Document:

Exhibit 10a

	Exhibit 10(a)

	
      INDEPENDENT AUDITORS’ CONSENT

    

	We consent to use in this Post-Effective Amendment
      No. 4 to Registration Statement No. 333-92404 of Merrill Lynch Principal
      Protected Trust on Form N-1A of our report dated February 25, 2003 on Merrill
      Lynch Core Principal Protected Fund of Merrill Lynch Principal Protected
      Trust, appearing in the Statement of Additional Information, which is part
      of this Registration Statement.

	
      Deloitte & Touche LLP

      Princeton, New Jersey

        February 25, 2003Exhibit 10b

	Exhibit 10(b)

	INDEPENDENT AUDITORS’ CONSENT

	The Board of Directors

      Ambac Assurance Corporation:

	We consent to the incorporation by reference
      on the registration statement on Form N-1A of Merrill Lynch Principal Protected
      Trust of our report dated January 23, 2002 on the consolidated financial
      statements of Ambac Assurance Corporation and subsidiaries as of December
      31, 2001 and 2000, and for each of the years in three-year period ended
      December 31, 2001, which report appears in the Annual Report on Form 10-K
      of Ambac Financial Group, Inc. which was filed with the Securities and Exchange
      Commission on March 26, 2002.

	 	KPMG LLP
	
      New York, New York

        February 25, 2003Exhibit 10c

	Exhibit 10(c)

	INDEPENDENT AUDITORS’ CONSENT

	We consent to use in this Post-Effective Amendment
      No. 4 to Registration Statement No. 333-92404 of Merrill Lynch Principal
      Protected Trust on Form N-1A of our report dated December 10, 2002, January
      7, 2003, as to Note 5 (which expresses an unqualified opinion and includes
      an explanatory paragraph relating to the restatement described in Note 5)
      on Master Large Cap Core Portfolio, appearing in the Statement of Additional
      Information, and to the reference to us under the heading “Financial
      Highlights for the Master Portfolio” in the Prospectus, which is part
      of this Registration Statement.

	Deloitte & Touche LLP
      New York, New York

        February 24, 2003EXHIBIT 4.1

                                CREDIT AGREEMENT

                                      among

                    FIRST HORIZON PHARMACEUTICAL CORPORATION,
                                VARIOUS LENDERS,

                                       and

                       LASALLE BANK NATIONAL ASSOCIATION,
                             as ADMINISTRATIVE AGENT

                         ------------------------------
                          Dated as of February 11, 2003
                         ------------------------------

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

SECTION 1.        Amount and Terms of Credit...................................1

         1.1.     The Commitment...............................................1
         1.2.     Minimum Amount of Each Borrowing.............................1
         1.3.     Notice of Borrowing..........................................1
         1.4.     Disbursement of Funds........................................2
         1.5.     Notes........................................................3
         1.6.     Conversions..................................................4
         1.7.     Pro Rata Borrowings..........................................4
         1.8.     Interest.....................................................4
         1.9.     Interest Periods.............................................5
         1.10.    Increased Costs, Illegality, etc.............................6
         1.11.    Compensation.................................................8
         1.12.    Change of Lending Office.....................................8
         1.13.    Replacement of Lenders.......................................9

SECTION 2.        Letters of Credit...........................................10

         2.1.     Letters of Credit...........................................10
         2.2.     Maximum Letter of Credit Outstandings; Final Maturities.....10
         2.3.     Letter of Credit Requests; Minimum Stated Amount............11
         2.4.     Letter of Credit Participations.............................12
         2.5.     Agreement to Repay Letter of Credit Drawings................14
         2.6.     Increased Costs.............................................14

SECTION 3.        Fees; Reductions of Commitment..............................15

         3.1.     Fees........................................................15
         3.2.     Voluntary Termination of Unutilized Loan Commitment.........16
         3.3.     Mandatory Reduction of Commitment...........................17

SECTION 4.        Prepayments; Payments; Taxes................................17

         4.1.     Voluntary Prepayments.......................................17
         4.2.     Mandatory Repayments........................................18
         4.3.     Method and Place of Payment.................................21
         4.4.     Net Payments................................................21

SECTION 5.        Conditions Precedent to Credit Events on the Initial
                  Borrowing Date..............................................23

         5.1.     Effective Date; Notes.......................................23
         5.2.     Officer's Certificate.......................................23

                                       -i-
<PAGE>
                                TABLE OF CONTENTS
                                  (continued)

                                                                            PAGE

         5.3.     Opinions of Counsel.........................................23
         5.4.     Corporate Documents; Proceedings; etc.......................23
         5.5.     Employee Benefit Plans; Shareholders' Agreements;
                    Management Agreements; Employment Agreements;
                    Non-Compete Agreements; Collective Bargaining
                    Agreements; Tax Sharing Agreements; Existing
                    Indebtedness Agreements...................................24
         5.6.     Adverse Change; Approvals...................................25
         5.7.     Litigation..................................................26
         5.8.     Subsidiaries Guaranty.......................................26
         5.9.     Security Agreement..........................................26
         5.10.    Pledge Agreement............................................26
         5.11.    Business....................................................26
         5.12.    Corporate and Capital Structure.............................27
         5.13.    Insurance Certificates......................................27
         5.14.    Fees, etc...................................................27
         5.15.    Borrowing Base..............................................27
         5.16.    Releases....................................................27
         5.17.    Master Letter of Credit Agreement...........................27

SECTION 6.        Conditions Precedent to All Credit Events...................27

         6.1.     Default; Representations and Warranties.....................27
         6.2.     Notice of Borrowing; Letter of Credit Request...............28

SECTION 7.        Representations, Warranties and Agreements..................28

         7.1.     Organizational Status.......................................28
         7.2.     Power and Authority.........................................29
         7.3.     No Violation................................................29
         7.4.     Approvals...................................................29
         7.5.     Financial Statements; Financial Condition;
                     Undisclosed Liabilities..................................29
         7.6.     Litigation..................................................31
         7.7.     True and Complete Disclosure................................31
         7.8.     Use of Proceeds; Margin Regulations.........................31
         7.9.     Tax Returns and Payments....................................31
         7.10.    Compliance with ERISA.......................................32
         7.11.    The Security Documents......................................33
         7.12.    Properties..................................................33
         7.13.    Capitalization..............................................33
         7.14.    Subsidiaries................................................34
         7.15.    Compliance with Statutes, etc...............................34
         7.16.    Investment Company Act......................................34

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

                                                                            PAGE

         7.17.    Public Utility Holdings Company Act.........................34
         7.18.    Environmental Matters.......................................34
         7.19.    Labor Relations.............................................35
         7.20.    Intellectual Property, etc..................................35
         7.21.    Indebtedness................................................35
         7.22.    Insurance...................................................35
         7.23.    Representations and Warranties in Other Documents...........36
         7.24.    Legal Names; Type of Organization (and Whether
                    a Registered Organization); Jurisdiction of
                    Organization, etc. .......................................36

SECTION 8.        Affirmative Covenants.......................................36

         8.1.     Information Covenants.......................................36
         8.2.     Books, Records and Inspections; Annual Meetings.............39
         8.3.     Maintenance of Property; Insurance..........................40
         8.4.     Existence; Franchises.......................................41
         8.5.     Compliance with Statutes, etc...............................41
         8.6.     Compliance with Environmental Laws..........................41
         8.7.     ERISA.......................................................42
         8.8.     End of Fiscal Years; Fiscal Quarters........................43
         8.9.     Performance of Obligations..................................43
         8.10.    Payment of Taxes............................................44
         8.11.    Use of Proceeds.............................................44
         8.12.    Additional Security; Further Assurances, etc................44
         8.13.    Ownership of Subsidiaries; etc..............................45
         8.14.    Corporate Separateness......................................45
         8.15.    Landlord Waivers............................................45
         8.16.    Pledge Agreement Collateral.................................45

SECTION 9.        Negative Covenants..........................................46

         9.1.     Liens.......................................................46
         9.2.     Consolidation, Merger, Purchase or Sale of Assets, etc......48
         9.3.     Dividends...................................................49
         9.4.     Indebtedness................................................49
         9.5.     Advances, Investments and Loans.............................50
         9.6.     Transactions with Affiliates................................51
         9.7.     Capital Expenditures........................................51
         9.8.     Consolidated Interest Coverage Ratio........................51
         9.9.     Minimum Consolidated EBITDA.................................51
         9.10.    Leverage Ratio..............................................52
         9.11.    Fixed Charge Coverage Ratio.................................52

                                     -iii-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

                                                                            PAGE

         9.12.    Modification of Certificate of Incorporation,
                    By-Laws and Certain Other Agreements, etc.................52
         9.13.    Limitation on Certain Restrictions on Subsidiaries..........53
         9.14.    Limitation on Issuance of Capital Stock.....................53
         9.15.    Business; etc...............................................53
         9.16.    Limitation on Creation of Subsidiaries......................54
         9.17.    Change of Legal Names; Type of Organization
                   (and Whether a Registered Organization; Jurisdiction of
                   Organization etc...........................................54

SECTION 10.       Events of Default...........................................54

         10.1.    Payments....................................................54
         10.2.    Representations, etc........................................55
         10.3.    Covenants...................................................55
         10.4.    Default Under Other Agreements..............................55
         10.5.    Bankruptcy, etc.............................................55
         10.6.    ERISA.......................................................56
         10.7.    Security Documents..........................................56
         10.8.    Guaranties..................................................57
         10.9.    Judgments...................................................57
         10.10.   Change of Control...........................................57
         10.11.   Material Adverse Effect.....................................57
         10.12.   Approvals...................................................57
         10.13.   Licenses....................................................57
         10.14.   Supply Agreements...........................................57
         10.15.   First Horizon International Financing.......................57

SECTION 11.       Definitions and Accounting Terms............................58

         11.1.    Defined Terms...............................................58

SECTION 12.       The Administrative Agent....................................79

         12.1.    Appointment.................................................79
         12.2.    Nature of Duties............................................80
         12.3.    Lack of Reliance on the Administrative Agent................80
         12.4.    Certain Rights of the Administrative Agent..................80
         12.5.    Reliance....................................................81
         12.6.    Indemnification.............................................81
         12.7.    The Administrative Agent in its Individual Capacity.........81
         12.8.    Holders.....................................................81
         12.9.    Resignation by the Administrative Agent.....................82

                                      -iv-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

                                                                            PAGE

SECTION 13.       Miscellaneous...............................................82

         13.1.    Payment of Expenses, etc....................................82
         13.2.    Right of Setoff.............................................84
         13.3.    Notices.....................................................84
         13.4.    Benefit of Agreement Assignments; Participations............84
         13.5.    No Waiver; Remedies Cumulative..............................86
         13.6.    Payments Pro Rata...........................................87
         13.7.    Calculations; Computations..................................87
         13.8.    GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
                    WAIVER OF JURY TRIAL......................................88
         13.9.    Counterparts................................................89
         13.10.   Effectiveness...............................................89
         13.11.   Headings Descriptive........................................89
         13.12.   Amendment or Waiver; etc....................................89
         13.13.   Survival....................................................91
         13.14.   Domicile of Loans...........................................91
         13.15.   Register....................................................91
         13.16.   Confidentiality.............................................91
         13.17.   Restructuring of Assets.....................................92

                                      -v-
<PAGE>

SCHEDULE I      Commitment
SCHEDULE II     Lender Addresses
SCHEDULE III    Real Property
SCHEDULE IV     Plans
SCHEDULE V      Subsidiaries
SCHEDULE VI     Legal  Names/Types of Organization
SCHEDULE VII    Existing Indebtedness
SCHEDULE VIII   Insurance
SCHEDULE IX     Existing  Liens
SCHEDULE X      Existing  Investments
SCHEDULE XI     Litigation
SCHEDULE XII    Required Landlord Waivers

EXHIBIT A-1     Notice of Borrowing
EXHIBIT A-2     Notice of Conversion/Continuation
EXHIBIT B       Revolving Note
EXHIBIT C       Letter of Credit Request
EXHIBIT D       Section 4.4(b)(ii) Certificate
EXHIBIT E       Opinion of Burke, Warren, MacKay & Serritella, P.C.
EXHIBIT F       Officers' Certificate
EXHIBIT G       Borrowing Base Certificate
EXHIBIT H       Security Agreement
EXHIBIT I       Pledge Agreement
EXHIBIT J       Compliance Certificate
EXHIBIT K       Assignment and Assumption Agreement
EXHIBIT L       Subsidiaries Guaranty
EXHIBIT M       Joinder Agreement

                                      -vi-
<PAGE>

     CREDIT  AGREEMENT,  dated as of February  __,  2003,  among  FIRST  HORIZON
PHARMACEUTICAL CORPORATION, a Delaware corporation (the "Borrower"), the Lenders
party  hereto  from  time to time and  LASALLE  BANK  NATIONAL  ASSOCIATION,  as
Administrative  Agent  (in  such  capacity  the  "Administrative   Agent").  All
capitalized  terms  used  herein and  defined  in Section 11 are used  herein as
therein defined.

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

     WHEREAS,  subject to and upon the terms and conditions set forth herein the
Lenders  are  willing to make  available  to the  Borrower  the credit  facility
provided for herein;

     NOW, THEREFORE, IT IS AGREED:

     SECTION 1. AMOUNT AND TERMS OF CREDIT.

     1.1. The Commitment. Subject to and upon the terms and conditions set forth
herein, each Lender with a Revolving Loan Commitment severally, but not jointly,
agrees  to  make,  at any time and  from  time to time on or after  the  Initial
Borrowing  Date and prior to the Revolving  Loan Maturity Date, a revolving loan
or revolving loans (each a "Revolving  Loan" and,  collectively,  the "Revolving
Loans") to the  Borrower,  which  Revolving  Loans (i) shall be  denominated  in
Dollars,  (ii) shall, at the option of the Borrower,  be incurred and maintained
as, and/or converted into, Base Rate Loans or Eurodollar  Loans,  provided that,
except as otherwise  specifically  provided in Section  1.10(b),  all  Revolving
Loans  comprising  the same  Borrowing  shall at all times be of the same  Type,
(iii) may be repaid and reborrowed in accordance with the provisions hereof, and
(iv) shall not exceed for any such Lender at any time outstanding that aggregate
principal  amount  which,  when  added to the  product of (x) such  Lender's  RL
Percentage  and (y) the  aggregate  amount of all Letter of Credit  Outstandings
(exclusive  of Unpaid  Drawings  which are  repaid  with the  proceeds  of,  and
simultaneously  with the incurrence  of, the respective  incurrence of Revolving
Loans) at such time then  outstanding,  equals the lesser of the Revolving  Loan
Commitment  of such Lender at such time and such  Lender's RL  Percentage of the
Borrowing Base Amount.

     1.2.  Minimum Amount of Each Borrowing.  The aggregate  principal amount of
each  Borrowing  of Loans shall not be less than the Minimum  Borrowing  Amount.
More than one Borrowing  may occur on the same date,  but at no time shall there
be outstanding  more than five (5) Borrowings of Revolving  Loans  maintained as
Eurodollar Loans.

     1.3. Notice of Borrowing.

          (a)  Whenever  the  Borrower,  desires to incur (x)  Eurodollar  Loans
hereunder,  it shall give the Administrative Agent at the Notice Office at least
three  Business  Days'  prior  notice  of each  Eurodollar  Loan to be  incurred
hereunder and (y) Base Rate Loans  hereunder,  it shall give the  Administrative
Agent at the Notice Office at least one Business Day's prior notice of each Base
Rate Loan to be incurred hereunder, provided that (in each case) any such notice

<PAGE>

shall be deemed to have been given on a certain day only if given  before  12:00
Noon  (Chicago  time)  on  such  day.  Each  such  notice  (each  a  "Notice  of
Borrowing"),  except as otherwise  expressly  provided in Section 1.10, shall be
irrevocable  and shall be in writing,  or by  telephone  promptly  confirmed  in
writing, in the form of Exhibit A-1, appropriately completed to specify: (i) the
aggregate  principal  amount  of the  Loans  to be  incurred  pursuant  to  such
Borrowing,  (ii) the date of such Borrowing  (which shall be a Business Day) and
(iii)  whether the Loans being  incurred  pursuant to such  Borrowing  are to be
initially  maintained as Base Rate Loans or, to the extent  permitted  hereunder
Eurodollar  Loans and, if Eurodollar  Loans,  the initial  Interest Period to be
applicable  thereto.  The  Administrative  Agent shall promptly give each Lender
which is required to make Loans specified in the respective Notice of Borrowing,
notice of such proposed Borrowing,  of such Lender's proportionate share thereof
and of the other matters  required by the immediately  preceding  sentence to be
specified in the Notice of Borrowing.

          (b) Without in any way  limiting  the  obligation  of the  Borrower to
confirm in writing any  telephonic  notice of any  Borrowing  or  prepayment  of
Loans,  the  Administrative  Agent may act without  liability  upon the basis of
telephonic notice of such Borrowing or prepayment,  as the case may be, believed
by the  Administrative  Agent  in good  faith  to be  from  the  President,  the
Controller,  the Chief  Executive  Officer,  the Chief  Financial  Officer,  the
Treasurer  or any  Assistant  Treasurer  of the  Borrower,  or from  any  other,
authorized officer of the Borrower  designated in writing by the Borrower to the
Administrative  Agent as being  authorized to give such notices prior to receipt
of written confirmation.  In each such case the Borrower hereby waives the right
to dispute the  Administrative  Agent's  record of the terms of such  telephonic
notice of such  Borrowing or  prepayment  of Loans,  as the case may be,  absent
manifest error.

     1.4.  Disbursement of Funds. No later than 12:00 Noon (Chicago time) on the
date specified in each Notice of Borrowing,  each Lender with a Commitment  will
make available its pro rata portion  (determined in accordance with Section 1.7)
of each such Borrowing  requested to be made on such date. All such amounts will
be made available in Dollars and in immediately  available  funds at the Payment
Office, and the Administrative  Agent will make available to the Borrower at the
Payment  Office the  aggregate of the amounts so made  available by the Lenders.
Unless the Administrative  Agent shall have been notified by any Lender prior to
the date of Borrowing  that such Lender does not intend to make available to the
Administrative  Agent such Lender's  portion of any Borrowing to be made on such
date, the Administrative  Agent may assume that such Lender has made such amount
available  to the  Administrative  Agent  on  such  date  of  Borrowing  and the
Administrative  Agent may (but shall not be obligated to), in reliance upon such
assumption,  make  available  to the  Borrower a  corresponding  amount.  If the
Administrative  Agent shall have made such corresponding amount available to the
Borrower,  but such  corresponding  amount is not in fact made  available to the
Administrative  Agent by such Lender, the Administrative Agent shall be entitled
to recover such corresponding  amount on demand from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower and
the  Borrower  shall   immediately   pay  such   corresponding   amount  to  the
Administrative Agent. The Administrative Agent also shall be entitled to recover

                                       2
<PAGE>

on demand from such Lender or the Borrower, as the case may be, interest on such
corresponding  amount in  respect  of each day from the date such  corresponding
amount was made available by the Administrative  Agent to the Borrower until the
date such corresponding  amount is recovered by the  Administrative  Agent, at a
rate per annum equal to (i) if recovered from such Lender, the overnight Federal
Funds  Rate  for  the  first  three  days  and at the  interest  rate  otherwise
applicable to such Loans for each day  thereafter and (ii) if recovered from the
Borrower,  the rate of  interest  applicable  to the  respective  Borrowing,  as
determined  pursuant to Section 1.8. Nothing in this Section 1.4 shall be deemed
to  relieve  any  Lender  from its  obligation  to make  Loans  hereunder  or to
prejudice  any rights which the Borrower may have against any Lender as a result
of any failure by such Lender to make Loans hereunder.

     1.5. Notes.

          (a) The Borrower's obligation to pay the principal of, and interest on
the Loans made by each Lender shall be evidenced in the Register  maintained  by
the  Administrative  Agent pursuant to Section 13.15 and shall,  if requested by
such Lender,  also be evidenced by a promissory note duly executed and delivered
by  the  Borrower   substantially   in  the  form  of  Exhibit  B,  with  blanks
appropriately  completed in conformity  herewith  (each a "Revolving  Note" and,
collectively, the "Revolving Notes").

          (b) The Revolving Note issued to each Lender that has a Revolving Loan
Commitment or outstanding Revolving Loans shall (i) be executed by the Borrower,
(ii) be  payable  to such  Lender  or its  registered  assigns  and be dated the
Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be dated
the date of the issuance  thereof),  (iii) be in a stated principal amount equal
to the  Revolving  Loan  Commitment  of such  Lender  (or,  if issued  after the
termination  thereof,  be in a stated  principal amount equal to the outstanding
Revolving  Loans of such Lender at such time) and be payable in the  outstanding
principal  amount of the Revolving Loans evidenced  thereby,  (iv) mature on the
Revolving Loan Maturity  Date, (v) bear interest as provided in the  appropriate
clause of Section 1.8 in respect of the Base Rate Loans and Eurodollar Loans, as
the case may be, evidenced thereby,  (vi) be subject to voluntary  prepayment as
provided in Section 4.1, and mandatory repayment as provided in Section 4.2, and
(vii) be  entitled  to the  benefits  of this  Agreement  and the  other  Credit
Documents.

          (c) Each Lender will note on its  internal  records the amount of each
Loan made by it and each payment in respect thereof and prior to any transfer of
its Note will  endorse on the reverse  side  thereof the  outstanding  principal
amount of Loans  evidenced  thereby.  Failure to make any such  notation  or any
error in such notation shall not affect the Borrower's obligations in respect of
such Loans.

          (d)  Notwithstanding  anything to the contrary contained above in this
Section 1.5 or  elsewhere  in this  Agreement,  Notes shall only be delivered to
Lenders  which at any time  specifically  request the delivery of such Note.  No
failure of any Lender to,  request or obtain a Note  evidencing its Loans to the
Borrower shall affect or in any manner impair the obligations of the Borrower to
pay the Loans (and all related Obligations) incurred by the Borrower which would
otherwise be  evidenced  thereby in  accordance  with the  requirements  of this

                                       3
<PAGE>

Agreement,  and shall not in any way affect the security or guaranties  therefor
provided  pursuant to the various  Credit  Documents.  Any Lender which does not
have a Note  evidencing its  outstanding  Loans shall in no event be required to
make the notations otherwise described in preceding clause (c). At any time when
any Lender  requests the  delivery of a Note to evidence  any of its Loans,  the
Borrower  shall  promptly  execute  and  deliver  to the  respective  Lender the
requested Note in the appropriate amount or amounts to evidence such Loans.

     1.6.  Conversions.  The Borrower shall have the option, to convert,  on any
Business Day, all or a portion equal to at least the Minimum Borrowing Amount of
the  outstanding  principal  amount  of  Loans  made  pursuant  to one  or  more
Borrowings  of one or more Types of Loans into a  Borrowing  of another  Type of
Loan,  provided  that,  (i) except as  otherwise  provided  in Section  1.10(b),
Eurodollar  Loans may be converted  into Base Rate Loans only on the last day of
an Interest  Period  applicable to the Loans being converted and no such partial
conversion of Eurodollar Loans shall reduce the outstanding  principal amount of
such  Eurodollar  Loans made  pursuant  to a single  Borrowing  to less than the
Minimum  Borrowing Amount applicable  thereto,  (ii) unless the Required Lenders
otherwise agree,  Base Rate Loans may only be converted into Eurodollar Loans if
no Default or Event of Default is in existence on the date of the conversion and
(iii) no  conversion  pursuant  to this  Section  1.6 shall  result in a greater
number of Borrowings of  Eurodollar  Loans than is permitted  under Section 1.2.
Each  such  conversion   shall  be  effected  by  the  Borrower  by  giving  the
Administrative  Agent at the Notice Office prior to 12:00 Noon (Chicago time) at
least   three    Business    Days'   prior    notice    (each   a   "Notice   of
Conversion/Continuation") in the form of Exhibit A-2, appropriately completed to
specify the Loans to be so converted,  the  Borrowing or Borrowings  pursuant to
which such Loans were incurred and, if to be converted  into  Eurodollar  Loans,
the Interest Period to be initially applicable thereto. The Administrative Agent
shall give each Lender prompt notice of any such proposed  conversion  affecting
any of its Loans.  Upon any such conversion the proceeds  thereof will be deemed
to be applied  directly on the day of such  conversion to prepay the outstanding
principal amount of the Loans being converted.

     1.7. Pro Rata  Borrowings.  All  Borrowings  of Revolving  Loans under this
Agreement  shall be  incurred  from the  Lenders  pro rata on the basis of their
Revolving Loan Commitments. It is understood that no Lender shall be responsible
for any default by any other Lender of its  obligation  to make Loans  hereunder
and that each Lender shall be obligated to make the Loans provided to be made by
it  hereunder,  regardless  of the failure of any other Lender to make its Loans
hereunder.

     1.8. Interest.

          (a) The  Borrower  agrees to pay  interest  in  respect  of the unpaid
principal amount of each Base Rate Loan from the date of Borrowing thereof until
the earlier of (i) the maturity  thereof  (whether by acceleration or otherwise)
and (ii) the conversion of such Base Rate Loan to a Eurodollar  Loan pursuant to
Section 1.6 or 1.9, as  applicable,  at a rate per annum which shall be equal to
the sum of the relevant  Applicable Margin plus the Base Rate, each as in effect
from time to time.

                                       4
<PAGE>

          (b) The  Borrower  agrees to pay  interest  in  respect  of the unpaid
principal  amount of each  Eurodollar  Loan from the date of  Borrowing  thereof
until the  earlier of (i) the  maturity  thereof  (whether  by  acceleration  or
otherwise) and (ii) the conversion of such  Eurodollar  Loan to a Base Rate Loan
pursuant to Section 1.6, 1.9 or 1.10, as  applicable,  at a rate per annum which
shall,  during each interest Period applicable  thereto,  be equal to the sum of
the  relevant  Applicable  Margin as in effect  from  time to time  during  such
Interest Period plus the Eurodollar Rate for such Interest Period.

          (c) Overdue  principal  and, to the extent  permitted by law,  overdue
interest in respect of each Loan shall,  in each case,  bear  interest at a rate
per annum equal to the greater of (x) the rate which is 2% in excess of the rate
then  borne by such  Loans  and (y) the rate  which is 2% in  excess of the rate
otherwise  applicable to Base Rate Loans from time to time and all other overdue
amounts  payable  hereunder  and under  any other  Credit  Document  shall  bear
interest at a rate per annum equal to the rate which is 2% in excess of the rate
applicable to Revolving  Loans  maintained as Base Rate Loans from time to time.
Interest that accrues under this Section 1.8(c) shall be payable on demand.

          (d) Accrued (and theretofore  unpaid) interest shall be payable (i) in
respect  of each Base Rate  Loan,  (x) in  arrears  on each  Scheduled  Interest
Payment  Date,  (y) on the date of any  repayment or  prepayment  in full of all
outstanding  Base Rate Loans,  and (z) at maturity  (whether by  acceleration or
otherwise)  and,  after such  maturity,  on demand,  and (ii) in respect of each
Eurodollar Loan, (x) on the last day of each Interest Period applicable  thereto
and (y) on the date of any  repayment  or  prepayment  (on the amount  repaid or
prepaid),  at maturity  (whether by  acceleration  or otherwise) and, after such
maturity, on demand.

          (e) Upon each Interest  Determination  Date, the Administrative  Agent
shall determine the Eurodollar  Rate for each Interest Period  applicable to the
respective  Eurodollar  Loans and shall  promptly  notify the  Borrower  and the
Lenders thereof.  Each such determination shall, absent manifest error, be final
and conclusive and binding on all parties hereto.

     1.9.  Interest  Periods.  At the time the  Borrower  gives  any  Notice  of
Borrowing  or Notice of  Conversion/Continuation  in respect of the making of or
conversion into, any Eurodollar Loan (in the case of the initial Interest Period
applicable  thereto) or prior to 12:00 Noon (Chicago time) on the third Business
Day prior to the expiration of an Interest Period  applicable to such Eurodollar
Loan (in the case of any subsequent  Interest  Period),  the Borrower shall have
the right to elect the interest period (each an "Interest Period") applicable to
such  Eurodollar  Loan,  which  Interest  Period  shall,  at the  option  of the
Borrower, be a one, two or three month period, provided that (in each case):

               (i) all  Eurodollar  Loans  comprising  a Borrowing  shall at all
          times have the same Interest Period;

               (ii) the initial  Interest  Period for any Eurodollar  Loan shall
          commence on the date of Borrowing of such  Eurodollar  Loan (including
          the date of any  conversion  thereto  from a Base Rate  Loan) and each
          interest  Period  occurring  thereafter in respect of such  Eurodollar

                                       5
<PAGE>

          Loan shall  commence on the day on which the next  preceding  Interest
          Period applicable thereto expires;

               (iii) if any Interest  Period for a  Eurodollar  Loan begins on a
          day  for  which  there  is no  numerically  corresponding  day  in the
          calendar  month  at the end of such  Interest  Period,  such  Interest
          Period shall end on the last Business Day of such calendar month;

               (iv) if any Interest Period for a Eurodollar Loan would otherwise
          expire on a day which is not a  Business  Day,  such  Interest  Period
          shall expire on the next succeeding  Business Day; provided,  however,
          that if any  Interest  Period for a  Eurodollar  Loan would  otherwise
          expire on a day which is not a Business  Day but is a day of the month
          after  which no  further  Business  Day  occurs  in such  month,  such
          Interest Period shall expire on the next preceding Business Day;

               (v) unless the  Required  Lenders  otherwise  agree,  no Interest
          Period  may be  selected  at any time  when a  Default  or an Event of
          Default is then in existence; and

               (vi) no  Interest  Period in  respect of any  Borrowing  of Loans
          shall be selected  which extends  beyond the  Revolving  Loan Maturity
          Date.

If upon the  expiration  of any  Interest  Period  applicable  to a Borrowing of
Eurodollar  Loans,  the  Borrower  has failed to elect,  or is not  permitted to
elect,  a new  Interest  Period to be  applicable  to such  Eurodollar  Loans as
provided  above,  the  Borrower  shall be deemed to have elected to convert such
Eurodollar  Loans into Base Rate Loans  effective as of the  expiration  date of
such current Interest Period.

     1.10. Increased Costs, Illegality, etc.

          (a)  In the  event  that  any  Lender  shall  have  determined  (which
determination  shall,  absent manifest error,  subject to Section 1.13, be final
and  conclusive  and binding upon all parties hereto but, with respect to clause
(i) below, may be made only by the  Administrative  Agent):

          (i) on any Interest  Determination Date that, by reason of any changes
     arising after the date of this Agreement affecting the interbank Eurodollar
     market,  adequate  and  fair  means  do  not  exist  for  ascertaining  the
     applicable  interest  rate on the basis  provided for in the  definition of
     Eurodollar Rate; or

          (ii) at any time,  that such  Lender  shall incur  increased  costs or
     reductions in the amounts received or receivable  hereunder with respect to
     any such Lender's  agreement to make or its making,  funding or maintaining
     any  Eurodollar  Loan because of (x) any change since the Effective Date in
     any applicable law or governmental rule,  regulation,  order,  guideline or
     request  (whether or not having the force of law) or in the  interpretation
     or administration  thereof and including the introduction of any new law or

                                       6
<PAGE>

     governmental rule,  regulation,  order,  guideline or request, such as, but
     not  limited  to: (A) a change in the basis of  taxation  of payment to any
     Lender of the  principal  of or  interest  on the Loans or the Notes or any
     other amounts payable  hereunder (except for changes in the rate of tax on,
     or determined by reference to, the net income or net profits of such Lender
     pursuant to the laws of the  jurisdiction  in which it is  organized  or in
     which its principal  office or applicable  lending office is located or any
     subdivision  thereof  or  therein)  or (B) a  change  in  official  reserve
     requirements,  but,  in  all  events,  excluding  reserves  required  under
     Regulation D to the extent  included in the  computation  of the Eurodollar
     Rate  and/or  (y) other  circumstances  arising  since the  Effective  Date
     affecting such Lender,  the interbank  Eurodollar market or the position of
     such Lender in such market; or

          (iii) at any time,  that the making or  continuance  by such Lender or
     its  applicable  lending  office of any  Eurodollar  Loan has been made (x)
     unlawful  by  any  law or  governmental  rule,  regulation  or  order,  (y)
     impossible by compliance by any Lender in good faith with any  governmental
     request  (whether  or not having  force of law) or (z)  impracticable  as a
     result of a contingency occurring after the Effective Date which materially
     and adversely affects the interbank Eurodollar market;

     then, and in any such event, such Lender (or the  Administrative  Agent, in
     the case of clause (i) above)  shall  promptly  give  notice (by  telephone
     promptly  confirmed in writing) to the Borrower and,  except in the case of
     clause (i) above, to the Administrative  Agent of such determination (which
     notice the  Administrative  Agent  shall  promptly  transmit to each of the
     other Lenders).  Thereafter (x) in the case of clause (i) above, Eurodollar
     Loans shall no longer be  available  until such time as the  Administrative
     Agent notifies the Borrower and the Lenders that the  circumstances  giving
     rise to such notice by the  Administrative  Agent no longer exist,  and any
     Notice  of  Borrowing  or Notice  of  Conversion/Continuation  given by the
     Borrower with respect to Eurodollar  Loans which have not yet been incurred
     (including by way of conversion) shall be deemed rescinded by the Borrower,
     (y) in the case of clause (ii) above,  the  Borrower  agrees to pay to such
     Lender, upon such Lender's written demand therefor, such additional amounts
     (in the form of an increased rate of, or a different method of calculating,
     interest  or  otherwise  as  such  Lender  in  its  sole  discretion  shall
     determine)  as  shall  be  required  to  compensate  such  Lender  for such
     increased costs or reductions in amounts  received or receivable  hereunder
     (a written notice as to the additional amounts owed to such Lender, showing
     in reasonable  detail the basis for the calculation  thereof,  submitted to
     the Borrower by such Lender  shall,  absent  manifest  error,  be final and
     conclusive  and binding on all the  parties  hereto) and (z) in the case of
     clause (iii) above, the Borrower shall take one of the actions specified in
     Section 1.10(b) as promptly as possible and, in any event,  within the time
     period required by law.

          (b)  At  any  time  that  any  Eurodollar  Loan  is  affected  by  the
circumstances  described in Section  1.10(a)(ii),  the Borrower  may, and in the
case of a Eurodollar  Loan  affected by the  circumstances  described in Section
1.10(a)(iii),  the Borrower shall, either (x) if the affected Eurodollar Loan is

                                       7
<PAGE>

then being made initially or pursuant to a conversion,  cancel such Borrowing by
giving the Administrative  Agent telephonic notice (confirmed in writing) on the
same  date  that  the  Borrower  was  notified  by the  affected  Lender  or the
Administrative  Agent  pursuant  to Section  1.10(a)(ii)  or (iii) or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days'
written  notice to the  Administrative  Agent,  require the  affected  Lender to
convert such Eurodollar Loan into a Base Rate Loan,  provided that, if more than
one Lender is affected at any time,  then all  affected  Lenders must be treated
the same pursuant to this Section 1.10(b).

          (c) If any  Lender  determines  that  after  the  Effective  Date  the
introduction  of or any  change  in any  applicable  law or  governmental  rule,
regulation,  order,  guideline,  directive or request (whether or not having the
force of law) concerning  capital  adequacy,  or any change in interpretation or
administration thereof by the NAIC or any governmental  authority,  central bank
or comparable agency, or compliance  therewith by such Lender (or its applicable
lending  office)  will  have the  effect of  increasing  the  amount of  capital
required  or  expected  to be  maintained  by  such  Lender  or any  corporation
controlling  such Lender  based on the  existence  of such  Lender's  Commitment
hereunder or its obligations hereunder,  then the Borrower agrees to pay to such
Lender,  upon its written demand therefor,  such additional  amounts as shall be
required to compensate  such Lender or such other  corporation for the increased
cost to such Lender or such other  corporation  or the  reduction in the rate of
return to such Lender or such other  corporation as a result of such increase of
capital. In determining such additional amounts, each Lender will act reasonably
and in good  faith and will use  averaging  and  attribution  methods  which are
reasonable,  provided that such Lender's  determination  of  compensation  owing
under this Section 1.10(c) shall, absent manifest error, be final and conclusive
and binding on all the parties hereto.  Each Lender,  upon  determining that any
additional  amounts will be payable pursuant to this Section 1.10(c),  will give
prompt  written  notice  thereof to the  Borrower,  which  notice  shall show in
reasonable detail the basis for calculation of such additional amounts.

