Document:

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                                                                  EXECUTION COPY

                             NOVASTAR MORTGAGE, INC.
                                   as Seller,

                      NOVASTAR MORTGAGE FUNDING CORPORATION
                                   as Company,

                       WACHOVIA BANK, NATIONAL ASSOCIATION
                          as Certificate Administrator

                                       and

                               JPMORGAN CHASE BANK
                                   as Trustee

                        MORTGAGE LOAN PURCHASE AGREEMENT

                            Dated as of June 1, 2002

                    Fixed and Adjustable Rate Mortgage Loans

                 NovaStar Mortgage Funding Trust, Series 2002-2
        NovaStar Home Equity Loan Asset-Backed Certificate, Series 2002-2

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                                TABLE OF CONTENTS

Page(s)

ARTICLE I              DEFINITIONS.............................................1

     Section 1.01      Definitions.............................................1

ARTICLE II             SALE OF MORTGAGE LOANS AND RELATED PROVISIONS...........2

     Section 2.01      Sale of Closing Date Mortgage Loans and MI Policies.....2

ARTICLE III            REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH.....5

     Section 3.01      Seller Representations and Warranties...................5
     Section 3.02      Company Representations and Warranties.................18
     Section 3.03      [Reserved].............................................19

ARTICLE IV             SELLER'S COVENANTS.....................................19

     Section 4.01      Covenants of the Seller................................19
     Section 4.02      Payment of Expenses....................................19

ARTICLE V              CONDITIONS TO CLOSING DATE MORTGAGE LOAN PURCHASE......20

     Section 5.01      Conditions of Company's Obligations....................20

ARTICLE VI             INDEMNIFICATION BY THE SELLER WITH RESPECT TO THE
                         MORTGAGE LOANS.......................................21

     Section 6.01      Indemnification With Respect to the Mortgage Loans.....21
     Section 6.02      Limitation on Liability of the Seller..................21

ARTICLE VII            TERMINATION............................................21

     Section 7.01      Termination............................................21

ARTICLE VIII           MISCELLANEOUS PROVISIONS...............................23

     Section 8.01      Amendment..............................................23
     Section 8.02      Governing Law..........................................23
     Section 8.03      Notices................................................23

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     Section 8.04      Severability of Provisions.............................24
     Section 8.05      Relationship of Parties................................24
     Section 8.06      Counterparts...........................................24
     Section 8.07      Further Agreements.....................................24
     Section 8.08      Intention of the Parties...............................25
     Section 8.09      Successors and Assigns; Assignment of Purchase
                         Agreement............................................25
     Section 8.10      Survival...............................................25
     Section 8.11      Liability of the Trustee...............................25

EXHIBIT 1.........     Closing Date Mortgage Loan Schedule

                                       ii

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                  THIS MORTGAGE LOAN PURCHASE AGREEMENT (this "Purchase
Agreement"), dated as of June 1, 2002, is made among NovaStar Mortgage, Inc.
(the "Seller"), NovaStar Mortgage Funding Corporation (the "Company"), Wachovia
Bank, National Association (the "Certificate Administrator") and JPMorgan Chase
Bank (the "Trustee").

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

                  WHEREAS, pursuant to the terms of this Purchase Agreement, the
Seller will sell the Initial Mortgage Loans and the related MI Policies to the
Company on the Closing Date;

                  WHEREAS, pursuant to the terms of the Pooling and Servicing
Agreement, the Company will transfer the Initial Mortgage Loans and the related
MI Policies, and assign all of its rights under the Purchase Agreement, to the
Trustee, without recourse, on the Closing Date;

                  WHEREAS, pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee will issue the Certificates;

                  WHEREAS, pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee will transfer to the Company the Certificates;

                  WHEREAS, pursuant to the terms of the Underwriting Agreement,
the Company will sell the Underwritten Certificates to the Underwriter;

                  WHEREAS, pursuant to the terms of the REMIC Interests Sale
Agreement, the Company will sell the Retained Certificates to NRFC;

                  WHEREAS, pursuant to the terms of the Pooling and Servicing
Agreement, the Servicer will service the Mortgage Loans; and

                  WHEREAS, pursuant to the terms of the Converted Loan Purchase
Agreement, the Converted Loan Purchaser will purchase the Converted Mortgage
Loans from the Trustee.

                                   ARTICLE I

                                   DEFINITIONS

                  Section 1.01 Definitions.

                  For all purposes of this Purchase Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions contained in Section 1.01 of the Pooling and
Servicing Agreement, dated as of June 1, 2002, among the Certificate
Administrator, the Trustee, the Company and NovaStar Mortgage, Inc. as seller
and servicer (the "Servicer") which is incorporated by reference herein. All
other capitalized terms used herein shall have the meanings specified herein.

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                                   ARTICLE II

                  SALE OF MORTGAGE LOANS AND RELATED PROVISIONS

       Section 2.01 Sale of Closing Date Mortgage Loans and MI Policies.

            (a) The Seller hereby sells, and the Company hereby purchases
on the Closing Date the Closing Date Mortgage Loans identified (and the related
MI Policies) on the Mortgage Loan Schedule annexed hereto as Exhibit 1, the
proceeds thereof and all rights under the Related Documents (including the
related Mortgage Files). The Closing Date Mortgage Loans consist of two groups
of conventional, residential first or second lien mortgage loans with fixed and
adjustable interest rates, the Group I Mortgage Loans and the Group II Mortgage
Loans. The Closing Date Mortgage Loans will have a Principal Balance as of the
close of business on the Cut-off Date, after giving effect to any payments due
on or before such date whether or not received, of approximately $310,000,100.
The sale of the Closing Date Mortgage Loans will take place on the Closing Date,
subject to and simultaneously with the deposit of the Closing Date Mortgage
Loans into the Trust Fund, the issuance of the Securities by the Trustee and the
sale of the Underwritten Certificates pursuant to the Underwriting Agreement.
The purchase price (the "Purchase Price") for the Closing Date Mortgage Loans to
be paid by the Company to the Seller on the Closing Date shall consist of the
following:

                  (i) a payment in an amount equal to $301,475,000 representing
the net proceeds of the sale of the Underwritten Certificates, which payment
shall be paid to the Seller by wire transfer in immediately available funds on
the Closing Date by or on behalf of the Company, or as otherwise agreed by the
Company; and

                  (ii) a payment in an amount equal to $8,525,100 representing
the proceeds of the sale of the Retained Certificates by the Company to NRFC
pursuant to the REMIC Interests Sale Agreement, which payment shall be paid to
the Seller by wire transfer in immediately available funds on the Closing Date
by or on behalf of the Company, or as otherwise agreed by the Company.

