Document:

WARRANTS TO PURCHASE COMMON STOCK
                        OF MIRAVANT MEDICAL TECHNOLOGIES

No.  ____                                      Certificate for (SHARES) Warrants

     This certifies that PHARMACIA & UPJOHN TREASURY SERVICES, AB, or registered
assigns,  is the  registered  holder of the number of Warrants  set forth above.
Each Warrant entitles the holder thereof (a "Holder"), subject to the provisions
contained  herein and in the Warrant  Agreement  referred to below, to purchase,
from Miravant Medical Technologies,  a Delaware corporation (the "Company"), the
number of shares of the Company's  common  stock,  par value $.01 per share (the
"Common  Stock"),  provided in the Warrant  Agreement,  at an exercise  price of
$(PRICE) per Warrant and subject to all of the terms and conditions set forth in
the Warrant Agreement. At the sole election of the Company, upon the exercise of
any  Warrant,  the  Company may pay to the Holder a certain  amount of cash,  as
provided in the Warrant  Agreement,  in lieu of delivering  the shares of Common
Stock.

     This Warrant Certificate is issued under and in accordance with the Warrant
Agreement, dated as of February 18, 1999 (the "Warrant Agreement"),  between the
Company and Pharmacia & Upjohn Treasury Services AB (the "Initial Holder"),  and
is subject to the terms and provisions  contained in the Warrant  Agreement,  to
all of which  terms  and  provisions  the  Holder  of this  Warrant  Certificate
consents by  acceptance  hereof.  The Warrant  Agreement is hereby  incorporated
herein by  reference  and made a part  hereof.  Reference  is hereby made to the
Warrant Agreement for a full statement of the respective rights,  limitations of
rights,  duties,  obligations  and immunities  thereunder of the Company and the
Holders of the Warrants.

     This Warrant  Certificate  shall  terminate  and be void as of the Close of
Business on (EXPIRATION DATE).

     As  provided  in  the  Warrant  Agreement  and  subject  to the  terms  and
conditions  therein set forth,  the Warrants shall be  exercisable  from time to
time on any Business Day ending on the Expiration Date.

     The  number  of shares of Common  Stock  issuable,  and the  amount of cash
payable, upon the exercise of each Warrant are subject to adjustment as provided
in the Warrant Agreement.

     Upon payment therefor,  all shares of Common Stock issued upon the exercise
of  Warrants  shall  be  duly  authorized,   validly  issued,   fully  paid  and
nonassessable free of preemptive rights and free from all taxes, liens,  charges
and security interests with respect to the issuance thereof.

     In order to exercise a Warrant, the registered holder hereof must surrender
this Warrant  Certificate  to the Registrar  for the Warrants (the  "Registrar")
with  the form of  election  on the  reverse  hereof  or  attached  hereto  duly
executed,  together  with payment of the  Exercise  Price then in effect for the
share(s) of Common Stock as to which the Warrant(s)  represented by this Warrant
Certificate are submitted for exercise,  all subject to the terms and conditions
hereof and of the Warrant Agreement. Any such payment of the cash Exercise Price
shall be by certified or official  bank check or wire transfer to the Company of
same day funds.

     The Company shall pay all transfer,  stamp and other similar taxes that may
be imposed in respect of the issuance or delivery of Warrants,  or in respect of
the  issuance or delivery  of any  securities  upon  exercise of  Warrants.  The
Company shall not be required,  however,  to pay any tax or other charge imposed
in connection with any transfer  involved in the issuance of any certificate for
shares of Common Stock or other securities underlying the Warrants or payment of
cash to any Person  other than the Holder of a Warrant  Certificate  surrendered
upon the  exercise  or purchase  of a Warrant,  and in case of such  transfer or
payment, the Company shall not be required to issue any stock certificate or pay
any cash until such tax or other charge has been paid or it has been established
to the  Company's  reasonable  satisfaction  that no such tax or other charge is
due.
     Subject to the Warrant Agreement,  this Warrant  Certificate and all rights
hereunder are transferable by the registered holder hereof, in whole or in part,
on  the  Warrant  Register  of the  Company,  upon  surrender  of  this  Warrant
Certificate  to the  Registrar,  duly endorsed by, or  accompanied  by a written
instrument  of  transfer in form  reasonably  satisfactory  to the Company  duly
executed by the Holder hereof or his attorney duly  authorized in writing.  Upon
any partial  transfer,  the Company  will issue and deliver to such holder a new
Warrant  Certificate  or  Certificates  with  respect  to  any  portion  not  so
transferred.

     No  service  charge  shall be made for any  transfer  or  exchange  of this
Warrant Certificate, but the Company may require payment from the Holder of this
Warrant Certificate of a sum sufficient to cover any stamp or other governmental
charge  or tax that may be  imposed  in  connection  with any such  transfer  or
exchange.

     Each taker and holder of this Warrant Certificate, by taking or holding the
same, consents and agrees that this Warrant  Certificate,  when duly endorsed in
blank,  shall be deemed negotiable and that when this Warrant  Certificate shall
have been so  endorsed,  the holder  hereof may be treated by the  Company,  the
Registrar and all other  persons  dealing with this Warrant  Certificate  as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights  represented  hereby,  or to the  transfer  hereof on the register of the
Company maintained by the Registrar, any notice to the contrary notwithstanding,
but until such  transfer on such  register,  the Company and the  Registrar  may
treat the registered Holder hereof as the owner for all purposes.

     This Warrant Certificate and the Warrant Agreement are subject to amendment
as provided in the Warrant Agreement.

     All terms used in this Warrant  Certificate that are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.

     Copies of the  Warrant  Agreement  are on file at the office of the Company
and may be  obtained  by writing to the Company at the  following  address:  336
Bollay Drive,  Santa  Barbara,  California  93117,  Attention:  Chief  Financial
Officer.

Dated: (DATE)

                                       MIRAVANT MEDICAL TECHNOLOGIES

                                        By:
                                            ------------------------------------
                                            John M. Philpott
                                            Chief Financial Officer

cc:   Bob Randall, Pharmacia & Upjohn
      Gary Kledzik, Miravant Medical Technologies
      David Mai, Miravant Medical TechnologiesExhibit 10.1

                                CREDIT AGREEMENT

                                      among

                        DOLLAR TREE DISTRIBUTION, INC.
                                  as Borrower,

                   CERTAIN OF THE DOMESTIC AFFILIATES OF THE
                   BORROWER FROM TIME TO TIME PARTIES HERETO,
                                 as Guarantors,

                           THE LENDERS PARTIES HERETO,
                              FLEET NATIONAL BANK,
                              as Syndication Agent,

                                 SUNTRUST BANK,
                             as Documentation Agent,

                                       and

                           FIRST UNION NATIONAL BANK,
                             as Administrative Agent

                           Dated as of March 12, 2001

                          FIRST UNION SECURITIES, INC.,
                        as Sole Arranger and Book Runner

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I  DEFINITIONS........................................................1
 Section 1.1    Defined Terms.................................................1

 Section 1.2    Other Definitional Provisions................................22

 Section 1.3    Accounting Terms.............................................22

ARTICLE II  THE LOANS; AMOUNT AND TERMS......................................22
 Section 2.1    Revolving Loans..............................................22

 Section 2.2    Letter of Credit Subfacility.................................24

 Section 2.3    Fees.........................................................27

 Section 2.4    Reduction or Increase of the Revolving Commitments...........28

 Section 2.5    Prepayments..................................................30

 Section 2.6    Minimum Borrowing Amounts and Principal Amounts of Tranches..31

 Section 2.7    Interest Payments; Default Interest; Interest Payment Dates..31

 Section 2.8    Conversion Options...........................................32

 Section 2.9    Computation of Interest and Fees.............................32

 Section 2.10   Pro Rata Treatment and Payments..............................33

 Section 2.11   Non-Receipt of Funds by the Administrative Agent.............34

 Section 2.12   Inability to Determine Interest Rate.........................35

 Section 2.13   Illegality...................................................36

 Section 2.14   Requirements of Law..........................................36

 Section 2.15   Indemnity....................................................37

 Section 2.16   Taxes........................................................38

 Section 2.17   Indemnification; Nature of Issuing Lender's Duties...........40

 Section 2.18   Waiver of Notice.............................................41

 Section 2.19   Defaulting Lenders; Limitation on Claims.....................42

 Section 2.20   Replacement of Lenders.......................................44

ARTICLE III  REPRESENTATIONS AND WARRANTIES..................................44
 Section 3.1    Financial Condition..........................................44

 Section 3.2    No Change....................................................45

 Section 3.3    Corporate Existence; Compliance with Law.....................45

 Section 3.4    Corporate Power; Authorization; Enforceable Obligations......45

 Section 3.5    No Legal Bar; No Default.....................................46

 Section 3.6    No Material Litigation.......................................46

 Section 3.7    Government Acts..............................................46

 Section 3.8    Margin Regulations...........................................46

 Section 3.9    ERISA........................................................47

 Section 3.10   Environmental Matters........................................47

 Section 3.11   Purpose of Loans.............................................48

 Section 3.12   Subsidiaries.................................................48

 Section 3.13   Ownership....................................................49

 Section 3.14   Indebtedness.................................................49

 Section 3.15   Taxes........................................................49

 Section 3.16   Intellectual Property........................................49
<PAGE>

 Section 3.17   Solvency.....................................................49

 Section 3.18   Investments..................................................50

 Section 3.19   No Burdensome Restrictions...................................50

 Section 3.20   Brokers' Fees................................................50

 Section 3.21   Labor Matters................................................50

 Section 3.22   Accuracy and Completeness of Information.....................50

ARTICLE IV  CONDITIONS PRECEDENT.............................................51
 Section 4.1    Conditions to Closing Date and Initial
                Revolving Loans..............................................51

 Section 4.2    Conditions to All Extensions of Credit.......................54

ARTICLE V  AFFIRMATIVE COVENANTS.............................................55
 Section 5.1    Financial Statements.........................................55

 Section 5.2    Certificates; Other Information..............................56

 Section 5.3    Payment of Obligations.......................................56

 Section 5.4    Conduct of Business and Maintenance of Existence.............57

 Section 5.5    Maintenance of Property; Insurance...........................57

 Section 5.6    Inspection of Property; Books and Records; Discussions.......57

 Section 5.7    Notices......................................................57

 Section 5.8    Environmental Laws...........................................59

 Section 5.9    Financial Covenants..........................................60

 Section 5.10   Obligations Regarding Subsidiaries; Additional
                Subsidiary Guarantors........................................60

 Section 5.11   Compliance with Law..........................................60

 Section 5.12   Additional Credit Parties....................................61

 Section 5.13   Covenants Related to Certain Subsidiaries....................61

ARTICLE VI  NEGATIVE COVENANTS...............................................61
 Section 6.1    Indebtedness.................................................61

 Section 6.2    Liens........................................................62

 Section 6.3    Nature of Business...........................................62

 Section 6.4    Consolidation, Merger, Sale or Purchase of Assets, etc.......62

 Section 6.5    Advances, Investments and Loans..............................64

 Section 6.6    Transactions with Affiliates.................................64

 Section 6.7    Ownership of Subsidiaries; Restrictions......................64

 Section 6.8    Fiscal Year; Organizational Documents; Material Contracts....65

 Section 6.9    Limitation on Actions........................................65

 Section 6.10   Restricted Payments..........................................66

 Section 6.11   Prepayments of Indebtedness, etc.............................66

 Section 6.12   Sale Leasebacks..............................................67

 Section 6.13   Use of Proceeds..............................................67

ARTICLE VII  EVENTS OF DEFAULT...............................................67
 Section 7.1    Events of Default............................................67

 Section 7.2    Acceleration; Remedies.......................................70

ARTICLE VIII  THE AGENT......................................................70
 Section 8.1    Appointment..................................................70

 Section 8.2    Delegation of Duties.........................................71

 Section 8.3    Exculpatory Provisions.......................................71
<PAGE>

 Section 8.4    Reliance by Administrative Agent.............................71

 Section 8.5    Notice of Default............................................72

 Section 8.6    Non-Reliance on Administrative Agent and Other Lenders.......72

 Section 8.7    Indemnification..............................................73

 Section 8.8    Administrative Agent in Its Individual Capacity..............73

 Section 8.9    Successor Administrative Agent...............................73

 Section 8.10   Documentation Agent and Syndication Agent....................74

ARTICLE IX  MISCELLANEOUS....................................................74
 Section 9.1    Amendments and Waivers.......................................74

 Section 9.2    Notices......................................................76

 Section 9.3    No Waiver; Cumulative Remedies...............................77

 Section 9.4    Survival of Representations and Warranties...................77

 Section 9.5    Payment of Expenses and Taxes................................77

 Section 9.6    Successors and Assigns; Participations; Purchasing Lenders...78

 Section 9.7    Adjustments; Set-off.........................................80

 Section 9.8    Table of Contents and Section Headings.......................81

 Section 9.9    Counterparts.................................................82

 Section 9.10   Effectiveness................................................82

 Section 9.11   Severability.................................................82

 Section 9.12   Integration..................................................82

 Section 9.13   Governing Law................................................82

 Section 9.14   Consent to Jurisdiction and Service of Process...............82

 Section 9.15   Arbitration..................................................83

 Section 9.16   Confidentiality..............................................84

 Section 9.17   Acknowledgments..............................................85

 Section 9.18   Waivers of Jury Trial........................................85

ARTICLE X  GUARANTY..........................................................85
 Section 10.1   The Guaranty.................................................85

 Section 10.2   Bankruptcy...................................................86

 Section 10.3   Nature of Liability..........................................86

 Section 10.4   Independent Obligation.......................................87

 Section 10.5   Authorization................................................87

 Section 10.6   Reliance.....................................................87

 Section 10.7   Waiver.......................................................87

 Section 10.8   Limitation on Enforcement....................................88

 Section 10.9   Confirmation of Payment......................................89

Schedules

Schedule 1.1(a)                     Account Designation Letter
Schedule 1.1(b)                     Investments
Schedule 1.1(c)                     Liens
Schedule 2.1(a)                     Lenders and Commitments
Schedule 2.1(b)(i)                  Form of Notice of Borrowing
Schedule 2.1(d)                     Form of Revolving Note

<PAGE>

Schedule 2.8                        Form of Notice of Conversion/Extension
Schedule 2.16                       Section 2.16 Certificate
Schedule 3.12                       Subsidiaries
Schedule 4.1(b)                     Form of Secretary's Certificate
Schedule 4.1(h)                     Form of Solvency Certificate
Schedule 5.12                       Form of Joinder Agreement
Schedule 6.1(b)                     Indebtedness
Schedule 9.2                        Lenders' Lending Offices
Schedule 9.6(c)                     Form of Commitment Transfer Supplement

<PAGE>

                                       89

         CREDIT AGREEMENT, dated as of March 12, 2001, among DOLLAR TREE
DISTRIBUTION, INC., a Virginia corporation (the "Borrower"), DOLLAR TREE STORES,
INC., a Virginia corporation (the "Parent Guarantor"), each Domestic Subsidiary
of the Borrower and the Parent Guarantor identified as a "Guarantor" on the
signature pages hereto and such other Domestic Subsidiaries of the Borrower and
the Parent Guarantor as may from time to time become a party hereto
(collectively, the "Subsidiary Guarantors" and together with the Parent
Guarantor, the "Guarantors"), the several banks and other financial institutions
as may from time to time become parties to this Agreement (collectively, the
"Lenders"; and individually, a "Lender"), FLEET NATIONAL BANK, as Syndication
Agent, SUNTRUST BANK, as Documentation Agent, and FIRST UNION NATIONAL BANK, as
administrative agent for the Lenders hereunder (in such capacity, the
"Administrative Agent" or the "Agent").

                              W I T N E S S E T H:

         WHEREAS, the Borrower has requested that the Lenders make loans and
other financial accommodations to the Borrower as more particularly described
herein;

         WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.1       Defined Terms.

         As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:

         "Account Designation Letter" shall mean the Notice of Account
Designation Letter dated the Closing Date from the Borrower to the
Administrative Agent substantially in the form attached hereto as Schedule
1.1(a).

         "Additional Credit Party" shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.

         "Additional Lender" shall have the meaning set forth in Section 2.4.

         "Administrative Agent" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
<PAGE>

         "Affiliate" shall mean as to any Person, any other Person (excluding
any Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, a Person shall be deemed to be "controlled by" a Person if such
Person possesses, directly or indirectly, power either (a) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise..

         "Agreement" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time in accordance with its terms.

         "Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by First Union at its principal office in Charlotte,
North Carolina as its prime rate. Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime Rate
occurs. The parties hereto acknowledge that the rate announced publicly by First
Union as its Prime Rate is an index or base rate and shall not necessarily be
its lowest or best rate charged to its customers or other banks; and "Federal
Funds Effective Rate" shall mean, for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.

         "Alternate Base Rate Loans" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.

         "Applicable Percentage" shall mean, for any day, the rate per annum set
forth below opposite the applicable Level then in effect, it being understood
that the Applicable Percentage for (i) Revolving Loans which are Alternate Base
Rate Loans shall be the percentage set forth under the column "Alternate Base
Rate Margin for Revolving Loans", (ii) Revolving Loans which are LIBOR Rate
Loans or Index Rate Loans and for Standby Letter of Credit Fees shall be the
percentage set forth under the column "LIBOR Rate and Index Rate Margin for
Revolving Loans and Standby Letter of Credit Fees", (iii) the Trade Letter of
Credit Fees shall be the percentage set forth under the column "Trade Letter of
Credit Fees" and (iv) the Facility Fee shall be the percentage set forth under
the column "Facility Fee":
<PAGE>

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

                                       LIBOR Rate and
                           Alternate     Index Rate
             Pricing       Base Rate     Margin for
               Grid        Margin for  Revolving Loans    Trade Letter
             Leverage      Revolving  and Standby Letter   of Credit    Facility
              Ratio          Loans     of Credit Fees        Fees         Fee
              -----          -----     --------------        ----         ---
Level

 I       < 0.75 to 1.0        0.00%       0.525%            0.2625%       0.075%

 II     < 1.00 to 1.0 but     0.00%       0.625%            0.3125%       0.125%
         => 0.75 to 1.0

 III    < 1.25 to 1.0 but     0.00%       0.825%            0.4125%       0.175%
         => 1.00 to 1.0

 IV     > 1.25 to 1.0         0.00%       1.025%            0.5125%       0.225%
               -
------------ ------------------- -------------------- --------------------- ----

         The Applicable Percentage shall, in each case, be determined and
adjusted quarterly on the date five (5) Business Days after the date on which
the Parent Guarantor is required to provide to the Administrative Agent the
quarterly financial information and certifications in accordance with the
provisions of Sections 5.1(a) and (b) and 5.2(c) (each an "Interest
Determination Date"). Such Applicable Percentage shall be effective from such
Interest Determination Date until the next such Interest Determination Date. The
initial Applicable Percentages shall be based on Level I until the first
Interest Determination Date occurring after the Closing Date. After the Closing
Date, if the Parent Guarantor shall fail to provide the quarterly financial
information and certifications in accordance with the provisions of Sections
5.1(a) and (b) and 5.2(c), the Applicable Percentage from such Interest
Determination Date shall, on the date five (5) Business Days after the date by
which the Parent Guarantor was so required to provide such financial information
and certifications to the Administrative Agent and the Lenders, be based on
Level IV until such time as such information and certifications are provided,
whereupon the Level shall be determined by the then current Pricing Grid
Leverage Ratio.

         "Asset Disposition" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of the Parent Guarantor or any Subsidiary
whether by sale, lease, transfer or otherwise. The term "Asset Disposition"
shall not include (i) Excluded Dispositions, (ii) the sale, lease or transfer of
assets permitted by Section 6.4(c)(iii) hereof, (iii) any Equity Issuance or
(iv) an Asset Disposition that constitutes a Recovery Event.
<PAGE>

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

         "Borrower" shall have the meaning set forth in the first paragraph of
this Agreement.

         "Borrowing Date" shall mean, in respect of any Loan, the date such Loan
is made.

         "Business" shall have the meaning set forth in Section 3.10.

         "Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or Norfolk, Virginia
are authorized or required by law to close; provided, however, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan or Index Rate Loan, the term "Business Day" shall also exclude any day
on which banks in London, England are not open for dealings in Dollar deposits
in the London interbank market.

         "Capital Lease" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.

         "Capital Lease Obligations" shall mean the capitalized lease
obligations relating to a Capital Lease determined in accordance with GAAP.

         "Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

         "Cash Equivalents" shall mean (i) securities issued directly or fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("Government Obligations"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, eurodollar time deposits and eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than one year from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any commercial
paper or variable rate notes issued by, or guaranteed by any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or
the equivalent thereof) or better by Moody's and maturing within nine months of
the date of acquisition, (iv) repurchase agreements with a bank or trust company
(including a Lender) or a recognized securities dealer having capital and
surplus in excess of $500,000,000 for direct obligations issued by or fully
<PAGE>

guaranteed by the United States of America, (v) obligations of any state of the
United States or any political subdivision thereof rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better by
Moody's having maturities of not more than one year, and (vi) auction preferred
stock rated in the highest short-term credit rating category by S&P or Moody's.

         "Change of Control" shall mean (a) any Person or two or more Persons
acting in concert shall have acquired "beneficial ownership," directly or
indirectly, of, or shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will result in
its or their acquisition of, control over, Voting Stock of the Parent Guarantor
(or other securities convertible into such Voting Stock) representing 35% or
more of the combined voting power of all Voting Stock of the Parent Guarantor,
(b) during any period of up to 25 consecutive months, commencing after the
Closing Date, individuals who at the beginning of such 25 month period were
directors of the Parent Guarantor (together with any new director whose election
by the Parent Guarantor's Board of Directors or whose nomination for election by
the Parent Guarantor's shareholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors of the Parent Guarantor then in office or (c) the Parent Guarantor
shall fail to own all of the Capital Stock of the Borrower and the other Credit
Parties. As used herein, "beneficial ownership" shall have the meaning provided
in Rule 13d-3 of the Securities and Exchange Commission under the Securities Act
of 1934.

         "Closing Date" shall mean the date of this Agreement.

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

         "Commitment" shall mean the Revolving Commitment and the LOC
Commitment, individually or collectively, as appropriate.

         "Commitment Percentage" shall mean the Revolving Commitment Percentage
and/or the LOC Commitment Percentage, as appropriate.

         "Commitment Period" shall mean the period from and including the
Closing Date to but not including the Maturity Date.

         "Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, substantially in the form of Schedule 9.6(c).

         "Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.

         "Consolidated EBITDA" shall mean, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the

<PAGE>

determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense, (B) total federal, state, local and foreign
income taxes and (C) depreciation, amortization expense and other non-cash
charges, minus (iii) extraordinary gains of the Parent Guarantor and its
Subsidiaries for such period. Except as otherwise provided herein, the
applicable period shall be for the four consecutive quarters ending as of the
date of computation.

         "Consolidated EBITDAR" shall mean, for any period, the sum of (a)
Consolidated EBITDA for such period plus (b) Consolidated Rental Expense for
such period.

         "Consolidated Fixed Charges" shall mean, for any period, the sum of (i)
Consolidated Interest Expense for such period plus (ii) Consolidated Rental
Expense for such period of the Parent Guarantor and its Subsidiaries on a
consolidated basis determined in accordance with GAAP, applied on a consistent
basis. The applicable period shall be for the four consecutive quarters ending
as of the date of computation.

         "Consolidated Interest Expense" shall mean, for any period, all
interest expense of the Parent Guarantor and its Subsidiaries, including the
interest component under Capital Leases, as determined in accordance with GAAP.
Except as otherwise provided herein, the applicable period shall be for the four
consecutive quarters ending as of the date of computation.

         "Consolidated Net Income" shall mean, for any period, net income
(excluding extraordinary items) after taxes for such period of the Parent
Guarantor and its Subsidiaries on a consolidated basis, as determined in
accordance with GAAP. Except as otherwise provided herein, the applicable period
shall be for the four consecutive quarters ending as of the date of computation.

         "Consolidated Net Worth" shall mean total shareholders' equity (or its
equivalent) of the Parent Guarantor and its Subsidiaries on a consolidated
basis, determined in accordance with GAAP applied on a consistent basis.

         "Consolidated Rental Expense" shall mean, for any applicable period of
computation, the sum of all real property rental expense of the Parent Guarantor
and its Subsidiaries on a consolidated basis for such period, determined in
accordance with GAAP.

         "Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.

         "Credit Documents" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit and the LOC Documents.

         "Credit Party" shall mean any of the Borrower or the Guarantors.

         "Credit Party Obligations" shall mean, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the Issuing
Lenders) and the Administrative Agent, whenever arising, under this Agreement,

<PAGE>

the Notes or any of the other Credit Documents (including, but not limited to,
any interest accruing after the occurrence of a filing of a petition of
bankruptcy under the Bankruptcy Code with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the Bankruptcy
Code) and (ii) all liabilities and obligations, whenever arising, owing from any
Credit Party to any Lender, or any Affiliate of a Lender, arising under any
Hedging Agreement.

         "Debt" shall mean, with respect to any Person, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to assets
purchased by such Person (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the deferred
purchase price of assets or services purchased by such Person (other than trade
debt incurred in the ordinary course of business and due within six months of
the incurrence thereof) which would appear as liabilities on a balance sheet of
such Person, (e) the principal portion of all obligations of such Person under
Capital Leases, (f) the maximum amount of all standby letters of credit issued
or bankers' acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
(g) all preferred Capital Stock issued by such Person and which by the terms
thereof could be (at the request of the holders thereof or otherwise) subject to
mandatory sinking fund payments, redemption or other acceleration, (h) the
principal balance outstanding under any synthetic lease, tax retention operating
lease, accounts receivable securitization program, off-balance sheet loan or
similar off-balance sheet financing product, including, without limitation, the
ELLF Facility, (i) all Debt of others of the type referred to in clauses (a)
through (h) above secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds of production from, property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
(j) all Guaranty Obligations of such Person with respect to Debt of the type
referred to in clauses (a) through (h) above of another Person and (k) Debt of
the type referred to in clauses (a) through (h) above of any partnership or
unincorporated joint venture in which such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto.