     1.11. Compensation. The Borrower agrees to compensate each Lender, upon its
written  request (which  request shall set forth in reasonable  detail the basis
for requesting  such  compensation),  for all losses,  expenses and  liabilities
(including,  without,  limitation,  any loss,  expense or liability  incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such  Lender to fund its  Eurodollar  Loans but  excluding  loss of  anticipated
profits)  which such  Lender may  sustain:  (i) if for any reason  (other than a
default  by  such  Lender  or the  Administrative  Agent)  a  Borrowing  of,  or
conversion from or into, or continuance of, Eurodollar Loans does not occur on a
date or in the amount  specified  therefor in a Notice of Borrowing or Notice of
Conversion/Continuation  (whether  or not  withdrawn  by the  Borrower or deemed
withdrawn  pursuant to Section  1.10(a));  (ii) if any  prepayment  or repayment
(including  any  prepayment or repayment  made pursuant to Section 4.1,  Section
4.2, or as a result of an  acceleration  of the Loans pursuant to Section 10) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect  thereto;  (iii) if any prepayment of any
of its Eurodollar  Loans is not made on any date or in the amount specified in a
notice of prepayment given by the Borrower; or (iv) as a consequence of, (x) any
other  default by the Borrower to repay  Eurodollar  Loans when  required by the

                                       8
<PAGE>

terms of this Agreement or the Note held by such Lender or (y) any election made
pursuant to Section 1.10(b).

     1.12.  Change of Lending Office.  Each Lender agrees that on the occurrence
of any event  giving  rise to the  operation  of Section  1.10(a)(ii)  or (iii),
Section  1.10(c),  Section 2.6 or Section 4.4 with  respect to such  Lender,  it
will, if requested by the Borrower,  use reasonable  efforts (subject to overall
policy  considerations  of such Lender) to designate  another lending office for
any Loans or  Letters  of Credit  affected  by such  event,  provided  that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory  disadvantage,  with the object of avoiding the
consequence  of the event giving rise to the operation of such Section.  Nothing
in this  Section 1.12 shall  affect or postpone  any of the  obligations  of the
Borrower or the right of any Lender provided in Sections 1.10, 2.6 and 4.4.

     1.13.  Replacement  of Lenders.  (x) If any Lender  becomes,  a  Defaulting
Lender or  otherwise  defaults in its  obligations  to make Loans,  (y) upon the
occurrence  of an event giving rise to the operation of Section  1.10(a)(ii)  or
(iii),  Section  1.10(c),  Section 2.6 or Section 4.4 with respect to any Lender
which results in such Lender charging to the Borrower increased costs materially
in excess of those being  generally  charged by the other  Lenders or (z) in the
case of a refusal by a Lender to consent to certain proposed  changes,  waivers,
discharges  or  terminations  with  respect  to this  Agreement  which have been
approved  by the  Required  Lenders as (and to the  extent)  provided in Section
13.12(b),  the Borrower shall have the right,  if no Default or Event of Default
then exists (or, in the case of  preceding  clause (z),  will exist  immediately
after giving effect to such replacement),  to replace such Lender (the "Replaced
Lender")  with  one or more  other  Eligible  Transferees,  none  of whom  shall
constitute a Defaulting  Lender at the time of such  replacement  (collectively,
the  "Replacement  Lender") and each of whom shall be required to be  reasonably
acceptable  to the  Administrative  Agent,  provided that (i) at the time of any
replacement  pursuant to this Section 1.13, the  Replacement  Lender shall enter
into one or more  Assignment  and  Assumption  Agreements  pursuant  to  Section
13.4(b) (and with all fees payable  pursuant to said Section  13.4(b) to be paid
by the  Replacement  Lender  and/or the Replaced  Lender (as may be agreed to at
such time by and among the  Borrower,  the  Replacement  Lender and the Replaced
Lender))  pursuant  to which the  Replacement  Lender  shall  acquire all of the
Commitment and outstanding Loans of, and in each case  participations in Letters
of Credit by, the Replaced Lender and, in connection therewith, shall pay to (x)
the  Replaced  Lender in respect  thereof  an amount  equal to the sum of (I) an
amount equal to the principal of, and all accrued  interest on, all  outstanding
Loans of the Replaced  Lender,  (II) an amount equal to all Unpaid Drawings that
have been funded by (and not reimbursed to) such Replaced Lender,  together with
all then unpaid  interest with respect thereto at such time, and (III) an amount
equal to all accrued,  but theretofore unpaid, Fees owing to the Replaced Lender
pursuant  to Section  3.1,  and (y) the Issuing  Lender an amount  equal to such
Replaced  Lender's  RL  Percentage  of any  Unpaid  Drawing  (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore  funded
by such Replaced  Lender to the Issuing  Lender and (ii) all  obligations of the
Borrower  due and owing to the  Replaced  Lender at such time  (other than those
specifically  described  in clause (i) above in respect of which the  assignment
purchase price has been, or is concurrently  being,  paid) shall be paid in full
to such Replaced Lender  concurrently with such replacement.  Upon the execution

                                       9
<PAGE>

of the respective  Assignment and Assumption  Agreement,  the payment of amounts
referred  to in  clauses  (i)  and  (ii)  above  and,  if so  requested  by  the
Replacement  Lender,  delivery to the Replacement Lender of the appropriate Note
executed by the Borrower, the Replacement Lender shall become a Lender hereunder
and the Replaced  Lender shall cease to  constitute a Lender  hereunder,  except
with respect to  indemnification  provisions  under this  Agreement  (including,
without  limitation,  Sections 1.10, 1.11, 2.6, 4.4, 12.6 and 13.1), which shall
survive as to such Replaced Lender.

     SECTION 2. LETTERS OF CREDIT.

     2.1. Letters of Credit.

          (a) Upon  execution  of the Master  Letter of Credit  Agreement by the
Borrower,  subject to and upon the terms and  conditions  set forth herein,  the
Borrower may request that the Issuing Lender issue, at any time and from time to
time on and after the Initial  Borrowing Date and prior to the 60th day prior to
the Revolving  Loan Maturity  Date,  for the account of the Borrower and for the
benefit of (x) any holder (or any trustee, agent or other similar representative
for any such holders) of L/C  Supportable  Obligations,  an irrevocable  standby
letter of credit,  in a form  customarily  used by the Issuing Lender or in such
other form as is reasonably acceptable to the Issuing Lender, and (y) sellers of
goods to the Borrower or any of its Subsidiaries, an irrevocable trade letter of
credit,  in a form  customarily used by the Issuing Lender or in such other form
as has been approved by the Issuing Lender (each such letter of credit a "Letter
of Credit" and  collectively,  the "Letters of  Credit").  All Letters of Credit
shall be denominated in Dollars and shall be issued on a sight basis only.

          (b) Subject to and upon the terms and conditions set forth herein, the
Issuing  Lender  agrees  that it will,  at any time and from time to time on and
after  the  Initial  Borrowing  Date and  prior  to the  60th  day  prior to the
Revolving Loan Maturity Date,  following its receipt of the respective Letter of
Credit Request, issue for account of the Borrower, one or more Letters of Credit
as are  permitted  to remain  outstanding  hereunder  without  giving  rise to a
Default or an Event of Default,  provided  that the Issuing  Lender shall not be
under any obligation to issue any Letter of Credit of the types  described above
if at the time of such issuance:

          (i) any order,  judgment or decree of any  governmental  authority  or
     arbitrator  shall  purport by its terms to enjoin or  restrain  the Issuing
     Lender  from  issuing  such  Letter  of Credit  or any  requirement  of law
     applicable  to the Issuing  Lender or any request or directive  (whether or
     not  having  the  force  of  law)  from  any  governmental  authority  with
     jurisdiction  over the Issuing Lender shall  prohibit,  or request that the
     Issuing Lender refrain from, the issuance of letters of credit generally or
     such Letter of Credit in particular or shall impose upon the Issuing Lender
     with respect to such Letter of Credit any restriction or reserve or capital
     requirement  (for which the  Issuing  Lender is not  otherwise  compensated
     hereunder)  not in effect with  respect to the  Issuing  Lender on the date
     hereof, or any unreimbursed  loss, cost or expense which was not applicable
     or in effect with  respect to the Issuing  Lender as of the date hereof and
     which the Issuing Lender reasonably and in good faith deems material to it;
     or

                                       10
<PAGE>

          (ii) the Issuing  Lender shall have received  from the  Borrower,  any
     other Credit Party or the  Required  Lenders  prior to the issuance of such
     Letter of Credit  notice of the type  described  in the second  sentence of
     Section 2.3(b).

     2.2.   Maximum   Letter   of   Credit   Outstandings;   Final   Maturities.
Notwithstanding  anything to the contrary  contained in this  Agreement,  (i) no
Letter of Credit shall be issued the Stated  Amount of which,  when added to the
Letter of Credit Outstandings  (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the  respective  Letter of Credit) at
such time would exceed either (x)  $3,000,000 or (y) when added to the aggregate
principal amount of all Revolving Loans then outstanding would exceed the lesser
of an amount equal to the Total  Revolving Loan  Commitment at such time and the
Borrowing  Base, and (ii) each Letter of Credit shall by its terms terminate (x)
in the case of standby  Letters of Credit,  on or before the  earlier of (A) the
date which occurs 12 months after the date of the issuance thereof (although any
such standby Letter of Credit shall be extendible  for successive  periods of up
to 12 months,  but, in each case, not beyond the tenth Business Day prior to the
Revolving Loan Maturity Date, on terms acceptable to the Issuing Lender) and (B)
ten Business Days prior to the Revolving Loan Maturity Date, and (y) in the case
of trade  Letters  of  Credit,  on or before  the  earlier of (A) the date which
occurs 180 days after the date of issuance  thereof and (B) 30 days prior to the
Revolving Loan Maturity Date.

     2.3. Letter of Credit Requests; Minimum Stated Amount:

          (a) Whenever  the  Borrower  desires that a Letter of Credit be issued
for its  account,  the  Borrower  shall  give the  Administrative  Agent and the
Issuing  Lender  at least  five  Business  Days' (or such  shorter  period as is
reasonably  acceptable to the Issuing Lender) written notice thereof  (including
by  way  of  facsimile).  Each  notice  shall  be in  the  form  of  Exhibit  C,
appropriately completed (each a "Letter of Credit Request"). In the event of any
inconsistency  between  the terms of any  Letter of  Credit  Request,  Letter of
Credit  application or the Master Letter of Credit Agreement,  the terms of this
Agreement shall control.

          (b) The making of each Letter of Credit  Request shall be deemed to be
a representation and warranty by the Borrower to the Lenders that such Letter of
Credit may be issued in accordance  with, and will not violate the  requirements
of Section 2.2. Unless the Issuing Lender has received notice from the Borrower,
any other  Credit  Party or the  Required  Lenders  before it issues a Letter of
Credit that one or more of the  conditions  specified  in Section 5 or 6 are not
then  satisfied,  or that the  issuance of such Letter of Credit  would  violate
Section 2.2, then the Issuing Lender shall,  subject to the terms and conditions
of this Agreement,  issue the requested  Letter of Credit for the account of the
Borrower in accordance with the Issuing Lender's usual and customary  practices.
Upon the  issuance of or  modification  or  amendment  to any standby  Letter of
Credit,   the  Issuing  Lender  shall  promptly  notify  the  Borrower  and  the
Administrative Agent, in writing of such issuance, modification or amendment and
such  notice  shall be  accompanied  by a copy of such  Letter  of Credit or the
respective modification or amendment thereto, as the case may be. Promptly after
receipt of such notice the  Administrative  Agent shall notify the Participants,
in writing, of such issuance,  modification or amendment.  On the first Business
Day of each week, the Issuing Lender shall furnish the Administrative Agent with

                                       11
<PAGE>

a written (including via facsimile) report of the daily aggregate outstanding of
trade  letters of credit for the  immediately  preceding  week.  Notwithstanding
anything to the contrary contained in this Agreement, in the event that a Lender
Default  exists with  respect to an RL Lender,  the Issuing  Lender shall not be
required  to issue any Letter of Credit  unless the  Issuing  Lender has entered
into  arrangements  satisfactory to it and the Borrower to eliminate the Issuing
Lender's  risk with  respect  to the  participation  in Letters of Credit by the
Defaulting Lender or Lenders,  including by cash collateralizing such Defaulting
Lender's or Lenders' RL Percentage of the Letter of Credit Outstandings.

          (c) The initial  Stated  Amount of each Letter of Credit  shall not be
less than $100,000 or such lesser amount as is acceptable to the Issuing Lender.

     2.4. Letter of Credit Participations.

          (a) Immediately  upon the issuance by the Issuing Lender of any Letter
of Credit,  the Issuing  Lender shall be deemed to have sold and  transferred to
each RL Lender, and each such RL Lender (in its capacity under this Section 2.4,
a  "Participant")  shall  be  deemed  irrevocably  and  unconditionally  to have
purchased and received from the Issuing Lender, without recourse or warranty, an
undivided  interest and  participation,  to the extent of such  Participant's RL
Percentage,  in such Letter of Credit,  each drawing or payment made  thereunder
and the  obligations of the Borrower under this Agreement with respect  thereto,
and any security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan  Commitments or RL Percentages of the Lenders pursuant to Section
1.13 or 13.4(b),  it is hereby  agreed  that,  with  respect to all  outstanding
Letters  of Credit and  Unpaid  Drawings  relating  thereto,  there  shall be an
automatic  adjustment  to the  participations  pursuant  to this  Section 2.4 to
reflect the new RL Percentages of the assignor and assignee Lender,  as the case
may be.

          (b) In  determining  whether to pay under any  Letter of  Credit,  the
Issuing Lender shall not have any obligation relative to the other Lenders other
than to confirm that any documents required to be delivered under such Letter of
Credit  appear to have been  delivered  and that  they  appear to  substantially
comply on their face with the requirements of such Letter of Credit.  Any action
taken or omitted to be taken by the Issuing  Lender under or in connection  with
any Letter of Credit  issued by it shall not create for the  Issuing  Lender any
resulting  liability to the Borrower,  any other Credit Party, any Lender or any
other  Person  unless  such  action is taken or  omitted  to be taken with gross
negligence  or  willful  misconduct  on the  part  of  the  Issuing  Lender  (as
determined by a court of competent  jurisdiction  in a final and  non-appealable
decision).

          (c) In the event that the Issuing  Lender makes any payment  under any
Letter of Credit issued by it and the Borrower  shall not have  reimbursed  such
amount in full to the Issuing  Lender  pursuant to Section  2.5(a),  the Issuing
Lender shall  promptly  notify the  Administrative  Agent,  which shall promptly
notify each Participant of such failure, and each Participant shall promptly and
unconditionally  pay to the Issuing Lender,  the amount of such Participant's RL
Percentage of such unreimbursed payment in Dollars and in same day funds. If the
Administrative  Agent so  notifies,  prior to 12:00 Noon  (Chicago  time) on any
Business  Day,  any  Participant  required  to fund a payment  under a Letter of

                                       12
<PAGE>

Credit,  such Participant  shall make available to the Issuing Lender in Dollars
such  Participant's RL Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such  Participant  shall not have so
made its RL  Percentage  of the amount of such payment  available to the Issuing
Lender,  such  Participant  agrees to pay to the Issuing  Lender,  forthwith  on
demand such amount,  together with interest thereon, for each day from such date
until  the date  such  amount is paid to the  Issuing  Lender  at the  overnight
Federal Funds Rate for the first three days and at the interest rate  applicable
to  Revolving  Loans  that  are  maintained  as Base  Rate  Loans  for  each day
thereafter.  The failure of any  Participant  to make  available  to the Issuing
Lender its RL  Percentage  of any payment  under any Letter of Credit  shall not
relieve any other  Participant of its obligation  hereunder to make available to
the Issuing  Lender its RL  Percentage of any payment under any Letter of Credit
on  the  date  required,  as  specified  above,  but  no  Participant  shall  be
responsible  for the failure of any other  Participant  to make available to the
Issuing Lender such other Participant's RL Percentage of any such payment.

          (d) Whenever the Issuing Lender  receives a payment of a reimbursement
obligation  as to which  it has  received  any  payments  from the  Participants
pursuant  to  clause  (c)  above,  the  Issuing  Lender  shall  pay to each such
Participant which has paid its RL Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based upon the proportionate
aggregate amount  originally  funded by such Participant to the aggregate amount
funded  by all  Participants)  of the  principal  amount  of such  reimbursement
obligation  and interest  thereon  accruing after the purchase of the respective
participations.

          (e) Upon the  request of any  Participant,  the  Administrative  Agent
shall furnish to such Participant  copies of any standby Letter of Credit issued
by it and such  other  documentation  as may  reasonably  be  requested  by such
Participant.

          (f)  The  obligations  of the  Participants  to make  payments  to the
Issuing  Lender with respect to Letters of Credit shall be  irrevocable  and not
subject  to any  qualification  or  exception  whatsoever  and  shall be made in
accordance   with  the  terms  and  conditions  of  this  Agreement   under  all
circumstances,   including,   without   limitation,   any   of   the   following
circumstances:

          (i) any lack of validity or enforceability of this Agreement or any of
     the other Credit Documents;

          (ii) the existence of any claim, setoff,  defense or other right which
     the  Borrower  or any of its  Subsidiaries  may have at any time  against a
     beneficiary  named in a Letter of Credit,  any  transferee of any Letter of
     Credit (or any  Person for whom any such  transferee  may be  acting),  the
     Administrative  Agent,  any  Participant,  or any other Person,  whether in
     connection  with this  Agreement,  any Letter of Credit,  the  transactions
     contemplated herein or any unrelated transactions (including any underlying
     transaction  between the Borrower or any Subsidiary of the Borrower and the
     beneficiary named in any such Letter of Credit);

                                       13
<PAGE>

          (iii) any draft, certificate or any other document presented under any
     Letter of Credit proving to be forged, fraudulent,  invalid or insufficient
     in any respect or any  statement  therein being untrue or inaccurate in any
     respect;

          (iv) the surrender or  impairment of any security for the  performance
     or observance of any of the terms of any of the Credit Documents; or

          (v) the occurrence of any Default or Event of Default.

     2.5 Agreement to Repay Letter of Credit Drawings.

          (a) The Borrower  agrees to reimburse  the Issuing  Lender,  by making
payment  to the  Administrative  Agent  in  immediately  available  funds at the
Payment Office, for any payment or disbursement made by the Issuing Lender under
any Letter of Credit issued by it (each such amount,  so paid until  reimbursed,
an "Unpaid  Drawing"),  not later than one Business Day following receipt by the
Borrower of notice of such payment or disbursement (provided that no such notice
shall be required to be given if a Default or an Event of Default  under Section
10.5 shall have  occurred and be  continuing,  in which case the Unpaid  Drawing
shall be due and payable immediately  without  presentment,  demand,  protest or
notice of any kind  (all of which are  hereby  waived  by the  Borrower)),  with
interest on the amount so paid or disbursed by the Issuing Lender, to the extent
not reimbursed prior to 12:00 Noon (Chicago time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but excluding the
date such Issuing Lender was  reimbursed by the Borrower  therefor at a rate per
annum  equal to the Base  Rate in effect  from time to time plus the  Applicable
Margin as in effect from time to time for Revolving Loans that are maintained as
Base  Rate  Loans;  provided,  however,  to the  extent  such  amounts  are  not
reimbursed  prior  to  12:00  Noon  (Chicago  time) on the  third  Business  Day
following the receipt by the Borrower of notice of such payment or  disbursement
or following  the  occurrence  of a Default or an Event of Default under Section
10.5,  interest shall  thereafter  accrue on the amounts so paid or disbursed by
the Issuing  Lender (and until  reimbursed  by the Borrower) at a rate per annum
equal to the Base Rate in effect  from time to time plus the  Applicable  Margin
for  Revolving  Loans that are  maintained  as Base Rate Loans as in effect from
time to time plus 2%, with such  interest  to be payable on demand.  The Issuing
Lender shall give the Borrower  prompt  written notice of each Drawing under any
Letter of Credit issued by it, provided that the failure to give any such notice
shall in no way affect, impair or diminish the Borrower's obligations hereunder.

          (b)  The  obligations  of  the  Borrower  under  this  Section  2.5 to
reimburse  the  Issuing  Lender  with  respect  to  drafts,  demands  and  other
presentations  for  payment  under  Letters  of  Credit  issued  by it  (each  a
"Drawing")  (including,  in each case,  interest  thereon) shall be absolute and
unconditional  under any and all  circumstances  and irrespective of any setoff,
counterclaim  or defense to payment which the Borrower or any  Subsidiary of the
Borrower may have or have had against any Lender  (including  in its capacity as
the Issuing Lender or as a  Participant),  including,  without  limitation,  any
defense  based  upon the  failure  of any  drawing  under a Letter  of Credit to
conform  to  the  terms  of the  Letter  of  Credit  or  any  nonapplication  or
misapplication  by the  beneficiary  of the proceeds of such Drawing;  provided,
however,  that the Borrower  shall not be  obligated  to  reimburse  the Issuing

                                       14
<PAGE>

Lender for any  wrongful  payment  made by the Issuing  Lender under a Letter of
Credit  issued  by it as a  result  of acts or  omissions  constituting  willful
misconduct or gross  negligence on the part of the Issuing Lender (as determined
by a court of competent  jurisdiction in a final decision of such court, subject
to any appeal rights of the Issuing Lender).

     2.6.  Increased  Costs.  If at any  time  after  the  Effective  Date,  the
introduction  of or any change in any applicable law, rule,  regulation,  order,
guideline or request or in the  interpretation or administration  thereof by the
NAIC  or  any  governmental   authority  charged  with  the   interpretation  or
administration  thereof,  or compliance by the Issuing Lender or any Participant
with any request or directive by the NAIC or by any such governmental  authority
(whether or not having the force of law),  shall  either (i)  impose,  modify or
make applicable any reserve,  deposit,  capital adequacy or similar  requirement
against letters of credit issued by the Issuing Lender or participated in by any
Participant,  or (ii) impose on the Issuing Lender or any  Participant any other
conditions relating,  directly or indirectly, to this Agreement or any Letter of
Credit;  and the result of any of the  foregoing  is to increase the cost to the
Issuing Lender or any Participant of issuing,  maintaining or  participating  in
any Letter of Credit,  or reduce the amount of any sum received or receivable by
the Issuing Lender or any Participant  hereunder or reduce the rate of return on
its capital with respect to Letters of Credit (except for changes in the rate of
tax on, or  determined by reference to, the net income or profits of the Issuing
Lender or such Participant  pursuant to the laws of the jurisdiction in which it
is organized or in which its principal  office or applicable  lending  office is
located or any subdivision  thereof or therein),  then, upon the delivery of the
certificate  referred  to below to the  Borrower  by the  Issuing  Lender or any
Participant (a copy of which  certificate shall be sent by the Issuing Lender or
such Participant to the Administrative Agent), the Borrower agrees to pay to the
Issuing Lender or such  Participant  such  additional  amount or amounts as will
compensate  the Issuing  Lender or such  Participant  for such increased cost or
reduction  in the amount  receivable  or  reduction on the rate of return on its
capital.  The  Issuing  Lender or any  Participant,  upon  determining  that any
additional  amounts  will be payable  pursuant to this  Section  2.6,  will give
prompt  written  notice  thereof to the  Borrower,  which notice shall include a
certificate  submitted to the Borrower by the Issuing Lender or such Participant
(a copy of  which  certificate  shall  be sent  by the  Issuing  Lender  or such
Participant to the Administrative Agent), setting forth in reasonable detail the
basis for the  calculation  of such  additional  amount or amounts  necessary to
compensate the Issuing Lender or such Participant.  The certificate  required to
be delivered pursuant to this Section 2.6 shall, absent manifest error, be final
and conclusive and binding on the Borrower.

     SECTION 3. FEES; REDUCTIONS OF COMMITMENT.

     3.1. Fees.

          (a)  The  Borrower  agrees  to  pay to the  Administrative  Agent  for
distribution  to each RL Lender  (based on each such RL Lender's  respective  RL
Percentage)  a fee in respect of each  Letter of Credit  (the  "Letter of Credit
Fee") for the period from and  including  the date of issuance of such Letter of
Credit to and including the date of  termination or expiration of such Letter of
Credit,  computed  at a rate per annum  equal to the  Applicable  Margin then in

                                       15
<PAGE>

effect with respect to Letters of Credit on the daily Stated Amount of each such
Letter  of  Credit.  Accrued  Letter  of Credit  Fees  shall be due and  payable
quarterly in arrears on each  Scheduled  Interest  Payment Date and on the first
day on or after the  termination  of the Total  Revolving Loan  Commitment  upon
which no Letters of Credit remain outstanding.

          (b) The  Borrower  agrees to pay to the  Issuing  Lender,  for its own
account,  a facing  fee in respect  of each  Letter of Credit  issued by it (the
"Facing  Fee") for the period  from and  including  the date of issuance of such
Letter of Credit to and including the date of  termination or expiration of such
Letter of Credit,  computed  at a rate per annum equal to 1/4 of 1% on the daily
Stated  Amount of such Letter of Credit,  provided that in any event the minimum
amount of Facing  Fees  payable in any  twelve-month  period for each  Letter of
Credit shall be not less than $500, it being agreed that, on the day of issuance
of any Letter of Credit and on each anniversary thereof prior to the termination
or expiration of such Letter of Credit, if $500 will exceed the amount of Facing
Fees that will accrue with respect to such Letter of Credit for the  immediately
succeeding  twelve-month  period,  the full $500 shall be payable on the date of
issuance of such Letter of Credit and on each such anniversary  thereof.  Except
as  otherwise  provided in the proviso to the  immediately  preceding  sentence,
accrued  Facing  Fees  shall be due and  payable  quarterly  in  arrears on each
Scheduled  Interest  Payment  Date  and  upon  the  first  day on or  after  the
termination  of the Total  Revolving  Loan  Commitment  upon which no Letters of
Credit remain outstanding.

          (c) The  Borrower  agrees to pay to the  Issuing  Lender,  for its own
account,  upon each payment  under,  issuance of, or amendment to, any Letter of
Credit  issued  by it,  such  amount  as shall at the time of such  event be the
administrative  charge and the  reasonable  expenses which the Issuing Lender is
generally imposing in connection with such occurrence with respect to letters of
credit.

          (d) The  Borrower  agrees to pay to the  Administrative  Agent and its
affiliates  such fees as have been or may be agreed to in  writing  from time to
time by the Borrower or any of its  Subsidiaries  and the  Administrative  Agent
and/or its respective affiliates.

          (e) The Borrower agrees to pay to the  Administrative  Agent,  for the
account  of the  applicable  Lenders,  a  non-utilization  fee equal to the rate
specified in the definition of "Applicable Margin" of the total of (a) the Total
Revolving  Loan  Commitment,  less (b) the sum of (i) the daily  average  of the
aggregate  principal  amount of all Revolving Loans  outstanding,  plus (ii) the
daily  average of the  aggregate  amount of the  Letter of Credit  Outstandings.
Accrued  non-utilization  fees shall be due and payable  quarterly in arrears on
each  Scheduled  Interest  Payment  Date and upon the  first day on or after the
termination of the Total Revolving Loan Commitment.

          (f) The  Borrower  agrees to pay to  LaSalle a  commitment  fee in the
amount of One Hundred  Thirty-Seven  Thousand and 00/100 Dollars  ($137,000.00),
payable on or before the Effective Date.

                                       16
<PAGE>

     3.2. Voluntary Termination of Unutilized Loan Commitment.

          (a) Upon at least three  Business  Day's prior  written  notice to the
Administrative Agent at the Notice Office (which notice the Administrative Agent
shall  promptly  transmit to each of the Lenders),  the Borrower  shall have the
right, at any time or from time to time, without premium or penalty to terminate
the Total  Unutilized  Revolving Loan Commitment in whole, or reduce it in part,
pursuant to this Section 3.2(a), in an integral multiple of $500,000 in the case
of  partial  reductions  to the  Total  Unutilized  Revolving  Loan  Commitment,
provided that each such  reduction  shall apply  proportionately  to permanently
reduce the Revolving Loan Commitment of each Lender.

          (b) In the  event of a  refusal  by a Lender  to  consent  to  certain
proposed  changes,  waivers,  discharges  or  terminations  with respect to this
Agreement  which  have been  approved  by the  Required  Lenders  as (and to the
extent)  provided  in  Section  13.12(b),  the  Borrower  may,  subject  to  its
compliance with the requirements of Section  13.12(b),  upon five Business Days'
prior written notice to such Lender and the  Administrative  Agent at the Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Lenders)  terminate  all of the  Commitment  of such Lender,  so long as all
Loans,  together with accrued and unpaid  interest,  Fees and all other amounts,
owing to such  Lender are repaid  concurrently  with the  effectiveness  of such
termination pursuant to Section 4.1(b) (at which time Schedule I shall be deemed
modified to reflect such changed amounts) and such Lender's RL Percentage of all
outstanding Letters of Credit is cash collateralized in a manner satisfactory to
the  Administrative  Agent and the Issuing Lender, and at such time, such Lender
shall no longer  constitute a "Lender" for  purposes of this  Agreement,  except
with  respect to  indemnifications  under  this  Agreement  (including,  without
limitation,  Sections 1.10, 1.11, 2.6, 4.4, 12.6 and 13.1),  which shall survive
as to such repaid Lender.

     3.3. Mandatory Reduction of Commitment.

          (a)  The  Total  Revolving  Loan  Commitment  shall  terminate  in its
entirety  upon the  earlier of (i) the  Revolving  Loan  Maturity  Date and (ii)
unless the  Required  Lenders  otherwise  agree in writing,  the date on which a
Change of Control occurs.

          (b) Each  reduction to, or  termination  of, the Total  Revolving Loan
Commitment shall be applied to proportionately reduce or terminate,  as the case
may be, the  Revolving  Loan  Commitment  of each Lender  with a Revolving  Loan
Commitment.

     SECTION 4. PREPAYMENTS; PAYMENTS; TAXES.

     4.1. Voluntary Prepayments.

          (a) The  Borrower  shall have the right to prepay  the Loans,  without
premium or penalty, in whole or in part at any time and from time to time on the
following terms and conditions:  (i) the Borrower shall give the  Administrative
Agent prior to 12:00 Noon  (Chicago  time) at the Notice Office (x) at least one
Business Day's prior written notice (or telephonic notice promptly  confirmed in

                                       17
<PAGE>

writing) of its intent to prepay Base Rate Loans and (y) at least three Business
Days' prior written notice (or telephonic notice promptly  confirmed in writing)
of its intent to prepay  Eurodollar  Loans,  which  notice (in each case)  shall
specify the amount of such  prepayment and the Types of Loans to be prepaid and,
in the case of Eurodollar Loans, the specific  Borrowing or Borrowings  pursuant
to which such  Eurodollar  Loans were made, and which notice the  Administrative
Agent  shall  promptly  transmit  to  each of the  Lenders;  (ii)  each  partial
prepayment  of Revolving  Loans  pursuant to this Section  4.1(a) shall be in an
aggregate  principal  amount of at least  $500,000 (or such lesser  amount as is
acceptable to the Administrative Agent), provided that if any partial prepayment
of Eurodollar  Loans made pursuant to any Borrowing shall reduce the outstanding
principal  amount of  Eurodollar  Loans made  pursuant to such  Borrowing  to an
amount less than the Minimum  Borrowing  Amount,  then such Borrowing may not be
continued as a Borrowing of Eurodollar  Loans (and same shall  automatically  be
converted  into a Borrowing  of Base Rate Loans) and any election of an Interest
period with respect thereto given by the Borrower shall have no force or effect;
(iii) at the time of prepayment of Eurodollar Loans pursuant to this Section 4.1
on any date other than the last day of the Interest Period  applicable  thereto,
the Borrower shall pay the amounts  required  pursuant to Section 1.11; and (iv)
each  prepayment  pursuant to this  Section  4.1(a) in respect of any Loans made
pursuant  to a Borrowing  shall be applied  pro rata among such Loans,  provided
that at the Borrower's  election in connection  with any prepayment of Revolving
Loans pursuant to this Section 4.1(a),  such prepayment shall not, so long as no
Default or Event of Default then exists,  be applied to any Revolving  Loan of a
Defaulting Lender.

          (b) In the  event of a  refusal  by a Lender  to  consent  to  certain
proposed  changes,  waivers,  discharges  or  terminations  with respect to this
Agreement  which  have been  approved  by the  Required  Lenders  as (and to the
extent) provided in Section 13.12(b), the Borrower may, upon five Business Days'
prior  written  notice to the  Administrative  Agent at the Notice Office (which
notice the Administrative  Agent shall promptly transmit to each of the Lenders)
repay all Loans,  together  with accrued and unpaid  interest,  Fees,  and other
amounts owing to such Lender in accordance with, and subject to the requirements
of,  said  Section  13.12(b)  so long as (I) the  Commitment  of such  Lender is
terminated concurrently with such repayment pursuant to Section 3.2(b) (at which
time  Schedule I shall be deemed  modified to reflect  the changed  Commitment),
(II) such Lender's RL Percentage  of all  outstanding  Letters of Credit is cash
collateralized  in a manner  satisfactory  to the  Administrative  Agent and the
Issuing Lender and (III) the consents,  if any,  required under Section 13.12(b)
in connection with the repayment pursuant to this clause (b) have been obtained.

     4.2. Mandatory Repayments.

          (a) On any  day on  which  the sum of (I)  the  aggregate  outstanding
principal  amount  of all  Revolving  Loans  (after  giving  effect to all other
repayments  thereof on such date) and (II) the aggregate amount of all Letter of
Credit  Outstandings  exceeds  the lesser of the  Borrowing  Base Amount and the
Total  Revolving Loan Commitment at such time, the Borrower shall prepay on such
day the  principal  of Revolving  Loans in an amount  equal to such excess.  If,
after giving effect to the prepayment of all outstanding  Revolving  Loans,  the
aggregate  amount  of the  Letter  of  Credit  Outstandings  exceeds  the  Total

                                       18
<PAGE>

Revolving  Loan  Commitment  at  such  time,  the  Borrower  shall  pay  to  the
Administrative  Agent at the Payment Office on such day an amount of cash and/or
Cash  Equivalents  equal to the amount of such  excess  (up to a maximum  amount
equal to the Letter of Credit  Outstandings at such time), such cash and/or Cash
Equivalents  to be held as security for all  obligations  of the Borrower to the
Issuing  Lender and the Lenders  hereunder  in a cash  collateral  account to be
established by the Administrative Agent.

          (b) In addition  to any other  mandatory  repayments  pursuant to this
Section 4.2, on each date on or after the Initial  Borrowing Date upon which the
Borrower or any of its Domestic Subsidiaries receives any cash proceeds from any
capital  contribution  or any sale or  issuance  of its  equity,  the Net Equity
Proceeds in excess of $3,000,000 in the aggregate  during any fiscal year of the
Borrower of such capital  contribution or sale or issuance of equity shall first
be applied on such date as a mandatory  repayment of  principal  of  outstanding
Term Loans (as defined in the First Horizon  International  Financing documents)
(up to a  maximum  amount  of 50% of such  Net  Equity  Proceeds),  second,  any
remainder  as a  mandatory  repayment  of  principal  of  outstanding  Loans  in
accordance  with  the  requirements  of  Sections  4.2(g)  and (h),  third,  any
remainder to any outstanding Term Loans, and fourth,  with the balance,  if any,
being retained by the Borrower or applicable Domestic Subsidiary.

          (c) In addition  to any other  mandatory  repayments  pursuant to this
Section 4.2, on each date on or after the Initial  Borrowing Date upon which the
Borrower or any of its Domestic Subsidiaries receives any cash proceeds from any
issuance or  incurrence by the Borrower or any of its Domestic  Subsidiaries  of
Indebtedness  for borrowed  money (other than  Indebtedness  for borrowed  money
permitted to be incurred  pursuant to Section 9.4 as in effect on the  Effective
Date), the Net Debt Proceeds of the respective  incurrence of Indebtedness shall
first  be  applied  on such  date  as a  mandatory  repayment  of  principal  of
outstanding Term Loans (as defined in the First Horizon International  Financing
documents)  (up to a maximum amount of 50% of such Net Debt  Proceeds),  second,
any  remainder as a mandatory  repayment of  principal of  outstanding  Loans in
accordance  with  the  requirements  of  Sections  4.2(g)  and (h),  third,  any
remainder to any outstanding Term Loans, and fourth,  with the balance,  if any,
being retained by the Borrower or applicable Domestic Subsidiary.