            (b) [Reserved]

            (c) In connection with such conveyances by the Seller, the Seller
shall on behalf of and at the direction of the Company deliver to, and deposit
with the Certificate Administrator on behalf of the Trustee, on or before the
Closing Date in the case of an Closing Date Mortgage Loan, the following
documents or instruments with respect to each Mortgage Loan (the "Mortgage
File"):

                  (i) the original Mortgage Note endorsed to "JPMorgan Chase
Bank, as Trustee of the NovaStar Mortgage Funding Trust, Series 2002-2, relating
to the NovaStar Home Equity Loan Asset-Backed Certificates, Series 2002-2";

                  (ii) the original Mortgage with evidence of recording thereon,
or, if the original Mortgage has not yet been returned from the public recording
office, a copy of the original Mortgage certified by the Seller or the public
recording office in which such original Mortgage has been recorded and if the
Mortgage Loan is registered on the MERS System, such

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Mortgage shall include thereon a statement that it is a MOM Loan and shall
include the MIN for such Mortgage Loan;

                  (iii) unless the Mortgage Loan is registered on the MERS
System, an original assignment (which may be included in one or more blanket
assignments if permitted by applicable law) of the Mortgage endorsed to
"JPMorgan Chase Bank, as Trustee of the NovaStar Mortgage Funding Trust, Series
2002-2, relating to the NovaStar Home Equity Loan Asset-Backed Certificates,
Series 2002-2", and otherwise in recordable form;

                  (iv) originals of any intervening assignments of the Mortgage
showing an unbroken chain of title from the originator thereof to the Person
assigning it to the Trustee (or to MERS, if the Mortgage Loan is registered on
the MERS System, and noting the presence of a MIN, if the Mortgage Loan is
registered on the MERS System), with evidence of recording thereon, or, if the
original of any such intervening assignment has not yet been returned from the
public recording office, a copy of such original intervening assignment
certified by the Seller or the public recording office in which such original
intervening assignment has been recorded;

                  (v) the original policy of title insurance (or a commitment
for title insurance, if the policy is being held by the title insurance company
pending recordation of the Mortgage);

                  (vi) true and correct copy of each assumption, modification,
consolidation or substitution agreement, if any, relating to the Mortgage Loan;
and

                  (vii) an executed copy of the notice of assignment and
acknowledgement of assignment with respect to the Mortgage Loans covered by the
MI Policies.

            If a material defect in any Mortgage File is discovered which may
materially and adversely affect the value of the related Mortgage Loan, or the
interests of the Trustee (as pledgee of the Mortgage Loans), or the
Certificateholders in such Mortgage Loan, including if any document required to
be delivered to the Certificate Administrator has not been delivered (provided
that a Mortgage File will not be deemed to contain a defect for an unrecorded
assignment under clause (i) above for 180 days following submission of the
assignment if the Seller has submitted such assignment for recording pursuant to
the terms of the following paragraph), the Seller shall cure such defect,
repurchase the related Mortgage Loan at the Repurchase Price or substitute an
Eligible Substitute Mortgage Loan for the related Mortgage Loan upon the same
terms and conditions set forth in Section 3.01 hereof as to the Closing Date
Mortgage Loans for breaches of representations and warranties.

            Promptly after the Closing Date in the case of an Closing Date
Mortgage Loan (or after the date of transfer of any Eligible Substitute Mortgage
Loan), the Seller at its own expense shall complete and submit for recording in
the appropriate public office for real property records each of the assignments
referred to in clause (i) above, with such assignment completed in favor of the
Trustee, excluding any Mortgage Loan that is registered on the MERS System if
MERS is identified on the Mortgage or on a properly recorded assignment of
Mortgage as the mortgagee of record. While such assignment to be recorded is
being recorded, the Certificate Administrator shall retain a photocopy of such
assignment. If any assignment is lost or returned unrecorded to

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the Certificate Administrator because of any defect therein, the Seller is
required to prepare a substitute assignment or cure such defect, as the case may
be, and the Seller shall cause such substitute assignment to be recorded in
accordance with this paragraph.

            In instances where an original Mortgage or any original intervening
assignment of Mortgage is not, in accordance with clause (ii) or (iv) above,
delivered by the Seller to the Certificate Administrator, on behalf of the
Trustee, prior to or on the Closing Date in the case of a Closing Date Mortgage
Loan, the Seller will deliver or cause to be delivered the originals of such
documents to the Certificate Administrator, on behalf of the Trustee, promptly
upon receipt thereof.

            In connection with the assignment of any Closing Date Mortgage Loan
registered on the MERS System, promptly after the Closing Date, the Seller
further agrees that it will cause, at the Seller's own expense, the MERS System
to indicate that such Closing Date Mortgage Loan has been assigned by the Seller
to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including in such computer files (a) the applicable
Trustee code in the field "Trustee" which identifies the Trustee and (b) the
code "NovaStar 2002-2" (or its equivalent) in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans.

            Effective on the Closing Date, the Company hereby acknowledges its
acceptance of all right, title and interest to the Closing Date Mortgage Loans
and other property, existing on the Closing Date and thereafter created and
conveyed to it pursuant to this Section 2.01.

            The Trustee, as assignee or transferee of the Company, shall be
entitled to all scheduled principal payments due after the Cut-off Date, all
other payments of principal due and collected after the Cut-off Date, and all
payments of interest on the Closing Date Mortgage Loans. No scheduled payments
of principal due on or before the Cut-off Date and collected after the Cut-off
Date shall belong to the Company pursuant to the terms of this Purchase
Agreement. The Pooling and Servicing Agreement shall provide that any late
payment charges collected in connection with a Mortgage Loan shall be paid to
the Servicer as provided therein.

                  (d) The parties hereto intend that the transactions set forth
herein constitute a sale by the Seller to the Company on the Closing Date of all
the Seller's right, title and interest in and to the Closing Date Mortgage Loans
and other property as and to the extent described above. In the event the
transactions set forth herein shall be deemed not to be a sale, the Seller
hereby grants to the Company as of the Closing Date a security interest in all
of the Seller's right, title and interest in, to and under the Closing Date
Mortgage Loans and such other property, to secure all of the Seller's
obligations hereunder and this Purchase Agreement shall constitute a security
agreement under applicable law and in such event, the parties hereto acknowledge
that the Certificate Administrator, in addition to holding the Closing Mortgage
Loans on behalf of the Trustee for the benefit of the Certificateholders, holds
the Closing Date Mortgage Loans as designee of the Company. The Seller agrees to
take or cause to be taken such actions and to execute such documents, including
without limitation the filing of all necessary UCC-1 financing statements filed
in the Commonwealth of Virginia (which shall have been submitted for filing as
of the Closing Date), any continuation statements with respect thereto and any
amendments thereto required to reflect a change in the name or corporate
structure of the Seller, as are

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necessary to perfect and protect the interests of the Company and their
respective assignees in each Closing Date Mortgage Loan and the proceeds
thereof. The Company agrees to take or cause to be taken such actions and to
execute such documents, including without limitation the filing of all necessary
UCC-1 financing statements, and continuation statements with respect thereto and
any amendments thereto as are necessary to perfect and protect the interests of
the Trustee and its assignees in each Closing Date Mortgage Loan.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES;
                               REMEDIES FOR BREACH

                  Section 3.01 Seller Representations and Warranties.