         "Default" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice or the lapse of time, or
both, or any other condition, has been satisfied.

         "Defaulting Lender" shall mean, at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the terms of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any other
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent by its principal regulator or has
become subject to a bankruptcy or insolvency proceeding or to a receiver,
trustee or similar official.

         "Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
<PAGE>

         "Domestic Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on Schedule
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the office
of such Lender at which Alternate Base Rate Loans and Index Rate Loans of such
Lender are to be made.

         "Domestic Subsidiary" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.

         "ELLF Facility" shall mean that $165,000,000 synthetic lease facility
evidenced by the ELLF Facility Documents.

         "ELLF Facility Documents" shall mean (i) that certain Participation
Agreement dated as of the date hereof among the various guarantors party
thereto, First Security Bank, National Association, as the Owner Trustee under
the DTSD Realty Trust 1999-1, the various banks and other lending institutions
party thereto from time to time as holders of certificates issued with respect
to the DTSD Realty Trust 1999-1, the various banks and other lending
institutions party thereto from time to time as lenders, and First Union
National Bank, as agent, and (ii) each of the other "Operative Agreements" as
such term in defined in Appendix A to the ELLF Participation Agreement, in each
case as such documents may from time to time be amended, modified or otherwise
supplemented in accordance with the terms hereof and thereof.

         "Environmental Claim" shall mean, with respect to any Person, any
written or oral notice, claim, demand or other communication (collectively, a
"claim") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (a) the presence, or release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (b) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law. The term "Environmental Claim" shall
include, without limitation, any claim by any Governmental Authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.

         "Environmental Laws" shall mean any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.

         "Equity Issuance" shall mean any issuance by the Parent Guarantor or
any of its Subsidiaries to any Person which is not a Credit Party of (a) shares

<PAGE>

of its Capital Stock, (b) any shares of its Capital Stock pursuant to the
exercise of options or warrants or (c) any shares of its Capital Stock pursuant
to the conversion of any debt securities to equity.

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

         "ERISA Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which any Credit Party or any of its Subsidiaries is a member,
(ii) solely for purposes of potential liability under Section 302(c)(11) of
ERISA and Section 4l2(c)(l1) of the Code and the lien created under Section
302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or
(o) of the Code of which any Credit Party or any of its Subsidiaries is a member
and (iii) which are under common control with any Credit Party or any of its
Subsidiaries within the meaning of Section 4001(a)(14) of ERISA.

         "Eurodollar Reserve Percentage" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.

         "Event of Default" shall mean any of the events specified in Section
7.1; provided, however, that any requirement for the giving of notice or the
lapse of time, or both, or any other condition, has been satisfied.

         "Excluded Disposition" shall mean the sale, transfer, or other
disposition of (a) any motor vehicles or other equipment no longer used or
useful in the business of the Parent Guarantor or any of its Subsidiaries, (b)
any inventory in the ordinary course of business and on ordinary business terms,
(c) Permitted Investments described in clause (a) of the definition thereof and
(d) "margin stock" within the meaning of Regulation U.

         "Extension of Credit" shall mean, as to any Lender, the making of a
Loan by such Lender or the issuance of, or participation in, a Letter of Credit
by such Lender.

         "Facility Fee" shall have the meaning set forth in Section 2.3(a).

         "Federal Funds Effective Rate" shall have the meaning set forth in the
definition of "Alternate Base Rate".

         "Fee Letter" shall mean the letter agreement dated January 16, 2001
addressed to the Parent Guarantor from the Administrative Agent, as amended,
modified or otherwise supplemented.

         "First Union" shall mean First Union National Bank, a national banking
association.
<PAGE>

         "Fixed Charge Coverage Ratio" means, with respect to the Parent
Guarantor and its Subsidiaries on a consolidated basis for the twelve month
period ending on the last day of any fiscal quarter of the Parent Guarantor, the
ratio of (i) Consolidated EBITDAR to (ii) Consolidated Fixed Charges.

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

         "Fronting Fee" shall have the meaning set forth in Section 2.3(b).

         "GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, subject, however, in
the case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.

         "Government Acts" shall have the meaning set forth in Section 2.17.

         "Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

         "Guarantor" shall mean any of the Parent Guarantor, the Domestic
Subsidiaries identified as a "Guarantor" on the signature pages hereto and the
Additional Credit Parties which execute a Joinder Agreement, together with their
successors and permitted assigns.

         "Guaranty" shall mean the guaranty of the Guarantors set forth in
Article X.

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

         "Hazardous Material" shall mean, collectively, (a) any petroleum or
petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other equipment
that contain polychlorinated biphenyls ("PCB's"), (b) any chemicals or other

<PAGE>

materials or substances that are now or hereafter become defined as or included
in the definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants", "pollutants" or words of
similar import under any Environmental Law and (c) any other chemical or other
material or substance, exposure to which is now or hereafter prohibited, limited
or regulated under any Environmental Law.

         "Hedging Agreements" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency or raw materials values, including, without limitation, any
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate hedging agreements.

         "Increased Commitment Date" has the meaning set forth in Section 2.4.

         "Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to assets purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of assets or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements, (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, assets owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, (g) all Guaranty
Obligations of such Person with respect to Indebtedness of another Person, (h)
the principal portion of all obligations of such Person under Capital Leases,
(i) all obligations of such Person under Hedging Agreements, (j) the maximum
amount of all standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (k) all preferred Capital
Stock issued by such Person and which by the terms thereof could be (at the
request of the holders thereof or otherwise) subject to mandatory sinking fund
payments, redemption or other acceleration, (l) the principal balance
outstanding under any synthetic lease, tax retention operating lease, accounts
receivable securitization program, off-balance sheet loan or similar off-balance
sheet financing product, and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer.

         "Index Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the London interbank
offered rate for one (1) month Dollar deposits as reported on Dow Jones Telerate
page 3750 (or any successor page) at approximately 11:00 a.m. (London time), on
such day, or if such day is not a Business Day, then the immediately preceding
Business Day (or if not so reported, then as determined by the Administrative
Agent from another recognized source or interbank quotation).
<PAGE>

         "Index Rate Loan" shall mean Loans the rate of interest applicable to
which is based on the Index Rate.

         "Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.

         "Insolvent" shall mean being in a condition of Insolvency.

         "Intellectual Property" has the meaning set forth in Section 3.16.

         "Interest Payment Date" shall mean (a) as to any Alternate Base Rate
Loan or any Index Rate Loan, the last day of each March, June, September and
December and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan
having an Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any LIBOR Rate Loan having an Interest Period longer than
three months, the day which is three months after the first day of such Interest
Period and the last day of such Interest Period.

         "Interest Period" shall mean, with respect to any LIBOR Rate Loan,
          ---------------

                  (i) ______ initially, the period commencing on the Borrowing
        Date or conversion date, as the case may be, with respect to such LIBOR
        Rate Loan and ending (a) fourteen days or (b) one, two, three or six
        months thereafter, as selected by the Borrower in the Notice of
        Borrowing or Notice of Conversion given with respect thereto; and

                  (ii) _____ thereafter, each period commencing on the last day
        of the immediately preceding Interest Period applicable to such LIBOR
        Rate Loan and ending (a) fourteen days or (b) one, two, three or six
        months thereafter, as selected by the Borrower by irrevocable notice to
        the Administrative Agent not less than three Business Days prior to the
        last day of the then current Interest Period with respect thereto;
        provided that the foregoing provisions are subject to the following:

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

                           (B) ______ any Interest Period (other than a 14-day
                  Interest Period) pertaining to a LIBOR Rate Loan that 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 the relevant calendar month;
<PAGE>

                           (C) ______ if the Borrower shall fail to give notice
                  as provided above, the Borrower shall be deemed to have
                  selected an Alternate Base Rate Loan to replace the affected
                  LIBOR Rate Loan;

                           (D) no Interest Period shall extend beyond the
                  Maturity Date; and

                           (E) ______ no more than six (6) LIBOR Rate Loans may
                  be in effect at any time. For purposes hereof, LIBOR Rate
                  Loans with different Interest Periods shall be considered as
                  separate LIBOR Rate Loans, even if they shall begin on the
                  same date and have the same duration, although borrowings, ___
                  extensions and conversions may, in accordance with the
                  provisions hereof, be combined at the end of existing Interest
                  Periods to constitute a new LIBOR Rate Loan with a single
                  Interest Period.

         "Issuing Lender" shall mean (i) First Union or (ii) such other Lender
reasonably acceptable to the Administrative Agent selected by the Borrower from
time to time to issue a Letter of Credit.

         "Issuing Lender Fees" shall have the meaning set forth in Section
2.3(c).

         "Joinder Agreement" shall mean a Joinder Agreement substantially in the
form of Schedule 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.

         "Lender" shall have the meaning set forth in the first paragraph of
this Agreement.

         "Letters of Credit" shall mean any letter of credit issued by an
Issuing Lender pursuant to the terms hereof, as such Letters of Credit may be
amended, modified, extended, renewed or replaced from time to time.

         "Leverage Ratio" shall mean, with respect to the Parent Guarantor and
its Subsidiaries on a consolidated basis for the twelve month period ending on
the last day of any fiscal quarter, the ratio of (a) Total Debt calculated on
the last day of such period to (b) Consolidated EBITDA for such period.

         "LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, 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 in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for any reason
such rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan
for any Interest Period therefor, 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 in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more

<PAGE>

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%). If, for any reason, neither of such rates is
available, then "LIBOR" shall mean the rate per annum at which, as determined by
the Administrative Agent, Dollars in an amount comparable to such LIBOR Rate
Loan are being offered to leading banks at approximately 11:00 A.M. London time,
two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
Notwithstanding the foregoing, for any LIBOR Rate Loan having an Interest Period
of fourteen days, LIBOR shall be determined for such Loan as if such Loan had an
Interest Period of one-month.

         "LIBOR Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.

         "LIBOR Rate" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the Administrative
Agent pursuant to the following formula:

                  LIBOR Rate =                       LIBOR
                                    -----------------------------------
                                    1.00 - Eurodollar Reserve Percentage

         "LIBOR Rate Loan" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.

         "Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).

         "Loan" shall mean a Revolving Loan, or a portion of any Revolving Loan,
as applicable.

         "LOC Commitment" shall mean the commitment of the Issuing Lender(s) to
issue Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to such
Lender's LOC Committed Amount as specified in Schedule 2.1(a), as such amount
may be reduced from time to time in accordance with the provisions hereof.

         "LOC Commitment Percentage" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
<PAGE>

         "LOC Committed Amount" shall mean, collectively, the aggregate amount
of all of the LOC Commitments of the Lenders to issue and participate in Letters
of Credit as referenced in Section 2.2 and, individually, the amount of each
Lender's LOC Commitment as specified in Schedule 2.1(a).

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

         "LOC Obligations" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender(s) but not theretofore reimbursed.

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

         "Material Adverse Effect" shall mean a material adverse effect on (a)
the business, condition (financial or otherwise), assets, liabilities or
operations of the Parent Guarantor and its Subsidiaries taken as a whole, which
has caused or could reasonably be expected to cause the Consolidated Net Worth
of the Parent Guarantor and its Subsidiaries to decrease by ten percent (10%) or
more from the then current Consolidated Net Worth of the Parent Guarantor and
its Subsidiaries, (b) the ability of the Borrower or any Guarantor to perform
its obligations, when such obligations are required to be performed, under this
Agreement, any of the Notes or any other Credit Document or (c) the validity or
enforceability of this Agreement, any of the Notes or any of the other Credit
Documents or the rights or remedies of the Administrative Agent or the Lenders
hereunder or thereunder.

         "Material Contract" shall mean any contract or other arrangement,
whether written or oral, to which the Parent Guarantor or any of its
Subsidiaries is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could reasonably be expected to have a
Material Adverse Effect.

         "Maturity Date" shall mean the date which is 364 days from the Closing
Date.

         "Moody's" shall mean Moody's Investors Service, Inc.

         "Multiemployer  Plan" shall mean a Plan which is a multiemployer  plan
as defined in Section 4001(a)(3) of ERISA.

         "Note" or "Notes" shall mean the Revolving Notes, collectively,
separately or individually, as appropriate.
<PAGE>

         "Note Purchase Agreement" shall mean the Note Agreement dated as of
April 10, 1997 entered into by the Parent Guarantor and the Borrower in
connection with the issuance of $30,000,000 7.29% Senior Guaranteed Notes, Due
April 30, 2004, as such agreement may from time to time be amended, modified or
otherwise supplemented in accordance with the terms hereof and thereof.

         "Notice of Borrowing" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i).

         "Notice of Conversion" shall mean the written notice of extension or
conversion as referenced and defined in Section 2.8.

         "Obligations" shall mean, collectively, Loans and LOC Obligations.

         "Parent Guarantor" shall have the meaning set forth in the first
paragraph of this Agreement.

         "Participant" shall have the meaning set forth in Section 9.6(b).

         "Participation Interest" shall mean the purchase by a Lender of a
participation interest in Letters of Credit as provided in Section 2.2.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.

         "Permitted Acquisition" shall mean an acquisition by any Credit Party
which (i) is an acquisition of a Person or assets of a Person in the same or a
similar line of business which has pro forma EBITDA before the acquisition in an
amount greater than $0 for the immediately preceding twelve month period, (ii)
is approved by the Board of Directors or the requisite shareholders of the
Person being acquired or Person transferring the assets being acquired, (iii) if
an acquisition of Capital Stock of a Person, all issued and outstanding Capital
Stock of such Person is acquired, and (iv) after giving effect to such
acquisition on a Pro Forma Basis, the Credit Parties are in compliance with each
of the financial covenants set forth in Section 5.9.

         "Permitted Investments" shall mean:

                  (a)      cash or Cash Equivalents;

                  (b)      investments outstanding as of the Closing Date and
         identified in Schedule 1.1(b);

                  (c) investments of any Subsidiary of the Parent  Guarantor in
         any Credit  Party or  investments  of any Credit Party in any other
         Credit Party;

                  (d)      Permitted Acquisitions;
<PAGE>

                  (e)      operating deposit accounts with depository
         institutions;

                  (f)      Hedging Agreements;

                  (g)      investments permitted under Section 6.4(b) hereof;

                  (h)      investments by the Parent  Guarantor and its
         Subsidiaries in the Capital Stock of their Subsidiaries to the extent
         outstanding as of the Closing Date;

                  (i)      loans and  advances  to  employees  in the  ordinary
         course of business  not  exceeding $1,000,000 in the aggregate;

                  (j)      deposits to secure bids, tenders, utilities,
         vendors, leases, licenses, statutory obligations, surety and appeal
         bonds and other deposits of like nature arising in the ordinary course
         of business not exceeding $1,000,000 in the aggregate; and

                  (k)      additional  investments  up to but not exceeding
         $25,000,000  in the  aggregate  during each fiscal year.

         As used herein, "investment" means all investments, in cash or by
delivery of assets made, directly or indirectly in, to or from any Person,
whether by acquisition of shares of Capital Stock, property, assets,
indebtedness or other obligations or securities or by loan advance, capital
contribution or otherwise.

         "Permitted Liens" shall mean:

                  (a)      Liens created by or otherwise  existing,  under or in
         connection  with this Agreement or the other Credit Documents in favor
         of the Lenders;

                  (b)      Liens in existence on the Closing Date and listed on
         Schedule 1.1(c);

                  (c)      Liens imposed by any Governmental Authority for
         taxes, assessments or charges not yet delinquent or that are being
         contested in good faith and by appropriate proceedings if, unless the
         amount thereof is not material with respect to it or its financial
         condition, adequate reserves with respect thereto are maintained on the
         books of the Parent Guarantor or the affected Subsidiaries, as the case
         may be, in accordance with GAAP;

                  (d)      carriers', warehousemen's, mechanics',
         materialmen's, landlord's, repairmen's or other like Liens arising in
         the ordinary course of business that are not overdue for a period of
         more than 30 days or that are being contested in good faith and by
         appropriate proceedings;

                  (e)      Liens  securing  judgments  but only to the  extent
         for an amount  and for a period not resulting in an Event of Default
         under Section 7.1(f) hereof;
<PAGE>

                  (f)      pledges or  deposits  under  worker's  compensation,
         unemployment  insurance  and other social security legislation;

                  (g)      deposits or pledges to secure the performance of
         bids, trade contracts (other than for Indebtedness), leases, licenses,
         statutory obligations, surety and appeal bonds, performance bonds and
         other obligations of a like nature incurred in the ordinary course of
         business;

                  (h)      easements, rights-of-way, restrictions and other
         similar encumbrances incurred in the ordinary course of business and
         encumbrances consisting of zoning restrictions, easements, licenses,
         restrictions on the use of Property or minor imperfections in title
         thereto that, in the aggregate, are not material in amount, and that do
         not in any case materially detract from the value of the Property
         subject thereto or interfere with the ordinary conduct of the business
         of the Parent Guarantor or any of its Subsidiaries;

                  (i)      Liens upon assets of the Parent Guarantor or any of
         its Subsidiaries acquired after the Closing Date securing Indebtedness
         permitted by Section 6.1(c) hereof; provided that (A) no such Lien
         shall extend to or cover any assets of the Parent Guarantor or such
         Subsidiary other than the assets so acquired, (B) the principal amount
         of Indebtedness secured by any such Lien shall at no time exceed the
         fair market value (as determined in good faith by a Responsible Officer
         of the Parent Guarantor) of such assets at the time they were acquired,
         and (C) any such Lien shall attach within 60 days of the date such
         assets were acquired;

                  (j)      Liens upon real Property heretofore leased or
         leased after the date hereof (under operating or Capital Leases) in the
         ordinary course of business by the Parent Guarantor or any of its
         Subsidiaries in favor of the lessor created at the inception of the
         lease transaction, securing obligations of the Parent Guarantor or any
         of its Subsidiaries under or in respect of such lease and extending to
         or covering only the Property subject to such lease and improvements
         thereon;

                  (k)      protective  Uniform  Commercial  Code filings with
         respect to personal  Property  leased by, or consigned to, any of the
         Parent Guarantor or its Subsidiaries;

                  (l)      Liens created pursuant to the ELLF Facility
         Documents; and

                  (m)      Liens (excluding  blanket Liens on accounts,
         inventory,  equipment or general intangibles) securing
         Indebtedness permitted to be incurred pursuant to Section 6.1(e).

         "Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
<PAGE>

         "Plan" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.

         "Pricing Grid Leverage Ratio" shall mean, with respect to the Parent
Guarantor and its Subsidiaries on a consolidated basis for the twelve month
period ending on the last day of any fiscal quarter, the ratio of (a) Total Debt
less the maximum amount of all standby letters of credit issued for the account
of the Borrower or any of the other Credit Parties, calculated on the last day
of such period to (b) Consolidated EBITDA for such period.

         "Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.

         "Pro Forma Basis" shall mean, with respect to any Permitted
Acquisition, asset sale, incurrence of indebtedness or sale-leaseback
transaction permitted hereunder or dividend made pursuant to Section 6.10(e),
that such Permitted Acquisition, asset sale, incurrence of indebtedness,
sale-leaseback transaction or dividend shall be deemed to have occurred or been
made, as applicable, as of the first day of the four fiscal-quarter period
ending as of the most recent fiscal quarter end preceding the date such
Permitted Acquisition, asset sale, incurrence of indebtedness or sale-leaseback
transaction occurred or such dividend was made.

         "Property" shall mean any tangible property or assets, whether real or
personal.

         "Purchasing Lenders" shall have the meaning set forth in Section
9.6(c).

         "Real Properties" shall have the meaning set forth in Section 3.10(a).

         "Recovery Event" shall mean the receipt by the Parent Guarantor or any
of its Subsidiaries of any cash insurance proceeds or condemnation award payable
by reason of theft, loss, physical destruction or damage, taking or similar
event with respect to any of their respective property or assets.

         "Register" shall have the meaning set forth in Section 9.6(d).

         "Reorganization" shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.

         "Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. ss.4043.

         "Required Lenders" shall mean Lenders holding in the aggregate more
than 66 2/3rds % of all Revolving Loans and LOC Obligations then outstanding at
such time plus the aggregate unused Revolving Commitments at such time (treating
for purposes hereof in the case of LOC Obligations, in the case of any Issuing

<PAGE>

Lender, only the portion of the LOC Obligations of such Issuing Lender which is
not subject to the Participation Interests of the other Lenders and, in the case
of the Lenders other than such Issuing Lender, the Participation Interests of
such Lenders in LOC Obligations hereunder as direct Obligations of such
Lenders); provided, however, that if any Lender shall be a Defaulting Lender at
such time, then there shall be excluded from the determination of Required
Lenders, Obligations (including Participation Interests) owing to such
Defaulting Lender and such Defaulting Lender's Commitments, or after termination
of the Commitments, the principal balance of the Obligations owing to such
Defaulting Lender.

         "Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

         "Responsible Officer" of any Person shall mean the President, the Chief
Executive Officer, the Chief Financial Officer or the Vice President/Treasurer
of such Person.

         "Restricted Payment" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
the Parent Guarantor or any of its Subsidiaries, now or hereafter outstanding,
(b) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of the Parent Guarantor or any of its Subsidiaries, now or
hereafter outstanding, or (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 Capital Stock of the Parent Guarantor or any of its
Subsidiaries, now or hereafter outstanding.

         "Revolving Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Commitment
Percentage of the Revolving Committed Amount as specified in Schedule 2.1(a), as
such amount may be increased or reduced from time to time in accordance with the
provisions hereof or in connection with any assignment made in accordance with
the provisions of Section 9.6(c).

         "Revolving Commitment Percentage" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a),
as such percentage may be increased or reduced pursuant to Section 2.4(c) or in
connection with any assignment made in accordance with the provisions of Section
9.6(c).

         "Revolving Committed Amount" shall mean, with respect to the Lenders
collectively, the aggregate amount of all Revolving Commitments as defined in
Section 2.1(a), as such amount may be increased or reduced from time to time in
accordance with the provisions hereof, and, with respect to each Lender, the
amount of such Lender's Revolving Commitment as specified on Schedule 2.1(a), as
such amount may be increased or reduced from time to time in accordance with the
provisions hereof or in connection with any assignment made in accordance with
the provisions of Section 9.6(c).
<PAGE>

         "Revolving Loan" shall have the meaning set forth in Section 2.1.

         "Revolving Note" or "Revolving Notes" shall mean the promissory notes
of the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.

         "S&P" shall mean Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc.

         "SEC" shall mean the Securities and Exchange Commission or any
successor thereto.

         "Single Employer Plan" shall mean any Plan which is not a Multiemployer
Plan.

         "Standby Letter of Credit Fee" shall have the meaning set forth in
Section 2.3(b).

         "Subsidiary" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Parent Guarantor and shall include the
Borrower and the Subsidiary Guarantors.

         "Subsidiary Guarantors" shall have the meaning set forth in the first
paragraph of this Agreement.

         "Taxes" shall have the meaning set forth in Section 2.16.

         "Total Debt" shall mean, as of any date of calculation, all Debt of the
Parent Guarantor and its Subsidiaries, on a consolidated basis.

         "Trade Letter of Credit Fee" shall have the meaning set forth in
Section 2.3(b).

         "Tranche" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "LIBOR Tranche".

         "Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.

         "2.16 Certificate" shall have the meaning set forth in Section 2.16.
<PAGE>

         "Type" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan, LIBOR Rate Loan or Index Rate Loan, as the case may be.

         "Voting Stock" means, with respect to any Person, Capital Stock issued
by such 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 though the right so to vote
has been suspended by the happening of such a contingency.

         Section 1.2       Other Definitional Provisions.

                  (a)        Unless otherwise specified therein, all terms
         defined in this Agreement shall have the defined meanings when used in
         the Notes or other Credit Documents or any certificate or other
         document made or delivered pursuant hereto.

                  (b)        The words "hereof", "herein" and "hereunder" and
         words of similar import when used in this Agreement shall refer to this
         Agreement as a whole and not to any particular provision of this
         Agreement, and Section, subsection, Schedule and Exhibit references are
         to this Agreement unless otherwise specified.

                  (c)        The meanings given to terms defined herein shall be
         equally applicable to both the singular and plural forms of such terms.

         Section 1.3       Accounting Terms.

         Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Parent Guarantor delivered to the
Lenders.

         The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.

<PAGE>

                                   ARTICLE II

                           THE LOANS; AMOUNT AND TERMS

         Section 2.1       Revolving Loans.

                  (a)       Revolving Commitment.  During the Commitment
         Period, subject to the terms and conditions hereof, each Lender
         severally agrees to make revolving credit loans ("Revolving Loans") to
         the Borrower from time to time for the purposes hereinafter set forth;
         provided, however, that (i) with regard to each Lender individually,
         the sum of such Lender's outstanding Revolving Loans plus such Lender's
         LOC Commitment Percentage of LOC Obligations shall not exceed such
         Lender's Revolving Commitment Percentage of the Revolving Committed
         Amount and (ii) with regard to the Lenders collectively, the sum of the
         aggregate amount of outstanding Revolving Loans plus LOC Obligations
         shall not exceed the Revolving Committed Amount. For purposes hereof,
         the aggregate amount available under this Section 2.1(a) shall be FIFTY
         Million DOLLARS ($50,000,000) (as such aggregate maximum amount may be
         increased or reduced from time to time as provided in Section 2.4, the
         "Revolving Committed Amount"). Revolving Loans may consist of Alternate
         Base Rate Loans, LIBOR Rate Loans or Index Rate Loans, or a combination
         thereof, as the Borrower may request, and may be repaid and reborrowed
         in accordance with the provisions hereof. LIBOR Rate Loans shall be
         made by each Lender at its LIBOR Lending Office and Alternate Base Rate
         Loans and Index Rate Loans at its Domestic Lending Office.