          (d) In addition  to any other  mandatory  repayments  pursuant to this
Section 4.2, on each date on or after the Initial  Borrowing Date upon which the
Borrower or any of its Domestic Subsidiaries receives any cash proceeds from any
Asset Sale, the Net Sale Proceeds  therefrom shall first be applied on such date
as a mandatory  repayment of principal of outstanding  Term Loans (as defined in
the First Horizon International  Financing documents) (up to a maximum amount of
50% of such Net Sale Proceeds),  second, any remainder as a mandatory  repayment
of  principal  of  outstanding  Loans in  accordance  with the  requirements  of
Sections 4.2(g) and (h), third, any remainder to any outstanding Term Loans, and
fourth,  with the balance,  if any, being retained by the Borrower or applicable
Domestic  Subsidiary;  provided,  however,  that  with  respect  to no more than
$500,000 in the  aggregate of cash  proceeds from Asset Sales in any fiscal year
of the Borrower,  the Net Sale Proceeds therefrom shall not be required to be so
applied  on such date so long as no Default  and no Event of Default  then exits
and such Net Sale Proceeds shall be used to purchase  assets (other than working

                                       19
<PAGE>

capital) used or to be used in the businesses permitted pursuant to Section 9.15
within 90 days following the date of such Asset Sale, and provided further, that
if all or any portion of such Net Sale Proceeds not required to be so applied as
provided above in this Section  4.2(d) are not so reinvested  within such 90-day
period (or such earlier date,  if any, as the Borrower or the relevant  Domestic
Subsidiary determines not to reinvest the Net Sale Proceeds from such Asset Sale
as set forth above),  such remaining portion shall be applied on the last day of
such period (or such earlier date, as the case may be) as provided above in this
Section 4.2(d) without regard to the preceding proviso.

          (e) In addition  to any other  mandatory  repayments  pursuant to this
Section 4.2, on the date on or after the Initial  Borrowing  Date upon which the
Borrower or any of its Domestic Subsidiaries receives any cash proceeds from any
Recovery  Event,  the Net Recovery Event Proceeds from such Recovery Event shall
first be applied as a mandatory repayment of principal of outstanding Term Loans
(as defined in the First Horizon  International  Financing  documents)  (up to a
maximum  amount  of 50% of  such  Net  Recovery  Event  Proceeds),  second,  any
remainder  as a  mandatory  repayment  of  principal  of  outstanding  Loans  in
accordance  with  the  requirements  of  Sections  4.2(g)  and (h),  third,  any
remainder to any outstanding Term Loans, and fourth,  with the balance,  if any,
being  retained by the Borrower or  applicable  Domestic  Subsidiary;  provided,
however, that so long as no Default or Event of Default then exists and such Net
Recovery Event Proceeds do not exceed  $1,000,000 in the aggregate in any fiscal
year of the Borrower such Net Recovery  Event  Proceeds shall not be required to
be so applied on such date to the  extent  that the  Borrower  has  delivered  a
certificate  to the  Administrative  Agent stating that such Net Recovery  Event
Proceeds shall be used to replace or restore any properties or assets in respect
of which such Net Recovery  Event  Proceeds were paid within 180 days  following
the date of the receipt of such Net Recovery Event Proceeds  (which  certificate
shall  set forth the  estimates  of the Net  Recovery  Event  Proceeds  to be so
expended); and provided further, that if all or any portion of such Net Recovery
Event Proceeds not required to be so applied  pursuant to the preceding  proviso
are not so used  within  180  days  after  the date of the  receipt  of such Net
Recovery  Event  Proceeds (or such earlier  date, if any, as the Borrower or the
relevant Domestic  Subsidiary  determines not to reinvest the Net Recovery Event
Proceeds  relating to such Recovery  Event as set forth above),  such  remaining
portion  shall be applied on the last day of such period (or such earlier  date,
as the case may be) as provided  above in this Section  4.2(e) without regard to
the preceding proviso.

          (f) In addition to any other  mandatory  prepayments  pursuant to this
Section 4.2, on March 31 of each year, beginning March 31, 2004, an amount equal
to 75% of Excess Cash Flow of the Borrower and its Domestic Subsidiaries for the
most recently  completed  fiscal year of the Borrower  shall be first applied on
such  date as a  mandatory  repayment  of  principal  of  outstanding  Loans  in
accordance  with the  requirements  of  Sections  4.2(g) and (h),  second,  as a
mandatory  repayment of principal of  outstanding  Term Loans (as defined in the
First Horizon International  Financing documents),  and third, with the balance,
if any, being retained by the Borrower or the applicable Domestic Subsidiary.

                                       20
<PAGE>

          (g)  Notwithstanding  anything in Section 4.2(b),  (c), (d) and (e) to
the contrary,  so long as no Event of Default or Default shall have occurred and
be  continuing,  the Borrower may request that all of such Net Equity  Proceeds,
Net  Debt  Proceeds,  Net Sale  Proceeds  or Net  Recovery  Event  Proceeds,  as
applicable,  be  applied  first  to the  outstanding  Loans  hereunder  and  any
remainder  to Term  Loans and upon the  consent  of the  Required  Lenders,  the
Administrative Agent shall apply the same in such order. All repayments of Loans
pursuant to Section  4.2(b),  (c), (d), (e) and (f) shall be applied pro rata to
the Loans.

          (h) After an Event of Default shall have  occurred and be  continuing,
the  Administrative  Agent shall have the right to  designate  which loans (Term
Loans or Loans)  shall be repaid in its sole  discretion.  With  respect to each
repayment of Loans  required by this Section 4.2, so long as no Event of Default
shall have occurred and be  continuing,  the Borrower may designate the Types of
Loans which are to be repaid and, in the case of Eurodollar  Loans, the specific
Borrowing  or  Borrowings  pursuant  to which such  Eurodollar  Loans were made,
provided that:  (i) repayments of Eurodollar  Loans pursuant to this Section 4.2
may only be made on the last day of an Interest Period applicable thereto unless
all  Eurodollar  Loans with  Interest  Periods  ending on such date of  required
repayment and all Base Rate Loans have been paid in full;  (ii) if any repayment
of  Eurodollar  Loans  made  pursuant  to a single  Borrowing  shall  reduce the
outstanding  Eurodollar  Loans made pursuant to such Borrowing to an amount less
than the  Minimum  Borrowing  Amount,  such  Borrowing  shall  be  automatically
converted  into a Borrowing of Base Rate Loans;  and (iii) each repayment of any
Loans made  pursuant to a Borrowing  shall be applied pro rata among such Loans.
In the absence of a  designation  by the Borrower as described in the  preceding
sentence,  the  Administrative  Agent  shall,  subject to the  above,  make such
designation in its sole discretion.

          (i) In addition  to any other  mandatory  repayments  pursuant to this
Section 4.2, (i) all then outstanding Revolving Loans shall be repaid in full on
the Revolving Loan Maturity Date and (ii) unless the Required Lenders  otherwise
agree in writing, all then outstanding Loans shall be repaid in full on the date
on which a Change of Control occurs.

     4.3. Method and Place of Payment. Except as otherwise specifically provided
herein,  all payments  under this  Agreement and under any Note shall be made to
the  Administrative  Agent for the  account of the  Lender or  Lenders  entitled
thereto not later than 12:00 Noon (Chicago  time) on the date when due and shall
be made in  Dollars  in  immediately  available  funds  at the  Payment  Office.
Whenever  any payment to be made  hereunder or under any Note shall be stated to
be due on a day  which is not a  Business  Day,  the due date  thereof  shall be
extended to the next  succeeding  Business Day and,  with respect to payments of
principal,  interest  shall  be  payable  at the  applicable  rate  during  such
extension.

     4.4. Net Payments.

          (a) All  payments  made by the Borrower  hereunder  and under any Note
will be made without setoff,  counterclaim or other defense.  Except as provided
in Section 4.4(b), all such payments will be 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

                                       21
<PAGE>

imposed by any jurisdiction or by any political  subdivision or taxing authority
thereof or therein  with  respect to such  payments  (but  excluding,  except as
provided in the second  succeeding  sentence,  any tax imposed on or measured by
the  net  income  or  net  profits  of a  Lender  pursuant  to the  laws  of the
jurisdiction in which it is organized or the jurisdiction in which the principal
office or applicable lending office of such Lender is located or any subdivision
thereof or therein) and all interest, penalties, expenses or similar liabilities
with  respect  to  such  non-excluded  taxes,  levies,  imposts,  duties,  fees,
assessments  or other charges (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. If any amounts are payable
in respect of Taxes pursuant to the preceding  sentence,  the Borrower agrees to
reimburse  each  Lender,  upon the  written  request of such  Lender,  for taxes
imposed on or measured by the net income or net profits of such Lender  pursuant
to the laws of the  jurisdiction  in which such Lender is  organized or in which
the principal  office or applicable  lending office of such Lender is located or
under the laws of any  political  subdivision  or taxing  authority  of any such
jurisdiction in which such Lender is organized or in which the principal  office
or applicable  lending office of such Lender is located and for any  withholding
of taxes as such Lender shall  determine are payable by, or withheld from,  such
Lender,  in  respect  of such  amounts  so paid to or on behalf  of such  Lender
pursuant to the  preceding  sentence and in respect of any amounts paid to or on
behalf of such Lender  pursuant to this  sentence.  The Borrower will furnish to
the Administrative  Agent within 45 days after the date the payment of any Taxes
is due pursuant to applicable  law certified  copies 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 (within 10 days
of such  request),  for the amount of any Taxes so levied or imposed and paid by
such  Lender  whether  or not such Taxes were  correctly  or legally  imposed or
asserted by the relevant governmental authority.

          (b) Each  Lender that 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
agrees to deliver to the  Borrower and the  Administrative  Agent on or prior to
the Effective Date or, in the case of a Lender that is an assignee or transferee
of an interest under this Agreement  pursuant to Section 1.13 or 13.4(b) (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) two accurate and complete original signed copies of Internal Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete  exemption  under
an  income  tax  treaty)  (or  successor  forms)  certifying  to  such  Lender's
entitlement  as  of  such  date  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 and cannot  deliver either  Internal  Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete  exemption  under
an income tax treaty) (or any successor forms) pursuant to clause (i) above, (x)
a certificate  substantially in the form of Exhibit D (any such  certificate,  a
"Section  4.4(b)(ii)  Certificate")  and (y) two accurate and complete  original

                                       22
<PAGE>

signed  copies of Internal  Revenue  Service  Form W-8BEN  (with  respect to the
portfolio  interest  exemption) (or successor form)  certifying to such Lender's
entitlement  as  of  such  date  to a  complete  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 from time to
time after the Effective Date,  when a lapse in time or change in  circumstances
renders the  previous  certification  obsolete  or  inaccurate  in any  material
respect,  such Lender will deliver to the Borrower and the Administrative  Agent
two new accurate and complete original signed copies of Internal Revenue Service
Form  W-8ECI,  Form  W-8BEN  (with  respect  to the  benefits  of any income tax
treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and a
Section 4.4(b)(ii) Certificate,  as the case may be, and 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,  or such Lender  shall
immediately notify the Borrower and the Administrative Agent of its inability to
deliver any such Form or  Certificate,  in which case such  Lender  shall not be
required  to  deliver  any such Form or  Certificate  pursuant  to this  Section
4.4(b).  Notwithstanding  anything to the contrary  contained in Section 4.4(a),
but subject to Section 13.4(b) and 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  income or similar 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 4.4(a) to gross-up payments
to be made to a Lender in  respect  of income or  similar  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  4.4(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 4.4 and except as set forth in Section 13.4(b), the Borrower agrees
to pay any  additional  amounts and to  indemnify  each Lender in the manner set
forth in Section  4.4(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 that are effective  after the Effective Date in any applicable  law,
treaty,   governmental  rule,   regulation,   guideline  or  order,  or  in  the
interpretation thereof, relating to the deducting or withholding of such Taxes.

     SECTION 5. CONDITIONS  PRECEDENT TO CREDIT EVENTS ON THE INITIAL  BORROWING
DATE.  The  obligation of each Lender to make Loans,  and the  obligation of the
Issuing  Lender to issue Letters of Credit,  on the Initial  Borrowing  Date, is
subject at the time of the making of such Loans or the  issuance of such Letters
of Credit to the satisfaction of the following conditions:

     5.1.  Effective Date; Notes. On or prior to the Initial Borrowing Date, (i)
the Effective  Date shall have occurred and (ii) there shall have been delivered
to the  Administrative  Agent for the  account of each of the  Lenders  that has

                                       23
<PAGE>

requested same the appropriate  Revolving Note executed by the Borrower, in each
case in the amount, maturity and as otherwise provided herein.

     5.2.   Officer's   Certificate.   On  the  Initial   Borrowing   Date,  the
Administrative  Agent  shall have  received  a  certificate,  dated the  Initial
Borrowing  Date and  signed on behalf of the  Borrower  by the  Chairman  of the
Board, the Chief Executive Officer,  the President,  the Chief Financial Officer
or the  Controller,  certifying  on  behalf  of  the  Borrower  that  all of the
conditions in Sections  5.5,  5.6, 5.7, 5.8, 5.9 and 6.1 have been  satisfied on
such date.

     5.3. Opinions of Counsel. On the Initial Borrowing Date, the Administrative
Agent shall have received from Burke, Warren, MacKay & Serritella, P.C., special
counsel to the Credit Parties, an opinion addressed to the Administrative Agent,
the  Collateral  Agent and each of the Lenders  and dated the Initial  Borrowing
Date covering the matters set forth in Exhibit E and such other matters incident
to  the  transactions  contemplated  herein  as  the  Administrative  Agent  may
reasonably request.

     5.4. Corporate Documents; Proceedings; etc.

          (a) On the Initial Borrowing Date, the Administrative Agent shall have
received a certificate from each Credit Party, dated the Initial Borrowing Date,
signed by the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Financial Officer or the Controller of such Credit Party, and attested
to by the Secretary or any Assistant Secretary of such Credit Party, in the form
of  Exhibit  F  with  appropriate  insertions,   together  with  copies  of  the
certificate   or  articles   of   incorporation   and  by-laws  (or   equivalent
organizational   documents),  as  applicable,  of  such  Credit  Party  and  the
resolutions  of such Credit Party referred to in such  certificate,  and each of
the  foregoing  shall  be in form and  substance  reasonably  acceptable  to the
Administrative Agent.

          (b) On the Initial Borrowing Date, all corporate and legal proceedings
and  all  instruments  and  agreements  in  connection  with  the   transactions
contemplated  by  this  Agreement  and  the  other  Credit  Documents  shall  be
reasonably  satisfactory in form and substance to the Administrative  Agent, and
the  Administrative  Agent shall have received all information and copies of all
documents and papers,  including records of corporate proceedings,  governmental
approvals, good standing certificates and bring-down telegrams or facsimiles, if
any, which the Administrative  Agent reasonably may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate, limited liability company or governmental authorities.

     5.5.   Employee  Benefit  Plans;   Shareholders'   Agreements;   Management
Agreements; Employment Agreements; Non-Compete Agreements; Collective Bargaining
Agreements;  Tax Sharing Agreements;  Existing  Indebtedness  Agreements.  On or
prior to the initial  Borrowing  Date,  there shall have been  delivered  to the
Administrative Agent true and correct copies of the following documents:

                                       24
<PAGE>

               (i) all  Plans  (and for each Plan  that is  required  to file an
          annual report on Internal Revenue Service Form 5500-series,  a copy of
          the most recent such report  (including,  to the extent required,  the
          related  financial  and  actuarial  statements  and opinions and other
          supporting statements, certifications, schedules and information), and
          for each Plan that is a "single-employer  plan," as defined in Section
          4001(a)(15) of ERISA, the most recently prepared  actuarial  valuation
          therefor) and a summary or description of any other "employee  benefit
          plans,"  as  defined  in  Section  3(3) of  ERISA,  and a  summary  or
          description of any other material  agreements,  plans or arrangements,
          with or for the benefit of current or former employees of the Borrower
          or any of its  Subsidiaries  or ERISA  Affiliates  (provided  that the
          foregoing  shall  apply  in the  case of any  multiemployer  plan,  as
          defined in Section  4001(a)(3)  of ERISA,  only to the extent that any
          document  described therein is in the possession of the Borrower,  any
          Subsidiary  of the  Borrower  or any ERISA  Affiliate,  or  reasonably
          available  thereto  from the  sponsor  or  trustee  of any such  Plan)
          (collectively, the "Employee Benefits Plans");

               (ii) all  agreements  entered  into by the Borrower or any of its
          Subsidiaries  governing  the terms and  relative  rights of its equity
          interests and any agreements entered into by its shareholders relating
          to any such entity with respect to its equity interests (collectively,
          the "Shareholders' Agreements");

               (iii) all  agreements  with  members of, or with  respect to, the
          management  of the  Borrower  or any of  its  Subsidiaries  which  the
          Borrower  reasonably  believes  to be  material  to  its or any of its
          Subsidiaries'  business or operations  (collectively,  the "Management
          Agreements");

               (iv) all  employment  agreements  entered into by the Borrower or
          any of its Subsidiaries which the Borrower  reasonably  believes to be
          material to its or any of its  Subsidiaries'  business  or  operations
          (collectively, the "Employment Agreements");

               (v) all  non-compete  agreements  entered into by the Borrower or
          any of its Subsidiaries  which restrict the activities of the Borrower
          or  any   of  its   Subsidiaries   (collectively,   the   "Non-Compete
          Agreements");

               (vi) all collective bargaining agreements applying or relating to
          any  employee  of the  Borrower  or  any  of  any of its  Subsidiaries
          (collectively,     the    "Collective     Bargaining     Agreements");

               (vii)  all  tax  sharing,   tax   allocation  and  other  similar
          agreements  entered  into by the  Borrower or any of its  Subsidiaries
          (collectively, the "Tax Sharing Agreements"); and

               (viii) all agreements  evidencing or relating to  Indebtedness of
          the Borrower or any of its Subsidiaries which is to remain outstanding
          after giving effect to the  Transaction  (the  "Existing  Indebtedness
          Agreements");

                                       25
<PAGE>

all of  which  Employee  Benefit  Plans,  Shareholders'  Agreements,  Management
Agreements, Employment Agreements, Non-Compete Agreements, Collective Bargaining
Agreements, Tax Sharing Agreements and Existing Indebtedness Agreements shall be
in form and substance  reasonably  satisfactory to the Administrative  Agent and
shall be in full force and effect on the Initial Borrowing Date,

     5.6. Adverse Change; Approvals.

          (a) On or prior to the  Initial  Borrowing  Date,  nothing  shall have
occurred (and neither the Administrative  Agent nor any Lender shall have become
aware of any facts or conditions not previously known) which the  Administrative
Agent or the Required  Lenders shall  determine has had, or could  reasonably be
expected  to have,  (i) a Material  Adverse  Effect or (ii) a  material  adverse
effect on the Transaction.

          (b)  On  or  prior  to  the  Initial  Borrowing  Date,  all  necessary
governmental (domestic and foreign) and third party approvals and/or consents in
connection with the Transaction,  the other transactions contemplated hereby and
the granting of Liens under the Credit  Documents  shall have been  obtained and
remain in effect,  and all applicable waiting periods with respect thereto shall
have expired  without any action being taken by any  competent  authority  which
restrains,   prevents  or  imposes   materially   adverse  conditions  upon  the
consummation  of the Transaction or the other  transactions  contemplated by the
Credit  Documents  or  otherwise  referred to herein or therein.  On the Initial
Borrowing Date, there shall not exist any judgment,  order,  injunction or other
restraint  issued  or filed or a  hearing  seeking  injunctive  relief  or other
restraint  pending  or  notified  prohibiting  or  imposing  materially  adverse
conditions  upon the Transaction or the other  transactions  contemplated by the
Documents or otherwise referred to herein or therein.

     5.7.  Litigation.  On the Initial  Borrowing  Date,  except as disclosed on
Schedule XI, no  litigation  by any entity  (private or  governmental)  shall be
pending or threatened with respect to (i) the Transaction,  this Agreement,  any
other Credit Document or any other documentation executed in connection herewith
and therewith or the transactions contemplated hereby and thereby, or (ii) which
the Administrative Agent and the Required Lenders shall reasonably determine has
had, or could reasonably be expected to have, a Material Adverse Effect.

     5.8. Subsidiaries  Guaranty. On the Initial Borrowing Date, each Subsidiary
Guarantor shall have duly  authorized,  executed and delivered the  Subsidiaries
Guaranty  in  the  form  of  Exhibit  L  (as  amended,  modified,   restated  or
supplemented from time to time the "Subsidiaries Guaranty"),  guarantying all of
the  obligations  of the  Borrower  as  more  fully  provided  therein,  and the
Subsidiaries Guaranty shall be in full force and effect.

     5.9. Security  Agreement.  On the Initial Borrowing Date, each Credit Party
shall have duly authorized, executed and delivered the Security Agreement in the
form of Exhibit H (as amended,  modified or supplemented  from time to time, the
"Security  Agreement")  covering all of such Credit Party's  Security  Agreement
Collateral, together with:

                                       26
<PAGE>

          (i) proper financing  statements (Form UCC-1 or the equivalent)  fully
     authorized  and  executed  for  filing  under the UCC or other  appropriate
     filing  offices  of  each  jurisdiction  as may  be  necessary  or,  in the
     reasonable  opinion of the  Collateral  Agent,  desirable,  to perfect  the
     security interests purported to be created by the Security Agreement;

          (ii)  certified  copies of requests  for  information  or copies (Form
     UCC-II),  or equivalent  reports as of a recent date, listing all effective
     financing  statements that name the Borrower or any of its  Subsidiaries as
     debtor and that are filed in the  jurisdictions  referred  to in clause (i)
     above and in such other jurisdictions in which Collateral is located on the
     Initial  Borrowing  Date,  together  with  copies of such  other  financing
     statements  that name the  Borrower  or any of its  Subsidiaries  as debtor
     (none of which shall cover any of the  Collateral  except (x) to the extent
     evidencing  Permitted Liens or (y) those in respect of which the Collateral
     Agent shall have received termination statements (Form UCC-3) or such other
     termination statements as shall be required by local law fully executed for
     filing); and

          (iii) evidence that all other actions  necessary or, in the reasonable
     opinion of the  Collateral  Agent,  desirable  to perfect  and  protect the
     security  interests  purported to be created by the Security Agreement have
     been taken, and the Security Agreement shall be in full force and effect.

     5.10.  Pledge  Agreement.  On the Initial Borrowing Date, each Credit Party
shall have duly  authorized,  executed and delivered the Pledge Agreement in the
form of Exhibit I (as amended,  modified or supplemented  from time to time, the
"Pledge Agreement").

     5.11. Business.  During the period from the date hereof through the Initial
Borrowing  Date,  the Borrower and its  Subsidiaries'  business  shall have been
operated in the ordinary  course and there shall not have been sold any material
assets of such business other than in the ordinary  course and  consistent  with
past practice.

     5.12.  Corporate and Capital Structure.  On the Initial Borrowing Date, all
agreements relating to, and the corporate and capital structure of, the Borrower
and its Subsidiaries,  and all organizational  documents of the Borrower and its
Subsidiaries,  in each case as the same will exist  after  giving  effect to the
consummation  of  the  Transaction,  shall  be  reasonably  satisfactory  to the
Administrative Agent and the Required Lenders.

     5.13.   Insurance   Certificates.   On  the  Initial  Borrowing  Date,  the
Administrative  Agent shall have received  certificates  of insurance  complying
with the  requirements  of Section 8.3 for the  business and  properties  of the
Borrower and its Subsidiaries,  in form and substance reasonably satisfactory to
the  Administrative  Agent and  naming  the  Collateral  Agent as an  additional
insured  and/or as loss payee,  and  stating  that such  insurance  shall not be
canceled  or the amount of coverage  thereunder  materially  reduced  without at
least 30 days' prior written notice by the insurer to the Collateral Agent.

                                       27
<PAGE>

     5.14.  Fees,  etc. On the Initial  Borrowing  Date, the Borrower shall have
paid to the  Administrative  Agent and each Lender all costs,  fees and expenses
(including,  without  limitation,  reasonable legal fees and expenses) and other
compensation  contemplated  hereby payable to the  Administrative  Agent or such
Lender to the extent then due.

     5.15.  Borrowing Base. On the Initial  Borrowing  Date, the  Administrative
Agent shall have received a duly completed Borrowing Base Certificate, dated the
Initial Borrowing Date, substantially in the form of Exhibit G.

     5.16.  Releases.  All  security  interest in and Liens on the assets of the
Borrower and its  Subsidiaries  created  pursuant to any security  documentation
(other than the Security Documents) shall have been terminated and released, and
all such assets shall have been returned to the Borrower or such Subsidiary. The
Administrative  Agent shall have received evidence that the matters set forth in
this Section 5.16 have been satisfied on such date.

     5.17.  Master  Letter  of  Credit  Agreement.  A Master  Letter  of  Credit
Agreement duly executed by the Borrower.

     SECTION 6.  CONDITIONS  PRECEDENT TO ALL CREDIT  EVENTS.  The obligation of
each Lender to make Loans (including Loans made on the Initial  Borrowing Date),
and the obligation of the Issuing  Lender to issue Letters of Credit  (including
Letters of Credit issued on the Initial Borrowing Date), is subject, at the time
of each such Credit Event (except as hereinafter indicated), to the satisfaction
of the following conditions:

     6.1.  Default;  Representations  and  Warranties.  At the time of each such
Credit  Event and also after  giving  effect  thereto  (i) there  shall exist no
Default  or  Event  of  Default  and (ii)  all  representations  and  warranties
contained  herein and in the other Credit Documents shall be true and correct in
all material  respects with the same effect as though such  representations  and
warranties  had been made on the date of such Credit Event (it being  understood
and agreed that any  representation or warranty which by its terms is made as of
a  specified  date shall be  required  to be true and  correct  in all  material
respects only as of such specified date).

     6.2. Notice of Borrowing; Letter of Credit Request.

          (a) Prior to the making of each Loan, the  Administrative  Agent shall
have received a Notice of Borrowing meeting the requirements of Section 1.3(a).

          (b) Prior to the issuance of each Letter of Credit, the Administrative
Agent and the  Issuing  Lender  shall have  received a Letter of Credit  Request
meeting the requirements of Section 2.3(a).

     The  acceptance  of the  benefits of each Credit  Event shall  constitute a
representation and warranty by the Borrower to the Administrative Agent and each
of the Lenders that all the  conditions  specified in Section 5 (with respect to
Credit Events on the Initial Borrowing Date) and in this Section 6 (with respect
to Credit Events on or after the Initial  Borrowing Date) and applicable to such

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<PAGE>

Credit  Event are  satisfied  as of that time.  All of the Notes,  certificates,
legal  opinions and other  documents and papers  referred to in Section 5 and in
this  Section  6,  unless  otherwise  specified,   shall  be  delivered  to  the
Administrative Agent at the Notice Office for the account of each of the Lenders
and, except for the Notes, in sufficient  counterparts or copies for each of the
Lenders  and  shall  be in form and  substance  reasonably  satisfactory  to the
Administrative Agent and the Required Lenders.

     SECTION 7. REPRESENTATIONS,  WARRANTIES AND AGREEMENTS.  In order to induce
the Lenders to enter into this  Agreement  and to make the Loans,  and issue (or
participate in) the Letters of Credit as provided herein, the Borrower makes the
following representations,  warranties and agreements, in each case after giving
effect to the Transaction, all of which shall survive the execution and delivery
of this  Agreement and the Notes and the making of the Loans and the issuance of
the Letters of Credit,  with the occurrence of each Credit Event on or after the
Initial Borrowing Date being deemed to constitute a representation  and warranty
that the  matters  specified  in this  Section  7 are true  and  correct  in all
material  respects  on and as of the Initial  Borrowing  Date and on the date of
each  such  other  Credit  Event  (it  being  understood  and  agreed  that  any
representation  or warranty  which by its terms is made as of a  specified  date
shall be  required to be true and correct in all  material  respects  only as of
such specified date).

     7.1.   Organizational  Status.  Each  of  the  Borrower  and  each  of  its
Subsidiaries  (i)  is  a  duly  organized  and  validly  existing   corporation,
partnership or limited liability  company,  as the case may be, in good standing
under the laws of the jurisdiction of its organization,  (ii) has the corporate,
partnership or limited  liability  company power and authority,  as the case may
be, to own its  property  and assets and to transact the business in which it is
engaged  and  presently  proposes to engage and (iii) is duly  qualified  and is
authorized to do business and is in good standing in each jurisdiction where the
ownership,  leasing or  operation of its property or the conduct of its business
requires  such  qualifications  except for  failures to be so  qualified  which,
either  individually  or in the  aggregate,  could not reasonably be expected to
have a Material Adverse Effect.

     7.2. Power and Authority. Each Credit Party has the corporate,  partnership
or  limited  liability  company  power  and  authority,  as the case may be,  to
execute,  deliver  and perform  the terms and  provisions  of each of the Credit
Documents  to  which  it  is  party  and  has  taken  all  necessary  corporate,
partnership  or  limited  liability  company  action,  as the  case  may be,  to
authorize the execution,  delivery and  performance by it of each of such Credit
Documents.  Each Credit Party has duly executed and delivered each of the Credit
Documents to which it is party,  and each of such Credit  Documents  constitutes
its legal,  valid and binding  obligation  enforceable  in  accordance  with its
terms,  except to the extent that the  enforceability  thereof may be limited by
applicable bankruptcy, insolvency,  reorganization,  moratorium or other similar
laws  generally  affecting   creditors'  rights  and  by  equitable   principles
(regardless of whether enforcement is sought in equity or at law).

     7.3. No Violation.  Neither the  execution,  delivery or performance by any
Credit Party of the Credit  Documents to which it is a party,  nor compliance by
it with the terms and  provisions  thereof (i) will  contravene any provision of
any law, statute, rule or regulation or any order, writ, injunction or decree of

                                       29
<PAGE>

any court or governmental instrumentality,  (ii) will conflict with or result in
any breach of any of the  terms,  covenants,  conditions  or  provisions  of, or
constitute a default  under,  or result in the creation or imposition of (or the
obligation  to create or  impose)  any Lien  (except  pursuant  to the  Security
Documents)  upon any of the property or assets of any Credit Party or any of its
Subsidiaries  pursuant to the terms of any indenture,  mortgage,  deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, in each case to which any Credit Party or any of its Subsidiaries is
a party or by which it or any its property or assets is bound or to which it may
be subject,  or (iii) will violate any provision of the  certificate or articles
of incorporation,  certificate of formation, limited liability company agreement
or by-laws (or  equivalent  organizational  documents),  as  applicable,  of any
Credit Party or any of its Subsidiaries.

     7.4. Approvals.  No order,  consent,  approval,  license,  authorization or
validation of, or filing,  recording or registration  with (except for (x) those
that have otherwise  been obtained or made on or prior to the Initial  Borrowing
Date and which remain in full force and effect on the Initial Borrowing Date and
(y) filings which are necessary to perfect the security  interests created under
the Security Documents, which filings will be made within ten days following the
Initial  Borrowing  Date),  or exemption by, any  governmental or public body or
authority, or any subdivision thereof, is required to be obtained or made by, or
on behalf of, any Credit  Party to  authorize,  or is required to be obtained or
made by,  or on  behalf  of,  any  Credit  Party  in  connection  with,  (i) the
execution, delivery and performance of any Credit Document or (ii) the legality,
validity, binding effect or enforceability of any such Credit Document.

     7.5. Financial Statements; Financial Condition; Undisclosed Liabilities.

          (a) The (i) audited  consolidated  balance  sheets of the Borrower and
its  Subsidiaries for its fiscal year ended on December 31, 2001 and the related
audited  consolidated  statements of income, cash flows and shareholders' equity
of the Borrower and its Subsidiaries for its fiscal year ended on such date, and
(ii) unaudited  consolidated balance sheets of the Borrower and its Subsidiaries
for its fiscal  quarter  ended  September  30,  2002 and the  related  unaudited
consolidated  statements of income,  cash flows and shareholders'  equity of the
Borrower and its Subsidiaries for its fiscal quarter ended on such date,  copies
of which have been furnished to the Lenders prior to the Initial Borrowing Date,
present fairly in all material respects the consolidated  financial  position of
the Borrower and its  Subsidiaries  at the dates of such balance  sheets and the
consolidated  results of the operations of the Borrower and its Subsidiaries for
the periods covered thereby.  All interim monthly financial statements furnished
prior to the Initial  Borrowing Date present fairly the consolidated  results of
the  operations  of the Borrower and its  Subsidiaries  for the periods  covered
thereby. All of the foregoing historical financial statements have been prepared
in accordance with generally accepted accounting principles consistently applied
(except,  in the case of the aforementioned  interim financial  statements,  for
normal year-end audit adjustment and the absence of footnotes).

          (b) On and as of the Initial Borrowing Date and after giving effect to
the Transaction and to all Indebtedness  (including the Loans) being incurred or
assumed and Liens created by the Credit Parties in connection  therewith (i) the
sum of the assets,  at a fair valuation,  of the Borrower on a stand-alone basis

                                       30
<PAGE>

and of the  Borrower  and its  Subsidiaries  taken as a whole will exceed  their
respective  debts,  (ii) each of the  Borrower  on a stand  alone  basis and the
Borrower  and its  Subsidiaries  taken as a whole have not  incurred  and do not
intend to incur,  and do not believe  that they will incur,  debts  beyond their
respective  ability  to pay such  debts as such  debts  mature,  and  (iii)  the
Borrower on a stand-alone basis and the Borrower and its Subsidiaries taken as a
whole  will have  sufficient  capital  with which to  conduct  their  respective
businesses. For purposes of this Section 7.5(b), "debt" means any liability on a
claim,  and "claim"  means (a) right to payment,  whether or not such a right is
reduced to  judgment,  liquidated,  unliquidated,  fixed,  contingent,  matured,
unmatured,  disputed, undisputed, legal, equitable, secured, or unsecured or (b)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment,  whether or not such  right to an  equitable  remedy is reduced to
judgment, fixed, contingent,  matured, unmatured,  disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances  existing at
such time,  represents  the amount that can  reasonably be expected to become an
actual or matured liability.

          (c) Except as fully  disclosed  in the  December  31,  2001  financial
statements  delivered  pursuant to Section 7.5(a),  there were as of the Initial
Borrowing Date no liabilities or obligations with respect to the Borrower or any
of its  Subsidiaries  of  any  nature  whatsoever  (whether  absolute,  accrued,
contingent or otherwise and whether or not due) which either  individually or in
the  aggregate,  could  reasonably be expected to be material to the Borrower or
any of its Subsidiaries. As of the Initial Borrowing Date, the Borrower knows of
no reasonable  basis for the assertion  against it or any of its Subsidiaries of
any liability or obligation of any nature whatsoever that is not fully disclosed
in the  December 31, 2001  financial  statements  delivered  pursuant to Section
7.5(a) or  referred  to in the  immediately  preceding  sentence  which,  either
individually or in the aggregate, could reasonably be expected to be material to
the Borrower or any of its Subsidiaries.

          (d) After giving effect to the  Transaction,  since December 31, 2001,
there has been no Material Adverse Effect.

     7.6. Litigation.  Except as disclosed on Schedule XI, there are no actions,
suits  or  proceedings  pending  or,  to the  best  knowledge  of the  Borrower,
threatened,  or material adverse development in litigation disclosed on Schedule
XI (i) with respect to the Transaction or any Credit Document or (ii) that could
reasonably  be expected,  either  individually  or in the  aggregate,  to have a
Material Adverse Effect.

     7.7.  True and Complete  Disclosure.  All factual  information  (taken as a
whole)   furnished   by  or  on  behalf  of  the  Borrower  in  writing  to  the
Administrative  Agent  or  any  Lender  (including,   without  limitation,   all
information  contained in the Credit Documents) for purposes of or in connection
with this Agreement,  the other Credit Documents or any transaction contemplated
herein or therein is, and all other such factual  information (taken as a whole)
hereafter  furnished  by  or on  behalf  of  the  Borrower  in  writing  to  the
Administrative  Agent or any Lender will be, true and  accurate in all  material
respects on the date as of which such  information is dated or certified and not
incomplete  by omitting  to state any fact  necessary  to make such  information

                                       31
<PAGE>

(taken as a whole) not misleading in any material  respect at such time in light
of the circumstances under which such information was provided.

     7.8. Use of Proceeds; Margin Regulations.

          (a) All proceeds of the  Revolving  Loans will be used for the working
capital and general corporate purposes of the Borrower and its Subsidiaries.