            The Seller hereby represents and warrants to the Company and the
Trustee as of the date hereof, as of the Closing Date (or if otherwise specified
below, as of the date so specified):

            (a) As to the Seller:

                  (i) The Seller (i) is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of Virginia and
(ii) is qualified and in good standing as a foreign corporation to do business
in each jurisdiction where such qualification is necessary, except where the
failure so to qualify would not have a material adverse effect on the Seller's
ability to enter into this Purchase Agreement and to consummate the transactions
contemplated hereby and thereby;

                  (ii) The Seller has the power and authority to make, execute,
deliver and perform its obligations under this Purchase Agreement and all of the
transactions contemplated under this Purchase Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Purchase Agreement;

                  (iii) The Seller is not required to obtain the consent of any
other Person or any consent, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Purchase Agreement, except for such consents, approvals or authorization, or
registration or declaration, as shall have been obtained or filed, as the case
may be;

                  (iv) The execution and delivery of this Purchase Agreement and
the performance of the transactions contemplated hereby by the Seller will not
violate any provision of any existing law or regulation or any order or decree
of any court applicable to the Seller or any provision of the certificate of
incorporation or bylaws of the Seller, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Seller is a party
or by which the Seller may be bound;

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                  (v) No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Seller threatened, against the Seller or any of its properties
or with respect to this Purchase Agreement, the Certificates which in the
opinion of the Seller has a reasonable likelihood of resulting in a material
adverse effect on the transactions contemplated by this Purchase Agreement;

                  (vi) This Purchase Agreement constitutes the legal, valid and
binding obligations of the Seller, enforceable against the Seller in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in general
and except as such enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity);

                  (vii) This Purchase Agreement constitutes a valid transfer and
assignment to the Company of all right, title and interest of the Seller in and
to the Cut-off Date Principal Balance of the Closing Date Mortgage Loans, all
monies due or to become due with respect thereto, and all proceeds of such
Cut-off Date Principal Balance of the Closing Date Mortgage Loans, and this
Purchase Agreement;

                  (viii) The Seller is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state or
governmental agency, which default might have consequences that would materially
and adversely affect the condition (financial or other) or operations of the
Seller or its properties or might have consequences that would materially
adversely affect its performance hereunder; and

                  (ix) The Servicer or any Subservicer who will be servicing any
Mortgage Loan pursuant to the Pooling and Servicing Agreement or a Subservicing
Agreement is qualified to do business in all jurisdictions in which its
activities as Servicer or Subservicer of the Mortgage Loans serviced by it
require such qualifications except where failure to be so qualified will not
have a material adverse effect on such servicing activities.

            (b) As to each Closing Date Mortgage Loan as of the Closing Date,
except as otherwise expressly stated:

                  (i) The information set forth on the Mortgage Loan Schedule
with respect to each Closing Date Mortgage Loan is true and correct in all
material respects as of the Closing Date, and the information regarding the
Closing Date Mortgage Loans on the computer diskette or tape delivered to the
Trustee prior to the Closing Date, as applicable, is true and accurate in all
material respects and describes the same Mortgage Loans as the Mortgage Loans on
the Mortgage Loan Schedule;

                  (ii) The Mortgage Loans are not being transferred with any
intent to hinder, delay or defraud any creditors;

                  (iii) No more than 6.00% and 6.00% of the Group I Mortgage
Loans and Group II Initial Mortgage Loans, respectively, (by Cut-off Date
Principal Balance) were secured by condominium units; and no more than 12.00%
and 21.00% of the Group I

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Mortgage Loans and the Group II Initial Mortgage Loans, respectively, (by
Cut-off Date Principal Balance) were secured by properties in planned unit
developments;

                  (iv) As of the Cut-off Date, the remaining term of each Group
I Mortgage Loan is not more than 360 months and not less than 119 months and the
remaining term of each Group II Initial Mortgage Loan is not more than 360
months and not less than 119 months;

                  (v) No more than 55.00% and 58.00% of the Group I Mortgage
Loans and Group II Initial Mortgage Loans, respectively, (by Cut-off Date
Principal Balance) have been the subject of cash-out refinances;

                  (vi) No more than 11.00% and 10.00% of the Group I Mortgage
Loans and Group II Initial Mortgage Loans, respectively, (by Cut-off Date
Principal Balance) respectively, have been the subject of rate and term (no
cash-out) refinances;

                  (vii) No fewer than 34.00% and 32.00% of the Group I Mortgage
Loans and Group II Initial Mortgage Loans, respectively, (by Cut-off Date
Principal Balance) are purchase money loans;

                  (viii) No more than 13.06% and 12.28% of the Group I Mortgage
Loans and the Group II Initial Mortgage Loans, respectively, (by Cut-off Date
Principal Balance) are secured by Mortgaged Properties located in the State of
Florida; no more than 21.00% and 24.34% of the Group I Mortgage Loans and the
Group II Initial Mortgage Loans, respectively, (by Cut-off Date Principal
Balance) are secured by Mortgaged Properties located in the State of California;
and no more than 7.00% and 6.00% of the Group I Mortgage Loans and the Group II
Initial Mortgage Loans, respectively, (by Cut-off Date Principal Balance) are
located in any other state;

                  (ix) The outstanding Principal Balances of the Group I
Mortgage Loans (by Cut-off Date Principal Balance) ranged from $8,000 to
$347,000, respectively; the average outstanding Principal Balance of the Group I
Mortgage Loans is approximately $134,788; the original Principal Balances of the
Group II Initial Mortgage Loans (by Cut-off Date Principal Balance) ranged from
$10,000 to $600,000, respectively; the average outstanding Principal Balance of
the Group II Initial Mortgage Loans is approximately $135,072;

                  (x) At least 77.00% and 73.00% of the Group I Mortgage Loans
and the Group II Initial Mortgage Loans, respectively, (by Cut-off Date
Principal Balance) were secured by a first lien on a parcel of real property
improved by a detached single family residence; no more than 6.00% and 2.00% of
the Group I Mortgage Loans and the Group II Initial Mortgage Loans,
respectively, (by Cut-off Date Principal Balance) were secured by a first lien
on a parcel of real estate improved by a two-to four-unit single family
residence;

                  (xi) All points and fees related to each Mortgage Loan were
disclosed in writing to the borrower in accordance with applicable state and
federal law. Except in the case of a Mortgage Loan in an original principal
amount of less than $60,000 which would have resulted in an unprofitable
origination, no borrower was charged "points and fees" (whether or not financed)
in an amount greater than 5% of the principal amount of such loan, such 5%

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limitation calculated in accordance with the Lender Letter. All fees and charges
(including finance charges) and whether or not financed, assessed, collected or
to be collected with the origination and servicing of each Mortgage Loan has
been disclosed in writing to the borrower in accordance with applicable state
and federal law and regulation;

