or its
Applicable Lending Office) or the Agent (as the case may be) is organized or any
political  subdivision  thereof (all such non-excluded  taxes,  duties,  levies,
imposts, deductions,  charges,  withholdings,  and liabilities being hereinafter
referred to as "Taxes").  If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable  under this  Agreement  or any other
Loan Document to any Lender or the Agent, (i) the sum payable shall be increased
as necessary so that after making all required deductions  (including deductions
applicable to additional sums payable under this Section 5.6) such Lender or the
Agent  receives an amount  equal to the sum it would have  received  had no such
deductions  been made, (ii) the Borrower shall make such  deductions,  (iii) the
Borrower shall pay the full amount

                                       49

<PAGE>

deducted to the relevant  taxation  authority or other  authority in  accordance
with  applicable  law, and (iv) the Borrower shall furnish to the Agent,  at its
address  referred to in Section  12.2,  the  original  or a certified  copy of a
receipt evidencing payment thereof.

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

         (c) The Borrower  agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including,  without limitation,  any Taxes
or Other Taxes imposed or asserted by any  jurisdiction on amounts payable under
this  Section 5.6) paid by such Lender or the Agent (as the case may be) and any
liability  (including  penalties,  interest,  and expenses) arising therefrom or
with respect thereto.

         (d) Each Lender organized under the laws of a jurisdiction  outside the
United  States,  on or prior to the date of its  execution  and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which  it  becomes  a Lender  in the case of each  other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long as such Lender  remains  lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal  Revenue Service Form
1001 or 4224, as  appropriate,  or any successor form prescribed by the Internal
Revenue  Service,  certifying  that such Lender is entitled to benefits under an
income tax treaty to which the United  States is a party  which  reduces to zero
the rate of  withholding  tax on payments of  interest  or  certifying  that the
income receivable  pursuant to this Agreement is effectively  connected with the
conduct of a trade or  business  in the United  States,  (ii)  Internal  Revenue
Service Form W-8 or W-9, as appropriate, or any successor form prescribed by the
Internal  Revenue Service,  and (iii) any other form or certificate  required by
any taxing authority  (including any certificate required by Sections 871(h) and
881(c) of the Internal Revenue Code), certifying that such Lender is entitled to
an  exemption  from  or a  reduced  rate  of tax on  payments  pursuant  to this
Agreement or any of the other Loan Documents.

         (e) For any period with respect to which a Lender has failed to provide
the Borrower and the Agent with the appropriate  form pursuant to Section 5.6(d)
(unless such failure is due to a change in treaty, law, or regulation  occurring
subsequent to the date on which a form  originally was required to be provided),
such Lender shall not be entitled to  indemnification  under  Section  5.6(a) or
5.6(b) with respect to Taxes imposed by the United  States;  provided,  however,
that  should a Lender,  which is  otherwise  exempt from or subject to a reduced
rate of  withholding  tax,  become  subject to Taxes  because of its  failure to
deliver a form required  hereunder,  the Borrower  shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.

         (f) If the Borrower is required to pay additional amounts to or for the
account of any Lender  pursuant to this Section 5.6, then such Lender will agree
to use reasonable efforts to

                                       50

<PAGE>

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 Lender, is not otherwise disadvantageous to such Lender.

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

         (h) Without  prejudice  to the  survival of any other  agreement of the
Borrower hereunder,  the agreements and obligations of the Borrower contained in
this Section 5.6 shall survive the  termination of the Tranche A Commitments and
the Tranche B Commitments and the payment in full of the Notes.

                                       51

<PAGE>

                                   ARTICLE VI

            Conditions to Making Loans and Issuing Letters of Credit

         6.1.  Conditions of Initial  Advance.  The obligation of the Lenders to
make the initial  Advance under the Tranche A Revolving  Credit Facility and the
Tranche B  Revolving  Credit  Facility,  and of the  Issuing  Banks to issue any
Letter of Credit  (other than  Existing  Letters of  Credit),  is subject to the
conditions precedent that:

                  (a) the Agent shall have received on the Closing Date, in form
         and substance satisfactory to the Agent, the following:

                            (i) executed  originals  of each of this  Agreement,
                  the Notes, the LC Account Agreement, the other Loan Documents,
                  together with all schedules and exhibits thereto;

                           (ii) the favorable  written  opinion or opinions with
                  respect   to  the   Loan   Documents   and  the   transactions
                  contemplated  thereby of special counsel to the Borrower dated
                  the Closing  Date,  addressed to the Agent and the Lenders and
                  satisfactory to Smith Helms Mulliss & Moore,  L.L.P.,  special
                  counsel to the Agent, substantially in the form of Exhibit G;

                           (iii) resolutions of the boards of directors or other
                  appropriate  governing body (or of the  appropriate  committee
                  thereof)  of  the  Borrower  certified  by  its  secretary  or
                  assistant  secretary  as of the Closing  Date,  approving  and
                  adopting the Loan Documents, and authorizing the execution and
                  delivery thereof;

                           (iv)   specimen   signatures  of  officers  or  other
                  appropriate  representatives  executing the Loan  Documents on
                  behalf  of  the  Borrower,   certified  by  the  secretary  or
                  assistant secretary of the Borrower;

                           (v)  the  Organizational  Documents  of the  Borrower
                  certified as of a recent date by the Secretary of State of its
                  state of organization;

                           (vi) Operating Documents of the Borrower certified as
                  of the Closing  Date as true and correct by its  secretary  or
                  assistant secretary;

                           (vii)  certificate  issued as of a recent date by the
                  Secretary  of State of the  jurisdiction  of  formation of the
                  Borrower  as to the due  existence  and good  standing  of the
                  Borrower;

                           (viii)   notice  of   appointment   of  the   initial
                  Authorized Representative(s);

                                       52

<PAGE>

                           (ix)  certificate  of  an  Authorized  Representative
                  dated  the  Closing  Date  demonstrating  compliance  with the
                  financial  covenants  contained  in  Sections  9.1(a)  through
                  9.1(c) as of the end of the fiscal quarter most recently ended
                  prior  to the  Closing  Date,  substantially  in the  form  of
                  Exhibit H;

                           (x) an initial  Borrowing  Notice,  if any,  and,  if
                  elected by the Borrower, Interest Rate Selection Notice;

                           (xi) a certificate of an Authorized Representative as
                  to the  occurrence  or  truthfulness,  as  applicable,  of the
                  matters set forth in Section 6.1(b);

                           (xii) evidence that all notices  required to be given
                  to terminate the Existing Credit  Agreement in accordance with
                  its terms have been delivered;

                           (xiii) evidence of repayment of all amounts due under
                  the  Existing  Credit  Agreement as of the Closing Date (other
                  than the Existing Letters of Credit);

                           (xiv) evidence of termination of the Existing  Credit
                  Agreement;

                           (xv)  evidence  that all fees payable by the Borrower
                  on the Closing  Date to the Agent,  BAS and the  Lenders  have
                  been paid in full;

                           (xvi) such other documents, instruments, certificates
                  and opinions as the Agent or any Lender may reasonably request
                  on or  prior  to the  Closing  Date  in  connection  with  the
                  consummation of the transactions contemplated hereby; and

                  (b) Each of the  following  shall have occurred or be true, in
         the good faith judgment of the Agent and the Lenders:

                            (i) there shall not have occurred or become known to
                  the Agent or the Lenders any event,  condition,  situation  or
                  status  since April 30, 1999 that has had or could  reasonably
                  be expected to result in a Material Adverse Effect;

                           (ii) no litigation,  action,  suit,  investigation or
                  other arbitral, administrative or judicial proceeding shall be
                  pending or  threatened  which  could  reasonably  be likely to
                  result in a Material Adverse Effect;

                           (iii) the Borrower shall have received all approvals,
                  consents  and  waivers,  and  shall  have  made or  given  all
                  necessary   filings  and  notices  as  shall  be  required  to
                  consummate the  transactions  contemplated  hereby without the
                  occurrence of any default under, conflict with or violation of
                  (A) any applicable law, rule,  regulation,  order or decree of
                  any  Governmental  Authority or arbitral  authority or (B) any
                  agreement,  document or  instrument to which the Borrower is a
                  party or by which it or its  properties  is bound,  except for
                  such approvals,

                                       53

<PAGE>

                  consents,  waivers, filings and notices the receipt, making or
                  giving of which will not have a Material Adverse Effect;

                           (iv) the Borrower shall have paid in full all amounts
                  owing under the Existing Credit  Agreement and all obligations
                  related thereto (other than the Existing Letters of Credit);

                           (v) the Agent and the Lenders shall have received and
                  reviewed,  with  results  satisfactory  to the  Agent  and the
                  Lenders,  information confirming that (a) the Borrower and its
                  Subsidiaries are taking all necessary and appropriate steps to
                  ascertain  the  extent of, and to  quantify  and  successfully
                  address,  business and financial risks facing the Borrower and
                  its  Subsidiaries  as a  result  of  the  Year  2000  Problem,
                  including  risks resulting from the failure of key vendors and
                  customers of the Borrower and its Subsidiaries to successfully
                  address the Year 2000 Problem and (b) the  Borrower's  and its
                  Subsidiaries'  material computer applications and those of its
                  material  vendors and customers  will,  not later than October
                  31,  1999,  adequately  address  the Year 2000  Problem in all
                  material respects.

         6.2.  Conditions of Loans and Letters of Credit. The obligations of the
Lenders to make any Loans,  and the  Issuing  Banks to issue  Letters of Credit,
hereunder on or subsequent  to the Closing Date are subject to the  satisfaction
of the following conditions:

                  (a) the  Agent  shall  have  received  a  Borrowing  Notice if
         required by Article II;

                  (b) the  representations  and  warranties  of the Borrower set
         forth in Article VII and in each of the other Loan  Documents  shall be
         true and correct in all material respects on and as of the date of such
         Advance or Letter of Credit  issuance or renewal,  with the same effect
         as though such  representations  and warranties had been made on and as
         of such  date,  except  to the  extent  that such  representations  and
         warranties  expressly  relate to an earlier  date and  except  that the
         financial  statements  referred  to in Section  7.5(a)  shall be deemed
         (solely for the purpose of the representation and warranty contained in
         such Section  7.5(a) but not for the purpose of any cross  reference to
         such Section 7.5(a) or to the financial  statements  described  therein
         contained in any other provision of Section 7.5 or elsewhere in Article
         VII) to be those financial  statements  most recently  delivered to the
         Agent and the Lenders  pursuant to Section 8.1 from the date  financial
         statements  are  delivered  to the Agent and the Lenders in  accordance
         with such Section;

                  (c) in the case of the  issuance  of a Letter of  Credit,  the
         Borrower  and the  Designated  Subsidiary,  if  applicable,  shall have
         executed and delivered to the  Applicable  Issuing Bank an  Application
         and  Agreement  for Letter of Credit in form and content  acceptable to
         the Applicable  Issuing Bank together with such other  instruments  and
         documents as it shall request;

                                       54

<PAGE>

                  (d) at the time of (and after  giving  effect to) each Advance
         or the  issuance of a Letter of Credit,  no Default or Event of Default
         specified in Article X shall have occurred and be continuing; and

                  (e)      immediately after giving effect to:

                           (i) a Tranche A Loan, the aggregate principal balance
                  of all outstanding  Tranche A Loans for each Lender and in the
                  aggregate  shall not exceed,  respectively,  (X) such Lender's
                  Tranche A Commitment or (Y) the Total Tranche A Commitment;

                           (ii) a Tranche B Loan, the Dollar  Equivalent  Amount
                  of the aggregate  principal balance of all outstanding Tranche
                  B Loans for each Lender shall not exceed such Lender's Tranche
                  B Commitment;

                           (iii)  a  Commercial  Letter  of  Credit  or  renewal
                  thereof,   the  Dollar  Equivalent  Amount  of  the  aggregate
                  principal   balance  of  all  outstanding   Participations  in
                  Commercial  Letters  of Credit and the  related  Reimbursement
                  Obligations  (or in the case of the  Applicable  Issuing Bank,
                  its remaining  interest after deduction of all  Participations
                  in Commercial Letters of Credit and the related  Reimbursement
                  Obligations)  for each Lender and in the  aggregate  shall not
                  exceed,  respectively,  (X) such Lender's Commercial Letter of
                  Credit Commitment or (Y) the Total Commercial Letter of Credit
                  Commitment;

                           (iv) a Standby  Letter of Credit or renewal  thereof,
                  the  Dollar  Equivalent  Amount  of  the  aggregate  principal
                  balance of all outstanding  Participations  in Standby Letters
                  of Credit and the related Reimbursement Obligations (or in the
                  case of the Applicable  Issuing Bank,  its remaining  interest
                  after  deduction of all  Participations  in Standby Letters of
                  Credit and the  related  Reimbursement  Obligations)  for each
                  Lender and in the  aggregate  shall not exceed,  respectively,
                  (X) such Lender's  Standby Letter of Credit  Commitment or (Y)
                  the Total Standby Letter of Credit Commitment;

                           (v) a Tranche B Loan or a Letter of Credit or renewal
                  thereof,  the sum of the Dollar Equivalent Amount of Letter of
                  Credit  Outstandings  plus the  Dollar  Equivalent  Amount  of
                  Tranche B  Outstandings  shall not exceed the Total  Tranche B
                  Commitment;

                           (vi)  a   Tranche  B  Loan  or  a  Letter  of  Credit
                  denominated  in an Offshore  Currency,  the Dollar  Equivalent
                  Amount of Outstandings in Offshore Currencies shall not exceed
                  the Total Offshore Currency Sublimit.

                                       55

<PAGE>

                                   ARTICLE VII

                         Representations and Warranties

         The Borrower  represents and warrants with respect to itself and to its
Subsidiaries (which representations and warranties shall survive the delivery of
the documents mentioned herein and the making of Loans), that:

         7.1.     Organization and Authority.

                  (a) The Borrower and each Material Subsidiary is a corporation
         duly organized and validly  existing under the laws of the jurisdiction
         of its formation;

                  (b) The  Borrower  and each  Material  Subsidiary  (x) has the
         requisite  power and authority to own its  properties and assets and to
         carry on its business as now being conducted and as contemplated in the
         Loan  Documents,   and  (y)  is  qualified  to  do  business  in  every
         jurisdiction  in which  failure  so to  qualify  would  have a Material
         Adverse Effect;

                  (c) The  Borrower  has the power  and  authority  to  execute,
         deliver  and  perform  this  Agreement  and the  Notes,  and to  borrow
         hereunder,  and to execute,  deliver and perform each of the other Loan
         Documents to which it is a party; and

                  (d) When executed and delivered, each of the Loan Documents to
         which the  Borrower  is a party  will be the legal,  valid and  binding
         obligation  or  agreement,  as  the  case  may  be,  of  the  Borrower,
         enforceable against the Borrower in accordance with its terms,  subject
         to the effect of any  applicable  bankruptcy,  moratorium,  insolvency,
         reorganization  or other similar law affecting  the  enforceability  of
         creditors' rights generally and to the effect of general  principles of
         equity (whether considered in a proceeding at law or in equity).

         7.2. Loan  Documents.  The execution,  delivery and  performance by the
Borrower of each of the Loan Documents to which it is a party:

                  (a) have been duly authorized by all requisite  Organizational
         Action of the Borrower required for the lawful execution,  delivery and
         performance thereof;

                  (b) do not violate any provisions of (i) applicable  law, rule
         or regulation, (ii) any judgment, writ, order, determination, decree or
         arbitral  award of any  Governmental  Authority  or arbitral  authority
         binding on the Borrower or its properties,  or (iii) the Organizational
         Documents or Operating Documents of the Borrower;

                  (c) does not and will not be in  conflict  with,  result  in a
         breach of or  constitute an event of default,  or an event which,  with
         notice or lapse of time or both,  would constitute an event of default,
         under any contract, indenture, agreement or other

                                       56

<PAGE>

         instrument  or document to which the  Borrower is a party,  or by which
         the properties or assets of the Borrower are bound; and

                  (d) does not and will not result in the creation or imposition
         of any Lien upon any of the properties or assets of the Borrower or any
         Subsidiary.

         7.3.  Subsidiaries and  Stockholders.  The Borrower has no Subsidiaries
other than those Persons listed as  Subsidiaries  in Schedule 7.3 and additional
Subsidiaries created or acquired after the Closing Date; Schedule 7.3 identifies
the Material Subsidiaries,  states as of the date hereof the organizational form
of each entity,  the authorized  and issued  capitalization  of each  Subsidiary
listed thereon,  the number of shares or other equity interests of each class of
capital stock or interest issued and outstanding of each such Subsidiary and the
number  and/or  percentage  of  outstanding  shares  or  other  equity  interest
(including  options,  warrants and other rights to acquire any interest) of each
such class of capital stock or other equity interest owned by Borrower or by any
such Subsidiary;  the outstanding  shares or other equity interests of each such
Subsidiary  have been duly  authorized and validly issued and are fully paid and
non assessable;  and Borrower and each such Subsidiary owns  beneficially and of
record  all the shares and other  interests  it is listed as owning in  Schedule
7.3, free and clear of any Lien.

         7.4. Ownership Interests. Borrower owns no interest in any Person other
than the  Persons  listed in Schedule  7.3,  equity  investments  in Persons not
constituting   Subsidiaries   permitted   under   Section  9.6  and   additional
Subsidiaries created or acquired after the Closing Date.

         7.5.     Financial Condition.

                  (a) The  Borrower has  heretofore  furnished to each Lender an
         audited consolidated balance sheet of the Borrower and its Subsidiaries
         as  at  April  30,  1999,   and  the  notes  thereto  and  the  related
         consolidated statements of earnings, shareowners' equity and cash flows
         for  the  Fiscal  Year  then  ended  as  examined   and   certified  by
         PriceWaterhouseCoopers LLP. Except as set forth therein, such financial
         statements (in cluding the notes thereto)  present fairly the financial
         condition of the Borrower  and its  Subsidiaries  as of the end of such
         Fiscal  Year and  results of their  operations  and the  changes in its
         shareowners'  equity for the Fiscal Year then ended,  all in conformity
         with GAAP applied on a Consistent Basis;

                  (b) since the later of (i) the date of the  audited  financial
         statements delivered pursuant to Section 7.5(a) hereof or (ii) the date
         of the audited financial statements most recently delivered pursuant to
         Section 8.1(a) hereof, there has been no event,  condition,  failure of
         condition  or  occurrence  which could  reasonably  be likely to have a
         Material Adverse Effect; and

                  (c) except as set forth in the financial  statements  referred
         to in Section  7.5(a) or in Schedule  7.5 or  permitted by Section 9.4,
         neither  Borrower nor any  Subsidiary  has incurred,  other than in the
         ordinary course of business, any material Indebtedness,

                                       57

<PAGE>

         Contingent  Obligation or other  commitment or liability  which remains
         outstanding or unsatisfied.

         7.6.  Title  to  Properties.  The  Borrower  and  each of its  Material
Subsidiaries  has  good  and  marketable  title  to all its  real  and  personal
properties, subject to no transfer restrictions or Liens of any kind, except for
the  transfer  restrictions  and  Liens  described  in  Schedule  7.6 and  Liens
permitted by Section 9.3.

         7.7. Taxes.  Except as set forth in Schedule 7.7, the Borrower and each
of its Subsidiaries has filed or caused to be filed all federal, state and local
tax  returns  which are  required  to be filed by it and,  except  for taxes and
assessments being contested in good faith by appropriate  proceedings diligently
conducted  and against  which  reserves  reflected in the  financial  statements
described in Section 7.5(a) or Sections  8.1(a) or (b) and  satisfactory  to the
Borrower's independent certified public accountants have been established,  have
paid or  caused  to be paid  all  taxes  as  shown  on  said  returns  or on any
assessment received by it, to the extent that such taxes have become due.

         7.8.     Other Agreements.  Neither the Borrower nor any Subsidiary is

                  (a) a party to or  subject  to any  judgment,  order,  decree,
         agreement, lease or instrument, or subject to other restrictions, which
         individually or in the aggregate could reasonably be expected to have a
         Material Adverse Effect; or

                  (b) in default in the  performance,  observance or fulfillment
         of any of the  obligations,  covenants or  conditions  contained in any
         agreement or instrument to which the Borrower is a party, which default
         has,  or if not  remedied  within any  applicable  grace  period  could
         reasonably be likely to have, a Material Adverse Effect.

         7.9.  Litigation.  Except as set  forth in  Schedule  7.9,  there is no
action,  suit,  investigation  or proceeding at law or in equity or by or before
any governmental  instrumentality or agency or arbitral body pending, or, to the
knowledge of the Borrower, threatened by or against the Borrower or any Material
Subsidiary  or  affecting  the  Borrower  or  any  Material  Subsidiary  or  any
properties or rights of the Borrower or any Subsidiary,  which could  reasonably
be likely to have a Material Adverse Effect.

         7.10.  Margin Stock. The proceeds of the borrowings made hereunder will
be used by the Borrower only for the purposes expressly  authorized herein. None
of such  proceeds  will be used,  directly  or  indirectly,  for the  purpose of
purchasing  or  carrying  any margin  stock or for the  purpose of  reducing  or
retiring any  Indebtedness  which was  originally  incurred to purchase or carry
margin stock or for any other  purpose which might  constitute  any of the Loans
under this Agreement as a "purpose credit" within the meaning of said Regulation
U or  Regulation X (12 C.F.R.  Part 221) of the Board.  Neither the Borrower nor
any agent  acting in its behalf has taken or will take any  action  which  might
cause this Agreement or any of the documents or instruments  delivered  pursuant
hereto to violate any regulation of the Board or to violate the Securities

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Exchange Act of 1934, as amended,  or the Securities Act of 1933, as amended, or
any state securities laws, in each case as in effect on the date hereof.

         7.11. Investment Company. Neither the Borrower nor any Subsidiary is an
"investment  company," or an "affiliated person" of, or "promoter" or "principal
underwriter"  for,  an  "investment  company",  as such terms are defined in the
Investment  Company Act of 1940, as amended (15 U.S.C.  ss. 80a-1, et seq.). The
application  of the proceeds of the Loans and repayment  thereof by the Borrower
and the performance by the Borrower of the transactions contemplated by the Loan
Documents will not violate any provision of said Act, or any rule, regulation or
order issued by the Securities and Exchange Commission thereunder,  in each case
as in effect on the date hereof.

         7.12.  Patents,  Etc. The Borrower and each  Subsidiary owns or has the
right to use, under valid license agreements or otherwise, all material patents,
licenses,  franchises,  trademarks,  trademark rights,  trade names,  trade name
rights,  trade secrets and copyrights necessary to or used in the conduct of its
businesses as now conducted and as contemplated  by the Loan Documents,  without
known conflict with any patent,  license,  franchise,  trademark,  trade secret,
trade name, copyright, other proprietary right of any other Person.

         7.13.  No Untrue  Statement.  Neither (a) this  Agreement nor any other
Loan Document or certificate or document  executed and delivered by or on behalf
of the Borrower or any  Subsidiary  in  accordance  with or pursuant to any Loan
Document  nor (b) any  statement,  representation,  or warranty  provided to the
Agent in connection  with the  negotiation  or preparation of the Loan Documents
contains any  misrepresentation or untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstance under which it was
made, in order to make any such warranty,  representation or statement contained
therein not misleading.

         7.14. No Consents, Etc. Neither the respective businesses or properties
of the Borrower or any Subsidiary,  nor any  relationship  among the Borrower or
any Subsidiary and any other Person, nor any circumstance in connection with the
execution,  delivery and performance of the Loan Documents and the  transactions
contemplated thereby, is such as to require a consent, approval or authorization
of, or filing, registration or qualification with, any Governmental Authority or
any other Person on the part of the  Borrower as a condition  to the  execution,
delivery and performance of, or consummation of the transactions contemplated by
the Loan  Documents,  which,  if not obtained or effected,  would be  reasonably
likely to have a Material  Adverse  Effect,  or if so, such  consent,  approval,
authorization,  filing,  registration or qualification has been duly obtained or
effected, as the case may be.