          (b) No part of any Credit Event (or the proceeds thereof) will be used
to  purchase  or carry any Margin  Stock or to extend  credit for the purpose of
purchasing or carrying any Margin Stock.  Neither the making of any Loan nor the
use of the proceeds  thereof nor the  occurrence  of any other Credit Event will
violate or be  inconsistent  with the  provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.

     7.9.  Tax  Returns  and  Payments.  Each of the  Borrower  and  each of its
Subsidiaries  has timely filed or caused to be timely filed (taking into account
applicable extensions of time to file) with the appropriate taxing authority all
federal  and state  income  tax  returns  and all other  material  tax  returns,
domestic and foreign (the "Returns") required to be filed by, or with respect to
the  income,  properties  or  operations  of,  the  Borrower  and/or  any of its
Subsidiaries.  The  Returns  accurately  reflect in all  material  respects  all
liability for taxes of the Borrower and its Subsidiaries for the periods covered
thereby.  Each of the Borrower and each of its  Subsidiaries  has paid all taxes
and  assessments  payable by it which have become due, other than those that are
being contested in good faith and adequately disclosed and fully provided for on
the financial statements of the Borrower and its Subsidiaries in accordance with
generally accepted  accounting  principles.  There is no material action,  suit,
proceeding,  investigation, audit or claim now pending or, to the best knowledge
of the Borrower, threatened by any authority regarding any taxes relating to the
Borrower or any of its Subsidiaries.  As of the Initial Borrowing Date,  neither
the Borrower nor any of its Subsidiaries has entered into an agreement or waiver
or been requested to enter into an agreement or waiver  extending any statute of
limitations  relating to the payment or  collection  of taxes of the Borrower or
any of its Subsidiaries,  or is aware of any circumstances  that would cause the
taxable  years  or  other  taxable  periods  of  the  Borrower  or  any  of  its
Subsidiaries  not  to  be  subject  to  the  normally   applicable   statute  of
limitations. Neither the Borrower nor any of its Subsidiaries has provided, with
respect to themselves or property held by them, any consent under Section 341 of
the Code.  Neither the Borrower nor any of its  Subsidiaries  has incurred,  nor
will any of them incur,  any  material  tax  liability  in  connection  with the
Transaction or any other transactions  contemplated  hereby (it being understood
that the representation contained in this sentence does not cover any future tax
liabilities  of the Borrower or any of its  Subsidiaries  arising as a result of
the operation of their businesses in the ordinary course of business).

     7.10.  Compliance  with ERISA.  Schedule  IV sets forth,  as of the Initial
Borrowing  Date,  the name of each  Plan.  Each Plan (and  each  related  trust,
insurance contract or fund) is in substantial compliance with its terms and with
all applicable laws,  including,  without  limitation,  ERISA and the Code; each
Plan (and each related  trust,  if any) which is intended to be qualified  under
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that it meets the  requirements of Sections 401(a)

                                       32
<PAGE>

and 501(a) of the Code; neither the Borrower nor any of its ERISA Affiliates has
ever  maintained or  contributed  to, or had any obligation to contribute to (or
borne any liability with respect to) any "employee pension benefit plan," within
the meaning of Section 3(2) of ERISA, that is a "multiemployer plan," within the
meaning of Section  3(37) of ERISA,  or that is subject to the  minimum  funding
standards of Section 412 of the Code or Section 302 of ERISA or subject to Title
IV of ERISA;  neither  the  Borrower  nor any of its ERISA  Affiliates  has ever
maintained or  contributed  to, or had any obligation to contribute to (or borne
any  liability  with respect to) any Foreign  Pension  Plan;  all  contributions
required to be made with  respect to a Plan have been timely  made;  neither the
Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has incurred
any  material  liability  (including  any  indirect,   contingent  or  secondary
liability) to or on account of a Plan pursuant to Section 409,  502(i),  502(l),
515,  4204 or 4212 of ERISA or Section  4975 of the Code or expects to incur any
such material  liability under any of the foregoing sections with respect to any
Plan; no condition  exists which presents a material risk to the Borrower or any
Subsidiary  of the  Borrower  or any ERISA  Affiliate  of  incurring  a material
liability to or on account of a Plan  pursuant to the  foregoing  provisions  of
ERISA and the Code; no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of any
Plan  (other  than  routine  claims  for  benefits)  is  pending,   expected  or
threatened;  each group  health plan (as  defined in Section  607(l) of ERISA or
Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees  of the  Borrower,  any  Subsidiary  of  the  Borrower,  or any  ERISA
Affiliate has at all times been operated in  compliance  with the  provisions of
Part 6 of subtitle B of Title I of ERISA and Section  4980B of the Code,  except
for any failure to so comply which could not,  individually or in the aggregate,
reasonably be expected to result in a material  liability of the Borrower or any
Subsidiary  of the  Borrower;  no lien  imposed  under  the Code or ERISA on the
assets of the Borrower or any Subsidiary of the Borrower or any ERISA  Affiliate
exists or is likely to arise on account of any Plan;  and the  Borrower  and its
Subsidiaries  may cease  contributions to or terminate any employee benefit plan
maintained by any of them without incurring any material liability.

     7.11. The Security Documents.

          (a) The  provisions of the Security  Agreement are effective to create
in favor of the  Collateral  Agent for the  benefit of the  Secured  Creditors a
legal, valid and enforceable  security interest in all right, title and interest
of the Credit Parties in the Security  Agreement  Collateral  described therein,
and the  Collateral  Agent,  for the benefit of the Secured  Creditors,  has (or
within 10 days following the Initial Borrowing Date will have) a fully perfected
security  interest  in all  right,  title and  interest  in all of the  Security
Agreement  Collateral  described  therein,  subject to no other Liens other than
Permitted Liens.  The recordation of (x) the Grant of Security  Interest in U.S.
Patents  and (y) the  Grant  of  Security  Interest  in U.S.  Trademarks  in the
respective form attached to the Security  Agreement,  in each case in the United
States  Patent and  Trademark  Office,  together with filings on Form UCC-1 made
pursuant to the Security  Agreement,  will  create,  as may be perfected by such
filings and  recordation,  a perfected  security  interest in the United  States
trademarks and patents covered by the Security Agreement, and the recordation of

                                       33
<PAGE>

the Grant of Security  Interest in U.S.  Copyrights  in the form attached to the
Security  Agreement  with the United  States  Copyright  Office,  together  with
filings on Form UCC-1 made pursuant to the Security  Agreement,  will create, as
may be perfected by such filings and recordation,  a perfected security interest
in the United States copyrights covered by the Security Agreement.

          (b) The security interests created under the Pledge Agreement in favor
of the Collateral Agent, as Pledgee,  for the benefit of the Secured  Creditors,
constitute  perfected  security  interests  in the Pledge  Agreement  Collateral
described in the Pledge Agreement, subject to no security interests of any other
Person.  No filings or recordings  are required in order to perfect (or maintain
the  perfection  or priority  of) the security  interests  created in the Pledge
Agreement  Collateral under the Pledge Agreement other than with respect to that
portion of the Pledge Agreement  Collateral  constituting a "general intangible"
under the UCC.

     7.12. Properties.  All Real Property owned or leased by the Borrower or any
of its  Subsidiaries  as of the Initial  Borrowing  Date,  and the nature of the
interest  therein,  is correctly set forth in Schedule III. Each of the Borrower
and each of its  Subsidiaries  has good and  indefeasible  title to all material
properties owned by it, including all material property reflected in the balance
sheets  referred to in Section 7.5(a)  (except as sold or otherwise  disposed of
since the date of such balance  sheet in the  ordinary  course of business or as
permitted by the terms of this  Agreement),  free and clear of all Liens,  other
than Permitted Liens.

     7.13. Capitalization. On the Initial Borrowing Date, the authorized capital
stock of the Borrower consists of 100,000,000 shares of common stock, $0.001 par
value,  of which  35,414,129  shares are issued and  outstanding,  and 1,000,000
authorized  shares  of  preferred  stock,  none of which  are  outstanding.  All
outstanding  shares of capital  stock of the Borrower have been duly and validly
issued  and are  fully  paid  and  non-assessable.  The  Borrower  does not have
outstanding  any  capital  stock  or  other   securities   convertible  into  or
exchangeable  for  its  capital  stock  or any  rights  to  subscribe  for or to
purchase, or any options for the purchase of, or any agreement providing for the
issuance  (contingent or otherwise)  of, or any calls,  commitments or claims of
any character relating to, its capital stock.

     7.14.  Subsidiaries.  As of the Initial Borrowing Date, the Borrower has no
Subsidiaries  other than those  Subsidiaries  listed on Schedule  V.  Schedule V
correctly sets forth as of the Initial Borrowing Date, the percentage  ownership
(direct or  indirect)  of the  Borrower in each class of capital  stock or other
equity of its Subsidiaries and also identifies the direct owner thereof.

     7.15.  Compliance with Statutes,  etc. Each of the Borrower and each of its
Subsidiaries  is in compliance  with all applicable  statutes,  regulations  and
orders of, and all applicable  restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of  its  property   (including,   without   limitation,   applicable   statutes,
regulations,  orders and restrictions  relating to  environmental  standards and
controls),  except such  noncompliances as could not, either  individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

                                       34
<PAGE>

     7.16.  Investment  Company  Act.  Neither  the  Borrower  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.

     7.17.  Public Utility Holdings Company Act. Neither the Borrower nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary  company"
of a "holding company" within the meaning of the Public Utility Holdings Company
Act of 1935, as amended.

     7.18. Environmental Matters.

          (a) Each of the Borrower and each of its Subsidiaries is in compliance
with all  applicable  Environmental  Laws and the  requirements  of any  permits
issued under such Environmental  Laws. There are no pending or, to the knowledge
of the Borrower,  threatened Environmental Claims against the Borrower or any of
its Subsidiaries or any Real Property owned,  leased or operated by the Borrower
or any  of  its  Subsidiaries  (including  any  such  claim  arising  out of the
ownership,  lease or operation by the Borrower or any of its Subsidiaries of any
Real Property  formerly owned,  leased or operated by the Borrower or any of its
Subsidiaries  but no longer owned,  leased or operated by the Borrower or any of
its Subsidiaries). There are no facts, circumstances,  conditions or occurrences
with  respect  to the  business  or  operations  of the  Borrower  or any of its
Subsidiaries,  or any Real Property  owned, or to the knowledge of the Borrower,
leased or operated by the  Borrower or any of its  Subsidiaries  (including  any
Real Property  formerly owned,  leased or operated by the Borrower or any of its
Subsidiaries  but no longer owned,  leased or operated by the Borrower or any of
its Subsidiaries) or, to the knowledge of the Borrower,  any property  adjoining
or adjacent to any such Real Property  that could be reasonably  expected (i) to
form the basis of an  Environmental  Claim  against  the  Borrower or any of its
Subsidiaries or any Real Property  owned,  leased or operated by the Borrower or
any of its  Subsidiaries  or (ii) to cause any Real  Property  owned,  leased or
operated  by  the  Borrower  or any of its  Subsidiaries  to be  subject  to any
restrictions on the ownership,  lease, occupancy or transferability of such Real
Property  by  the  Borrower  or any of its  Subsidiaries  under  any  applicable
Environmental Law.

          (b) Hazardous  Materials  have not at any time been  generated,  used,
treated or stored on, or  transported  to or from,  or Released on or from,  any
Real  Property  owned,  leased  or  operated  by  the  Borrower  or  any  of its
Subsidiaries  or, to the  knowledge of the Borrower,  any property  adjoining or
adjacent to any Real Property, where such generation,  use, treatment,  storage,
transportation  or Release  has  violated  or could be  reasonably  expected  to
violate any applicable Environmental Law or give rise to an Environmental Claim.

          (c) Notwithstanding anything to the contrary in this Section 7.18, the
representations and warranties made in this Section 7.18 shall be untrue only if
the effect of any or all conditions, violations, claims, restrictions,  failures
and noncompliances of the types described above could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

                                       35
<PAGE>

     7.19. Labor Relations.  Neither the Borrower nor any of its Subsidiaries is
engaged in any unfair labor practice that could  reasonably be expected,  either
individually or in the aggregate,  to have a Material  Adverse Effect.  There is
(i) no unfair labor practice  complaint  pending  against the Borrower or any of
its Subsidiaries or, to the knowledge of the Borrower, threatened against any of
them, before the National Labor Relations Board, and no grievance or arbitration
proceeding  arising out of or under any  collective  bargaining  agreement is so
pending against the Borrower or any of its  Subsidiaries or, to the knowledge of
the Borrower,  threatened  against any of them,  (ii) no strike,  labor dispute,
slowdown or stoppage pending against the Borrower or any of its Subsidiaries or,
to the knowledge of the Borrower,  threatened against the Borrower or any of its
Subsidiaries and (iii) no union  representation  question exists with respect to
the employees of the Borrower or any of its  Subsidiaries,  except (with respect
to any matter specified in clause (i), (ii) or (iii) above,  either individually
or in the aggregate) such as could not reasonably be expected to have a Material
Adverse Effect.

     7.20.  Intellectual  Property,  etc.  Each of the  Borrower and each of its
Subsidiaries owns or has the right to use all the patents, trademarks,  permits,
domain names,  service marks,  trade names,  copyrights,  licenses,  franchises,
inventions,  trade secrets,  proprietary  information  and know-how of any type,
whether or not  written  (including,  but not  limited  to,  rights in  computer
programs and databases)  and formulas,  or rights with respect to the foregoing,
and has  obtained  assignments  of all  leases,  licenses  and  other  rights of
whatever nature, necessary for the present conduct of its business,  without any
known conflict with the rights of others which,  or the failure to obtain which,
as the case may be, could reasonably be expected,  either individually or in the
aggregate, to have a Material Adverse Effect,

     7.21. Indebtedness. Schedule VII sets forth a true and complete list of all
Indebtedness   (including  Contingent  Obligations)  of  the  Borrower  and  its
Subsidiaries as of the Initial Borrowing Date and which is to remain outstanding
after  giving  effect to the  Transaction,  in each case  showing the  aggregate
principal amount thereof and the name of the respective  borrower and any Credit
Party or any of its  Subsidiaries  which directly or indirectly  guarantees such
debt.

     7.22.  Insurance.  Schedule VIII sets forth a true and complete  listing of
all insurance  maintained by the Borrower and its Subsidiaries as of the Initial
Borrowing  Date,  with the  amounts  insured  (and any  deductibles)  set  forth
therein.

     7.23.    Representations   and   Warranties   in   Other   Documents.   All
representations and warranties set forth in the other Credit Documents were true
and   correct  in  all   material   respects  at  the  time  as  of  which  such
representations  and warranties were made (or deemed made) and shall be true and
correct in all  material  respects as of the Initial  Borrowing  Date as if such
representations  or  warranties  were  made on and as of  such  date  (it  being
understood  and agreed that any such  representation  or  warranty  which by its
terms is made as of a specified  date shall be true and correct in all  material
respects as of such specified date).

     7.24.  Legal  Names;   Type  of  Organization  (and  Whether  a  Registered
Organization);  Jurisdiction of Organization,  etc.  Schedule VI attached hereto
contains the exact legal name of the Borrower and each Subsidiary Guarantor, the
type of organization of the Borrower and each Subsidiary  Guarantor,  whether or

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<PAGE>

not the Borrower and each Subsidiary Guarantor is a registered organization, the
jurisdiction of organization of the Borrower and each Subsidiary Guarantor,  and
the  organizational  identification  number  (if any) of the  Borrower  and each
Subsidiary  Guarantor.  To the  extent  that  the  Borrower  or  any  Subsidiary
Guarantor  does not have an  organizational  identification  number  on the date
hereof and later obtains one, the Borrower or such  Subsidiary  Guarantor  shall
promptly   thereafter  notify  the  Collateral  Agent  of  such   organizational
identification number and shall take all actions reasonably  satisfactory to the
Collateral  Agent to the extent  necessary to maintain the security  interest of
the  Collateral  Agent in the  Collateral  intended to be granted  hereby  fully
perfected and in full force and effect.

     SECTION 8. AFFIRMATIVE COVENANTS.  The Borrower hereby covenants and agrees
that on and after the  Effective  Date and  until the Total  Commitment  and all
Letters of Credit have  terminated and the Loans,  Notes and Unpaid Drawings (in
each case together with interest thereon), Fees and all other Obligations (other
than indemnities  described in Section 13.13 which are not then due and payable)
incurred hereunder and thereunder, are paid in full:

     8.1. Information Covenants. The Borrower will furnish to each Lender:

          (a) Monthly Reports. Within 30 days after the end of each fiscal month
of the Borrower (45 days in the event such fiscal month is also a fiscal quarter
end of the  Borrower)  (commencing  with its fiscal month ending on February 28,
2003), the consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal  month and the related  consolidated  statement of income
and statement of cash flows for such fiscal month and for the elapsed portion of
the  fiscal  year  ended with the last day of such  fiscal  month,  in each case
setting  forth  comparative  figures for the  corresponding  fiscal month in the
prior fiscal year and comparable  budgeted  figures for such fiscal month as set
forth in the respective  budget  delivered  pursuant to Section  8.1(d),  all of
which shall be certified by the chief financial officer or the controller of the
Borrower that they fairly  present in all material  respects in accordance  with
generally accepted accounting principles the financial condition of the Borrower
and its  Subsidiaries  as of the  dates  indicated  and  the  results  of  their
operations  for  the  periods  indicated,   subject  to  normal  year-end  audit
adjustments and the absence of footnotes.

          (b)  Annual  Financial  Statements.  Within 90 days after the close of
each fiscal year of the  Borrower,  (i) the  consolidated  balance  sheet of the
Borrower and its  Subsidiaries as at the end of such fiscal year and the related
consolidated  statements  of income and retained  earnings and statement of cash
flows for such fiscal year setting forth  comparative  figures for the preceding
fiscal year and  certified  without  qualification  or going  concern  issues by
Deloitte Touche  Tohmatsu or other  independent  auditor of recognized  national
standing  selected by the Borrower  and  reasonably  acceptable  to the Required
Lenders, together with a report of such audit firm stating that in the course of
its  regular  audit  of  the  financial  statements  of  the  Borrower  and  its
Subsidiaries,  which audit was conducted in accordance  with generally  accepted
auditing  standards,  such audit firm obtained no knowledge of any Default or an
Event of Default relating to financial or accounting  matters which has occurred
and is continuing or, if in the opinion of such  accounting  firm such a Default
or an Event of Default has  occurred  and is  continuing,  a statement as to the
nature  thereof,  (ii)  containing  a  computation  of each  financial  ratio or

                                       37
<PAGE>

restriction contained in this Agreement,  and (iii) management's  discussion and
analysis of the important  operational  and financial  developments  during such
fiscal year.

          (c)  Management  Letters.  Promptly after the Borrower's or any of its
Subsidiaries'  receipt thereof, a copy of any "management  letter" received from
its auditor and management's response thereto.

          (d)  Budgets.  No later than 30 days  following  the first day of each
fiscal year of the Borrower,  a budget in form  reasonably  satisfactory  to the
Administrative Agent (including budgeted statements of income,  sources and uses
of  cash  and  balance  sheets  for  the  Borrower  and  its  Subsidiaries  on a
consolidated  basis)  (i) for each of the  twelve  months  of such  fiscal  year
prepared  in detail and (ii) for the two  immediately  succeeding  fiscal  years
prepared  in  summary  form,  in  each  case  setting  forth,  with  appropriate
discussion, the principal assumptions upon which such budget is based; provided,
however,  for the Fiscal Year 2003, the Borrower shall have until March 31, 2003
to deliver such statement of sources and uses of cash and balance sheet only.

          (e) Officer's  Certificates.  Within 45 days after each fiscal quarter
of the Borrower,  a compliance  certificate from the chief financial  officer or
the  controller of the Borrower in the form of Exhibit J certifying on behalf of
the Borrower that, (x) to such  officer's best knowledge  after due inquiry,  no
Default or Event of Default has occurred and is continuing or, if any Default or
Event of Default  has  occurred  and is  continuing,  specifying  the nature and
extent  thereof,  which  certificate  shall set forth in  reasonable  detail the
calculations  required to establish  whether the  Borrower and its  Subsidiaries
were in  compliance  with the  provisions  of Sections  4.2,  9.1(x),  9.1(xii),
9.2(iv),  9.4(ii),  9.5(v) and 9.7 through 9.12,  inclusive,  at the end of such
fiscal  month,  quarter or year,  as the case may be and (y) (i) no changes  are
required to be made to any of Schedule VI hereto, Annexes B, C, F, H, 1, J and K
of the  Security  Agreement or Annexes A through F of the Pledge  Agreement,  in
each case so as to make the information set forth therein  accurate and complete
as of the date of such certificate,  or (ii) to the extent that such information
is no longer  accurate and complete as of such date,  list in reasonable  detail
all  information  necessary to make such Schedule and all such Annexes  accurate
and complete (at which time such Schedule  and/or all such Annexes,  as the case
may be, shall be deemed modified to reflect such information) .

          (f)  Notice  of  Default,  Litigation  and  Material  Adverse  Effect.
Promptly,  and in any event within three  Business Days after any officer of the
Borrower or any of its Subsidiaries obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of Default, (ii)
any litigation or governmental  investigation or proceeding  pending against the
Borrower or any of its  Subsidiaries  (x) which,  either  individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect or (y)
with respect to any Credit  Document,  (iii) the  occurrence  of any event which
constitutes a default under, or causes the termination of, any material contract
of the Borrower or any of its Subsidiaries,  including any license, distribution
agreement, supply agreement or manufacturing agreement, or (iv) any other event,
change or circumstance  that has had, or could reasonably be expected to have, a
Material Adverse Effect.

                                       38
<PAGE>

          (g) Other Reports and Filings.  Promptly  after the filing or delivery
thereof,  copies of all financial  information,  proxy materials and reports, if
any, which the Borrower or any of its Subsidiaries  shall publicly file with the
Securities  and  Exchange  Commission  or any  successor  thereto (the "SEC") or
deliver to holders (or any trustee,  agent or other representative  therefor) of
its material Indebtedness  pursuant to the terms of the documentation  governing
such Indebtedness.

          (h) Environmental Matters.  Promptly after any officer of the Borrower
or any of its Subsidiaries  obtains knowledge thereof,  notice of one or more of
the  following  environmental  matters  to the  extent  that such  environmental
matters,   either   individually   or  when   aggregated  with  all  other  such
environmental  matters,  could reasonably be expected to have a Material Adverse
Effect:

          (i) any pending or threatened Environmental Claim against the Borrower
     or any of its  Subsidiaries or any Real Property owned,  leased or operated
     by the Borrower or any of its Subsidiaries;

          (ii) any  condition or occurrence on or arising from any Real Property
     owned,  leased or operated by the Borrower or any of its Subsidiaries  that
     (a) results in  noncompliance  by the  Borrower or any of its  Subsidiaries
     with any applicable  Environmental  Law or (b) could reasonably be expected
     to form the basis of an Environmental  Claim against the Borrower or any of
     its Subsidiaries or any such Real Property;

          (iii) any condition or occurrence on any Real Property  owned,  leased
     or  operated  by  the  Borrower  or  any of  its  Subsidiaries  that  could
     reasonably  be  expected  to cause such Real  Property to be subject to any
     restrictions on the ownership,  lease, occupancy, use or transferability by
     the Borrower or any of its  Subsidiaries  of such Real  Property  under any
     Environmental Law; and

          (iv) the taking of any removal or  remedial  action in response to the
     actual or alleged  presence of any Hazardous  Material on any Real Property
     owned,  leased or operated by the  Borrower or any of its  Subsidiaries  as
     required  by  any   Environmental   Law  or  any   governmental   or  other
     administrative  agency;  provided  that in any  event  the  Borrower  shall
     deliver to each Lender all notices  received by the  Borrower or any of its
     Subsidiaries from any government or governmental  agency under, or pursuant
     to,  CERCLA  which  identify  the  Borrower or any of its  Subsidiaries  as
     potentially  responsible  parties for remediation  costs or which otherwise
     notify the Borrower or any of its Subsidiaries of potential liability under
     CERCLA.

All such notices shall  describe in  reasonable  detail the nature of the claim,
investigation,  condition,  occurrence  or  removal or  remedial  action and the
Borrower's or such Subsidiary's response thereto.

                                       39
<PAGE>

          (i) Borrowing Base Certificate.  Within thirty (30) days after the end
of each month (45 days in the event such month is also a fiscal  quarter  end of
the Borrower), deliver to the Administrative Agent a Borrowing Base Certificate,
certified as accurate by the Borrower and acceptable to the Administrative Agent
in its sole and absolute discretion.

          (j) Aged Accounts  Schedule.  Within thirty (30) days after the end of
each month (45 days in the event such month is also a fiscal  quarter end of the
Borrower),  deliver to the Administrative Agent an aged schedule of the Accounts
of the  Borrower,  listing the name and amount due from each Account  Debtor and
showing the  aggregate  amounts due from (i) 0-30 days,  (ii) 31-60 days,  (iii)
61-90  days  and (iv)  more  than 90  days,  and  certified  as  accurate  by an
appropriate officer of the Borrower.

          (k) Inventory  Reports.  Within thirty (30) days after the end of each
month  (45 days in the  event  such  month is also a fiscal  quarter  end of the
Borrower),  deliver to the Administrative Agent an inventory report, in form and
substance  satisfactory to the Administrative Agent, certified as accurate by an
appropriate officer of the Borrower.

          (l) Field Audits.  The Borrower shall, and shall cause each Subsidiary
to, allow the Administrative  Agent, at the Borrower's sole expense,  to conduct
an annual  field  examination  of the  Collateral,  the results of which must be
satisfactory to the Required Lenders in the Required  Lenders' sole and absolute
discretion.

          (m) Other  Information.  From time to time, such other  information or
documents  (financial or  otherwise)  with respect to the Borrower or any of its
Subsidiaries   as  the   Administrative   Agent  or  any  Lender   (through  the
Administrative Agent) may reasonably request.

     8.2.    Books,     Records    and     Inspections;     Annual     Meetings.

          (a) The Borrower  will,  and will cause each of its  Subsidiaries  to,
keep proper books of record and accounts in which full, true and correct entries
in conformity with generally accepted accounting principles and all requirements
of law  shall  be made of all  dealings  and  transactions  in  relation  to its
business  and  activities.  The  Borrower  will,  and  will  cause  each  of its
Subsidiaries  to,  permit  officers  and  designated   representatives   of  the
Administrative  Agent or any  Lender to visit and  inspect,  under  guidance  of
officers  of the  Borrower  or such  Subsidiary,  any of the  properties  of the
Borrower or such Subsidiary, and to examine the books of account of the Borrower
or such  Subsidiary  and  discuss  the  affairs,  finances  and  accounts of the
Borrower  or such  Subsidiary  with,  and be  advised as to the same by, its and
their officers and independent accountants, all upon reasonable prior notice and
at such  reasonable  times and  intervals and to such  reasonable  extent as the
Administrative  Agent or any such Lender may reasonably request. If a Default or
an Event of Default has occurred and is  continuing or if access is necessary to
preserve or protect the  Collateral as determined by the  Administrative  Agent,
the Borrower shall,  and shall cause each of its  Subsidiaries  to, provide such
access to the  Administrative  Agent at all times and  without  advance  notice.
Furthermore,  so long as any  Default or Event of Default  has  occurred  and is
continuing,  the  Borrower  and  each  of its  Subsidiaries  shall  provide  the
Administrative Agent with access to their suppliers and customers.

                                       40
<PAGE>

          (b) At a date to be mutually  agreed upon  between the  Administrative
Agent and the Borrower occurring on or prior to the 120th day after the close of
each fiscal  year of the  Borrower,  the  Borrower  will,  at the request of the
Administrative  Agent,  hold a meeting with all of the Lenders at which  meeting
will be reviewed the financial  results of the Borrower and its Subsidiaries for
the previous  fiscal year and the budgets  presented for the current fiscal year
of the Borrower.

     8.3. Maintenance of Property; Insurance.

          (a) The Borrower will, and will cause each of its Subsidiaries to, (i)
keep all property necessary to the business of the Borrower and its Subsidiaries
in good working  order and  condition,  ordinary  wear and tear  excepted,  (ii)
maintain with financially sound and reputable  insurance  companies insurance on
all such property and against all such risks as is consistent  and in accordance
with  industry  practice  for  companies   similarly   situated  owning  similar
properties   and  engaged  in  similar   businesses  as  the  Borrower  and  its
Subsidiaries  and (iii) furnish to the  Administrative  Agent,  upon its request
therefor,  full  information  as to the  insurance  carried.  In addition to the
requirements of the  immediately  preceding  sentence,  the Borrower will at all
times cause  insurance of the types  described in Schedule VIII to be maintained
(with the same scope of coverage as that  described in Schedule  VIII) at levels
which are  consistent  with  their  practices  immediately  before  the  Initial
Borrowing Date. Such insurance  shall include  physical damage  insurance on all
real and personal property  (whether now owned or hereafter  acquired) on an all
risk basis and business interruption  insurance.  The provisions of this Section
8.3 shall be deemed  supplemental  to, but not duplicative of, the provisions of
any Security Documents that require the maintenance of insurance. In addition to
the foregoing,  the Borrower acknowledges and agrees that (x) the Administrative
Agent has the right,  on an annual  basis,  to review the  insurance  then being
maintained by the Borrower and its  Subsidiaries and to require the Borrower and
its  Subsidiaries  to increase  their  levels of  coverage  from that which then
exists to the extent that the  Administrative  Agent has a  reasonable  basis to
require same and (y) it will, and will cause each of its Subsidiaries to, within
30 days following  such a request by the  Administrative  Agent,  use reasonable
commercial efforts to obtain such increased insurance coverage.

          (b) The Borrower will, and will cause each of its  Subsidiaries to, at
all times keep its property  insured in favor of the Collateral  Agent,  and all
policies or  certificates  (or  certified  copies  thereof) with respect to such
insurance  (and any other  insurance  maintained  by the  Borrower  and/or  such
Subsidiaries) (i) shall be endorsed to the Collateral  Agent's  satisfaction for
the benefit of the Collateral Agent (including,  without  limitation,  by naming
the Collateral Agent as loss payee and/or additional insured),  (ii) shall state
that such  insurance  policies  shall not be canceled  without at least 30 days'
prior written notice thereof by the respective  insurer to the Collateral Agent,
(iii) shall provide that the respective  insurers  irrevocably waive any and all
rights of subrogation with respect to the Collateral Agent and the other Secured
Creditors, and (iv) shall be deposited with the Collateral Agent.

          (c) If the Borrower or any of its Subsidiaries  shall fail to maintain
insurance in accordance  with this Section 8.3, or if the Borrower or any of its
Subsidiaries  shall fail to so endorse and deposit all policies or  certificates

                                       41
<PAGE>

with respect thereto,  the Administrative  Agent shall have the right (but shall
be under no  obligation)  to procure such  insurance and the Borrower  agrees to
reimburse  the  Administrative  Agent for all  reasonable  costs and expenses of
procuring such insurance.

     8.4. Existence;  Franchises.  The Borrower will, and will cause each of its
Subsidiaries  to, do or cause to be done,  all things  necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses, permits,  copyrights,  trademarks and patents; provided, however, that
nothing  in this  Section  8.4  shall  prevent  (i)  sales of  assets  and other
transactions  by the  Borrower or any of its  Subsidiaries  in  accordance  with
Section 9.2 or (ii) the  withdrawal  by the Borrower or any of its  Subsidiaries
(other  than First  Horizon  International)  of its  qualification  as a foreign
corporation,  partnership or limited liability  company,  as the case may be, in
any  jurisdiction  if such withdrawal  could not, either  individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

     8.5. Compliance with Statutes,  etc. The Borrower will, and will cause each
of its  Subsidiaries  to, comply with all applicable  statutes,  regulations and
orders of, and all applicable  restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of  its  property  (including  applicable  statutes,   regulations,  orders  and
restrictions  relating to  environmental  standards and  controls),  except such
noncompliances as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

     8.6. Compliance with Environmental Laws.

          (a) The Borrower will comply,  and will cause each of its Subsidiaries
to comply,  with all Environmental  Laws and permits  applicable to, or required
by, the  ownership,  lease or use of its Real  Property now or hereafter  owned,
leased or  operated  by the  Borrower  or any of its  Subsidiaries,  except such
noncompliances as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, and will promptly pay or cause to
be paid all costs and expenses incurred in connection with such compliance,  and
will keep or cause to be kept all such Real Property free and clear of any Liens
imposed pursuant to such Environmental Laws. Neither the Borrower nor any of its
Subsidiaries will generate,  use, treat, store, Release or dispose of, or permit
the  generation,  use,  treatment,  storage,  Release or disposal  of  Hazardous
Materials on any Real Property now or hereafter owned, leased or operated by the
Borrower or any of its Subsidiaries,  or transport or permit the  transportation
of Hazardous  Materials to or from any such Real Property,  except for Hazardous
Materials generated,  used, treated, stored, Released or disposed of at any such
Real  Properties  in compliance  in all material  respects  with all  applicable
Environmental Laws and as required in connection with the normal operation,  use
and  maintenance  of the  business or  operations  of the Borrower or any of its
Subsidiaries.

          (b) (i) After the receipt by the Administrative Agent or any Lender of
any notice of the type  described in Section  8.1(h),  (ii) at any time that the
Borrower or any of its Subsidiaries are not in compliance with Section 8.6(a) or
(iii) in the event that any Event of Default is in existence,  the Borrower will

                                       42
<PAGE>

provide,  at the  sole  expense  of the  Borrower  and  at  the  request  of the
Administrative  Agent, an environmental  site assessment  report  concerning any
Real  Property  owned,  leased  or  operated  by  the  Borrower  or  any  of its
Subsidiaries,  prepared by an environmental  consulting firm reasonably approved
by the  Administrative  Agent,  indicating  the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in connection
with such Hazardous  Materials on such Real  Property.  If the Borrower fails to
provide the same within 45 days after such request was made, the  Administrative
Agent may order the same, the cost of which shall be borne by the Borrower,  and
the Borrower shall grant and hereby grants to the  Administrative  Agent and the
Lenders  and  their   respective   agents  access  to  such  Real  Property  and
specifically  grants the  Administrative  Agent and the  Lenders an  irrevocable
non-exclusive  license,  subject to the rights of tenants,  to undertake such an
assessment at any reasonable time upon reasonable notice to the Borrower, all at
the sole expense of the Borrower.