                  (xii) The Mortgage Rates borne by the adjustable rate Group I
Mortgage Loans as of the Cut-off Date range from 6.500% and per annum to 12.875%
per annum, and the weighted average Mortgage Rate (by Cut-off Date Principal
Balance) of the adjustable rate Group I Mortgage Loans was 8.855%, per annum;
the Mortgage Rates borne by fixed rate Group I Mortgage Loans as of the Cut-off
Date range from 6.375% per annum to 12.125% per annum, and the weighted average
Mortgage Rate (by Cut-off Date Principal Balance) of the Group I Mortgage Loans
was 9.028% per annum; the Mortgage Rates borne by adjustable rate Group II
Initial Mortgage Loans as of the Cut-off Date range from 6.500% per annum to
11.500% per annum, and the weighted average Mortgage Rate (by Cut-off Date
Principal Balance) of the adjustable rate Group II Initial Mortgage Loans was
8.664%, per annum; the Mortgage Rates borne by fixed rate Group II Initial
Mortgage Loans as of the Cut-off Date range from 6.750% per annum to 14.500% per
annum, and the weighted average Mortgage Rate (by Cut-off Date Principal
Balance) of the Group II Initial Mortgage Loans was 9.323% per annum;

                  (xiii) Approximately 44.66% and 48.32% of the Group I Mortgage
Loans and the Group II Initial Mortgage Loans, respectively, (by Cut-off Date
Principal Balance) have a Loan-to-Value Ratio in excess of 80.00%; no Group I
Mortgage Loan or Group II Initial Mortgage Loan in the Mortgage Pool had a
Loan-to-Value Ratio at origination in excess of 100%; and the weighted average
Loan-to-Value Ratio (by Cut-off Date Principal Balance) of the Group I Mortgage
Loans and the Group II Mortgage Initial Mortgage Loans was equal to or less than
80.64% and 80.57%, respectively;

                  (xiv) All of the Initial Mortgage Loans are secured by first
or second liens on the related Mortgaged Property;

                  (xv) [Reserved]

                  (xvi) There is no valid offset, right of rescission, defense,
claim or counterclaim of any obligor under any Mortgage Note or Mortgage,
including the obligation of the Mortgagor to pay the unpaid principal of or
interest on such Mortgage Note, and any applicable right of rescission has
expired, nor will the operation of any of the terms of such Mortgage Note or
Mortgage, or the exercise of any right thereunder, render either the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject to any right
of rescission, set-off, recoupment, counterclaim or defense, including, without
limitation, the defense of usury, and no such right of rescission, set-off,
recoupment, counterclaim or defense has been asserted with respect thereto, and,
to the best of Seller's knowledge, no Mortgagor of the applicable Mortgage was a
debtor in any state or federal bankruptcy or insolvency proceeding;

                  (xvii) There are no mechanics' liens or claims for work, labor
or material affecting any Mortgaged Property which are or may be a lien prior
to, or equal with, the

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lien of such Mortgage, except those which are insured against by the title
insurance policy referred to in clause (xix) below;

                  (xviii) As of the Cut-off Date in the case of an Initial
Mortgage Loan, each Mortgaged Property is free of material damage and is in good
repair and there is no proceeding pending or threatened for the total or partial
condemnation of any Mortgage Property;

                  (xix) Each Mortgage is a valid and enforceable first or second
lien on the Mortgaged Property securing the related Mortgage Note and each
Mortgaged Property is owned by the Mortgagor in fee simple (except with respect
to common areas in the case of condominiums, PUDs and de minimis PUTDs) subject
only to (1) the lien of nondelinquent current real property taxes and
assessments, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to mortgage
lending institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Mortgage Loan or referred to
in the lender's title insurance policy delivered to the originator of the
related Mortgage Loan and (3) other matters to which like properties are
commonly subject that do not materially interfere with the benefits of the
security intended to be provided by such Mortgage. Immediately prior to the sale
of such Mortgage Loan to the Company in the case of a Closing Date Mortgage
Loan, the Seller had full right to sell and assign the same to the Company or
the Trustee, as the case may be. Immediately following the sale of such Mortgage
Loan to the Company and the Company's assignment and sale thereof of such
Mortgage Loan to the Trustee in the case of a Closing Date Mortgage Loan, the
Trustee will have good title thereto subject to no claims or liens, including
delinquent tax or assessment liens including delinquent tax or assessment liens.
Immediately following the sale of such Mortgage Loan to the Company, the Trustee
will have good title thereto subject to no claims or liens;

                  (xx) Each Mortgage Loan at origination complied in all
material respects with applicable state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement procedures,
the Truth In Lending Act of 1968, as amended, and disclosure laws and
consummation of the transactions contemplated hereby, including without
limitation, the receipt of interest by the owner of such Mortgage Loan or the
Holders of Certificates secured thereby, will not violate any such laws. Each
Mortgage Loan is being serviced in all material respects in accordance with
applicable state and federal laws, including, without limitation, the Truth In
Lending Act of 1968, as amended, and other consumer protection laws, real estate
settlement procedures, usury, equal credit opportunity and disclosure laws;

                  (xxi) Neither the Seller nor any prior holder of any Mortgage
has impaired, waived, altered or modified the Mortgage or Mortgage Notes in any
material respect (except that a Mortgage Loan may have been modified by a
written instrument which has been recorded, if necessary to protect the
interests of the owner of such Mortgage Loan or the Certificates, and which has
been delivered to the Trustee); satisfied, canceled or subordinated such
Mortgage in whole or in part; released the applicable Mortgaged Property in
whole or in part from the lien of such Mortgage; or executed any instrument of
release, cancellation or satisfaction with respect thereto;

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                  (xxii) A lender's policy of title insurance (on an ALTA or
CLTA form) or binder, or other assurance of title customary in the relevant
jurisdiction insuring the first lien priority of the Mortgage Loan in an amount
at least equal to the original Principal Balance of each such Mortgage Loan or a
commitment binder or commitment to issue the same was effective on the date of
the origination of each Mortgage Loan, each such policy is valid and remains in
full force and effect, and each such policy was issued by a title insurer
qualified to do business in the jurisdiction where the Mortgaged Property is
located, which policy insures the Seller and successor owners of indebtedness
secured by the insured Mortgage as to the first or second priority lien of the
Mortgage as applicable. The Seller is, and such successor owners will be, the
sole insured under such lender's title insurance policy; no claims have been
made under such mortgage title insurance policy; no prior holder of the
applicable Mortgage, including the Seller, has done, by act or omission,
anything which would impair the coverage of such mortgage title insurance
policy; and each such policy, binder or assurance contains all applicable
endorsements;

                  (xxiii) All of the improvements which were included for the
purpose of determining the Appraised Value of the Mortgaged Property lie wholly
within the boundaries and building restriction lines of such property and no
improvements on adjoining properties encroach upon the Mortgaged Property;

                  (xxiv) No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation,
subdivision law or ordinance, except where the failure to comply would not have
a material adverse effect on the market value of the Mortgaged Property. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities and the Mortgaged Property is lawfully
occupied under applicable law except where the failure to comply would not have
a material adverse effect on the market value of the Mortgaged Property;

                  (xxv) Each Mortgage Note and the applicable Mortgage are
genuine, and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium, receivership and other
similar laws relating to creditors' rights generally or by equitable principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law). All parties to the Mortgage Note and the Mortgage had legal capacity
to execute the Mortgage Note and the Mortgage and each Mortgage Note and
Mortgage has been duly and properly executed by such parties;