         7.15.    Employee Benefit Plans.

                  (a) The  Borrower  and each  ERISA  Affiliate  is in  material
         compliance with all applicable  provisions of ERISA and the regulations
         and published  interpretations  thereunder  and in compliance  with all
         Foreign Benefit Laws with respect to all Employee  Benefit Plans except
         for any required amendments for which the remedial amendment

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<PAGE>

         period as defined in  Section  401(b) of the Code has not yet  expired.
         Each  Employee  Benefit  Plan that is  intended to be  qualified  under
         Section  401(a) of the Code has been  determined or the Borrower or its
         Subsidiaries  is in the  process of  obtaining a  determination  by the
         Internal Revenue Service to be so qualified, each trust related to such
         plan has been determined to be exempt under Section 501(a) of the Code,
         and each Employee  Benefit Plan subject to any Foreign  Benefit Law has
         received  the  required   approvals  by  any   Governmental   Authority
         regulating such Employee  Benefit Plan. No material  liability has been
         incurred  by  the  Borrower  or  any  ERISA   Affiliate  which  remains
         unsatisfied  for any taxes or  penalties  with  respect to any Employee
         Benefit Plan or any Multiemployer Plan;

                  (b)  Neither  the  Borrower  nor any ERISA  Affiliate  has (i)
         engaged in a nonexempt prohibited transaction described in Section 4975
         of the Code or  Section  406 of  ERISA  affecting  any of the  Employee
         Benefit Plans or the trusts created  thereunder which could subject any
         such  Employee  Benefit  Plan or trust to a material  tax or penalty on
         prohibited  transactions  imposed under  Internal  Revenue Code Section
         4975 or ERISA,  (ii) incurred any accumulated  funding  deficiency with
         respect to any Employee  Benefit  Plan,  whether or not waived,  or any
         other  liability to the PBGC which remains  outstanding  other than the
         payment of premiums and there are no premium payments which are due and
         unpaid,  (iii) failed to make a required  contribution  or payment to a
         Multiemployer Plan, (iv) failed to make a required installment or other
         required payment under Section 412 of the Code, Section 302 of ERISA or
         the  terms of such  Employee  Benefit  Plan,  or (v)  failed  to make a
         required  contribution  or payment,  or otherwise  failed to operate in
         compliance with any Foreign Benefit Law regulating any Employee Benefit
         Plan;

                  (c)  No  Termination  Event  has  occurred  or  is  reasonably
         expected  to occur with  respect to any Pension  Plan or  Multiemployer
         Plan which would  reasonably be likely to result in a Material  Adverse
         Effect,  and neither the Borrower nor any ERISA  Affiliate has incurred
         any unpaid withdrawal liability with respect to any Multiemployer Plan;

                  (d) The present  value of all vested  accrued  benefits  under
         each  Employee  Benefit Plan which is subject to Title IV of ERISA,  or
         the funding of which is regulated  by any Foreign  Benefit Law did not,
         as of the most  recent  valuation  date for each such plan,  exceed the
         then  current  value  of the  assets  of  such  Employee  Benefit  Plan
         allocable to such benefits;

                  (e) To the best of the  Borrower's  knowledge,  each  Employee
         Benefit  Plan which is  subject to Title IV of ERISA or the  funding of
         which is  regulated  by any  Foreign  Benefit  Law,  maintained  by the
         Borrower or any ERISA  Affiliate,  has been  administered in accordance
         with its terms in all  material  respects and is in  compliance  in all
         material respects with all applicable requirements of ERISA, applicable
         Foreign Benefit Law and other applicable  laws,  regulations and rules;
         and

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<PAGE>

                  (f)   No   material   proceeding,    claim,   lawsuit   and/or
         investigation  exists or, to the best  knowledge of the Borrower  after
         due inquiry, is threatened concerning or involving any Employee Benefit
         Plan;

         7.16.  No  Default.  As of the date  hereof,  there  does not exist any
Default or Event of Default hereunder.

         7.17.  Environmental  Laws.  Except  as listed on  Schedule  7.17,  the
Borrower and each Subsidiary is in compliance with all applicable  Environmental
Laws and has been issued and currently maintains all required federal, state and
local  permits,  licenses,  certificates  and  approvals.  Except  as  listed on
Schedule 7.17,  neither the Borrower nor any Subsidiary has been notified of any
pending or threatened action, suit, proceeding or investigation, and neither the
Borrower  nor any  Subsidiary  is aware  of any  facts,  which  (a)  calls  into
question,  or could reasonably be expected to call into question,  compliance by
the Borrower or any Subsidiary with any Environmental  Laws, (b) seeks, or could
reasonably  be  expected  to form the  basis  of a  meritorious  proceeding,  to
suspend,  revoke or terminate any license,  permit or approval necessary for the
operation of the  Borrower's or any  Subsidiary's  business or facilities or for
the  generation,  handling,  storage,  treatment  or disposal  of any  Hazardous
Materials,  or (c) seeks to cause,  or could  reasonably be expected to form the
basis of a meritorious  proceeding to cause, any property of the Borrower or any
Subsidiary to be subject to any  restrictions  on ownership,  use,  occupancy or
transferability under any Environmental Law.

         7.18.  Employment  Matters.  Except to the extent a failure to maintain
compliance  would not have a Material  Adverse  Effect,  the  Borrower  and each
Subsidiary is in compliance in all respects with all applicable  laws, rules and
regulations  pertaining  to  labor  or  employment  matters,  including  without
limitation those pertaining to wages,  hours,  occupational  safety and taxation
and there is  neither  pending  or  threatened  any  litigation,  administrative
proceeding nor, to the knowledge of the Borrower, any investigation,  in respect
of such  matters  which,  if  decided  adversely,  could  reasonably  be likely,
individually or in the aggregate, to have a Material Adverse Effect.

         7.19. Year 2000 Compliance.  The Borrower and its Subsidiaries have (i)
initiated  a review  and  assessment  of all  areas  within  its and each of its
Subsidiaries'  business and operations  (including those affected by information
received from  suppliers  and vendors)  that could  reasonably be expected to be
adversely affected by the Year 2000 Problem,  (ii) developed a plan and timeline
for  addressing  the Year 2000  Problem  on a timely  basis,  and (iii) to date,
implemented  that plan  substantially  in accordance  with that  timetable.  The
Borrower  reasonably  believes that all computer  applications  (including those
affected by  information  received  from its  suppliers  and  vendors)  that are
material to its or any of its  Subsidiaries'  business and  operations  will not
later than October 31, 1999 be Year 2000 Compliant,  except to the extent that a
failure to do so could not  reasonably  be  expected  to have  Material  Adverse
Effect.

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<PAGE>

         7.20. Material Subsidiaries. The Borrower and its Material Subsidiaries
together  account for more than 85% of each of (a) the sum of all assets (valued
at the greater of book or fair market) of the Borrower and its  Subsidiaries  as
of  the  end of  the  most  recently  completed  fiscal  quarter,  and  (b)  the
Consolidated Net Income of the Borrower and its  Subsidiaries,  as of the end of
the most recently completed fiscal quarter, for the immediately  preceding Four-
Quarter Period.

         7.21.  Insurance.  The Borrower  and each of its Material  Subsidiaries
maintain  insurance coverage by financially sound and reputable insurers in such
forms and amounts and against such risks as are  customary for  corporations  of
established  reputation engaged in the same or a similar business and owning and
operating similar properties in similar locations.

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                                  ARTICLE VIII

                              Affirmative Covenants

         Until the Facility  Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and where applicable will cause
each Subsidiary to:

         8.1. Financial Reports,  Etc. (a) As soon as practical and in any event
within 120 days after the end of each  Fiscal Year of the  Borrower,  deliver or
cause to be  delivered to the Agent and each Lender (i) a  consolidated  balance
sheet of the  Borrower and its  Subsidiaries  as at the end of such Fiscal Year,
and the notes  thereto,  and the related  consolidated  statements  of earnings,
shareowners'  equity and cash flows, and the respective notes thereto,  for such
Fiscal Year,  setting forth comparative  financial  statements for the preceding
Fiscal Year, all prepared in accordance with GAAP applied on a Consistent  Basis
and containing, with respect to the consolidated financial statements,  opinions
of  PriceWaterhouseCoopers  LLP,  or other  such  independent  certified  public
accountants  selected  by the  Borrower  and  approved  by the Agent,  which are
unqualified as to the scope of the audit performed and as to the "going concern"
status of the Borrower and without any exception not  acceptable to the Lenders,
and (ii) a certificate of an Authorized Representative  demonstrating compliance
with Sections 9.1(a) through 9.1(c),  which  certificate shall be in the form of
Exhibit H;

         (b) as soon as practical  and in any event within 45 days after the end
of each fiscal  quarter  (except the last  fiscal  quarter of the Fiscal  Year),
deliver to the Agent and each  Lender (i) a  consolidated  balance  sheet of the
Borrower  and its  Subsidiaries  as at the end of such fiscal  quarter,  and the
related consolidated statements of earnings,  shareowners' equity and cash flows
for such  fiscal  quarter  and for the  period  from the  beginning  of the then
current Fiscal Year through the end of such reporting period, and accompanied by
a certificate of an Authorized  Representative to the effect that such financial
statements  present  fairly  the  financial  position  of the  Borrower  and its
Subsidiaries  as of the end of such  fiscal  period  and the  results  of  their
operations and the changes in their  financial  position for such fiscal period,
in conformity  with the  standards  set forth in Section  7.5(a) with respect to
interim  financial   statements,   and  (ii)  a  certificate  of  an  Authorized
Representative  containing  computations  for such  quarter  comparable  to that
required pursuant to Section 8.1(a)(ii);

         (c) together with each delivery of the financial statements required by
Section  8.1(a)(i),  deliver  to the  Agent  and each  Lender a letter  from the
Borrower's accountants specified in Section 8.1(a)(i) stating that in performing
the audit necessary to render an opinion on the financial  statements  delivered
under Section  8.1(a)(i),  they obtained no knowledge of any Default or Event of
Default by the Borrower in the  fulfillment  of the terms and provisions of this
Agreement insofar as they relate to financial matters (which at the date of such
statement  remains  uncured);  or if the accountants have obtained  knowledge of
such Default or Event of Default,  a statement  specifying the nature and period
of existence thereof;

         (d) together with each delivery of the financial statements required by
Section 8.1(a)(i), deliver to the Agent and each Lender, a consolidating summary
of business unit sales,

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<PAGE>

operating  income,  assets and  investments  of the  Borrower  and its  Material
Subsidiaries prepared by an Authorized  Representative in form acceptable to the
Agent;

         (e)  promptly  upon  their  becoming  available  to the  Borrower,  the
Borrower shall deliver to the Agent and each Lender a copy of (i) all regular or
special  reports or  effective  registration  statements  which  Borrower or any
Subsidiary  shall  file with the  Securities  and  Exchange  Commission  (or any
successor  thereto)  or  any  securities  exchange,  (ii)  any  proxy  statement
distributed by the Borrower or any Subsidiary to its  shareholders,  bondholders
or the financial community in general,  and (iii) any management letter or other
report submitted to the Borrower or any Subsidiary by independent accountants in
connection  with any  annual,  interim or special  audit of the  Borrower or any
Subsidiary; and

         (f)  promptly,  from time to time,  deliver or cause to be delivered to
the Agent and each Lender such other  information  regarding  Borrower's and any
Subsidiary's  operations,  business affairs and financial condition as the Agent
or such Lender may reasonably request;

         Without  limitation of the terms of Section 12.16 hereof, the Agent and
the Lenders are hereby  authorized  to deliver a copy of any such  financial  or
other  information  delivered  hereunder to the Lenders (or any affiliate of any
Lender) or to the Agent, to any Governmental  Authority having jurisdiction over
the Agent or any of the Lenders  pursuant to any written request  therefor or in
the ordinary  course of  examination  of loan files,  or to any other Person who
shall acquire or consider the assignment of, or acquisition of any participation
interest in, any Obligation permitted by this Agreement.

         8.2.  Maintain  Properties.  Maintain all  properties  necessary to its
operations  in good  working  order  and  condition,  make all  needed  repairs,
replacements and renewals to such  properties,  and maintain free from Liens all
trademarks, trade names, patents, copyrights, trade secrets, know-how, and other
intellectual   property  and  proprietary   information  (or  adequate  licenses
thereto),  in each case as are  reasonably  necessary to conduct its business as
currently conducted or as contemplated  hereby, all in accordance with customary
and prudent business practices.

         8.3.  Existence,  Qualification,  Etc.  Except as  otherwise  expressly
permitted  under  Section  9.7, do or cause to be done all things  necessary  to
preserve and keep in full force and effect its existence and all material rights
and franchises,  and maintain its license or  qualification  to do business as a
foreign  corporation  and  good  standing  in each  jurisdiction  in  which  its
ownership or lease of property or the nature of its business  makes such license
or qualification necessary except where the failure to so qualify would not have
a Material Adverse Effect.

         8.4.  Regulations  and Taxes.  Comply in all material  respects with or
contest in good faith all  statutes  and  governmental  regulations  and pay all
taxes,  assessments,  governmental charges, claims for labor, supplies, rent and
any other  obligation  which, if unpaid,  would become a Lien against any of its
properties  except  liabilities  being  contested  in good faith by  appropriate
proceedings  diligently conducted and against which adequate reserves acceptable
to the Borrower's independent certified public accountants have been established
unless and until any

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Lien resulting therefrom attaches to any of its property and becomes enforceable
against its creditors.

         8.5.  Insurance.  (a) Keep all of its insurable  properties  adequately
insured  at  all  times  with  responsible   insurance  carriers,   or,  in  the
alternative,  maintain appropriate  reserves if self- insuring,  against loss or
damage  by fire  and  other  hazards  to the  extent  and in the  manner  as are
customarily  insured  against  by  similar  businesses  owning  such  properties
similarly situated, (b) maintain general public liability insurance at all times
with responsible  insurance  carriers against  liability on account of damage to
persons and property and (c) maintain  insurance  under all applicable  workers'
compensation  laws (or in the alternative,  maintain  required reserves if self-
insured  for  workers'  compensation  purposes)  and  against  loss by reason of
business   interruption   such  policies  of  insurance  to  have  such  limits,
deductibles,  exclusions,  co-insurance and other  provisions  providing no less
coverages than are maintained by similar businesses that are similarly situated,
such insurance policies to be in form reasonably satisfactory to the Agent.

         8.6.  True Books.  Keep true books of record and account in which full,
true and correct  entries will be made of all of its dealings and  transactions,
and set up on its books such reserves as may be required by GAAP with respect to
doubtful  accounts and all taxes,  assessments,  charges,  levies and claims and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements.

         8.7. Year 2000 Compliance.  The Borrower will promptly notify the Agent
and the  Lenders in the event the  Borrower  discovers  or  determines  that any
computer application  (including those affected by information received from its
suppliers  and  vendors)  that is  material  to its or any of its  Subsidiaries'
business  and  operations  will not be Year 2000  Compliant  on a timely  basis,
except to the extent that such failure could not  reasonably be expected to have
a Material Adverse Effect.

         8.8. Right of Inspection. Permit any Person designated by any Lender or
the  Agent to visit  and  inspect  any of the  properties,  corporate  books and
financial  reports of the Borrower or any Subsidiary and to discuss its affairs,
finances and accounts  with its  principal  officers  and, in the presence of an
officer or agent of the Borrower,  its independent certified public accountants,
all at reasonable  times,  at reasonable  intervals  and with  reasonable  prior
notice.

         8.9.  Observe  all Laws.  Conform to and duly  observe in all  material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business, except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.

         8.10. Governmental Licenses. Obtain and maintain all licenses, permits,
certifications and approvals of all applicable  Governmental  Authorities as are
required  for  the  conduct  of  its  business  as  currently  conducted  and as
contemplated by the Loan Documents,  except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

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<PAGE>

         8.11.  Covenants  Extending  to  Other  Persons.   Cause  each  of  its
Subsidiaries to do with respect to itself, its business and its assets,  each of
the things  required  of the  Borrower in Sections  8.2 through  8.10,  and 8.20
inclusive.

         8.12. Officer's Knowledge of Default.  Upon any officer of the Borrower
obtaining  knowledge  of any Default or Event of Default  hereunder or under any
other obligation of the Borrower or any Subsidiary to any Lender,  or any event,
development or occurrence  which could reasonably be expected to have a Material
Adverse Effect, cause such officer or an Authorized Representative to notify the
Agent of the nature thereof,  the period of existence  thereof,  and what action
the Borrower or such Subsidiary proposes to take with respect thereto.

         8.13.  Suits or Other  Proceedings.  Upon any  officer of the  Borrower
obtaining  knowledge of any  litigation or other  proceedings  being  instituted
against the Borrower or any Subsidiary,  or any attachment,  levy,  execution or
other  process  being  instituted  against  any  assets of the  Borrower  or any
Subsidiary,  making  a claim or  claims  in an  aggregate  amount  greater  than
$2,000,000 not otherwise covered by insurance,  deliver to the Agent within five
Business  Days  written  notice  thereof  stating  the nature and status of such
litigation, dispute, proceeding, levy, execution or other process.

         8.14. Notice of Environmental Complaint or Condition.  Promptly provide
to the  Agent  true,  accurate  and  complete  copies  of any and  all  notices,
complaints,  orders, directives, claims or citations received by the Borrower or
any  Subsidiary  relating  to any (a)  violation  or  alleged  violation  by the
Borrower or any Subsidiary of any applicable  Environmental  Law; (b) release or
threatened release by the Borrower or any Subsidiary, or by any Person handling,
transporting or disposing of any Hazardous Material on behalf of the Borrower or
any  Subsidiary,  or at any facility or property  owned or leased or operated by
the  Borrower  or  any  Subsidiary,  of any  Hazardous  Material,  except  where
occurring  legally pursuant to a permit or license;  or (c) liability or alleged
liability  of the  Borrower  or any  Subsidiary  for the costs of  cleaning  up,
removing,  remediating or responding to a release of Hazardous Materials; which,
in each of the  foregoing  cases,  could  reasonably be expected to result in an
aggregate liability greater than $2,000,000.

         8.15. Environmental Compliance. If the Borrower or any Subsidiary shall
receive any  letter,  notice,  complaint,  order,  directive,  claim or citation
alleging that the Borrower or any Subsidiary has violated any Environmental Law,
has released any Hazardous Material,  or is liable for the costs of cleaning up,
removing,  remediating  or responding to a release of Hazardous  Materials,  the
Borrower and any Subsidiary  shall,  within the time period permitted and to the
extent  required  by  the  applicable  Environmental  Law  or  the  Governmental
Authority  responsible  for  enforcing  such  Environmental  Law,  (a) remove or
remedy, or cause the applicable  Subsidiary to remove or remedy,  such violation
or release or (b) satisfy such  liability or (c) contest such  liability in good
faith by  appropriate  proceedings  diligently  conducted and maintain  adequate
reserves or other appropriate provisions in accordance with GAAP with respect to
such liability.

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         8.16.    Employee Benefit Plans.

                  (a) With reasonable promptness, and in any event within thirty
         (30) days thereof, give notice to the Agent of (a) the establishment of
         any new Pension Plan (which  notice shall include a copy of such plan),
         (b) the  commencement  of  contributions  in a  material  amount to any
         Employee  Benefit  Plan  to  which  the  Borrower  or any of its  ERISA
         Affiliates was not previously  contributing,  (c) any material increase
         in the benefits of any existing Employee Benefit Plan, (d) each funding
         waiver  request  filed  with  respect  to  any  Pension  Plan  and  all
         communications  received or sent by the Borrower or any ERISA Affiliate
         with respect to such request and (e) the failure of the Borrower or any
         ERISA Affiliate to make a required installment or payment under Section
         302 of ERISA  or  Section  412 of the  Code  (in the  case of  Employee
         Benefit  Plans  regulated  by the Code or ERISA)  or under any  Foreign
         Benefit Law (in the case of Employee  Benefit  Plans  regulated  by any
         Foreign Benefit Law) by the due date;

                  (b)  Promptly  and in any event  within  fifteen  (15) days of
         becoming aware of the  occurrence or forthcoming  occurrence of any (a)
         Termination  Event or (b) nonexempt  "prohibited  transaction," as such
         term is defined in Section 406 of ERISA or Section 4975 of the Code, in
         connection  with  any  Employee  Benefit  Plan  or  any  trust  created
         thereunder,  deliver  to the  Agent  a  notice  specifying  the  nature
         thereof,  what action the Borrower or any ERISA Affiliate has taken, is
         taking or proposes to take with respect  thereto and,  when known,  any
         action  taken  or  threatened  by the  Internal  Revenue  Service,  the
         Department of Labor or the PBGC with respect thereto; and

                  (c) With reasonable promptness but in any event within fifteen
         (15) days for  purposes  of clauses  (a),  (b) and (c),  deliver to the
         Agent  copies  of (a) any  unfavorable  determination  letter  from the
         Internal  Revenue Service  regarding the  qualification  of an Employee
         Benefit Plan under Section 401(a) of the Code, (b) all notices received
         by  the  Borrower  or  any  ERISA   Affiliate  of  the  PBGC's  or  any
         Governmental  Authority's  intent to  terminate  any Pension Plan or to
         have a trustee  appointed  to  administer  any Pension  Plan,  (c) each
         Schedule B  (Actuarial  Information)  to the annual  report  (Form 5500
         Series) filed by the Borrower or any ERISA  Affiliate with the Internal
         Revenue Service with respect to each Employee  Benefit Plan and (d) all
         notices  received  by  the  Borrower  or  any  ERISA  Affiliate  from a
         Multiemployer  Plan  sponsor  concerning  the  imposition  or amount of
         withdrawal  liability  pursuant to Section 4202 of ERISA.  The Borrower
         will notify the Agent in writing  within five (5) Business  Days of the
         Borrower or any ERISA Affiliate  obtaining  knowledge or reason to know
         that the Borrower or any ERISA Affiliate has filed or intends to file a
         notice  of  intent to  terminate  any  Pension  Plan  under a  distress
         termination within the meaning of Section 4041(c) of ERISA.

         8.17.  Continued  Operations.  Continue  at all  times to  conduct  its
business  and  engage  principally  in  the  same  line  or  lines  of  business
substantially as heretofore conducted.

         8.18.  Notices Regarding Material  Subsidiaries.  Promptly from time to
time,  upon request of the Agent,  deliver to the Agent a written  report of any
change in the list of Material

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Subsidiaries  set forth on Schedule 7.3 or any change in the  designation of any
Subsidiary as or to a "Material Subsidiary".

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                                   ARTICLE IX

                               Negative Covenants

         Until the Facility  Termination Date, unless the Required Lenders shall
otherwise  consent in writing,  the  Borrower  will not,  nor will it permit any
Subsidiary to:

         9.1.     Financial Covenants.

         (a)   Consolidated    Shareholders'    Equity.    Permit   Consolidated
Shareholders' Equity to be less than (i) $379,000,000 at April 30, 1999 and (ii)
as at the last day of each  succeeding  fiscal quarter of the Borrower and until
(but  excluding)  the last  day of the  next  following  fiscal  quarter  of the
Borrower,  the  sum of (A)  the  amount  of  Consolidated  Shareholders'  Equity
required to be maintained  pursuant to this Section  9.1(a) as at the end of the
immediately  preceding  fiscal quarter,  plus (B) 50% of Consolidated Net Income
(with no reduction for net losses  during any period) for the fiscal  quarter of
the Borrower  ending on such day  (including  within  "Consolidated  Net Income"
certain  items  otherwise  excluded,  as  provided  for  in  the  definition  of
"Consolidated  Net  Income"),  plus  (C)  100% of the  aggregate  amount  of all
increases in the stated capital and additional  paid-in capital  accounts of the
Borrower  resulting  from the  issuance of equity  securities  or other  capital
investments.

         (b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio
as of the end of any Four-Quarter Period to be greater than 3.50 to 1.00.

         (c)  Consolidated  Interest  Coverage  Ratio.  Permit the  Consolidated
Interest Coverage Ratio as of the end of any Four-Quarter Period to be less than
2.25 to 1.00.