     8.7.  ERISA.  As soon as possible  and, in any event,  within ten (10) days
after the Borrower,  any Subsidiary of the Borrower or any ERISA Affiliate knows
or has reason to know of the  occurrence of any of the  following,  the Borrower
will deliver to each of the Lenders a certificate of the chief financial officer
or the  Controller  of the  Borrower  setting  forth the full details as to such
occurrence and the action,  if any, that the Borrower,  such  Subsidiary or such
ERISA  Affiliate  is required or  proposes  to take,  together  with any notices
required or proposed to be given or filed by the Borrower, such Subsidiary,  the
Plan  administrator  or such  ERISA  Affiliate  to or with the PBGC or any other
governmental  agency,  or a Plan  participant  and any  notices  received by the
Borrower,  such  Subsidiary or such ERISA  Affiliate  from the PBGC or any other
government agency, or a Plan participant with respect thereto: that a Reportable
Event has  occurred  (except  to the extent  that the  Borrower  has  previously
delivered  to the Lenders a  certificate  and notices (if any)  concerning  such
event  pursuant  to the next clause  hereof);  that a  contributing  sponsor (as
defined in Section  4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
is subject to the  advance  reporting  requirement  of PBGC  Regulation  Section
4043.61 (without regard to subparagraph (b)(1) thereof),  and an event described
in subsection  .62, .63,  .64, .65, .66, .67 or .68 of PBGC  Regulation  Section
4043 is  reasonably  expected  to occur  with  respect  to such Plan  within the
following 30 days; that an accumulated funding deficiency, within the meaning of
Section  412 of the  Code or  Section  302 of  ERISA,  has been  incurred  or an
application  may be or has been made for a waiver or modification of the minimum
funding standard (including any required  installment  payments) or an extension
of any  amortization  period under Section 412 of the Code or Section 303 or 304
of ERISA with respect to a Plan; that any contribution  required to be made with
respect to a Plan or Foreign  Pension Plan has not been timely made; that a Plan
has been or may be terminated,  reorganized,  partitioned or declared  insolvent
under Title IV of ERISA;  that a Plan has an Unfunded  Current  Liability;  that
proceedings  may be or have been instituted to terminate or appoint a trustee to
administer a Plan which is subject to Title IV of ERISA;  that a proceeding  has
been  instituted  pursuant  to  Section  515 of ERISA to  collect  a  delinquent
contribution to a Plan; that the Borrower, any Subsidiary of the Borrower or any
ERISA  Affiliate  will  or may  incur  any  material  liability  (including  any
indirect,   contingent,  or  secondary  liability)  to  or  on  account  of  the
termination of or withdrawal from a Plan under Section 4062,  4063,  4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan under Section  401(a)(29),

                                       43
<PAGE>

4971, 4975 or 4980 of the Code or Section 409, 502(i) or 502(1) of ERISA or with
respect to a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2)  of the Code) under  Section 4980B of the Code; or that the Borrower
or any  Subsidiary of the Borrower may incur any material  liability for retiree
benefits  pursuant to any employee  welfare  benefit plan (as defined in Section
3(1) of ERISA) that  provides  benefits  to retired  employees  or other  former
employees  (other than as required by the severance pay Plans of the Borrower or
any of its  Subsidiaries  or  Section  601 of ERISA) or any Plan or any  Foreign
Pension  Plan.  The Borrower  will deliver to each of the Lenders  copies of any
records,  documents or other information that must be furnished to the PBGC with
respect to any Plan  pursuant  to Section  4010 of ERISA.  At the request of any
Lender,  the Borrower  will also  deliver to such Lender a complete  copy of the
annual  report (on  Internal  Revenue  Service  Form  5500-series)  of each Plan
(including,  to  the  extent  required,  the  related  financial  and  actuarial
statements  and  opinions  and  other  supporting  statements,   certifications,
schedules  and  information)  required  to be filed  with the  Internal  Revenue
Service.  In addition to any  certificates  or notices  delivered to the Lenders
pursuant to the first sentence hereof, copies of annual reports and any records,
documents or other  information  required to be  furnished to the PBGC,  and any
material notices received by the Borrower, any Subsidiary of the Borrower or any
ERISA  Affiliate  with  respect to any Plan or Foreign  Pension Plan or received
from any  governmental  agency or plan  administrator or sponsor or trustee with
respect to any multiemployer  plan (as defined in Section  4001(a)(3) of ERISA),
shall be  delivered  to the  Lenders  no later than ten (10) days after the date
such records, documents and/or information has been furnished to the PBGC or any
other governmental agency or such notice has been received by the Borrower,  the
respective Subsidiary or the ERISA Affiliate,  as applicable.  The Borrower will
ensure,  and cause  each of its  applicable  Subsidiaries  to  ensure,  that all
Foreign Pension Plans administered by it or into which it makes payments obtains
or retains (as applicable) registered status under and as required by applicable
law and is  administered  in a timely manner in all respects in compliance  with
all  applicable  laws except where the failure to do any of the foregoing  could
not, either  individually or in the aggregate,  reasonably be expected to have a
Material Adverse Effect.

     8.8. End of Fiscal Years; Fiscal Quarters. The Borrower will cause (i) each
of its,  and each of its  Subsidiaries',  fiscal  years to end on December 31 of
each year and (ii) each of its, and each of its  Subsidiaries',  fiscal quarters
to end on dates which are consistent with a fiscal year end as described above.

     8.9. Performance of Obligations.  The Borrower will, and will cause each of
its  Subsidiaries  to,  perform all of its  obligations  under the terms of each
mortgage,  indenture, security agreement, loan agreement or credit agreement and
each other agreement,  contract or instrument by which it is bound,  except such
non-performances  as  could  not,  either  individually  or  in  the  aggregate,
reasonably be expected to have a Material Adverse Effect.

     8.10. Payment of Taxes. The Borrower will pay and discharge, and will cause
each of its  Subsidiaries  to pay and  discharge,  all  taxes,  assessments  and
governmental  charges or levies imposed upon it or upon its income or profits or
upon any properties belonging to it, prior to the date on which penalties attach

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<PAGE>

thereto,  and all lawful claims which, if unpaid,  might become a Lien or charge
upon any  properties  of the Borrower or any of its  Subsidiaries  not otherwise
permitted  under Section  9.1(i);  provided that neither the Borrower nor any of
its Subsidiaries shall be required to pay any such tax, assessment, charge, levy
or claim which is being contested in good faith and by proper  proceedings if it
has  maintained  adequate  reserves  with  respect  thereto in  accordance  with
generally accepted accounting principles.

     8.11. Use of Proceeds. The Borrower will use the proceeds of the Loans only
as provided in Section 7.8.

     8.12. Additional Security; Further Assurances, etc.

          (a) The Borrower will, and will cause each of the other Credit Parties
that are Subsidiaries  (other than  International  Subsidiaries) of the Borrower
to,  grant to the  Collateral  Agent for the  benefit of the  Secured  Creditors
security  interests and Mortgages in such assets and  properties of the Borrower
and such other Credit Parties that are  Subsidiaries  (other than  International
Subsidiaries)  of the  Borrower  as are not  covered  by the  original  Security
Documents  and  as  may  be  reasonably  requested  from  time  to  time  by the
Administrative  Agent or the Required  Lenders  (collectively,  the  "Additional
Security Documents"). All such security interests and Mortgages shall be granted
pursuant to documentation  reasonably  satisfactory in form and substance to the
Administrative  Agent  and shall  constitute  valid  and  enforceable  perfected
security  interests  and  Mortgages  superior  to and prior to the rights of all
third  Persons and subject to no other Liens  except for  Permitted  Liens.  The
Additional  Security  Documents or instruments  related  thereto shall have been
duly  recorded or filed in such manner and in such places as are required by law
to establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Additional  Security  Documents and
all taxes,  fees and other charges  payable in connection  therewith  shall have
been paid in full.

          (b) The Borrower will, and will cause each of the other Credit Parties
that are Subsidiaries  (other than  International  Subsidiaries) of the Borrower
to, at the expense of the Borrower, make, execute,  endorse,  acknowledge,  file
and/or  deliver  to the  Collateral  Agent  from  time  to time  such  vouchers,
invoices,   schedules,   confirmatory   assignments,    conveyances,   financing
statements,  transfer  endorsements,  powers  of  attorney,  certificates,  real
property  surveys,  reports,   landlord  waivers,  bailee  agreements,   control
agreements  and other  assurances  or  instruments  and take such further  steps
relating  to the  Collateral  covered by any of the  Security  Documents  as the
Collateral  Agent may reasonably  require.  Furthermore,  the Borrower will, and
will  cause  the  other  Credit  Parties  that  are  Subsidiaries   (other  than
International  Subsidiaries) of the Borrower to, deliver to the Collateral Agent
such opinions of counsel,  title insurance and other related documents as may be
reasonably  requested  by the  Administrative  Agent to assure  itself that this
Section 8.12 has been complied with.

          (c) If the  Administrative  Agent or the Required  Lenders  reasonably
determine  that  they  are  required  by law or  regulation  to have  appraisals
prepared in respect of any Real  Property of the Borrower  and its  Subsidiaries
constituting Collateral, the Borrower will, at their own expense, provide to the
Administrative Agent appraisals which satisfy the applicable requirements of the

                                       45
<PAGE>

Real Estate Appraisal  Reform  Amendments of the Financial  Institution  Reform,
Recovery and Enforcement  Act of 1989, as amended,  and which shall otherwise be
in form and substance reasonably satisfactory to the Administrative Agent.

          (d) The  Borrower  agrees  that each  action  required  by clauses (a)
through (c) of this Section 8.12 shall be completed as soon as possible,  but in
no event  later than 75 days after such action is  requested  to be taken by the
Administrative  Agent or the Required  Lenders;  provided that, in no event will
the Borrower or any of its  Subsidiaries  be required to take any action,  other
than using its  reasonable  commercial  efforts,  to obtain  consents from third
parties with respect to its compliance with this Section 8.12.

     8.13.  Ownership of  Subsidiaries;  etc. The Borrower  will, and will cause
each of its  Subsidiaries  to, own 100% of the  capital  stock and other  equity
interests of each of their Subsidiaries (other than directors' qualifying shares
to the extent required by applicable law).

     8.14. Corporate  Separateness.  Each Credit Party will, and will cause each
of its Subsidiaries to, satisfy customary  corporate,  limited liability company
or partnership formalities, as the case may be, including the holding of regular
board of  directors'  and  shareholders'  meetings  or  action by  directors  or
shareholders  without  a  meeting  and the  maintenance  of  corporate,  limited
liability  company or  partnership,  as the case may be,  offices  and  records.
Finally,  neither the Borrower nor any of its Subsidiaries will take any action,
or conduct its affairs in a manner  which is likely to result in the  corporate,
limited liability  company or partnership,  as the case may be, existence of the
Borrower  or  any of its  Subsidiaries  being  ignored,  or in  the  assets  and
liabilities  of the  Borrower  or any of its  Subsidiaries  being  substantively
consolidated  with  those  of the  Borrower  and  its  other  Subsidiaries  in a
bankruptcy, reorganization or other insolvency proceeding.

     8.15.  Landlord  Waivers.  The Borrower will use its reasonable  commercial
efforts  to obtain  and  deliver  to the  Administrative  Agent  fully  executed
landlord waivers, as requested by the Administrative  Agent prior to the Initial
Borrowing  Date and listed on Schedule  XII,  as promptly as possible  after the
Initial Borrowing Date.

     8.16. Pledge Agreement Collateral. Unless sooner demanded by the Collateral
Agent, concurrently with the funding of the initial loan under the First Horizon
International  Financing,   each  Credit  Party  shall  have  delivered  to  the
Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral,
if any, referred to in the Pledge Agreement and then owned by such Credit Party,
(x)  endorsed  in blank  in the case of  promissory  notes  constituting  Pledge
Agreement Collateral and (y) together with executed and undated endorsements for
transfer  in the  case of  equity  interests  constituting  certificated  Pledge
Agreement  Collateral,  along with evidence that all other actions necessary or,
in the reasonable  opinion of the Collateral  Agent,  desirable,  to perfect the
security  interests  purported to be created by the Pledge  Agreement  have been
taken and the Pledge Agreement shall be in full force and effect.

     SECTION 9. NEGATIVE  COVENANTS.  The Borrower  hereby  covenants and agrees
that on and after the  Effective  Date and  until the Total  Commitment  and all
Letters of Credit have  terminated and the Loans,  Notes and Unpaid Drawings (in

                                       46
<PAGE>

each case,  together  with  interest  thereon),  Fees and all other  Obligations
(other than any  indemnities  described in Section  13.13 which are not then due
and payable) incurred hereunder and thereunder, are paid in full:

     9.1.  Liens.  The  Borrower  will  not,  and  will  not  permit  any of its
Subsidiaries to, create,  incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal,  tangible or intangible) of
the  Borrower  or  any of its  Subsidiaries,  whether  now  owned  or  hereafter
acquired,  or sell any such property or assets  subject to an  understanding  or
agreement,  contingent  or  otherwise,  to  repurchase  such  property or assets
(including sales of accounts  receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income or permit the filing of
any financing  statement under the UCC or any other similar notice of Lien under
any similar  recording or notice  statute;  provided that the provisions of this
Section 9.1 shall not prevent the creation, incurrence,  assumption or existence
of the following  (Liens  described  below are herein  referred to as "Permitted
Liens"):

          (i) inchoate Liens for taxes,  assessments or governmental  charges or
     levies not yet due or Liens for taxes,  assessments or governmental charges
     or levies being contested in good faith and by appropriate  proceedings for
     which adequate  reserves have been established in accordance with generally
     accepted accounting principles;

          (ii) Liens in respect of property or assets of the  Borrower or any of
     its Subsidiaries imposed by law, which were incurred in the ordinary course
     of business  and do not secure  Indebtedness  for borrowed  money,  such as
     carriers',  warehousemen's,  materialmen's  and mechanics'  liens and other
     similar Liens arising in the ordinary course of business,  and (x) which do
     not in the aggregate materially detract from the value of the Borrower's or
     such  Subsidiary's  property or assets or materially impair the use thereof
     in the operation of the business of the Borrower or such  Subsidiary or (y)
     which are being contested in good faith by appropriate  proceedings,  which
     proceedings  have the effect of  preventing  the  forfeiture or sale of the
     property or assets subject to any such Lien;

          (iii)  Liens in  existence  on the  Initial  Borrowing  Date which are
     listed, and the property subject thereto described, in Schedule IX but only
     to the  respective  date,  if any,  set forth in such  Schedule  IX for the
     removal,  replacement  and  termination  of any such Liens,  plus renewals,
     replacements  and  extensions of such Liens to the extent set forth on such
     Schedule  IX,  provided  that (x) the  aggregate  principal  amount  of the
     Indebtedness,  if any,  secured by such Liens does not  increase  from that
     amount  outstanding  at  the  time  of any  such  renewal,  replacement  or
     extension  and (y) any such  renewal,  replacement  or  extension  does not
     encumber any additional  assets or properties of the Borrower or any of its
     Subsidiaries;

          (iv) Liens created pursuant to the Security Documents;

          (v)  licenses,  sublicenses,  leases  or  subleases  granted  to other
     Persons not materially  interfering with the conduct of the business of the
     Borrower or any of its Subsidiaries;

                                       47
<PAGE>

          (vi)  Liens upon  assets of the  Borrower  or any of its  Subsidiaries
     subject to Capitalized  Lease  Obligations  to the extent such  Capitalized
     Lease Obligations are permitted by Section 9.4(ii),  provided that (x) such
     Liens only serve to secure the payment of  Indebtedness  arising under such
     Capitalized  Lease Obligation and (y) the Lien encumbering the asset giving
     rise to the Capitalized  Lease Obligation does not encumber any other asset
     of the Borrower or any Subsidiary of the Borrower;

          (vii) Liens  placed upon  equipment or  machinery  acquired  after the
     Initial  Borrowing Date and used in the ordinary  course of business of the
     Borrower  or  any  of its  Subsidiaries  and  placed  at  the  time  of the
     acquisition  thereof by the Borrower or such  Subsidiary  or within 90 days
     thereafter to secure  Indebtedness  incurred to pay all or a portion of the
     purchase price thereof or to secure  Indebtedness  incurred  solely for the
     purpose of financing the  acquisition of any such equipment or machinery or
     extensions,  renewals or  replacements of any of the foregoing for the same
     or a lesser  amount,  provided  that (x) the  Indebtedness  secured by such
     Liens is  permitted  by Section  9.4(ii)  and (y) in all  events,  the Lien
     encumbering  the  equipment or machinery so acquired  does not encumber any
     other asset of the Borrower or such Subsidiary;

          (viii) easements, rights-of-way, restrictions, encroachments and other
     similar charges or encumbrances, and minor title deficiencies, in each case
     not securing  Indebtedness and not materially  interfering with the conduct
     of the business of the Borrower or any of its Subsidiaries;

          (ix) Liens arising from precautionary UCC financing  statement filings
     regarding  operating leases entered into in the ordinary course of business
     and in accordance with Section 9.2(v);

          (x) Liens  arising  out of the  existence  of  judgments  or awards in
     respect  of which the  Borrower  or any of its  Subsidiaries  shall in good
     faith be prosecuting an appeal or proceedings  for review and in respect of
     which there shall have been secured a subsisting stay of execution  pending
     such appeal or proceedings,  provided that the aggregate amount of all cash
     and the fair market value of all other property  subject to such Liens does
     not exceed $500,000 at any time outstanding;

          (xi) statutory and common law  landlords'  liens under leases to which
     the Borrower or any of its Subsidiaries is a party;

          (xii) Liens (other than Liens  imposed  under  ERISA)  incurred in the
     ordinary course of business in connection with workers compensation claims,
     unemployment  insurance and social security benefits and Liens securing the
     performance of bids,  tenders,  leases and contracts in the ordinary course
     of business,  statutory  obligations,  surety bonds,  performance bonds and
     other  obligations  of a like  nature  incurred in the  ordinary  course of
     business and  consistent  with past practice  (exclusive of  obligations in
     respect of the payment for borrowed  money),  provided  that the  aggregate
     amount of all cash and the fair market value of all other property  subject
     to all Liens  permitted  by this clause  (xii) shall not at any time exceed
     $500,000;

                                       48
<PAGE>

          (xiii) Permitted Encumbrances; and

          (xiv) Liens in favor of the Collateral Agent and the Secured Creditors
     in connection with the First Horizon International Financing.

In connection  with the granting of Liens of the type  described in clauses (vi)
and (vii) of this  Section 9.1 by the Borrower of any of its  Subsidiaries,  the
Administrative  Agent and the  Collateral  Agent shall be authorized to take any
actions deemed reasonably  appropriate by it in connection therewith (including,
without limitation, by executing appropriate lien releases or lien subordination
agreements  in favor of the  holder or  holders of such  Liens,  in either  case
solely with respect to the item or items of equipment or other assets subject to
such Liens).

     9.2.  Consolidation,  Merger, Purchase or Sale of Assets, etc. The Borrower
will not, and will not permit any of its  Subsidiaries to, wind up, liquidate or
dissolve  its  affairs  or  enter  into  any  partnership,   joint  venture,  or
transaction  of merger or  consolidation,  or convey,  sell,  lease or otherwise
dispose  of all or any  part of its  property  or  assets,  or  enter  into  any
sale-leaseback  transactions,  or  purchase  or  otherwise  acquire (in one or a
series of related  transactions)  any part of the property or assets (other than
purchases or other  acquisitions  of  inventory,  materials and equipment in the
ordinary  course of business) of any Person (or agree to do any of the foregoing
at any future time), except that:

          (i) Capital Expenditures by the Borrower and its Subsidiaries shall be
     permitted to the extent not in violation of Section 9.7;

          (ii)  each of the  Borrower  and its  Subsidiaries  may make  sales of
     inventory in the ordinary course of business;

          (iii) Investments may be made to the extent permitted by Section 9.5;

          (iv) the Borrower and its Subsidiaries may sell assets (other than the
     capital stock or other equity interests of any Subsidiary),  so long as (v)
     no Default or Event of Default then exists or would result  therefrom,  (w)
     each such sale is in an  arm's-length  transaction  and the Borrower or the
     respective Subsidiary receives at least fair market value (as determined in
     good faith by the Borrower or such Subsidiary, as the case may be), (x) the
     consideration  received by the Borrower or such Subsidiary  consists solely
     of cash and is paid at the time of the  closing of such  sale,  (y) the Net
     Sale Proceeds  therefrom are applied as required by Section  4.2(d) and (z)
     the aggregate amount of the proceeds received from all assets sold pursuant
     to this  clause  (iv) shall not exceed  $500,000  in any fiscal year of the
     Borrower without the consent of the Required Lenders;

          (v) each of the Borrower and its Subsidiaries may lease (as lessee) or
     license (as licensee) real or personal  property (so long as any such lease
     or license does not create a  Capitalized  Lease  Obligation  except to the

                                       49
<PAGE>

     extent permitted by Section 9.4(ii)) and the aggregate  rentals  thereunder
     do not exceed  $5,000,000  for leases of  automobiles  and  $1,000,000  for
     leases of other equipment;

          (vi) each of the Borrower and its  Subsidiaries  may sell or discount,
     in each case without  recourse  and in the ordinary  course of business and
     for cash at fair  market  value  (as  determined  by the  Borrower  in good
     faith), accounts receivable arising in the ordinary course of business, but
     only in connection  with the  compromise  or collection  thereof and not as
     part of any financing  transaction,  provided that the aggregate  amount of
     such sales shall not exceed $500,000 in any fiscal year of the Borrower;

          (vii) each of the Borrower and its  Subsidiaries  may grant  licenses,
     sublicenses,   leases  or  subleases  to  other   Persons  not   materially
     interfering  with the conduct of the business of the Borrower or any of its
     Subsidiaries,  in each case so long as no such grant otherwise  affects the
     Collateral  Agent's  security  interest  in the asset or  property  subject
     thereto;

          (viii) the Borrower and the  International  Subsidiaries may enter the
     transaction described in Section 13.17 on the conditions contained therein;
     and

          (ix) in connection with any Acquisition  permitted pursuant to Section
     9.5(vi) and if the result of such Acquisition is a Subsidiary, the Borrower
     and such Subsidiary shall have complied with Section 9.16.

To the extent the Required Lenders waive the provisions of this Section 9.2 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this  Section 9.2 (other than to the  Borrower or a  Subsidiary  thereof),  such
Collateral  shall be sold free and clear of the Liens  created  by the  Security
Documents,  and the  Administrative  Agent  and the  Collateral  Agent  shall be
authorized  to take any  actions  deemed  appropriate  in order  to  effect  the
foregoing.

     9.3.  Dividends.  The  Borrower  will not,  and will not  permit any of its
Subsidiaries  to,  authorize,  declare or pay any Dividends  with respect to the
Borrower or any of its Subsidiaries,  except that any Subsidiary of the Borrower
may pay cash Dividends to the Borrower or to any Wholly-Owned  Subsidiary of the
Borrower.

     9.4.  Indebtedness.  The Borrower  will not, and will not permit any of its
Subsidiaries  to,  contract,  create,  incur,  assume  or  suffer  to exist  any
Indebtedness, except:

          (i)  Indebtedness  incurred  pursuant to this  Agreement and the other
     Credit Documents;

          (ii)  Indebtedness of the Borrower and its  Subsidiaries  evidenced by
     Capitalized Lease Obligations (to the extent permitted  pursuant to Section
     9.7)  and  purchase  money  Indebtedness  described  in  Section  9.1(vii),
     provided  that  in no  event  shall  the sum of the  aggregate  outstanding
     principal  amount of all Capitalized  Lease  Obligations and purchase money

                                       50
<PAGE>

     Indebtedness permitted by this clause (ii) exceed at any time $1,000,000;

          (iii) Indebtedness in connection with the First Horizon  International
     Financing; and

          (iv) Indebtedness in connection with Other Hedging Agreements incurred
     in the  ordinary  course of  business  up to a maximum  notional  amount of
     $3,000,000.

     9.5.  Advances,  Investments and Loans. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly,  lend money or 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 other  Person,  or purchase or own a futures  contract or  otherwise  become
liable for the  purchase or sale of currency  or other  commodities  at a future
date in the nature of a futures  contract,  or hold any cash or Cash Equivalents
(each of the foregoing an "Investment" and, collectively, "Investments"), except
that the following shall be permitted:

          (i) the Borrower and its  Subsidiaries  may acquire and hold  accounts
     receivable  owing to any of them,  if created or acquired  in the  ordinary
     course  of  business  and  payable  or  dischargeable  in  accordance  with
     customary trade terms of the Borrower or such Subsidiary;

          (ii) the Borrower and its  Subsidiaries  may acquire and hold cash and
     Cash Equivalents;

          (iii) the Borrower and its  Subsidiaries may hold the Investments held
     by them on the Initial Borrowing Date and described on Schedule X, provided
     that  any  additional  Investments  made  with  respect  thereto  shall  be
     permitted only if permitted under the other provisions of this Section 9.5;

          (iv) the Borrower and its Subsidiaries may acquire and own investments
     (including debt obligations)  received in connection with the bankruptcy or
     reorganization  of suppliers and customers and in good faith  settlement of
     delinquent obligations of, and other disputes with, customers and suppliers
     arising in the ordinary course of business;

          (v) the Borrower and its  Subsidiaries  may make loans and advances to
     their officers and employees for moving, relocation and travel expenses and
     other similar expenditures, in each case in the ordinary course of business
     in an  aggregate  amount  not to exceed  $500,000  at any time  (determined
     without  regard  to  any  write-downs  or  write-offs  of  such  loans  and
     advances); and

          (vi) investments in order to consummate  Acquisitions,  provided that:
     (i) in the case of Acquisitions  involving mergers or  consolidations,  the
     Borrower or the applicable  Subsidiary shall be the continuing or surviving
     corporation,  (ii) before and after giving  effect to the  Acquisition,  no

                                       51
<PAGE>

     Default or Event of Default  shall have occurred and be  continuing,  (iii)
     such  Acquisitions  are undertaken in accordance with applicable laws; (iv)
     the prior, effective written consent or approval to such Acquisition of the
     board  or  directors  or  equivalent  governing  body  of the  acquiree  is
     obtained;  (v) Borrower and its Subsidiaries hold cash and Cash Equivalents
     and Revolving Loan Availability in a minimum amount of $5,000,000; (vi) the
     Borrower has additional Revolving Loan Availability of at least $5,000,000;
     (vii) the Borrower  shall have  received the prior  written  consent of the
     Required Lenders for any Acquisition the  consideration for which equals or
     exceeds $20,000,000;  (viii) the Borrower and its Subsidiaries,  before and
     after  giving  effect  to such  Acquisition,  shall be  compliant  with all
     financial  covenants contained in the Credit Documents on an actual and pro
     forma basis;  and (ix) the Collateral Agent shall be able to obtain a first
     priority  Lien on the assets which are the subject of the  Acquisition  and
     have available to it enforcement remedies against the acquirer and acquiree
     in order to be able to realize  maximum value from such acquired  assets in
     the event of an Event of Default.

     9.6.  Transactions  with  Affiliates.  The Borrowers will not, and will not
permit  any of its  Subsidiaries  to,  enter into any  transaction  or series of
related  transactions  with  any  Affiliate  of  the  Borrower  or  any  of  its
Subsidiaries,  other than in the  ordinary  course of business  and on terms and
conditions  substantially  as favorable to the  Borrower or such  Subsidiary  as
would  reasonably be obtained by the Borrower or such Subsidiary at that time in
a comparable  arm's-length  transaction  with a Person other than an  Affiliate,
except that (i) Dividends may be paid to the extent  provided in Section 9.3 and
(ii) customary fees may be paid to non-officer directors of the Borrower and its
Subsidiaries.

     9.7. Capital  Expenditures.  The Borrower will not, and will not permit any
of its  Subsidiaries to, make any Capital  Expenditures,  except that during any
fiscal year of the Borrower (taken as one accounting  period),  the Borrower and
its Subsidiaries  may make Capital  Expenditures so long as the aggregate amount
of all such  Capital  Expenditures  does not exceed  $600,000  in the  aggregate
during any fiscal year ended after December 31, 2002. In addition,  Borrower may
spend up to $2,000,000 in the aggregate to implement its sales force  automation
system, including hardware and software.

     9.8. Consolidated Interest Coverage Ratio. The Borrower will not permit the
Consolidated  Interest  Coverage  Ratio for any Test  Period  ending on or after
December 31, 2002 to be less than 5.00:1.00.

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<PAGE>

     9.9. Minimum Consolidated EBITDA. The Borrower will not permit Consolidated
EBITDA  for any Test  Period  ending on the last day of a fiscal  quarter of the
Borrower  set forth  below to be less than the  amount set forth  opposite  such
fiscal quarter below:

                   Fiscal Quarter
                  Ending Closet To                                  Amount
                  ----------------                                  ------

    December 31, 2002 through September 29, 2003                 $27,000,000
    September 30, 2003 through December 30, 2003                 $30,000,000
          December 31, 2003 and thereafter                       $36,000,000

Notwithstanding  that the  foregoing  covenant  is measured on the last day of a
fiscal quarter, compliance is required at all times during such fiscal quarter.

     9.10.  Leverage Ratio.  The Borrower will not permit the Leverage Ratio for
any Test Period ending on the last day of the fiscal quarter of the Borrower set
forth below to be greater than the ratio set forth  opposite such fiscal quarter
below:

         Fiscal Quarter Ending Closest To:                         Ratio
         ---------------------------------                         -----

    December 31, 2002 through December 30, 2003                  1.5 to 1.0
         December 31, 2003 and thereafter                       1.25 to 1.0

Notwithstanding  that the  foregoing  covenant  is measured on the last day of a
fiscal quarter, compliance is required at all times during such fiscal quarter.

     9.11.  Fixed Charge Coverage Ratio.  The Borrower will not permit the Fixed
Charge  Coverage  Ratio for any Test Period ending on the last day of any fiscal
quarter  of the  Borrower  set  forth  below to be less than the ratio set forth
opposite such fiscal quarter below:

              Fiscal Quarter Ending Closest To:                    Ratio
              ---------------------------------                    -----

         December 31, 2002 through December 30, 2003            1.75 to 1.0
          December 31, 2003 through March 30, 2003              2.00 to 1.0
                March 31, 2003 and thereafter                   2.25 to 1.0

Notwithstanding  that the  foregoing  covenant  is measured on the last day of a
fiscal quarter, compliance is required at all times during such fiscal quarter.

     9.12.  Modification  of Certificate of  Incorporation,  By-Laws and Certain
Other  Agreements,  etc. The  Borrower  will not, and will not permit any of its
Subsidiaries to:

          (i)  amend,   modify  or  change  its   certificate   or  articles  of
     incorporation (including, without limitation, by the filing or modification
     of any certificate or articles of  designation),  certificate of formation,
     limited   liability   company  agreement  or  by-laws  (or  the  equivalent

                                       53
<PAGE>

     organizational  documents), as applicable, or any agreement entered into by
     it with respect to its capital stock or other equity  interests  (including
     any Shareholders'  Agreement), or enter into any new agreement with respect
     to its capital  stock or other  equity  interests,  unless such  amendment,
     modification,  change or other action contemplated by this clause (i) could
     not reasonably be expected to be adverse to the interests of the Lenders in
     any material respect;

          (ii) amend,  modify or change any term or  provision  of any  license,
     distribution agreement,  supply agreement or manufacturing agreement unless
     such amendment,  modification or change could not reasonably be expected to
     be adverse to the interests of the Lenders in any material respect; or

          (iii) make any voluntary,  optional or mandatory payment or prepayment
     in respect of any Indebtedness of the Borrower or its Subsidiaries,  except
     as otherwise permitted by this Agreement or the First Horizon International
     Financing,  or amend,  modify,  or permit the amendment or modification of,
     any provision of any agreement evidencing any such Indebtedness, except for
     such amendments or  modifications  that could not reasonably be expected to
     be adverse to the interest of the Lenders in any material respect.

     9.13. Limitation on Certain Restrictions on Subsidiaries. The Borrower will
not, and will not permit any of its  Subsidiaries  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  Subsidiary  to (a) pay dividends or
make any other  distributions  on its  capital  stock or any other  interest  or
participation  in its profits owned by the Borrower or any of its  Subsidiaries,
or pay any  Indebtedness  owed to the Borrower or any of its  Subsidiaries,  (b)
make  loans  or  advances  to the  Borrower  or any of its  Subsidiaries  or (c)
transfer  any  of  its  properties  or  assets  to  the  Borrower  or any of its
Subsidiaries,  except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit Documents
or  the  First  Horizon  International  Financing,  (iii)  customary  provisions
restricting  subletting  or  assignment  of any lease  governing  any  leasehold
interest of the  Borrower  or any of its  Subsidiaries,  (iv)  except  where the
existence  of such  provision  causes or may be  reasonably  believed to cause a
Material  Adverse Effect,  customary  provisions  restricting  assignment of any
licensing  agreement  (in which the Borrower or any of its  Subsidiaries  is the
licensee)  or  other  contract  entered  into  by  the  Borrower  or  any of its
Subsidiaries  in the  ordinary  course  of  business,  (v)  restrictions  on the
transfer  of any asset  pending  the close of the sale of such  asset,  and (vi)
restrictions on the transfer of any asset subject to a Lien permitted by Section
9.1(iii), (vi) or (vii).

     9.14. Limitation on Issuance of Capital Stock.

          (a) The  Borrower  will not  issue  (i) any  preferred  stock or other
preferred equity  interests , other than Qualified  Preferred Stock, or (ii) any
redeemable common stock or other redeemable common equity interests,  other than
common stock or other  redeemable  common equity interests that is redeemable at

                                       54
<PAGE>

the sole option of the Borrower or such Subsidiary, as the case may be.

          (b) The Borrower will not permit any of its  Subsidiaries to issue any
capital stock or other equity  interests  (including by way of sales of treasury
stock) or any options or warrants to purchase,  or securities  convertible into,
capital  stock  or  other  equity  interests,   except  (i)  for  transfers  and
replacements  of then  outstanding  shares  of  capital  stock or  other  equity
interests,  (ii) for stock splits,  stock  dividends and issuances  which do not
decrease the percentage  ownership of the Borrower or any of its Subsidiaries in
any class of the capital  stock or other equity  interests  of such  Subsidiary,
(iii) to qualify  directors to the extent required by applicable law or (iv) for
any  issuance  of stock or  other  equity  interests  by any  Subsidiary  of the
Borrower to the Borrower or a Wholly-Owned Subsidiary of the Borrower,

     9.15. Business;  etc. The Borrower will not, and will not permit any of its
Subsidiaries to, engage in any business other than the businesses  engaged in by
Borrower and its  Subsidiaries  as of the Initial  Borrowing Date and reasonable
extensions thereof.

     9.16.  Limitation  on  Creation  of  Subsidiaries.  Except as  provided  in
Sections 9.2(ix) and 9.5(vi),  the Borrower will not, and will not permit any of
its Subsidiaries to,  establish,  create or acquire after the Initial  Borrowing
Date any Subsidiary.  The Borrower hereby  acknowledges and agrees that,  unless
the Required  Lenders  amend or waive the  provisions of this Section 9.16 after
the Initial  Borrowing  Date, the Borrower will (i) pledge all the capital stock
of such new  Subsidiary  to the  Collateral  Agent  pursuant  to the  terms  and
conditions of the Pledge Agreement (unless the Subsidiary shall be designated by
the Borrower and such designation  shall be consented to by the Required Lenders
as an  International  Subsidiary,  in which case only 65% of such  International
Subsidiary's capital stock shall be pledged as herein provided), (ii) cause such
new  Subsidiary  (other  than an  International  Subsidiary)  to enter  into the
Subsidiaries  Guaranty  and to  execute  and  deliver  to the  Collateral  Agent
counterparts of the Security  Agreement and the Pledge  Agreement,  (iii) to the
extent  required  by Section  8.12,  cause such new  Subsidiary  (other  than an
International  Subsidiary) to enter into such Additional  Security  Documents as
the Administrative Agent or the Required Lenders may require and (iv) cause such
new Subsidiary  (other than an International  Subsidiary) to execute and deliver
all other  relevant  documentation  (including  opinions of counsel) of the type
described  in Section 5 as such new  Subsidiary  would have had to deliver if it
were a Credit Party on the Initial Borrowing Date.

     9.17. Change of Legal Names; Type of Organization (and Whether a Registered
Organization;  Jurisdiction  of Organization  etc.  Neither the Borrower nor any
Subsidiary Guarantor shall change its legal name, its type of organization,  its
status as a registered organization (in the case of a registered  organization),
its  jurisdiction  of  organization,   its  location,   or  its   organizational
identification  number (if any), except that any such changes shall be permitted
(so long as such changes are not in violation of the applicable  requirements of
the  Security  Documents  and so long as same do not  involve  (x) a  registered
organization  ceasing to constitute  same or (y) the Borrower or any  Subsidiary
Guarantor  changing its jurisdiction of organization or location from the United
States or a State thereof to a jurisdiction of organization or location,  as the
case may be,  outside the United States or a State thereof) if (i) it shall have

                                       55
<PAGE>

given to the  Collateral  Agent not less than 15 days' prior  written  notice of
each  change to the  information  listed on  Schedule  VI (as  adjusted  for any
subsequent  changes  thereto  previously made in accordance with this sentence),
together with a supplement  to Schedule VI which shall  correct all  information
contained therein for the Borrower or the respective Subsidiary  Guarantor,  and
(ii) in connection  with such change or changes,  it shall have taken all action
reasonably  requested by the Collateral Agent to maintain the security interests
of the Collateral  Agent in the Collateral  intended to be granted hereby at all
times fully perfected and in full force and effect.