                  (xxvi) The proceeds of the Mortgage Loans have been fully
disbursed, there is no requirement for future advances thereunder and any and
all requirements as to completion of any on-site or off-site improvements and as
to disbursement of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making, closing or recording the Mortgage Loans
were paid and the Mortgagor is not entitled to any refund of amounts paid or due
under the Mortgage Note;

                                       10
<PAGE>

                  (xxvii) Each Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including (i) in the case of a Mortgage designated as a deed of trust,
by trustee's sale, and (ii) otherwise by judicial foreclosure or if applicable,
non-judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the property, subject to any applicable rights of
redemption;

                  (xxviii) With respect to each Mortgage constituting a deed of
trust, either a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in such
Mortgage or if no duly qualified trustee has been properly designated and so
serves, the Mortgage contains satisfactory provisions for the appointment of
such trustee by the holder of the Mortgage at no cost or expense to such holder,
and no fees or expenses are or will become payable by the Certificateholders to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;

                  (xxix) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary arrangements
for repayment thereof cannot be made, and no escrow deficits or payments of
other charges or payments due the Seller have been capitalized under the
Mortgage or the applicable Mortgage Note;

                  (xxx) The Mortgage Note is not and has not been secured by any
collateral, pledged account or other security other than real estate securing
the Mortgagor's obligations and no Mortgage Loan is secured by more than one
Mortgaged Property;

                  (xxxi) As of the Closing Date in the case of a Closing Date
Mortgage Loan, the improvements upon each Mortgaged Property are covered by a
valid and existing hazard insurance policy substantially acceptable to FNMA and
acceptable to the Seller which policy provides for fire extended coverage and
such other hazards as are customary in the area where the Mortgaged Property is
located representing coverage in an amount not less than the lesser of (A) the
maximum insurable value of the improvements securing such Mortgage Loan and (B)
the outstanding Principal Balance of the related Mortgage Loan; if the
improvement on the Mortgaged Property is a condominium unit, it is included
under the coverage afforded by a blanket policy for the condominium project. All
individual insurance policies contain a standard mortgagee clause naming the
Seller or the original holder of the Mortgage, and its successors in interest,
as mortgagee, and the Seller has received no notice that any premiums due and
payable thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and expense,
and upon the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to obtain and maintain such insurance at the Mortgagor's cost and expense and to
seek reimbursement therefor from the Mortgagor. There has been no act or
omission which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of either;

                  (xxxii) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as having
special flood

                                       11
<PAGE>

hazards, a flood insurance policy in a form meeting the requirements of the
current guidelines of the Flood Insurance Administration is in effect with
respect to such Mortgaged Property with a generally acceptable carrier in an
amount representing coverage not less than the least of (A) the outstanding
Principal Balance of the Mortgage Loan, (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis and (C) the maximum
amount of flood coverage that is available under federal law;

                  (xxxiii) Except for the Mortgage Loan referred to in clause
(xii) as being delinquent, there is no material monetary default, breach,
violation or event of acceleration existing under the Mortgage or the applicable
Mortgage Note; and no material event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
material default, breach, violation or event of acceleration, and neither the
Seller, any of its affiliates nor any servicer or subservicer of any related
Mortgage Loan has waived any default, breach, violation or event of
acceleration; no foreclosure action is threatened or has been commenced with
respect to the Mortgage Loan;

                  (xxxiv) Each Mortgage Loan is being serviced by the Servicer;

                  (xxxv) There is no obligation on the part of the Seller or any
other party to make any payments with respect to the related Mortgage Loan in
addition to the Monthly Payments required to be made by the applicable
Mortgagor;

                  (xxxvi) Any future advances made prior to the Cut-off Date in
the case of a Closing Date Mortgage Loan, with respect to any Mortgage Loan have
been consolidated with the outstanding principal amount secured by such
Mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term reflected on the Mortgage Loan Schedule.
Except with respect to the Negative Amortization Loans, the consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan. The Mortgage Note with respect to any Mortgage Loan does not permit or
obligate the Servicer to make future advances to the Mortgagor at the option of
the Mortgagor;

                  (xxxvii) The Seller has caused or will cause to be performed
any and all acts required to preserve the rights and remedies of the Company and
the Trustee evidencing an interest in the Mortgage Loans in any insurance
policies applicable to the Mortgage Loans including, without limitation, any
necessary notifications of insurers, assignments of policies or interests
therein, and establishments of coinsured, joint loss payee and mortgagee rights
in favor of Trustee;

                  (xxxviii) Except as set forth in clause (xlii), there are no
defaults by the Mortgagor in complying with the terms of any Mortgage, and all
taxes, governmental assessments, insurance premiums, water, sewer and municipal
charges which previously became due and owing have been paid, or, if required by
the terms of the Mortgage Loan, an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and which has
been assessed, but is not yet due and payable. Except for (A) payments in the
nature of escrow payments and (B) interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage proceeds to the day which
precedes by one month the Due Date of the first installment of principal and
interest, including, without limitation, taxes and

                                       12
<PAGE>

insurance payments, the Servicer has not advanced funds, or induced, solicited
or knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the Mortgage;

                  (xxxix) At the time of origination, each Mortgaged Property
was the subject of an appraisal which conforms to the underwriting requirements
of the related originator; and the Mortgage File contains an appraisal of the
applicable Mortgaged Property;

                  (xl) None of the Mortgage Loans are graduated payment Mortgage
Loans or growth equity Mortgage Loans;

                  (xli) 90.52% and 89.73% of the adjustable rate Group I Initial
ARM Mortgage Loans and the adjustable rate Group II Initial ARM Mortgage Loans,
respectively, (by Cut-off Date Principal Balance) are Convertible Mortgage
Loans;

                  (xlii) Except with respect to no more than 1% of the Initial
Mortgage Loans (by Cut-off Date Principal Balance), none of the payments of
principal of or interest on or in respect of any Initial Mortgage Loans shall be
30 days or more but less than 60 days past due as of the Cut-off Date; except
with respect to no more than 0.5% of the Initial Mortgage Loans (by Cut-off Date
Principal Balance), none of the payments of principal or interest on or in
respect of any Initial Mortgage Loans shall be 60 days or more but less than 90
days past due as of the Cut-off Date; and no Initial Mortgage Loan was 90 days
or more past due as of the Cut-off Date (except that one Initial Mortgage Loan
was past 90 days due as of the Cut-off Date, such loan having been repurchased
by the Seller); (b) except as set forth in clause (a) above, no Initial Mortgage
Loan has been contractually delinquent for more than one monthly installment
period during the twelve months preceding the Cut-off Date; (c) except as set
forth in clause (a) above, all payments required to be made by the Mortgagor
under the terms of the Mortgage Note have been made and credited; and (d) to the
Seller's knowledge, there was no delinquent recording, tax or assessment lien
against the property subject to any Mortgage, except where such lien was being
contested in good faith and a stay had been granted against levying on the
property;