         9.2.  Acquisitions.   Enter  into  any  agreement,   contract,  binding
commitment  or other  arrangement  providing  for any  Acquisition,  or take any
action to solicit  the  tender of  securities  or proxies in respect  thereof in
order to effect  any  Acquisition,  unless (i) the board of  directors  or other
managing  body of the Person to be (or whose assets are to be) acquired does not
oppose  such  Acquisition  and the line or lines of business of the Person to be
acquired  are  substantially  the same as one or more line or lines of  business
conducted  by the  Borrower  and its  Subsidiaries,  (ii) no Default or Event of
Default  shall have occurred and be continuing  either  immediately  prior to or
immediately  after  giving  effect to such  Acquisition  and,  (iii) the  Person
acquired shall be a Wholly-owned Subsidiary, or be merged into the Borrower or a
Subsidiary (with the Borrower or such Subsidiary surviving), or be merged with a
Subsidiary and such Person survives as a Subsidiary,  subject to compliance with
Section 9.7(ii),  immediately upon consummation of the Acquisition (or if assets
are  being  acquired,  the  acquiror  shall be the  Borrower  or a  Wholly-owned
Subsidiary).

         9.3. Liens.  Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature  whatsoever with respect to any property or assets now
owned or hereafter acquired by the Borrower or any Subsidiary, other than

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                  (a) Liens  existing  as of the date hereof and as set forth in
         Schedule 7.6;

                  (b) Liens imposed by law for taxes,  assessments or charges of
         any  Governmental  Authority  for claims not yet due or which are being
         contested in good faith by appropriate proceedings diligently conducted
         and  with  respect  to which  adequate  reserves  or other  appropriate
         provisions are being maintained in accordance with GAAP and which Liens
         are not yet enforceable against other creditors;

                  (c)  statutory  Liens of  landlords  and  Liens  of  carriers,
         warehousemen,  mechanics, materialmen and other Liens imposed by law or
         created in the ordinary  course of business and in existence  less than
         90 days from the date of  creation  thereof  for amounts not yet due or
         which are being  contested  in good  faith by  appropriate  proceedings
         diligently  conducted  and with respect to which  adequate  reserves or
         other  appropriate  provisions are being  maintained in accordance with
         GAAP and which Liens are not yet enforceable against other creditors;

                  (d) Liens incurred or deposits made in the ordinary  course of
         business (including, without limitation, surety bonds and appeal bonds)
         in connection with workers'  compensation,  unemployment  insurance and
         other types of social security benefits or to secure the performance of
         tenders,  bids,  leases,  contracts  (other than for the  repayment  of
         Indebtedness),  statutory  obligations and other similar obligations or
         arising as a result of progress payments under government contracts;

                  (e) easements  (including  reciprocal  easement agreements and
         utility agreements),  rights-of-way, covenants, consents, reservations,
         encroachments, variations and zoning and other restrictions, charges or
         encumbrances  (whether  or  not  recorded),   which  do  not  interfere
         materially with the ordinary conduct of the business of the Borrower or
         any Subsidiary  and which do not  materially  detract from the value of
         the property to which they attach or materially  impair the use thereof
         to the Borrower or any Subsidiary;

                  (f) Liens of or resulting from any judgment or award, the time
         for appeal or petition for  rehearing of which shall not have  expired,
         or in respect of which the Borrower or a  Subsidiary  shall at any time
         in good faith be  prosecuting  an appeal or proceeding for a review and
         in  respect  of  which a stay  of  execution  pending  such  appeal  or
         proceeding  for review  shall  have been  secured,  and any  pledges or
         deposits for the purpose of securing such appeal or stay; provided that
         the aggregate  amount secured by such Liens,  pledges and deposits does
         not at any time exceed $10,000,000;

                  (g) Liens,  mortgages,  conditional sales contracts,  security
         interests or other  arrangements  for the retention of title (including
         Capital Leases) incurred after the Closing Date and given to secure the
         payment  of  the  purchase  price  incurred  in  connection   with  the
         acquisition or  construction  of fixed assets useful and intended to be
         used in carrying  on the  business  of the  Borrower  or a  Subsidiary,
         including   Liens  existing  on  such  fixed  assets  at  the  time  of
         acquisition thereof or at the time of

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         Acquisition  by the Borrower or a Subsidiary  of any Person then owning
         such fixed  assets,  whether or not such  existing  Liens were given to
         secure the payment of the  purchase  price of the fixed assets to which
         they attach so long as they were not  incurred,  extended or renewed in
         contemplation of such Acquisition; provided that (i) the Lien or charge
         shall attach solely to the property acquired or purchased,  (ii) at the
         time  of  acquisition  of  such  fixed  assets,  the  aggregate  amount
         remaining  unpaid on all  Indebtedness  secured  by Liens on such fixed
         assets whether or not assumed by the Borrower or a Subsidiary shall not
         exceed an amount  equal to the  lesser of the total  purchase  price or
         fair market value at the time of  acquisition  of such fixed assets (as
         determined  in good faith by the Board of Directors  of the  Borrower),
         and (iii) all such  Indebtedness  shall have been  incurred  within the
         applicable limitations of Section 9.4; and

                  (h)  Liens  incurred  by the  Borrower  or any  Subsidiary  in
         addition to those described in clauses (a) through (g) above;  provided
         that (i) the  aggregate  amount of all  Indebtedness  secured  by Liens
         pursuant  to  this  clause  (h)  shall  not at any  time  exceed  3% of
         Consolidated Net Tangible Assets,  and (ii) all such Indebtedness shall
         have been incurred within the applicable limitations of Section 9.4;

         9.4.  Indebtedness.  Incur,  create,  assume  or  permit  to exist  any
Indebtedness of the Borrower, howsoever evidenced, except:

                  (a) Indebtedness  existing as of the Closing Date as set forth
         in Schedule  7.5;  provided,  none of the  instruments  and  agreements
         evidencing or governing such Indebtedness shall be amended, modified or
         supplemented   after  the   Closing   Date  to  change   any  terms  of
         subordination,  repayment  or rights of  conversion,  put,  exchange or
         other  rights  from such terms and  rights as in effect on the  Closing
         Date;

                  (b)  Indebtedness   owing  to  the  Agent  or  any  Lender  in
         connection with this Agreement, any Note or other Loan Document;

                  (c) the  endorsement of negotiable  instruments for deposit or
         collection or similar  transactions in the ordinary course of business;
         and

                  (d)   unsecured    Indebtedness    (excluding    reimbursement
         obligations  in respect of letters of credit) of the  Borrower  that is
         pari  passu  with,  or   subordinate   in  right  of  payment  to,  the
         Obligations;  provided  that at the  time of  creation,  assumption  or
         incurrence   thereof  and  after  giving  effect  thereto  and  to  the
         application  of the  proceeds  thereof,  no Default or Event of Default
         shall have occurred and be continuing;

                  (e)   unsecured    Indebtedness    (excluding    reimbursement
         obligations  in  respect  of  letters  of  credit)  of any  Subsidiary;
         provided that at the time of creation, assumption or incurrence thereof
         and after giving effect thereto and to the  application of the proceeds
         thereof,  no  Default or Event of Default  shall have  occurred  and be
         continuing;  and provided,  further that the  aggregate  amount of such
         Indebtedness at any time outstanding

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<PAGE>

         (including such Indebtedness existing as of the Closing Date) shall not
         exceed 20% of Consolidated Tangible Net Worth;

                  (f)  Indebtedness  in respect of Capital  Leases and  purchase
         money Indebtedness (other than such Indebtedness  falling within clause
         (i) below) not to exceed the Dollar Equivalent Amount of $50,000,000 in
         the aggregate at any one time outstanding;

                  (g) unsecured intercompany Indebtedness for loans and advances
         made by the Borrower or any Wholly-owned  Subsidiary to the Borrower or
         any   Wholly-owned   Subsidiary,   provided   that  such   intercompany
         Indebtedness  of the  Borrower is  evidenced  by a  promissory  note or
         similar written instrument  acceptable to the Agent which provides that
         such  Indebtedness  is  subordinated  to  obligations,  liabilities and
         undertakings of the holder or owner thereof under the Loan Documents on
         terms acceptable to the Agent;

                  (h) unsecured reimbursement  obligations (including commercial
         letters of credit  which are  secured by  documents)  in respect of any
         surety bonds and letters of credit (other than any Letter of Credit) so
         long  as the sum of (x)  the  maximum  Dollar  Equivalent  Amount  that
         thereafter  could be drawn  under such  letters of credit  (other  than
         Letters of Credit)  plus (y) the  aggregate  Dollar  Equivalent  Amount
         drawn but not  unreimbursed  with respect to all such letters of credit
         does not exceed a Dollar Equivalent Amount of $20,000,000; and

                  (i) Indebtedness  secured by Liens permitted by Section 9.3(g)
         so long  as the  aggregate  amount  of such  Indebtedness  at any  time
         outstanding shall not exceed 15% of Consolidated Net Tangible Assets.

         9.5. Transfer of Assets. Sell, lease,  transfer or otherwise dispose of
any assets of Borrower or any Subsidiary other than:

                   (a) dispositions of inventory and accounts  receivable in the
         ordinary  course of business.  For the purposes of this Section  9.5(a)
         the sale or discount of any receivable for fair value  consistent  with
         industry  custom  and  without  recourse  shall be deemed to be "in the
         ordinary course of business";

                  (b)  dispositions  of  property  that is  substantially  worn,
         damaged,  obsolete or, in the judgment of the Borrower,  no longer best
         used or useful in its business or that of any Subsidiary;

                  (c) transfers of assets  necessary to give effect to merger or
         consolidation transactions permitted by Section 9.7;

                  (d) the  disposition  of Eligible  Securities  in the ordinary
         course of  management of the  investment  portfolio of the Borrower and
         its Subsidiaries;

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<PAGE>

                  (e) any Subsidiary may sell, lease or otherwise dispose of all
         or  any  substantial  part  of  its  assets  to  the  Borrower  or  any
         Wholly-owned Subsidiary; and

                   (f)  the  Borrower  or any  Subsidiary  may  sell,  lease  or
         otherwise  dispose of assets for fair value if such  assets  (valued at
         the  greater of book or fair  market),  when added to all other  assets
         sold,  leased  or  otherwise  disposed  of  by  the  Borrower  and  its
         Subsidiaries (other than in the ordinary course of business) during the
         term of this Agreement, do not exceed 20% of the consolidated assets of
         the  Borrower  and its  Subsidiaries  (determined  as of the end of the
         fiscal  quarter  most  recently  ended  prior  to the  Closing  Date in
         accordance with GAAP),  and also do not contribute more than 20% of the
         consolidated  gross  revenues  of the  Borrower  and  its  Subsidiaries
         (determined  as of the end of the  Four-Quarter  Period  most  recently
         ended prior to the Closing Date in accordance with GAAP); and

                  (g) sales of accounts  receivable in connection with Permitted
         Receivables Securitizations.

         9.6.  Investments.  Purchase,  own,  invest  in or  otherwise  acquire,
directly  or  indirectly,  any stock or other  securities,  or make or permit to
exist any interest  whatsoever  in any other Person or permit to exist any loans
or advances to any Person,  except that  Borrower  may maintain  investments  or
invest in:

                  (a)  securities  of  any  Person  acquired  in an  Acquisition
         permitted hereunder;

                  (b) Eligible Securities;

                  (c)  investments  existing  as of the date  hereof  and as set
         forth in Schedule 7.3;

                  (d) accounts  receivable  arising and trade credit  granted in
         the  ordinary  course  of  business  and  any  securities  received  in
         satisfaction  or  partial   satisfaction  thereof  in  connection  with
         accounts  of  financially  troubled  Persons to the  extent  reasonably
         necessary in order to prevent or limit loss; and

                  (e) investments in Subsidiaries;

                  (f) loans between the Borrower and  Subsidiaries  described in
         Section 9.4(g); and

                  (g) other  loans,  advances  and  investments  in an aggregate
         principal amount at any time outstanding not to exceed $40,000,000.

         9.7. Merger or  Consolidation.  (a) Consolidate  with or merge into any
other  Person,  or (b)  permit  any other  Person to merge into it, or (c) sell,
transfer  or lease or  otherwise  dispose  of all or a  substantial  part of its
assets (other than sales permitted under Section 9.5(a), (b), (d), (e) and (f));
provided,  however, (i) any Subsidiary of the Borrower may merge or transfer all
or

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<PAGE>

substantially  all of its assets into or  consolidate  with the  Borrower or any
Wholly-owned Subsidiary, and (ii) any other Person may merge into or consolidate
with the Borrower or any  Wholly-owned  Subsidiary  and any Subsidiary may merge
into or consolidate with any other Person,  in each event in order to consummate
an Acquisition permitted by Section 9.2, provided further, that any resulting or
surviving  entity shall execute and deliver such agreements and other documents,
and take such other  action as the Agent may  require to evidence or confirm its
express  assumption  of the  obligations  and  liabilities  of  its  predecessor
entities under the Loan Documents.

         9.8. Restricted  Payments.  Make any Restricted Payment or apply or set
apart any of their assets  therefor or agree to do any of the  foregoing  unless
immediately  preceding and  immediately  after giving effect to such  Restricted
Payment there exists no Default or Event of Default hereunder.

         9.9.  Transactions with Affiliates.  Other than transactions  permitted
under Sections 9.6 and 9.7, enter into any  transaction  after the Closing Date,
including,  without  limitation,  the  purchase,  sale,  lease  or  exchange  of
property,  real or personal, or the rendering of any service, with any Affiliate
of the  Borrower,  except  (a) that such  Persons  may  render  services  to the
Borrower or its  Subsidiaries  for compensation at the same rates generally paid
by Persons  engaged in the same or  similar  businesses  for the same or similar
services,  (b) that the Borrower or any Subsidiary  may render  services to such
Persons for compensation at the same rates generally  charged by the Borrower or
such  Subsidiary  and (c) in either case in the ordinary  course of business and
pursuant to the reasonable  requirements of the Borrower's (or any Subsidiary's)
business  consistent with past practice of the Borrower and its Subsidiaries and
upon  fair  and  reasonable  terms no less  favorable  to the  Borrower  (or any
Subsidiary) than would be obtained in a comparable arm's-length transaction with
a Person not an Affiliate.

         9.10.  Compliance  with ERISA,  the Code and Foreign Benefit Laws. With
respect to any Pension Plan, Employee Benefit Plan or Multiemployer Plan:

                  (a) permit the occurrence of any Termination Event which would
         result  in a  liability  on the  part  of  the  Borrower  or any  ERISA
         Affiliate to the PBGC or to any Governmental Authority; or

                  (b) permit the present value of all benefit  liabilities under
         all  Pension  Plans to exceed the  current  value of the assets of such
         Pension Plans allocable to such benefit liabilities; or

                  (c) permit any accumulated  funding  deficiency (as defined in
         Section 302 of ERISA and  Section 412 of the Code) with  respect to any
         Pension Plan, whether or not waived; or

                  (d)  fail  to  make  any   contribution   or  payment  to  any
         Multiemployer  Plan which the  Borrower or any ERISA  Affiliate  may be
         required to make under any  agreement  relating  to such  Multiemployer
         Plan, or any law pertaining thereto; or

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<PAGE>

                  (e) engage,  or permit any Borrower or any ERISA  Affiliate to
         engage,  in any  prohibited  transaction  under Section 406 of ERISA or
         Sections 4975 of the Code for which a civil penalty pursuant to Section
         502(I) of ERISA or a tax  pursuant  to Section  4975 of the Code may be
         imposed in a material amount; or

                  (f) permit the  establishment  of any  Employee  Benefit  Plan
         providing post-  retirement  welfare benefits or establish or amend any
         Employee Benefit Plan which  establishment or amendment could result in
         material  liability to the Borrower or any ERISA  Affiliate or increase
         the   obligation   of  the  Borrower  or  any  ERISA   Affiliate  to  a
         Multiemployer Plan; or

                  (g) fail,  or permit the  Borrower or any ERISA  Affiliate  to
         fail, to establish,  maintain and operate each Employee Benefit Plan in
         compliance in all material  respects with the provisions of ERISA,  the
         Code, all applicable Foreign Benefit Laws and all other applicable laws
         and the regulations and interpretations thereof.

         9.11. Fiscal Year. Change its Fiscal Year more than one time during the
term of this Agreement.

         9.12. Dissolution,  etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily)  or commence or suffer any  proceedings  seeking any such winding
up,  liquidation  or  dissolution,   except  in  connection  with  a  merger  or
consolidation permitted pursuant to Section 9.7.

         9.13. Change in Control.  Cause, suffer or permit to exist or occur any
Change of Control.

         9.14.  Restrictive  Agreements,  etc..  Enter into or cause,  suffer or
permit to exist  any  agreement  with any  Person  other  than the Agent and the
Lenders  pursuant to this Agreement or any other Loan Documents  which prohibits
or limits (a) the  ability of the  Borrower  to amend or  otherwise  modify this
Agreement  or any other Loan  Document or (b) the ability of any  Subsidiary  to
make any payments,  directly or indirectly, to the Borrower by way of dividends,
advances,  repayments of loans or advances,  reimbursements  of  management  and
other  intercompany   charges,   expenses  and  accruals  or  other  returns  on
investments,  or any other agreement or arrangement  which restricts the ability
of any such Subsidiary to make any such payment,  directly or indirectly, to the
Borrower.

         9.15. Issuance or Sale of Stock by Subsidiaries.  The Borrower will not
permit any  Subsidiary to issue or sell any shares of capital stock of any class
(including  as  "capital  stock" for the  purposes  of this  Section  9.15,  any
warrants,  rights or options to purchase or otherwise  acquire  capital stock or
other  securities  exchangeable  for or convertible  into capital stock) of such
Subsidiary to any Person other than the Borrower or a  Wholly-owned  Subsidiary,
except for the purpose of qualifying directors, or except in satisfaction of the
validly  pre-existing  preemptive rights of minority  shareholders in connection
with  the  simultaneous  issuance  of  capital  stock to the  Borrower  and/or a
Wholly-owned Subsidiary whereby the Borrower and/or such Wholly-owned Subsidiary
maintain their same proportionate interests in such Subsidiary.

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<PAGE>

         9.16.  Sale of Stock  in  Subsidiaries.  The  Borrower  will not  sell,
transfer or otherwise  dispose of any shares of capital stock in any  Subsidiary
(except to qualify  directors) or any  Indebtedness of any Subsidiary,  and will
not permit any Subsidiary to sell,  transfer or otherwise  dispose of (except to
the Borrower or a  Wholly-owned  Subsidiary)  any shares of capital stock or any
Indebtedness of any other Subsidiary, unless:

                  (a) there shall not exist any violation of Sections 9.5 or 9.7
         either  immediately  prior to, or  immediately  after giving effect to,
         such sale, transfer or disposition;

                  (b) simultaneously with such sale,  transfer,  or disposition,
         all shares of capital stock and all  Indebtedness of such Subsidiary at
         the time owned by the Borrower and by every other  Subsidiary  shall be
         sold, transferred or disposed of as an entirety;

                  (c)  the  Board  of  Directors  of  the  Borrower  shall  have
         determined, as evidenced by a resolution thereof, that the retention of
         such capital stock and  Indebtedness is no longer in the best interests
         of the Borrower;

                  (d) such capital stock and  Indebtedness is sold,  transferred
         or  otherwise  disposed  of to a  Person,  for fair  value and on terms
         reasonably  deemed  by  the  Board  of  Directors  to be  adequate  and
         satisfactory; and

                  (e) the  Subsidiary  being  disposed  of  shall  not  have any
         continuing investment in the Borrower or any other Subsidiary not being
         simultaneously disposed of.
 .

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                                    ARTICLE X

                       Events of Default and Acceleration

         10.1.  Events of Default.  If any one or more of the  following  events
(herein called "Events of Default")  shall occur for any reason  whatsoever (and
whether such  occurrence  shall be voluntary or  involuntary or come about or be
effected by operation of law or pursuant to or in compliance  with any judgment,
decree  or  order  of  any  court  or  any  order,  rule  or  regulation  of any
Governmental Authority), that is to say:

                  (a) if default  shall be made in the due and punctual  payment
         of the  principal  of  any  Loan,  Reimbursement  Obligation  or  other
         Obligation,  when and as the  same  shall  be due and  payable  whether
         pursuant to any  provision  of Article II or Article III or Article IV,
         at maturity, by acceleration or otherwise; or

                  (b) if default  shall be made in the due and punctual  payment
         of any amount of  interest  on any Loan,  Reimbursement  Obligation  or
         other  Obligation or of any fees or other amounts payable to any of the
         Lenders or the Agent  within three  Business  Days of the date on which
         the same shall be due and payable; or

                  (c) if default shall be made in the  performance or observance
         of any covenant set forth in Section 8.8, 8.12, 8.13, or Article IX;

                  (d)  if  a  default  shall  be  made  in  the  performance  or
         observance  of,  or shall  occur  under,  any  covenant,  agreement  or
         provision  contained  in this  Agreement  or the Notes  (other  than as
         described  in clauses  (a),  (b) or (c) above) and such  default  shall
         continue  for 30 or more days after the earlier of receipt of notice of
         such  default  by the  Authorized  Representative  from the Agent or an
         officer of the Borrower becomes aware of such default,  or if a default
         shall be made in the  performance  or  observance  of,  or shall  occur
         under,  any  covenant,  agreement or provision  contained in any of the
         other  Loan  Documents  (beyond 30 days or any other  applicable  grace
         period contained  therein) or in any instrument or document  evidencing
         or creating any obligation,  guaranty, or Lien in favor of the Agent or
         any of the Lenders or  delivered  to the Agent or any of the Lenders in
         connection   with  or  pursuant  to  this   Agreement  or  any  of  the
         Obligations,  or if any Loan  Document  ceases to be in full  force and
         effect (other than as expressly provided for hereunder or thereunder or
         with the  express  written  consent of the  Agent),  or if without  the
         written  consent  of the  Lenders,  this  Agreement  or any other  Loan
         Document shall be disaffirmed or shall  terminate,  be terminable or be
         terminated or become void or  unenforceable  for any reason  whatsoever
         (other than as expressly  provided for  hereunder or thereunder or with
         the express written consent of the Agent); or

                  (e) if there shall  occur (i) a default,  which is not waived,
         in the payment of any principal, interest, premium or other amount with
         respect  to  any   Indebtedness   (other   than  the  Loans  and  other
         Obligations) of the Borrower or any Material Subsidiary in an

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<PAGE>

         amount not less than $5,000,000 in the aggregate outstanding, or (ii) a
         default,  which  is not  waived,  in  the  performance,  observance  or
         fulfillment  of any term or  covenant  contained  in any  agreement  or
         instrument  under or pursuant to which any such  Indebtedness  may have
         been issued, created, assumed, guaranteed or secured by the Borrower or
         any  Material  Subsidiary,  or (iii)  any  other  event of  default  as
         specified in any agreement or instrument under or pursuant to which any
         such Indebtedness may have been issued, created, assumed, guaranteed or
         secured by the Borrower or any Material Subsidiary, and such default or
         event of default shall  continue for more than the period of grace,  if
         any,  therein  specified,  or such  default or event of  default  shall
         permit  the  holder of any such  Indebtedness  (or any agent or trustee
         acting on behalf of one or more  holders) to  accelerate  the  maturity
         thereof; or

                  (f) if any representation, warranty or other statement of fact
         contained in any Loan Document or in any writing,  certificate,  report
         or statement at any time  furnished to the Agent or any Lender by or on
         behalf  of the  Borrower  pursuant  to or in  connection  with any Loan
         Document,  or  otherwise,  shall be false or misleading in any material
         respect when given; or

                  (g) if the Borrower or any Material Subsidiary shall be unable
         to pay its debts  generally as they become due; file a petition to take
         advantage of any insolvency statute; make an assignment for the benefit
         of its  creditors;  commence  a  proceeding  for the  appointment  of a
         receiver,  trustee, liquidator or conservator of itself or of the whole
         or any  substantial  part of its  property;  file a petition  or answer
         seeking  liquidation,  reorganization  or arrangement or similar relief
         under  the  federal  bankruptcy  laws or any  other  applicable  law or
         statute; or