     SECTION 10. EVENTS OF DEFAULT.  Upon the occurrence of any of the following
specified events (each an "Event of Default"):

     10.1.  Payments.  The Borrower shall (i) default in the payment when due of
any  principal of any Loan or any Note or (ii)  default,  and such default shall
continue  unremedied for three or more Business Days, in the payment when due of
any  interest on any Loan or Note,  any Unpaid  Drawing or any Fees or any other
amounts owing hereunder or under any other Credit Document; or

     10.2. Representations, etc. Any representation,  warranty or statement made
or deemed made by any Credit Party herein or in any other Credit  Document or in
any  certificate  delivered to the  Administrative  Agent or any Lender pursuant
hereto or thereto in the context in which it was made,  taken as a whole,  shall
prove to be  untrue  in any  material  respect  on the date as of which  made or
deemed made; or

     10.3. Covenants.  The Borrower or any of its Subsidiaries shall (i) default
in the due  performance  or observance by it of any term,  covenant or agreement
contained in Section 8.1(f), 8.8, 8.11, 8.16 or Section 9 or (ii) default in the
due  performance  or observance  by it of any other term,  covenant or agreement
contained in this  Agreement or in any other Credit  Document  (other than those
set forth in Sections  10.1 and 10.2) and such default  described in this clause
(ii) shall  continue  unremedied  for a period of 30 days after  written  notice
thereof to the  defaulting  party by the  Administrative  Agent or the  Required
Lenders; or

     10.4.  Default  Under  Other  Agreements.  (i) The  Borrower  or any of its
Subsidiaries  shall (x) default in any payment of any  Indebtedness  (other than
the Obligations)  beyond the period of grace, if any,  provided in an instrument
or  agreement  under which such  Indebtedness  was created or (y) default in the
observance  or  performance  of  any  agreement  or  condition  relating  to any
Indebtedness  (other than the  Obligations)  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 a trustee or agent on behalf of such holder or holders) to cause (determined
without  regard to whether any notice is  required),  any such  Indebtedness  to
become due prior to its stated maturity or (ii) any Indebtedness (other than the
Obligations) of the Borrower or any of its Subsidiaries  shall be declared to be
(or shall  become) due and  payable,  or required to be prepaid  other than by a
regularly scheduled required  prepayment,  prior to the stated maturity thereof,
provided  that it shall  not be a  Default  or an Event of  Default  under  this

                                       56
<PAGE>

Section  10.4  unless the  aggregate  principal  amount of all  Indebtedness  as
described in preceding clauses (i) and (ii) is at least $1,000,000; or

     10.5.  Bankruptcy,  etc.  The  Borrower  or any of its  Subsidiaries  shall
commence a voluntary case concerning  itself under Title 11 of the United States
Code  entitled  "Bankruptcy,"  as now or hereafter in effect,  or any  successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries, and the petition is not controverted within
30 days, or is not dismissed within 60 days, after  commencement of the case; or
a  custodian  (as defined in the  Bankruptcy  Code) is  appointed  for, or takes
charge of, all or  substantially  all of the  property of the Borrower or any of
its Subsidiaries, or the Borrower or any of its Subsidiaries commences any other
proceeding under any reorganization,  arrangement, adjustment of debt, relief of
debtors,   dissolution,   insolvency  or  liquidation  or  similar  law  of  any
jurisdiction  whether now or hereafter in effect relating to the Borrower or any
of its  Subsidiaries,  or there is commenced  against the Borrower or any of its
Subsidiaries  any such proceeding  which remains  undismissed for a period of 60
days (it is  acknowledged  and agreed  that  during the cure period for any such
involuntary proceeding, the Lenders shall have no obligation to extend new Loans
or issue new Letters of Credit),  or the Borrower or any of its  Subsidiaries is
adjudicated  insolvent  or  bankrupt;  or any  order of  relief  or other  order
approving any such case or proceeding is entered;  or the Borrower or any of its
Subsidiaries  suffers any appointment of any custodian or the like for it or any
substantial  part of its  property to continue  undischarged  or unstayed  for a
period of 60 days;  or the Borrower or any of its  Subsidiaries  makes a general
assignment  for the benefit of creditors;  or any corporate,  limited  liability
company or similar  action is taken by the  Borrower or any of its  Subsidiaries
for the  purpose of  effecting  any of the  foregoing;  or the  Borrower  or any
Subsidiary  becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due; or

     10.6.  ERISA.  (a) Any Plan  shall  fail to  satisfy  the  minimum  funding
standard  required  for any plan year or part thereof  under  Section 412 of the
Code or Section 302 of ERISA or a waiver of such  standard or  extension  of any
amortization  period is  sought  or  granted  under  Section  412 of the Code or
Section  303 or 304  of  ERISA,  a  Reportable  Event  shall  have  occurred,  a
contributing  sponsor  (as  defined in Section  4001(a)(13)  of ERISA) of a Plan
subject  to  Title  IV of  ERISA  shall  be  subject  to the  advance  reporting
requirement of PBGC Regulation  Section 4043.61  (without regard to subparagraph
(b)(1) thereof) and an event described in subsection 62, .63, .64, .65, .66, .67
or .68 of PBGC  Regulation  Section 4043 shall be  reasonably  expected to occur
with  respect  to such Plan  within  the  following  30 days,  any Plan which is
subject  to Title IV of ERISA  shall  have had or is  likely  to have a  trustee
appointed  to  administer  such  Plan,  any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be  terminated or to be the subject of
termination  proceedings  under ERISA,  any Plan shall have an Unfunded  Current
Liability,  a  contribution  required  to be made  with  respect  to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the  Borrower  or any ERISA  Affiliate  has  incurred  or is likely to incur any
liability to or on account of a Plan under  Section 409,  502(i),  502(1),  515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),  4971
or 4975 of the Code or on account of a group  health plan (as defined in Section
607(1) of ERISA or Section  4980B(g)(2)  of the Code) under Section 4980B of the
Code,  or the  Borrower or any  Subsidiary  of the  Borrower  has incurred or is

                                       57
<PAGE>

likely to incur  liabilities  pursuant to one or more employee  welfare  benefit
plans (as  defined in Section  3(1) of ERISA) that  provide  benefits to retired
employees  or other former  employees  (other than as required by Section 601 of
ERISA) or Plans or Foreign  Pension  Plans,  a  "default"  within the meaning of
Section 4219(c)(5) of ERISA shall occur with respect to any Plan, any applicable
law,   rule  or  regulation  is  adopted,   changed  or   interpreted,   or  the
interpretation or administration thereof is changed, in each case after the date
hereof,  by any  governmental  authority or agency or by any court (a "Change of
Law"), or, as a result of a Change in Law, an event occurs following a Change in
Law,  with respect to or otherwise  affecting  any Plan;  (b) there shall result
from any such  event or events  the  imposition  of a lien,  the  granting  of a
security  interest,  or a liability or a material risk of incurring a liability;
and (c) such lien, security interest or liability, either individually and/or in
the aggregate,  has had, or could reasonably be expected to have, in the opinion
of the Required Lenders, a Material Adverse Effect; or

     10.7. Security  Documents.  Any of the Security Documents shall cease to be
in full force and effect,  or shall cease to give the  Collateral  Agent for the
benefit of the  Secured  Creditors  the  Liens,  rights,  powers and  privileges
purported to be created  thereby  (including,  without  limitation,  a perfected
security  interest  in,  and Lien  on,  all of the  Collateral,  in favor of the
Collateral  Agent,  superior  to and prior to the  rights  of all third  Persons
(except as permitted by Section  9.1),  and subject to no other Liens (except as
permitted  by  Section  9.1),  or any  Credit  Party  shall  default  in the due
performance  or observance of any term,  covenant or agreement on its part to be
performed or observed  pursuant to any such  Security  Document and such default
shall  continue  beyond the  period of grace,  if any,  specifically  applicable
thereto pursuant to the terms of such Security Document; or

     10.8.  Guaranties.  Any Guaranty or any provision thereof shall cease to be
in full  force or effect as to any  Guarantor,  or any  Guarantor  or any Person
acting  for or on  behalf  of  such  Guarantor  shall  deny  or  disaffirm  such
Guarantor's  obligations  under  the  Guaranty  to  which  it is a party  or any
Guarantor  shall  default  in the due  performance  or  observance  of any term,
covenant or agreement  on its part to be  performed or observed  pursuant to the
Guaranty to which it is a party; or

     10.9. Judgments.  One or more judgments or decrees shall be entered against
the Borrower or any  Subsidiary  of the Borrower  involving in the aggregate for
the Borrower and its  Subsidiaries  a liability  (not paid or fully covered by a
reputable and solvent  insurance  company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated,  discharged or stayed
or  bonded  pending  appeal  for any  period  of 30  consecutive  days,  and the
aggregate amount of all such judgments equals or exceeds $1,000,000; or

     10.10. Change of Control. A Change of Control shall occur; or

     10.11.  Material Adverse Effect.  The determination by the Required Lenders
that a Material Adverse Effect has occurred; or

                                       58
<PAGE>

     10.12.  Approvals.  The FDA or DEA shall  revoke,  suspend or terminate any
approvals  for  the  manufacture,  distribution  or sale  of any  drug(s)  which
constitutes  a product line offered by the Borrower or any  Subsidiary  and such
drug(s)'  sales  equal or  exceed  5% of gross  sales  of the  Borrower  for the
immediately preceding twelve months; or

     10.13. Licenses. Any license to manufacture, distribute or sell any drug(s)
which  constitutes  part of the  product  lines  offered by the  Borrower or any
Subsidiary  and such  drug(s)'  sales  equal or exceed 5% of gross  sales of the
Borrower  for the  immediately  preceding  twelve  months  shall  be  suspended,
cancelled, terminated, disputed or shall expire for any reason whatsoever; or

     10.14.  Supply Agreements.  Any manufacturing,  coating or supply agreement
for any drug(s)  constituting  part of the product lines offered by the Borrower
or any  Subsidiary  and such drug(s)' sales equal or exceed 5% of gross sales of
the Borrower for the  immediately  preceding  twelve  months shall be suspended,
interrupted,  cancelled,  terminated  or shall  expire and the  Borrower or such
Subsidiary shall fail to obtain an alternative manufacturing,  coating or supply
source within 90 days; or

     10.15. First Horizon International  Financing.  A default, event of default
or similar event shall occur or continue beyond any applicable cure period under
any document related to the First Horizon International Financing.

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be  continuing,  the  Administrative  Agent may,  or upon the written
request of the Required  Lenders shall, by written notice to the Borrower,  take
any or all of the  following  actions,  without  prejudice  to the rights of the
Administrative Agent, any Lender or the holder of any Note to enforce its claims
against any Credit Party  (provided  that,  if an Event of Default  specified in
Section  10.5 shall occur with respect to the  Borrower,  the result which would
occur upon the giving of written notice by the Administrative Agent as specified
in clauses (i) and (ii) below shall  occur  automatically  without the giving of
any such notice):  (i) declare the Total Commitment  terminated,  whereupon each
Commitment of each Lender shall  forthwith  terminate  immediately  and any Fees
shall  forthwith  become due and payable  without any other  notice of any kind;
(ii) declare the  principal of and any accrued  interest in respect of all Loans
and  the  Notes  and all  Obligations  owing  hereunder  and  thereunder  to be,
whereupon the same shall become,  forthwith due and payable without presentment,
demand,  protest or other notice of any kind,  all of which are hereby waived by
each Credit Party;  (iii) terminate any Letter of Credit which may be terminated
in accordance with its terms;  (iv) direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice,  or upon the  occurrence of an Event of
Default specified in Section 10.5 with respect to the Borrower,  it will pay) to
the  Collateral  Agent at the Payment Office such  additional  amount of cash or
Cash Equivalents, to be held as security by the Collateral Agent, as is equal to
the  aggregate  Stated Amount of all Letters of Credit issued for the account of
the Borrower and then outstanding;  (v) enforce, as Collateral Agent, all of the
Liens and security  interests  created pursuant to the Security  Documents;  and
(vi) apply any cash  collateral  held by the  Administrative  Agent  pursuant to
Section 4.2 to the repayment of the Obligations.

                                       59
<PAGE>

     SECTION 11. DEFINITIONS AND ACCOUNTING TERMS.

     11.1.  Defined Terms. As used in this Agreement,  the following terms shall
have the following  meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):

     "Account" shall have the meaning specified in the Security Agreement.

     "Account  Debtor"  shall  have  the  meaning   specified  in  the  Security
Agreement.

     "Acquisitions"  shall  mean  any  transaction,  or any  series  of  related
transactions,  consummated on or after the date of this Agreement,  by which the
Borrower or any of its  Subsidiaries  (a) acquires any going business or some or
all of the assets of any firm, corporation or division thereof,  whether through
purchase of assets, merger or otherwise;  provided, however, that when less than
all of the assets of a firm, corporation or division thereof are acquired,  such
acquired assets shall include all the assets and rights necessary to conduct the
business as contemplated by the parties to such acquisition to which such assets
relate or (b) directly or indirectly acquires (in one transaction or as the most
recent  transaction in a series of  transactions) at least a majority (in number
of votes) of the  securities of a corporation  which have ordinary  voting power
for the election of directors  (other than securities  having such power only by
reason of the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding  partnership interests of a partnership,  in each case
relating  to the  pharmaceutical  business,  including  drug  and  drug  license
acquisitions.

     "Additional  Security Documents" shall have the meaning provided in Section
8.12.

     "Administrative   Agent"   shall  mean   LaSalle,   in  its   capacity   as
Administrative Agent for the Lenders hereunder,  and shall include any successor
to the Administrative Agent appointed pursuant to Section 12.9. Without limiting
the foregoing, it is understood and agreed that, for purposes of Sections 12 and
13.1 of this Agreement, the term Administrative Agent shall also include LaSalle
in its capacity as Collateral Agent pursuant to the Security Documents.

     "Affiliate"  shall  mean,  with  respect to any  Person,  any other  Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person),  controlled by, or under direct or indirect common
control  with,  such Person.  For the purposes of Section 9.6, a Person shall be
deemed  to  control  another  Person  if  such  Person  possesses,  directly  or
indirectly,  the power (i) to vote 20% or more of the securities having ordinary
voting power for the election of directors  (or  equivalent  governing  body) of
such  Person  or (ii) to direct or cause the  direction  of the  management  and
policies  of  such  other  Person,  whether  through  the  ownership  of  voting
securities,  by contract  or  otherwise;  provided,  however,  that  neither the
Administrative  Agent  nor any  Lender  (nor  any  Affiliate  thereof)  shall be
considered an Affiliate of the Borrower or any Subsidiary thereof.

                                       60
<PAGE>

     "Agreement"  shall mean this Credit Agreement,  as modified,  supplemented,
amended,  restated (including any amendment and restatement hereof), extended or
renewed from time to time.

     "Applicable  Margin"  shall mean,  with respect to Loans,  Letter of Credit
Outstandings and Letter of Credit fees and non-use fees, until the first Pricing
Date, the basis points per annum shown  opposite  Level I below,  and thereafter
from one Pricing Date to the next the  Applicable  Margin means the basis points
per annum determined in accordance with the following schedule:

<TABLE>
<CAPTION>
<S>      <C>                          <C>                        <C>                     <C>            <C>
---------------------------------------------------------------------------------------------------------------------
 LEVEL     LEVERAGE RATIO FOR SUCH      APPLICABLE MARGIN FOR    APPLICABLE MARGIN FOR   UNUSED FEE     LETTER OF
                PRICING DATE            BASE RATE LOANS UNDER       EURODOLLAR LOANS                    CREDIT FEE
                                      REVOLVING LOAN COMMITMENT   UNDER REVOLVING LOAN
                                        AND LETTER OF CREDIT           COMMITMENT
                                            OUTSTANDINGS
---------------------------------------------------------------------------------------------------------------------
   I     Less than or equal to 1.50            75 bps                   275 bps           37.5 bps       275 bps
         to 1.0 but greater than or
         equal to 1.25 to 1.0
---------------------------------------------------------------------------------------------------------------------
   II    Less than 1.25 to 1.0, but            50 bps                   250 bps            25 bps        250 bps
         greater than or equal to
         1.0 to 1.0
---------------------------------------------------------------------------------------------------------------------
  III    Less than 1.0 to 1.0, but             25 bps                   225 bps            25 bps        225 bps
         greater than or equal to
         .75 to 1.0
---------------------------------------------------------------------------------------------------------------------
   IV    Less than .75 to 1.0                   0 bps                   200 bps            25 bps        200 bps
---------------------------------------------------------------------------------------------------------------------
</TABLE>

For purposes  hereof,  the term "Pricing Date" means,  for any fiscal quarter of
the  Borrower  ending  on or after  December  31,  2002,  the date on which  the
Administrative  Agent is in receipt of the  Borrower's  most  recent  compliance
certificate for the fiscal quarter then ended, pursuant to Section 8.1(e) hereof
(it being  understood  that the first  Pricing Date shall be the date upon which
the  Administrative  Agent receives such  compliance  certificate for the fiscal
quarter ending  December 31, 2002).  The Applicable  Margin shall be established
based on the Leverage Ratio for the most recently  completed  fiscal quarter and
the Applicable Margin established on a Pricing Date shall remain in effect until
the  next  Pricing  Date.  If the  Borrower  has not  delivered  its  compliance
certificate by the date such compliance  certificate is required to be delivered
under Section 8.1(e) hereof, until such compliance certificate is delivered, the
Applicable  Margin shall be the highest  Applicable  Margin (i.e.,  the Leverage
Ratio  shall  be  deemed  to be  greater  than  1.25 to  1.0).  If the  Borrower
subsequently delivers such compliance  certificate before the next Pricing Date,
the Applicable Margin established by such late delivered compliance  certificate
shall take effect from the date of delivery  until the next Pricing Date. In all
other  circumstances,  the  Applicable  Margin  established  by such  compliance
certificate  shall be in effect  from the Pricing  Date that occurs  immediately
after the end of the fiscal quarter covered by such compliance certificate until
the next Pricing Date. Each  determination of the Applicable  Margin made by the
Administrative  Agent in accordance  with the foregoing  shall be conclusive and
binding on the Borrower.

                                       61
<PAGE>

     "Asset  Sale"  shall mean any sale,  transfer or other  disposition  by the
Borrower or any of its Domestic  Subsidiaries to any Person (including by way of
redemption  by such  Person),  other  than  to the  Borrower  or a  Wholly-Owned
Subsidiary of the Borrower,  of any asset (including,  without  limitation,  any
capital stock or other  securities of, or equity  interests in, another  Person)
other than sales of assets pursuant to Sections 9.2(ii) and 9.2(vi).

     "Assignment  and  Assumption   Agreement"  shall  mean  an  Assignment  and
Assumption  Agreement  substantially  in the form of  Exhibit  K  (appropriately
completed).

     "Bankruptcy Code" shall have the meaning provided in Section 10.5.

     "Base Rate" shall mean,  at any time,  the higher of (i) the Prime  Lending
Rate at such time and (ii) 1/2 of 1% in excess of the  overnight  Federal  Funds
Rate at such time.

     "Base Rate Loan" shall mean each Loan  designated  or deemed  designated as
such  by the  Borrower  at the  time of the  incurrence  thereof  or  conversion
thereto.

     "Borrower" shall mean First Horizon Pharmaceutical  Corporation, a Delaware
corporation.

     "Borrowing"  shall  mean the  borrowing  of one  Type of Loan  from all the
Lenders  having  Commitments  on a given date (or resulting from a conversion or
conversions  on such  date)  having  in the case of  Eurodollar  Loans  the same
Interest  Period,  provided  that Base Rate Loans  incurred  pursuant to Section
1.10(b) shall be considered part of the related Borrowing of Eurodollar Loans.

     "Borrowing Base Amount" shall mean:

          (a) an amount equal to 85% of the net amount (after  deduction of such
reserves and allowances as the Administrative  Agent deems proper and necessary)
of the Eligible Accounts; plus

          (b) an amount equal to 50% of the lower of cost or market value (after
deduction of such  reserves and  allowances  as the  Administrative  Agent deems
proper and necessary) of the non-sample Eligible Inventory; plus

          (c) an amount equal to 20% of the lower of cost or market value (after
deduction of such  reserves and  allowances  as the  Administrative  Agent deems
proper and necessary) of sample Eligible  Inventory;  provided,  however,  in no
event shall the sum of clause (b) and clause (c) hereof  exceed 50% of the Total
Revolving Loan Commitment.

     "Borrowing  Base  Certificate"  shall mean the  certificate  in the form of
Exhibit G hereto, or in such other form acceptable to the Administrative  Agent,
to be delivered to the Administrative  Agent and the Lenders pursuant to Section
8.1(i) hereof.

                                       62
<PAGE>

     "Business  Day"  shall mean (i) for all  purposes  other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
Chicago,  Illinois,  a legal holiday or a day on which banking  institutions are
authorized or required by law or other government  action to close and (ii) with
respect to all notices and  determinations  in connection  with, and payments of
principal  and interest on,  Eurodollar  Loans,  any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in U.S. dollar deposits in the interbank Eurodollar market.

     "Capital  Expenditures"  shall  mean,  with  respect  to  any  Person,  all
expenditures  by such Person  which should be  capitalized  in  accordance  with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.

     "Capitalized Lease Obligations" shall mean, with respect to any Person, all
rental  obligations of such Person which,  under generally  accepted  accounting
principles,  are or will be  required  to be  capitalized  on the  books of such
Person,  in each case taken at the amount thereof  accounted for as indebtedness
in accordance with such principles.

     "Cash  Equivalents"  shall mean, as to any Person, (i) securities issued or
directly and fully  guaranteed  or insured by the United States or any agency or
instrumentality  thereof  (provided that the full faith and credit of the United
States is pledged in support thereof) having  maturities of not more than twelve
months from the date of acquisition,  (ii) marketable direct  obligations issued
by any state of the United States or any political subdivision of any such state
or any public  instrumentality  thereof  maturing  within twelve months from the
date of acquisition  thereof and, at the time of acquisition,  having one of the
two  highest  ratings  obtainable  from  either  S&P or  Moody's,  (iii)  Dollar
denominated  time deposits,  certificates of deposit and bankers  acceptances of
any Lender or any  commercial  bank having,  or which is the  principal  banking
subsidiary of a bank holding company having,  a long-term  unsecured debt rating
of at least "A" or the  equivalent  thereof  from S&P or "A2" or the  equivalent
thereof from Moody's with  maturities  of not more than six months from the date
of acquisition by such Person,  (iv) repurchase  obligations  with a term of not
more than seven days for underlying  securities of the types described in clause
(i) above  entered  into with any bank meeting the  qualifications  specified in
clause (iii) above,  (v) commercial  paper issued by any Person  incorporated in
the  United  States  rated at least A-1 or the  equivalent  thereof by S&P or at
least P-1 or the  equivalent  thereof by Moody's and in each case  maturing  not
more than six months  after the date of  acquisition  by such  Person,  and (vi)
investments  in  money  market  funds  substantially  all of  whose  assets  are
comprised of securities of the types described in clauses (i) through (v) above.

     "CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and  Liability  Act of 1980,  as the same has been amended and may  hereafter be
amended from time to time, 42 U.S.C. ss. 9601 et seq.

     "Change of Control"  shall mean (i) any  "person" or "group" (as such terms
are used in  Section  13(d)  and  14(d) of the  Exchange  Act)  (other  than the
Permitted  Holders)  is or shall  become the  "beneficial  owner" (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act),  directly or  indirectly,  of
greater than 30% of the economic or voting  interests in the Borrower's  capital

                                       63
<PAGE>

stock,  (ii) the Board of Directors of the Borrower  shall cease to consist of a
majority of Continuing Directors or (iii) a "change of control" or similar event
shall  occur  as  provided  in any  Qualified  Preferred  Stock  or  outstanding
Indebtedness (or the documentation governing the same).

     "Change of Law" shall have the meaning provided in Section 10.6.

     "Code" shall mean the Internal  Revenue Code of 1986,  as amended from time
to time, and the regulations promulgated and rulings issued thereunder.  Section
references  to the  Code  are to the  Code  as in  effect  at the  date  of this
Agreement  and  any  subsequent  provisions  of  the  Code  amendatory  thereof,
supplemental thereto or substituted therefor.

     "Collateral"  shall  mean all  property  (whether  real or  personal)  with
respect to which any security  interests  have been granted (or  purported to be
granted) pursuant to any Security Document,  including,  without limitation, all
Security Agreement Collateral,  all Pledge Agreement  Collateral,  all Mortgaged
Properties and all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.2 or 10.

     "Collateral Agent" shall mean the Administrative Agent acting as collateral
agent for the Secured Creditors pursuant to the Security Documents.

     "Collective  Bargaining  Agreements"  shall have the  meaning  provided  in
Section 5.5.

     "Commitment" shall mean the Revolving Loan Commitment of any Lender.

     "Consolidated EBIT" shall mean, for any period, Consolidated Net Income for
such period before deducting  therefrom  Consolidated  Interest Expense for such
period (to the extent that such  Consolidated  Interest  Expense was deducted in
arriving at  Consolidated  Net Income for such period) and  provision  for taxes
based on income that were  included in arriving at  Consolidated  Net Income for
such  period and without  giving  effect (x) to any  extraordinary  gains or any
extraordinary  non-cash losses (except to the extent that any such extraordinary
non-cash  losses will require a cash payment in a future  period) and (y) to any
gains or losses from sales of assets  other than from sales of  inventory in the
ordinary course of business.

     "Consolidated  EBITDA" shall mean,  for any period,  Consolidated  EBIT for
such  period,  adjusted  by adding  thereto  the amount of all  amortization  of
intangibles and depreciation  that were deducted in arriving at Consolidated Net
Income for such period.  Upon the  consummation  of each  Acquisition  permitted
under the Credit Documents and without any duplication or double counting, a pro
rata portion of the  consolidated  net income before  interest  expense,  taxes,
depreciation  and  amortization of the acquiree  related to the assets which are
the  subject  of  the   Acquisition  may  be  included  in  the  calculation  of
Consolidated EBITDA hereunder to the extent each of the components thereof to be
included  in  Consolidated  EBITDA  have  either (i) been  included in pro forma
financials  prepared by the Borrower in accordance  with  applicable  regulatory
requirements,  including any SEC requirement,  and audited or otherwise approved
by the Borrower's  auditors in a manner reasonably  satisfactory to the Required
Lenders or (ii) been the  subject  of a written  "due  diligence"  report of the

                                       64
<PAGE>

Borrower's  auditors or other  auditors  reasonably  acceptable  to the Required
Lenders,  such report in form and substance  acceptable to the Required Lenders;
provided,  however,  nothing in this sentence shall impair the obligation of the
Borrower and its  Subsidiaries to be in compliance with the financial  covenants
in this Agreement without giving effect to such Acquisition.

     "Consolidated  Funded  Debt"  shall  mean,  as  to  the  Borrower  and  its
Subsidiaries,  Indebtedness  of the  Borrower  and its  Subsidiaries  other than
Indebtedness  described in clauses (vi) - (viii)  inclusive of the definition of
"Indebtedness."

     "Consolidated  Indebtedness"  shall mean, at any time, the principal amount
of all Indebtedness of the Borrower and its Subsidiaries at such time determined
on a consolidated basis.

     "Consolidated  Interest  Coverage  Ratio" shall mean,  for any period,  the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such period.

     "Consolidated  Interest Expense" shall mean, for any period, the sum of the
total  consolidated  interest  expense of the Borrower and its  Subsidiaries for
such  period  (calculated  without  regard  to any  limitations  on the  payment
thereof) paid in cash plus, without duplication, (x) that portion of Capitalized
Lease Obligations of the Borrower and its Subsidiaries representing the interest
factor for such period and (y) the "deemed interest expense" (i.e., the interest
expense which would have been  applicable  if the  respective  obligations  were
structured  as  on-balance  sheet  financing  arrangements)  with respect to all
Indebtedness  of the  Borrower  and its  Subsidiaries  of the type  described in
clause  (viii) of the  definition  of  Indebtedness  contained  herein  for such
period.

     "Consolidated  Net Income" shall mean,  for any period,  the net income (or
loss) of the Borrower and its  Subsidiaries  for such  period,  determined  on a
consolidated basis (after any deduction for minority  interests),  provided that
(i) in determining  Consolidated Net Income,  the net income of any other Person
which is not a Subsidiary of the Borrower or is accounted for by the Borrower by
the equity  method of  accounting  shall be  included  only to the extent of the
payment of cash  dividends  or cash  distributions  by such other  Person to the
Borrower or a Subsidiary thereof during such period,  (ii) the net income of any
Subsidiary of the Borrower shall be excluded to the extent that the  declaration
or payment of cash dividends or similar cash distributions by that Subsidiary of
that net income is not at the date of  determination  permitted  by operation of
its charter or any agreement,  instrument or law  applicable to such  Subsidiary
and (iii) the net income (or loss) of any other Person  acquired by the Borrower
or a Subsidiary  of the Borrower in a pooling of interests  transaction  for any
period prior to the date of such acquisition shall be excluded.

     "Contingent  Obligation"  shall mean, as to any Person,  any  obligation of
such  Person as a result of such  Person  being a general  partner  of any other
Person,  unless the underlying  obligation is expressly made  non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness,  leases, dividends or other obligations ("primary

                                       65
<PAGE>

obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly,  including,  without limitation,  any obligation of such
Person,  whether or not contingent,  (i) to purchase any such primary obligation
or any  property  constituting  direct or indirect  security  therefor,  (ii) to
advance or supply  funds (x) for the  purchase  or  payment of any such  primary
obligation or (y) to maintain  working  capital or equity capital of the primary
obligor or  otherwise  to  maintain  the net worth or  solvency  of the  primary
obligor,  (iii) to purchase  property,  securities or services primarily for the
purpose of assuring the owner of any such primary  obligation  of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof provided, however, that the term Contingent Obligation shall not
include  endorsements  of instruments  for deposit or collection in the ordinary
course of business.  The amount of any Contingent  Obligation shall be deemed to
be an  amount  equal  to the  stated  or  determinable  amount  of  the  primary
obligation  in respect of which such  Contingent  Obligation  is made or, if not
stated or determinable,  the maximum reasonably anticipated liability in respect
thereof  (assuming such Person is required to perform  thereunder) as determined
by such Person in good faith.

     "Continuing  Directors"  shall mean the  directors  of the  Borrower on the
Effective  Date  and each  other  director  if such  director's  nomination  for
election to the Board of Directors of the Borrower is  recommended by a majority
of the then Continuing Directors.

     "Credit  Documents"  shall mean this Agreement and, after the execution and
delivery  thereof  pursuant  to the  terms of this  Agreement,  each  Note,  the
Subsidiaries  Guaranty,  the Master Letter of Credit Agreement and each Security
Document.

     "Credit  Event"  shall mean the making of any Loan or the  issuance  of any
Letter of Credit.

     "Credit Party" shall mean the Borrower and each Subsidiary Guarantor.

     "DEA" shall mean the Drug Enforcement Agency,  together with its successors
and comparable agencies in foreign countries.

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

     "Defaulting  Lender"  shall mean any Lender with  respect to which a Lender
Default is in effect.

     "Dividend"  shall mean,  with  respect to any Person,  that such Person has
declared or paid a dividend,  distribution or returned any equity capital to its
stockholders,  partners or members or authorized or made any other distribution,
payment or  delivery of property  (other than common  equity of such  Person) or
cash to its  stockholders,  partners or members as such,  or redeemed,  retired,
purchased or otherwise acquired, directly or indirectly, for a consideration any
shares  of any  class of its  capital  stock or any  partnership  or  membership
interests outstanding on or after the Effective Date (or any options or warrants
issued  by such  Person  with  respect  to its  capital  stock or  other  equity

                                       66
<PAGE>

interests),  or set aside any funds for any of the foregoing purposes,  or shall
have permitted any of its  Subsidiaries  to purchase or otherwise  acquire for a
consideration any shares of any class of the capital stock or any partnership or
membership  interests of such Person  outstanding on or after the Effective Date
(or any  options or warrants  issued by such Person with  respect to its capital
stock or other equity  interests).  Without limiting the foregoing,  "Dividends"
with respect to any Person  shall also include all payments  made or required to
be made by such Person with  respect to any stock  appreciation  rights,  plans,
equity  incentive or achievement  plans or any similar plans or setting aside of
any funds for the foregoing purposes.

     "Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States.

     "Domestic  Subsidiary"  means any  Subsidiary  which is not  designated  an
International  Subsidiary  by the  Borrower  with the  consent  of the  Required
Lenders.

     "Drawing" shall have the meaning provided in Section 2.5(b).

     "Effective Date" shall have the meaning provided in Section 13.10.

     "Eligible Accounts" shall mean those Accounts of the Borrower which:

          (a) are genuine in all respects and have arisen in the ordinary course
of the Borrower's business from (i) the performance of services by the Borrower,
which  services  have been fully  performed,  acknowledged  and  accepted by the
Account  Debtor or (ii) the sale,  license,  assignment or lease of Goods by the
Borrower,  including C.O.D. sales, which Goods have been completed in accordance
with the Account Debtor's  specifications (if any) and delivered to and accepted
by the Account  Debtor,  and the Borrower has possession of, or has delivered to
the  Administrative  Agent at the Administrative  Agent's request,  shipping and
delivery receipts evidencing such shipment;

          (b) are  evidenced  by an  invoice  delivered  to the  Account  Debtor
thereunder,  are due and payable  within  ninety (90) days after the date of the
invoice or shipment of the  Inventory  referred to in the invoice,  whichever is
later, and are not more than ninety (90) days past due;

          (c) do not arise from a "sale on approval" or a "sale or return";

          (d) have not arisen  out of  contracts  with the United  States or any
state,  county,  city or other governmental  body, or any department,  agency or
instrumentality thereof;

          (e) are not due from an  Account  Debtor  which is a  Subsidiary  or a
director, officer, employee, agent, parent or Affiliate of the Borrower;

          (f) do not arise in connection with a sale to an Account Debtor who is
not a resident or citizen of and is located  within the United States of America
{or Canada};

                                       67
<PAGE>

          (g) do not arise in connection with a sale to an Account Debtor who is
located  within a state  which  requires  the  Borrower,  as a  precondition  to
commencing or maintaining  an action in the courts of that state,  either to (i)
receive a  certificate  of authority  to do business and be in good  standing in
such state, or (ii) file a notice of business  activities or similar report with
such  state's  taxing  authority,  unless (A) the  Borrower has taken one of the
actions  described  in clauses  (i) or (ii),  (B) the failure to take one of the
actions described in either clause (i) or (ii) may be cured retroactively by the
Borrower at its election,  or (C) the Borrower has proven to the satisfaction of
the Administrative Agent that it is exempt from any such requirements under such
state's laws;

          (h) do not arise  out of a  contract  or order  which,  by its  terms,
forbids or makes void or  unenforceable  the  assignment  by the Borrower to the
Administrative  Agent of the Account  arising with  respect  thereto and are not
unassignable to the Administrative Agent for any other reason;

          (i) are the valid, legally enforceable and unconditional obligation of
the Account  Debtor,  are not the subject of any setoff,  counterclaim,  credit,
allowance or  adjustment by the Account  Debtor,  or of any claim by the Account
Debtor denying liability  thereunder in whole or in part, and the Account Debtor
has not  refused to accept  and/or has not  returned or offered to return any of
the Goods or services which are the subject of such Account;

          (j) are not subject to any Lien whatsoever, other than the Lien of the
Administrative Agent; and

          (k) no  proceedings  or actions are pending or threatened  against the
Account  Debtor  which  might  result  in any  material  adverse  change  in its
financial condition or in its ability to pay any Account in full.

An Account which is an Eligible  Account  shall cease to be an Eligible  Account
whenever  it ceases  to meet any one of the  foregoing  requirements,  but shall
again be deemed to be an Eligible  Account once such foregoing  requirements are
again complied with in a manner  reasonably  satisfactory to the  Administrative
Agent.

         If  invoices  representing  twenty-five  percent  (25%)  or more of the
unpaid net amount of all  Accounts  from any one Account  Debtor are unpaid more
than ninety  (90) days after the due date of such  invoices,  then all  Accounts
relating to such Account Debtor shall cease to be Eligible Accounts.