                  (xliii) Upon payment of the Purchase Price for the Mortgage
Loans by the Company or the Trustee, as applicable, pursuant to this Purchase
Agreement, the Seller has transferred to the Company in the case of a Closing
Date Mortgage Loan, good and marketable title to each Mortgage Note and Mortgage
free and clear of any and all liens, claims, encumbrances, participation
interests, equities, pledges, charges or security interests of any nature and
has or had full right and authority, subject to no participation of or agreement
with any other person, to sell and assign the same, and following the sale of
each Closing Date Mortgage Loan, the Company or the Trustee, as applicable, will
own such Mortgage Loan free and clear of any encumbrance, equity interest,
participation interest, lien, pledge, charge, claim or security interest;

                  (xliv) The Seller acquired any right, title and interest in
and to the Mortgage Loans in good faith and without notice of any adverse claim;

                                       13
<PAGE>

                  (xlv) The Mortgage Note, the Mortgage, the related Assignment
of Mortgage and any other documents required to be delivered by the Seller have
been delivered to the Certificate Administrator. The Certificate Administrator
is in possession of a complete, true and accurate Mortgage File in accordance
with Section 2.01 hereof. Substantially all Mortgage Loans have monthly payments
due on the first day of each month and each Mortgage Loan had an original term
to maturity of no greater than 30 years;

                  (xlvi) Each Mortgage Loan contains a due-on-sale provision,
although each Mortgage Loan may be assumable if permitted by the Servicer under
certain circumstances;

                  (xlvii) Each of the Mortgage and the Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (xlviii) The Mortgagor has not notified the Seller, and the
Seller has no knowledge of any relief requested or allowed to the Mortgagor
under the Soldiers' and Sailors' Civil Relief Act of 1940;

                  (xlix) To the best of the Seller's knowledge, there exists no
violation of any local, state, or federal environmental law, rule or regulation
in respect of the Mortgaged Property which violation has or could have a
material adverse effect on the market value of such Mortgaged Property. The
Seller has no knowledge of any pending action or proceeding directly involving
the related Mortgaged Property in which compliance with any environmental law,
rule or regulation is in issue; and, to the best of the Seller's knowledge,
nothing further remains to be done to satisfy in full all requirements of each
such law, rule or regulation constituting a prerequisite to the use and
employment of such Mortgaged Property;

                  (l) Each Mortgage Loan conforms, and all such Mortgage Loans
in the aggregate conform, to the description thereof set forth in the Prospectus
and Prospectus Supplement in all material respects;

                  (li) Immediately prior to the transfer to the Company or the
Trustee, as applicable, the Seller had good and marketable title thereto, and
the Seller is the sole owner of beneficial title to and holder of the Mortgage
Loan. The Seller is conveying the same to the Company or the Trustee, as
applicable, free and clear of any and all liens, claims, encumbrances,
participation interests, equities, pledges, charges or security interests of any
nature and has full right and authority to sell and assign the same pursuant to
this Purchase Agreement, except for liens which will be released simultaneously
with such conveyance;

                  (lii) For each Mortgage Loan, the related Mortgage File
contains a true, accurate and correct copy of each of the documents and
instruments required to be included therein;

                  (liii) The Servicer meets all applicable requirements under
the Pooling and Servicing Agreement, is properly qualified to service each
Mortgage Loan and has been servicing each Mortgage Loan prior to the Cut-off
Date;

                                       14
<PAGE>

                  (liv) No instrument of release or waiver has been executed in
connection with the Mortgage Loans, and no Mortgagor has been released, in whole
or in part from its obligations in connection with a Mortgage Loan except in
connection with an assumption agreement which has been delivered to the Trustee;

                  (lv) On the basis of a representation by the Mortgagor at the
time of origination of the Mortgage Loans, at least 93.19% and 94.90% of the
Group I Mortgage Loans and Group II Initial Mortgage Loans, respectively, (by
Cut-off Date Principal Balance) will be secured by Mortgages on owner-occupied
primary residence properties;

                  (lvi) 12.25% and 11.86% of the Group I Mortgage Loans and the
Group II Initial Mortgage Loans, respectively, (by Cut-off Date Principal
Balance) provide for a balloon payment and each Mortgage Note with respect to
each such Mortgage Loan requires monthly payments of principal based on 30 year
amortization schedules and have scheduled maturity dates of 15 years from the
due date of the first monthly payment;

                  (lvii) No Mortgage Loan was originated based on an appraisal
of the related Mortgaged Property made prior to completion of construction of
the improvements thereon;

                  (lviii) None of the Mortgage Loans is a "buy down" mortgage
loan;

                  (lix) None of the Group I Mortgage Loans are subject to the
Home Ownership and Equity Protection Act of 1994, as amended, or any comparable
state law; no proceeds from any Group I Mortgage Loan were used to finance any
single premium credit insurance policies; none of the Group I Mortgage Loans (by
Cut-off Date Principal Balance) require a mortgagor to pay a Prepayment Charge
if the mortgagor prepays a Mortgage Loan more than five years after the date the
Mortgage Loan was originated.

                  (lx) No selection procedure reasonably believed by the Seller
to be adverse to the interests of the Certificateholders was utilized in
selecting the Mortgage Loans;

                  (lxi) The terms of the Mortgage Note related to each
Adjustable Rate Mortgage Loan provide that, following an initial period of two
or three years following the month in which such Mortgage Loan was originated
and semiannually or annually thereafter (each such date, an "Adjustment Date"),
the Mortgage Rate on such Mortgage Loan will be adjusted to equal the sum of (a)
the related Index and (b) a fixed percentage amount specified in the related
Mortgage Note (each, a "Gross Margin"); provided, however, that the Mortgage
Rate generally will not increase or decrease by the related Periodic Rate Cap,
and will not increase above a specified maximum Mortgage Rate over the life of
the Adjustable Rate Mortgage Loan (the "Maximum Mortgage Rate") or decrease
below a specified minimum Mortgage Rate over the life of the Adjustable Rate
Mortgage Loan (the "Minimum Mortgage Rate");

                  (lxii) None of the Initial Mortgage Loans (by Cut-off Date
Principal Balance) are negative amortization loans;

                                       15
<PAGE>

                  (lxiii) No material misrepresentation, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of the
Seller, its affiliates or employees or any other person involved in the
origination of the Mortgage Loan or in the application for any insurance,
including, but not limited to the MI Policy, in relation to such Mortgage Loan;

                  (lxiv) Each Mortgage Loan was originated by a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections
203 and 211 of the Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or similar institution which is
supervised and examined by a federal or state authority;

                  (lxv) With respect to each Mortgage Loan secured by
manufactured housing, such manufactured housing is permanently affixed to a
foundation and constitutes real estate under applicable state law;

                  (lxvi) No Mortgage Loans are date of payment or simple
interest loans;

                  (lxvii) The sale, transfer, assignment and conveyance of
Mortgage Loans by the Seller pursuant to this Purchase Agreement is not subject
to and will not result in any tax, fee or governmental charge payable by the
Company, the Trustee, the Certificate Administrator or the Trustee to any
federal, state or local government ("Transfer Taxes") other than Transfer Taxes
which have or will be paid by the Seller as due; and

                  (lxviii) [Reserved]

                  (lxix) Approximately 90.02% of the Initial Mortgage Loans (by
Cut-Off Date Principal Balance) with a Loan-to-Value Ratio greater than 60% are
covered by an MI Policy issued by an MI Insurer;

                  (lxx) Each of the Initial Mortgage Loans that is identified on
Schedule 1 hereto is covered by a MI Policy issued by the MI Insurer;

                  (lxxi) All requirements for the valid transfer of each MI
Policy, including any assignments or notices required in each MI Policy, have
been satisfied; and

                  (lxxii) As of the Closing Date with respect to each Closing
Date Mortgage Loan that is subject to a MI Policy, the Seller is unaware of any
existing circumstances which would cause the MI Insurer to deny a claim with
respect to such Mortgage Loan.