                  (b)      Revolving Loan Borrowings.

                           (i)       Notice of Borrowing. The Borrower shall
                  request a Revolving Loan borrowing by written notice (or
                  telephone notice promptly confirmed in writing which
                  confirmation may be by fax) to the Administrative Agent not
                  later than 11:00 A.M. (Charlotte, North Carolina time) on the
                  date of requested borrowing in the case of Alternate Base Rate
                  Loans and Index Rate Loans, and on the third Business Day
                  prior to the date of the requested borrowing in the case of
                  LIBOR Rate Loans. Each such request for borrowing shall be
                  irrevocable and shall specify (A) that a Revolving Loan is
                  requested, (B) the date of the requested borrowing (which
                  shall be a Business Day), (C) the aggregate principal amount
                  to be borrowed, (D) whether the borrowing shall be comprised
                  of Alternate Base Rate Loans, LIBOR Rate Loans or Index Rate
                  Loans or a combination thereof, and if LIBOR Rate Loans are
                  requested, the Interest Period(s) therefor. A form of Notice
                  of Borrowing (a "Notice of Borrowing") is attached as Schedule
                  2.1(b)(i). If the Borrower shall fail to specify in any such
                  Notice of Borrowing (I) an applicable Interest Period in the
                  case of a LIBOR Rate Loan, then such notice shall be deemed to
                  be a request for an Interest Period of one month, or (II) the
                  type of Revolving Loan requested, then such notice shall be
                  deemed to be a request for an Alternate Base Rate Loan
                  hereunder. The Administrative Agent shall give notice to each
                  Lender promptly upon receipt of each Notice of Borrowing, the

<PAGE>

                  contents thereof and each such Lender's share thereof. LIBOR
                  Rate Loans shall not be available hereunder until three (3)
                  Business Days after the Closing Date.

                           (ii)      Advances. Each Lender will make its
                  Revolving Commitment Percentage of each Revolving Loan
                  borrowing available to the Administrative Agent for the
                  account of the Borrower at the office of the Administrative
                  Agent specified in Schedule 9.2, or at such other office as
                  the Administrative Agent may designate in writing, by 1:00
                  P.M. (Charlotte, North Carolina time) on the date specified in
                  the applicable Notice of Borrowing in Dollars and in funds
                  immediately available to the Administrative Agent. Such
                  borrowing will then be made available to the Borrower by the
                  Administrative Agent by crediting the account of the Borrower
                  on the books of such office with the aggregate of the amounts
                  made available to the Administrative Agent by the Lenders and
                  in like funds as received by the Administrative Agent.

                  (c)      Repayment.  The  principal  amount of all  Revolving
         Loans  shall be due and payable in full on the Maturity Date.

                  (d)      Revolving Notes. Each Lender's  Revolving  Commitment
         Percentage of the Revolving Loans shall be  evidenced by a duly
         executed promissory note of the Borrower to such Lender in
         substantially the form of Schedule 2.1(d).

         Section 2.2       Letter of Credit Subfacility.

                  (a)        Issuance. In reliance upon the other Lenders'
         obligation to participate therein, and subject to the terms and
         conditions hereof and of the LOC Documents, if any, and any other terms
         and conditions which the applicable Issuing Lender may reasonably
         require, during the Commitment Period the applicable Issuing Lender
         shall issue, and the Lenders shall participate in, Letters of Credit
         for the account of the Borrower from time to time upon request in a
         form acceptable to the applicable Issuing Lender; provided, however,
         that (i) the aggregate amount of LOC Obligations shall not at any time
         exceed the lesser of (A) SEVENTY-FIVE MILLION DOLLARS ($75,000,000) and
         (B) the Revolving Committed Amount (the "LOC Committed Amount"), (ii)
         the sum of the aggregate amount of Revolving Loans plus LOC Obligations
         shall not at any time exceed the Revolving Committed Amount, (iii) all
         Letters of Credit shall be denominated in Dollars and (iv) Letters of
         Credit shall be issued for lawful corporate purposes and may be issued
         as standby letters of credit, including in connection with workers'
         compensation and other insurance programs, and trade letters of credit.
         Except as otherwise expressly agreed upon by the applicable Issuing
         Lender and the Administrative Agent, no Letter of Credit shall have an
         original expiry date beyond the Maturity Date; provided, however, so
         long as no Default or Event of Default has occurred and is continuing
         and subject to the other terms and conditions to the issuance of
         Letters of Credit hereunder, the expiry dates of Letters of Credit may
         be extended periodically from time to time on the request of the
         Borrower or by operation of the terms of the applicable Letter of
         Credit; provided, further, that no Letter of Credit, as originally

<PAGE>

         issued or as extended, shall have an expiry date extending beyond the
         Maturity Date unless the Borrower shall have established a cash
         collateral account in favor of the Agent for the benefit of the Lenders
         and deposited therein cash and Cash Equivalents in a sufficient amount
         to adequately secure the LOC Obligations which extend beyond the
         Maturity Date. Each Letter of Credit shall comply with the related LOC
         Documents. The issuance and expiry date of each Letter of Credit shall
         be a Business Day. Any Letters of Credit issued hereunder shall be in a
         minimum original face amount of $100,000.

                  (b)        Notice and Reports. The request for the issuance of
         a Letter of Credit shall be submitted to the applicable Issuing Lender
         at least five (5) Business Days prior to the requested date of
         issuance. Each Issuing Lender will promptly upon request provide to the
         Administrative Agent for dissemination to the Lenders a detailed report
         specifying the Letters of Credit issued by such Issuing Lender which
         are then issued and outstanding and any activity with respect thereto
         which may have occurred since the date of any prior report, and
         including therein, among other things, the account party, the
         beneficiary, the face amount, expiry date as well as any payments or
         expirations which may have occurred. Each Issuing Lender will further
         provide to the Administrative Agent promptly upon request copies of the
         Letters of Credit issued by such Issuing Lender. Each Issuing Lender
         will provide to the Administrative Agent promptly upon request a
         summary report of the nature and extent of LOC Obligations of such
         Issuing Lender then outstanding.

                  (c)        Participations. Each Lender upon issuance of a
         Letter of Credit shall be deemed to have purchased without recourse a
         risk participation from the applicable Issuing Lender in such Letter of
         Credit and the obligations arising thereunder and any collateral
         relating thereto, in each case in an amount equal to its LOC Commitment
         Percentage of the obligations under such Letter of Credit and shall
         absolutely, unconditionally and irrevocably assume, as primary obligor
         and not as surety, and be obligated to pay to the applicable Issuing
         Lender therefor and discharge when due, its LOC Commitment Percentage
         of the obligations arising under such Letter of Credit. Without
         limiting the scope and nature of each Lender's participation in any
         Letter of Credit, to the extent that an Issuing Lender has not been
         reimbursed as required hereunder or under any LOC Document, each such
         Lender shall pay to such Issuing Lender its LOC Commitment Percentage
         of such unreimbursed drawing in same day funds on the day of
         notification by such Issuing Lender of an unreimbursed drawing pursuant
         to the provisions of subsection (d) below if such notice is received at
         or before 2:00 P.M. (Charlotte, North Carolina time), otherwise such
         payment shall be made at or before 12:00 Noon (Charlotte, North
         Carolina time) on the Business Day next succeeding the day such notice
         is received. The obligation of each Lender to so reimburse the
         applicable Issuing Lender shall be absolute and unconditional and shall
         not be affected by the occurrence of a Default, an Event of Default or
         any other occurrence or event. Any such reimbursement shall not relieve
         or otherwise impair the obligation of the Borrower to reimburse the
         applicable Issuing Lender under any Letter of Credit, together with
         interest as hereinafter provided.
<PAGE>

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

                  (e)         Repayment with Revolving  Loans. On any day on
         which the Borrower shall have requested, or been deemed to have
         requested a Revolving Loan to reimburse a drawing under a Letter of
         Credit, the Administrative Agent shall give notice to the Lenders that
         a Revolving Loan has been requested or deemed requested in connection
         with a drawing under a Letter of Credit, in which case a Revolving Loan
         borrowing comprised entirely of Alternate Base Rate Loans (each such
         borrowing, a "Mandatory Borrowing") shall be immediately made (without
         giving effect to any termination of the Commitments pursuant to Section

<PAGE>

         7.2) pro rata based on each Lender's respective Revolving Commitment
         Percentage (determined before giving effect to any termination of the
         Commitments pursuant to Section 7.2) and in the case of both clauses
         (i) and (ii) the proceeds thereof shall be paid directly to the
         applicable Issuing Lender for application to the respective LOC
         Obligations. Each Lender hereby irrevocably agrees to make such
         Revolving Loans immediately upon any such request or deemed request on
         account of each Mandatory Borrowing in the amount and in the manner
         specified in the preceding sentence and on the same such date
         notwithstanding (i) the amount of Mandatory Borrowing may not comply
         with the minimum amount for borrowings of Revolving Loans otherwise
         required hereunder, (ii) whether any conditions specified in Section
         4.2 are then satisfied, (iii) whether a Default or an Event of Default
         then exists, (iv) failure for any such request or deemed request for
         Revolving Loan to be made by the time otherwise required in Section
         2.1(b), (v) the date of such Mandatory Borrowing, or (vi) any reduction
         in the Revolving Committed Amount after any such Letter of Credit may
         have been drawn upon; provided, however, that in the event any such
         Mandatory Borrowing should be less than the minimum amount for
         borrowings of Revolving Loans otherwise provided in Section 2.1(b)(ii),
         the Borrower shall pay to the Administrative Agent for its own account
         an administrative fee of $500. In the event that any Mandatory
         Borrowing cannot for any reason be made on the date otherwise required
         above (including, without limitation, as a result of the commencement
         of a proceeding under the Bankruptcy Code with respect to the
         Borrower), then each such Lender hereby agrees that it shall forthwith
         fund (as of the date the Mandatory Borrowing would otherwise have
         occurred, but adjusted for any payments received from the Borrower on
         or after such date and prior to such purchase) its Participation
         Interests in the outstanding LOC Obligations; provided, further, that
         in the event any Lender shall fail to fund its Participation Interest
         on the day the Mandatory Borrowing would otherwise have occurred, then
         the amount of such Lender's unfunded Participation Interest therein
         shall bear interest payable to the applicable Issuing Lender upon
         demand, at the rate equal to, if paid within two (2) Business Days of
         such date, the Federal Funds Effective Rate, and thereafter at a rate
         equal to the Alternate Base Rate.

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

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

                  (h)       Uniform Customs and Practices/International Standby
         Practices 1998. The applicable Issuing Lender shall have the Letters of
         Credit be subject to The Uniform Customs and Practice for Documentary
         Credits (the "UCP") or the International Standby Practices 1998 (the
         "ISP98"), in either case as published as of the date of issue by the

<PAGE>

         International Chamber of Commerce, in which case the UCP or ISP98, as
         applicable, may be incorporated therein and deemed in all respects to
         be a part thereof.

         Section 2.3       Fees.

                  (a)       Facility Fee. In consideration of the Revolving
         Commitments, the Borrower agrees to pay to the Administrative Agent for
         the ratable benefit of the Lenders a facility fee (the "Facility Fee")
         in an amount equal to the Applicable Percentage per annum on the
         Revolving Committed Amount, regardless of usage. The Facility Fee shall
         be payable quarterly in arrears on the 15th day following the last day
         of each calendar quarter for the prior calendar quarter and upon
         termination of the Revolving Commitments.

                  (b)      Letter of Credit Fees. In consideration of issuance
         of standby Letters of Credit hereunder, the Borrower agrees to pay to
         the applicable Issuing Lender (i) a fee (the "Standby Letter of Credit
         Fee") on such Lender's Revolving Commitment Percentage of the average
         daily maximum amount available to be drawn under each such standby
         Letter of Credit computed at a per annum rate for each day from the
         date of issuance to the date of expiration equal to the Applicable
         Percentage, (ii) a fee (the "Trade Letter of Credit Fee") on such
         Lender's Revolving Commitment Percentage of the average daily maximum
         amount available to be drawn under each such trade Letter of Credit
         computed at a per annum rate for each day from the date of issuance to
         the date of expiration equal to the Applicable Percentage and (iii) an
         additional fronting fee (the "Fronting Fee")of one-eighth of one
         percent (0.125%) per annum on the average daily maximum amount
         available to be drawn under each standby Letter of Credit issued by it
         (such fronting fee shall be for the account of the applicable Issuing
         Lender without sharing by the other Lenders). The applicable Issuing
         Lender shall promptly pay over to the Administrative Agent for the
         ratable benefit of the Lenders (including the applicable Issuing
         Lender) the Standby Letter of Credit Fee and the Trade Letter of Credit
         Fee. The Standby Letter of Credit Fee, the Trade Letter of Credit Fee
         and the Fronting Fee shall be payable quarterly in arrears on the 15th
         day following the last day of each calendar quarter for the prior
         calendar quarter.

                  (c)       Issuing Lender Fees. In addition to the Standby
         Letter of Credit Fees and Trade Letter of Credit Fees payable pursuant
         to subsection (b) above, the Borrower shall pay to the applicable
         Issuing Lender for its own account without sharing by the other Lenders
         the reasonable and customary charges from time to time of the
         applicable Issuing Lender with respect to the amendment, transfer,
         administration, cancellation and conversion of, and drawings
         under, such Letters of Credit (collectively, the "Issuing Lender
         Fees").

                  (d)      Administrative  Fee. The Borrower agrees to pay to
         the  Administrative  Agent the annual administrative fee as described
         in the Fee Letter.
<PAGE>

         Section 2.4       Reduction or Increase of the Revolving Commitments.

                  (a)      Voluntary Reductions. The Borrower shall have the
         right to terminate or permanently reduce the unused portion of the
         Revolving Committed Amount at any time or from time to time upon not
         less than five Business Days' prior notice to the Administrative Agent
         (which shall notify the Lenders thereof as soon as practicable) of each
         such termination or reduction, which notice shall specify the effective
         date thereof and the amount of any such reduction which shall be in a
         minimum amount of $3,000,000 or a whole multiple of $1,000,000 in
         excess thereof and shall be irrevocable and effective upon receipt by
         the Administrative Agent, provided that no such reduction or
         termination shall be permitted if after giving effect thereto, and to
         any prepayments of the Loans made on the effective date thereof, the
         sum of the then outstanding aggregate principal amount of the Revolving
         Loans plus LOC Obligations would exceed the Revolving Committed Amount
         after such proposed reduction.

                  (b)      Maturity Date. The Revolving  Commitments  and the
         LOC Commitments  shall  automatically terminate 364 days from the
         Closing Date.

                  (c)      Increase of Revolving Committed Amount. The
         Borrower shall have the right from time to time (but not later than
         sixty (60) days prior to the Maturity Date) to increase the Revolving
         Committed Amount up to a total amount of $150,000,000 by adding to this
         Agreement one or more other lenders (which may include any Lender (with
         the consent of such Lender)) (each such lender an "Additional Lender")
         with the approval of the Administrative Agent (not to be unreasonably
         withheld) and with notice to each Lender; provided, however, that the
         Borrower shall provide the Lenders with the opportunity to participate
         in such increase of the Revolving Committed Amount prior to soliciting
         other lenders. Each of the Additional Lenders shall have entered into
         an agreement in form and substance satisfactory to the Borrower and the
         Administrative Agent pursuant to which such Additional Lender shall
         undertake a Revolving Commitment (and if any such Additional Lender is
         a Lender, its Revolving Commitment shall be in addition to such
         Lender's Revolving Commitment hereunder) in an amount at least equal to
         $10,000,000 or a larger integral multiple of $1,000,000, and upon the
         effectiveness of such agreement (the date of the effectiveness of any

<PAGE>

         such agreement being hereinafter referred to as the "Increased
         Commitment Date") such Additional Lender shall thereupon become a
         "Lender" for all purposes of this Agreement.

                  On the Increased Commitment Date, each Additional Lender shall
         by assignments from the other Lenders (which assignments shall be
         deemed to occur hereunder automatically, and without any requirement
         for additional documentation, on the Increased Commitment Date) acquire
         a portion of the Revolving Loans and Participation Interests of the
         other Lenders (and the Lenders shall, through the Administrative Agent,
         make such other adjustments among themselves as shall be necessary) so
         that after giving effect to such assignments and adjustments the
         Lenders shall hold Revolving Loans and Participation Interests
         hereunder ratably in accordance with their respective Revolving
         Commitments and LOC Commitments. The Borrower shall compensate each
         Lender whose outstanding Revolving Loans have decreased as a result of
         the foregoing assignments and adjustments as if such decrease were a
         payment or prepayment referred to in Section 2.13 hereof.

                  Notwithstanding the foregoing, the increase in the aggregate
         Revolving Commitments hereunder pursuant to this Section 2.4 shall be
         effective only if:

                           (i)      the Borrower shall have given the
                  Administrative Agent notice of any such increase at least
                  thirty (30) days prior to any such Increased Commitment Date;

                           (ii)     no Default or Event of Default  shall have
                  occurred and be continuing as of the date of the notice
                  referred to in the foregoing  clause (i) or on the Increased
                  Commitment Date; and

                           (iii)    the resulting aggregate amount of the
                  Revolving  Commitments is no greater than $150,000,000.

         Section 2.5       Prepayments.

                  (a)        Optional Prepayments. The Borrower shall have the
         right to prepay Loans in whole or in part from time to time; provided,
         however, that (i) each partial prepayment of Alternate Base Rate Loans
         or Index Rate Loans shall be in a minimum principal amount of
         $1,000,000 and integral multiples of $500,000 in excess thereof and
         (ii) each partial prepayment of LIBOR Rate Loans shall be in a minimum
         principal amount of $3,000,000 and integral multiples of $1,000,000 in
         excess thereof. The Borrower shall give irrevocable written notice (or
         telephone notice promptly confirmed in writing which confirmation may
         be by fax) to the Administrative Agent (which shall notify the Lenders
         thereof as soon as practicable) not later than 11:00 A.M. (Charlotte,
         North Carolina time) on the date of the requested prepayment in the
         case of Alternate Base Rate Loans or Index Rate Loans, and on the third
         Business Day prior to the date of the requested prepayment in the case
         of LIBOR Rate Loans. Subject to the foregoing terms, amounts prepaid
         under this Section 2.5(a) shall be applied as the Borrower may elect.
         Within the parameters of the applications set forth above, prepayments
         shall be applied first to Alternate Base Rate Loans, second to Index
         Rate Loans and then to LIBOR Rate Loans in direct order of Interest
         Period maturities. All prepayments under this Section 2.5(a) shall be
         subject to Section 2.15, but otherwise without premium or penalty.
         Interest on the principal amount prepaid shall be payable (a) at the
         time of such prepayment with respect to LIBOR Rate Loans, along with
         any costs then due and payable under Section 2.15, and (b) with respect
         to Alternate Base Rate Loans and Index Rate Loans, on the next
         occurring Interest Payment Date that would have occurred had such loan
         not been prepaid or, at the request of the Administrative Agent,
         interest on the principal amount of any Alternate Base Rate Loans or
         Index Rate Loans prepaid shall be payable on any date that a prepayment
         is made hereunder to the date of prepayment. Amounts prepaid on the
         Revolving Loans may be reborrowed in accordance with the terms hereof.
<PAGE>

                  (b)        Mandatory Prepayments. If at any time after the
         Closing Date, the sum of the aggregate principal amount of outstanding
         Revolving Loans plus LOC Obligations shall exceed the Revolving
         Committed Amount, the Borrower immediately shall prepay the Revolving
         Loans and (after all Revolving Loans have been repaid) cash
         collateralize the LOC Obligations, in an amount sufficient to eliminate
         such excess. Such prepayments shall be applied first to Alternate Base
         Rate Loans, second to Index Rate Loans and then to LIBOR Rate Loans in
         direct order of Interest Period maturities. All prepayments under this
         Section 2.5(b) shall be subject to Section 2.15 and be accompanied by
         interest on the principal amount prepaid to the date of prepayment.
         Amounts prepaid on Revolving Loans may be reborrowed in accordance with
         the terms hereof.

         Section 2.6      Minimum Borrowing Amounts and Principal Amounts of
                          Tranches.

                  (a)        Each Alternate Base Rate Loan borrowing and each
         Index Rate Loan borrowing shall be in a minimum amount of $1,000,000
         and whole multiples of $500,000 in excess thereof.

                  (b)        Each LIBOR Rate Loan borrowing shall be in a
         minimum amount of $3,000,000 and whole multiples of $1,000,000 in
         excess thereof.

                  (c)        All borrowings, payments and prepayments in respect
         of Revolving Loans shall be in such amounts and be made pursuant to
         such elections so that after giving effect thereto the aggregate
         principal amount of the Revolving Loans comprising any LIBOR Tranche
         shall either be zero or shall not be less than $3,000,000 or a whole
         multiple of $1,000,000 in excess thereof.

         Section 2.7       Interest Payments; Default Interest; Interest Payment
                           Dates.

                  (a)      Interest  Payments.  Subject to the provisions of
        Section  2.7(b),  all Loans shall bear interest as follows:

                           (i)      Alternate  Base Rate Loans.  During such
                  periods as Loans shall be comprised of Alternate  Base Rate
                  Loans,  each such  Alternate  Base Rate Loan shall bear
                  interest  at a per annum rate equal to the sum of the
                  Alternate Base Rate plus the Applicable Percentage;

                           (ii)     Index Rate Loans.  During such  periods as
                  Loans  shall be  comprised  of Index Rate  Loans,  each such
                  Index Rate Loan shall bear  interest at a per annum rate equal
                  to the sum of the Index Rate plus the Applicable Percentage;
                  and

                           (iii)    LIBOR Rate Loans. During such periods as
                  Loans shall be comprised of LIBOR Rate Loans, each such LIBOR
                  Rate Loan shall bear interest at a per annum rate equal to the
                  sum of the LIBOR Rate plus the Applicable Percentage.
<PAGE>

                  (b)       Default Interest. Upon the occurrence, and during
         the continuance, of a Default or an Event of Default, the principal of
         and, to the extent permitted by law, interest on the Loans and any
         other amounts owing hereunder or under the other Credit Documents shall
         (at the option of the Administrative Agent) bear interest, payable on
         demand, at a per annum rate 2% greater than the applicable rate then in
         effect or, if no rate is then in effect, at a per annum rate 2% greater
         than the Alternate Base Rate. Upon and during the continuance of an
         Event of Default, all Index Rate Loans and LIBOR Rate Loans shall be
         automatically converted to Alternate Base Rate Loans, to take effect
         immediately in the case of Index Rate Loans and in the case of LIBOR
         Rate Loans, on the last day of the applicable Interest Period for any
         such LIBOR Rate Loans.

                  (c)      Interest  Payment  Date.  Interest on Loans shall be
payable in arrears on each Interest Payment Date, subject to Section 2.10.

         Section 2.8       Conversion Options.

                  (a)       The Borrower may elect from time to time to convert
         Alternate Base Rate Loans or Index Rate Loans to LIBOR Rate Loans by
         giving irrevocable written notice (or telephone notice promptly
         confirmed in writing which confirmation may be by fax) to the
         Administrative Agent not later than 11:00 A.M. (Charlotte, North
         Carolina time) on the third Business Day prior to the date of the
         requested conversion. A form of Notice of Conversion/ Extension is
         attached as Schedule 2.8. If the date upon which an Alternate Base Rate
         Loan or Index Rate Loan is to be converted to a LIBOR Rate Loan is not
         a Business Day, then such conversion shall be made on the next
         succeeding Business Day and during the period from such last day of an
         Interest Period to such succeeding Business Day such Loan shall bear
         interest as if it were an Alternate Base Rate Loan or Index Rate Loan,
         as applicable. All or any part of outstanding Alternate Base Rate Loans
         or Index Rate Loans may be converted as provided herein, provided that
         (i) no Loan may be converted into a LIBOR Rate Loan when any Default or
         Event of Default has occurred and is continuing and (ii) partial
         conversions shall be in an aggregate principal amount of $3,000,000 or
         a whole multiple of $1,000,000 in excess thereof.

                  (b)      Any LIBOR Rate Loans may be continued as such upon
         the expiration of an Interest Period with respect thereto by compliance
         by the Borrower with the notice provisions contained in Section 2.8(a);
         provided, that no LIBOR Rate Loan may be continued as such when any
         Default or Event of Default has occurred and is continuing, in which
         case such Loan shall be automatically converted to an Alternate Base
         Rate Loan at the end of the applicable Interest Period with respect
         thereto. If the Borrower shall fail to give timely notice of an
         election to continue a LIBOR Rate Loan, or the continuation of LIBOR
         Rate Loans is not permitted hereunder, ___ such LIBOR Rate Loans shall
         be automatically converted to Alternate Base Rate Loans at the end of
         the applicable Interest Period with respect thereto.
<PAGE>

         Section 2.9       Computation of Interest and Fees.