                  (h) if a court of competent jurisdiction shall enter an order,
         judgment  or  decree   appointing  a  custodian,   receiver,   trustee,
         liquidator or conservator of the Borrower or any Material Subsidiary or
         of the whole or any substantial  part of its properties and such order,
         judgment  or decree  continues  unstayed  and in effect for a period of
         sixty (60) days,  or approve a petition  filed  against the Borrower or
         any  Material   Subsidiary  seeking   liquidation,   reorganization  or
         arrangement or similar relief under the federal  bankruptcy laws or any
         other  applicable law or statute of the United States of America or any
         state,  which petition is not dismissed  within sixty (60) days; or if,
         under the provisions of any other law for the relief or aid of debtors,
         a court of competent  jurisdiction  shall assume  custody or control of
         the  Borrower  or  any  Material  Subsidiary  or of  the  whole  or any
         substantial  part of its properties,  which control is not relinquished
         within sixty (60) days;  or if there is commenced  against the Borrower
         or  any  Material   Subsidiary  any  proceeding  or  petition   seeking
         reorganization,   arrangement  or  similar  relief  under  the  federal
         bankruptcy  laws or any other  applicable  law or statute of the United
         States of America or any state which  proceeding  or  petition  remains
         undismissed  for a period of sixty (60) days; or if the Borrower or any
         Material  Subsidiary  takes any action to  indicate  its  consent to or
         approval of any such proceeding or petition; or

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<PAGE>

                  (i) if (i) one or more  judgments  or orders  where the amount
         not covered by insurance (or the amount as to which the insurer  denies
         liability) is in excess of $5,000,000 is rendered  against the Borrower
         or any  Subsidiary,  or (ii)  there is any  attachment,  injunction  or
         execution against any of the Borrower's or Subsidiaries' properties for
         any amount in excess of $5,000,000 in the aggregate; and such judgment,
         attachment,   injunction  or  execution   remains   unpaid,   unstayed,
         undischarged, unbonded or undismissed for a period of thirty (30) days;
         or

                  (j) if the Borrower or any Subsidiary shall, other than in the
         ordinary course of business (as determined by past practices),  suspend
         all or any  part  of its  operations  material  to the  conduct  of the
         business of the Borrower or such  Subsidiary  for a period of more than
         60 days;

then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived,

                           (A) either or both of the  following  actions  may be
                  taken: (i) the Agent may, and at the direction of the Required
                  Lenders  shall,  declare any obligation of the Lenders and the
                  Issuing  Banks to make  further  Loans or to issue  additional
                  Letters of Credit terminated, whereupon the obligation of each
                  Lender to make further Loans and of the Issuing Banks to issue
                  additional  Letters  of  Credit,   hereunder  shall  terminate
                  immediately,  and (ii) the Agent shall at the direction of the
                  Required  Lenders,  at their option,  declare by notice to the
                  Borrower any or all of the  Obligations to be immediately  due
                  and payable,  and the same,  including  all  interest  accrued
                  thereon and all other obligations of the Borrower to the Agent
                  and the Lenders,  shall forthwith  become  immediately due and
                  payable without presentment,  demand, protest, notice or other
                  formality  of any  kind,  all of which  are  hereby  expressly
                  waived,   anything  contained  herein  or  in  any  instrument
                  evidencing the  Obligations  to the contrary  notwithstanding;
                  provided,  however,  that  notwithstanding the above, if there
                  shall occur an Event of Default under clause (g) or (h) above,
                  then the  obligation  of the  Lenders to make Loans and of the
                  Issuing  Banks to issue  Letters  of  Credit  hereunder  shall
                  automatically  terminate  and any  and all of the  Obligations
                  shall be immediately  due and payable without the necessity of
                  any action by the Agent or the  Required  Lenders or notice to
                  the Agent or the Lenders;

                           (B) The Borrower  shall,  upon demand of the Agent or
                  the Required Lenders, deposit cash with the Agent in an amount
                  equal to the amount of any Letter of Credit  Outstandings,  as
                  collateral  security for the repayment of any future  drawings
                  or payments  under such  Letters of Credit,  and such  amounts
                  shall be held by the  Agent  pursuant  to the  terms of the LC
                  Account Agreement; and

                           (C) the Agent and each of the Lenders  shall have all
                  of the rights and remedies  available under the Loan Documents
                  or under any applicable law.

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<PAGE>

         10.2.  Agent to Act.  In case any one or more  Events of Default  shall
occur and not have been  waived,  the Agent  may,  and at the  direction  of the
Required Lenders shall,  proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both,  whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan  Document,  or to enforce the payment of the  Obligations  or any
other legal or equitable right or remedy.

         10.3.  Cumulative  Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained  herein or in any other Loan Document,  and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.

         10.4.  No Waiver.  No course of dealing  between the  Borrower  and any
Lender or the  Agent or any  failure  or delay on the part of any  Lender or the
Agent in exercising  any rights or remedies under any Loan Document or otherwise
available  to it shall  operate  as a waiver of any  rights or  remedies  and no
single or partial  exercise of any rights or remedies  shall operate as a waiver
or preclude  the  exercise of any other  rights or remedies  hereunder or of the
same right or remedy on a future occasion.

         10.5.  Allocation of Proceeds.  If an Event of Default has occurred and
not been waived, and the maturity of the Notes has been accelerated  pursuant to
Article X hereof,  all payments  received by the Agent hereunder,  in respect of
any principal of or interest on the  Obligations or any other amounts payable by
the Borrower hereunder, shall be applied by the Agent in the following order:

                  (a) amounts due to the Lenders and the Applicable Issuing Bank
         pursuant to Sections 4.7(a), 4.7(b), 4.7(c), 4.7(d), 4.7(e) and 12.5;

                  (b)  amounts  due to the Agent  pursuant  to  Section  4.7(f);

                  (c)   payments  of   interest   on  Loans  and   Reimbursement
         Obligations, to be applied for the ratable benefit of the Lenders;

                  (d)  payments  of   principal   of  Loans  and   Reimbursement
         Obligations, to be applied for the ratable benefit of the Lenders;

                  (e)  payments  of cash  amounts  to the  Agent in  respect  of
         outstanding   Letters   of  Credit   pursuant   to   Section   10.1(B);

                  (f) amounts due to the Applicable  Issuing Bank, the Agent and
         the Lenders pursuant to Sections 3.2(h) and 12.9;

                  (g)  payments  of all other  amounts due under any of the Loan
         Documents,  if any,  to be  applied  for  the  ratable  benefit  of the
         Lenders; and

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<PAGE>

                  (h) any surplus  remaining  after  application as provided for
         herein,  to the Borrower or otherwise as may be required by  applicable
         law.

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<PAGE>

                                   ARTICLE XI

                                    The Agent

         11.1.   Appointment,   Powers,  and  Immunities.   Each  Lender  hereby
irrevocably  appoints  and  authorizes  the Agent to act as its agent under this
Agreement and the other Loan  Documents  with such powers and  discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Loan  Documents,  together with such other powers as are  reasonably  incidental
thereto.  The Agent (which term as used in this sentence and in Section 11.5 and
the first  sentence of Section 11.6 hereof shall include its  affiliates and its
own and its affiliates' officers, directors, employees, and agents):

                   (a) shall  not have any  duties  or  responsibilities  except
         those  expressly set forth in this Agreement and shall not be a trustee
         or fiduciary for any Lender;

                  (b) shall not be  responsible  to the Lenders for any recital,
         statement,  representation,  or warranty (whether written or oral) made
         in or in connection  with any Loan Document or any certificate or other
         document  referred  to or  provided  for in, or received by any of them
         under, any Loan Document,  or for the value,  validity,  effectiveness,
         genuineness,  enforceability,  or sufficiency of any Loan Document,  or
         any other  document  referred  to or  provided  for  therein or for any
         failure  by the  Borrower  or any other  Person to  perform  any of its
         obligations thereunder;

                  (c)  shall  not  be  responsible  for  or  have  any  duty  to
         ascertain, inquire into, or verify the performance or observance of any
         covenants  or  agreements  by the Borrower or the  satisfaction  of any
         condition or to inspect the property  (including the books and records)
         of the Borrower or any of its Subsidiaries or affiliates;

                  (d)  shall  not  be   required  to  initiate  or  conduct  any
         litigation or collection  proceedings under any Loan Document except as
         directed by and together with the Required Lenders; and

                  (e) shall not be  responsible  for any action taken or omitted
         to be taken by it under or in connection with any Loan Document, except
         for its own gross negligence or willful misconduct.

The Agent may employ agents and  attorneys-in-fact  and shall not be responsible
for the  negligence  or  misconduct  of any  such  agents  or  attorneys-in-fact
selected by it with reasonable care.

         11.2.  Reliance by Agent.  The Agent shall be entitled to rely upon any
certification,  notice, instrument,  writing, or other communication (including,
without limitation, any thereof by telephone or telefacsimile) believed by it to
be genuine and correct and to have been signed,  sent or made by or on behalf of
the proper  Person or Persons,  and upon advice and  statements of legal counsel
(including counsel for the Borrower or its Subsidiaries), independent

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<PAGE>

accountants,  and other  experts  selected by the Agent.  The Agent may deem and
treat the payee of any Note as the holder thereof for all purposes hereof unless
and until the Agent receives and accepts an Assignment  and Acceptance  executed
in accordance with Section 12.1 hereof. As to any matters not expressly provided
for by  this  Agreement,  the  Agent  shall  not be  required  to  exercise  any
discretion  or take any action,  but shall be required to act or to refrain from
acting (and shall be fully  protected  in so acting or  refraining  from acting)
upon the instructions of the Required Lenders,  and such  instructions  shall be
binding on all of the Lenders;  provided,  however,  that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to any Loan Document or  applicable  law or unless it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking any such action.

         11.3.  Defaults.  The Agent  shall not be deemed to have  knowledge  or
notice of the  occurrence of a Default or Event of Default  unless the Agent has
received written notice from a Lender or the Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of  Default".  In the
event that the Agent  receives  such a notice of the  occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall  (subject to Section  11.2  hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders,  provided  that,  unless and until the Agent shall have  received  such
directions,  the Agent may (but shall not be obligated to) take such action,  or
refrain  from  taking  such  action,  with  respect to such  Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.

         11.4.  Rights as Lender.  With respect to its Tranche A Commitment  and
Tranche B  Commitment  and the Loans made by it and Letters of Credit  issued by
it, Bank of America  (and any  successor  acting as Agent) in its  capacity as a
Lender  hereunder  shall have the same rights and powers  hereunder as any other
Lender and may exercise the same as though it were not acting as the Agent,  and
the term "Lender" or "Lenders" shall,  unless the context  otherwise  indicates,
include the Agent in its individual capacity. Bank of America (and any successor
acting as Agent) and its affiliates may (without  having to account  therefor to
any Lender) accept  deposits from,  lend money to, make  investments in, provide
services  to,  and  generally  engage in any kind of  lending,  trust,  or other
business  with the Borrower or any of its  Subsidiaries  or  affiliates as if it
were not  acting as Agent,  and Bank of  America  (and any  successor  acting as
Agent) and its  affiliates  may  accept  fees and other  consideration  from the
Borrower or any of its  Subsidiaries  or  affiliates  for services in connection
with this  Agreement or otherwise  without having to account for the same to the
Lenders.

         11.5. Indemnification. The Lenders agree to indemnify the Agent (to the
extent not  reimbursed  under  Section  12.9  hereof,  but without  limiting the
obligations of the Borrower under such Section) ratably in accordance with their
respective  Tranche A  Commitments  and Tranche B  Commitments,  for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses (including reasonable attorneys' fees), or disbursements of any
kind and nature  whatsoever  that may be imposed  on,  incurred  by or  asserted
against the Agent  (including  by any Lender) in any way  relating to or arising
out of any Loan Document or the transactions  contemplated thereby or any action
taken or omitted by the Agent under any

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<PAGE>

Loan Document;  provided that no Lender shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful  misconduct of the
Person to be  indemnified.  Without  limitation  of the  foregoing,  each Lender
agrees to reimburse the Agent  promptly upon demand for its ratable share of any
costs or expenses payable by the Borrower under Section 12.5, to the extent that
the  Agent  is not  promptly  reimbursed  for such  costs  and  expenses  by the
Borrower. The agreements contained in this Section 11.5 shall survive payment in
full of the Loans and all other amounts payable under this Agreement.

         11.6.  Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed  appropriate,  made its
own credit analysis of the Borrower and its  Subsidiaries  and decision to enter
into this Agreement and that it will,  independently  and without  reliance upon
the Agent or any other Lender, and based on such documents and information as it
shall  deem  appropriate  at the time,  continue  to make its own  analysis  and
decisions in taking or not taking  action under the Loan  Documents.  Except for
notices,  reports, and other documents and information  expressly required to be
furnished  to the Lenders by the Agent  hereunder,  the Agent shall not have any
duty  or  responsibility  to  provide  any  Lender  with  any  credit  or  other
information  concerning  the affairs,  financial  condition,  or business of the
Borrower  or any of its  Subsidiaries  or  affiliates  that  may  come  into the
possession of the Agent or any of its affiliates.

         11.7.  Resignation of Agent. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower.  Upon any such resignation,  the
Required Lenders (with the Borrower's consent) shall have the right to appoint a
successor  Agent.  If no  successor  Agent shall have been so  appointed  by the
Required  Lenders and shall have  accepted such  appointment  within thirty (30)
days  after the  retiring  Agent's  giving of  notice of  resignation,  then the
retiring  Agent may, on behalf of the Lenders,  appoint a successor  Agent which
shall be a  commercial  bank  organized  under the laws of the United  States of
America having combined capital and surplus of at least  $500,000,000.  Upon the
acceptance of any appointment as Agent hereunder by a successor,  such successor
shall  thereupon  succeed  to and become  vested  with all the  rights,  powers,
discretion, privileges, and duties of the retiring Agent, and the retiring Agent
shall be  discharged  from its  duties  and  obligations  hereunder.  After  any
retiring Agent's resignation  hereunder as Agent, the provisions of this Article
XI shall  continue in effect for its benefit in respect of any actions  taken or
omitted to be taken by it while it was acting as Agent.

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<PAGE>

                                   ARTICLE XII

                                  Miscellaneous

         12.1. Assignments and Participations. (a) Each Lender may assign to one
or more Eligible  Assignees all or a portion of its rights and obligations under
this Agreement  (including,  without limitation,  all or a portion of its Loans,
its Tranche A Note,  Tranche B Note,  and its Tranche A Commitment and Tranche B
Commitment); provided, however, that

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

                  (ii) except in the case of an assignment to another  Lender or
an assignment of all of a Lender's rights and obligations  under this Agreement,
any such partial  assignment shall be in an amount at least equal to $10,000,000
or an integral multiple of $1,000,000 in excess thereof;

                  (iii) each such assignment by a Lender shall be of a constant,
and not  varying,  percentage  of all of its rights and  obligations  under this
Agreement  and its Notes  (except  that any  assignment  by a Lender  that is an
Issuing Bank shall not include its rights, benefits or duties as an Issuing Bank
with respect to any Letter of Credit  unless the  beneficiary  of such Letter of
Credit shall have agreed to such assignment); and

         (iii)  each  such  assignment  by a Lender  shall  be the same  ratable
assignment  of such  Lender's  rights and  obligations  under both the Tranche A
Revolving Credit Facility and the Tranche B Revolving Credit Facility; and

                  (iv) the parties to such assignment  shall execute and deliver
to the Agent for its  acceptance  an  Assignment  and  Acceptance in the form of
Exhibit B hereto, together with any Tranche A Note and Tranche B Note subject to
such assignment and a processing fee of $3,500.

Upon execution,  delivery, and acceptance of such Assignment and Acceptance, the
assignee  thereunder  shall  be a  party  hereto  and,  to the  extent  of  such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning  Lender shall,  to the extent of such  assignment,  relinquish its
rights and be  released  from its  obligations  under this  Agreement.  Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrower shall make appropriate  arrangements so that, if required,  new
Notes are  issued to the  assignor  and the  assignee.  If the  assignee  is not
incorporated  under the laws of the United States of America or a state thereof,
it shall  deliver to the  Borrower and the Agent  certification  as to exemption
from deduction or withholding of Taxes in accordance with Section 5.6.

         (b) The Agent shall maintain at its address referred to in Section 12.2
a copy of each  Assignment and Acceptance  delivered to and accepted by it and a
register for the  recordation  of the names and addresses of the Lenders and the
Tranche A Commitment  and Tranche B Commitment  of, and principal  amount of the
Loans owing to, each Lender from time to time (the  "Register").  The entries in
the Register shall be conclusive and binding for all purposes, absent

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<PAGE>

manifest  error,  and the  Borrower,  the Agent and the  Lenders  may treat each
Person  whose name is recorded in the  Register  as a Lender  hereunder  for all
purposes of this  Agreement.  The Register  shall be available for inspection by
the  Borrower  or any Lender at any  reasonable  time and from time to time upon
reasonable prior notice.

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

         (d) Each Lender may sell  participations  to one or more Persons in all
or a portion of its rights,  obligations  or rights and  obligations  under this
Agreement  (including all or a portion of its Tranche A Commitment and Tranche B
Commitment or its Loans); provided,  however, that (i) such Lender's obligations
under this  Agreement  shall  remain  unchanged,  (ii) such Lender  shall remain
solely  responsible  to the other  parties  hereto for the  performance  of such
obligations, (iii) the participant shall be entitled to the benefit of the yield
protection  provisions contained in Article V to the same extent that the Lender
selling such participation is entitled to such yield protection and the right of
set-off  contained in Section 12.3, and (iv) the Borrower shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the  obligations of the Borrower  relating to its Loans and its Note and
to approve  any  amendment,  modification,  or waiver of any  provision  of this
Agreement  (other than  amendments,  modifications,  or waivers  decreasing  the
amount of principal of or the rate at which interest is payable on such Loans or
Note,  extending  any  scheduled  principal  payment  date or date fixed for the
payment of interest on such Loans or Note, or extending its Tranche A Commitment
or Tranche B Commitment).

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

         (f) Without  limitation of the terms of Section  12.16,  any Lender may
furnish any  information  concerning the Borrower or any of its  Subsidiaries in
the  possession of such Lender from time to time to assignees  and  participants
(including prospective assignees and participants).

         (g) Whenever in this  Agreement  any of the parties  hereto is referred
to, such  reference  shall be deemed to include  the  successors  and  permitted
assigns of such party and all  covenants,  provisions  and  agreements  by or on
behalf of the Borrower which are contained in the Loan Documents  shall inure to
the benefit of the successors and permitted  assigns of the Agent,  the Lenders,
or any of them.  The Borrower may not assign or otherwise  transfer to any other
Person any  right,  power,  benefit,  or  privilege  (or any  interest  therein)
conferred hereunder

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<PAGE>

or under  any of the  other  Loan  Documents,  or  delegate  (by  assumption  or
otherwise)  to any other  Person  any duty,  obligation,  or  liability  arising
hereunder  or under  any of the other  Loan  Documents,  and any such  purported
assignment, delegation or other transfer shall be void.

         12.2.  Notices.  Any notice shall be  conclusively  deemed to have been
received by any party hereto and be effective (i) on the day on which  delivered
(including hand delivery by commercial  courier  service) to such party (against
receipt  therefor),  (ii) on the date of transmission to such party, in the case
of notice by  telefacsimile  (where the proper  transmission  of such  notice is
either  acknowledged  by  the  recipient  or  electronically  confirmed  by  the
transmitting  device), or (iii) on the fifth Business Day after the day on which
mailed to such party,  if sent prepaid by certified or registered  mail,  return
receipt  requested,  in each case delivered,  transmitted or mailed, as the case
may be, to the address or telefacsimile number, as appropriate,  set forth below
or such other address or number as such party shall specify by notice hereunder:

                  (a)      if to the Borrower:

                           Kellwood Company
                           600 Kellwood Parkway
                           Chesterfield, Missouri 63017
                           Attn: Legal Department/Corporate Secretary
                           Telephone:       (314) 576-3100
                           Telefacsimile: (314) 576-3388

                  (b)      if to the Agent:

                           Bank of America, N.A.
                           101 North Tryon Street, 15th Floor
                           NC1-001-15-04
                           Charlotte, North Carolina  28255
                           Attention: Agency Services
                           Telephone:       (704) 386-9368
                           Telefacsimile:            (704) 409-0012

                           with a copy to:

                           Bank of America, N.A.
                           Apparel-Textiles-Furnishings
                           100 North Tryon Street
                           NC1-007-17-12
                           Charlotte, North Carolina 28255
                           Attention: Deirdre B. Doyle
                           Telephone:       (704) 386-0783
                           Telefacsimile:            (704) 386-1270

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<PAGE>

                  (c)      if to the Lenders:

                           At the  addresses  set forth on the  signature  pages
                           hereof and on the signature  page of each  Assignment
                           and Acceptance.

         12.3. Right of Set-off; Adjustments. (a) Upon the occurrence and during
the  continuance  of  any  Event  of  Default,  each  Lender  (and  each  of its
affiliates)  is  hereby  authorized  at any time and from  time to time,  to the
fullest  extent  permitted  by law,  to set off and apply  any and all  deposits
(general or special, time or demand,  provisional or final) at any time held and
other  indebtedness  at any time owing by such Lender (or any of its affiliates)
to or for the credit or the account of the  Borrower  against any and all of the
obligations  of the Borrower now or hereafter  existing under this Agreement and
the Note held by such  Lender,  irrespective  of whether  such Lender shall have
made any demand under this Agreement or such Note and although such  obligations
may be unmatured.  Each Lender agrees  promptly to notify the Borrower after any
such set-off and application made by such Lender;  provided,  however,  that the
failure to give such notice  shall not affect the  validity of such  set-off and
application.  The rights of each Lender  under this Section 12.3 are in addition
to other rights and remedies  (including,  without  limitation,  other rights of
set-off) that such Lender may have.

         (b) If any Lender (a "benefitted Lender") shall at any time receive any
payment of all or part of the Loans owing to it, or interest thereon, or receive
any collateral in respect  thereof  (whether  voluntarily or  involuntarily,  by
set-off,  or  otherwise),  in a greater  proportion  than any such payment to or
collateral  received  by any other  Lender,  if any,  in  respect  of such other
Lender's Loans owing to it, or interest  thereon,  such benefitted  Lender shall
purchase  for cash  from the  other  Lenders a  participating  interest  in such
portion of each such other  Lender's  Loans owing to it, or shall  provide  such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be  necessary  to cause  such  benefitted  Lender to share  the  excess
payment or benefits of such  collateral  or  proceeds  ratably  with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter  recovered  from such  benefitted  Lender,  such purchase
shall be rescinded,  and the purchase price and benefits returned, to the extent
of such recovery,  but without interest.  The Borrower agrees that any Lender so
purchasing a  participation  from a Lender pursuant to this Section 12.3 may, to
the  fullest  extent  permitted  by law,  exercise  all of its rights of payment
(including the right of set- off) with respect to such participation as fully as
if such  Person were the direct  creditor of the  Borrower in the amount of such
participation.

         12.4.  Survival.   All  covenants,   agreements,   representations  and
warranties  made herein shall survive the making by the Lenders of the Loans and
the  issuance of the  Letters of Credit and the  execution  and  delivery to the
Lenders of this  Agreement  and the Notes and shall  continue  in full force and
effect so long as any of  Obligations  remain  outstanding or any Lender has any
Tranche A  Commitment  or Tranche B  Commitment  hereunder  or the  Borrower has
continuing obligations hereunder unless otherwise provided herein.

         12.5.  Expenses.  The  Borrower  agrees to pay on demand  all costs and
expenses  of  the  Agent  in  connection  with  the  syndication,   preparation,
execution, delivery, administration,

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<PAGE>

modification, and amendment of this Agreement, the other Loan Documents, and the
other documents to be delivered hereunder,  including,  without limitation,  the
reasonable  fees and  expenses of counsel for the Agent  (including  the cost of
internal counsel) with respect thereto and with respect to advising the Agent as
to its  rights  and  responsibilities  under the Loan  Documents.  The  Borrower
further  agrees to pay on demand  all  costs and  expenses  of the Agent and the
Lenders, if any (including,  without limitation,  reasonable attorneys' fees and
expenses and the cost of internal  counsel),  in connection with the enforcement
(whether  through  negotiations,  legal  proceedings,  or otherwise) of the Loan
Documents and the other documents to be delivered hereunder.