     "Eligible   Inventory"  shall  mean  all  Inventory   (excluding  packaging
materials)  of the Borrower  constituting  first quality  finished  prescription
pharmaceutical products which:

          (a) is not subject to any Lien whatsoever,  other than the Lien of the
Administrative Agent;

                                       68
<PAGE>

          (b) is held for sale,  lease or furnished  under contracts of service,
and is (except as the Administrative Agent may otherwise consent in writing) new
and unused;

          (c) is not now and shall not at any time  hereafter  be stored  with a
bailee,  warehouseman  or similar party without (i) the  Administrative  Agent's
prior  written  approval and (ii) delivery to the  Administrative  Agent by such
party  of  non-negotiable  warehouse  receipts  therefor  in the  Administrative
Agent's name or such other bailee's letter, in form and substance  acceptable to
the Administrative Agent;

          (d) is not unacceptable to the  Administrative  Agent, in its sole and
absolute discretion,  due to age; provided,  however,  Inventory which has 15 or
more months to expiry shall constitute Eligible Inventory;

          (e) is not  produced  in  violation  of the Fair Labor  Standards  Act
and/or  subject to the so-called  "hot goods"  provisions  contained in Title 29
U.S.C. 215(a); {and}

          (f)  does  not  violate  the  negative  covenants  and  satisfies  the
affirmative covenants of the Borrower contained in this Agreement[; and

          (G) IS LOCATED  (I) IN THE UNITED  STATES,  (II) IN ANY  TERRITORY  OR
POSSESSION  OF THE  UNITED  STATES  THAT HAS  ADOPTED  REVISED  ARTICLE 9 OF THE
UNIFORM COMMERCIAL CODE OR (III) OUTSIDE ANY OF THE FOREGOING JURISDICTIONS (THE
"NON-UCC  JURISDICTIONS"),  PROVIDED  THAT  THE  AGGREGATE  AMOUNT  OF  ELIGIBLE
INVENTORY IN THE NON-UCC JURISDICTIONS SHALL NOT EXCEED $500,000. ]

     Inventory which is Eligible  Inventory shall cease to be Eligible Inventory
whenever  it ceases  to meet any one of the  foregoing  requirements,  but shall
again be deemed to be Eligible  Inventory once such foregoing  requirements  are
again complied with in a manner  reasonably  satisfactory to the  Administrative
Agent.

     "Eligible  Transferee"  shall  mean  and  include  a  commercial  bank,  an
insurance  company, a finance company,  a financial  institution,  any fund that
invests in loans or any other "accredited  investor" (as defined in Regulation D
of the Securities Act).

     "Employee Benefit Plans" shall have the meaning provided in Section 5.5.

     "Employment Agreements" shall have the meaning provided in Section 5.5.

     "Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions,  suits, demands,  demand letters,  directives,  claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any  Environmental  Law or any permit issued,  or any approval given,
under any such  Environmental  Law  (hereafter,  "Claims"),  including,  without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement,  cleanup, removal,  response,  remedial or other actions or damages
pursuant to any applicable  Environmental Law, and (b) any and all Claims by any
third party  seeking  damages,  contribution,  indemnification,  cost  recovery,

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compensation or injunctive relief in connection with alleged injury or threat of
injury to health,  safety or the  environment  due to the  presence of Hazardous
Materials.

     "Environmental  Law"  shall  mean  any  Federal,  state,  foreign  or local
statute, law, rule, regulation,  ordinance, code, guideline,  policy and rule of
common  law now or  hereafter  in effect  and in each case as  amended,  and any
judicial or  administrative  interpretation  thereof,  including any judicial or
administrative  order, consent decree or judgment,  relating to the environment,
employee  health  and  safety  or  Hazardous   Materials,   including,   without
limitation,  CERCLA; the Resource Conservation and Recovery Act, 42 U.S.Css.6901
et seq.; the Federal Water Pollution Control Act, 33 U.S.C.ss. 1251 et seq.; the
Toxic Substances  Control Act, 15 U.S.C.ss.  2601 et seq.; the Clean Air Act, 42
U.S.C.ss.  7401 et seq.; the Safe Drinking Water Act, 42  U.S.C.ss.3803 et seq.;
the Oil Pollution Act of 1990, 33 U.S.C.ss. 2701 et seq.; the Emergency Planning
and the Community  Right-to-Know  Act of 1986, 42 U.S.C.ss.  11001 et seq.;  the
Hazardous   Material   Transportation   Act,  49   U.S.C.ss.1801  et  seq.;  the
Occupational  Safety and Health Act, 29 U.S.C. ss.651 et seq.; and any state and
local or foreign counterparts or equivalents,  in each case as amended from time
to time.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended from time to time, and the  regulations  promulgated  and rulings issued
thereunder.  Section  references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent  provisions of ERISA,  amendatory  thereof,
supplemental thereto or substituted therefor.

     "ERISA  Affiliate"  shall mean each person (as  defined in Section  3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of Section 414(b),  (c),
(m) or (o) of the Code or (ii) as a result of the  Borrower or a  Subsidiary  of
the Borrower being or having been a general partner of such person.

     "Eurodollar  Loan" shall mean each Loan  designated as such by the Borrower
at the time of the incurrence thereof or conversion thereto.

     "Eurodollar  Rate" shall mean a per annum rate of  interest  equal to LIBOR
for the relevant  Interest Period  (rounded upward if necessary,  to the nearest
1/16 of 1.00%),  which  Eurodollar  Rate shall remain fixed during such Interest
Period.

     "Event of Default" shall have the meaning provided in Section 10.

     "Excess Cash Flow" means,  with respect to any period,  the amount (if any)
by which (a) Consolidated  EBITDA (including for the purpose hereof,  Borrower's
Domestic  Subsidiaries  only) during such period  exceeds (b) the sum of (i) the
aggregate  amount  of  payments  required  to be  made by the  Borrower  and its
Domestic  Subsidiaries in cash during such period in respect of all principal on
all  Indebtedness  (whether at maturity,  as a result of mandatory  sinking fund
redemption,  mandatory  prepayment,  acceleration  or  otherwise,  but excluding
payments  made on the  Revolving  Loans and  prepayments  of the Term  Loans (as
defined in the First  Horizon  International  Financing  documents)  made out of

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Excess Cash Flow),  plus (ii) Consolidated  Interest Expense  (including for the
purpose hereof,  Borrower's Domestic  Subsidiaries only) paid or payable in cash
during such period, plus (iii) federal,  state or local taxes paid or payable in
cash by the Borrower and its Domestic Subsidiaries during such period, plus (iv)
the aggregate  amount of Capital  Expenditures  incurred by the Borrower and its
Domestic Subsidiaries during such period.

     "Exchange Act" shall mean the Securities  Exchange Act of 1934, as amended,
and the rules and  regulations  promulgated  thereunder  as from time to time in
effect.

     "Existing  Indebtedness  Agreements"  shall have the  meaning  provided  in
Section 5.5.

     "Facing Fee" shall have the meaning provided in Section 3.1(b).

     "FDA"  shall  mean  the Food and  Drug  Administration,  together  with its
successors and comparable agencies in foreign countries.

     "Federal  Funds Rate" shall mean,  for any period,  a fluctuating  interest
rate equal for each day during such period to 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 for such day (or, if such
day is not a Business Day, for the next  preceding  Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a  Business  Day,  the  average  of the  quotations  for  such  day  on  such
transactions  received  by the  Administrative  Agent from three  Federal  Funds
brokers of recognized standing selected by the Administrative Agent.

     "Fees" shall mean all amounts payable pursuant to or referred to in Section
3.1.

     "First   Horizon   International"   means  First   Horizon   Pharmaceutical
International  Limited,  an Irish corporation,  together with its successors and
assigns.

     "First  Horizon  International  Financing"  means the  secured  acquisition
financing provided to First Horizon International by LaSalle,  certain financial
institutions and the  Administrative  Agent, as agent, in the initial  principal
amount of $15,000,000, as such amount may be modified from time to time.

     "Fixed  Charge  Coverage  Ratio"  shall mean at any time,  the ratio of (a)
Consolidated EBITDA less Capital Expenditures less provision for taxes that were
included in arriving at  Consolidated  Net Income to (b)  Consolidated  Interest
Expense and current maturities of long term Consolidated Funded Debt.

     "Foreign  Exchange  Hedging  Agreement"  shall  mean any  foreign  exchange
contracts,  currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values.

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     "Foreign Pension Plan" shall mean each employee  benefit plan,  employment,
bonus,  incentive,  stock purchase and stock option plan, program,  agreement or
arrangement;   and  each  severance,   termination  pay,  salary   continuation,
retention,  accrued  leave,  vacation,  sick  pay,  sick  leave,  medical,  life
insurance,  disability,  accident,  profit-sharing,   fringe  benefit,  pension,
deferred compensation or other retirement or superannuation plan, fund, program,
agreement,  commitment  or  arrangement  sponsored,  established,  maintained or
contributed  to, or required to be contributed  to, or with respect to which any
liability is borne, outside the fifty states of the United States of America, by
the Borrower or any of its Subsidiaries, including, without limitation, any such
plan,  fund,  program,  agreement or  arrangement  sponsored by a government  or
governmental entity.

     "Goods" shall have the meaning specified in the Security Agreement.

     "Guarantor" shall mean each Subsidiary Guarantor.

     "Guaranty" shall mean the Subsidiaries Guaranty.

     "Hazardous  Materials" shall mean (a) any petroleum or petroleum  products,
radioactive  materials,  asbestos in any form that is or could  become  friable,
urea  formaldehyde  foam  insulation,  dielectric  fluid  containing  levels  of
polychlorinated  biphenyls,  and radon  gas;  (b) any  chemicals,  materials  or
substances  defined as or included in the definition of "hazardous  substances,"
"hazardous  waste," "hazardous  materials,"  "extremely  hazardous  substances,"
"restricted   hazardous   waste,"  "toxic   substances,"   "toxic   pollutants,"
"contaminants,"  or  "pollutants,"  or  words  of  similar  import,   under  any
applicable Environmental Law; and (c) any other chemical, material or substance,
the exposure to, or Release of which is prohibited,  limited or regulated by any
governmental authority.

     "Indebtedness" shall mean, as to any Person,  without duplication,  (i) all
indebtedness  (including principal,  interest,  fees and charges) of such Person
for borrowed  money or for the deferred  purchase price of property or services,
(ii) the  maximum  amount  available  to be drawn  under all  letters of credit,
bankers'  acceptances  and  similar  obligations  issued for the account of such
Person and all unpaid  drawings in respect of such  letters of credit,  bankers'
acceptances  and  similar  obligations,  (iii)  all  Indebtedness  of the  types
described  in clause (i),  (ii),  (iv),  (v),  (vi) or (vii) of this  definition
secured by any Lien on any property  owned by such  Person,  whether or not such
Indebtedness  has been assumed by such Person  (provided that, if the Person has
not assumed or otherwise  become  liable in respect of such  Indebtedness,  such
Indebtedness  shall be deemed to be in an amount  equal to the fair market value
of the property to which such Lien relates as  determined  in good faith by such
Person),  (iv) the aggregate amount of all Capitalized Lease Obligations of such
Person, (v) all obligations of such Person to pay a specified purchase price for
goods or services,  whether or not delivered or accepted,  i.e., take-or-pay and
similar obligations,  (vi) all Contingent  Obligations of such Person, (vii) all
obligations  under any Interest  Rate  Protection  Agreement,  any Other Hedging
Agreement  or under any  similar  type of  agreement  and  (viii)  all  monetary
obligations of such Person under (x) a so-called synthetic, off-balance sheet or
tax retention  lease,  or (y) an agreement for the use or possession of property
creating  obligations that do not appear on the balance sheet of such Person but
which, upon the insolvency or bankruptcy of such Person,  would be characterized

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as the  indebtedness of such Person  (without  regard to accounting  treatment).
Notwithstanding the foregoing, Indebtedness shall not include trade payables and
accrued expenses  incurred by any Person in accordance with customary  practices
and in the ordinary course of business of such Person.

     "Initial  Borrowing  Date"  shall mean the date  occurring  on or after the
Effective Date on which the initial Borrowing of Loans occurs.

     "Interest  Determination  Date" shall mean,  with respect to any Eurodollar
Loan, the second  Business Day prior to the  commencement of any Interest Period
relating to such Eurodollar Loan.

     "Interest Period" shall have the meaning provided in Section 1.9.

     "Interest  Rate  Protection  Agreement"  shall mean any interest  rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.

     "International  Subsidiary" shall mean First Horizon  International,  First
Horizon Pharmaceutical Ireland Limited, an Irish corporation,  and First Horizon
Pharmaceutical  Netherlands  BV, a Dutch  corporation,  and any other  direct or
indirect  Subsidiary  of the Borrower  that shall be  designated by the Borrower
with the consent of the Required Lenders as an International Subsidiary pursuant
to Section 9.16 of this Agreement, or otherwise.

     "Inventory" shall have the meaning specified in the Security Agreement.

     "Investments" shall have the meaning provided in Section 9.5.

     "Issuing  Lender"  shall  mean  LaSalle  or  any  Lender  approved  by  the
Administrative  Agent  which has agreed to issue  Letters  of Credit  under this
Agreement.

     "LaSalle" shall mean LaSalle Bank National  Association,  in its individual
capacity,  and any successor  corporation  thereto by merger,  consolidation  or
otherwise.

     "L/C Supportable Obligations" shall mean (i) obligations of the Borrower or
any of its Subsidiaries with respect to workers  compensation,  surety bonds and
other  similar  statutory  obligations  and (ii) such other  obligations  of the
Borrower or any of its Subsidiaries as are reasonably  acceptable to the Issuing
Lender and otherwise permitted to exist pursuant to the terms of this Agreement.

     "Leaseholds" of any Person shall mean all the right,  title and interest of
such Person as lessee or licensee  in, to and under  leases or licenses of land,
improvements and/or fixtures.

     "Lender"  shall mean each  financial  institution  listed on Schedule I, as
well as any Person that becomes a "Lender" hereunder pursuant to Section 1.13 or
13.4(b).

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     "Lender  Default" shall mean (i) the refusal (which has not been retracted)
or the failure of a Lender to make  available  its portion of any  Borrowing  in
violation of the  requirements  of this  Agreement or to fund its portion of any
unreimbursed  payment under Section  2.4(c) or (ii) a Lender having  notified in
writing the Borrower and/or the  Administrative  Agent that such Lender does not
intend to comply with its obligations under Section 1.1 or 2.

     "Letter of Credit" shall have the meaning provided in Section 2.1(a).

     "Letter of Credit Fee" shall have the meaning provided in Section 3.1(a).

     "Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the
Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount
of all Unpaid Drawings in respect of all Letters of Credit.

     "Letter of Credit  Request"  shall  have the  meaning  provided  in Section
2.3(a).

     "Leverage Ratio" shall mean, at any time, the ratio of Consolidated  Funded
Debt at such time to Consolidated  EBITDA for the Test Period then most recently
ended.

     "LIBOR" shall mean a rate of interest equal to the LIBOR Index Rate for the
relevant  Interest Period,  if such index is available,  and, if the LIBOR Index
Rate cannot be determined, the per annum rate of interest at which United States
dollar deposits in an amount comparable to the amount of the relevant Eurodollar
Loan  and for a  period  equal  to the  relevant  Interest  Period  are  offered
generally to the  Administrative  Agent  (rounded  upward if  necessary,  to the
nearest 1/16 of 1.00%) in the London Interbank  Eurodollar  market at 11:00 a.m.
(London time) on the Interest  Determination Date, in each case less the maximum
reserve percentages for determining reserves to be maintained by member banks of
the Federal  Reserve System for  Eurocurrency  liabilities,  such rate to remain
fixed for such Interest  Period.  The  Administrative  Agent's  determination of
LIBOR shall be conclusive, absent manifest error.

     "LIBOR Index Rate" shall mean, for any Interest Period,  the rate per annum
(rounded upwards, if necessary,  to the nearest 1/16th of 1.00%) for deposits in
U.S.  Dollars for a period equal to such Interest  Period,  which appears on the
Bloomberg  Financial Markets System, or other  authoritative  source selected by
the  Administrative  Agent in its sole  discretion  as of  11:00  a.m.  (London,
England time) on the Interest Determination Date.

     "Lien" shall mean any mortgage, pledge, hypothecation,  assignment, deposit
arrangement,  encumbrance,  lien (statutory or other),  preference,  priority or
other security  agreement of any kind or nature whatsoever  (including,  without
limitation,  any  conditional  sale or  other  title  retention  agreement,  any
financing  or  similar  statement  or  notice  filed  under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).

     "Loan" shall mean each Revolving Loan.

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     "Location" of any Person shall mean its location as determined  pursuant to
Section 9-307 of the UCC (or any successor section thereof).

     "Management Agreements" shall have the meaning provided in Section 5.5.

     "Margin Stock" shall have the meaning provided in Regulation U.

     "Master  Letter  of  Credit  Agreement"  shall  mean the  Issuing  Lender's
standard form of master letter of credit agreement,  as amended or modified from
time to time,  which shall be executed in  connection  with this  Agreement  and
which shall contain terms applicable to Letters of Credit.

     "Material  Adverse Effect" shall mean (i) a material  adverse effect on the
business,  operations,  property, assets,  liabilities,  condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole or
(ii) a material  adverse  effect (x) on the rights or remedies of the Lenders or
the Administrative  Agent hereunder or under any other Credit Document or (y) on
the  ability of any Credit  Party to perform its  obligations  to the Lenders or
Administrative Agent hereunder or under any other Credit Document.

     "Minimum  Borrowing  Amount" shall mean  $1,000,000  for  Revolving  Loans.

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

     "Mortgage"  shall  mean a  mortgage,  leasehold  mortgage,  deed of  trust,
leasehold deed of trust,  deed to secure debt,  leasehold deed to secure debt or
similar security instrument.

     "Mortgage Policy" shall mean a mortgage title insurance policy or a binding
commitment with respect thereto.

     "Mortgaged  Property"  shall mean any Real Property  owned or leased by the
Borrower  or any of its  Subsidiaries  which is  encumbered  (or  required to be
encumbered) by a Mortgage.

     "NAIC" shall mean the National Association of Insurance Commissioners.

     "Net  Debt  Proceeds"  shall  mean,  with  respect  to  any  incurrence  of
Indebtedness  for  borrowed  money,  the  cash  proceeds  (net  of  underwriting
discounts and  commissions  and other  reasonable  costs  associated  therewith)
received  by the  respective  Person  from  the  respective  incurrence  of such
Indebtedness for borrowed money.

     "Net Equity  Proceeds" shall mean, with respect to each issuance or sale of
any equity by any Person or any capital  contribution  to such Person,  the cash
proceeds (net of underwriting  discounts and  commissions  and other  reasonable
costs associated  therewith) received by such Person from the respective sale or
issuance of its equity or from the respective capital contribution.

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<PAGE>

     "Net  Recovery  Event  Proceeds"  shall mean,  with respect to any Recovery
Event,  the cash  proceeds  (net of  reasonable  costs  and  taxes  incurred  in
connection  with such  Recovery  Event)  received  by the  respective  Person in
connection with such Recovery Event,  including without limitation any such cash
proceeds received pursuant to insurance  policies,  as condemnation  proceeds or
otherwise.

     "Net Sale Proceeds" shall mean, for any Asset Sale, the gross cash proceeds
(including any cash received by way of deferred payment pursuant to a promissory
note, receivable or otherwise, but only as and when received) received from such
Asset Sale, net of the reasonable  costs of such Asset Sale  (including fees and
commissions,  payments of unassumed  liabilities relating to any assets sold and
required payments of any Indebtedness (other than Indebtedness  secured pursuant
to the Security  Documents)  which is secured by any assets sold pursuant to the
respective Asset Sale), and the incremental taxes paid or payable as a result of
such Asset Sale.

     "Non-Compete Agreements" shall have the meaning provided in Section 5.5.

     "Non-Defaulting  Lender"  and  "Non-Defaulting  RL  Lender"  shall mean and
include  each Lender or RL Lender,  as the case may be,  other than a Defaulting
Lender.

     "Note" shall mean each Revolving Note.

     "Notice of Borrowing" shall have the meaning provided in Section 1.3(a).

     "Notice of  Conversion/Continuation"  shall have the  meaning  provided  in
Section 1.6.

     "Notice Office" shall mean the office of the  Administrative  Agent located
at 135 South LaSalle Street,  Suite 828,  Chicago,  Illinois  60603,  Attention:
Patrick O'Toole or such other office or person as the  Administrative  Agent may
hereafter designate in writing as such to the other parties hereto.

     "Obligations" shall mean all amounts owing to the Administrative Agent, the
Collateral Agent, the Issuing Lender or any Lender pursuant to the terms of this
Agreement or any other Credit Document.

     "Other  Hedging  Agreements"  shall mean any  foreign  exchange  contracts,
currency swap agreements,  commodity  agreements or other similar  agreements or
arrangements  designed to protect  against  fluctuations  in currency  values or
commodity prices.

     "Participant" shall have the meaning provided in Section 2.4(a).

     "Payment Office" shall mean the office of the Administrative  Agent located
at 135 South LaSalle Street, Chicago, Illinois 60603 or such other office as the
Administrative  Agent may  hereafter  designate  in writing as such to the other
parties hereto.

     "PBGC"  shall mean the Pension  Benefit  Guaranty  Corporation  established
pursuant to Section 4002 of ERISA, or any successor thereto.

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<PAGE>

     "Permitted Encumbrance" shall mean, with respect to any Mortgaged Property,
such exceptions to title as are set forth in the Mortgage Policy  delivered with
respect   thereto,   all  of  which   exceptions   must  be  acceptable  to  the
Administrative Agent in its reasonable discretion.

     "Permitted  Holders"  shall mean John Kapoor,  his decedents and members of
their immediate families as well as Persons controlled by any of the foregoing.

     "Permitted Liens" shall have the meaning provided in Section 9.1.

     "Person"  shall mean any  individual,  partnership,  joint  venture,  firm,
corporation,  association,  limited liability company, trust or other enterprise
or any  government  or  political  subdivision  or  any  agency,  department  or
instrumentality thereof.

     "Plan"  shall mean any  pension  plan as defined in Section  3(2) of ERISA,
which is maintained or  contributed to by (or to which there is an obligation to
contribute  of)  the  Borrower  or a  Subsidiary  of the  Borrower  or an  ERISA
Affiliate  on or after the Initial  Borrowing  Date,  and each such plan for the
five year period immediately  following the latest date (whether before or after
the Initial Borrowing Date) on which the Borrower,  a Subsidiary of the Borrower
or an  ERISA  Affiliate  maintained,  contributed  to or  had an  obligation  to
contribute to such plan.

     "Pledge Agreement" shall have the meaning provided in Section 5.10.

     "Pledge Agreement Collateral" shall mean all "Collateral" as defined in the
Pledge Agreement.

     "Pledgee" shall have the meaning provided in the Pledge Agreement.

     "Prime  Lending  Rate" shall mean the rate which the  Administrative  Agent
announces from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes.  The Prime Lending Rate is a
reference  rate and does not  necessarily  represent  the  lowest  or best  rate
actually  charged to any customer by the  Administrative  Agent,  which may make
commercial  loans or other  loans at rates of  interest  at,  above or below the
Prime Lending Rate.

     "Qualified  Preferred Stock" shall mean any preferred stock of the Borrower
so long as the terms of such  preferred  stock (i) do not contain any  mandatory
put, redemption, repayment, sinking fund or other similar provision prior to the
sixth  anniversary  of the Initial  Borrowing  Date,  (ii) do not  require  cash
payments  (of  dividends  or  otherwise)  at a time when such  payment  would be
prohibited  or  not  permitted  under  this  Agreement  (as  amended,  modified,
supplemented,  refinanced or replaced  from time to time),  (iii) do not contain
any  covenants,  (iv) do not grant the holders  thereof any voting rights except
for (x) voting rights  required to be granted to such holders  under  applicable
law and (y) limited  customary  voting  rights on  fundamental  matters  such as
mergers,  consolidations,  sales  of  substantially  all  of the  assets  of the
Borrower,  or  liquidations  involving  the  Borrower,  and  (v)  are  otherwise
satisfactory to the Administrative Agent.

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     "Real Property" of any Person shall mean all the right,  title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.

     "Recovery  Event'  shall  mean the  receipt by the  Borrower  or any of its
Subsidiaries of any cash insurance  proceeds or condemnation  awards payable (i)
by reason of theft,  loss,  physical  destruction,  damage,  taking or any other
similar  event with  respect to any property or assets of the Borrower or any of
its  Subsidiaries  and  (ii)  under  any  policy  of  insurance  required  to be
maintained under Section 8.3.

     "Register" shall have the meaning provided in Section 13.15.

     "Regulation  D" shall mean  Regulation  D of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.

     "Regulation  T" shall mean  Regulation  T of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof.

     "Regulation  U" shall mean  Regulation  U of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof.

     "Regulation  X" shall mean  Regulation  X of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof.

     "Release"  shall  mean  actively  or  passively   disposing,   discharging,
injecting,  spilling, pumping, leaking, leaching,  dumping, emitting,  escaping,
emptying,  pouring,  seeping,  migrating  or the like,  into or upon any land or
water or air, or otherwise entering into the environment.

     "Replaced Lender" shall have the meaning provided in Section 1.13.

     "Replacement Lender" shall have the meaning provided in Section 1.13.

     "Reportable  Event"  shall mean an event  described  in Section  4043(c) of
ERISA with  respect  to a Plan that is  subject to Title IV of ERISA  other than
those events as to which the 30-day  notice  period is waived  under  subsection
..22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.

     "Required  Lenders"  shall  mean  Non-Defaulting  Lenders  the sum of whose
outstanding  Revolving  Loan  Commitments  (or  after the  termination  thereof,
outstanding Revolving Loans and RL Percentages of Letter of Credit Outstandings)
represent  at least  50.1%  of the  Total  Revolving  Loan  Commitment  less the
Revolving Loan  Commitments of all Defaulting  Lenders (or after the termination
thereof,  the sum of then total  outstanding  Revolving Loans of  Non-Defaulting
Lenders and the aggregate RL  Percentages of all  Non-Defaulting  Lenders of the
total outstanding Letter of Credit Outstandings at such time).

     "Returns" shall have the meaning provided in Section 7.9.

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     "Revolving Loan" shall have the meaning provided in Section 1.1.

     "Revolving Loan Availability" shall mean at any time, the lesser of (a) the
Total Revolving Loan Commitments less the Letter of Credit Outstandings, and (b)
the Borrowing Base Amount less the Letter of Credit Outstandings.

     "Revolving  Loan  Commitment"  shall mean, for each Lender,  the amount set
forth  opposite  such  Lender's  name in  Schedule I  directly  below the column
entitled  "Revolving  Loan  Commitment," as same may be (x) reduced from time to
time  pursuant to Sections  3.2, 3.3 and/or 10 or (y) adjusted from time to time
as a result of  assignments  to of from such Lender  pursuant to Section 1.13 or
13.4(b).

     "Revolving Loan Maturity Date" shall mean February __, 2006.

     "Revolving Note" shall have the meaning provided in Section 1.5(a).

     "RL Lender" shall mean each Lender with a Revolving Loan Commitment or with
outstanding Revolving Loans.

     "RL  Percentage"  of any  RL  Lender  at any  time  shall  mean a  fraction
(expressed  as a  percentage)  the  numerator  of  which is the  Revolving  Loan
Commitment  of such RL Lender at such time and the  denominator  of which is the
Total Revolving Loan Commitment at such time, provided that if the RL Percentage
of any RL Lender is to be determined  after the Total  Revolving Loan Commitment
has  been  terminated,  then  the RL  Percentage  of such  RL  Lender  shall  be
determined immediately prior (and without giving effect) to such termination.

     "Scheduled  Interest  Payment Date" shall mean (x) in the case of Base Rate
Loans,  the last  Business  Day of each  calendar  month ended after the Initial
Borrowing Date (beginning with February 28, 2003) and on or before the Revolving
Loan  Maturity  Date,  (y) in the case of  Letters of Credit  fees,  on the last
Business Day of the third month following the issuance or renewal of such Letter
of Credit and on the last  Business Day of each three month  period  thereafter,
and (z) in the case of other Fees,  on the last  Business  Day of each  calendar
quarter, commencing on the first such date to occur after the Effective Date.

     "SEC" shall have the meaning provided in Section 8.1(g).

     "Section 4.4(b)(ii) Certificate" shall have the meaning provided in Section
4.4(b)(ii).

     "Secured  Creditors"  shall  have the  meaning  assigned  that  term in the
respective Security Documents.

     "Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

     "Security Agreement" shall have the meaning provided in Section 5.9.

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     "Security  Agreement  Collateral" shall mean all "Collateral" as defined in
the Security Agreement.

     "Security Documents" shall mean and include each of the Security Agreement,
the Pledge  Agreement and each  Mortgage  and,  after the execution and delivery
thereof, each Additional Security Document.

     "Shareholders' Agreements" shall have the meaning provided in Section 5.5.

     "Stated  Amount" of each  Letter of Credit  shall  mean,  at any time,  the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).

     "Subsidiaries Guaranty" shall have the meaning provided in Section 5.8.

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

     "Subsidiary  Guarantor" shall mean each Domestic Subsidiary of the Borrower
existing on the Initial Borrowing Date or established, created or acquired after
the Initial  Borrowing Date (unless the Required Banks, in their sole discretion
have waived in writing the requirement that any such Domestic  Subsidiary become
a Subsidiary Guarantor).

     "Tax Sharing Agreements" shall have the meaning provided in Section 5.5.

     "Taxes" shall have the meaning provided in Section 4.4(a).

     "Test Period" shall mean each period of four consecutive fiscal quarters of
the  Borrower  ended on the last day of any fiscal  quarter of the  Borrower (in
each case taken as one accounting period).

     "Total  Commitment"  shall mean, at any time,  the sum of the Commitment of
each Lender at such time.

     "Total Revolving Loan  Commitment"  shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Lenders at such time.

     "Total  Unutilized  Revolving Loan Commitment"  shall mean, at any time, an
amount equal to the remainder of (x) the Total Revolving Loan Commitment then in
effect less (y) the sum of the aggregate principal amount of all Revolving Loans

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then outstanding plus the aggregate amount of all Letter of Credit Outstandings.

     "Transaction"  shall mean the entering into of the Credit Documents and the
incurrence of Loans on the Initial  Borrowing  Date and the payment of all flees
and expenses in connection with the foregoing.

     "Type" shall mean the type of Loan  determined  with regard to the interest
option applicable thereto, i.e., whether a Base Rate Loan or a Eurodollar Loan.

     "UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the State of Illinois.

     "Unfunded Current  Liability" of any Plan shall mean the amount, if any, by
which the value of the accumulated  plan benefits under the Plan determined on a
plan  termination  basis in accordance  with actuarial  assumptions at such time
consistent  with those  prescribed  by the PBGC for  purposes of Section 4044 of
ERISA,  exceeds  the fair  market  value of all plan  assets  allocable  to such
liabilities   under  Title  IV  of  ERISA  (excluding  any  accrued  but  unpaid
contribution).

     "United States" and "U.S." shall each mean the United States of America.

     "Unpaid Drawing" shall have the meaning provided in Section 2.5(a).

     "Unutilized  Revolving  Loan  Commitment"  shall mean,  with respect to any
Lender at any time,  such Lender's  Revolving Loan  Commitment at such time less
the sum of (i) the aggregate outstanding principal amount of all Revolving Loans
made by such  Lender at such time and (ii) such  Lender's RL  Percentage  of the
Letter of Credit Outstandings at such time.

     "Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose  capital  stock is at the time owned by such Person  and/or one or
more  Wholly-Owned  Subsidiaries  of  such  Person  and  (ii)  any  partnership,
association,  joint  venture or other entity in which such Person  and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.

     SECTION 12. The Administrative Agent.

     12.1.  Appointment.  The Lenders hereby  irrevocably  designate and appoint
LaSalle as  Administrative  Agent (for  purposes of this  Section 12 and Section
13.1, the term "Administrative Agent" also shall include LaSalle in its capacity
as  Collateral  Agent  pursuant to the Security  Documents)  to act as specified
herein  and in the  other  Credit  Documents.  Each  Lender  hereby  irrevocably
authorizes,  and each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the Administrative Agent to take such action on
its behalf under the provisions of this  Agreement,  the other Credit  Documents
and any other  instruments  and agreements  referred to herein or therein and to
exercise such powers and to perform such duties  hereunder and thereunder as are
specifically  delegated to or required of the Administrative  Agent by the terms

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hereof and thereof and such other powers as are reasonably  incidental  thereto.
The  Administrative  Agent may perform any of its respective duties hereunder by
or through its officers, directors, agents, employees or affiliates.

     12.2. Nature of Duties. The Administrative  Agent shall not have any duties
or  responsibilities  except those  expressly set forth in this Agreement and in
the other  Credit  Documents.  Neither the  Administrative  Agent nor any of its
officers,  directors,  agents,  employees or affiliates  shall be liable for any
action  taken or  omitted  by it or them  hereunder  or under any  other  Credit
Document or in connection  herewith or therewith,  unless caused by its or their
gross  negligence or willful  misconduct  (as determined by a court of competent
jurisdiction  in a  final  and  non-appealable  decision).  The  duties  of  the
Administrative  Agent shall be  mechanical  and  administrative  in nature;  the
Administrative  Agent  shall not have by reason of this  Agreement  or any other
Credit Document a fiduciary  relationship in respect of any Lender or the holder
of any Note;  and nothing in this  Agreement  or in any other  Credit  Document,
expressed or implied,  is intended to or shall be so construed as to impose upon
the  Administrative  Agent any  obligations  in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.

     12.3.  Lack of  Reliance on the  Administrative  Agent.  Independently  and
without reliance upon the  Administrative  Agent,  each Lender and the holder of
each Note, to the extent it deems  appropriate,  has made and shall  continue to
make  (i) its own  independent  investigation  of the  financial  condition  and
affairs of the Borrower and its  Subsidiaries  in connection with the making and
the  continuance  of the Loans and the  taking  or not  taking of any  action in
connection  herewith and (ii) its own appraisal of the  creditworthiness  of the
Borrower  and  its  Subsidiaries  and,  except  as  expressly  provided  in this
Agreement,  the Administrative  Agent shall not have any duty or responsibility,
either  initially or on a continuing  basis, to provide any Lender or the holder
of any Note with any credit or other  information with respect thereto,  whether
coming  into its  possession  before  the  making of the Loans or at any time or
times  thereafter.  The  Administrative  Agent shall not be  responsible  to any
Lender or the  holder  of any Note for any  recitals,  statements,  information,
representations  or warranties  herein or in any document,  certificate or other
writing  delivered in connection  herewith or for the execution,  effectiveness,
genuineness, validity, enforceability,  perfection, collectibility,  priority or
sufficiency  of this  Agreement  or any other Credit  Document or the  financial
condition of the Borrower or any of its  Subsidiaries or be required to make any
inquiry  concerning  either the  performance  or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document,  or the
financial  condition of the Borrower or any of its Subsidiaries or the existence
or possible existence of any Default or Event of Default.

     12.4.  Certain Rights of the  Administrative  Agent. If the  Administrative
Agent requests instructions from the Required Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any other
Credit Document, the Administrative Agent shall be entitled to refrain from such
act or taking such action unless and until the  Administrative  Agent shall have
received  instructions from the Required Lenders;  and the Administrative  Agent
shall not incur  liability  to any  Lender by reason of so  refraining.  Without
limiting the foregoing, neither any Lender nor the holder of any Note shall have

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any right of action whatsoever against the  Administrative  Agent as a result of
the Administrative Agent acting or refraining from acting hereunder or under any
other  Credit  Document in  accordance  with the  instructions  of the  Required
Lenders.

     12.5.  Reliance.  The  Administrative  Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement,  certificate,  telex,  teletype  or  telecopier  message,  cablegram,
radiogram,  order or other document or telephone message signed, sent or made by
any Person that the Administrative  Agent believed to be the proper Person, and,
with respect to all legal  matters  pertaining  to this  Agreement and any other
Credit Document and its duties hereunder and thereunder,  upon advice of counsel
selected by the Administrative Agent.

     12.6.  Indemnification.  To the  extent  the  Administrative  Agent (or any
affiliate  thereof) is not  reimbursed  and  indemnified  by the  Borrower,  the
Lenders will reimburse and indemnify the Administrative Agent (and any affiliate
thereof) in proportion to their  respective  "percentage" as used in determining
the Required Lenders (determined as if there were no Defaulting Lenders) for and
against  any and  all  liabilities,  obligations,  losses,  damages,  penalties,
claims, actions,  judgments, costs, expenses or disbursements of whatsoever kind
or  nature  which  may be  imposed  on,  asserted  against  or  incurred  by the
Administrative  Agent  (or  any  affiliate  thereof  in  performing  its  duties
hereunder  or under any  other  Credit  Document  or in any way  relating  to or
arising out of this  Agreement or any other Credit  Document or its  syndication
efforts in connection herewith;  provided that no Lender shall be liable for any
portion of such liabilities,  obligations,  losses, damages, penalties,  claims,
actions,  judgments,  suits, costs, expenses or disbursements resulting from the
Administrative  Agent's  (or  such  affiliate's)  gross  negligence  or  willful
misconduct  (as determined by a court of competent  jurisdiction  in a final and
non-appealable decision).