                  (a)        Interest payable hereunder with respect to
         Alternate Base Rate Loans based on the Prime Rate shall be calculated
         on the basis of a year of 365 days (or 366 days, as applicable) for the
         actual days elapsed. All other interest and fees and all other interest
         amounts payable hereunder shall be calculated on the basis of a 360 day
         year for the actual days elapsed. The Administrative Agent shall as
         soon as practicable notify the Borrower and the Lenders of each
         determination of a LIBOR Rate on the Business Day of the determination
         thereof. Any change in the interest rate on a Loan resulting from a
         change in the Alternate Base Rate shall become effective as of the
         opening of business on the day on which such change in the Alternate
         Base Rate shall become effective. Any change in the interest rate on an
         Index Rate Loan resulting from a change in the Index Rate shall become
         effective as of the opening of business on the day on which such change
         in the Index Rate shall become effective.  The Administrative Agent
         shall as soon as practicable notify the Borrower and the Lenders of the
         effective date and the amount of each such change.

                  (b)        Each determination of an interest rate by the
         Administrative Agent pursuant to any provision of this Agreement shall
         be conclusive and binding on the Borrower and the Lenders in the
         absence of manifest error. The Administrative Agent shall, at the
         request of the Borrower, deliver to the Borrower a statement showing
         the computations used by the Administrative Agent in determining any
         interest rate.

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

<PAGE>

         not otherwise accrued on the date of such demand, and the Lenders do
         not intend to charge or receive any unearned interest in the event of
         such demand. All interest paid or agreed to be paid to the Lenders with
         respect to the Loans shall, to the extent permitted by applicable law,
         be amortized, prorated, allocated, and spread throughout the full
         stated term (including any renewal or extension) of the Loans so that
         the amount of interest on account of such indebtedness does not exceed
         the maximum nonusurious amount permitted by applicable law.

         Section 2.10      Pro Rata Treatment and Payments.

         Each borrowing of Revolving Loans and any reduction of the Revolving
Commitments shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment under this Agreement or any Note shall
be applied, first, to any fees then due and owing by the Borrower pursuant to
Section 2.3, second, to interest then due and owing in respect of the Notes of
the Borrower and, third, to principal then due and owing hereunder and under the
Notes of the Borrower. Each payment on account of any fees pursuant to Section
2.3 shall be made pro rata in accordance with the respective amounts due and
owing (except as to the portion of the Standby Letter of Credit Fee or Trade
Letter of Credit Fee retained by the applicable Issuing Lender, the Issuing
Lender Fees, the Fronting Fee and fees payable to the Administrative Agent).
Each payment (other than prepayments) by the Borrower on account of principal of
and interest on the Revolving Loans shall be made pro rata according to the
respective amounts due and owing in accordance with Section 2.5(a) hereof. Each
optional prepayment on account of principal of the Loans shall be applied to
such of the Loans as the Borrower may designate (to be applied pro rata among
the Lenders); provided, that prepayments made pursuant to Section 2.13 shall be
applied in accordance with such section. Each mandatory prepayment on account of
principal of the Loans shall be applied in accordance with Section 2.5(b). All
payments (including prepayments) to be made by the Borrower on account of
principal, interest and fees shall be made without defense, set-off or
counterclaim (except as provided in Section 2.16(b)) and shall be made to the
Administrative Agent for the account of the Lenders at the Administrative
Agent's office specified on Schedule 9.2 in Dollars and in immediately available
funds not later than 1:00 P.M. (Charlotte, North Carolina time) on the date when
due. The Administrative Agent shall distribute such payments to the Lenders
entitled thereto promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a LIBOR Rate Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.

         Section 2.11      Non-Receipt of Funds by the Administrative Agent.

                  (a)        Unless the Administrative Agent shall have been
         notified in writing by a Lender prior to the date a Loan is to be made
         by such Lender (which notice shall be effective upon receipt) that such

<PAGE>

         Lender does not intend to make the proceeds of such Loan available to
         the Administrative Agent, the Administrative Agent may assume that such
         Lender has made such proceeds available to the Administrative Agent on
         such date, and the Administrative Agent may in reliance upon such
         assumption (but shall not be required to) make available to the
         Borrower a corresponding amount. If such corresponding amount is not in
         fact made available to the Administrative Agent, the Administrative
         Agent shall be able to recover such corresponding amount from such
         Lender. If such Lender does not pay such corresponding amount forthwith
         upon the Administrative Agent's demand therefor, the Administrative
         Agent will promptly notify the Borrower, and the Borrower shall
         immediately pay such corresponding amount to the Administrative Agent.
         The Administrative Agent shall also be entitled to recover from the
         Lender or the Borrower, as the case may be, interest on such
         corresponding amount in respect of each day from the date such
         corresponding amount was made available by the Administrative Agent to
         the Borrower to the date such corresponding amount is recovered by the
         Administrative Agent at a per annum rate equal to (i) from the Borrower
         at the applicable rate for the applicable borrowing pursuant to the
         Notice of Borrowing and (ii) from a Lender at the Federal Funds
         Effective Rate.

                  (b)        Unless the Administrative Agent shall have been
         notified in writing by the Borrower, prior to the date on which any
         payment is due from it hereunder (which notice shall be effective upon
         receipt) that the Borrower does not intend to make such payment, the
         Administrative Agent may assume that the Borrower has made such payment
         when due, and the Administrative Agent may in reliance upon such
         assumption (but shall not be required to) make available to each Lender
         on such payment date an amount equal to the portion of such assumed
         payment to which such Lender is entitled hereunder, and if the Borrower
         has not in fact made such payment to the Administrative Agent, such
         Lender shall, on demand, repay to the Administrative Agent the amount
         made available to such Lender. If such amount is repaid to the
         Administrative Agent on a date after the date such amount was made
         available to such Lender, such Lender shall pay to the Administrative
         Agent on demand interest on such amount in respect of each day from the
         date such amount was made available by the Administrative Agent to such
         Lender to the date such amount is recovered by the Administrative Agent
         at a per annum rate equal to the Federal Funds Effective Rate.

                  (c)        A certificate of the Administrative Agent submitted
         to the Borrower or any Lender with respect to any amount owing under
         this Section 2.11 shall be conclusive in the absence of manifest error.

         Section 2.12      Inability to Determine Interest Rate.

         Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for an Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested

<PAGE>

be outstanding as a LIBOR Tranche during an Interest Period, the Administrative
Agent shall forthwith give telephone notice of such determination, confirmed in
writing, to the Borrower, and the Lenders at least two Business Days prior to
the first day of such Interest Period. Unless the Borrower shall have notified
the Administrative Agent upon receipt of such telephone notice that it wishes to
rescind or modify its request regarding such LIBOR Rate Loans, any Loans that
were requested to be made as LIBOR Rate Loans shall be made as Alternate Base
Rate Loans and any Loans that were requested to be converted into or continued
as LIBOR Rate Loans shall be converted into Alternate Base Rate Loans. Until any
such notice has been withdrawn by the Administrative Agent, no further Loans
shall be made as, continued as, or converted into, LIBOR Rate Loans for the
Interest Periods so affected.

         Section 2.13      Illegality.

         Notwithstanding any other provision of this Agreement, if the adoption
of or any change in any Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR Lending Office to make or maintain
LIBOR Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify the Administrative Agent and
the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR
Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended
until the Administrative Agent shall give notice that the condition or situation
which gave rise to the suspension shall no longer exist, and (c) such Lender's
Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the
last day of the Interest Period for such Loans or within such earlier period as
required by law as Alternate Base Rate Loans. The Borrower hereby agrees
promptly to pay any Lender, upon its demand, any additional amounts necessary to
compensate such Lender for actual and direct costs (but not including
anticipated profits) reasonably incurred by such Lender in making any repayment
in accordance with this Section including, but not limited to, any interest or
fees payable by such Lender to lenders of funds obtained by it in order to make
or maintain its LIBOR Rate Loans hereunder. A certificate as to any additional
amounts payable pursuant to this Section submitted by such Lender, through the
Administrative Agent, to the Borrower shall be conclusive in the absence of
manifest error. Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its LIBOR Lending Office) to avoid or to minimize
any amounts which may otherwise be payable pursuant to this Section; provided,
however, that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender in its
sole discretion to be material.

         Section 2.14      Requirements of Law.

                  (a)        If the adoption of or any change in any Requirement
         of Law or in the interpretation or application thereof or compliance by
         any Lender with any request or directive (whether or not having the
         force of law) from any central bank or other Governmental Authority
         made subsequent to the date hereof:

                           (i)        shall subject such Lender to any tax of
                  any kind whatsoever with respect to any Letter of Credit or
                  any application relating thereto, any LIBOR Rate Loan made by

<PAGE>

                  it, or change the basis of taxation of payments to such Lender
                  in respect thereof (except for changes in the rate of tax on
                  the overall net income of such Lender);

                           (ii)       shall impose, modify or hold applicable
                  any reserve,  special deposit, compulsory loan or similar
                  requirement against assets held by, deposits or other
                  liabilities in or for the account of, advances, loans or other
                  extensions of credit by, or any other acquisition of funds by,
                  any office of such Lender which is not otherwise included in
                  the determination of the LIBOR Rate hereunder; or

                           (iii)    shall impose on such Lender any other
                  condition;and the result of any of the foregoing is to
                  increase the cost to such Lender of making or maintaining
                  LIBOR Rate Loans or the Letters of Credit or to reduce any
                  amount receivable hereunder or under any Note, then, in any
                  such case, the Borrower shall promptly pay such Lender, upon
                  its demand, any additional amounts necessary to compensate
                  such Lender for such additional cost or reduced amount
                  receivable which such Lender reasonably deems to be material
                  as determined by such Lender with respect to its LIBOR Rate
                  Loans or Letters of Credit. A certificate as to any additional
                  amounts payable pursuant to this Section submitted by such
                  Lender, through the Administrative Agent, to the Borrower\
                  shall be conclusive in the absence of manifest error. Each
                  Lender agrees to use reasonable efforts (including reasonable
                  efforts to change its Domestic Lending Office or LIBOR Lending
                  Office, as the case may be) to avoid or to minimize any
                  amounts which might otherwise be payable pursuant to this
                  paragraph of this Section; provided, however, that such
                  efforts shall not cause the imposition on such Lender of any
                  additional costs or legal or regulatory burdens deemed by
                  such Lender in its sole discretion to be material.

                  (b)        If any Lender shall have reasonably determined that
         the adoption of or any change in any Requirement of Law regarding
         capital adequacy or in the interpretation or application thereof or
         compliance by such Lender or any corporation controlling such Lender
         with any request or directive regarding capital adequacy (whether or
         not having the force of law) from any central bank or Governmental
         Authority made subsequent to the date hereof does or shall have the
         effect of reducing the rate of return on such Lender's or such
         corporation's capital as a consequence of its obligations hereunder to
         a level below that which such Lender or such corporation could have
         achieved but for such adoption, change or compliance (taking into
         consideration such Lender's or such corporation's policies with respect
         to capital adequacy) by an amount reasonably deemed by such Lender to
         be material, then from time to time, within fifteen (15) days after
         demand by such Lender, the Borrower shall pay to such Lender such
         additional amount as shall be certified by such Lender as being
         required to compensate it for such reduction. Such a certificate as to
         any additional amounts payable under this Section submitted by a Lender
         (which certificate shall include a description of the basis for the
         computation), through the Administrative Agent, to the Borrower shall
         be conclusive absent manifest error.
<PAGE>

                  (c)       The agreements in this Section 2.14 shall survive
         the termination of this Agreement and payment of the Notes and all
         other amounts payable hereunder.

         Section 2.15      Indemnity.

         The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing after the
Borrower has given a notice in accordance with the terms hereof, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by the Borrower of any
payment or prepayment of a Loan, or the conversion thereof, on a day which is
not the last day of the Interest Period with respect thereto, in each case
including, but not limited to, any such loss or expense arising from interest or
fees payable by such Lender to lenders of funds obtained by it in order to
maintain its Loans hereunder. A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender, through the Administrative
Agent, to the Borrower (which certificate must be delivered to the
Administrative Agent within thirty days following such default, prepayment or
conversion) shall be conclusive in the absence of manifest error. The agreements
in this Section shall survive termination of this Agreement and payment of the
Notes and all other amounts payable hereunder.

         Section 2.16      Taxes.

                  (a)        All payments made by the Borrower hereunder or
         under any Note will be, except as provided in Section 2.16(b), made
         free and clear of, and without deduction or withholding for, any
         present or future taxes, levies, imposts, duties, fees, assessments or
         other charges of whatever nature now or hereafter imposed by any
         Governmental Authority or by any political subdivision or taxing
         authority thereof or therein with respect to such payments (but
         excluding any tax imposed on or measured by the net income or profits
         of a Lender) and all interest, penalties or similar liabilities with
         respect thereto (all such non-excluded taxes, levies, imposts, duties,
         fees, assessments or other charges being referred to collectively as
         "Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to
         pay the full amount of such Taxes, and such additional amounts as may
         be necessary so that every payment of all amounts due under this
         Agreement or under any Note, after withholding or deduction for or on
         account of any Taxes, will not be less than the amount provided for
         herein or in such Note. The Borrower will furnish to the Administrative
         Agent as soon as practicable after the date the payment of any Taxes is
         due pursuant to applicable law certified copies (to the extent
         reasonably available and required by law) of tax receipts evidencing
         such payment by the Borrower. The Borrower agrees to indemnify and hold
         harmless each Lender, and reimburse such Lender upon its written
         request, for the amount of any Taxes so levied or imposed and paid by
         such Lender but excluding any interest or penalties caused by such

<PAGE>

         Lender's failure to pay any such taxes when due.

                  (b)        Each Lender that is not a United States person (as
         such term is defined in Section 7701(a)(30) of the Code) agrees to
         deliver to the Borrower and the Administrative Agent on or prior to the
         Closing Date, or in the case of a Lender that is an assignee or
         transferee of an interest under this Agreement pursuant to Section
         9.6(d) (unless the respective Lender was already a Lender hereunder
         immediately prior to such assignment or transfer), on the date of such
         assignment or transfer to such Lender, (i) if the Lender is a "bank"
         within the meaning of Section 881(c)(3)(A) of the Code, two accurate
         and complete original signed copies of Internal Revenue Service Form
         4224 or 1001 (or successor forms) certifying such Lender's entitlement
         to a complete exemption from United States withholding tax with respect
         to payments to be made under this Agreement and under any Note, or (ii)
         if the Lender is not a "bank" within the meaning of Section
         881(c)(3)(A) of the Code, either Internal Revenue Service Form 1001 or
         4224 as set forth in clause (i) above, or (x) a certificate
         substantially in the form of Schedule 2.16 (any such certificate, a
         "2.16 Certificate") and (y) two accurate and complete original signed
         copies of Internal Revenue Service Form W-8 (or successor form)
         certifying such Lender's entitlement to an exemption from United States
         withholding tax with respect to payments of interest to be made under
         this Agreement and under any Note. In addition, each Lender agrees that
         it will deliver upon the Borrower's request updated versions of the
         foregoing, as applicable, whenever the previous certification has
         become obsolete or inaccurate in any material respect, together with
         such other forms as may be required in order to confirm or establish
         the entitlement of such Lender to a continued exemption from or
         reduction in United States withholding tax with respect to payments
         under this Agreement and any Note. Notwithstanding anything to the
         contrary contained in Section 2.16(a), but subject to the immediately
         succeeding sentence, (x) the Borrower shall be entitled, to the extent
         it is required to do so by law, to deduct or withhold Taxes imposed by
         the United States (or any political subdivision or taxing authority
         thereof or therein) from interest, fees or other amounts payable
         hereunder for the account of any Lender which is not a United States
         person (as such term is defined in Section 7701(a)(30) of the Code) for
         U.S. Federal income tax purposes to the extent that such Lender has not
         provided to the Borrower U.S. Internal Revenue Service Forms that
         establish a complete exemption from such deduction or withholding and
         (y) the Borrower shall not be obligated pursuant to Section 2.16(a)
         hereof to gross-up payments to be made to a Lender in respect of Taxes
         imposed by the United States if (I) such Lender has not provided to the
         Borrower the Internal Revenue Service Forms required to be provided to
         the Borrower pursuant to this Section 2.16(b) or (II) in the case of a
         payment, other than interest, to a Lender described in clause (ii)
         above, to the extent that such Forms do not establish a complete
         exemption from withholding of such Taxes. Notwithstanding anything to
         the contrary contained in the preceding sentence or elsewhere in this
         Section 2.16, the Borrower agrees to pay additional amounts and to
         indemnify each Lender in the manner set forth in Section 2.16(a)
         (without regard to the identity of the jurisdiction requiring the
         deduction or withholding) in respect of any amounts deducted or
         withheld by it as described in the immediately preceding sentence as a
         result of any changes after the Closing Date in any applicable law,
         treaty, governmental rule, regulation, guideline or order, or in the
         interpretation thereof, relating to the deducting or withholding of

<PAGE>

         Taxes.

                  (c)        Each Lender agrees to use reasonable efforts
         (including reasonable efforts to change its Domestic Lending Office or
         LIBOR Lending Office, as the case may be) to avoid or to minimize any
         amounts which might otherwise be payable pursuant to this Section;
         provided, however, that such efforts shall not cause the imposition on
         such Lender of any additional costs or legal or regulatory burdens
         deemed by such Lender in its sole discretion to be material.

                  (d)        If the Borrower pays any additional amount pursuant
         to this Section 2.16 with respect to a Lender, such Lender shall use
         reasonable efforts to obtain a refund of tax or credit against its tax
         liabilities on account of such payment; provided that such Lender shall
         have no obligation to use such reasonable efforts if either (i) it is
         in an excess foreign tax credit position or (ii) it believes in good
         faith, in its sole discretion, that claiming a refund or credit would
         cause adverse tax consequences to it. In the event that such Lender
         receives such a refund or credit, such Lender shall pay to the Borrower
         an amount that such Lender reasonably determines is equal to the net
         tax benefit obtained by such Lender as a result of such payment by the
         Borrower. In the event that no refund or credit is obtained with
         respect to the Borrower's payments to such Lender pursuant to this
         Section 2.16(d), then such Lender shall upon request provide a
         certification that such Lender has not received a refund or credit for
         such payments. Nothing contained in this Section 2.16(d) shall require
         a Lender to disclose or detail the basis of its calculation of the
         amount of any tax benefit or any other amount or the basis of its
         determination referred to in the proviso to the first sentence of this
         Section 2.16(d) to the Borrower or any other party.

                  (e)        The agreements in this Section 2.16 shall survive
         the termination of this Agreement and the payment of the Notes and all
         other amounts payable hereunder.

         Section 2.17      Indemnification; Nature of Issuing Lender's Duties.

                  (a)        In addition to its other obligations under Section
         2.2, the Borrower hereby agrees to protect, indemnify, pay and save the
         applicable Issuing Lender harmless from and against any and all claims,
         demands, liabilities, damages, losses, costs, charges and expenses
         (including reasonable attorneys' fees) that the applicable Issuing
         Lender may incur or be subject to as a consequence, direct or indirect,
         of (i) the issuance of any Letter of Credit or (ii) the failure of the
         applicable Issuing Lender to honor a drawing under a Letter of Credit
         as a result of any act or omission, whether rightful or wrongful, of
         any present or future de jure or de facto government or governmental
         authority (all such acts or omissions, herein called "Government
         Acts").

                  (b)        As between the Borrower and the applicable Issuing
         Lender, the Borrower shall assume all risks of the acts, omissions or
         misuse of any Letter of Credit by the beneficiary thereof. The
         applicable Issuing Lender shall not be responsible: (i) for the form,
         validity, sufficiency, accuracy, genuineness or legal effect of any
         document submitted by any party in connection with the application for
         and issuance of any Letter of Credit, even if it should in fact prove
         to be in any or all respects invalid, insufficient, inaccurate,

<PAGE>

         fraudulent or forged; (ii) for the validity or sufficiency of any
         instrument transferring or assigning or purporting to transfer or
         assign any Letter of Credit or the rights or benefits thereunder or
         proceeds thereof, in whole or in part, that may prove to be invalid or
         ineffective for any reason; (iii) for failure of the beneficiary of a
         Letter of Credit to comply fully with conditions required in order to
         draw upon a Letter of Credit; (iv) for errors, omissions, interruptions
         or delays in transmission or delivery of any messages, by mail, cable,
         telegraph, telex or otherwise, whether or not they be in cipher; (v)
         for errors in interpretation of technical terms; (vi) for any loss or
         delay in the transmission or otherwise of any document required in
         order to make a drawing under a Letter of Credit or of the proceeds
         thereof; and (vii) for any consequences arising from causes beyond the
         control of the applicable Issuing Lender, including, without
         limitation, any Government Acts. None of the above shall affect,
         impair, or prevent the vesting of the applicable Issuing Lender's
         rights or powers hereunder.

                  (c)        In furtherance and extension and not in limitation
         of the specific provisions hereinabove set forth, any action taken or
         omitted by the applicable Issuing Lender, under or in connection with
         any Letter of Credit or the related certificates, if taken or omitted
         in good faith, shall not put such applicable Issuing Lender under any
         resulting liability to the Borrower. It is the intention of the parties
         that this Agreement shall be construed and applied to protect and
         indemnify the applicable Issuing Lender against any and all risks
         involved in the issuance of the Letters of Credit, all of which risks
         are hereby assumed by the Borrower, including, without limitation, any
         and all risks of the acts or omissions, whether rightful or wrongful,
         of any Government Authority. The applicable Issuing Lender shall not,
         in any way, be liable for any failure by the applicable Issuing Lender
         or anyone else to pay any drawing under any Letter of Credit as a
         result of any Government Acts or any other cause beyond the control of
         the applicable Issuing Lender.

                  (d)        Nothing in this Section 2.17 is intended to limit
         the reimbursement obligation of the Borrower contained in Section
         2.2(d) hereof. The obligations of the Borrower under this Section 2.17
         shall survive the termination of this Agreement. No act or omissions of
         any current or prior beneficiary of a Letter of Credit shall in any way
         affect or impair the rights of the applicable Issuing Lender to enforce
         any right, power or benefit under this Agreement.

                  (e)        Notwithstanding anything to the contrary contained
         in this Section 2.17, the Borrower shall have no obligation to
         indemnify the applicable Issuing Lender in respect of any liability
         incurred by the applicable Issuing Lender arising out of the gross
         negligence or willful misconduct of the applicable Issuing Lender
         (including action not taken by the applicable Issuing Lender), as
         determined by a court of competent jurisdiction.

         Section 2.18      Waiver of Notice.

                  (a)       Except as otherwise expressly provided herein, the
         Borrower hereby waives notice of occurrence of any Default or Event of
         Default (except to the extent notice is expressly required to be given
         pursuant to the terms of this Credit Agreement), or of any demand for
<PAGE>

         any payment under this Credit Agreement, notice of any action at any
         time taken or omitted by the Administrative Agent or the Lenders under
         or in respect of any of the Credit Party Obligations hereunder, any
         requirement of diligence and, generally, all demands, notices and other
         formalities of every kind in connection with this Credit Agreement. The
         Borrower hereby assents to, and waives notice of, any extension or
         postponement of the time for the payment of any of the Credit Party
         Obligations hereunder, the acceptance of any partial payment thereon,
         any waiver, consent or other action or acquiescence by the
         Administrative Agent or the Lenders at any time or times in respect of
         any default by the Borrower in the performance or satisfaction of any
         term, covenant, condition or provision of this Credit Agreement or any
         other Credit Document, any and all other indulgences whatsoever by the
         Administrative Agent or the Lenders in respect of any of the Credit
         Party Obligations hereunder, and the taking, addition, substitution or
         release, in whole or in part, at any time or times, of any security for
         any of such Credit Party Obligations or the addition, substitution or
         release, in whole or in part, of any Borrower. Without limiting the
         generality of the foregoing, the Borrower assents to any other action
         or delay in acting or any failure to act on the part of the
         Administrative Agent or the Lenders, including, without limitation, any
         failure strictly or diligently to assert any right or to pursue any
         remedy or to comply fully with applicable laws or regulations
         thereunder which might, but for the provisions of this Section 2.18,
         afford grounds for terminating, discharging or relieving the Borrower,
         in whole or in part, from any of its obligations under this Agreement,
         it being the intention of the Borrower that, so long as any of the
         Credit Party Obligations remain unsatisfied, the obligations of the
         Borrower under this Agreement shall not be discharged except by
         performance and then only to the extent of such performance. The
         obligations of the Borrower under this Agreement shall not be
         diminished or rendered unenforceable by any winding up, reorganization,
         arrangement, liquidation, reconstruction or similar proceeding with
         respect to any reconstruction or similar proceeding with respect to the
         Borrower or any Lender.

                  (b)        The provisions of this Section 2.18 are made for
         the benefit of the Administrative Agent and the Lenders and their
         respective successors and assigns, and may be enforced by any such
         Person from time to time against the Borrower as often as occasion
         therefor may arise and without requirement on the part of any Lender
         first to marshal any of its claims or to resort to any other source or
         means of obtaining payment of any of the Credit Party Obligations or to
         elect any other remedy. Without limiting the generality of the
         foregoing, the Borrower hereby specifically waives the benefits of N.C.
         Gen. Stat. ss.ss.26-7 through 26-9, inclusive, to the extent
         applicable. The provisions of this Section 2.18 shall remain in effect
         until all the Credit Party Obligations hereunder shall have been paid
         in full or otherwise fully satisfied. If at any time, any payment, or
         any part thereof, made in respect of any of the Credit Party
         Obligations, is rescinded or must otherwise be restored or returned by
         the Lenders upon the insolvency, bankruptcy or reorganization of the
         Borrower, or otherwise, the provisions of this Section 2.18 will
         forthwith be reinstated and in effect as though such payment had not
         been made.