         12.6.  Amendments  and Waivers.  Any provision of this Agreement or any
other Loan Document may be amended or waived if, but only if, such  amendment or
waiver is in writing  and is signed by the  Borrower  and  either  the  Required
Lenders or (as to Loan Documents  other than the Credit  Agreement) the Agent on
behalf of the Required  Lenders  (and,  if Article XI or the rights or duties of
the Agent are affected thereby,  by the Agent);  provided that no such amendment
or waiver shall,  unless  signed by all the Lenders,  (i) increase the Tranche A
Commitments  or Tranche B  Commitments  of the  Lenders  or the Total  Tranche A
Commitment or the Total  Tranche B  Commitment,  (ii) reduce the principal of or
rate of interest  on any Loan or any fees or other  amounts  payable  hereunder,
(iii)  postpone any date fixed for the payment of any scheduled  installment  of
principal  of or  interest  on any  Loan or any fees or  other  amounts  payable
hereunder  or  for  termination  of  any  Tranche  A  Commitment  or  Tranche  B
Commitment, or (iv) change the percentage of the Tranche A Commitment or Tranche
B Commitment or of the unpaid  principal  amount of the Notes,  or the number of
Lenders,  which  shall be  required  for the  Lenders or any of them to take any
action  under this Section 12.6 or any other  provision of this  Agreement;  and
provided,  further,  that no such  amendment  or waiver that affects the rights,
privileges or  obligations  of each Issuing Bank as issuer of Letters of Credit,
shall be effective unless signed in writing by each Issuing Bank.

         No notice to or demand on the  Borrower  in any case shall  entitle the
Borrower  to any  other  or  further  notice  or  demand  in  similar  or  other
circumstances,  except  as  otherwise  expressly  provided  herein.  No delay or
omission on any Lender's or the Agent's part in exercising any right,  remedy or
option shall operate as a waiver of such or any other right, remedy or option or
of any Default or Event of Default.

         12.7.  Counterparts.  This  Agreement  may be executed in any number of
counterparts,  each of which when so executed and  delivered  shall be deemed an
original,  and it shall not be necessary  in making  proof of this  Agreement to
produce or account for more than one such fully- executed counterpart.

         12.8.  Termination.  The termination of this Agreement shall not affect
any rights of the  Borrower,  the Lenders or the Agent or any  obligation of the
Borrower,  the Lenders or the Agent, arising prior to the effective date of such
termination,  and the  provisions  hereof shall  continue to be fully  operative
until all  transactions  entered into or rights created or obligations  incurred
prior to such  termination  have been fully disposed of, concluded or liquidated
and the  Obligations  arising  prior  to or after  such  termination  have  been
irrevocably paid in full. The

                                       89

<PAGE>

rights  granted  to the  Agent for the  benefit  of the  Lenders  under the Loan
Documents  shall  continue  in  full  force  and  effect,   notwithstanding  the
termination of this Agreement,  until all of the  Obligations  have been paid in
full after the  termination  hereof  (other  than  Obligations  in the nature of
continuing  indemnities  or expense  reimbursement  obligations  not yet due and
payable, which shall continue) or the Borrower has furnished the Lenders and the
Agent with an  indemnification  satisfactory  to the Agent and each  Lender with
respect thereto.  Notwithstanding the foregoing, if after receipt of any payment
of all or any part of the Obligations, any Lender is for any reason compelled to
surrender  such payment to any Person  because such payment is  determined to be
void or voidable as a  preference,  impermissible  setoff,  a diversion of trust
funds or for any other reason,  this Agreement  shall continue in full force and
the Borrower shall be liable to, and shall  indemnify and hold the Agent or such
Lender harmless for, the amount of such payment  surrendered  until the Agent or
such Lender shall have been finally and irrevocably paid in full. The provisions
of the foregoing  sentence  shall be and remain  effective  notwithstanding  any
contrary  action  which  may have  been  taken by the  Agent or the  Lenders  in
reliance  upon such  payment,  and any such  contrary  action so taken  shall be
without  prejudice to the Agent or the Lenders'  rights under this Agreement and
shall be deemed to have been  conditioned  upon such payment having become final
and irrevocable.

         12.9. Indemnification; Limitation of Liability. (a) The Borrower agrees
to  indemnify  and hold  harmless  the Agent and each  Lender  and each of their
affiliates and their respective  officers,  directors,  employees,  agents,  and
advisors  (each,  an  "Indemnified  Party") from and against any and all claims,
damages,   losses,   liabilities,   costs,  and  expenses  (including,   without
limitation,  reasonable  attorneys' fees) that may be incurred by or asserted or
awarded  against  any  Indemnified  Party,  in each  case  arising  out of or in
connection with or by reason of (including,  without  limitation,  in connection
with any investigation,  litigation,  or proceeding or preparation of defense in
connection therewith) the Loan Documents,  any of the transactions  contemplated
herein or the actual or proposed  use of the proceeds of the Loans or Letters of
Credit,  except to the extent such claim,  damage,  loss,  liability,  cost,  or
expense is found in a final,  non-appealable  judgment  by a court of  competent
jurisdiction to have resulted from such Indemnified  Party's gross negligence or
willful  misconduct.  In the  case  of an  investigation,  litigation  or  other
proceeding to which the indemnity in this Section 12.9 applies,  such  indemnity
shall be effective whether or not such  investigation,  litigation or proceeding
is brought by the  Borrower,  its  directors,  shareholders  or  creditors or an
Indemnified  Party or any other Person or any  Indemnified  Party is otherwise a
party  thereto  and  whether  or not the  transactions  contemplated  hereby are
consummated.  The  Borrower  agrees  that no  Indemnified  Party  shall have any
liability (whether direct or indirect,  in contract or tort or otherwise) to it,
any of its  Subsidiaries,  or any security holders or creditors  thereof arising
out of, related to or in connection with the transactions  contemplated  herein,
except to the  extent  that such  liability  is found in a final  non-appealable
judgment by a court of competent  jurisdiction  to have  directly  resulted from
such Indemnified  Party's gross negligence or willful  misconduct.  The Borrower
agrees  not to assert any claim  against  the Agent,  any  Lender,  any of their
affiliates,  or  any  of  their  respective  directors,   officers,   employees,
attorneys,  agents,  and  advisers,  on any theory of  liability,  for  special,
indirect,  consequential,  or  punitive  damages  arising  out  of or  otherwise
relating to the Loan Documents,  any of the transactions  contemplated herein or
the actual or proposed use of the proceeds of the Loans.

                                       90

<PAGE>

         (b) Without  prejudice  to the  survival of any other  agreement of the
Borrower hereunder,  the agreements and obligations of the Borrower contained in
this Section  12.9 shall  survive the payment in full of the Loans and all other
amounts payable under this Agreement.

         12.10.  Severability.  If any provision of this  Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties  hereto,  then such provision shall remain in effect with respect to
all parties,  if any, as to whom such provision is neither  illegal nor invalid,
and in any event all other provisions  hereof shall remain effective and binding
on the parties hereto.

         12.11. Entire Agreement.  This Agreement,  together with the other Loan
Documents,  constitutes  the entire  agreement among the parties with respect to
the subject matter hereof and supersedes all previous  proposals,  negotiations,
representations,  commitments  and  other  communications  between  or among the
parties,  both  oral and  written,  with  respect  thereto  (except  that  those
provisions (if any) which by the express terms of the commitment letter dated as
of May 11,  1999,  executed  by  Bank of  America  and BAS and  accepted  by the
Borrower, survive the closing of the Tranche A Revolving Credit Facility and the
Tranche B Revolving Credit Facility, shall survive and continue in effect).

         12.12.  Agreement  Controls.  In the event  that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of this
Agreement,  the terms and  provisions  of this  Agreement  shall  control to the
extent of such conflict.

         12.13.  Usury  Savings  Clause.  Notwithstanding  any  other  provision
herein,  the aggregate  interest rate charged under any of the Notes,  including
all  charges or fees in  connection  therewith  deemed in the nature of interest
under  applicable  law shall not exceed the Highest Lawful Rate (as such term is
defined  below).  If the rate of  interest  (determined  without  regard  to the
preceding  sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined  below),  the  outstanding  amount of the Loans made  hereunder
shall  bear  interest  at the  Highest  Lawful  Rate  until the total  amount of
interest due hereunder  equals the amount of interest  which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect.  In addition,  if when the Loans made hereunder are repaid
in full the total  interest  due  hereunder  (taking  into  account the increase
provided for above) is less than the total  amount of interest  which would have
been due  hereunder if the stated rates of interest set forth in this  Agreement
had at all times  been in  effect,  then to the  extent  permitted  by law,  the
Borrower  shall pay to the Agent for the  benefit of itself  and the  Lenders an
amount  equal to the  difference  between  the amount of  interest  paid and the
amount of interest  which would have been paid if the Highest Lawful Rate had at
all times been in effect.  Notwithstanding the foregoing, it is the intention of
the Lenders and the Borrower to conform  strictly to any applicable  usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which  constitutes  interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled  automatically  and, if previously paid, shall at such
Lender's option be applied to the outstanding amount of the Loans made hereunder
or be refunded to the  Borrower.  As used in this  paragraph,  the term "Highest
Lawful Rate" means the maximum

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<PAGE>

lawful  interest  rate,  if any,  that at any  time or from  time to time may be
contracted  for,  charged,  or received under the laws applicable to such Lender
which are  presently  in effect  or, to the extent  allowed  by law,  under such
applicable  laws  which  may  hereafter  be in effect  and which  allow a higher
maximum nonusurious interest rate than applicable laws now allow.

         12.14. Payments. All principal,  interest, and other amounts to be paid
by the Borrower under this Agreement and the other Loan Documents  shall be paid
to the Agent or the  Applicable  Issuing Bank in  immediately  available  funds,
without  setoff,  deduction  or  counterclaim.  Subject  to  the  definition  of
"Interest Period" herein, whenever any payment under this Agreement or any other
Loan  Document  shall be stated to be due on a day that is not a  Business  Day,
such payment may be made on the next succeeding Business Day, and such extension
of time in such case shall be included in the  computation of interest and fees,
as applicable, and as the case may be.

         12.15. GOVERNING LAW; WAIVER OF JURY TRIAL.

                  (A) THIS  AGREEMENT  AND THE  OTHER  LOAN  DOCUMENTS  SHALL BE
         GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
         NEW YORK APPLICABLE TO CONTRACTS  EXECUTED,  AND TO BE FULLY PERFORMED,
         IN SUCH STATE.

                  (B) THE BORROWER HEREBY  EXPRESSLY AND IRREVOCABLY  AGREES AND
         CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
         TO THIS  AGREEMENT  AND THE  TRANSACTIONS  CONTEMPLATED  HEREIN  MAY BE
         INSTITUTED  IN ANY STATE OR  FEDERAL  COURT  SITTING  IN NEW YORK CITY,
         STATE OF NEW YORK,  UNITED  STATES OF AMERICA AND, BY THE EXECUTION AND
         DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY WAIVES ANY OBJECTION
         THAT IT MAY NOW OR HEREAFTER  HAVE TO THE LAYING OF VENUE IN, OR TO THE
         EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN
         ANY  SUCH  SUIT,   ACTION  OR  PROCEEDING,   AND  THE  BORROWER  HEREBY
         IRREVOCABLY  SUBMITS GENERALLY AND  UNCONDITIONALLY TO THE JURISDICTION
         OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.

                  (C) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
         PERSONAL  SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
         PROCESS IN ANY SUCH SUIT,  ACTION OR  PROCEEDING,  OR BY  REGISTERED OR
         CERTIFIED  MAIL  (POSTAGE  PREPAID)  TO THE  ADDRESS  OF  THE  BORROWER
         PROVIDED IN SECTION  12.2,  OR BY ANY OTHER METHOD OF SERVICE  PROVIDED
         FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.

                  (D)      NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF
         SHALL PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY

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<PAGE>

         SUIT,  ACTION OR  PROCEEDING  ARISING  OUT OF OR  RELATING  TO ANY LOAN
         DOCUMENT IN THE COURTS OF ANY JURISDICTION WHERE THE BORROWER OR ANY OF
         THE  BORROWER'S  PROPERTY  OR ASSETS  MAY BE FOUND OR  LOCATED.  TO THE
         EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH  JURISDICTION,  THE
         BORROWER  HEREBY  IRREVOCABLY  SUBMITS TO THE  JURISDICTION OF ANY SUCH
         COURT AND  EXPRESSLY  WAIVES,  IN RESPECT  OF ANY SUCH SUIT,  ACTION OR
         PROCEEDING,  OBJECTION TO THE EXERCISE OF JURISDICTION  OVER IT AND ITS
         PROPERTY BY ANY SUCH OTHER COURT OR COURTS WHICH NOW OR  HEREAFTER  MAY
         BE AVAILABLE UNDER APPLICABLE LAW.

                  (E) IN ANY  ACTION OR  PROCEEDING  TO  ENFORCE  OR DEFEND  ANY
         RIGHTS  OR  REMEDIES  UNDER  OR  RELATED  TO ANY LOAN  DOCUMENT  OR ANY
         AMENDMENT,  INSTRUMENT,  DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
         THE FUTURE BE DELIVERED IN  CONNECTION  THEREWITH,  THE  BORROWER,  THE
         AGENT  AND  THE  LENDERS  HEREBY  AGREE,  TO THE  EXTENT  PERMITTED  BY
         APPLICABLE LAW, THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE TRIED
         BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY  IRREVOCABLY  WAIVE, TO
         THE EXTENT  PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE
         TO TRIAL BY JURY IN ANY SUCH ACTION, SUIT OR PROCEEDING.

                  (F) THE BORROWER HEREBY  EXPRESSLY WAIVES ANY OBJECTION IT MAY
         HAVE THAT ANY COURT TO WHOSE  JURISDICTION IT HAS SUBMITTED PURSUANT TO
         THE TERMS HEREOF IS AN INCONVENIENT FORUM.

         12.16.  Confidentiality.  The Agent and each  Lender  (each a  "Lending
Party") agrees to keep confidential any information  furnished or made available
to it by the Borrower  pursuant to this Agreement  that is marked  confidential;
provided that nothing  herein shall  prevent any Lending  Party from  disclosing
such  information  (a) to any other  Lending  Party or  affiliate of any Lending
Party, or any officer, director, employee, agent or advisor of any Lending Party
or  affiliate  of any  Lending  Party,  (b) as  required  by any  law,  rule  or
regulation,  (c) upon the order of any court or administrative  agency, (d) upon
the  request or demand of any  regulatory  agency or  authority,  (e) that is or
becomes  available to the public or that is or becomes  available to any Lending
Party other than as a result of a disclosure by any Lending Party  prohibited by
this  Agreement,  (f) in  connection  with any  litigation to which such Lending
Party or any of its  affiliates may be a party,  (g) to the extent  necessary in
connection  with the  exercise of any remedy  under this  Agreement or any other
Loan  Document,  and (h) subject to  provisions  substantially  similar to those
contained  in this  Section  12.16,  to any actual or  proposed  participant  or
assignee.

                                       93

<PAGE>

         12.17.  Special Funding Option.

                  (a) Notwithstanding anything to the contrary contained herein,
         any Lender (for purposes of this Section  12.17,  a "Granting  Lender")
         may grant to a special  purpose  funding  vehicle  (for the purposes of
         this  Section  12.17,  an "SPC") the option to make,  on behalf of such
         Granting  Lender,  all or a portion of the Advances which such Granting
         Lender is obligated to make (a "Funding  Obligation") under the Tranche
         A Revolving  Credit  Facility,  the Tranche B Revolving Credit Facility
         and the Letter of Credit  Facility,  such option to be  exerciseable in
         the sole discretion of the SPC; provided, however, that notwithstanding
         the  granting of such option to the SPC, or the exercise of such option
         by the SPC:

                           (i) such  Granting  Lender's  obligations  under this
                  Agreement  and the  Loan  Documents  shall  remain  unchanged,
                  including without limitation the  indemnification  obligations
                  of the Granting Lender pursuant to Section 11.5 hereof;

                           (ii)  such   Granting   Lender  shall  remain  solely
                  responsible to the other parties hereto for the performance of
                  all Funding Obligations;

                           (iii) the  Borrower  and the Lenders  (other than the
                  Granting  Lender)  shall  continue to deal solely and directly
                  with such  Granting  Lender in  connection  with such Granting
                  Lender's rights and obligations under this Agreement,  and the
                  Agent shall continue to deal directly with the Granting Lender
                  as agent for the SPC with respect to  distribution of payments
                  of principal,  interest and fees,  notices of  Conversion  and
                  Continuation and all other matters;

                           (iv) such Granting Lender shall retain the sole right
                  (x) to enforce the obligations of the Borrower relating to its
                  Loans,  its Notes and its  Participations,  and (y) to approve
                  any amendment, modification or waiver of any provision of this
                  Agreement;

                           (v)  shall  not   constitute   an  assignment  to  or
                  participation  of  such  SPC  of or in the  Granting  Lender's
                  Commitments and Participations and Obligations owing thereto;

                           (vi) such SPC shall not become a Lender hereunder;

                           (vii)  such  SPC  shall  not  become   obligated   or
                  committed to make Advances; and

                           (viii) if such SPC elects not to exercise such option
                  or otherwise fails to make all or any part of an Advance,  the
                  Granting  Lender  shall retain its Funding  Obligation  and be
                  obligated  to make the entire  Advance or any  portion of such
                  Advance not made by such SPC.

                                       94

<PAGE>

                  (b)  Advances  made by an SPC  hereunder  shall be  deemed  to
         satisfy the Funding Obligation and utilize the Tranche A Commitment and
         Tranche B Commitment,  as applicable, of the Granting Lender as if, and
         to the same extent, such Advances were made by such Granting Lender.

                  (c) Each party  hereto  agrees that no SPC shall be liable for
         any  indemnity  or payment  under this  Agreement  for which a Granting
         Lender  would  otherwise  be liable so long as, and to the extent that,
         the Granting Lender provides such indemnity or makes such payment.

                  (d) Notwithstanding anything to the contrary contained in this
         Agreement,  an SPC may  disclose on a  confidential  basis,  subject to
         provisions  substantially  similar to those contained in Section 12.16,
         any  nonpublic  information  relating  to  Advances  made by  such  SPC
         hereunder to any rating agency,  commercial paper dealer or provider of
         any surety or guarantee to such SPC.

                  (e) This  Section  12.17 may not be amended  without the prior
         written  consent of the Granting Lender on behalf of which such SPC has
         made all or any part of its Advances  which remain  outstanding  at the
         time of such amendment.

                         [Signatures on following pages]

                                       95

<PAGE>

         IN WITNESS  WHEREOF,  the parties hereto have caused this instrument to
be made,  executed and delivered by their duly authorized officers as of the day
and year first above written.

                                KELLWOOD COMPANY

                                By:
                                   ---------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                BANK OF AMERICA, N.A.
                                as Agent for the Lenders

                                By:
                                   ---------------------------------------------
                                Name:  Deirdre B. Doyle
                                Title:    Vice President

                                CREDIT AGREEMENT
                             Signature Page 1 of 16

<PAGE>

                                BANK OF AMERICA, N.A.

                                By:
                                   ---------------------------------------------
                                Name:  Deirdre B. Doyle
                                Title:    Vice President

                                Lending Office for Base Rate Loans:
                                         Bank of America, N.A.
                                         101 North Tryon Street, 15th Floor
                                         NC1-001-15-04
                                         Charlotte, North Carolina  28255
                                         Attention: Ret Taylor
                                         Telephone:        (704) 386-9368
                                         Telefacsimile:           (704) 386-9923

                                Wire Transfer Instructions:
                                         Bank of America, N.A.
                                         ABA# 053000196
                                         Account No.: 1366212250600
                                         Reference: Kellwood
                                         Attention: Administrative Services

                                Lending Office for Fixed Rate Loans:
                                         Bank of America, N.A.
                                         101 North Tryon Street, 15th Floor
                                         NC1-001-15-04
                                         Charlotte, North Carolina  28255
                                         Attention: Ret Taylor
                                         Telephone:        (704) 386-9368
                                         Telefacsimile:           (704) 386-9923

                                Wire Transfer Instructions:
                                         Bank of America, N.A.
                                         ABA# 053000196
                                         Account No.: 1366212250600
                                         Reference: Kellwood
                                         Attention: Administrative Services

                                CREDIT AGREEMENT
                             Signature Page 2 of 16

<PAGE>

                                THE BANK OF NOVA SCOTIA

                                By:
                                   ---------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                Lending Office for Base Rate Loans:
                                         The Bank of Nova Scotia
                                         600 Peachtree St., N.E., Suite 2700
                                         Atlanta, Georgia 30308
                                         Attention: Sheila Davis
                                         Telephone:  404/877-1540
                                         Telefacsimile:             404/888-8998

                                Wire Transfer Instructions:
                                         The Bank of Nova Scotia.
                                         ABA#  026002532
                                         Account No.: 0606634
                                         Reference: Kellwood Company
                                         Attention: Chicago Team

                                Lending Office for Fixed Rate Loans:
                                         The Bank of Nova Scotia
                                         600 Peachtree St., N.E., Suite 2700
                                         Atlanta, Georgia 30308
                                         Attention: Sheila Davis
                                         Telephone:  404/877-1540
                                         Telefacsimile:             404/888-8998

                                Wire Transfer Instructions:
                                         The Bank of Nova Scotia
                                         ABA#  026002532
                                         Account No.: 0606634
                                         Reference: Kellwood Company
                                         Attention: Chicago Team

                                CREDIT AGREEMENT
                             Signature Page 3 of 16

<PAGE>

                                THE CHASE MANHATTAN BANK

                                By:
                                   ---------------------------------------------
                                Name:             Susan H. Atha
                                Title:   Vice President

                                Lending Office for Base Rate Loans and
                                Eurodollar Loans:
                                         The Chase Manhattan Bank
                                         111 West 40th Street, 10th Floor
                                         New York, New York 10018
                                         Attention: Caridad Tio
                                         Telephone:        212/403-5052
                                         Telefacsimile:             212/403-5060

                                Wire Transfer Instructions for Base Rate Loans
                                and Eurodollar Loans
                                         The Chase Manhattan Bank.
                                         ABA# 021000021
                                         Account No.: Commercial Loan
                                                      Operations-Dept. 9420
                                         Reference: Kellwood Company
                                         Attention: Tanya Rodriguez

                                Lending Office for Offshore Currency Loans:
                                         The Chase Manhattan Bank
                                         111 West 40th Street, 10th Floor
                                         New York, New York 10018
                                         Attention: Caridad Tio
                                         Telephone:        212/403-5052
                                         Telefacsimile:             212/403-5060

                                Wire Transfer Instructions for Offshore Currency
                                Loans:
                                         * Note: Wire  instructions for Offshore
                                         Currency  Loans  are  dependent  on the
                                         type of currency utilized.