     12.7. The Administrative Agent in its Individual Capacity.  With respect to
its  obligation  to make Loans,  or issue or  participate  in Letters of Credit,
under this Agreement,  the Administrative Agent shall have the rights and powers
specified  herein for a "Lender"  and may exercise the same rights and powers as
though  it were  not  performing  the  duties  specified  herein;  and the  term
"Lender,"  "Required  Lenders,"  "holders of Notes" or any similar  terms shall,
unless the context clearly indicates otherwise, include the Administrative Agent
in its  respective  individual  capacities.  The  Administrative  Agent  and its
Affiliates may accept deposits from, lend money to, and generally  engage in any
kind of banking,  investment  banking,  trust or other business with, or provide
debt financing,  equity capital or other services (including  financial advisory
services)  to any Credit  Party or any  Affiliate  of any  Credit  Party (or any
Person  engaged in a similar  business  with any Credit  Party or any  Affiliate
thereof) as if they were not performing  the duties  specified  herein,  and may
accept fees and other  consideration  from any Credit Party or any  Affiliate of
any Credit Party for services in  connection  with this  Agreement and otherwise
without having to account for the same to the Lenders.

     12.8. Holders. The Administrative Agent may deem and treat the payee of any
Note as the owner  thereof for all  purposes  hereof  unless and until a written
notice of the assignment,  transfer or endorsement  thereof, as the case may be,

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shall have been filed with the Administrative  Agent. Any request,  authority or
consent of any Person  who,  at the time of making  such  request or giving such
authority or consent,  is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee,  assignee or endorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.

     12.9. Resignation by the Administrative Agent.

          (a) The  Administrative  Agent may resign from the  performance of all
its  respective  functions  and duties  hereunder  and/or under the other Credit
Documents at any time by giving 15 Business  Days' prior  written  notice to the
Lenders  and,  unless a Default or an Event of Default  under  Section 10.5 then
exists, the Borrower. Such resignation shall take effect upon the appointment of
a  successor  Administrative  Agent  pursuant to clauses (b) and (c) below or as
otherwise provided below.

          (b) Upon any such notice of resignation by the  Administrative  Agent,
the Required Lenders shall appoint a successor Administrative Agent hereunder or
thereunder who shall be a commercial bank or trust company reasonably acceptable
to the Borrower,  which acceptance shall not be unreasonably withheld or delayed
(provided  that the  Borrower's  approval  shall not be  required if an Event of
Default then exists).

          (c) If a  successor  Administrative  Agent  shall  not  have  been  so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower  (which  consent shall not be  unreasonably  withheld or
delayed,  provided that the Borrower's consent shall not be required if an Event
of Default then exists), shall then appoint a successor Administrative Agent who
shall serve as Administrative  Agent hereunder or thereunder until such time, if
any,  as the  Required  Lenders  appoint  a  successor  Administrative  Agent as
provided above.

          (d) If no successor  Administrative  Agent has been appointed pursuant
to clause (b) or (c) above by the 20th  Business  Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation  shall become  effective and the Required  Lenders shall  thereafter
perform all the duties of the  Administrative  Agent hereunder  and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.

          (e) Upon a resignation  of the  Administrative  Agent pursuant to this
Section 12.9, the  Administrative  Agent shall remain  indemnified to the extent
provided in this Agreement and the other Credit  Documents and the provisions of
this Section 12 shall  continue in effect for the benefit of the  Administrative
Agent for all of its actions and inactions  while serving as the  Administrative
Agent.

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     SECTION 13. Miscellaneous.

     13.1. Payment of Expenses,  etc. The Borrower hereby agrees to: (i) whether
or not the transactions herein contemplated are consummated,  pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including, without
limitation,  the reasonable fees and disbursements of Gardner,  Carton & Douglas
and the Administrative Agent's other counsel and consultants) in connection with
the preparation,  execution,  delivery and  administration of this Agreement and
the other Credit Documents and the documents and instruments  referred to herein
and therein and any amendment,  waiver or consent relating hereto or thereto, of
the Administrative Agent in connection with its syndication efforts with respect
to this Agreement and of the  Administrative  Agent and, after the occurrence of
an Event of Default,  each of the Lenders in connection  with the enforcement of
this Agreement and the other Credit  Documents and the documents and instruments
referred  to  herein  and  therein  or in  connection  with any  refinancing  or
restructuring  of the credit  arrangements  provided under this Agreement in the
nature of a "work-out" or pursuant to any  insolvency or bankruptcy  proceedings
(including,   in  each  case,  without  limitation,   the  reasonable  fees  and
disbursements of counsel and consultants for the Administrative Agent and, after
the  occurrence of an Event of Default,  counsel for each of the Lenders);  (ii)
pay and hold the Administrative  Agent and each of the Lenders harmless from and
against any and all present and future  stamp,  court,  excise and other similar
documentary  taxes,  charges or similar  levies  with  respect to the  foregoing
matters  (collectively,  "Other Taxes"),  and save the Administrative  Agent and
each of the  Lenders  harmless  from and against  any and all  liabilities  with
respect to or  resulting  from any delay or  omission  (other than to the extent
attributable  to the  Administrative  Agent or such  Lender)  to pay such  Other
Taxes; (iii) indemnify the Administrative Agent and each Lender for (a) the full
amount of Other Taxes paid by the  Administrative  Agent and/or such Lender, and
(b) any liability (including penalties, interest and expenses) arising therefrom
or with  respect  thereto,  whether or not such Other  Taxes were  correctly  or
legally  imposed or asserted by the relevant  governmental  authority;  and (iv)
indemnify the Administrative Agent and each Lender, and each of their respective
officers, directors,  employees,  representatives,  agents, affiliates, trustees
and investment  advisors from and hold each of them harmless against any and all
liabilities,  obligations  (including  removal  or  remedial  actions),  losses,
damages,  penalties,  claims,  actions,  judgments,  suits, costs,  expenses and
disbursements   (including  reasonable  attorneys'  and  consultants'  fees  and
disbursements)  incurred  by,  imposed on or  assessed  against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
actual or  prospective  claim,  investigation,  litigation  or other  proceeding
(whether or not the  Administrative  Agent or any Lender is a party  thereto and
whether or not such investigation,  litigation or other proceeding is brought by
or on  behalf  of  any  Credit  Party)  related  to  the  entering  into  and/or
performance  of this  Agreement or any other  Credit  Document or the use of any
Letter of Credit or the proceeds of any Loans  hereunder or the  consummation of
the Transaction or any other  transactions  contemplated  herein or in any other
Credit  Document  or the  exercise of any of their  rights or remedies  provided
herein or in the other Credit  Documents,  or (b) the actual or alleged presence
of  Hazardous  Materials  in the air,  surface  water or  groundwater  or on the
surface or subsurface of any Real Property at any time owned, leased or operated
by  the  Borrower  or  any  of  its  Subsidiaries,   the  generation,   storage,
transportation,  handling or disposal of Hazardous  Materials by the Borrower or
any of its  Subsidiaries  at any  location,  whether  or not  owned,  leased  or

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operated by the Borrower or any of its Subsidiaries,  the  non-compliance by the
Borrower  or any of its  Subsidiaries  with  any  Environmental  Law  (including
applicable  permits  thereunder)   applicable  to  any  Real  Property,  or  any
Environmental  Claim asserted  against the Borrower,  any of its Subsidiaries or
any Real  Property at any time owned,  leased or operated by the Borrower or any
of its Subsidiaries, including, in each case, without limitation, the reasonable
fees and disbursements of counsel and other  consultants  incurred in connection
with any such  investigation,  litigation or other proceeding (but excluding any
losses,  liabilities,  claims,  damages or  expenses  to the extent  incurred by
reason  of the  gross  negligence  or  willful  misconduct  of the  Person to be
indemnified  (as determined by a court of competent  jurisdiction in a final and
non-appealable  decision)). To the extent that the undertaking to indemnify, pay
or hold  harmless  the  Administrative  Agent  or any  Lender  set  forth in the
preceding  sentence may be  unenforceable  because it is violative of any law or
public policy,  the Borrower shall make the maximum  contribution to the payment
and  satisfaction  of each of the indemnified  liabilities  which is permissible
under  applicable  law. All amounts due under this Section 13.1 shall be payable
within ten days after demand therefor.

     13.2. Right of Setoff.  In addition to any rights now or hereafter  granted
under  applicable  law or  otherwise,  and not by way of  limitation of any such
rights,  upon the occurrence and during the  continuance of an Event of Default,
the  Administrative  Agent and each Lender is hereby  authorized  at any time or
from time to time, without presentment,  demand,  protest or other notice of any
kind to any Credit  Party or to any other  Person,  any such notice being hereby
expressly  waived,  to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by the
Administrative Agent or such Lender (including,  without limitation, by branches
and  agencies  of such  Lender  wherever  located)  to or for the  credit or the
account of the Borrower or any of its Subsidiaries against and on account of the
Obligations and liabilities of the Credit Parties to the Administrative Agent or
such Lender under this  Agreement  or under any of the other  Credit  Documents,
including  without  limitation,  all interests in Obligations  purchased by such
Lender  pursuant  to  Section  13.6(b),  and all other  claims of any  nature or
description  arising out of or connected with this Agreement or any other Credit
Document,  irrespective of whether or not such Lender shall have made any demand
hereunder and although said  Obligations,  liabilities or claims, or any of them
shall be contingent or unmatured.

     13.3.  Notices.  Except as otherwise expressly provided herein, all notices
and other  communications  provided for hereunder shall be in writing (including
telegraphic,  telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to any Credit Party, at the address
specified  opposite  its  signature  below  or  in  the  other  relevant  Credit
Documents;  if to any Lender, at its address specified on Schedule II; and if to
the  Administrative  Agent, at the Notice Office;  or, as to any Credit Party or
the  Administrative  Agent, at such other address as shall be designated by such
party in a written notice to the other parties hereto and, as to each Lender, at
such other address as shall be designated by such Lender in a written  notice to
the Borrower and the  Administrative  Agent. All such notices and communications
shall,  when  mailed,  telegraphed,  telexed,  telecopied,  or cabled or sent by
overnight  courier,  be effective when deposited in the mails,  delivered to the
telegraph company,  cable company or overnight  courier,  as the case may be, or

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sent by telex or  telecopier,  except  that  notices and  communications  to the
Administrative  Agent and the Borrower shall not be effective  until received by
the Administrative Agent or the Borrower, as the case may be.

     13.4. Benefit of Agreement Assignments; Participations.

          (a) This  Agreement  shall be binding upon and inure to the benefit of
and be  enforceable  by the  respective  successors  and  assigns of the parties
hereto;  provided,  however,  the Borrower may not assign or transfer any of its
rights,  obligations or interest  hereunder without the prior written consent of
the Lenders and,  provided further,  that,  although any Lender may from time to
time transfer,  assign or grant  participations in its rights and/or obligations
hereunder,  such Lender shall remain a "Lender" for all purposes  hereunder (and
may not transfer or assign all or any portion of its Commitment hereunder except
as  provided in  Sections  1.13 and  13.4(b))  and the  transferee,  assignee or
participant,  as the case may be, shall not constitute a "Lender" hereunder and,
provided further, that 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 final  scheduled  maturity of any Loan,  Note or
Letter of Credit  (unless  such  Letter of  Credit is not  extended  beyond  the
Revolving Loan Maturity Date) in which such  participant  is  participating,  or
reduce  the rate or extend  the time of  payment  of  interest  or Fees  thereon
(except  in  connection  with a  waiver  of  applicability  of any  post-Default
increase in interest  rates) or reduce the  principal  amount  thereof (it being
understood that any amendment or  modification  to the financial  definitions in
this  Agreement or to Section  13.7(a)  shall not  constitute a reduction in the
rate of  interest or Fees  payable  hereunder),  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 or of a  mandatory
reduction in the Total  Commitment shall not constitute a change in the terms of
such  participation,  and that an increase in any  Commitment  (or the available
portion  thereof)  or  Loan  shall  be  permitted  without  the  consent  of any
participant  if the  participant's  participation  is not  increased as a result
thereof),  (ii) consent to the  assignment or transfer by the Borrower of any of
its  rights  and  obligations  under  this  Agreement,   (iii)  release  all  or
substantially all of the Collateral under all of the Security  Documents (except
as expressly  provided in the Credit Documents)  supporting the Loans or Letters
of Credit hereunder in which such participant is participating  or, (iv) release
any Subsidiary  Guarantor from the  Subsidiaries  Guaranty  (except as expressly
provided in the Credit Documents).  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.

          (b) Notwithstanding the foregoing,  any Lender (or any Lender together
with  one or  more  other  Lenders)  may  (x)  assign  all or a  portion  of its
Commitment and related  outstanding  Obligations  (or, if the  Commitments  have
terminated,  outstanding  Obligations)  hereunder  to (i)(A) its parent  company
and/or any  Affiliate of such Lender or (B) to one or more other  Lenders or any

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Affiliate of any such other Lender (provided that any fund that invests in loans
and is managed or advised by the same  investment  advisor of another fund which
is a Lender (or by an Affiliate of such investment  advisor) shall be treated as
an  Affiliate  of  such  other  Lender  for  the  purposes  of  this  sub-clause
(x)(i)(B)),  or (ii) in the case of any  Lender  that is a fund that  invests in
loans,  any other  fund that  invests  in loans and is managed or advised by the
same  investment  advisor of any Lender or by an  Affiliate  of such  investment
advisor or (y)  assign  all,  or if less than all,  a portion  equal to at least
$1,000,000 in the aggregate for the assigning  Lender or assigning  Lenders,  of
such  Commitments and related  outstanding  Obligations  (or, if the Commitments
have  terminated,  outstanding  Obligations)  hereunder to one or more  Eligible
Transferees  (treating  any fund that  invests  in loans and any other fund that
invests in loans and is managed  or  advised by the same  investment  advisor of
such fund or by an Affiliate  of such  investment  advisor as a single  Eligible
Transferee), each of which assignees shall become a party to this Agreement as a
Lender by execution of an Assignment and Assumption Agreement, provided that (i)
at such time,  Schedule I shall be deemed  modified  to reflect  the  Commitment
and/or  outstanding  Loans,  as the case may be, of such new  Lender  and of the
existing  Lenders,  (ii) upon the surrender of its Notes by the assigning Lender
(or, upon such assigning  Lender's  indemnifying  the Borrower for any lost Note
pursuant to a customary indemnification  agreement) new Notes will be issued, at
the Borrower's  expense, to such new Lender and to the assigning Lender upon the
request  of such  new  Lender  or  assigning  Lender,  such  new  Notes to be in
conformity with the requirements of Section 1.5 (with appropriate modifications)
to the extent  needed to reflect  the  revised  Commitments  and/or  outstanding
Loans, as the case may be, (iii) the consent of the  Administrative  Agent shall
be required in connection with any such assignment  pursuant to clause (y) above
or any such  assignment  of Revolving  Loan  Commitments  pursuant to clause (x)
above (which consents shall not be unreasonably  withheld or delayed),  (iv) the
consent of the Issuing  Lender  shall be required  in  connection  with any such
assignment  of  Revolving  Loan   Commitments   (which  consents  shall  not  be
unreasonably withheld or delayed), (v) the Administrative Agent shall receive at
the time of each such  assignment,  from the assigning or assignee  Lender,  the
payment of a  non-refundable  assignment fee of $3,500 and (vi) no such transfer
or assignment  will be effective until recorded by the  Administrative  Agent on
the Register pursuant to Section 13.15. To the extent of any assignment pursuant
to  this  Section  13.4(b),  the  assigning  Lender  shall  be  relieved  of its
obligations  hereunder with respect to its assigned  Commitment and  outstanding
Loans.  At the time of each  assignment  pursuant to this  Section  13.4(b) 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, to the extent legally
entitled to do so,  provide to the Borrower  the  appropriate  Internal  Revenue
Service Forms (and, if applicable,  a Section 4.4(b)(ii)  Certificate) described
in Section  4.4(b).  To the extent that an assignment of all or any portion of a
Lender's Commitment and related outstanding Obligations pursuant to Section 1.13
or this  Section  13.4(b)  would,  at the  time of such  assignment,  result  in
increased  costs under Section 1.10,  2.6 or 4.4 from those being charged by the
respective  assigning Lender prior to such  assignment,  then the Borrower shall
not be  obligated  to pay  such  increased  costs  (although  the  Borrower,  in
accordance with and pursuant to the other provisions of this Agreement, shall be
obligated to pay any other increased costs of the type described above resulting
from changes after the date of the respective assignment).

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<PAGE>

          (c) Nothing in this  Agreement  shall  prevent or prohibit  any Lender
from pledging its Loans and Note hereunder to a Federal  Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank and, with prior
notification  to the  Administrative  Agent  (but  without  the  consent  of the
Administrative Agent or the Borrower), any Lender which is a fund may pledge all
or any  portion of its Loans and Note to its  trustee or to a  collateral  agent
providing  credit or credit support to such Lender in support of its obligations
to its trustee or such collateral  agent, as the case may be. No pledge pursuant
to  this  clause  (c)  shall  release  the  transferor  Lender  from  any of its
obligations hereunder.

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

     13.6. Payments Pro Rata.

          (a) Except as otherwise provided in this Agreement, the Administrative
Agent agrees that  promptly  after its receipt of each payment from or on behalf
of the  Borrower in respect of any  Obligations  hereunder,  the  Administrative
Agent shall  distribute  such payment to the Lenders (other than any Lender that
has  consented  in writing to waive its pro rata share of any such  payment) pro
rata based upon their respective shares, if any, of the Obligations with respect
to which such payment was received.

          (b) Each of the Lenders  agrees that, if it should  receive any amount
hereunder  (whether by voluntary payment,  by realization upon security,  by the
exercise  of the right of setoff or  banker's  lien,  by  counterclaim  or cross
action,  by  the  enforcement  of any  right  under  the  Credit  Documents,  or
otherwise),  which is applicable to the payment of the principal of, or interest
on, the Loans,  Unpaid  Drawings or Letter of Credit  Fees,  of a sum which with
respect to the  related sum or sums  received  by other  Lenders is in a greater
proportion  than the total of such  Obligation  then owed and due to such Lender
bears to the total of such  Obligation  then owed and due to all of the  Lenders
immediately  prior to such  receipt,  then such  Lender  receiving  such  excess
payment  shall  purchase  for cash without  recourse or warranty  from the other
Lenders an interest in the  Obligations of the  respective  Credit Party to such
Lenders in such amount as shall result in a  proportional  participation  by all
the Lenders in such amount;  provided  that if all or any portion of such excess

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amount  is  thereafter  recovered  from such  Lenders,  such  purchase  shall be
rescinded and the purchase price  restored to the extent of such  recovery,  but
without interest.

          (c)  Notwithstanding  anything to the contrary  contained herein,  the
provisions  of the  preceding  Sections  13.6(a) and (b) shall be subject to the
express  provisions  of this  Agreement  which  require,  or  permit,  differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.

     13.7. Calculations; Computations.

          (a) The financial  statements to be furnished to the Lenders  pursuant
hereto  shall  be made  and  prepared  in  accordance  with  generally  accepted
accounting  principles in the United States consistently  applied throughout the
periods  involved  (except  as set forth in the notes  thereto  or as  otherwise
disclosed in writing by the Borrower to the Lenders);  provided that,  except as
otherwise  specifically  provided  herein,  all  computations  of the Applicable
Margin,  and all computations and all definitions  (including  accounting terms)
used in determining compliance with financial covenants, shall utilize generally
accepted  accounting  principles  and policies in conformity  with those used to
prepare the  historical  financial  statements  of the  Borrower  referred to in
Section 7.5(a).

          (b) All  computations  of interest and other Fees  hereunder  shall be
made on the basis of a year of 360 days for the actual number of days (including
the first day but excluding  the last day;  except that in the case of Letter of
Credit Fees and Facing Fees,  the last day shall be  included)  occurring in the
period for which such interest or Fees are payable.

     13.8.  GOVERNING LAW;  SUBMISSION TO  JURISDICTION;  VENUE;  WAIVER OF JURY
TRIAL.

          (a) THIS  AGREEMENT AND THE OTHER CREDIT  DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER  SHALL,  EXCEPT AS OTHERWISE
PROVIDED IN ANY  MORTGAGES,  BE CONSTRUED IN ACCORDANCE  WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF ILLINOIS. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT  DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS,
IN EACH CASE WHICH ARE  LOCATED IN THE COUNTY OF COOK,  AND,  BY  EXECUTION  AND
DELIVERY OF THIS  AGREEMENT OR ANY OTHER CREDIT  DOCUMENT,  THE BORROWER  HEREBY
IRREVOCABLY  ACCEPTS FOR ITSELF AND IN RESPECT OF ITS  PROPERTY,  GENERALLY  AND
UNCONDITIONALLY,  THE JURISDICTION OF THE AFORESAID COURTS.  THE BORROWER HEREBY
FURTHER  IRREVOCABLY  WAIVES  ANY  CLAIM  THAT ANY  SUCH  COURTS  LACK  PERSONAL

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JURISDICTION  OVER THE BORROWER,  AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL
ACTION  OR  PROCEEDING  WITH  RESPECT  TO THIS  AGREEMENT  OR ANY  OTHER  CREDIT
DOCUMENTS  BROUGHT IN ANY OF THE  AFOREMENTIONED  COURTS,  THAT SUCH COURTS LACK
PERSONAL  JURISDICTION  OVER THE  BORROWER.  THE  BORROWER  FURTHER  IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS  OUT OF ANY OF THE  AFOREMENTIONED  COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES  THEREOF BY REGISTERED OR
CERTIFIED  MAIL,  POSTAGE  PREPAID,  TO THE  BORROWER  AT ITS  ADDRESS SET FORTH
OPPOSITE ITS  SIGNATURE  BELOW,  SUCH SERVICE TO BECOME  EFFECTIVE 30 DAYS AFTER
SUCH  MAILING.  THE BORROWER  HEREBY  IRREVOCABLY  WAIVES ANY  OBJECTION TO SUCH
SERVICE OF PROCESS  AND  FURTHER  IRREVOCABLY  WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING  COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.  NOTHING
HEREIN SHALL  AFFECT THE RIGHT OF THE  ADMINISTRATIVE  AGENT,  ANY LENDER OR THE
HOLDER OF ANY NOTE TO SERVE  PROCESS IN ANY OTHER MANNER  PERMITTED BY LAW OR TO
COMMENCE  LEGAL  PROCEEDINGS  OR OTHERWISE  PROCEED  AGAINST THE BORROWER IN ANY
OTHER JURISDICTION.

          (b) THE BORROWER HEREBY  IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID  ACTIONS OR
PROCEEDINGS  ARISING OUT OF OR IN  CONNECTION  WITH THIS  AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER  IRREVOCABLY  WAIVES  AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.

          (c) EACH OF THE PARTIES TO THIS AGREEMENT  HEREBY  IRREVOCABLY  WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,  PROCEEDING OR COUNTERCLAIM  ARISING
OUT OF OR  RELATING  TO  THIS  AGREEMENT,  THE  OTHER  CREDIT  DOCUMENTS  OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

     13.9.  Counterparts.  This  Agreement  may be  executed  in any  number  of
counterparts and by the different parties hereto on separate counterparts,  each
of which when so executed and delivered  shall be an original,  but all of which
shall together  constitute one and the same  instrument.  A set of  counterparts
executed by all the parties  hereto  shall be lodged with the  Borrower  and the
Administrative Agent.

     13.10.  Effectiveness.  This Agreement  shall become  effective on the date
(the "Effective Date") on which the Borrower,  the Administrative Agent and each
of the  Lenders  shall have signed a  counterpart  hereof  (whether  the same or
different  counterparts) and shall have delivered the same to the Administrative
Agent at the Notice  Office or, in the case of the Lenders,  shall have given to
the  Administrative  Agent telephonic  (confirmed in writing),  written or telex
notice  (actually  received)  at such  office  that the same has been signed and
mailed to it. The  Administrative  Agent will give the  Borrower and each Lender
prompt written notice of the occurrence of the Effective Date.

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<PAGE>

     13.11.  Headings  Descriptive.  The  headings of the several  sections  and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

     13.12. Amendment or Waiver; etc.

          (a) Neither this Agreement nor any other Credit Document nor any terms
hereof or thereof may be changed,  waived,  discharged or terminated unless such
change, waiver,  discharge or termination is in writing signed by the respective
Credit Parties party hereto or thereto and the Required  Lenders,  provided that
no such change,  waiver,  discharge or termination shall, without the consent of
each Lender (other than a Defaulting  Lender) (with  Obligations  being directly
affected in the case of following  clause (i)),  (i) extend the final  scheduled
maturity of any Loan or Note or extend the stated  expiration date of any Letter
of Credit beyond the Revolving  Loan Maturity Date, or reduce the rate or extend
the time of payment of interest or Fees thereon  (except in connection  with the
waiver of  applicability of any  post-default  increase in interest  rates),  or
reduce the principal  amount thereof (it being  understood that any amendment or
modification  to the  financial  definitions  in this  Agreement  or to  Section
13.7(a) shall not constitute a reduction in the rate of interest or Fees for the
purposes of this clause  (i)),  (ii)  release  all or  substantially  all of the
Collateral  (except as expressly provided in the Credit Documents) under all the
Security Documents,  (iii) release any Subsidiary Guarantor (except as expressly
provided in the Credit  Documents) from the Subsidiaries  Guaranty,  (iv) amend,
modify or waive any  provision  of this  Section  13.12  (except  for  technical
amendments  with respect to  additional  extensions  of credit  pursuant to this
Agreement which afford the  protections to such additional  extensions of credit
of the type provided to the Revolving Loan  Commitments on the Effective  Date),
(v) reduce the percentage  specified in the  definition of Required  Lenders (it
being  understood  that,  with the consent of the Required  Lenders,  additional
extensions  of  credit  pursuant  to  this  Agreement  may  be  included  in the
determination  of the Required  Lenders on  substantially  the same basis as the
extensions of Revolving Loan  Commitments are included on the Effective Date) or
(vi) consent to the  assignment or transfer by the Borrower of any of its rights
and obligations  under this Agreement;  provided  further,  that no such change,
waiver, discharge or termination shall (1) increase the Commitment of any Lender
over the amount  thereof  then in effect  without the consent of such Lender (it
being  understood  that  waivers  or  modifications  of  conditions   precedent,
covenants,  Defaults  or Events of Default or of a  mandatory  reduction  in the
Total  Commitment  shall not  constitute  an increase of the  Commitment  of any
Lender,  and that an increase in the available  portion of any Commitment of any
Lender shall not constitute an increase of the  Commitment of such Lender),  (2)
without the consent of the Issuing Lender,  amend, modify or waive any provision
of  Section 2 or alter its  rights or  obligations  with  respect  to Letters of
Credit, (3) without the consent of Collateral Agent,  amend, modify or waive any
provision  relating to the rights or obligations of the Collateral  Agent or (4)
without  the consent of the  Administrative  Agent,  amend,  modify or waive any
provision of Section 12 or any other  provision as same relates to the rights or
obligations of the Administrative Agent.

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          (b) If, in connection with any proposed change,  waiver,  discharge or
termination  of any of the  provisions  of this  Agreement  as  contemplated  by
clauses (i) through (v),  inclusive,  of the first proviso to Section  13.12(a),
the consent of the  Required  Lenders is obtained but the consent of one or more
of such other  Lenders  whose  consent is  required  is not  obtained,  then the
Borrower  shall  have the right,  so long as all  non-consenting  Lenders  whose
individual consent is required are treated as described in either clauses (A) or
(B) below, to either (A) replace each such non-consenting Lender or Lenders with
one or more Replacement  Lenders pursuant to Section 1.13 so long as at the time
of such  replacement,  each such  Replacement  Lender  consents to the  proposed
change,  waiver,  discharge or termination or (B) terminate such  non-consenting
Lender's  Commitment  and/or  repay  the  outstanding  Loans of such  Lender  in
accordance  with  Sections  3.2(b)  and/or  4.1(b),  provided  that,  unless the
Commitments that are terminated,  and Loans repaid, pursuant to preceding clause
(B) are  immediately  replaced in full at such time  through the addition of new
Lenders or the increase of the Commitments  and/or outstanding Loans of existing
Lenders (who in each case must specifically  consent thereto),  then in the case
of any action pursuant to preceding clause (B) the Required Lenders  (determined
after giving effect to the proposed action) shall specifically  consent thereto,
provided  further,  that in any event the  Borrower  shall not have the right to
replace a Lender, terminate its Commitment or repay its Loans solely as a result
of the exercise of such  Lender's  rights (and the  withholding  of any required
consent by such Lender) pursuant to the second proviso to Section 13.12(a).

     13.13.  Survival.  All  indemnities  set forth  herein  including,  without
limitation,  in Sections 1.10,  1.11,  2.6, 4.4, 12.6 and 13.1 shall survive the
execution,  delivery and  termination  of this  Agreement  and the Notes and the
making and repayment of the Obligations.

     13.14.  Domicile of Loans. Each Lender may transfer and carry its Loans at,
to or for the account of any office  Subsidiary  or  Affiliate  of such  Lender.
Notwithstanding  anything to the contrary contained herein, to the extent that a
transfer of Loans  pursuant to this  Section  13.14  would,  at the time of such
transfer,  result in increased  costs under Section 1.10,  1.11, 2.6 or 4.4 from
those being charged by the respective  Lender prior to such  transfer,  then the
Borrower  shall not be  obligated  to pay such  increased  costs  (although  the
Borrower  shall  be  obligated  to pay any  other  increased  costs  of the type
described  above  resulting  from  changes  after  the  date  of the  respective
transfer).

     13.15. Register. The Borrower hereby designates the Administrative Agent to
serve as its agent,  solely for  purposes of this Section  13.15,  to maintain a
register (the  "Register") on which it will record the Commitments  from time to
time of each of the  Lenders,  the Loans  made by each of the  Lenders  and each
repayment  in  respect  of the  principal  amount of the  Loans of each  Lender.
Failure to make any such recordation,  or any error in such  recordation,  shall
not affect the Borrower's  obligations in respect of such Loans. With respect to
any Lender,  the transfer of the Commitment of such Lender and the rights to the
principal of, and interest on, any Loan made pursuant to such  Commitment  shall
not be effective  until such transfer is recorded on the Register  maintained by
the Administrative Agent with respect to ownership of such Commitments and Loans
and prior to such  recordation  all amounts owing to the transferor with respect
to  such  Commitment  and  Loans  shall  remain  owing  to the  transferor.  The
registration  of  assignment or transfer of all or part of any  Commitments  and

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Loans shall be recorded by the  Administrative  Agent on the Register  only upon
the acceptance by the Administrative  Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 13.4(b). Coincident with
the  delivery  of  such  an   Assignment   and   Assumption   Agreement  to  the
Administrative  Agent for acceptance and  registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor  Lender shall  surrender the Note (if any)  evidencing such Loan, and
thereupon one or more new Notes in the same aggregate  principal amount shall be
issued to the  assigning  or  transferor  Lender  and/or  the new  Lender at the
request of any such Lender.  The Borrower agrees to indemnify the Administrative
Agent from and against any and all losses,  claims,  damages and  liabilities of
whatsoever  nature which may be imposed on, asserted  against or incurred by the
Administrative Agent in performing its duties under this Section 13.15.

     13.16. Confidentiality.

          (a) Subject to the  provisions  of clause (b) of this  Section  13.16,
each  Lender  agrees  that it will use its  reasonable  efforts  not to disclose
without  the  prior  consent  of the  Borrower  (other  than to its  Affiliates,
employees,  auditors, advisors or counsel or to another Lender if such Lender or
such Lender's  holding or parent company in its sole discretion  determines that
any such party  should have access to such  information,  provided  such Persons
shall be subject to the  provisions  of this Section 13.16 to the same extent as
such  Lender)  any  information  with  respect  to  the  Borrower  or any of its
Subsidiaries  which is now or in the  future  furnished  by or on  behalf of the
Borrower  or any of its  Subsidiaries  pursuant to this  Agreement  or any other
Credit   Document  which   information  is,  at  the  time  of  its  disclosure,
confidential  and/or  proprietary  and  clearly  identified  as such in  writing
(hereafter  "Confidential  Information"),  provided that any Lender may disclose
any such Confidential  Information (i) as has become generally  available to the
public  other  than by  virtue  of a  breach  of this  Section  13.16(a)  by the
respective  Lender,  (ii)  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  similar
organizations  (whether in the United States or elsewhere) or their  successors,
(iii) as may be required or appropriate in respect to any summons or subpoena or
in connection with any litigation,  (iv) in order to comply with any law, order,
regulation or ruling applicable to such Lender, (v) to the Administrative  Agent
or the Collateral Agent, (vi) to any direct or indirect contractual counterparty
in  any  swap,   hedge  or  similar   agreement  (or  to  any  such  contractual
counterparty's  professional advisor), so long as such contractual  counterparty
(or such  professional  advisor)  agrees to be bound by the  provisions  of this
Section 13.16 and (vii) to any  prospective or actual  transferee or participant
in connection with any  contemplated  transfer or  participation  of any Note or
Commitment  or  any  interest  therein  by  such  Lender,   provided  that  such
prospective  transferee  agrees  to be bound by the  confidentiality  provisions
contained in this Section 13.16;  and provided  further,  that in the event that
any Lender is requested or required in an  investigation,  legal  proceeding  or
similar process under Sections  13.16(a)(ii)-(iv)  above, to disclose any of the
Confidential  Information,   such  Lender  shall  endeavor  to  provide,  unless
prohibited by applicable  law, the Borrower  with prompt  written  notice of any

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such request or requirement so that the Borrower may seek a protective  order or
other appropriate remedy or waive compliance with the provisions of this Section
13.16(a).

          (b) The Borrower hereby  acknowledges  and agrees that each Lender may
share  with any of its  Affiliates,  and such  Affiliates  may  share  with such
Lender,  any  information  related to the  Borrower  or any of its  Subsidiaries
(including,  without limitation,  any non-public customer information  regarding
the  creditworthiness  of the  Borrower  and its  Subsidiaries),  provided  such
Persons  shall be subject to the  provisions  of this Section  13.16 to the same
extent as such Lender.

     13.17.  Restructuring  of Assets.  The parties hereto  acknowledge that the
Borrower has informed the Lenders  that it shall,  after the  occurrence  of the
Initial  Borrowing  Date,  transfer all or a portion of certain  assets to First
Horizon  International and with the International  Subsidiaries  enter the First
Horizon International Financing. The Administrative Agent and the Lenders hereby
agree,  so long as no Default or Event of Default  exists  hereunder,  that they
will work in good faith with the Borrower and the International  Subsidiaries to
consent  to  transactions  described  above  so long as  such  transactions  are
structured in a manner which is reasonably  satisfactory  to the  Administrative
Agent and the Required  Lenders and the Collateral  Agent's first perfected lien
remains on any transferred Collateral.  In connection with any such transaction,
the parties hereto shall enter into such  modifications  to the Credit Documents
as the  Administrative  Agent and the Required Lenders  determine are reasonably
necessary or desirable in connection with the transaction so approved,  it being
understood   and  agreed  by  all  parties   hereto  that  the  nature  of  such
modifications  may  require  the  consent of the  Required  Lenders  pursuant to
Section 13.12(a). It is further acknowledged and agreed that upon the funding of
the  initial  loan  under  the First  Horizon  International  Financing  and the
Collateral  Agent  obtaining  Liens in  connection  therewith as provided in the
documents  evidencing such financing,  any Lien of the Collateral  Agent for the
benefit of the  Lenders for the  Obligations  on any  property of First  Horizon
International  or its  subsidiaries  transferred  from the Borrower or otherwise
shall  be  released  and no  property  of  First  Horizon  International  or its
Subsidiaries shall secure the Obligations.

                            [Signature Page Follows]

                                       95
<PAGE>

IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  their duly  authorized
officers to execute and deliver this Credit Agreement as of the date first above
written.

<TABLE>
<CAPTION>
<S>                                              <C>
Address

First Horizon Pharmaceutical Corporation         FIRST HORIZON PHARMACEUTICAL CORPORATION
6195 Shiloh Road
Alpharetta, Georgia  30005
                                                 By: /s/ Darrell Borne
                                                     --------------------------------
                                                     Name: Darrell Borne
                                                     --------------------------------
                                                     Title: CFO
                                                     --------------------------------

                                                 LASALLE BANK NATIONAL ASSOCIATION,
                                                 Individually and as Administrative Agent

                                                 By: /s/ Patrick J. O'Toole
                                                     ---------------------------------
                                                     Name:  Patrick J. O'Toole
                                                     ---------------------------------
                                                     Title: Assistant Vice President
                                                     ---------------------------------
</TABLE>

1588405

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