                  (c)        Notwithstanding any provision to the contrary
         contained herein or in any other of the Credit Documents or Hedging
         Agreements, the obligations of the Borrower hereunder shall be limited
<PAGE>

         to an aggregate amount equal to the largest amount that would not
         render its obligations hereunder subject to avoidance under Section 548
         of the Bankruptcy Code or any comparable provisions of any applicable
         state law.

         Section 2.19      Defaulting Lenders; Limitation on Claims.

                  (a)        Generally. In addition to the rights and remedies
         that may be available to the Administrative Agent or the Borrower under
         this Agreement or applicable law, if at any time a Lender is a
         Defaulting Lender such Defaulting Lender's right to participate in the
         administration of the Loans, this Agreement and the other Credit
         Documents, including without limitation, any right to vote in respect
         of, to consent to or to direct any action or inaction of the
         Administrative Agent or to be taken into account in the calculation of
         the Required Lenders, shall be suspended during the pendency of such
         failure or refusal. If a Lender is a Defaulting Lender because it has
         failed to make timely payment to the Administrative Agent of any amount
         required to be paid to the Administrative Agent hereunder (without
         giving effect to any notice or cure periods), in addition to other
         rights and remedies which the Administrative Agent or the Borrower may
         have under the immediately preceding provisions or otherwise, the
         Administrative Agent shall be entitled (i) to collect interest from
         such Defaulting Lender on such delinquent payment for the period from
         the date on which the payment was due until the date on which the
         payment is made at the Federal Funds Effective Rate, (ii) to withhold
         or setoff and to apply in satisfaction of the defaulted payment and any
         related interest, any amounts otherwise payable to such Defaulting
         Lender under this Agreement or any other Credit Document until such
         defaulted payment and related interest has been paid in full and such
         default no longer exists and (iii) to bring an action or suit against
         such Defaulting Lender in a court of competent jurisdiction to recover
         the defaulted amount and any related interest. Any amounts received by
         the Administrative Agent in respect of a Defaulting Lender's Loans
         shall not be paid to such Defaulting Lender and shall be held
         uninvested by the Administrative Agent and either applied against the
         purchase price of such Loans under the following subsection (b) or paid
         to such Defaulting Lender upon the default of such Defaulting Lender
         being cured.

                  (b)        Purchase of Defaulting Lender's Commitment. Any
         Lender who is not a Defaulting Lender shall have the right, but not the
         obligation, in its sole discretion, to acquire all of a Defaulting
         Lender's Commitment. If more than one Lender exercises such right, each
         such Lender shall have the right to acquire such proportion of such
         Defaulting Lender's Commitment on a pro rata basis. Upon any such
         purchase, the Defaulting Lender's interest in the Loans and its rights
         hereunder (but not its liability in respect thereof or under the Credit
         Documents or this Agreement to the extent the same relate to the period
         prior to the effective date of the purchase) shall terminate on the
         date of purchase, and the Defaulting Lender shall promptly execute all
         documents reasonably requested to surrender and transfer such interest
         to the purchaser thereof subject to and in accordance with the
         requirements set forth in Section 9.6, including an appropriate
         Commitment Transfer Supplement. The purchase price for the Commitment
         of a Defaulting Lender shall be equal to the sum of the amount of the
         principal balance of the Loans outstanding and owed by the Borrower to
<PAGE>

         the Defaulting Lender, plus any accrued interest with respect thereto,
         plus any fees or other amounts owed by the Borrower to the Defaulting
         Lender. Prior to payment of such purchase price to a Defaulting Lender,
         the Administrative Agent shall apply against such purchase price any
         amounts retained by the Administrative Agent pursuant to the last
         sentence of the immediately preceding subsection (a). The Defaulting
         Lender shall be entitled to receive all amounts owed to it by the
         Borrower on account of principal of and interest on the Loans and the
         Notes, and fees and other amounts due under the Credit Documents which
         accrued prior to the date of the default by the Defaulting Lender, to
         the extent the same are received by the Administrative Agent from or on
         behalf of the Borrower. There shall be no recourse against any Lender
         or the Administrative Agent for the payment of such sums by the
         Borrower except to the extent of the receipt of payments from any other
         party or in respect of the Loans.

         Section 2.20      Replacement of Lenders.

         If any Lender shall become affected by any of the changes or events
described in Sections 2.12, 2.13, 2.14 or 2.16 (any such Lender being
hereinafter referred to as a "Replaced Lender") and shall petition the Borrower
for any increased cost or amounts thereunder, then in such case, the Borrower
may, upon at least five (5) Business Days' notice to the Administrative Agent
and such Replaced Lender, designate a replacement lender (a "Replacement
Lender") acceptable to the Administrative Agent in its reasonable discretion, to
which such Replaced Lender shall, subject to its receipt (unless a later date
for the remittance thereof shall be agreed upon by the Borrower and the Replaced
Lender) of all amounts owed to such Replaced Lender under Sections 2.12, 2.13,
2.14 or 2.16 assign all (but not less than all) of its rights, obligations,
Loans and Commitments hereunder; provided, that all amounts owed to such
Replaced Lender by the Borrower (except liabilities which by the terms hereof
survive the payment in full of the Loans and termination of this Agreement)
shall be paid in full as of the date of such assignment. Upon any assignment by
any Lender pursuant to this Section 2.20 becoming effective, the Replacement
Lender shall thereupon be deemed to be a "Lender" for all purposes of this
Agreement and such Replaced Lender shall thereupon cease to be a "Lender" for
all purposes of this Agreement and shall have no further rights or obligations
hereunder (other than pursuant to Sections 2.12, 2.13, 2.14, 2.16 and 9.5 while
such Replaced Lender was a Lender).

Notwithstanding any Replaced Lender's failure or refusal to assign its rights,
obligations, Loans and Commitments under this Section 2.20, the Replaced Lender
shall cease to be a "Lender" for all purposes of this Agreement and the
Replacement Lender substituted therefor upon payment to the Replaced Lender by
the Replacement Lender of all amounts set forth in this Section 2.20 without any
further action of the Replaced Lender.

<PAGE>

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represent
and warrant to the Administrative Agent and to each Lender that:

         Section 3.1       Financial Condition.

         The consolidated balance sheets and the related statements of income,
retained earnings and cash flows of the Parent Guarantor and its Subsidiaries
for the fiscal year ending December 31, 2000, are complete and correct and
present fairly, in all material respects, the financial condition of, and the
results of operations for, such Persons as of such dates. All such financial
statements have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as disclosed therein). None of the
Parent Guarantor nor its Subsidiaries have on the date hereof any material
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the balance
sheets referred to above.

         Section 3.2       No Change.

         Since December 31, 2000 (and after delivery of annual audited financial
statements in accordance with Section 5.1(a), from the date of the most recently
delivered annual audited financial statements) there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.

         Section 3.3       Corporate Existence; Compliance with Law.

         Each of the Parent Guarantor and its Subsidiaries (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the requisite power and authority and
the legal right to own and operate all its material property, to lease the
material property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified to conduct business and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
except to the extent that the failure to so qualify or be in good standing could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

         Section 3.4       Corporate Power; Authorization; Enforceable
                           Obligations.

         Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents

<PAGE>

to which it is party and has taken all necessary action to authorize the
execution, delivery and performance by it of the Credit Documents to which it is
party. No consent or authorization of, filing with, notice to or other act by or
in respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery or
performance of any Credit Document by the Borrower and the other Credit Parties
(other than those which have been obtained) or with the validity or
enforceability of any Credit Document against the Borrower and the other Credit
Parties (except such filings as are necessary in connection with the perfection
of the Liens created by such Credit Documents). Each Credit Document to which it
is a party has been duly executed and delivered on behalf of the Borrower and
the other Credit Parties, as the case may be. Each Credit Document to which it
is a party constitutes a legal, valid and binding obligation of the Borrower and
the other Credit Parties, as the case may be, enforceable against the Borrower
and Credit Parties, as the case may be, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

         Section 3.5       No Legal Bar; No Default.

         The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Parent Guarantor or
its Subsidiaries (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents. Neither the Parent
Guarantor nor any of its Subsidiaries is in default under or with respect to any
of its Contractual Obligations in any respect which could reasonably be expected
to have a Material Adverse Effect. No Default or Event of Default has occurred
and is continuing.

         Section 3.6       No Material Litigation.

         No litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the best knowledge of the Credit
Parties, threatened by or against the Parent Guarantor or any of its
Subsidiaries or against any of its or their respective properties or revenues
(a) with respect to the Credit Documents or any Loan or any of the transactions
contemplated hereby, or (b) which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect.

         Section 3.7       Government Acts.

                  (a)        Neither the Parent Guarantor nor any of its
         Subsidiaries is an "investment company", or a company "controlled" by
         an "investment company", within the meaning of the Investment Company
         Act of 1940, as amended.

                  (b)        Neither the Parent Guarantor nor any of its
         Subsidiaries is a "holding company", or an "affiliate" of a "holding
         company" or a "subsidiary company" of a "holding company", within the
         meaning of the Public Utility Holding Company Act of 1935, as amended.
<PAGE>

         Section 3.8       Margin Regulations.

         No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The aggregate
value of all "margin stock" owned by the Parent Guarantor and its Subsidiaries
taken as a group does not exceed 25% of the value of their assets.

         Section 3.9       ERISA.

         Except as could not reasonably be expected to have a Material Adverse
 Effect,

                  (a)        neither a Reportable Event nor an "accumulated
         funding deficiency" (within the meaning of Section 412 of the Code or
         Section 302 of ERISA) has occurred during the five-year period prior to
         the date on which this representation is made or deemed made with
         respect to any Plan, and each Plan has complied in all material
         respects with the applicable provisions of ERISA and the Code;

                  (b)        no termination of a Single Employer Plan has
         occurred resulting in any liability that has remained underfunded, and
         no Lien in favor of the PBGC or a Plan has arisen, during such
         five-year period;

                  (c)        the present value of all accrued benefits under
         each Single Employer Plan (based on those assumptions used to fund such
         Plans) did not, as of the last annual valuation date prior to the date
         on which this representation is made or deemed made, exceed the value
         of the assets of such Plan allocable to such accrued benefits; and

                  (d)        neither the Parent Guarantor, nor any of its
         Subsidiaries, nor any Commonly Controlled Entity is currently subject
         to any liability for a complete or partial withdrawal from a
         Multiemployer Plan.

         Section 3.10      Environmental Matters.

         Except as to matters which could not reasonably be expected to have a
Material Adverse Effect:

                  (a)        the facilities and properties owned, leased or
         operated by the Parent Guarantor or any of its Subsidiaries (the "Real
         Properties") do not contain any Hazardous Materials in amounts or
         concentrations which (i) constitute a violation of, or (ii) could give
         rise to liability under, any Environmental Law;

                  (b)        the Real Properties and all operations of the
         Parent Guarantor and/or its Subsidiaries at the Real Properties are in
         compliance, and have in the last five years been in compliance, in all

<PAGE>

         material respects with all applicable Environmental Laws, and there is
         no contamination at, under or about the Real Properties or violation of
         any Environmental Law with respect to the Real Properties or the
         business operated by the Parent Guarantor or any of its Subsidiaries
         (the "Business");

                  (c)        neither the Parent Guarantor nor any of its
         Subsidiaries has received any written or actual notice of violation,
         alleged violation, non-compliance,  liability or potential liability
         regarding environmental matters or compliance with Environmental Laws
         with regard to any of the Real Properties or the Business, nor does the
         Parent Guarantor or any of its Subsidiaries have knowledge or reason to
         believe that any such notice will be received or is being threatened;

                  (d)        Hazardous Materials have not been transported or
         disposed of from the Real Properties in violation of, or in a manner or
         to a location which could give rise to liability under any
         Environmental Law, nor have any Hazardous Materials been generated,
         treated, stored or disposed of at, on or under any of the Real
         Properties in violation of, or in a manner that could give rise to
         liability under, any applicable Environmental Law;

                  (e)        no judicial proceeding or governmental or
         administrative action is pending or, to the knowledge of the Credit
         Parties, threatened, under any Environmental Law to which the Parent
         Guarantor or any Subsidiary is or will be named as a party with respect
         to the Real Properties or the Business, nor are there any consent
         decrees or other decrees, consent orders, administrative orders or
         other orders, or other administrative or judicial requirements
         outstanding under any Environmental Law with respect to the Real
         Properties or the Business; and

                  (f)       there has been no release or threat of release of
         Hazardous Materials at or from the Real Properties, or arising from or
         related to the operations of the Parent Guarantor or any Subsidiary in
         connection with the Real Properties or otherwise in connection with the
         Business, in violation of or in amounts or in a manner that could give
         rise to liability under Environmental Laws.

         Section 3.11      Purpose of Loans.

         The proceeds of the Loans hereunder shall be used solely by the
Borrower to (i) refinance existing Indebtedness and (ii) provide for working
capital and other general corporate purposes, including Permitted Acquisitions
and repurchases of the Capital Stock of the Parent Guarantor. The Letters of
Credit shall be used for general corporate purposes.

         Section 3.12      Subsidiaries.

         Set forth on Schedule 3.12 is a complete and accurate list of all
Subsidiaries of the Parent Guarantor. Information on the attached Schedule
includes state of incorporation; the number of shares of each class of Capital
Stock or other equity interests outstanding; the number and percentage of
outstanding shares of each class of stock owned by Parent Guarantor or its

<PAGE>

Subsidiaries; and the number and effect, if exercised, of all outstanding
options, warrants, rights of conversion or purchase and similar rights. The
outstanding Capital Stock and other equity interests of all such Subsidiaries is
validly issued, fully paid and non-assessable and is owned, free and clear of
all Liens.

         Section 3.13      Ownership.

         Each of the Parent Guarantor and its Subsidiaries (a) is the owner of,
and has good and marketable title to, all of its respective assets, except as
may be permitted pursuant to Section 6.12 hereof, and none of such assets is
subject to any Lien other than Permitted Liens and (b) enjoys peaceful and
undisturbed possession of all leased and owned Real Properties that are
necessary for the operation and conduct of its business.

         Section 3.14      Indebtedness.

         Except as otherwise permitted under Section 6.1, the Parent Guarantor
and its Subsidiaries have no Indebtedness.

         Section 3.15      Taxes.

         Each of the Parent Guarantor and its Subsidiaries has filed, or caused
to be filed, all tax returns (federal, state, local and foreign) required to be
filed and paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP or (iii) the failure to file and pay such taxes could not
reasonably be expected to have a Material Adverse Effect. Neither the Parent
Guarantor nor any of its Subsidiaries is aware of any proposed tax assessments
against it or any of its Subsidiaries which could reasonably be expected to have
a Material Adverse Effect.

         Section 3.16      Intellectual Property.

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

         Section 3.17      Solvency.

         The fair saleable value of each Credit Party's assets, measured on a
going concern basis, exceeds all probable liabilities, including those to be
incurred pursuant to this Credit Agreement. None of the Credit Parties (a) has
unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (b) has incurred, or believes that it will incur after
giving effect to the transactions contemplated by this Credit Agreement,
Indebtedness beyond its ability to pay such Indebtedness as it becomes due.

         Section 3.18      Investments.

         All Investments of each of the Parent Guarantor and its Subsidiaries
are Permitted Investments.

         Section 3.19      No Burdensome Restrictions.

         None of the Parent Guarantor or any of its Subsidiaries is a party to
any agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

         Section 3.20      Brokers' Fees.

         None of the Parent Guarantor nor any of its Subsidiaries has any
obligation to any Person in respect of any finder's, broker's, investment
banking or other similar fee in connection with any of the transactions
contemplated under the Credit Documents other than the closing and other fees
payable pursuant to this Credit Agreement and the Fee Letter.

         Section 3.21      Labor Matters.

         None of the Parent Guarantor or any of its Subsidiaries (i) has
suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years or (ii) has knowledge of any potential or
pending strike, walkout or work stoppage.

         Section 3.22      Accuracy and Completeness of Information.

         All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Parent Guarantor or any of its Subsidiaries to
the Administrative Agent or any Lender for purposes of or in connection with
this Agreement or any other Credit Document, or any transaction contemplated
hereby or thereby, is or will be true and accurate in all material respects and
not incomplete by omitting to state any material fact necessary to make such
information not misleading. There is no fact now known to the Parent Guarantor
or any of its Subsidiaries which has, or could reasonably be expected to have, a
Material Adverse Effect which fact has not been set forth herein, in the
financial statements of the Parent Guarantor and its Subsidiaries furnished to
the Administrative Agent and/or the Lenders, or in any certificate, opinion or
other written statement made or furnished by the Parent Guarantor or any of its
Subsidiaries to the Administrative Agent and/or the Lenders.
<PAGE>

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

         Section 4.1       Conditions to Closing Date and Initial Revolving
                           Loans.

         This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Extension of Credit on the Closing Date is subject
to, the satisfaction of the following conditions precedent:

                  (a)      Execution of Agreement. The Administrative Agent
         shall have received (i) counterparts of this Agreement, executed by a
         duly authorized officer of each party hereto and (ii) for the account
         of each Lender, Revolving Notes, in each case conforming to the
         requirements of this Agreement and executed by a duly authorized
         officer of the Borrower.

                  (b)      Authority  Documents.  The  Administrative  Agent
         shall  have  received  a  secretary's certificate substantially in the
         form of Schedule 4.1(b) with respect to the following:

                           (i)        Charter Documents.  Copies of the
                  articles of  incorporation or other organizational
                  documents, as applicable, of each Credit Party and each
                  corporate general partner or managing member of a Credit Party
                  certified to be true and complete as of a recent date by the
                  appropriate Governmental Authority of the state of its
                  organization.

                           (ii)       Resolutions. Copies of resolutions or
                  certificate of authorization of the board of directors,
                  general partner or managing member of each Credit Party
                  approving and adopting the Credit Documents, the transactions
                  contemplated therein and authorizing execution and delivery
                  thereof, certified by an officer, general partner or managing
                  member of such Credit Party as of the Closing Date to be true
                  and correct and in force and effect as of such date.

                           (iii)      Bylaws; Operating Agreements; Etc.. A copy
                  of the bylaws, operating agreement or other governing document
                  of each Credit Party and each corporate general partner or
                  managing member of a Credit Party certified by an officer of
                  such Credit Party or corporate general partner or managing
                  member as of the Closing Date to be true and correct and in
                  force and effect as of such date.

                           (iv)       Good Standing. Copies of certificates of
                  good standing, existence or its equivalent with respect to
                  each Credit Party certified as of a recent date by the
                  appropriate Governmental Authorities of the state of

<PAGE>

                  incorporation and each other state in which the failure to so
                  qualify and be in good standing could reasonably be expected
                  to have a Material Adverse Effect on the business or
                  operations of the Parent Guarantor and its Subsidiaries, taken
                  as a whole.

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

                  (c)        Legal Opinions of Counsel. The
         Administrative Agent shall have received an opinion of legal counsel
         for the Credit Parties, dated the Closing Date and addressed to the
         Administrative Agent and the Lenders, in form and substance acceptable
         to the Administrative Agent.

                  (d)      [Reserved].

                  (e)      Liability and Casualty  Insurance. The Administrative
         Agent shall have received copies of insurance  policies or certificates
         of insurance  evidencing  liability and casualty  insurance meeting
         the requirements set forth herein.

                  (f)      Fees.  The  Administrative  Agent shall have received
         all fees, if any,  owing  pursuant to the Fee Letter and Section 2.3.

                  (g)         Litigation. There shall not exist any pending
         litigation or investigation affecting or relating to the Parent
         Guarantor or any of its Subsidiaries, this Agreement and the other
         Credit Documents that in the reasonable judgment of the Administrative
         Agent could reasonably be expected to have a Material Adverse Effect on
         the Parent Guarantor or any of its Subsidiaries, this Agreement and the
         other Credit Documents, that has not been settled, dismissed, vacated,
         discharged or terminated prior to the Closing Date.

                  (h)         Solvency Evidence.  The  Administrative
         Agent shall have received an officer's certificate for the Credit
         Parties prepared by the chief financial officer or treasurer of the
         Parent Guarantor and the Borrower as to the financial condition,
         solvency and related matters of the Credit Parties taken as a whole,
         after giving effect to the initial borrowings under the Credit
         Documents and the initial financings under the ELLF Facility Documents,
         in substantially the form of Schedule 4.1(h) hereto.

                  (i)      Account  Designation Letter. The Administrative Agent
         shall have received the executed Account Designation Letter in the form
         of Schedule 1.1(a) hereto.

                  (j)      Corporate Structure. The corporate capital and
         ownership structure of the Parent Guarantor and its Subsidiaries shall
         be as described in Schedule 3.12. The Administrative Agent shall be
         satisfied with the management structure, legal structure,
         voting control, liquidity and capitalization of the Parent
         Guarantor and the Borrower as of the Closing Date.
<PAGE>

                  (k)      ELLF Facility. The ELLF Facility shall have become
         effective according to the terms thereof. The Administrative Agent
         shall have received a copy of the ELLF Facility Documents, certified by
         an officer of the Borrower to be true and correct and in full force and
         effect.

                  (l)      [Reserved].

                  (m)      Consents. The  Administrative Agent
         shall have  received  evidence that all governmental,
         shareholder and material third party consents and approvals necessary
         in connection with the financings and other transactions contemplated
         hereby have been obtained and all applicable waiting periods have
         expired without any action being taken by any authority that could
         restrain, prevent or impose any material adverse conditions on such
         transactions or that could seek or threaten any of the foregoing.

                  (n)      Compliance with Laws. The financings and other
         transactions contemplated hereby shall be in compliance with all
         applicable laws and regulations (including Environmental Laws and all
         applicable securities and banking laws, rules and regulations).

                  (o)      Bankruptcy.  There shall be no  bankruptcy  or
         insolvency  proceedings  with respect to the Parent Guarantor or any of
         its Subsidiaries.

                  (p)      Financial  Statements.  The  Administrative  Agent
         shall  have  received  copies of the financial statements referred to
         in Section 3.1 hereof.

                  (q)      Material Adverse Change. Since December 31, 2000,
         there shall not have occurred any change or event which could
         reasonably be expected to have a Material Adverse Effect on the
         business, assets, liabilities (actual or contingent), operations or
         condition (financial or otherwise) of the Parent Guarantor and its
         Subsidiaries taken as a whole, or the facts and information regarding
         such entities as represented to date.

                  (r)      Officer's Certificates. The Administrative Agent
         shall have received a certificate or certificates executed by the chief
         financial officer or treasurer of the Parent Guarantor and the Borrower
         on behalf of the Credit Parties as of the Closing Date stating that (A)
         the Credit Parties and each of their Subsidiaries are in compliance
         with all existing material financial obligations, (B) all governmental,
         shareholder and third party consents and approvals, if any, with
         respect to the Credit Documents and the transactions contemplated
         thereby have been obtained, (C) no action, suit, investigation or
         proceeding is pending or threatened in any court or before any
         arbitrator or governmental instrumentality that purports to affect a
         Credit Party, any of the Credit Parties' Subsidiaries or any
         transaction contemplated by the Credit Documents,  if such
         action,  suit, investigation or proceeding would have or be
         reasonably expected to have a Material Adverse Effect, and (D)
         immediately after giving effect to this Credit Agreement, the other
         Credit Documents and all the transactions contemplated therein to occur
         on such date, including the initial financings under the ELLF Facility
         Documents, (1) no Default or Event of Default exists, (2) all
         representations and warranties contained herein and in the other Credit
         Documents are true and correct in all material respects, and (3) the
         Credit Parties are in compliance with each of the financial covenants
         set forth in Section 5.9.
<PAGE>

                  (s)      Projections. The Administrative Agent shall have
         received the five year financial and operational projections for the
         Parent Guarantor and its Subsidiaries for the fiscal years 2001 through
         2005, together with a detailed explanation of all management
         assumptions contained therein, which projections shall be in form and
         substance satisfactory to the Administrative Agent.

                  (t)      Additional  Matters.  All other  documents  and legal
         matters  in  connection  with the transactions  contemplated  by this
         Agreement shall be reasonably  satisfactory  in form and substance to
         the Administrative Agent and its counsel.

         Section 4.2       Conditions to All Extensions of Credit.

         The obligation of each Lender to make any Extension of Credit hereunder
is subject to the satisfaction of the following conditions precedent on the date
of making such Extension of Credit:

                  (a)      Representations and Warranties. The representations
         and warranties made by the Credit Parties herein or which are contained
         in any certificate furnished at any time under or in connection
         herewith shall be true and correct in all material respects on and as
         of the date of such Extension of Credit as if made on and as of such
         date (or, if any such representation or warranty is expressly stated to
         have been made as of a specific date, as of such specific date).

                  (b)      No Default or Event of Default. No Default or Event
         of Default shall have occurred and be continuing on such date or after
         giving effect to the Extension of Credit to be made on such date unless
         such Default or Event of Default shall have been waived in accordance
         with this Agreement.

                  (c) ______ Compliance with Commitments. Immediately after
         giving effect to the making of any such Extension of Credit (and the
         application of the proceeds thereof), (i) the sum of the aggregate
         principal amount of outstanding Revolving Loans plus LOC Obligations
         shall not exceed the Revolving Committed Amount and (ii) the LOC
         Obligations shall not exceed the LOC Committed Amount.

                  (d)      Additional  Conditions  to  Revolving  Loans.  If
         such Loan is made  pursuant to Section 2.1, all conditions set forth in
         such Section shall have been satisfied.