                                CREDIT AGREEMENT
                             Signature Page 4 of 16

<PAGE>

                                MERCANTILE BANK NATIONAL ASSOCIATION

                                By:
                                   ---------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                Lending Office for Base Rate Loans:
                                         Mercantile Bank National Association
                                         One Mercantile Center, 12th Floor
                                         St. Louis, Missouri 63101
                                         Attention: Jennifer Probst
                                         Telephone:  (314) 418-2432
                                         Telefacsimile:  (314) 418-2432

                                Wire Transfer Instructions:
                                         Mercantile Bank National Association
                                         ABA #: 081000210
                                         Account No.: 140117-939
                                         Account Name: Commercial Loan
                                                       Operations
                                         Reference: Kellwood Company
                                         Attention: Jennifer Probst

                                Lending Office for Fixed Rate Loans:
                                         Mercantile Bank National Association
                                         One Mercantile Center, 12th Floor
                                         St. Louis, Missouri 63101
                                         Attention: Jennifer Probst
                                         Telephone:  (314) 418-2432
                                         Telefacsimile:  (314) 418-2432

                                Wire Transfer Instructions:
                                         Mercantile Bank National Association
                                         ABA #: 081000210
                                         Account No.: 140117-939
                                         Account Name: Commercial Loan
                                                       Operations
                                         Reference: Kellwood Company
                                         Attention: Jennifer Probst

                                CREDIT AGREEMENT
                             Signature Page 5 of 16

<PAGE>

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

                                  By:
                                     -------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                  Lending Office for Base Rate Loans:
                                           The Bank of Tokyo-Mitsubishi, Ltd.
                                           227 West Monroe, Suite 2300
                                           Chicago, Illinois 60606
                                           Attention:  Janice Hennig
                                           Telephone:        312/696-4710
                                           Telefacsimile:           312/696-4532

                                  Wire Transfer Instructions:
                                           Federal Reserve Bank of Chicago,
                                           for the account of The Bank of Tokyo-
                                           Mitsubishi, Ltd., Chicago Branch
                                           ABA# 071002341
                                           Account No.: 1525720230
                                           Reference: Kellwood Company
                                           Attention: Loan Administration

                                  Lending Office for Fixed Rate Loans:
                                           The Bank of Tokyo-Mitsubishi, Ltd.
                                           227 West Monroe, Suite 2300
                                           Chicago, Illinois 60606
                                           Attention:  Janice Hennig
                                           Telephone:        312/696-4710
                                           Telefacsimile:           312/696-4532

                                  Wire Transfer Instructions:
                                           Federal Reserve Bank of Chicago,
                                           for the account of The Bank of Tokyo-
                                           Mitsubishi, Ltd., Chicago Branch
                                           ABA# 071002341
                                           Account No.: 1525720230
                                           Reference: Kellwood Company
                                           Attention: Loan Administration

                                CREDIT AGREEMENT
                             Signature Page 6 of 16

<PAGE>

                                  THE FIRST NATIONAL BANK OF CHICAGO

                                  By:
                                     -------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                  Lending Office for Base Rate Loans:
                                           The First National Bank of Chicago
                                           One First National Plaza
                                           IL1-0173
                                           Chicago, Illinois 60670
                                           Attention: Kathie Blomquist
                                           Telephone:        312/732-2683
                                           Telefacsimile:           312/732-2715

                                  Wire Transfer Instructions:
                                           First National Bank of Chicago
                                           ABA# 071000013
                                           Account No.: 481152860000
                                           Reference: Kellwood
                                           Attention: Loan Processing DP

                                  Lending Office for Fixed Rate Loans:
                                           The First National Bank of Chicago
                                           One First National Plaza
                                           IL1-0173
                                           Chicago, Illinois 60670
                                           Attention: Kathie Blomquist
                                           Telephone:        312/732-2683
                                           Telefacsimile:           312/732-2715

                                  Wire Transfer Instructions:
                                           First National Bank of Chicago
                                           ABA# 071000013
                                           Account No.: 481152860000
                                           Reference: Kellwood
                                           Attention: Loan Processing DP

                                CREDIT AGREEMENT
                             Signature Page 7 of 16

<PAGE>

                                  THE DAI-ICHI KANGYO BANK, LTD.

                                  By:
                                     -------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                  Lending Office for Base Rate Loans:
                                           The Dai-Ichi Kangyo Bank, Ltd.
                                           One World Trade Center, Suite 4911
                                           New York, New York 10048
                                           Attention: Merine Geerwar
                                           Telephone:        212/432-8458
                                           Telefacsimile:           212/549-0049

                                  Wire Transfer Instructions:
                                           Dai-Ichi Kangyo Bank, New York
                                           ABA# 026004307
                                           Account No.: N/A
                                           Reference: Kellwood Company
                                           Attention: Loan Admin. Asst. General
                                                      Manager

                                  Lending Office for Fixed Rate Loans:
                                           The Dai-Ichi Kangyo Bank, Ltd.
                                           One World Trade Center, Suite 4911
                                           New York, New York 10048
                                           Attention: Merine Geerwar
                                           Telephone:        212/432-8458
                                           Telefacsimile:           212/549-0049

                                  Wire Transfer Instructions:
                                           Dai-Ichi Kangyo Bank, New York
                                           ABA# 026004307
                                           Account No.: N/A
                                           Reference: Kellwood Company
                                           Attention: Loan Admin. Asst. General
                                                      Manager

                                CREDIT AGREEMENT
                             Signature Page 8 of 16

<PAGE>

                                FLEET BANK N.A.

                                 By:
                                    --------------------------------------------
                                 Name:
                                      ------------------------------------------
                                 Title:
                                       -----------------------------------------

                                 Lending Office for Base Rate Loans:
                                          Fleet Bank N.A.
                                          1185 Avenue of the Americas
                                          New York, New York 10036
                                          Attention: Claudine Mellish
                                          Telephone:
                                                            --------------------
                                          Telefacsimile:
                                                                     -----------

                                 Wire Transfer Instructions:
                                          Fleet Bank, NA
                                          ABA# 021 300 019
                                          Account No.: GL A/C #1510351-03102
                                          Reference: Kellwood Company
                                          Attention: Claudine Mellish

                                 Lending Office for Fixed Rate Loans:
                                          Fleet Bank N.A.
                                          1185 Avenue of the Americas
                                          New York, New York 10036
                                          Attention: Claudine Mellish
                                          Telephone:
                                                            --------------------
                                          Telefacsimile:
                                                                     -----------

                                 Wire Transfer Instructions:
                                          Fleet Bank, NA
                                          ABA# 021 300 019
                                          Account No.: GL AlC #1510351-03102
                                          Reference: Kellwood Company
                                          Attention: Claudine Mellish

                                CREDIT AGREEMENT
                             Signature Page 9 of 16

<PAGE>

                                 HARRIS TRUST AND SAVINGS BANK

                                 By:
                                    --------------------------------------------
                                 Name:
                                      ------------------------------------------
                                 Title:
                                       -----------------------------------------

                                 Lending Office for Base Rate Loans:
                                          Harris Trust and Savings Bank
                                          111 W. Monroe
                                          Chicago, Illinois 60603
                                          Attention: Violetta Smith
                                          Telephone:        312/461-5446
                                          Telefacsimile:            312/293-5283

                                 Wire Transfer Instructions:
                                          Harris Bank
                                          ABA# 071 000 288
                                          Account No.: 109-215-4
                                          Reference: Kellwood
                                          Attention: Loan Accounting

                                 Lending Office for Fixed Rate Loans:

                                 Wire Transfer Instructions:

                                CREDIT AGREEMENT
                             Signature Page 10 of 16

<PAGE>

                                 THE BANK OF NEW YORK

                                 By:
                                    --------------------------------------------
                                 Name:
                                      ------------------------------------------
                                 Title:
                                       -----------------------------------------

                                 Lending Office for Base Rate Loans:
                                          The Bank of New York
                                          One Wall Street, 8th Floor
                                          New York, New York 10286
                                          Attention: Madlyn Myrick
                                          Telephone:        212/635-1366
                                          Telefacsimile:            212/635-1481

                                 Wire Transfer Instructions:
                                          The Bank of New York
                                          101 Barclay Street
                                          ABA# 021000018
                                          Account No.: GLA #111556
                                          Reference: Kellwood Company
                                          Attention: Commercial Loan Servicing
                                                      Dept.

                                 Lending Office for Fixed Rate Loans:
                                          The Bank of New York
                                          One Wall Street, 8th Floor
                                          New York, New York 10286
                                          Attention: Madlyn Myrick
                                          Telephone:        212/635-1366
                                          Telefacsimile:            212/635-1481

                                 Wire Transfer Instructions:
                                          The Bank of New York
                                          101 Barclay Street
                                          ABA# 021000018
                                          Account No.: GLA #111556
                                          Reference: Kellwood Company
                                          Attention: Eurodollar/Cayman Funding
                                                     Area

                                CREDIT AGREEMENT
                             Signature Page 11 of 16

<PAGE>

                                 BANQUE NATIONALE DE PARIS

                                 By:
                                    --------------------------------------------
                                 Name:
                                      ------------------------------------------
                                 Title:
                                       -----------------------------------------

                                 Lending Office for Base Rate Loans:
                                          Banque Nationale de Paris
                                          209 South LaSalle Street
                                          Chicago, Illinois 60604
                                          Attention: Catherine Lui
                                          Telephone:        312/977-1386
                                          Telefacsimile:            312/977-2234

                                 Wire Transfer Instructions:
                                          Banque Nationale de Paris-New York
                                            Branch
                                          ABA# 026007689
                                          Account No.: 14119400189
                                          Reference: Kellwood Company
                                          Attention: Tim Alvord-Loan
                                                     Administrator

                                 Lending Office for Fixed Rate Loans:
                                          Banque Nationale de Paris
                                          209 South LaSalle Street
                                          Chicago, Illinois 60604
                                          Attention: Catherine Lui
                                          Telephone:        312/977-1386
                                          Telefacsimile:            312/977-2234

                                 Wire Transfer Instructions:
                                          Banque Nationale de Paris-New York
                                            Branch
                                          ABA# 026007689
                                          Account No.: 14119400189
                                          Reference: Kellwood Company
                                          Attention: Tim Alvord-Loan
                                                     Administrator

                                CREDIT AGREEMENT
                             Signature Page 12 of 16

<PAGE>

                                 CREDIT SUISSE FIRST BOSTON

                                 By:
                                    --------------------------------------------
                                 Name:
                                      ------------------------------------------
                                 Title:
                                       -----------------------------------------

                                 By:
                                    --------------------------------------------
                                 Name:
                                      ------------------------------------------
                                 Title:
                                       -----------------------------------------

                                 Lending Office for Base Rate Loans:
                                          Credit Suisse First Boston
                                          Eleven Madison Avenue
                                          New York, New York 10010
                                          Attention: Ronald Davis
                                          Telephone:        212/322-1865
                                          Telefacsimile:            212/355-0593

                                 Wire Transfer Instructions:
                                          The Bank of New York
                                          One Wall Street
                                          New York, NY 10006
                                          ABA# 021 000 018
                                          Account No.: 890-0329-262
                                          Account Name: CSFB NY Loan Clearing
                                          Reference: Kellwood

                                 Lending Office for Fixed Rate Loans:
                                          Credit Suisse First Boston
                                          Eleven Madison Avenue
                                          New York, New York 10010
                                          Attention: Ronald Davis
                                          Telephone:        212/322-1865
                                          Telefacsimile:            212/355-0593

                                 Wire Transfer Instructions:
                                          The Bank of New York
                                          One Wall Street
                                          New York, NY 10006
                                          ABA# 021 000 018
                                          Account No.: 890-0329-262
                                          Account Name: CSFB NY Loan Clearing
                                          Reference: Kellwood

                                CREDIT AGREEMENT
                             Signature Page 13 of 16

<PAGE>

                                 ISRAEL DISCOUNT BANK OF NEW YORK

                                 By:
                                    --------------------------------------------
                                 Name:
                                      ------------------------------------------
                                 Title:
                                       -----------------------------------------

                                 By:
                                    --------------------------------------------
                                 Name:
                                      ------------------------------------------
                                 Title:
                                       -----------------------------------------

                                 Lending Office for Base Rate Loans:
                                          Israel Discount Bank of New York
                                          511 Fifth Avenue
                                          New York, New York 10017
                                          Attention: Laury Quiles
                                          Telephone:        212/551-8596
                                          Telefacsimile:            212/551-8872
                                          Reference: Kellwood

                                 Wire Transfer Instructions:
                                          Israel Discount Bank of New York
                                          ABA# 026009768
                                          Account No.: 355400901621
                                          Reference: Kellwood
                                          Attention: Accounts Payable-Loan
                                                     Dept./Laury Quiles

                                 Lending Office for Fixed Rate Loans:
                                          Israel Discount Bank of New York
                                          511 Fifth Avenue
                                          New York, New York 10017
                                          Attention: Laury Quiles
                                          Telephone:        212/551-8596
                                          Telefacsimile:            212/551-8872
                                          Reference: Kellwood

                                 Wire Transfer Instructions:
                                          Israel Discount Bank of New York
                                          ABA# 026009768
                                          Account No.: 355400901621
                                          Reference: Kellwood
                                          Attention: Accounts Payable-Loan
                                                     Dept./Laury Quiles

                                CREDIT AGREEMENT
                             Signature Page 14 of 16

<PAGE>

                                 THE INDUSTRIAL BANK OF JAPAN, LIMITED

                                 By:
                                    --------------------------------------------
                                 Name:
                                      ------------------------------------------
                                 Title:
                                       -----------------------------------------

                                 Lending Office for Base Rate Loans:
                                          The Industrial Bank of Japan, Limited
                                          1251 Avenue of the Americas
                                          New York, New York  10020
                                          Attention: Richard Emmich
                                          Telephone:        212/282-4092
                                          Telefacsimile:            212/282-4478

                                 Wire Transfer Instructions:
                                          The Industrial Bank of Japan, Limited
                                          ABA# :026-008-345
                                          Account No.: N/A
                                          Reference: Kellwood
                                          Attention: Credit Administrative
                                                     Department

                                 Lending Office for Fixed Rate Loans:
                                          The Industrial Bank of Japan, Limited
                                          1251 Avenue of the Americas
                                          New York, New York  10020
                                          Attention: Richard Emmich
                                          Telephone:        212/282-4092
                                          Telefacsimile:            212/282-4478

                                 Wire Transfer Instructions:
                                          The Industrial Bank of Japan, Limited
                                          ABA# :026-008-345
                                          Account No.: N/A
                                          Reference: Kellwood
                                          Attention: Credit Administrative
                                                     Department

                                CREDIT AGREEMENT
                             Signature Page 15 of 16

<PAGE>

                                 UMB BANK OF ST. LOUIS, N.A.

                                 By:
                                    --------------------------------------------
                                 Name:
                                      ------------------------------------------
                                 Title:
                                       -----------------------------------------

                                 Lending Office for Base Rate Loans:
                                          UMB Bank of St. Louis, N.A.
                                          2 S. Broadway
                                          St. Louis, Missouri 63102
                                          Attention: Mary Leopold-Amberg
                                          Telephone: 314/612-8290
                                          Telefacsimile: 314/612-8150

                                 Wire Transfer Instructions:
                                          UMB Bank of St. Louis, N.A.
                                          ABA# : 081009813
                                          Account No.: N/A
                                          Reference: Kellwood
                                          Attention: Commercial Loan Department

                                 Lending Office for Fixed Rate Loans:
                                          UMB Bank of St. Louis, N.A.
                                          2 S. Broadway
                                          St. Louis, Missouri 63102
                                          Attention: Mary Leopold-Amberg
                                          Telephone: 314/612-8290
                                          Telefacsimile: 314/612-8150

                                 Wire Transfer Instructions:
                                          UMB Bank of St. Louis, N.A.
                                          ABA# : 081009813
                                          Account No.: N/A
                                          Reference: Kellwood
                                          Attention: Commercial Loan Department

                                CREDIT AGREEMENT
                             Signature Page 16 of 16

<PAGE>

                                              EXHIBIT A

                                  Applicable Commitment Percentages

<TABLE>
<CAPTION>
                                                                                                                APPLICABLE
                                           TRANCHE A             TRANCHE B                 TOTAL                COMMITMENT
               LENDER                     COMMITMENT             COMMITMENT              COMMITMENT             PERCENTAGE
==================================== ===================== ======================  ====================== ======================
<S>                                         <C>                    <C>                        <C>                  <C>
Bank of America, N.A.                       $13,142,857.12         $32,857,142.88             $46,000,000          13.142857143%
The Bank of Nova Scotia                      13,142,857.14          32,857,142.86             $46,000,000          13.142857143%
The Chase Manhattan Bank                     13,142,857.14          32,857,142.86             $46,000,000          13.142857143%
The First National Bank of                    6,628,571.43          16,571,428.57             $23,200,000           6.628571429%
Chicago
Mercantile Bank National                      6,628,571.43          16,571,428.57             $23,200,000           6.628571429%
Association
The Bank of Tokyo-Mitsubishi,                 6,628,571.43          16,571,428.57             $23,200,000           6.628571429%
Ltd., Chicago Branch
The Dai-Ichi Kangyo Bank, Ltd.                6,628,571.43          16,571,428.57             $23,200,000           6.628571429%
Fleet Bank N.A.                               6,628,571.43          16,571,428.57             $23,200,000           6.628571429%
Harris Trust and Savings Bank                 5,714,285.71          14,285,714.29             $20,000,000           5.714285714%
UMB Bank of St. Louis, N.A.                   4,285,714.29          10,714,285.71             $15,000,000           4.285741286%
Credit Suisse First Boston                    4,285,714.29          10,714,285.71             $15,000,000           4.285714286%
Banque Nationale de Paris                     3,285,714.29           8,214,285.71             $11,500,000           3.285714286%
The Industrial Bank of Japan,                 3,285,714.29           8,214,285.71             $11,500,000           3.285714286%
Limited
The Bank of New York                          3,285,714.29           8,214,285.71             $11,500,000           3.285714286%
Israel Discount Bank of New                   3,285,714.29           8,214,285.71             $11,500,000           3.285714286%
York
TOTAL                                      $100,000,000.00        $250,000,000.00         $350,000,000.00          100.00000000%

</TABLE>

                                       A-1

<PAGE>

                                    EXHIBIT B

                        Form of Assignment and Acceptance

         Reference is made to the Credit  Agreement  dated as of August 31, 1999
(the "Credit  Agreement")  among Kellwood Company,  a Delaware  corporation (the
"Borrower"),  the  Lenders  (as  defined  in the Credit  Agreement)  and Bank of
America,  N.A.,  as  Administrative  Agent for the Lenders (the "Agent") and the
Documentation  Agent and Syndication  Agent named therein.  Terms defined in the
Credit Agreement are used herein with the same meaning.

         The "Assignor"  and the  "Assignee"  referred to on Schedule 1 agree as
follows:

         1. The  Assignor  hereby  sells and  assigns to the  Assignee,  WITHOUT
RECOURSE and without  representation  or warranty  except as expressly set forth
herein,  and the Assignee  hereby  purchases and assumes from the  Assignor,  an
interest  in and to the  Assignor's  rights  and  obligations  under the  Credit
Agreement  and the  other  Loan  Documents  as of the date  hereof  equal to the
percentage  interest  specified  on  Schedule  1 of all  outstanding  rights and
obligations  under the  Credit  Agreement  and the other Loan  Documents.  After
giving effect to such sale and assignment,  the Assignee's  Tranche A Commitment
and  Tranche B  Commitment  and the amount of the  Tranche A Loans and Tranche B
Loans owing to the Assignee will be as set forth on Schedule 1.

         2. The Assignor (i)  represents  and warrants  that it is the legal and
beneficial  owner of the interest  being  assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty  and  assumes  no  responsibility   with  respect  to  any  statements,
warranties or  representations  made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability,  genuineness,  sufficiency
or value of the Loan  Documents or any other  instrument  or document  furnished
pursuant  thereto;  (iii) makes no  representation  or  warranty  and assumes no
responsibility  with respect to the financial  condition of the Borrower and its
Subsidiaries  or the  performance  or  observance  by the Borrower of any of its
obligations  under  the Loan  Documents  or any  other  instrument  or  document
furnished  pursuant thereto;  and (iv) attaches the Tranche A Note and Tranche B
Note held by the Assignor and requests  that the Agent  exchange  such Tranche A
Note and Tranche B Note for new  Tranche A Notes and Tranche B Notes  payable to
the order of the  Assignee in an amount  equal to the Tranche A  Commitment  and
Tranche B Commitment assumed by the Assignee pursuant hereto and to the Assignor
in an amount equal to the Tranche A Commitment and Tranche B Commitment retained
by the Assignor, if any, as specified on Schedule 1.

         3. The Assignee (i) confirms  that it has received a copy of the Credit
Agreement,  together  with  copies of the  financial  statements  referred to in
Section 8.1 thereof and such other  documents and  information  as it has deemed
appropriate  to make its own credit  analysis  and  decision  to enter into this
Assignment and Acceptance;  (ii) agrees that it will,  independently and without
reliance  upon the Agent,  the  Assignor  or any other  Lender and based on such
documents and

                                       B-1

<PAGE>

information as it shall deem  appropriate at the time,  continue to make its own
credit  decisions  in taking or not taking  action  under the Credit  Agreement;
(iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement as are delegated to the Agent by the terms
thereof,  together with such powers and discretion as are reasonably  incidental
thereto;  (v) agrees that it will perform in accordance  with their terms all of
the  obligations  that by the terms of the Credit  Agreement  are required to be
performed by it as a Lender; and (vi) attaches any U.S. Internal Revenue Service
or other forms required under Section 5.6.

         4. Following the execution of this Assignment and  Acceptance,  it will
be  delivered  to the Agent for  acceptance  and  recording  by the  Agent.  The
effective date for this Assignment and Acceptance  (the "Effective  Date") shall
be the date of acceptance  hereof by the Agent,  unless  otherwise  specified on
Schedule 1.

         5. Upon such acceptance and recording by the Agent, as of the Effective
Date,  (i) the  Assignee  shall be a party to the Credit  Agreement  and, to the
extent  provided  in  this  Assignment  and  Acceptance,  have  the  rights  and
obligations of a Lender  thereunder and (ii) the Assignor  shall,  to the extent
provided  in this  Assignment  and  Acceptance,  relinquish  its  rights  and be
released from its obligations under the Credit Agreement.

         6. Upon such acceptance and recording by the Agent,  from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the  Tranche A Notes and  Tranche B Notes in  respect of the  interest  assigned
hereby (including,  without limitation, all payments of principal,  interest and
commitment fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all  appropriate  adjustments in payments under the Credit  Agreement
and the Tranche A Notes and Tranche B Notes for periods  prior to the  Effective
Date directly between themselves.

         7. This  Assignment and Acceptance  shall be governed by, and construed
in accordance with, the laws of the State of New York.

         8. This  Assignment  and  Acceptance  may be  executed in any number of
counterparts and by different parties hereto in separate  counterparts,  each of
which when so executed  shall be deemed to be an original and all of which taken
together shall  constitute one and the same  agreement.  Delivery of an executed
counterpart of Schedule 1 to this  Assignment  and  Acceptance by  telefacsimile
shall be  effective  as  delivery  of a manually  executed  counterpart  of this
Assignment and Acceptance.

         IN WITNESS WHEREOF,  the Assignor and the Assignee have caused Schedule
1 to this  Assignment and Acceptance to be executed by their officers  thereunto
duly authorized as of the date specified thereon.

                                       B-2

<PAGE>

                                   Schedule 1

         Percentage interest assigned:                                 ________%

         Assignee's Tranche A Commitment:                              $_______

         Assignee's Tranche B Commitment:                              $_______

         Aggregate outstanding principal amount
           of Tranche A Loans assigned:                                $_______

         Aggregate outstanding principal amount
           of Tranche A Loans retained by Assignor:                    $_______

         Aggregate outstanding principal amount
           of Tranche B Loans assigned:                                $_______

         Aggregate outstanding principal amount
           of Tranche B Loans retained by Assignor:                    $_______

         Principal amount of Tranche A Note
           payable to Assignee:                                        $_______

         Principal amount of Tranche B Note
           payable to Assignee:                                        $_______

         Principal amount of Tranche A Note
           payable to Assignor:                                        $_______

         Principal amount of Tranche B Note
           payable to Assignor:                                        $_______

         Effective Date (if other than date
            of acceptance by Agent):                               _______, 19__

                                       [NAME OF ASSIGNOR], as Assignor

                                       By:
                                          --------------------------------
                                            Title:

                                       B-3

<PAGE>

                                       Dated:                     , 19 _
                                              --------------------

                                       [NAME OF ASSIGNEE], as Assignee

                                       By:
                                          --------------------------------
                                            Title:

                                       Domestic Lending Office:

                                       Fixed Rate Loan Lending Office:

Accepted [and Approved] **
this ___ day of ___________, 19 _

BANK OF AMERICA,  N.A., as Agent

By:
   ------------------------
Title:

[Approved this ____ day
of ____________, 19__

KELLWOOD COMPANY

By:                         ]**
   ------------------------
Title:

** Required if the Assignee is an Eligible  Assignee  solely by reason of clause
(iii) of the definition of "Eligible Assignee".

                                       B-4

<PAGE>

                                    EXHIBIT C

       Notice of Appointment (or Revocation) of Authorized Representative

             Reference is hereby made to the Credit Agreement dated as of August
31, 1999 (the "Agreement") among Kellwood Company,  a Delaware  corporation (the
"Borrower"),  the Lenders (as  defined in the  Agreement),  and Bank of America,
N.A., as  Administrative  Agent for the Lenders  ("Agent") and the Documentation
Agent and  Syndication  Agent  named  therein.  Capitalized  terms  used but not
defined  herein  shall have the  respective  meanings  therefor set forth in the
Agreement.