                  Upon discovery by the Seller or upon notice from the Company,
the Trustee, or the Certificate Administrator, as applicable, of a breach of any
representation or warranty in subsection (a) of this Section which materially
and adversely affects the interests of the Certificateholders the Seller shall,
within 45 days of its discovery or its receipt of notice of such breach, either
(i) cure such breach in all material respects or (ii) to the extent that such
breach is with respect to a Mortgage Loan or a Related Document, either (A)
repurchase such Mortgage Loan from the Trustee at the Repurchase Price, or (B)
substitute one or more Eligible Substitute

                                       16
<PAGE>

Mortgage Loans for such Mortgage Loan, in each case in the manner and subject to
the conditions and limitations set forth below.

            Upon discovery by the Seller or upon notice from the Company, the
Trustee, or the Certificate Administrator, as applicable, of a breach of any
representation or warranty in this subsection (b) with respect to any Mortgage
Loan or upon the occurrence of a Repurchase Event, which materially and
adversely affects the value of the related Mortgage Loan or the interests of any
Certificateholders or of the Company or the Trustee in such Mortgage Loan
(notice of which shall be given to the Company and the Trustee by the Seller, if
it discovers the same) the Seller shall, within 90 days after the earlier of its
discovery or receipt of notice thereof, either cure such breach or Repurchase
Event in all material respects or either (i) repurchase such Mortgage Loan from
the Trustee at the Repurchase Price, or (ii) substitute one or more Eligible
Substitute Mortgage Loans for such Mortgage Loan, in each case in the manner and
subject to the conditions set forth below. The Repurchase Price for any such
Mortgage Loan repurchased by the Seller shall be deposited or caused to be
deposited by the Servicer in the Collection Account maintained by it pursuant to
Section 3.06 of the Pooling and Servicing Agreement.

            In the event that the Seller elects to substitute an Eligible
Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to this
Section 3.01, the Seller shall deliver to the Certificate Administrator on
behalf of the Trustee, with respect to such Eligible Substitute Mortgage Loan or
Loans, the original Mortgage Note and all other documents and agreements as are
required by Section 2.01 hereof, with the Mortgage Note endorsed as required by
such Section 2.01 hereof. No substitution will be made in any calendar month
after the Determination Date for such month. Monthly Payments due with respect
to Eligible Substitute Mortgage Loans in the month of substitution shall not be
part of the Trust Fund and will be retained by the Servicer and remitted by the
Servicer to the Seller on the next succeeding Payment Date. For the month of
substitution, distributions to the Payment Account pursuant to the Pooling and
Servicing Agreement will include the Monthly Payment due on a Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan. The Servicer shall
amend or cause to be amended the Mortgage Loan Schedule to reflect the removal
of such Deleted Mortgage Loan and the substitution of the Eligible Substitute
Mortgage Loan or Loans and the Servicer shall deliver the amended Mortgage Loan
Schedule to the Certificate Administrator and the Trustee. Upon such
substitution, the Eligible Substitute Mortgage Loan or Loans shall be subject to
the terms of this Purchase Agreement and the Pooling and Servicing Agreement in
all respects, the Seller shall be deemed to have made the representations and
warranties with respect to the Eligible Substitute Mortgage Loan contained
herein set forth in this Section 3.01(b), to the extent set forth in the
definition of "Eligible Substitute Mortgage Loan", as of the date of
substitution, and the Seller shall be obligated to repurchase or substitute for
any Eligible Substitute Mortgage Loan as to which a Repurchase Event has
occurred as provided herein. In connection with the substitution of one or more
Eligible Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the amount (such amount, a "Substitution Adjustment
Amount"), if any, by which the aggregate principal balance of all such Eligible
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate principal balance of all such Deleted Mortgage Loans (after
application of the principal portion of the Monthly Payments due in the month of
substitution that are to be distributed to the Payment Account in the month of
substitution). The

                                       17
<PAGE>

Seller shall pay the amount of such shortfall to the Servicer for deposit into
the Collection Account on the day of substitution, without any reimbursement
therefor.

            Upon receipt by the Trustee of written notification, signed by a
Servicing Officer, of the deposit of such Repurchase Price or of such
substitution of an Eligible Substitute Mortgage Loan and deposit of any
applicable Substitution Adjustment Amount as provided above, the Certificate
Administrator shall, on behalf of the Trustee, cause to be released to the
Seller the related Mortgage File for the Mortgage Loan being repurchased or
substituted for and the Trustee shall execute and deliver such instruments of
transfer or assignment prepared by the Servicer, in each case without recourse,
as shall be necessary to vest in the Seller or its designee such Mortgage Loan
released pursuant hereto and thereafter such Mortgage Loan shall not be an asset
of the Trustee.

            It is understood and agreed that the obligation of the Seller to
cure any breach with respect to or to repurchase or substitute for, any Mortgage
Loan as to which such a breach has occurred and is continuing shall, except to
the extent provided in Section 6.01 of this Purchase Agreement, constitute the
sole remedy respecting such breach available to the Company, the Trustee, the
Certificateholders (or the Certificate Administrator on behalf of the Trustee
for the benefit of Certificateholders) against the Seller.

            It is understood and agreed that the representations and warranties
set forth in this Section 3.01 shall survive delivery of the respective Mortgage
Files to the Certificate Administrator.

            Section 3.02 Company Representations and Warranties.

            The Company hereby represents and warrants to the Seller and the
Trustee as of the date hereof and as of the Closing Date that:

            (a) The Company is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.

            (b) The Company is duly qualified to do business as a foreign
corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of its property
or the conduct of its business shall require such qualifications and in which
the failure to so qualify would have a material adverse effect on the business,
properties, assets or condition (financial or other) of the Company and the
ability of the Company to perform under this Purchase Agreement.

            (c) The Company has the power and authority to execute and deliver
this Purchase Agreement and to carry out its terms; the Company has full power
and authority to purchase the property to be purchased from the Seller and the
Company has duly authorized such purchase by all necessary corporate action; and
the execution, delivery and performance of this Purchase Agreement have been
duly authorized by the Company by all necessary corporate action.

                                       18
<PAGE>

            (d) The consummation of the transactions contemplated by this
Purchase Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Company, or any indenture, agreement or other
instrument to which the Company is a party or by which it is bound; nor result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); nor violate any law or, to the best of the
Company's knowledge, any order, rule or regulation applicable to the Company of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Company or its
properties.