                  (e)      Additional  Conditions  to  Letters  of  Credit.
         If such  Extension  of  Credit is made pursuant to Section 2.2, all
         conditions set forth in such Section shall have been satisfied.
<PAGE>

         Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (e) of this
Section have been satisfied.

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

         The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, the Facility Fee and all other
amounts owing to the Administrative Agent, any Issuing Lender or any Lender
hereunder, are paid in full, the Credit Parties shall, and shall cause each of
their respective Subsidiaries to:

         Section 5.1       Financial Statements.

         Furnish to the Administrative Agent and each of the Lenders:

                  (a)        Annual Financial Statements. As soon as available
         and in any event within 90 days after the end of each fiscal year of
         the Parent Guarantor (i) consolidated statements of income,
         stockholders' equity and cash flows of the Parent Guarantor and its
         Subsidiaries for such fiscal year and (ii) the related consolidated
         balance sheet of the Parent Guarantor and its Subsidiaries as at the
         end of such fiscal year, setting forth in each case in comparative form
         the corresponding consolidated figures for the preceding fiscal year,
         and accompanied by an unqualified opinion thereon of independent
         certified public accountants of recognized national standing, which
         opinion shall state that such consolidated financial statements fairly
         present the consolidated financial condition and results of operations
         of the Parent Guarantor and its Subsidiaries, as at the end of, and
         for, such fiscal year in accordance with GAAP, and a certificate of
         such accountants stating that, in making the examination necessary for
         their opinion, they obtained no knowledge, except as specifically
         stated, of any Default or Event of Default; and

                  (b)        Quarterly Financial Statements. As soon as
         available and in any event within 45 days after the end of each of the
         first three quarterly fiscal periods of each fiscal year of the Parent
         Guarantor, (i) consolidated statements of income and cash flows of the
         Parent Guarantor and its Subsidiaries and (ii) the related ___
         consolidated balance sheet of the Parent Guarantor and its
         Subsidiaries, in each case for such period and for the period from the
         beginning of the respective fiscal year to the end of such period,
         setting forth in each case in comparative form the corresponding
         consolidated figures for the corresponding periods in the preceding
         fiscal year, accompanied by a certificate of a Responsible Officer of
         the Parent Guarantor and the Borrower, which certificate shall state
         that such consolidated financial statements fairly present the
         consolidated financial condition and results of operations of the
         Parent Guarantor and its Subsidiaries, in accordance with GAAP
         consistently applied, as at the end of, and for, such period (subject
         to normal year-end audit adjustments); and
<PAGE>

all such financial statements to be accompanied by a description of, and an
estimation of the effect on the financial statements on account of, a change, if
any, in the application of accounting principles as provided in Section 1.3.

         Section 5.2       Certificates; Other Information.

         Furnish to the Administrative Agent and each of the Lenders:

                  (a)      promptly upon their becoming available, copies of
         all registration statements and regular periodic reports, if any, that
         the Parent Guarantor or any Subsidiary shall have filed with the SEC or
         any national securities exchange;

                  (b)      promptly upon mailing  thereof to the  shareholders
         of the Parent Guarantor  generally, copies of all financial statements,
         reports and proxy statements so mailed;

                  (c)      at the time it furnishes each set of financial
         statements pursuant to Sections 5.1(a) and 5.1(b) above, a certificate
         of a Responsible Officer of the Parent Guarantor and the Borrower (i)
         certifying that (A) each of the Credit Parties during such period
         observed or performed in all material respects all of its covenants and
         other agreements, and satisfied in all material respects every
         condition contained in this Agreement to be observed, performed or
         satisfied by it, and (B) no Default or Event of Default has occurred
         and is continuing (or, if any Default or Event of Default has occurred
         and is continuing, describing the same in reasonable detail and
         describing the action that the Parent Guarantor or the Borrower has
         taken or proposes to take with respect thereto) and (ii) setting forth
         in reasonable detail the computations necessary to determine whether
         the Credit Parties are in compliance with Section 5.9 hereof as of the
         end of the respective quarterly fiscal period or fiscal year;

                  (d)      from time to time such other information
         regarding the financial condition, operations, business or
         prospects of the Parent Guarantor or any of its Subsidiaries
         (including, without limitation, any Plan or Multiemployer Plan and any
         reports or other information required to be filed under ERISA) as any
         Lender or the Administrative Agent may reasonably request.

         Section 5.3       Payment of Obligations.

         Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all of its material
obligations of whatever nature and any additional costs that are imposed as a
result of any failure to so pay, discharge or otherwise satisfy such
obligations, except when the amount or validity of such obligations and costs is
currently being contested in good faith by appropriate proceedings and reserves,
if applicable, in conformity with GAAP with respect thereto have been provided
on the books of the Parent Guarantor or its Subsidiaries, as the case may be, or
failure to pay could not reasonably be expected to have a Material Adverse
Effect.
<PAGE>

         Section 5.4       Conduct of Business and Maintenance of Existence.

                  (a)        Preserve and maintain its legal existence and all
         of its material rights, privileges, licenses and franchises (provided
         that nothing in this Section 5.4 shall prohibit any transaction
         expressly permitted under Section 6.4 hereof).

                  (b)        Pay and discharge all taxes, assessments and
         governmental charges or levies imposed on it or on its income or
         profits or on any of its assets prior to the date on which penalties
         attach thereto, except for any such tax, assessment, charge or levy the
         payment of which is being contested in good faith and by proper
         proceedings and against which adequate reserves are being maintained or
         where failure to pay any such tax, assessment, charge or levy could not
         reasonably be expected to have a Material Adverse Effect.

         Section 5.5       Maintenance of Property; Insurance.

                  (a)        Keep all material property used or useful in its
         business in good working order and condition (ordinary wear and tear
         and obsolescence excepted).

                  (b)        Maintain insurance with financially sound and
         reputable insurance companies, and with respect to Property and risks
         of a character usually maintained by corporations engaged in the same
         or similar business similarly situated, against loss, damage and
         liability of the kinds and in the amounts customarily maintained by
         such corporations, including self-insurance.

         Section 5.6     Inspection of Property; Books and Records; Discussions.

                  (a)        Keep adequate records and books of account in which
         complete entries in accordance with GAAP consistently applied and all
         Requirements of Law shall be made of all dealings and transactions in
         relation to its businesses and activities.

                  (b) Upon reasonable prior notice, permit
         representatives of any Lender or the Administrative Agent,
         during normal business hours, to examine, copy and make extracts from
         its books and records, to inspect any of its Real Properties, and to
         discuss its business and affairs with its officers, all to the extent
         reasonably requested by such Lender or the Administrative Agent (as the
         case may be).

         Section 5.7       Notices.

         Give prompt notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:

                  (a)      within five  Business  Days after any Credit Party
         knows or has reason to know  thereof, the occurrence of any Default or
         Event of Default;
<PAGE>

                  (b)      any default or event of default under any
         Contractual Obligation of the Parent Guarantor or any of its
         Subsidiaries which could reasonably be expected to have a Material
         Adverse Effect;

                  (c)      any legal or arbitral proceedings before any
         Governmental Authority and any material development in respect of such
         legal or other proceedings affecting the Parent Guarantor or any of its
         Subsidiaries, except proceedings that, if adversely determined, would
         not (either individually or in the aggregate) have a Material Adverse
         Effect;

                  (d)      as soon as possible, and in any event within ten
         days after any Credit Party or any of its Subsidiaries knows or has
         reason to believe that any of the events or conditions specified below
         with respect to any Plan or Multiemployer Plan has occurred or exists,
         a statement signed by a Responsible Officer of the Parent Guarantor or
         such Credit Party setting forth details respecting such event or
         condition and the action, if any, that the Parent Guarantor, any Credit
         Party or any ERISA Affiliate proposes to take with respect thereto (and
         a copy of any report or notice required to be filed with or given to
         PBGC by the Parent Guarantor, any other Credit Party or any ERISA
         Affiliate with respect to such event or condition):

                           (i)        any Reportable Event with respect to a
                  Plan, as to which PBGC has not by regulation waived the
                  requirement of Section 4043(a) of ERISA that it be notified
                  within 30 days of the occurrence of such event (provided that
                  a failure to meet the minimum funding standard of Section 412
                  of the Code or Section 302 of ERISA, including, without
                  limitation, the failure to make on or before its due date a
                  required installment under Section 412(m) of the Code or
                  Section 302(e) of ERISA, shall be a reportable event
                  regardless of the issuance of any waivers in accordance with
                  Section 412(d) of the Code) and any request for a waiver under
                  Section 412(d) of the Code for any Plan;

                           (ii)       the distribution under Section 4041 of
                  ERISA of a notice of intent to terminate any Plan or any
                  action taken by any Credit Party or any of its Subsidiaries or
                  any ERISA Affiliate to terminate any Plan;

                           (iii)      the institution by PBGC of proceedings
                  under Section 4042 of ERISA for the termination of, or the
                  appointment of a trustee to administer, any Plan, or the
                  receipt by any Credit Party or any of its Subsidiaries or any
                  ERISA Affiliate of a notice from a Multiemployer Plan that
                  such action has been taken by PBGC with respect to such
                  Multiemployer Plan;

                           (iv)       the complete or partial withdrawal from a
                  Multiemployer Plan by any Credit Party or any of its
                  Subsidiaries or any ERISA Affiliate that results in liability
                  under Section 4201 or 4204 of ERISA (including the obligation
                  to satisfy secondary liability as a result of a purchaser
                  default) or the receipt by any Credit Party or any of its
                  Subsidiaries or any ERISA Affiliate of notice from a

<PAGE>

                  Multiemployer Plan that it is in reorganization or insolvency
                  pursuant to Section 4241 or 4245 of ERISA or that it intends
                  to terminate or has terminated under Section 4041A of ERISA;

                           (v)        the institution of a proceeding by a
                  fiduciary of any Multiemployer Plan against any Credit Party
                  or any of its Subsidiaries or any ERISA Affiliate to enforce
                  Section 515 of ERISA, which proceeding is not dismissed within
                  30 days; and

                           (vi)       the adoption of an amendment to any Plan
                  that, pursuant to Section 401(a)(29) of the Code or Section
                  307 of ERISA, would result in the loss of tax-exempt status of
                  the trust of which such Plan is a part if any Credit Party or
                  any of its Subsidiaries or any ERISA Affiliate fails to timely
                  provide security to the Plan in accordance with the provisions
                  of said Sections;

                  (e)       any assertion of any Environmental Claim by any
         Person against, or with respect to the activities of, the Parent
         Guarantor or any of its Subsidiaries and notice of any alleged
         violation of or non-compliance with any Environmental Laws or any
         permits, licenses or authorizations, other than any Environmental Claim
         or alleged violation that, if adversely determined, would not (either
         individually or in the aggregate) have a Material Adverse Effect; and

                  (f)      any other  development  or event which could
         reasonably  be expected to have a Material Adverse Effect.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Parent Guarantor or the Borrower proposes to take
with respect thereto. In the case of any notice of a Default or Event of
Default, the Borrower shall specify that such notice is a Default or Event of
Default notice on the face thereof.

         Section 5.8       Environmental Laws.

         Without limiting the general terms set forth in Section 5.11:

                  (a)        Comply in all material respects with, and ensure
         compliance in all material respects by all tenants and subtenants, if
         any, with, all applicable Environmental Laws and obtain and comply in
         all material respects with and maintain, and ensure that all tenants
         and subtenants obtain and comply in all material respects with and
         maintain, any and all licenses, approvals, notifications, registrations
         or permits required by applicable Environmental Laws except to the
         extent that failure to do so could not reasonably be expected to have a
         Material Adverse Effect;

                  (b)       Conduct and complete all investigations, studies,
         sampling and testing, and all remedial, removal and other actions
         required under Environmental Laws and promptly comply in all material
         respects with all lawful orders and directives of all Governmental
         Authorities regarding Environmental Laws except to the extent that the

<PAGE>

         same are being contested in good faith by appropriate proceedings and
         the pendency of such proceedings could not reasonably be expected to
         have a Material Adverse Effect; and

                  (c)       Defend, indemnify and hold harmless the
         Administrative Agent and the Lenders, and their respective employees,
         agents, officers and directors, from and against any and all claims,
         demands, penalties, fines, liabilities, settlements, damages, costs and
         expenses of whatever kind or nature known or unknown, contingent or
         otherwise, arising out of, or in any way relating to the violation of,
         noncompliance with or liability under, any Environmental Law applicable
         to the operations of the Parent Guarantor any of its Subsidiaries or
         the Real Properties, or any orders, requirements or demands of
         Governmental Authorities related thereto,  including, without
         limitation, reasonable attorney's and consultant's fees,
         investigation and laboratory fees, response costs, court costs and
         litigation expenses, except to the extent that any of the foregoing
         arise out of the gross negligence or willful misconduct of the party
         seeking indemnification therefor. The agreements in this paragraph
         shall survive repayment of the Notes and all other amounts payable
         hereunder.

         Section 5.9       Financial Covenants.

         Commencing on the day immediately following the Closing Date, the
Parent Guarantor shall, and shall cause each of its Subsidiaries to, comply with
the following financial covenants:

                  (a)      Leverage  Ratio.  The Leverage  Ratio,  as of the
         last day of each fiscal quarter of the Parent Guarantor and its
         Subsidiaries, shall be less than or equal to 1.50 to 1.0.

                  (b)      Fixed Charge  Coverage  Ratio.  The Fixed Charge
         Coverage  Ratio, as of the last day of each fiscal quarter of the
         Parent Guarantor and its  Subsidiaries,  shall be greater than or equal
         to 2.75 to 1.0.

         Section 5.10      Obligations Regarding Subsidiaries; Additional
                           Subsidiary Guarantors.

                  (a)        Except as permitted by Section 6.4, the Parent
         Guarantor will, and will cause each of its Subsidiaries to take such
         action from time to time as shall be necessary to ensure that each of
         its Subsidiaries remains a Subsidiary at all times.

                  (b)       The Credit Parties will cause each of their Domestic
         Subsidiaries, whether newly formed, after acquired or otherwise
         existing, to promptly become a Guarantor hereunder by way of execution
         of a Joinder Agreement and take such other action as may be required
         pursuant to the terms of Section 5.12.

         Section 5.11      Compliance with Law.

         Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
assets if noncompliance with any such law, rule, regulation, order or
restriction could reasonably be expected to have a Material Adverse Effect.
<PAGE>

         Section 5.12      Additional Credit Parties.

         Subject to Section 5.13, as soon as practicable and in any event within
30 days after any Person (whether newly formed, acquired or otherwise) becomes a
Subsidiary of any Credit Party, the Borrower shall provide the Administrative
Agent with written notice thereof and shall (a) if such Person is a Domestic
Subsidiary of a Credit Party, cause such Person to execute a Joinder Agreement
in substantially the same form as Schedule 5.12, and (b) deliver such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including, without limitation, certified resolutions and
other organizational and authorizing documents of such Person and favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above).

         Section 5.13      Covenants Related to Certain Subsidiaries.

         Within six months  following the Closing Date,  the Parent  Guarantor
shall cause Dollar  Express, Inc., DE&S Finance Company,  Dollar Express Stores,
Inc., Dollar Express Management,  Inc. and Dollar Express Royalties, Inc. to
either (a) be liquidated and dissolved or (b) become Guarantors pursuant to
Section 5.12

                                   ARTICLE VI

                               NEGATIVE COVENANTS

         The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, the Facility Fee and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, the Credit Parties shall, and shall cause each of their respective
Subsidiaries, to act in accordance with the following:

         Section 6.1       Indebtedness.

         The Parent Guarantor will not, nor will it permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Indebtedness, except:

                  (a)      Indebtedness arising or existing under this Agreement
         and the other Credit Documents;

                  (b)      Indebtedness of the Parent Guarantor and its
         Subsidiaries existing as of the Closing Date as referenced in the
         financial statements referenced in Section 3.1 (and set out more
         specifically in Schedule 6.1(b)) hereto and renewals, refinancings or

<PAGE>

         extensions thereof in a principal amount not in excess of that
         outstanding as of the date of such renewal, refinancing or extension;

                  (c)      Indebtedness (including Capital Lease Obligations)
         incurred to finance the purchase of equipment, and other Capital Lease
         Obligations, not to exceed, when added to Indebtedness outstanding
         pursuant to Section 6.1(e) hereof, 10% of Consolidated Net Worth in the
         aggregate outstanding at any time; provided that (i) such Indebtedness
         when incurred shall not exceed the purchase price or cost of
         construction of such asset and (ii) no such Indebtedness shall be
         refinanced for a principal amount in excess of the principal balance
         outstanding thereon at the time of such refinancing;

                  (d)      intercompany Indebtedness of one Credit Party to
         another Credit Party;

                  (e)      additional Indebtedness of the Credit Parties up to
         but not exceeding, when added to Indebtedness outstanding pursuant to
         Section 6.1(c) hereof, 10% of Consolidated Net Worth in the aggregate
         outstanding at any time;

                  (f)      Indebtedness in respect of Hedging Agreements to the
         extent permitted hereunder; and

                  (g)      Indebtedness evidenced by the ELLF Facility
         Documents in an aggregate amount not to exceed $165,000,000, provided
         that the aggregate amount thereunder may be increased from time to time
         by the parties thereto with the prior written consent of the Required
         Lenders.

         Section 6.2       Liens.

         The Parent Guarantor will not, nor will it permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its assets (other than "margin stock" within the meaning of Regulation U),
whether now owned or hereafter acquired, except for Permitted Liens.

         Section 6.3       Nature of Business.

         Neither the Parent Guarantor nor any of its Subsidiaries will engage in
any line or lines of business activity other than those conducted as of the
Closing Date, except for lines of business which generate less than 1% of the
gross revenues of the Parent Guarantor and its Subsidiaries on a consolidated
basis.

         Section 6.4     Consolidation, Merger, Sale or Purchase of Assets, etc.

         The Parent Guarantor will not, nor will it permit any Subsidiary to,

                  (a)      except as provided in Section 5.12, enter into
         any transaction of merger or consolidation or amalgamation, or
         liquidate, wind up or dissolve itself (or suffer any liquidation or
         dissolution);
<PAGE>

                  (b)      acquire  any  business  or  assets  from,  or Capital
         Stock  of,  or be a party to any acquisition of, any Person except:

                           (i)      for  purchases of inventory and other assets
                  to be sold or used in the ordinary course of business; and

                           (ii)     Investments permitted under Section 6.5
                  hereof;

                  (c)        convey, sell, lease, transfer or otherwise dispose
         of, in one transaction or a series of transactions, any part of its
         business or assets, whether now owned or hereafter acquired (including,
         without limitation, receivables and leasehold interests), but
         excluding:

                           (i)      any Excluded Disposition;

                           (ii)     obsolete or worn-out Property, tools or
                  equipment no longer used or useful in its business (other than
                  any Excluded Disposition) or real Property no longer used or
                  useful in its business;

                           (iii)    any sale, lease or transfer of assets from a
                  Credit  Party to another  Credit Party; and

                           (iv)     other assets provided that the aggregate
                  current market value of all assets so sold or transferred (in
                  each case determined at the time of such sale or transfer)
                  shall not at any time exceed, when added to the assets sold or
                  transferred pursuant to Section 6.12 hereof, 10% of the
                  current market value of the total assets of the Parent
                  Guarantor and its Subsidiaries and immediately after giving
                  effect to such transaction, the Parent Guarantor and its
                  Subsidiaries shall be in compliance with the financial
                  covenants set forth in Section 5.9 hereof on a Pro Forma
                  Basis; provided, that in each case with respect to subsection
                  (iv) above at least 85% of the consideration received therefor
                  by the Parent Guarantor or any such Subsidiary is in the form
                  of cash or Cash Equivalents; and

                  (d)      Notwithstanding the foregoing provisions of this
         Section 6.4, so long as no Default or Event of Default shall have
         occurred and be continuing, and after giving effect to any of the
         succeeding transactions, no Default or Event of Default would exist
         hereunder:

                           (i)        (A) any Credit Party may be merged or
                  consolidated with or into another Credit Party; provided, that
                  if one of the parties to such merger or consolidation is the
                  Borrower, the Borrower shall be the continuing or surviving
                  corporation, (B) any Subsidiary may be merged or consolidated
                  with or into another Credit Party so long as the surviving
                  party is either (x) a Credit Party or (y) an Additional Credit
                  Party; provided, that if one of the parties to such merger or
                  consolidation is the Borrower, the Borrower shall be the
                  continuing or surviving corporation and (C) any of the Parent
                  Guarantor or any Subsidiary may merge or consolidate with or

<PAGE>

                  into any Person that is not a Credit Party, provided that the
                  applicable conditions set forth in Section 6.4(b) regarding
                  acquisitions are complied with in connection with any such
                  acquisition by merger, the Parent Guarantor or any such
                  Subsidiary shall be the continuing or surviving corporation
                  and immediately after giving effect to such transaction, the
                  Parent Guarantor and its Subsidiaries shall be in compliance
                  with the financial covenants set forth in Section 5.9 hereof
                  on a Pro Forma Basis; and

                           (ii)       any Subsidiary of the Parent Guarantor
                  (other than the Borrower) may sell, lease, transfer or
                  otherwise dispose of any or all of its assets (upon voluntary
                  liquidation or otherwise) to any Credit Party.

         Section 6.5       Advances, Investments and Loans.

         The Parent Guarantor will not, nor will it permit any Subsidiary to,
lend money or extend credit or make advances to any Person, or purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any Person except for Permitted Investments.

         Section 6.6       Transactions with Affiliates.

         Except as expressly permitted by this Agreement, the Parent Guarantor
will not, nor will it permit any of its Subsidiaries to, directly or indirectly:
(a) make any investment in an Affiliate other than Permitted Investments; (b)
transfer, sell, lease, assign or otherwise dispose of any assets to an
Affiliate; (c) merge into or consolidate with or purchase or acquire assets from
an Affiliate other than Permitted Acquisitions; or (d) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate
(including, without limitation, guarantees and assumptions of obligations of an
Affiliate); provided that (i) any Affiliate who is an individual may serve as a
director, officer or employee of the Parent Guarantor or any of its Subsidiaries
and receive reasonable compensation for his or her services in such capacity and
(ii) the Parent Guarantor and its Subsidiaries may enter into transactions
(other than extensions of credit by the Parent Guarantor or any of its
Subsidiaries to an Affiliate) if the monetary or business consideration arising
therefrom would be substantially as advantageous to the Parent Guarantor and its
Subsidiaries as the monetary or business consideration that would be obtained in
a comparable transaction with a Person not an Affiliate.

         Section 6.7       Ownership of Subsidiaries; Restrictions.

         The Parent Guarantor will not, nor will it permit any Subsidiary to,
create, form or acquire any Subsidiaries, except for wholly-owned Domestic
Subsidiaries which are joined as Additional Credit Parties in accordance with
the terms hereof. The Parent Guarantor will not, nor will it permit its
Subsidiaries to, sell, transfer, pledge or otherwise dispose of any Capital
Stock or other equity interests in any of its Subsidiaries, nor will it permit

<PAGE>

any of its Subsidiaries to issue, sell, transfer, pledge or otherwise dispose of
any of its Capital Stock or other equity interests, except in a transaction
permitted by Section 6.4.

         Section 6.8       Fiscal Year; Organizational Documents; Material
                           Contracts.

         The Parent Guarantor will not, nor will it permit any of its
Subsidiaries to, change its fiscal year, except to adopt a retail fiscal year
end which is no more than 65 days from December 31. The Borrower will promptly
notify the Agent of such change in fiscal year. The Parent Guarantor will not,
nor will it permit any Subsidiary to, amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational document) or
bylaws (or other similar document) in any manner that could adversely affect the
rights of the Lenders hereunder. The Parent Guarantor will not, nor will it
permit any of its Subsidiaries to, without the prior written consent of the
Administrative Agent, amend, modify, cancel or terminate or fail to renew or
extend or permit the amendment, modification, cancellation or termination of any
of the Material Contracts, except in the event that such amendments,
modifications, cancellations or terminations could not reasonably be expected to
have a Material Adverse Effect.

         Section 6.9       Limitation on Actions.

                  (a)        The Parent Guarantor will not, nor will it permit
         any Subsidiary to, directly or indirectly, create or otherwise cause or
         suffer to exist or become effective any encumbrance or restriction on
         the ability of any such Person to (a) pay dividends or make any other
         distributions to any Credit Party on its Capital Stock or with respect
         to any other interest or participation in, or measured by, its profits,
         (b) pay any Indebtedness or other obligation owed to any Credit Party,
         (c) make loans or advances to any Credit Party, (d) sell, lease or
         transfer any of its properties or assets to any Credit Party, or (e)
         act as a Guarantor pursuant to the Credit Documents or any renewals,
         refinancings, exchanges, refundings or extension thereof, except (in
         respect of any of the matters referred to in clauses (a)-(d) above) for
         such encumbrances or restrictions existing under or by reason of (i)
         this Agreement and the other Credit Documents, (ii) applicable law,
         (iii) any document or instrument governing  Indebtedness incurred
         pursuant to Section 6.1(c),  provided that any such restriction
         contained therein relates only to the asset or assets constructed or
         acquired in connection therewith, (iv) any Permitted Lien or any
         document or instrument governing any Permitted Lien, provided that any
         such restriction contained therein relates only to the asset or assets
         subject to such Permitted Lien, or (v) the ELLF Facility Documents.