             The  Borrower  hereby  nominates,  constitutes  and  appoints  each
individual named below as an Authorized Representative under the Loan Documents,
and  hereby  represents  and  warrants  that (i) set  forth  opposite  each such
individual's name is a true and correct  statement of such  individual's  office
(to  which  such  individual  has been duly  elected  or  appointed),  a genuine
specimen  signature of such  individual and an address for the giving of notice,
and (ii) each such individual has been duly authorized by the Borrower to act as
Authorized Representative under the Loan Documents:

Name and Address                    Office                Specimen Signature

------------------------    ------------------------   -------------------------
------------------------
------------------------

------------------------    ------------------------   -------------------------
------------------------    ------------------------   -------------------------
------------------------

Borrower  hereby revokes  (effective upon receipt hereof by the Agent) the prior
appointment of ________________ as an Authorized Representative.

             This the ___ day of __________________, 19__.

                                       KELLWOOD COMPANY

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       C-1

<PAGE>

                                    EXHIBIT D

                            Form of Borrowing Notice

To:          Bank of America, N.A.
             as Agent
             101 North Tryon Street, 15th Floor
             NC1-001-15-04
             Charlotte, North Carolina  28255
             Attention: Agency Services
             Telefacsimile:  (704)386-9923

             Reference is hereby made to the Credit Agreement dated as of August
31, 1999 (the "Agreement") among Kellwood Company (the "Borrower"),  the Lenders
(as defined in the  Agreement),  and Bank of America,  N.A.,  as  Administrative
Agent for the Lenders  ("Agent")  and the  Documentation  Agent and  Syndication
Agent named  therein.  Capitalized  terms used but not defined herein shall have
the respective meanings therefor set forth in the Agreement.

             The Borrower  through its  Authorized  Representative  hereby gives
notice to the Agent that Loans of the type and amount set forth below be made on
the date indicated:

<TABLE>
<CAPTION>

Type of Loan                     Interest             Aggregate
(check one)                      Period(1)            Amount(2)               Date of Loan(3)         Currency(4)
-----------                      ---------            ---------               ---------------         -----------
<S>                              <C>                  <C>                     <C>                     <C>
Tranche A Loan
--------------
Base Rate Loan                   ________             ________                ________                ________
Eurodollar Rate Loan             ________             ________                ________                ________
Tranche B Loan
--------------
Base Rate Loan                   ________             ________                ________                ________
Eurodollar Rate Loan             ________             ________                ________                ________
Offshore Rate Loan               ________             ________                ________                ________
-----------------------

(1)          For any Eurodollar Rate Loan, one, two, three or six months.
(2)          Must be $5,000,000 or if greater an integral multiple of $1,000,000 if a Tranche A Loan.  Must be the
             Dollar Equivalent Amount of $5,000,000 or if greater an integral multiple of the Dollar Equivalent Amount
             of $1,000,000 if a Tranche B Loan, unless a Base Rate Refunding Loan.
(3)          At least  three (3)  Business  Days later if a Fixed Rate Loan;
(4)          Specify Dollars or the applicable Offshore Currency.

</TABLE>

                                       D-1

<PAGE>

             The Borrower  hereby  requests that the proceeds of Loans described
in this Borrowing  Notice be made available to the Borrower as follows:  [insert
transmittal instructions] .

             The undersigned hereby certifies that:

             1. No Default or Event of Default exists either now or after giving
effect to the borrowing described herein; and

             2. All the  representations and warranties set forth in Article VII
of the Agreement and in the Loan Documents (other than those expressly stated to
refer to a  particular  date) are true and correct as of the date hereof  except
that  the  reference  to the  financial  statements  in  Section  7.5(a)  of the
Agreement  shall be deemed  (solely  for the purpose of the  representation  and
warranty  contained in such Section  7.5(a) but not for the purpose of any cross
reference  to such  Section  7.5(a)  or to the  financial  statements  described
therein  contained in any other provision of Section 7.5 or elsewhere in Article
VII) to refer to those  financial  statements  most  recently  delivered  to you
pursuant to Section 8.1 of the Agreement (it being understood that any financial
statements  delivered  pursuant  to Section  8.1(b) have not been  certified  by
independent public accountants).

             3. All  conditions  contained in the Agreement to the making of any
Loan requested hereby have been met or satisfied in full .

                                KELLWOOD COMPANY

                                BY:
                                   ---------------------------------------------
                                         Authorized Representative

                                DATE:
                                     -------------------------------------------

                                       D-2

<PAGE>

                                    EXHIBIT E

                     Form of Interest Rate Selection Notice

To:          Bank of America, as Agent
             101 North Tryon Street, 15th Floor
             NC1-001-15-04
             Charlotte, North Carolina  28255
             Attention:  Agency Services
             Telefacsimile:  (704) 386-9923

             Reference is hereby made to the Credit Agreement dated as of August
31, 1999 (the "Agreement") among Kellwood Company (the "Borrower"),  the Lenders
(as defined in the  Agreement),  and Bank of America,  N.A.,  as  Administrative
Agent for the Lenders  ("Agent")  and the  Documentation  Agent and  Syndication
Agent named  therein.  Capitalized  terms used but not defined herein shall have
the respective meanings therefor set forth in the Agreement.

             The Borrower  through its  Authorized  Representative  hereby gives
notice to the Agent of the  following  selection  of a type of Loan and Interest
Period:

<TABLE>
<CAPTION>

Type of Loan                     Interest             Aggregate
(check one)                      Period(1)            Amount(2)               Date of Loan(3)         Currency(4)
-----------                      ---------            ---------               ---------------         -----------
<S>                              <C>                  <C>                     <C>                     <C>
Tranche A Loan
--------------
Eurodollar Rate Loan             ________             ________                ________                ________
Tranche B Loan
--------------
Eurodollar Rate Loan             ________             ________                ________                ________
Offshore Rate Loan               ________             ________                ________                ________
-----------------------

(1)          For any Eurodollar Rate Loan, one, two, three or six months.
(2)          Must be $5,000,000 or if greater an integral multiple of $1,000,000 if a Tranche A Loan.  Must be the
             Dollar Equivalent Amount of $5,000,000 or if greater an integral multiple of the Dollar Equivalent Amount
             of $1,000,000 if a Tranche B Loan, unless a Base Rate Refunding Loan.
(3)          At least  three (3)  Business  Days later if a Fixed Rate Loan;
(4)          Specify Dollars or the applicable Offshore Currency.

</TABLE>
                                       KELLWOOD COMPANY

                                       BY:
                                          --------------------------------------
                                                Authorized Representative

                                       DATE:
                                            ------------------------------------

                                       E-1

<PAGE>

                                   EXHIBIT F-1

                             Form of Tranche A Note

                                 Promissory Note
                                (Tranche A Loan)

$--------------                                        ---------, --------------

                                                                 August __, 1999

         FOR VALUE RECEIVED, KELLWOOD COMPANY, a Delaware corporation having its
principal place of business located in Chesterfield,  Missouri (the "Borrower"),
hereby       promises       to       pay       to       the       order       of
_______________________________________________    (the   "Lender"),    in   its
individual capacity,  at the office of BANK OF AMERICA,  N.A., as Administrative
Agent  for the  Lenders  (the  "Agent"),  located  at 101  North  Tryon  Street,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places
as the Agent may  designate  in  writing)  at the times set forth in the  Credit
Agreement  dated as of  August  __,  1999  among  the  Borrower,  the  financial
institutions  party thereto  (collectively,  the  "Lenders"),  the Agent and the
Documentation  Agent and Syndication Agent named therein (the "Agreement" -- all
capitalized  terms  not  otherwise  defined  herein  shall  have the  respective
meanings set forth in the  Agreement),  in lawful money of the United  States of
America,  in immediately  available  funds,  the principal amount of ___________
DOLLARS  ($__________)  or, if less than such  principal  amount,  the aggregate
unpaid  principal  amount  of all  Tranche  A Loans  made by the  Lender  to the
Borrower  pursuant to the  Agreement on the Tranche A  Termination  Date or such
earlier date as may be required  pursuant to the terms of the Agreement,  and to
pay interest from the date hereof on the unpaid principal amount hereof, in like
money, at said office, on the dates and at the rates provided in Articles II and
IV of the Agreement.  All or any portion of the principal amount of Loans may be
prepaid or required to be prepaid as provided in the Agreement.

         If payment of all sums due hereunder is accelerated  under the terms of
the  Agreement  or under the  terms of the  other  Loan  Documents  executed  in
connection with the Agreement,  the then remaining  principal amount and accrued
but unpaid  interest  thereon  evidenced  by this  Tranche A Note  shall  become
immediately due and payable, without presentation,  demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.

         In the event this  Tranche A Note is not paid when due at any stated or
accelerated  maturity,  the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees, and
interest due hereunder thereon at the rates set forth above.

         Interest hereunder shall be computed as provided in the Agreement.

         This  Tranche A Note is one of the  Tranche A Notes  referred to in the
Agreement and is issued pursuant to and entitled to the benefits and security of
the Agreement to which reference is

                                      F-1-1

<PAGE>

hereby made for a more complete statement of the terms and conditions upon which
the Tranche A Loans evidenced hereby were or are made and are to be repaid. This
Tranche A Note is subject to certain  restrictions  on transfer or assignment as
provided in the Agreement.

         All Persons bound on this obligation,  whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the  full  extent  permitted  by law all  defenses  based  on  suretyship  or
impairment of collateral  and the benefits of all  provisions of law for stay or
delay of execution or sale of property or other satisfaction of judgment against
any of them on account of  liability  hereon  until  judgment  be  obtained  and
execution  issued  against any other of them and returned  satisfied or until it
can be shown that the maker or any other party hereto had no property  available
for the  satisfaction  of the debt  evidenced by this  instrument,  or until any
other  proceedings  can be had against any of them, also their right, if any, to
require  the  holder  hereof  to hold as  security  for this  Tranche A Note any
collateral  deposited  by any of said Persons as  security.  Protest,  notice of
protest, notice of dishonor,  diligence or any other formality are hereby waived
by all parties bound hereon.

                            [Signature page follows.]

                                      F-1-2

<PAGE>

         IN WITNESS  WHEREOF,  the Borrower has caused this Tranche A Note to be
made,  executed and delivered by its duly  authorized  representative  as of the
date and year first above written, all pursuant to authority duly granted.

                                KELLWOOD COMPANY

                                By:
                                   ---------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                      F-1-3

<PAGE>

                                   EXHIBIT F-2

                             Form of Tranche B Note

                                 Promissory Note
                                (Tranche B Loan)

$--------------                                        ---------, --------------

                                                                 August __, 1999

         FOR VALUE RECEIVED, KELLWOOD COMPANY, a Delaware corporation having its
principal place of business located in Chesterfield,  Missouri (the "Borrower"),
hereby       promises       to       pay       to       the       order       of
_______________________________________________    (the   "Lender"),    in   its
individual capacity,  at the office of BANK OF AMERICA,  N.A., as Administrative
Agent  for the  Lenders  (the  "Agent"),  located  at 101  North  Tryon  Street,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places
as the Agent may  designate  in  writing)  at the times set forth in the  Credit
Agreement  dated as of  August  __,  1999  among  the  Borrower,  the  financial
institutions  party thereto  (collectively,  the  "Lenders"),  the Agent and the
Documentation  Agent and Syndication Agent named therein (the "Agreement" -- all
capitalized  terms  not  otherwise  defined  herein  shall  have the  respective
meanings set forth in the Agreement), in United States Dollars or the applicable
Offshore Currency as provided in Article II of the Agreement, and in immediately
available funds, the principal Dollar Equivalent  Amount of ___________  DOLLARS
($__________)  or, if less than such  principal  amount,  the  aggregate  unpaid
principal  amount of all  Tranche  B Loans  made by the  Lender to the  Borrower
pursuant to the Agreement on the Tranche B Termination Date or such earlier date
as may be required  pursuant to the terms of the Agreement,  and to pay interest
from the date hereof on the unpaid  principal  amount hereof,  in like money, at
said office, on the dates and at the rates provided in Articles II and IV of the
Agreement. All or any portion of the principal amount of Loans may be prepaid or
required to be prepaid as provided in the Agreement.

         If payment of all sums due hereunder is accelerated  under the terms of
the  Agreement  or under the  terms of the  other  Loan  Documents  executed  in
connection with the Agreement,  the then remaining  principal amount and accrued
but unpaid  interest  thereon  evidenced  by this  Tranche B Note  shall  become
immediately due and payable, without presentation,  demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.

         In the event this  Tranche B Note is not paid when due at any stated or
accelerated  maturity,  the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees, and
interest due hereunder thereon at the rates set forth above.

         Interest hereunder shall be computed as provided in the Agreement.

         This  Tranche B Note is one of the  Tranche B Notes  referred to in the
Agreement and is issued pursuant to and entitled to the benefits and security of
the Agreement to which reference is

                                      F-2-1

<PAGE>

hereby made for a more complete statement of the terms and conditions upon which
the Tranche B Loans evidenced hereby were or are made and are to be repaid. This
Tranche B Note is subject to certain  restrictions  on transfer or assignment as
provided in the Agreement.

         All Persons bound on this obligation,  whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the  full  extent  permitted  by law all  defenses  based  on  suretyship  or
impairment of collateral  and the benefits of all  provisions of law for stay or
delay of execution or sale of property or other satisfaction of judgment against
any of them on account of  liability  hereon  until  judgment  be  obtained  and
execution  issued  against any other of them and returned  satisfied or until it
can be shown that the maker or any other party hereto had no property  available
for the  satisfaction  of the debt  evidenced by this  instrument,  or until any
other  proceedings  can be had against any of them, also their right, if any, to
require  the  holder  hereof  to hold as  security  for this  Tranche B Note any
collateral  deposited  by any of said Persons as  security.  Protest,  notice of
protest, notice of dishonor,  diligence or any other formality are hereby waived
by all parties bound hereon.

                            [Signature page follows.]

                                      F-2-2

<PAGE>

         IN WITNESS  WHEREOF,  the Borrower has caused this Tranche B Note to be
made,  executed and delivered by its duly  authorized  representative  as of the
date and year first above written, all pursuant to authority duly granted.

                                KELLWOOD COMPANY

                                By:
                                   ---------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                      F-2-3

<PAGE>

                                    EXHIBIT G

                      Form of Opinion of Borrower's Counsel

                                August ___, 1999

Bank of America, N.A.,
as Agent and
  Each of the Lenders Party to the
  Credit Agreement Referenced Below
Bank of America Corporate Center
Charlotte, North Carolina 28255-0065

RE:      $350,000,000  REVOLVING  CREDIT AND LETTER OF CREDIT  FACILITIES  AMONG
         BANK OF AMERICA,  N.A., AS ADMINISTRATIVE  AGENT, THE SYNDICATION AGENT
         AND  DOCUMENTATION  AGENT NAMED THEREIN,  THE LENDERS PARTY THERETO AND
         KELLWOOD COMPANY

Ladies and Gentlemen:

         We have acted as counsel to Kellwood  Company,  a Delaware  corporation
(the "Borrower"), in connection with the negotiation, execution, and delivery of
the  Credit  Agreement  of even  date  herewith  among  you,  the  Lenders,  the
Documentation  Agent and  Syndication  Agent named therein and the Borrower (the
"Credit  Agreement";  capitalized  terms not otherwise defined herein shall have
the meanings  provided  therefor in the Credit  Agreement) and the execution and
delivery of the other Transaction  Documents (as defined below) by the Borrower,
pursuant to which the Lenders are providing  (a) the Tranche A Revolving  Credit
Facility in the amount of  $100,000,000  and (b) the Tranche B Revolving  Credit
Facility in the amount of  $250,000,000,  including the  $250,000,000  Letter of
Credit  Facility  and  the  $20,000,000   Offshore   Currency   Sublimit,   each
constituting  part of the Tranche B  Revolving  Credit  Facility,  and the other
transactions contemplated under the Credit Agreement.

         This opinion is being  delivered in accordance  with the conditions set
forth in Section 6.1 of the Credit Agreement.

         As such counsel,  we have reviewed  originals,  or copies  certified or
otherwise  authenticated  to our  satisfaction,  of the  following  documents as
executed and  delivered as of the date hereof  (collectively,  the  "Transaction
Documents"):

         1.       the Credit Agreement;

                                       G-1

<PAGE>

         2.       the Notes; and

         3.       LC Account Agreement;

         For purposes of the opinions  expressed below, we have assumed that all
natural persons  executing the  Transaction  Documents have legal capacity to do
so; that all signatures (other than those of  representatives of the Borrower on
the Transaction  Documents) on all documents  submitted to us are genuine;  that
all  documents  submitted  to  us  as  originals  (other  than  the  Transaction
Documents)  are authentic;  and that all documents  submitted to us as certified
copies  or  photocopies  conform  to the  originals  of  such  documents,  which
themselves are authentic.

         For purposes of giving this opinion,  we have  examined such  corporate
and  other  records  of  the  Borrower,   certificates   of  public   officials,
certificates of appropriate  officers or other  representatives of the Borrower,
and such  other  documents,  and have  made  such  inquiries  as we have  deemed
appropriate.

         Based upon and subject to the foregoing, it is our opinion that:

         1. The Borrower is a corporation  duly organized,  validly existing and
in good standing  under the laws of its state of formation and is duly qualified
to transact  business as a foreign  corporation  and is in good  standing in the
following  jurisdictions:___________________  ___________________,  and in  each
other  jurisdiction in which, in light of the nature of the business  transacted
by it or the  property  owned by it, such  qualification  is  necessary  and the
failure  so to  qualify  might  impair  title to any  property  material  to its
operations  or its right to enforce any material  contract  against  others,  or
expose it to any  substantial  liability or  impairment of rights or defenses in
such  jurisdiction.  The Borrower has full corporate  power and authority to own
its assets and  conduct  the  businesses  in which it is now  engaged and as are
expressly  contemplated  by the  Transaction  Documents,  and has full corporate
power and authority to enter into each of the Transaction  Documents to which it
is a  party  and to  perform  its  obligations  thereunder  and  consummate  the
transactions contemplated therein.

         2. Each of the  Transaction  Documents to which the Borrower is a party
has been duly  authorized  by the Board of Directors of the Borrower (and by any
required  shareholder  action),  has been duly  executed  and  delivered  by the
Borrower,  and constitutes the legal, valid and binding  obligation,  agreement,
instrument  or  conveyance,  as the case may be,  of the  Borrower,  enforceable
against the Borrower in accordance with its terms,  except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,  reorganization and
other similar laws relating to or affecting  creditors'  rights generally and by
the  application  of  general  equitable   principles   (whether  considered  in
proceedings at law or in equity).

         3.  Neither  the  execution  or  delivery  of, nor  performance  by the
Borrower of its obligations  under,  the Transaction  Documents (a) does or will
conflict with,  violate or constitute a breach of (i) any of the  Organizational
Documents  or  Operating  Documents  of the  Borrower,  (ii) any laws,  rules or
regulations  applicable  to the  Borrower,  or (iii)  any  contract,  agreement,
indenture, lease, instrument, commitment, judgment, writ, determination,  order,
decree or arbitral award, of

                                       G-2

<PAGE>

which we have knowledge after due inquiry of appropriate  representatives of the
Borrower,  to which the  Borrower or any  Subsidiary  is a party or by which the
Borrower or any Subsidiary or any of their properties is bound, (b) requires the
prior  consent  of,  notice to,  license  from or filing  with any  Governmental
Authority  which  has not  been  duly  obtained  or made on or prior to the date
hereof,  or (c) does or will result in the creation or  imposition  of any lien,
pledge,  charge or  encumbrance of any nature upon or with respect to any of the
properties of the Borrower or any Subsidiary, except for the Liens in your favor
expressly created pursuant to the Transaction Documents.

         4. Insofar as we have  knowledge of the  operations  and affairs of the
Borrower and upon due inquiry of  appropriate  representatives  of the Borrower,
there is no  pending or  overtly  threatened,  action,  suit,  investigation  or
proceeding (including,  without limitation, any action, suit, investigation,  or
proceeding  under any  environmental  or labor law)  before or by any court,  or
governmental department,  commission, board, bureau, instrumentality,  agency or
arbitral authority, (i) which calls into question the validity or enforceability
of any of the Transaction  Documents,  or the titles to their respective offices
or authority of any officers of the Borrower or (ii) an adverse  result in which
would reasonably be likely to have a Material Adverse Effect.

         5. Insofar as we have  knowledge of the  operations  and affairs of the
Borrower and upon due inquiry of  appropriate  representatives  of the Borrower,
there  exists no event,  circumstance  or  condition  (except that we express no
opinion as to financial reporting or accounting matters) which, immediately upon
giving effect to the Transaction Documents,  would constitute a Default or Event
of Default under the Credit Agreement.

         6.  None of the  transactions  contemplated  by the  Credit  Agreement,
including  without  limitation the use of the proceeds of the Loans provided for
in the Transaction Documents, will violate or result in a violation of Section 7
of the  Securities  Exchange Act of 1934,  as amended,  any  regulations  issued
pursuant  thereto,  or  regulations  T, U or X of the Board of  Governors of the
Federal Reserve System.

         7. A state or  federal  court  located  in the  State of New  York,  if
properly  presented  with the  question and applying the choice of laws rules of
the State of New York,  would in a properly  reasoned opinion give effect to the
provisions of the Transaction Documents providing that the Transaction Documents
shall be governed by and construed in accordance  with the internal  substantive
laws of the State of New York.

         8.  The  rate or  rates of  interest  provided  for in the  Transaction
Documents,  including all late payment charges and the Default Rate provided for
therein,  do not and will violate or conflict  with, or give rise to any defense
to  payment  of  the  Obligations  or to  any  claim,  counterclaim,  setoff  or
recoupment  under, any usury or other law or regulation of the State of New York
governing  the maximum  rate of interest or amount of other  charges that may be
charged  or  incurred  in  transactions  of  the  type  contemplated  under  the
Transaction Documents.

         9. No documentary,  stamp, intangibles,  excise or other tax is payable
to any  Governmental  Authority of the State of New York in connection  with the
execution, delivery,

                                       G-3

<PAGE>

enforcement, recording or filing of any of the Transaction Documents, other than
court  costs and fees  that may be or  become  payable  in  connection  with the
enforcement of the Transaction Documents.

         10.  Solely  by  reason  of (i) the  execution  and  delivery  of,  and
performance by the parties thereto under,  the Transaction  Documents,  (ii) the
acceptance  of  the  Notes  and  the  receipt  of  payments  in  respect  of the
Obligations, or (iii) the enforcement of rights and remedies by the Agent or any
Lender under the Transaction  Documents,  neither the Agent nor any Lender is or
shall (a) be  required to qualify to do business in the State of New York or (b)
be subject to the payment of any franchise or income tax or other tax imposed by
the State of New York or any agency  thereof  payable  in  respect  of  payments
received under the Transaction Documents.

         Our opinions  contained  herein are rendered  solely in connection with
the  transactions  contemplated  under the Transaction  Documents and may not be
relied upon in any manner by any Person other than the  addressees  hereof,  any
successor or assignee of any addressee (including  successive assignees) and any
Person who shall acquire a participation  interest in the interest of any Lender
(collectively,  the "Reliance Parties"),  or by any Reliance Party for any other
purpose.  Our  opinions  herein  shall  not be  quoted  or  otherwise  included,
summarized or referred to in any  publication or document,  in whole or in part,
for any purpose  whatsoever,  or  furnished  to any Person other than a Reliance
Party (or a Person  considering  whether to become a Reliance Party),  except as
may be required of any Reliance  Party by  applicable  law or  regulation  or in
accordance  with any  auditing or  oversight  function or request of  regulatory
agencies to which a Reliance Party is subject.