                  (b)        The Parent Guarantor will not, nor will it permit
         any Subsidiary to, enter into, assume or become subject to any
         agreement prohibiting or otherwise restricting the creation or
         assumption of any Lien upon its properties or assets, whether now owned
         or hereafter acquired, or requiring the grant of any security for such
         obligation if security is given for some other obligation except (i)
         pursuant to this Agreement and the other Credit Documents, (ii)
         pursuant to applicable law, (iii) pursuant to any document or
         instrument governing Indebtedness incurred pursuant to Section 6.1(c),
         provided that in the case of Section 6.1(c) any such restriction
         contained therein relates only to the asset or assets constructed or
         acquired in connection therewith, (iv) customary restrictions and
         conditions contained in agreements relating to the sale of a Subsidiary
         or assets pending such sale, provided such restrictions and conditions
         apply only to the Subsidiary or assets that are to be sold and such

<PAGE>

         sale is permitted hereunder, (v) restrictions or conditions imposed by
         any agreement relating to secured Indebtedness permitted by this
         Agreement if such restrictions or conditions apply only to the assets
         securing such Indebtedness, (vi) customary provisions in leases and
         other contracts restricting the assignment thereof, (vii) pursuant to
         the ELLF Facility Documents, (viii) restrictions in any document or
         instrument governing any Permitted Lien, provided that any such
         restriction contained therein relates only to the asset or assets
         subject to such Permitted Lien and (ix) any indenture agreement,
         instrument or other arrangement relating to the assets or business of
         any Subsidiary and existing prior to the consummation of the Permitted
         Acquisition in which such Subsidiary was acquired.

         Section 6.10      Restricted Payments.

         The Parent Guarantor will not, nor will it permit any Subsidiary to,
directly or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to any Credit Party (directly or indirectly through
Subsidiaries), (c) as permitted by Section 6.11, (d) to make dividends to or
repurchases from the Parent Guarantor or the parent of such Subsidiary (provided
that such parent company is a Credit Party) the proceeds of which shall be used
to pay taxes that are then due and payable, and (e) provided that no Default or
Event of Default shall have occurred and be continuing or be directly or
indirectly caused as a result thereof after giving effect to such repurchases on
a Pro Forma Basis, the Parent Guarantor may repurchase shares of its Capital
Stock on the open market in an aggregate amount not to exceed 20% of
Consolidated Net Worth, determined at the time of any such repurchase, during
the term of this Agreement.

         Section 6.11      Prepayments of Indebtedness, etc.

                  (a)        The Parent Guarantor will not, nor will it permit
         any of its Subsidiaries to, amend or modify (or permit the amendment or
         modification of) any of the terms of the documents evidencing its or
         their Indebtedness if such amendment or modification would add or
         change any terms in a manner adverse to the issuer of such
         Indebtedness, or shorten the final maturity or average life to maturity
         or require any payment to be made sooner than originally scheduled or
         increase the interest rate applicable thereto or change any
         subordination provision thereof.

                  (b)        The Borrower will furnish to the Administrative
         Agent a copy of each modification, supplement or waiver of any
         provisions of any agreement, instrument or other document evidencing or
         relating to the charter or bylaws of the Parent Guarantor or any of its
         Subsidiaries promptly upon the effectiveness thereof (and the
         Administrative Agent will promptly furnish a copy thereof to each
         Lender).
<PAGE>

         Section 6.12      Sale Leasebacks.

         The Parent Guarantor will not, nor will it permit any Subsidiary to,
directly or indirectly, enter into any arrangement, directly or indirectly,
whereby the Parent Guarantor or any Subsidiary shall sell or transfer any
property owned by it to a Person (other than the Parent Guarantor or any
Subsidiary) in order then or thereafter to lease such property or lease other
property which the Parent Guarantor or any Subsidiary intends to use for
substantially the same purpose as the property being sold or transferred.
Notwithstanding the foregoing provisions of this Section 6.12, the Parent
Guarantor or any Subsidiary may sell or transfer any property owned by it as
described in the preceding sentence provided that the aggregate current market
value of all assets so sold or transferred (in each case determined at the time
of such sale or transfer) shall not at any time exceed, when added to the assets
sold or transferred pursuant to Section 6.4(c)(iv) hereof, 10% of the current
market value of the total assets of the Parent Guarantor and its Subsidiaries
and immediately after giving effect to such transaction, the Parent Guarantor
and its Subsidiaries shall be in compliance with the financial covenants set
forth in Section 5.9 hereof on a Pro Forma Basis.

         Section 6.13      Use of Proceeds.

         The Borrower will not use the proceeds of the Loans and Letters of
Credit in a manner inconsistent with the uses permitted under Section 3.11
hereof.

                                   ARTICLE VII

                                EVENTS OF DEFAULT

         Section 7.1       Events of Default.

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

                  (a)        (i) The Borrower shall fail to pay any principal on
         any Note when due in accordance with the terms thereof or hereof; or
         (ii) the Borrower shall fail to reimburse the applicable Issuing Lender
         for any LOC Obligations when due in accordance with the terms hereof;
         or (iii) the Borrower shall fail to pay any interest on any Note or any
         fee or other amount payable hereunder when due in accordance with the
         terms thereof or hereof and any such failure shall continue unremedied
         for three (3) Business Days; or (iv) any Guarantor shall fail to pay on
         the Guaranty in respect of any of the foregoing or in respect of any
         other Guaranty Obligations thereunder; or

                  (b)        Any representation or warranty made or deemed made
         herein or in any of the other Credit Documents or which is contained in
         any certificate, document or financial or other statement furnished at
         any time under or in connection with this Agreement shall prove to have
         been incorrect, false or misleading in any material respect on or as of
         the date made or deemed made; or
<PAGE>

                  (c)       (i) Any Credit Party shall fail to perform, comply
         with or observe any term, covenant or agreement applicable to it
         contained in Sections 5.4(a), 5.6(b), 5.7(a) or 5.9 or Article VI
         hereof; or (ii) any Credit Party shall fail to comply with any other
         covenant, contained in this Credit Agreement or the other Credit
         Documents or any other agreement, document or instrument among any
         Credit Party, the Administrative Agent and the Lenders or executed by
         any Credit Party in favor of the Administrative Agent or the Lenders
         (other than as described in Sections 7.1(a) or 7.1(c)(i) above), and in
         the event any such breach or failure to comply is capable of cure, is
         not cured within thirty (30) days of its occurrence; or

                  (d)        The Parent Guarantor or any of its Subsidiaries
         shall (i) default in any payment of principal of or interest on any
         Indebtedness (other than the Notes) in a principal amount outstanding
         of at least $500,000 in the aggregate for the Parent Guarantor and any
         of its Subsidiaries beyond the period of grace (not to exceed 30 days),
         if any, provided in the instrument or agreement under which such
         Indebtedness was created; or (ii) default in the observance or
         performance of any other agreement or condition relating to any
         Indebtedness in a principal amount outstanding of at least $500,000 in
         the aggregate for the Parent Guarantor and its Subsidiaries or
         contained in any instrument or agreement evidencing, securing or
         relating thereto, or any other event shall occur or condition exist,
         the effect of which default or other event or condition is to cause, or
         to permit the holder or holders of such Indebtedness or beneficiary or
         beneficiaries of such Indebtedness (or a trustee or agent on behalf of
         such holder or holders or beneficiary or beneficiaries) to cause, with
         the giving of notice if required, such Indebtedness to become due prior
         to its stated maturity; or

                  (e)       (i) The Parent Guarantor or any of its Subsidiaries
         shall commence any case, proceeding or other action (A) under any
         existing or future law of any jurisdiction, domestic or foreign,
         relating to bankruptcy, insolvency, reorganization or relief of
         debtors, seeking to have an order for relief entered with respect to
         it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
         reorganization, arrangement, adjustment, winding-up, liquidation,
         dissolution, composition or other relief with respect to it or its
         debts, or (B) seeking appointment of a receiver, trustee, custodian,
         conservator or other similar official for it or for all or any
         substantial part of its assets, or the Parent Guarantor or any
         Subsidiary shall make a general assignment for the benefit of its
         creditors; or (ii) there shall be commenced against the Parent
         Guarantor or any Subsidiary any case, proceeding or other action of a
         nature referred to in clause (i) above which (A) results in the entry
         of an order for relief or any such adjudication or appointment or (B)
         remains undismissed, undischarged or unbonded for a period of 60 days;
         or (iii) there shall be commenced against the Parent Guarantor or any
         Subsidiary any case, proceeding or other action seeking issuance of a
         warrant of attachment, execution, distraint or similar process against
         all or any substantial part of its assets which results in the entry of
         an order for any such relief which shall not have been vacated,
         discharged, or stayed or bonded pending appeal within 60 days from the
         entry thereof; or (iv) the Parent Guarantor or any Subsidiary shall
         take any action in furtherance of, or indicating its consent to,
         approval of, or acquiescence in, any of the acts set forth in clause
         (i), (ii), or (iii) above; or (v) the Parent Guarantor or any

<PAGE>

         Subsidiary shall generally not, or shall be unable to, or shall admit
         in writing its inability to, pay its debts as they become due; or

                  (f)        One or more judgments or decrees shall be entered
         against the Parent Guarantor or any of its Subsidiaries involving in
         the aggregate a liability (to the extent not paid when due or covered
         by insurance) of $2,000,000 or more and all such judgments or decrees
         shall not have been paid and satisfied, vacated, discharged, stayed or
         bonded pending appeal within 30 days from the entry thereof; or

                  (g)       (i) Any Person shall engage in any "prohibited
         transaction" (as defined in Section 406 of ERISA or Section 4975 of the
         Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
         defined in Section 302 of ERISA), whether or not waived, shall exist
         with respect to any Plan or any Lien in favor of the PBGC or a Plan
         (other than a Permitted Lien) shall arise on the assets of the Parent
         Guarantor, any of its Subsidiaries or any Commonly Controlled Entity,
         (iii) a Reportable Event shall occur with respect to, or proceedings
         shall commence to have a trustee appointed, or a trustee shall be
         appointed, to administer or to terminate, any Single Employer Plan,
         which Reportable Event or commencement of proceedings or appointment of
         a Trustee is, in the reasonable opinion of the Required Lenders, likely
         to result in the termination of such Plan for purposes of Title IV of
         ERISA, (iv) any Single Employer Plan shall terminate for purposes of
         Title IV of ERISA, (v) the Parent Guarantor, any of its Subsidiaries or
         any Commonly Controlled Entity shall, or in the reasonable opinion of
         the Required Lenders is likely to, incur any liability in connection
         with a withdrawal from, or the Insolvency or Reorganization of, any
         Multiemployer Plan or (vi) any other similar event or condition shall
         occur or exist with respect to a Plan; and in each case in clauses (i)
         through (vi) above, such event or condition, together with all other
         such events or conditions, if any, could have a Material Adverse
         Effect; or

                  (h)        A reasonable basis shall exist for the assertion
         against the Parent Guarantor or any of its Subsidiaries, or any
         predecessor in interest of the Parent Guarantor or any of its
         Subsidiaries, of (or there shall have been asserted against the Parent
         Guarantor or any of its Subsidiaries) an Environmental Claim that, in
         the judgment of the Required Lenders, is reasonably likely to be
         determined adversely to the Parent Guarantor or any of its
         Subsidiaries, and the amount thereof (either individually or in the
         aggregate) is reasonably likely to have a Material Adverse Effect
         (insofar as such amount is payable by the Parent Guarantor or any of
         its Subsidiaries but after deducting any portion thereof that is
         reasonably expected to be paid by other creditworthy Persons jointly
         and severally liable therefor); or

                  (i)      A Change of Control shall occur; or

                  (j)        The Guaranty or any provision thereof shall cease
         to be in full force and effect or any Guarantor or any Person acting by
         or on behalf of any Guarantor shall deny or disaffirm any Guarantor's
         obligations under the Guaranty; or
<PAGE>

                  (k)        Any other Credit Document shall fail to be in full
         force and effect or to give the Administrative Agent and/or the Lenders
         the security interests, liens, rights, powers and privileges purported
         to be created thereby (except as such documents may be terminated or no
         longer in force and effect in accordance with the terms thereof, other
         than those indemnities and provisions which by their terms shall
         survive); or

                  (l)        There shall occur and be continuing any "Default"
         or "Event of Default" under and as defined in the ELLF Facility
         Documents or in the Note Purchase Agreement.

         Section 7.2       Acceleration; Remedies.

         Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section 7.1(e)
above, automatically the Commitments shall immediately terminate and the Loans
(with accrued interest thereon), and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall immediately become due and payable,
the Administrative Agent shall have the right to enforce any and all other
rights and interests created and existing under the Credit Documents, including,
without limitation, all rights and remedies against a Guarantor and all rights
of set-off, and the Administrative Agent shall have the right to enforce any and
all other rights and remedies of a creditor under applicable law, and (b) if
such event is any other Event of Default, with the written consent of the
Required Lenders, the Administrative Agent may, or upon the written request of
the Required Lenders, the Administrative Agent shall, by notice to the Borrower,
take any or all of the following actions: (i) declare the Commitments to be
terminated forthwith, whereupon the Commitments shall immediately terminate;
(ii) declare the Loans (with accrued interest thereon) and all other amounts
owing under this Agreement and the Notes to be due and payable forthwith and
direct the Borrower to pay to the Administrative Agent cash collateral as
security for the LOC Obligations for subsequent drawings under then outstanding
Letters of Credit in an amount equal to the maximum amount of which may be drawn
under Letters of Credit then outstanding, whereupon the same shall immediately
become due and payable; (iii) enforce any and all other rights and interests
created and existing under the Credit Documents, including, without limitation,
all rights and remedies against a Guarantor and all rights of set-off; and (iv)
enforce any and all other rights and remedies of a creditor under applicable
law. Except as expressly provided above in this Section 7.2, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.

                                  ARTICLE VIII

                                    THE AGENT

         Section 8.1       Appointment.

         Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this Agreement,
and each such Lender irrevocably authorizes First Union National Bank, as the

<PAGE>

Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.

         Section 8.2       Delegation of Duties.

         The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care. Without limiting the foregoing, the Administrative Agent may appoint one
of its Affiliates as its agent to perform the functions of the Administrative
Agent hereunder relating to the advancing of funds to the Borrower and
distribution of funds to the Lenders and to perform such other related functions
of the Administrative Agent hereunder as are reasonably incidental to such
functions.

         Section 8.3       Exculpatory Provisions.

         Neither  the  Administrative Agent nor any of its
officers, directors,  employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Credit Party or any officer thereof
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any of the Credit
Documents or for any failure of any Credit Party to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance by the Credit Parties of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Credit Parties.

         Section 8.4       Reliance by Administrative Agent.

         The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Credit Parties), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
<PAGE>

thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required Lenders
or all of the Lenders, as may be required under this Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.

         Section 8.5       Notice of Default.

         The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received written notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided, however, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Credit Agreement expressly requires that such action be taken, or not
taken, only with the consent or upon the authorization of the Required Lenders,
or all of the Lenders, as the case may be.

         Section 8.6     Non-Reliance on Administrative Agent and Other Lenders.

         Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representation or warranty to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Credit Parties, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and the Guarantors and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
<PAGE>

itself as to the business, operations, property, financial and other condition
and creditworthiness of the Parent Guarantor and its Subsidiaries. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Credit Parties
which may come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.

         Section 8.7       Indemnification.

         The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of any Credit Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Administrative Agent's gross negligence or
willful misconduct, as determined by a court of competent jurisdiction. The
agreements in this Section 8.7 shall survive the termination of this Agreement
and payment of the Notes and all other amounts payable hereunder.

         Section 8.8       Administrative Agent in Its Individual Capacity.

         The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower and
the Guarantors as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to its Loans made or renewed by it and any Note
issued to it, the Administrative Agent shall have the same rights and powers
under this Agreement as any Lender and may exercise the same as though it were
not the Administrative Agent, and the terms "Lender" and "Lenders" shall include
the Administrative Agent in its individual capacity.

         Section 8.9       Successor Administrative Agent.

         The Administrative Agent may resign as Administrative Agent upon 30
days' prior notice to the Borrower and the Lenders. If the Administrative Agent
shall resign as Administrative Agent under this Agreement and the Notes, then
the Required Lenders shall appoint from among the Lenders a successor agent for
the Lenders, which successor agent shall be approved by the Borrower, so long as
no Default or Event of Default has occurred and is continuing, whereupon such
successor agent shall succeed to the rights, powers and duties of the
<PAGE>

Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Notes. If no successor Administrative Agent has accepted
appointment as Administrative Agent within sixty (60) days after the retiring
Administrative Agent's giving notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless become effective and the Lenders shall
perform all duties of the Administrative Agent hereunder until such time, if
any, as the Required Lenders appoint a successor Administrative Agent as
provided for above. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 8.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.

         Section 8.10      Documentation Agent and Syndication Agent.

         Fleet National Bank, in its capacity as Syndication Agent, and Suntrust
Bank, in its capacity as Documentation Agent, shall not have any rights, powers,
duties, liabilities, fiduciary relationships or obligations under this agreement
or any of the other documents related hereto.

                                   ARTICLE IX

                                  MISCELLANEOUS

         Section 9.1       Amendments and Waivers.

         Neither this Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this Section nor
may be released except as specifically provided herein or in accordance with the
provisions of this Section 9.1. The Required Lenders may, or, with the written
consent of the Required Lenders, the Administrative Agent may, from time to
time, (a) enter into with the Borrower written amendments, supplements or
modifications hereto and to the other Credit Documents for the purpose of adding
any provisions to this Agreement or the other Credit Documents or changing in
any manner the rights or obligations of the Lenders or of the Borrower hereunder
or thereunder or (b) waive, on such terms and conditions as the Required Lenders
may specify in such instrument, any of the requirements of this Agreement or the
other Credit Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, waiver, supplement
or modification shall:

                           (i)        reduce the amount or extend the scheduled
                  date of maturity of any Loan or Note, or any installment
                  thereon, or reduce the stated rate of any interest or fee
                  payable hereunder (other than interest at the increased
                  post-default rate) or extend the scheduled date of any payment
                  thereof or increase the amount or extend the expiration date
                  of any Lender's Commitment or waive any Event of Default under
<PAGE>

                  Section 7.1(a) hereof, in each case without the written
                  consent of each Lender directly affected thereby; or

                           (ii)       amend, modify or waive any provision of
                  this Section 9.1, or reduce the percentage specified in the
                  definition of Required Lenders, without the written consent of
                  all the Lenders; or

                           (iii)    amend,  modify or waive any  provision  of
                  Article  VIII  without  the  written consent of the then
                  Administrative Agent; or

                           (iv)     release any  Guarantor  from its obligations
                  under the  Guaranty  without the written consent of all of the
                  Lenders; or

                           (v)        amend, modify or waive the requirement
                  that any issue be resolved or determined with the consent,
                  approval or upon the request of the Required Lenders or all
                  Lenders, without the written consent of all of the Lenders to
                  the change of such voting requirement and, provided, further,
                  that no amendment, waiver or consent affecting the rights or
                  duties of the Administrative Agent or the Issuing Lender(s)
                  under any Credit Document shall in any event be effective,
                  unless in writing and signed by the Administrative Agent
                  and/or the Issuing Lender(s), as applicable, in addition to
                  the Lenders required hereinabove to take such action.

         Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Credit Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

         Notwithstanding any of the foregoing to the contrary, the consent of
the Credit Parties shall not be required for any amendment, modification or
waiver of the provisions of Article VIII (other than the provisions of Section
8.9); provided, however, that the Administrative Agent will provide written
notice to the Borrower of any such amendment, modification or waiver. In
addition, the Borrower and the Lenders hereby authorize the Administrative Agent
to modify this Credit Agreement by unilaterally amending or supplementing
Schedule 2.1(a) from time to time in the manner requested by the Borrower, the
Administrative Agent or any Lender in order to reflect any assignments or
transfers of the Loans as provided for hereunder; provided, however, that the
Administrative Agent shall promptly deliver a copy of any such modification to
the Borrower and each Lender.

         Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of

<PAGE>

Section 1126(c) of the Bankruptcy Code supersede the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.

         Section 9.2       Notices.

         Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid or pursuant to an invoice arrangement to a reputable national
overnight air courier service, or (d) the fifth Business Day following the day
on which the same is sent by certified or registered mail, postage prepaid, in
each case, addressed as follows in the case of the Borrower, the other Credit
Parties and the Administrative Agent, and as set forth on Schedule 9.2 in the
case of the Lenders, or to such other address as may be hereafter notified by
the respective parties hereto and any future holders of the Notes:

     The Borrower          Dollar Tree Distribution, Inc.
     and the other         500 Volvo Parkway
     Credit Parties:       Chesapeake, Virginia  23320
                           Attention:  Frederick C. Coble
                           Telecopier:  (757) 321-5111
                                    Telephone:  (757) 321-5007

     The Administrative    First Union National Bank
     Agent:                Charlotte Plaza
                           201 S. College Street, CP-6
                           Charlotte, North Carolina  28288
                           Attention: Syndication Agency Services
                           Telecopier:  (704) 383-0835
                           Telephone:  (704) 383-3721

                           with a copy to:

                           First Union National Bank
                           1339 Chestnut Street
                           12th Floor - Widener Building
                           PA 4843
                           Philadelphia, Pennsylvania  19107
                           Attention: Tom Harper
                           Telecopier:  (215) 973-1887
                           Telephone:  (215) 973-5213
<PAGE>

         Section 9.3       No Waiver; Cumulative Remedies.

         No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

         Section 9.4       Survival of Representations and Warranties.

         All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, provided that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.

         Section 9.5       Payment of Expenses and Taxes.

         The Credit Parties agree (a) to pay or reimburse the Administrative
Agent for all its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation, negotiation, printing and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Credit Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, together with the reasonable fees
and disbursements of counsel to the Administrative Agent, (b) to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and to the Lenders (including reasonable allocated costs of
in-house legal counsel), (c) on demand, to pay, indemnify, and hold each Lender
and the Administrative Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, the Credit Documents and any such other documents, and (d) to
pay, indemnify, and hold each Lender and the Administrative Agent and their
Affiliates harmless from and against, any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of the Credit
Documents and any such other documents and the use, or proposed use, of proceeds
of the Loans and whether or not the Administrative Agent, the relevant Lenders
and their Affiliates are parties to the claim, demand, action, cause of action
or proceeding from which any of the aforementioned arises (all of the foregoing,
collectively, the "indemnified liabilities"); provided, however, that the
Borrower shall not have any obligation hereunder to the Administrative Agent or
any Lender with respect to indemnified liabilities arising from the gross

<PAGE>

negligence or willful misconduct of the Administrative Agent or any such Lender,
as determined by a court of competent jurisdiction. The agreements in this
Section 9.5 shall survive repayment or assignment of the Loans, Notes and all
other amounts payable hereunder.

         Section 9.6       Successors and Assigns; Participations; Purchasing
                           Lenders.

                  (a)        This Agreement shall be binding upon and inure to
         the benefit of the Borrower, the Lenders, the Administrative Agent, all
         future holders of the Notes and their respective successors and
         assigns, except that the Borrower may not assign or transfer any of
         their rights or obligations under this Agreement or the other Credit
         Documents without the prior written consent of each Lender.

                  (b)        Any Lender may, in the ordinary course of its
         commercial banking business and in accordance with applicable law, at
         any time sell to one or more banks or other entities ("Participants")
         participating interests in any Loan owing to such Lender, any Note held
         by such Lender, any Commitment of such Lender, or any other interest or
         obligation of such Lender hereunder. In the event of any such sale by a
         Lender of participating interests to a Participant, such Lender's
         obligations under this Agreement to the other parties to this Agreement
         shall remain unchanged, such Lender shall remain solely responsible for
         the performance thereof, such Lender shall remain the holder of any
         such Note for all purposes under this Agreement, and the Borrower and
         the Administrative Agent shall continue to deal solely and directly
         with such Lender in connection with such Lender's rights and
         obligations under this Agreement. No Lender shall transfer or grant any
         participation under which the Participant shall have rights to approve
         any amendment to or waiver of this Agreement or any other Credit
         Document except to the extent such amendment or waiver would (i) extend
         the scheduled maturity of any Loan or Note, or any installment thereon
         in which such Participant is participating, or reduce the stated rate
         or extend the time of payment of interest or fees thereon (except in
         connection with a waiver of interest at the increased post-default
         rate) or reduce the principal amount thereof, or increase the amount of
         the Participant's participation over the amount thereof then in effect
         (it being understood that a waiver of any Default or Event of Default
         shall not constitute a change in the terms of such participation, and
         that an increase in any Commitment or Loan shall be permitted without
         consent of any Participant if the Participant's participation is not
         increased as a result thereof), (ii) release all or substantially all
         of the Guarantors from their obligations under the Guaranty, or (iii)
         consent to the assignment or transfer by the Borrower of any of their
         rights and obligations under this Agreement. In the case of any such
         participation, the Participant shall not have any rights under this
         Agreement or any of the other Credit Documents (the Participant's
         rights against such Lender in respect of such participation to be those
         set forth in the agreement executed by such Lender in favor of the
         Participant relating thereto) and all amounts payable by the Borrower
         hereunder shall be determined as if such Lender had not sold such
         participation; provided that each Participant shall be entitled to the
         benefits of Sections 2.14, 2.15, 2.16 and 9.5 with respect to its
         participation in the Commitments and the Loans outstanding from time to
         time, but no Participant shall be entitled to receive any greater
         amount pursuant to such Sections than the transferor Lender would have
         been entitled to receive in respect of the amount of the participation
         transferred by such transferor Lender to such Participant had no such
         transfer occurred.
<PAGE>

                  (c)        Any Lender may, in the ordinary course of its
         commercial banking business and in accordance with applicable law, at
         any time, sell or assign to any Lender or any affiliate thereof or
         special purpose entity created thereby and with the consent of the
         Administrative Agent and, so long as no Event of Default has occurred
         and is continuing, the Borrower (in each case, which consent shall not
         be unreasonably withheld), to one or more additional banks or financial
         institutions ("Purchasing Lenders"), all or any part of its rights and
         obligations under this Agreement and the Notes in minimum amounts of
         $5,000,000 with respect to its Revolving Commitment and its Revolving
         Loans (or, if less, the entire amount of such Lender's obligations),
         pursuant to a Commitment Transfer Supplement, executed by such
         Purchasing Lender and such transferor Lender (and, in the case of a
         Purchasing Lender that is not then a Lender or an affiliate thereof,
         the Administrative Agent and, so long as no Event of Default has
         occurred and is continuing, the Borrower), and delivered to the
         Administrative Agent for its acceptance and recording in the Register;
         provided, however, that any sale or assignment to an existing Lender
         shall not require the consent of the Administrative Agent or the
         Borrower nor shall any such sale or assignment be subject to the
         minimum assignment amounts specified herein. Upon such execution,
         delivery, acceptance and recording, from and after the Transfer
         Effective Date specified in such Commitment Transfer Supplement, (x)
         the Purchasing Lender thereunder shall be a party hereto and, to the
         extent provided in such Commitment Transfer Supplement, have the rights
         and obligations of a Lender hereunder with a Commitment as set forth
         therein, and (y) the transferor Lender thereunder shall, to the extent
         provided in such Commitment Transfer Supplement, be released from its
         obligations under this Agreement (and, in the case of a Commitment
         Transfer Supplement covering all or the remaining portion of a
         transferor Lender's rights and obligations under this Agreement, such
         transferor Lender shall cease to be a party hereto). Such Commitment
         Transfer Supplement shall be deemed to amend this Agreement to the
         extent, and only to the extent, necessary to reflect the addition of
         such Purchasing Lender and the resulting adjustment of Commitment
         Percentages arising from the purchase by such Purchasing Lender of all
         or a portion of the rights and obligations of such transferor Lender
         under this Agreement and the Notes. On or prior to the Transfer
         Effective Date specified in such Commitment Transfer Supplement, the
         Borrower, at its own expense, shall execute and deliver to the
         Administrative Agent in exchange for the Notes delivered to the
         Administrative Agent pursuant to such Commitment Transfer Supplement
         new Notes to the order of such Purchasing Lender in an amount equal to
         the Commitment assumed by it pursuant to such Commitment Transfer
         Supplement and, unless the transferor Lender has not retained a
         Commitment hereunder, new Notes to the order of the transferor Lender
         in an amount equal to the Commitment retained by it hereunder. Such new
         Notes shall be dated the Closing Date and shall otherwise be in the
         form of the Notes replaced thereby. The Notes surrendered by the
         transferor Lender shall be returned by the Administrative Agent to the
         Borrower marked "canceled".

                  (d)        The Administrative Agent shall maintain at its
         address referred to in Section 9.2 a copy of each Commitment Transfer
         Supplement delivered to it and a register (the "Register") for the
         recordation of the names and addresses of the Lenders and the
         Commitment of, and principal amount of the Loans owing to, each Lender
         from time to time. The entries in the Register shall be conclusive, in
         the absence of manifest error, and the Borrower, the Administrative
         Agent and the Lenders may treat each Person whose name is recorded in
         the Register as the owner of the Loan recorded therein 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.

                  (e)         Upon its receipt of a duly executed Commitment
         Transfer Supplement, together with payment to the Administrative Agent
         by the transferor Lender or the Purchasing Lender, as agreed between
         them, of a registration and processing fee of $3,500 for each
         Purchasing Lender listed in such Commitment Transfer Supplement and the
         Notes subject to such Commitment Transfer Supplement, the
         Administrative Agent shall (i) accept such Commitment Transfer
         Supplement, (ii) record the information contained therein in the
         Register and (iii) give prompt notice of such acceptance and
         recordation to the Lenders and the Borrower.

                  (f)        The Credit Parties authorize each Lender to
         disclose to any Participant or Purchasing Lender (each, a "Transferee")
         and any prospective Transferee any and all financial information in
         such Lender's possession concerning the Credit Parties, their
         Subsidiaries and their Affiliates which has been delivered to such
         Lender by or on behalf of the Credit Parties pursuant to this Agreement
         or which has been delivered to such Lender by or on behalf of the
         Credit Parties in connection with such Lender's credit evaluation of
         the Credit Parties and their Affiliates prior to becoming a party to
         this Agreement, in each case subject to Section 9.16.

                  (g)       At the time of each assignment pursuant to this
         Section 9.6 to a Person which is not already a Lender hereunder and
         which is not a United States person (as such term is defined in Section
         7701(a)(30) of the Code) for Federal income tax purposes, the
         respective assignee Lender shall provide to the Borrower and the
         Administrative Agent the appropriate Internal Revenue Service Forms
         (and, if applicable, a 2.16 Certificate) described in Section 2.16.

                  (h)        Nothing herein shall prohibit any Lender from
         pledging or assigning any of its rights under this Agreement
         (including, without limitation, any right to payment of principal and
         interest under any Note) to any Federal Reserve Bank in accordance with
         applicable laws.

         Section 9.7       Adjustments; Set-off.

                  (a)        Each Lender agrees that if any Lender (a "benefited
         Lender") shall at any time receive any payment of all or part of its
         Loans, or interest thereon, or receive any collateral in respect
         thereof (whether voluntarily or involuntarily, by set-off, pursuant to

<PAGE>

         events or proceedings of the nature referred to in Section 7.1(e), 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, or interest thereon, such benefited Lender shall
         purchase for cash from the other Lenders a participating interest in
         such portion of each such other Lender's Loans, or shall provide such
         other Lenders with the benefits of any such collateral, or the proceeds
         thereof, as shall be necessary to cause such benefited 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
         benefited 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 each Lender so purchasing a
         portion of another Lender's Loans may exercise all rights of payment
         (including, without limitation, rights of set-off) with respect to such
         portion as fully as if such Lender were the direct holder of such
         portion.

                  (b)       In addition to any rights and remedies of the
         Lenders provided by law (including, without limitation, other rights of
         set-off), each Lender shall have the right, without prior notice to the
         Borrower, any such notice being expressly waived by the Borrower to the
         extent permitted by applicable law, upon the occurrence of any Event of
         Default, to setoff and appropriate and apply any and all deposits
         (general or special, time or demand, provisional or final), in any
         currency, and any other credits, indebtedness or claims, in any
         currency, in each case whether direct or indirect, absolute or
         contingent, matured or unmatured, at any time held or owing by such
         Lender or any branch or agency thereof to or for the credit or the
         account of the Borrower, or any part thereof in such amounts as such
         Lender may elect, against and on account of the obligations and
         liabilities of the Borrower to such Lender hereunder and claims of
         every nature and description of such Lender against the Borrower, in
         any currency, whether arising hereunder, under the Notes or under any
         documents contemplated by or referred to herein or therein, as such
         Lender may elect, whether or not such Lender has made any demand for
         payment and although such obligations, liabilities and claims may be
         contingent or unmatured. The aforesaid right of set-off may be
         exercised by such Lender against the Borrower or against any trustee in
         bankruptcy, debtor in possession, assignee for the benefit of
         creditors, receiver or execution, judgment or attachment creditor of
         the Borrower, or against anyone else claiming through or against the
         Borrower or any such trustee in bankruptcy, debtor in possession,
         assignee for the benefit of creditors, receiver, or execution, judgment
         or attachment creditor, notwithstanding the fact that such right of
         set-off shall not have been exercised by such Lender prior to the
         occurrence of any Event of Default. Each Lender agrees promptly to
         notify the Borrower and the Administrative Agent 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.

         Section 9.8       Table of Contents and Section Headings.

         The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing this
Agreement.
<PAGE>

         Section 9.9       Counterparts.

         This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.

         Section 9.10      Effectiveness.

         This Credit Agreement shall become effective on the date on which all
of the parties have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent pursuant to
Section 9.2 or, in the case of the Lenders, shall have given to the
Administrative Agent written, telecopied or telex notice (actually received) at
such office that the same has been signed and mailed to it.

         Section 9.11      Severability.

         Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

         Section 9.12      Integration.

         This Agreement, the Notes and the other Credit Documents represent the
agreement of the Borrower, the Guarantors, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent, the
Borrower, the Guarantors or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the Notes.

         Section 9.13      Governing Law.

         This Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and construed
and interpreted in accordance with, the law of the State of North Carolina.

         Section 9.14      Consent to Jurisdiction and Service of Process.

         All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of North Carolina, and, by execution and delivery of this
Agreement, the Borrower and the other Credit Parties accepts, for itself and in
connection with its properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any

<PAGE>

final judgment rendered thereby in connection with this Agreement from which no
appeal has been taken or is available. The Borrower and the other Credit Parties
irrevocably agrees that all service of process in any such proceedings in any
such court may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to it at its
address set forth in Section 9.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto, such service
being hereby acknowledged by the Borrower and the other Credit Parties to be
effective and binding service in every respect. The Borrower, the other Credit
Parties, the Administrative Agent and the Lenders irrevocably waives any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of forum non conveniens which it may now or hereafter
have to the bringing of any such action or proceeding in any such jurisdiction.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Lender to bring proceedings
against the Borrower or the other Credit Parties in the court of any other
jurisdiction.

         Section 9.15      Arbitration.

                  (a)        Notwithstanding the provisions of Section 9.14 to
         the contrary, upon demand of any party hereto, whether made before or
         within three (3) months after institution of any judicial proceeding,
         any dispute, claim or controversy arising out of, connected with or
         relating to this Agreement and other Credit Documents ("Disputes")
         between or among parties to this Agreement shall be resolved by binding
         arbitration as provided herein. Institution of a judicial proceeding by
         a party does not waive the right of that party to demand arbitration
         hereunder. Disputes may include, without limitation, tort claims,
         counterclaims, disputes as to whether a matter is subject to
         arbitration, claims brought as class actions, claims arising from
         Credit Documents executed in the future, or claims arising out of or
         connected with the transaction reflected by this Agreement.

                  Arbitration shall be conducted under and governed by the
         Commercial Arbitration Rules (the "Arbitration Rules") of the American
         Arbitration Association (the "AAA") and Title 9 of the U.S. Code. All
         arbitration hearings shall be conducted in Charlotte, North Carolina. A
         hearing shall begin within 90 days of demand for arbitration and all
         hearings shall be concluded within 120 days of demand for arbitration.
         These time limitations may not be extended unless a party shows cause
         for extension and then no more than a total extension of 60 days. The
         expedited procedures set forth in Rule 51 et seq. of the Arbitration
         Rules shall be applicable to claims of less than $1,000,000. All
         applicable statutes of limitation shall apply to any Dispute. A
         judgment upon the award may be entered in any court having
         jurisdiction. Arbitrators shall be licensed attorneys selected from the
         Commercial Financial Dispute Arbitration Panel of the AAA. The parties
         hereto do not waive applicable Federal or state substantive law except
         as provided herein. Notwithstanding the foregoing, this arbitration
         provision does not apply to disputes under or related to Hedging
         Agreements.

                  (b)        Notwithstanding the preceding binding arbitration
         provisions, the Administrative Agent, the Lenders, the Borrower and
         the other Credit Parties agree to preserve, without diminution, certain
         remedies that the Administrative Agent on behalf of the Lenders may
         employ or exercise freely, independently or in connection with an
<PAGE>

         arbitration proceeding or after an arbitration action is brought. The
         Administrative Agent on behalf of the Lenders shall have the right to
         proceed in any court of proper jurisdiction or by self-help to exercise
         or prosecute the following remedies, as applicable (i) all rights to
         foreclose against any real or personal property or other security by
         exercising a power of sale granted under Credit Documents or under
         applicable law or by judicial foreclosure and sale, including a
         proceeding to confirm the sale; (ii) all rights of self-help including
         peaceful occupation of real property and collection of rents, set-off,
         and peaceful possession of personal property; and (iii) obtaining
         provisional or ancillary remedies  including injunctive relief,
         sequestration, garnishment, attachment, appointment of receiver and
         filing an involuntary bankruptcy proceeding. Preservation of these
         remedies does not limit the power of an arbitrator to grant similar
         remedies that may be requested by a party in a Dispute.

                  (c)        The parties hereto agree that they shall not have a
         remedy of punitive or exemplary damages against the other in any
         Dispute and hereby waive any right or claim to punitive or exemplary
         damages they have now or which may arise in the future in connection
         with any Dispute whether the Dispute is resolved by arbitration or
         judicially.

                  (d)        By execution and delivery of this Agreement, each
         of the parties hereto accepts, for itself and in connection with its
         properties, generally and unconditionally, the non-exclusive
         jurisdiction relating to any arbitration proceedings conducted under
         the Arbitration Rules in Charlotte, North Carolina and irrevocably
         agrees to be bound by any final judgment rendered thereby in connection
         with this Agreement from which no appeal has been taken or is
         available.

         Section 9.16      Confidentiality.

         The Administrative Agent and each of the Lenders agrees that it will
use its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, affiliates, auditors or counsel or to another
Lender) any information with respect to the Parent Guarantor and its
Subsidiaries which is furnished pursuant to this Agreement, any other Credit
Document or any documents contemplated by or referred to herein or therein and
which is designated by the Borrower to the Lenders in writing as confidential or
as to which it is otherwise reasonably clear such information is not public,
except that any Lender may disclose any such information (a) as has become
generally available to the public other than by a breach of this Section 9.16,
(b) as may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or federal regulatory body having or claiming
to have jurisdiction over such Lender or to the Federal Reserve Board or the
Federal Deposit Insurance Corporation or the OCC or the NAIC or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
any law, order, regulation or ruling applicable to such Lender, (d) to any
prospective Participant or assignee in connection with any contemplated transfer
pursuant to Section 9.6, provided that such prospective transferee shall have
been made aware of this Section 9.16 and shall have agreed to be bound by its
provisions as if it were a party to this Agreement or (e) to Gold Sheets and
other similar bank trade publications; such information to consist of deal terms
and other information regarding the credit facilities evidenced by this Credit
Agreement customarily found in such publications.
<PAGE>

         Section 9.17      Acknowledgments.

         The Borrower and the other Credit Parties each hereby acknowledge that:

                  (a)      it has been  advised by counsel  in the  negotiation,
         execution  and  delivery  of each Credit Document;

                  (b)      neither the Administrative Agent nor any Lender has
         any fiduciary relationship with or duty to the Borrower or any other
         Credit Party arising out of or in connection with this Agreement and
         the relationship between Administrative Agent and Lenders, on one hand,
         and the Borrower and the other Credit Parties, on the other hand, in
         connection herewith is solely that of debtor and creditor; and

                  (c)      no joint  venture  exists  among the Lenders or among
         the  Borrower or the other  Credit Parties and the Lenders.

         Section 9.18      Waivers of Jury Trial.

         THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.

                                    ARTICLE X

                                    GUARANTY

         Section 10.1      The Guaranty.

         In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be received
by the Guarantors from the Extensions of Credit hereunder, each of the
Guarantors hereby agrees with the Administrative Agent and the Lenders as
follows: each Guarantor hereby unconditionally and irrevocably jointly and
severally guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all indebtedness of the Borrower to the Administrative Agent and the
Lenders. If any or all of the indebtedness of the Borrower to the Administrative
Agent and the Lenders becomes due and payable hereunder, each Guarantor
unconditionally promises to pay such indebtedness to the Administrative Agent
and the Lenders, on order, on demand, together with any and all reasonable
expenses which may be incurred by the Administrative Agent or the Lenders in
collecting any of the indebtedness. The word "indebtedness" is used in this
Article X in its most comprehensive sense and includes any and all advances,

<PAGE>

debts, obligations and liabilities of the Borrower arising in connection with
this Agreement, in each case, heretofore, now, or hereafter made, incurred or
created, whether voluntarily or involuntarily, absolute or contingent,
liquidated or unliquidated, determined or undetermined, whether or not such
indebtedness is from time to time reduced, or extinguished and thereafter
increased or incurred, whether the Borrower may be liable individually or
jointly with others, whether or not recovery upon such indebtedness may be or
hereafter become barred by any statute of limitations, and whether or not such
indebtedness may be or hereafter become otherwise unenforceable.

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

         Section 10.2      Bankruptcy.

         Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 7.1(e), and unconditionally
promises to pay such indebtedness to the Administrative Agent for the account of
the Lenders, or order, on demand, in lawful money of the United States. Each of
the Guarantors further agrees that to the extent that the Borrower or a
Guarantor shall make a payment or a transfer of an interest in any property to
the Administrative Agent or any Lender, which payment or transfer or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
or otherwise is avoided, and/or required to be repaid to the Borrower or a
Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such avoidance or repayment, the
obligation or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had not been made.

         Section 10.3      Nature of Liability.

         The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Administrative
Agent or the Lenders on the indebtedness which the Administrative Agent or such
Lenders repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding. The obligations of the

<PAGE>

Guarantors hereunder are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Credit
Documents or any other agreement or instrument referred to therein, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or a guarantor.

         Section 10.4      Independent Obligation.

         The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other Guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.

         Section 10.5      Authorization.

         Each of the Guarantors authorizes the Administrative Agent and each
Lender without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to (a) renew, compromise, extend, increase,
accelerate or otherwise change the time for payment of, or otherwise change the
terms of the indebtedness or any part thereof in accordance with this Agreement,
including any increase or decrease of the rate of interest thereon, (b) take and
hold security from any Guarantor or any other party for the payment of this
Guaranty or the indebtedness and exchange, enforce, waive and release any such
security, (c) apply such security and direct the order or manner of sale thereof
as the Administrative Agent and the Lenders in their discretion may determine
and (d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors.

         Section 10.6      Reliance.

         It is not necessary for the Administrative Agent or the Lenders to
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on their behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.

         Section 10.7      Waiver.

                  (a)       Each of the Guarantors waives any right (except as
         shall be required by applicable statute and cannot be waived) to
         require the Administrative Agent or any Lender to (i) proceed against
         the Borrower, any other guarantor or any other party, (ii) proceed
         against or exhaust any security held from the Borrower, any other
         guarantor or any other party, or (iii) pursue any other remedy in the
         Administrative Agent's or any Lender's power whatsoever. Each of the
         Guarantors waives any defense based on or arising out of any defense of
         the Borrower, any other Guarantor or any other party other than payment
         in full of the indebtedness, including without limitation any defense
         based on or arising out of the disability of the Borrower, any other
         guarantor or any other party, or the unenforceability of the
         indebtedness or any part thereof from any cause, or the cessation from

<PAGE>

         any cause of the liability of the Borrower other than payment in full
         of the indebtedness. Without limiting the generality of the provisions
         of this Article X, each of the Guarantors hereby specifically waives
         the benefits of N.C. Gen. Stat. ss. 26-7 through 26-9, inclusive. The
         Administrative Agent or any of the Lenders may, at their election,
         foreclose on any security held by the Administrative Agent or a Lender
         by one or more judicial or nonjudicial sales, whether or not every
         aspect of any such sale is commercially reasonable (to the extent such
         sale is permitted by applicable law), or exercise any other right or
         remedy the Administrative Agent and any Lender may have against the
         Borrower or any other party, or any security, without affecting or
         impairing in any way the liability of any Guarantor hereunder except to
         the extent the indebtedness has been paid. Each of the Guarantors
         waives any defense arising out of any such election by the
         Administrative Agent and each of the Lenders, even though such election
         operates to impair or extinguish any right of reimbursement or
         subrogation or other right or remedy of the Guarantors against the
         Borrower or any other party or any security.

                  (b)       Each of the Guarantors waives all presentments,
         demands for performance, protests and notices of nonperformance,
         notices of amendments or modifications to this Agreement or any of the
         other Credit Documents, notice of protest, notices of dishonor, notices
         of acceptance of this Guaranty, and notices of the existence, creation
         or incurring of new or additional indebtedness. Each Guarantor assumes
         all responsibility for being and keeping itself informed of the
         Borrower's financial condition and assets, and of all other
         circumstances bearing upon the risk of nonpayment of the indebtedness
         and the nature, scope and extent of the risks which such Guarantor
         assumes and incurs hereunder, and agrees that neither the
         Administrative Agent nor any Lender shall have any duty to advise such
         Guarantor of information known to it regarding such circumstances or
         risks.

                  (c)       Each of the Guarantors hereby agrees it will not
         exercise any rights of subrogation which it may at any time otherwise
         have as a result of this Guaranty (whether contractual, under Section
         509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the
         Lenders against the Borrower or any other guarantor of the indebtedness
         of the Borrower owing to the Lenders (collectively, the "Other
         Parties") and all contractual, statutory or common law rights of
         reimbursement, contribution or indemnity from any Other Party which it
         may at any time otherwise have as a result of this Guaranty until such
         time as the Loans hereunder shall have been paid and the Commitments
         have been terminated. Each of the Guarantors hereby further agrees not
         to exercise any right to enforce any other remedy which the
         Administrative Agent and the Lenders now have or may hereafter have
         against any Other Party, any endorser or any other guarantor of all or
         any part of the indebtedness of the Borrower and any benefit of, and
         any right to participate in, any security or collateral given to or for
         the benefit of the Lenders to secure payment of the indebtedness of the
         Borrower until such time as the Loans hereunder shall have been paid
         and the Commitments have been terminated.
<PAGE>

         Section 10.8      Limitation on Enforcement.

         The Lenders agree that this Guaranty may be enforced only by the action
of the Administrative Agent acting upon the instructions of the Required Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders upon the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.

         Section 10.9      Confirmation of Payment.

         The Administrative Agent and the Lenders will, upon request after
payment of the indebtedness and obligations which are the subject of this
Guaranty and termination of the commitments relating thereto, confirm to the
Borrower, the Guarantors or any other Person that such indebtedness and
obligations have been paid and the commitments relating thereto terminated,
subject to the provisions of Section 10.2.

<PAGE>

         IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be duly executed and delivered by its proper and duly authorized
officers as of the day and year first above written.

BORROWER:                  DOLLAR TREE DISTRIBUTION, INC.
--------

                           By: /s/ Frederick C. Coble
                              --------------------------------------------------
                           Name: Frederick C. Coble
                                ------------------------------------------------
                           Title: Senior Vice President
                                 -----------------------------------------------

PARENT GUARANTOR:          DOLLAR TREE STORES, INC.,
----------------

                           By: /s/ Frederick C. Coble
                              --------------------------------------------------
                           Name: Frederick C. Coble
                                ------------------------------------------------
                           Title: Senior Vice President
                                 -----------------------------------------------

GUARANTORS:                DOLLAR TREE MANAGEMENT, INC.
----------

                           By: /s/ Frederick C. Coble
                              --------------------------------------------------
                           Name: Frederick C. Coble
                                ------------------------------------------------
                           Title:  Senior Vice President
                                  ----------------------------------------------

                           DOLLAR TREE AIR, INC.
                           DT KEYSTONE MANAGEMENT INC.
                           DT KEYSTONE DISTRIBUTION, INC.
                           DOLLAR TREE PROPERTIES, INC.
                           DTD TENNESSEE, INC.

                           By: /s/ Frederick C. Coble
                              --------------------------------------------------
                           Name: Frederick C. Coble
                                ------------------------------------------------
                           Title: Senior Vice President
                                 -----------------------------------------------
                                 of each of the foregoing corporations

<PAGE>

                           DT KEYSTONE DISTRIBUTION, LLC

                           By:  DT Keystone Distribution, Inc.,
                                    its sole member

                           By: /s/ Frederick C. Coble
                              --------------------------------------------------
                           Name: Frederick C. Coble
                                ------------------------------------------------
                           Title: Senior Vice President
                                 -----------------------------------------------

                           DT KEYSTONE DISTRIBUTION, R.L.L.L.P.

                           By:  DT Keystone Management, Inc.,
                           its general partner

                           By: /s/ Frederick C. Coble
                              --------------------------------------------------
                           Name: Frederick C. Coble
                                ------------------------------------------------
                           Title: Senior Vice President
                                 -----------------------------------------------

<PAGE>

AGENT:                     FIRST UNION NATIONAL BANK,
-----
                           as Agent and a Lender

                           By: /s/ Martha M. Winters
                              --------------------------------------------------
                           Name: Martha M. Winters
                                ------------------------------------------------
                           Title: Vice President
                                 -----------------------------------------------

<PAGE>

LENDERS:                   SUNTRUST BANK,
-------
                           as Documentation Agent and as a Lender

                           By: /s/ Vernon M. Towler
                              --------------------------------------------------
                           Name: Vernon M. Towler
                                ------------------------------------------------
                           Title: Vice President
                                 -----------------------------------------------

<PAGE>

                           FLEET NATIONAL BANK,
                           as Syndication Agent and as a Lender

                           By: /s/ Judith C. E. Kelly
                              --------------------------------------------------
                           Name: Judith C. E. Kelly
                                ------------------------------------------------
                           Title: Director
                                 -----------------------------------------------

<PAGE>

                           BANK OF AMERICA, N.A.

                           By: /s/ Timothy H. Spanos
                              --------------------------------------------------
                           Name: Timothy H. Spanos
                                ------------------------------------------------
                           Title: Managing Director
                                 -----------------------------------------------

<PAGE>

                           NATIONAL CITY BANK

                           By: /s/ Brian T. Strayton
                              --------------------------------------------------
                           Name: Brian T. Stayton
                                ------------------------------------------------
                           Title: Vice President
                                 -----------------------------------------------

<PAGE>

                           FIRSTAR BANK, N.A.

                           By: /s/ Amanda Smith
                              --------------------------------------------------
                           Name: Amanda Smith
                                ------------------------------------------------
                           Title: Banking Officer
                                 -----------------------------------------------

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