                                       G-4

<PAGE>

                                    EXHIBIT H

                             Compliance Certificate

Bank of America, N.A.
as Agent
101 North Tryon Street, 15th Floor
NC1-001-15-04
Charlotte, North Carolina  28255
Attention: Agency Services
Telefacsimile:  (704) 386-9923

Bank of America, N.A.
as Agent
Apparel, Textiles & Furnishings
100 North Tryon Street
NC1-007-17-12
Charlotte, North Carolina 28255
Attention: Deirdre B. Doyle
Telephone:        (704) 386-0783
Telefacsimile:             (704) 386-1270

         Reference is hereby made to the Credit Agreement dated as of August __,
1999 (the  "Agreement")  among Kellwood  Company,  a Delaware  corporation  (the
"Borrower"),  the Lenders (as defined in the Agreement),  the Syndication  Agent
and   Documentation   Agent  named  therein  and  Bank  of  America,   N.A.,  as
Administrative  Agent for the Lenders ("Agent").  Capitalized terms used but not
otherwise  defined herein shall have the respective  meanings therefor set forth
in the Agreement.  The  undersigned,  a duly  authorized  and acting  Authorized
Representative,  hereby  certifies to you as of __________  (the  "Determination
Date") as follows:

1.       Calculations:

         A.       Compliance with Section 9.1(a): Consolidated Shareholders'
                  Equity

                  1.       Consolidated Shareholders' Equity required as at
                           the last day of the fiscal quarter immediately
                           preceding the Determination Date      $______________

                  2.       Consolidated Net Income for the
                           most recent fiscal quarter x 0.5      $______________

                  3.       100% of the aggregate amount of all increases

                                       H-1

<PAGE>

                           in the stated capital and additional paid-in capital
                           accounts of the Borrower resulting from the issuance
                           of equity securities or other capital investments
                                                                 $______________

                  4.       Sum of A.1 + A.2 + A.3                $______________

                  5.       Actual Consolidated Shareholders' Equity
                                                                 $______________

                  REQUIRED: LINE A.5 MUST NOT BE LESS THAN LINE A.4

         B.       Compliance with Section 9.1(b): Consolidated Leverage Ratio

                  1.       Consolidated Indebtedness             $______________

                  2.       Consolidated EBITDA*                  $______________

                  3.       B.1 / B.2                             ______ to 1.00

                  REQUIRED: LINE B.3 MUST NOT BE GREATER THAN 3.50 TO 1.00

         C.       Compliance with Section 9.1(c): Consolidated Interest Coverage
                  Ratio

                  1.       Consolidated EBITDA*                  $______________

                  2.       Capital Expenditures                  $______________

                  3.       C.1 - C.2                             $______________

                  4.       Consolidated Interest Expense         $______________

                  5.       C.3 / C.4                             ______ to 1.00

                  REQUIRED: LINE C.2 MUST NOT BE LESS THAN 2.25 TO 1.00

*See Attached Schedule 1 for calculation of Consolidated EBITDA

                                       H-2

<PAGE>

2.       No Default

                           A.  Since  __________  (the date of the last  similar
                  certification),  (a) the  Borrower  has not  defaulted  in the
                  keeping,   observance,   performance  or  fulfillment  of  its
                  obligations pursuant to any of the Loan Documents;  and (b) no
                  Default  or Event of  Default  specified  in  Article X of the
                  Agreement has occurred and is continuing.

                           B. If a  Default  or Event of  Default  has  occurred
                  since __________ (the date of the last similar certification),
                  the  Borrower  proposes  to take  the  following  action  with
                  respect to such Default or Event of Default: _________________
                  ______________________________________________________________
                  _____________________________________.
                           (Note,   if  no  Default  or  Event  of  Default  has
                           occurred, insert "Not Applicable").

         The  Determination  Date is the  date of the  last  required  financial
statements  submitted  to the  Lenders in  accordance  with  Section  8.1 of the
Agreement.

IN  WITNESS  WHEREOF,  I  have  executed  this  Certificate  this  _____  day of
__________, 19___.

                                       By:
                                          --------------------------------------
                                                Authorized Representative

                                       Name:
                                            ------------------------------------

                                       Title:
                                             -----------------------------------

                                       H-3

<PAGE>

                      Schedule 1 to Compliance Certificate

            Calculation of Consolidated EBIT and Consolidated EBITDA

<TABLE>
<CAPTION>

                                           Borrower's Actual          Acquisitions             Pro Forma**
                                           -----------------          ------------             -----------
<S>                                        <C>                        <C>                      <C>
A.       Consolidated Net Income
         less all noncash income           $______________            $____________            $____________
B.       Consolidated Interest
                  Expense                  $______________            $____________            $____________
C.       Taxes on income                   $______________            $____________            $____________
D.       Amortization                      $______________            $____________            $____________
E.       Depreciation                      $______________            $____________            $____________
F.       All other noncash
         expenses                          $______________            $____________            $____________
G.       CONSOLIDATED EBITDA               $______________            $____________            $____________
         (A + B+ C+ D + E + F)

** Determined on a historical pro forma basis as if such  Acquisitions  had been
consummated as a "pooling of interests"  notwithstanding  the elimination of the
"pooling of interests" accounting method under GAAP.

</TABLE>

                                       H-4

<PAGE>

                                  Schedule 1.1
                                  ------------

                           Existing Letters of Credit

Commercial Letters of Credit
----------------------------

Number         Beneficiary                             Amount             Expiry
------         -----------                             ------             ------

Standby Letters of Credit

Number         Beneficiary                             Amount             Expiry
------         -----------                             ------             ------

                                       S-1

<PAGE>

                                  Schedule 7.3
                                  ------------

                  Subsidiaries and Investments in Other Persons

                                       S-2

<PAGE>

                                  Schedule 7.5
                                  ------------

                                  Indebtedness

                                       S-3

<PAGE>

                                  Schedule 7.6
                                  ------------

                                      Liens

                                       S-4

<PAGE>

                                  Schedule 7.7
                                  ------------

                                   Tax Matters

                                       S-5

<PAGE>

                                  Schedule 7.9
                                  ------------

                                   Litigation

                                       S-6

<PAGE>

                                  Schedule 7.17
                                  -------------

                              Environmental Matters

                                       S-7<PAGE>

                                                                   EXHIBIT 10.02
                                                                   -------------

                         BINDING SETTLEMENT AGREEMENT
                         ----------------------------

     THIS AGREEMENT ("Settlement Agreement") is made and entered into as of this
9th day of April, 2001, by and between the following parties:  SUNNYSIDE II,
L.P., a Delaware limited partnership ("Sunnyside II"); SUNNYSIDE I, INC., a
Delaware corporation ("Sunnyside I"); NRG ENERGY, INC., a Delaware corporation;
BABCOCK & WILCOX INVESTMENT COMPANY, a Delaware corporation; SUNNYSIDE
COGENERATION ASSOCIATES, a Utah joint venture ("SCA") and all of these entities'
officers, directors, employees, agents, shareholders, affiliates, insurers,
predecessors, successors, attorneys and assigns (collectively referred to as
"Plaintiffs") and ENVIRONMENTAL POWER CORPORATION, a Delaware corporation;
SUNNYSIDE POWER CORPORATION, a Delaware corporation; KAISER SYSTEMS, INC., a
Delaware corporation ("Kaiser Systems"); and KAISER POWER OF SUNNYSIDE, INC., a
Delaware corporation ("Kaiser Power") and all of these entities' officers,
directors, employees, agents, shareholders, affiliates, insurers, predecessors,
successors, attorneys and assigns (collectively referred to as "Defendants")
(Plaintiffs and Defendants are hereinafter collectively referred to as the
"Settling Parties");

     WHEREAS, the Settling Parties are parties to a lawsuit captioned Sunnyside
II, L.P., et al. v. Environmental Power Corporation, et al., in the Seventh
District Court for Carbon County, Utah, Civil No. 960700211 CN (the
"Litigation");

     WHEREAS, as more fully set forth in the Third Amended Complaint, Plaintiffs
alleged in the Litigation that Defendants breached a Purchase and Sale
Agreement, dated December 31, 1994 ("Purchase Agreement" or "Purchase and Sale
Agreement"), pursuant to which, Sunnyside II (then B & W Sunnyside, L.P.) and
Sunnyside I (then NRG Sunnyside) had acquired the interests of Kaiser Systems
and Kaiser Power in SCA;
<PAGE>

     WHEREAS, in the Litigation, Plaintiffs sought, among other things, to
recover damages suffered as a result of said breaches, and to offset their
damages and losses against the outstanding principal and accrued interest due
under two non-negotiable Promissory Notes, dated December 31, 1994, each in the
principal sum of $2,357,000 (collectively referred to hereinafter as the
"Notes").  The first Note was payable to Kaiser Power, TIC Sunnyside, Inc.
("TIC") and Main Sunnyside, Inc. ("Main"); the second Note was payable to Kaiser
Systems, TIC and Main (The successors, assigns and anyone claiming by, through
or under TIC and/or Main are hereby included in the terms "Main" and "TIC");

     WHEREAS, as more fully set forth in the Defendants' Counterclaim,
Defendants asserted counterclaims against Plaintiffs in the Litigation;
including claims for breach of the Purchase and Sale Agreement, breach of the
Notes, breach of the duty of good faith and fair dealing, misrepresentation and
tortious interference;

     WHEREAS, the aforementioned Purchase and Sale Agreement provided for
attorneys fees to the prevailing party or parties and the Settling Parties have
incurred and will continue to incur substantial costs and attorneys fees if this
litigation is not resolved;

     WHEREAS, the Settling Parties wish to dismiss the Litigation and resolve
certain matters pertaining to the Litigation on the terms set forth below;

     WHEREAS, the Settling Parties wish to resolve and settle all claims as
between them for payments, offsets, damages, costs, attorneys fees or other
claims related in any way to the issues raised by the Litigation;

     WHEREAS, the Plaintiffs desire to retain any and all claims and defenses
they may have against Main or TIC by reason of breach or claims of breach of the
Purchase and Sale Agreement; and

                                       2
<PAGE>

     WHEREAS, the Defendants require indemnity and the Plaintiffs agree to
indemnify and hold harmless the Defendants from any claims of TIC or Main or
their successors or assigns or any party claiming by, through or under them that
are in any way related to this Settlement Agreement, the nonpayment of TIC or
Main under the Notes, the receipt of money from Plaintiffs, the absence of any
further effort by Defendants to collect sums of money from the Plaintiffs,
claims which would have been satisfied if the Notes were paid, or any other
claims related to the issues of the Litigation or the prior dealings or
relationships of the Settling Parties;

     NOW, THEREFORE, in consideration of the promises, covenants and conditions
contained herein, the receipt and sufficiency of which is acknowledged, the
Settling Parties agree as follows:

                               TERMS OF SETTLEMENT
                               -------------------

     1.  All definitions of terms contained in the foregoing preamble are herein
incorporated as applicable to the numbered paragraphs of this Settlement
Agreement.

     2.  Upon receipt of a fully-executed Settlement Agreement and by no later
than 5:00 p.m. Central Standard Time on April 16, 2001, Plaintiffs agree to pay
to Defendants the sum of One Million Five Hundred Thousand and no/100ths Dollars
($1,500,000.00) by wire transfer to:  Environmental Power Corporation, c/o
Wainwright Bank & Trust Company, ABA number 011002550, Savings Account number
311004983.  This sum represents settlement of Defendants claims against
Plaintiffs and payment of attorneys' fees and costs incurred by Defendants in
defending the litigation and payment in settlement of Defendants' claims related
to net adjustments under the Final Closing Adjustment Worksheet, accounts
payable and unreplaced collateral, including interest and consequential damages
incurred in connection with said claims.

                                       3
<PAGE>

     3.  In consideration of the covenants, promises and agreements made in this
Settlement Agreement, Defendants hereby completely and unconditionally release
and forever discharge Plaintiffs from any and all claims, demands, causes of
action, obligations and liability for damages arising out of or related to the
Litigation and/or any prior dealings or relationships between the Settling
Parties.  This release includes, but is not limited to, all past or present
claims, demands, obligations, actions, damages, promises, agreements, costs,
losses, expenses and compensation of any nature and from whatever source in law
or equity, whether contingent or fixed, known or unknown, suspected or
unsuspected, liquidated or unliquidated, whether based on tort (including
negligence), statute, contract, vicarious liability or any other theory of
recovery and whether for compensation, court costs, attorneys' fees or punitive
damages which Defendants have against Plaintiffs relating to the Litigation
and/or any prior dealings or relationships between the Settling Parties.
Defendants further agree not to institute any lawsuit or administrative action
regarding any matter which has been released hereby and that if this covenant is
violated it shall be considered a breach of this Settlement Agreement and shall
entitle the Plaintiffs released hereby to any damages caused by the breach,
together with reasonable attorneys' fees and costs incurred in defending or
otherwise responding to said suit or claim but shall not invalidate the releases
given.

     4.  In consideration of the covenants, promises and agreements made in this
Settlement Agreement, Plaintiffs hereby agree, except as provided herein, to
dismiss all claims they have or may have raised in the Litigation without
prejudice, and further agree never to initiate any further litigation that is
any way related to the subject matter of the Litigation, any contracts or
agreements between the Settling Parties or the prior dealings or relationships
between the Settling Parties, whether such be by means of complaint,
counterclaim, third party action, cross claim, demand for

                                       4
<PAGE>

arbitration or any other means, to the extent any such action has or will have
the possible effect of requiring Defendants to incur costs or attorneys fees or
pay damages, claims, costs, attorney fees or incur some form of other relief
against them. However, it is the express intent of the Settling Parties that
Plaintiffs shall retain the right to allege, claim and attempt to prove any
claims it had or has against Defendants for the purpose of initiating actions
against, or defending against actions initiated by, TIC or Main. If this
covenant is violated it shall be considered a breach of this Settlement
Agreement and a shall entitle the Defendants hereby to any damages caused by the
breach, together with reasonable attorneys' fees and costs incurred in defending
or otherwise responding to said suit or claim. Any breach of this provision also
shall invalidate all releases given by the Defendants in this Settlement
Agreement.

     5.  The Settling Parties wish to preserve any and all claims and defenses
that Plaintiffs may have arising out of or related to the Purchase Agreement
and/or the Notes (hereinafter referred to as "Claims"), whether or not they were
asserted in the Litigation, without risk that such Claims may be barred by any
statutes of limitations, statutes of repose, or any other legal or equitable
doctrines, including, without limitation, the doctrines of laches, estoppel, or
waiver (hereinafter referred to as "Limitations Period").  The Settling Parties
therefore agree that the running of any Limitations Period applicable to or
otherwise affecting the Claims is hereby tolled as of May 2, 1996, the date on
which the Litigation was commenced.  In other words, any Claim asserted by
Plaintiffs (whether in the form of a claim, cross-claim, counterclaim,
affirmative defense or otherwise) shall be deemed, for purposes of any
Limitation Period, the same as if the Claim had been asserted on May 2, 1996.

     6.  The Settling Parties further agree that Plaintiffs have met all other
requirements and

                                       5
<PAGE>

prerequisites for the assertion of said Claims, including but not limited to
providing all notices and/or satisfying all conditions precedent required by the
Purchase Agreement, the Notes or otherwise.

     7.  The Settling Parties agree that, in the event a lawsuit or other
proceeding is commenced against Plaintiffs and/or any of the Defendants by TIC
and/or Main, or any of their successors, predecessors, assigns, affiliates, or
related entities, arising out of or related to the Notes, the execution of this
Settlement Agreement,  the Litigation, or prior dealings between the Settling
Parties related to the Litigation, the Notes or the Purchase Agreement,
Plaintiffs will conduct the defense of any such lawsuit or proceeding and
indemnify and hold harmless Defendants from any and all claims, demands,
judgments, penalties, liabilities, damages, equitable relief and reasonable
costs and expenses including attorneys fees incurred by Defendants as a result
of any such lawsuit or proceeding.  Plaintiffs shall have sole discretion to
select counsel to represent Defendants in the lawsuit or proceeding.  Defendants
agree to notify Plaintiffs of the commencement of any such lawsuit or proceeding
at the earliest practical moment, not to exceed 30 days after notice thereof.
Defendants agree to cooperate and render reasonable assistance to Plaintiffs in
connection with any such lawsuit or proceeding.  Plaintiffs agree that any
settlement with Main will include a complete release of the Defendants.

     8.  Contemporaneously with execution of this Settlement Agreement, the
Settling Parties agree to direct their attorneys to execute and file a joint
Stipulation of Dismissal without prejudice of the Litigation in the form
attached as Exhibit A.  Each Settling Party will bear its own litigation and
courts costs and attorneys fees, and no claim will be made by any Settling Party
for litigation costs or attorneys' fees.

     9.  The Settling Parties acknowledge that the Purchase and Sale Agreement
contained

                                       6
<PAGE>

a provision for title insurance and that the Defendants may have expended sums
to require any insurer to maintain a commitment to issue such a policy.  The
Plaintiffs agree that this settlement includes resolution of any and all claims
regarding title insurance against the Defendants and that Defendants have no
further obligation to provide or pay for such a policy or maintain a commitment
for issuance of such a policy or continue making any payments to insurers
related to the title insurance referred to in the Purchase and Sale Agreement.
Provided, however, that Plaintiffs may require Defendants to assign any such
title policy or commitment without any cost or obligation on the part of
Defendants.

     10.  This Settlement Agreement is a compromise of claims herein identified,
past or present.  The claims between the parties are disputed, and this
Settlement Agreement is not an admission of wrongdoing or liability on behalf of
any of the Settling Parties B each of whom deny any liability or wrongdoing.

     11.  This Settlement Agreement contains the entire agreement and
understanding between the Settling Parties and supersedes and replaces all prior
negotiations or proposed agreements or amendments, written or oral.  The
Settling Parties and each of them acknowledge that other than as stated in this
Settlement Agreement no other party, agent or attorney or any other party has
made any promises or representation or warranty to induce them to enter into
this agreement, and the Settling Parties acknowledge that they have not executed
this Settlement Agreement in reliance upon any such promise, representation or
warranty not contained herein.  This Settlement Agreement contains the entire
agreement between the Settling Parties and the terms of the Settlement Agreement
are contractual not a mere recital.

     12.  The Settling Parties acknowledge and represent that they have each had
the benefit

                                       7
<PAGE>

of their own legal counsel, that they are relying upon legal advice of their
counsel, that this Settlement Agreement has been completely read by them,
explained to them by their respective counsel, and that the terms are fully
understood and voluntarily accepted by them.

     13.  The Settling Parties acknowledge and agree that each has negotiated
and reviewed the terms of this Settlement Agreement, assisted by such counsel as
they desired, and has contributed to its revisions.  The parties further agree
that the rule of construction that any ambiguities are resolved against the
drafting party will be subordinated to the principle that the terms and
provisions of this Settlement Agreement will be construed fairly as to both
parties and not in favor of or against any party.

     14.  In the event legal proceedings are initiated to enforce any terms of
this Agreement, the prevailing Settling Party shall be entitled to recover all
costs and expenses, including reasonable attorneys' fees.

     15.  This Settlement Agreement may be executed in counterparts, but shall
be construed as if signed in one document.

Dated:  April 4, 2001.        SUNNYSIDE II, L.P.
                              By: Sunnyside II, Inc., General Partner

                              By: /s/ Charles H. Linthicum
                              ----------------------------
                              Its President

STATE OF MARYLAND
                    ) ss.
COUNTY OF BALTIMORE

     The foregoing instrument was acknowledged before me this 4th day of April,
2001, by Charles H. Linthicum, the President of Sunnyside II, Inc., the general
partner of Sunnyside II, L.P., a Delaware limited partnership, on behalf of the
partnership.

                              /s/ Mary E. Robey
                              -----------------
                              Notary Public

                                       8
<PAGE>

Dated:  April 6, 2001.              SUNNYSIDE HOLDINGS I, INC.

                                    By: /s/ Gregory B. Lawyer
                                    -------------------------
                                    Its President
STATE OF CALIFORNIA
                    ) ss.
COUNTY OF SAN DIEGO

     The foregoing instrument was acknowledged before me this 6th day of April,
2001, by Gregory B. Lawyer, the President of Sunnyside Holdings I, Inc., a
Delaware corporation, on behalf of the corporation.

                              /s/ Dionne M. Beeson
                              --------------------
                              Notary Public

Dated: March 19, 2001.              NRG ENERGY, INC.

                                    By: /s/ Craig Mataczynski
                                    -------------------------
                                    Its Senior Vice President

STATE OF MINNESOTA
                    ) ss.
COUNTY OF HENNEPIN

     The foregoing instrument was acknowledged before me this 19th day of March,
2001, by Craig Mataczynski, the Senior Vice President of NRG Energy, Inc., a
Delaware corporation, on behalf of the corporation.

                              /s/ Kathy Lynn Ryan-Yares
                              -------------------------
                              Notary Public

                                       9
<PAGE>

Dated:  March 21, 2001.       BABCOCK & WILCOX INVESTMENT COMPANY

                              By: /s/ John T.  Nesser, III
                              ----------------------------
                              Its Executive Vice President

STATE OF LOUISIANA
                  ) ss.
PARISH OF ORLEANS

     The foregoing instrument was acknowledged before me this 21st day of March,
2001, by John T. Nesser, III, the Executive Vice President of Babcock & Wilcox
Investment Company, a Delaware corporation, on behalf of the corporation.

                              /s/ Rochelle L. Wald
                              --------------------
                              Notary Public

Dated:  April 6th, 2001.      SUNNYSIDE COGENERATION ASSOCIATES

                              By: Sunnyside Holdings I, Inc. General Partner
                              By: /s/ Gregory B. Lawyer
                              -------------------------
                              Its President

                              By: Sunnyside II, L. P., General Partner
                              By: Sunnyside II, Inc.
                              By: /s/ Charles H. Linthicum
                              ----------------------------
                              Its  President

STATE OF CALIFORNIA
                    ) ss.
COUNTY OF SAN DIEGO

     The foregoing instrument was acknowledged before me this 6th day of April,
2001, by Gregory B. Lawyer, the President of Sunnyside Holdings, I, Inc.,
general partner of Sunnyside Cogeneration Associates, a Utah joint venture, on
behalf of the joint venture.

                              /s/ Dionne M. Beeson
                              --------------------
                              Notary Public

STATE OF MARYLAND
                    ) ss.
COUNTY OF BALTIMORE

  The foregoing instrument was acknowledged before me the 4th day of April ,
2001, by Charles H. Linthicum the President of Sunnyside II, Inc., general
partner of Sunnyside II, L.P. , general partner of Sunnyside Cogeneration
Associates, a Utah joint venture, on behalf of the joint venture.

                              /s/ Mary E. Robey
                              -----------------
                              Notary Public

                                       10
<PAGE>

Dated:  April 6th, 2001.            ENVIRONMENTAL POWER
                                    CORPORATION

                                    By: /s/ Donald A. Livingston
                                    ----------------------------
Its  President

STATE OF NEW HAMPSHIRE
                       ) ss.
COUNTY OF ROCKINGHAM

     The foregoing instrument was acknowledged before me this 6th day of April,
2001, by Donald A. Livingston, the President of Environmental Power Corporation,
a Delaware corporation, on behalf of the corporation.

                              /s/ Carol A. Markie
                              -------------------
                              Notary Public

Dated:  April 6, 2001.          SUNNYSIDE POWER CORPORATION

                                    By: /s/ Donald A. Livingston
                                    ----------------------------
                                    Its Vice President

STATE OF NEW HAMPSHIRE
                       ) ss.
COUNTY OF ROCKINGHAM

     The foregoing instrument was acknowledged before me this 6th  day of April,
2001, by Donald A. Livingston, the Vice President of Sunnyside Power
Corporation, on behalf of the corporation.

                              /s/ Carol A. Markie
                              -------------------
                              Notary Public

                                       11
<PAGE>

Dated:  April 6, 2001.          KAISER SYSTEMS, INC.

                                    By: /s/ Donald A. Livingston
                                    ----------------------------
                                    Its Vice President

STATE OF NEW HAMPSHIRE
                       ) ss.
COUNTY OF ROCKINGHAM

     The foregoing instrument was acknowledged before me this 6th  day of April,
2001, by Donald A. Livingston, the Vice President of Kaiser Systems, Inc., a
Delaware corporation, on behalf of the corporation.

                              /s/ Carol A. Markie
                              -------------------
                              Notary Public

Dated:  April 6, 2001.              KAISER POWER OF SUNNYSIDE, INC.

                                    By: /s/ Donald A. Livingston
                                    ----------------------------
                                    Its Vice President

STATE OF NEW HAMPSHIRE
                       ) ss.
COUNTY OF ROCKINGHAM

     The foregoing instrument was acknowledged before me this 6th day of April,
2001, by Donald A. Livingston, the Vice President of Kaiser Power of Sunnyside,
Inc., a Delaware corporation, on behalf of the corporation.

                              /s/ Carol A. Markie
                              -------------------
                              Notary Public

                                       12

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