            (e) The Company (A) is a solvent entity and is paying its debts as
they become due and (B) after giving effect to the transfer of the Mortgage
Loans, will be a solvent entity and will have sufficient resources to pay its
debts as they become due.

            Section 3.03 [Reserved]

                                   ARTICLE IV

                               SELLER'S COVENANTS

            Section 4.01 Covenants of the Seller.

            The Seller hereby covenants as of the date hereof and as of the
Closing Date that, except for the transfer hereunder, on and after the Closing
Date, the Seller will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur or assume any Lien on, any Mortgage Loan, whether now
existing or hereafter created, or any interest therein; the Seller will notify
the Certificate Administrator and the Trustee of the existence of any such Lien
on any Mortgage Loan immediately upon discovery thereof; and the Seller will
defend the right, title and interest of the Trustee, on its own behalf and as
assignee of the Company, in, to and under the Mortgage Loans, whether now
existing or hereafter created, against all claims of third parties claiming
through or under the Seller.

            In the event that the Certificate Administrator or the Trustee
receives actual notice of any Transfer Taxes arising out of the transfer,
assignment and conveyance of the Mortgage Loans, on written demand by the
Certificate Administrator, or upon the Seller's otherwise being given notice
thereof by the Certificate Administrator, the Seller shall pay any and all such
Transfer Taxes (it being understood that the Holders of the Certificates, the
Company, the Certificate Administrator and the Trustee shall have no obligation
to pay such Transfer Taxes).

            Section 4.02 Payment of Expenses.

            (a) The Seller will pay on the Closing Date all expenses incident to
the performance of its obligations under this Purchase Agreement and the
Underwriting Agreement, including (i) the preparation, printing and any filing
of the preliminary prospectus, Prospectus Supplement and Prospectus (including
any schedules or exhibits and any document incorporated therein by reference)
originally filed and of each amendment or supplement thereto, (ii) the

                                       19
<PAGE>

preparation, printing and delivery to the Underwriter of this Purchase Agreement
and the Underwriting Agreement, the Pooling and Servicing Agreement and such
other documents as may be required in connection with the offering, purchase,
sale and delivery of the Certificates, (iii) the preparation, issuance and
delivery of the certificates for the Class A Certificates to the Underwriter,
including any charges of DTC, CEDEL, S.A. and the Euroclear System in connection
therewith; (iv) the qualification of the Class A Certificates and Mezzanine
Certificates under securities laws in accordance with the provisions of Section
3(f) of the Underwriting Agreement, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriter in connection therewith
and in connection with the preparation of the Blue Sky Survey and any supplement
thereto for delivery to potential investors, (v) in addition to the initial
printing and filing costs under (i) above, the printing and delivery to the
Underwriter of copies of each preliminary prospectus and of the Prospectus and
any amendments or supplements thereto for delivery to potential investors, (vi)
the fees and expenses of the Trustee and the Certificate Administrator,
including the fees and disbursements of counsel for the Trustee and the
Certificate Administrator in connection with the Pooling and Servicing
Agreement, the Purchase Agreement and the Certificates and (vii) any fees
payable in connection with the rating of the Certificates.

(b) If the Underwriting Agreement is terminated by the Underwriter in accordance
with the provisions of Section 5 or Section 9(a)(i) thereof, the Seller shall
reimburse the Underwriter for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.

                                   ARTICLE V

                CONDITIONS TO CLOSING DATE MORTGAGE LOAN PURCHASE

            Section 5.01 Conditions of Company's Obligations.

            The Company's obligations to purchase the Closing Date Mortgage
Loans which each accepts for purchase hereunder shall be subject to each of the
following conditions:

                  (i) the Mortgage File for each Closing Date Mortgage Loan
shall have been delivered in accordance with this Purchase Agreement;

                  (ii) the representations and warranties set forth in Section
3.01(b) hereof with respect to each Closing Date Mortgage Loan shall be true as
of the Closing Date;

                  (iii) the Underwriter or its affiliates shall have had an
opportunity to perform a due diligence review of each Mortgage Loan; and

                  (iv) the Seller shall have provided to the Underwriter or its
affiliates such other documents which are then required to have been delivered
under this Purchase Agreement or which are reasonably requested by the
Underwriter or its affiliates, which other documents may include UCC financing
statements, a favorable opinion or opinions of counsel with respect to matters
which are reasonably requested by the Underwriter, and/or an Officers'
Certificate.

                                       20
<PAGE>

                                   ARTICLE VI

                          INDEMNIFICATION BY THE SELLER

                       WITH RESPECT TO THE MORTGAGE LOANS

            Section 6.01 Indemnification With Respect to the Mortgage Loans.

            The Seller shall indemnify and hold harmless the Company, Trustee
and the Certificate Administrator from and against any loss, liability or
expense arising from the breach by the Seller of its representations and
warranties in Section 3.01 of this Purchase Agreement which materially and
adversely affects the value of any Mortgage Loan or the Company's assignees'
interest in any Mortgage Loan or from the failure by the Seller to perform its
obligations under this Purchase Agreement in any material respect.

            Section 6.02 Limitation on Liability of the Seller.

            None of the directors, officers, employees or agents of the Seller
shall be under any liability to the Company, it being expressly understood that
all such liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Purchase Agreement. Except as and to
the extent expressly provided in the Basic Documents, the Seller shall not be
under any liability to the Trustee, the Certificate Administrator or the
Certificateholders. The Seller and any director, officer, employee or agent of
the Seller may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.

                                  ARTICLE VII

                                   TERMINATION

            Section 7.01 Termination.

            (a) Except as provided in Section 7.01(b) hereof, the respective
obligations and responsibilities of the Seller, the Company, the Trustee and the
Certificate Administrator created hereby shall terminate, except for the
Seller's indemnity obligations as provided herein, upon the termination of the
Trust Fund pursuant to the terms of the Pooling and Servicing Agreement.

            (b) The Company may terminate this Purchase Agreement, by notice to
the Seller, at any time at or prior to the Closing Date:

                  (i) if the Underwriting Agreement is terminated by the
Underwriter pursuant to the terms of the Underwriting Agreement or if there has
been, since the time of execution of this Purchase Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the financial condition, earnings, business affairs
or business prospects of the Seller, whether or not arising in the ordinary
course of business, or

                                       21
<PAGE>

                  (ii) if there has occurred any material adverse change in the
financial markets in the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Underwriter, impracticable to market the Class A
Certificates and Mezzanine Certificates or to enforce contracts for the sale of
the Class A Certificates and Mezzanine Certificates, or

                  (iii) if trading in any securities of the Seller has been
suspended or limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the NASDAQ National Market System has been suspended or limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority,

                  (iv) if a banking moratorium has been declared by either
Federal or New York authorities,

                  (v) either (A) a change in control of the Seller shall have
occurred other than in connection with and as a result of the issuance and sale
by the Seller or registered, publicly offered common stock; or (B) the
Underwriter determines in its sole discretion that any material adverse change
has occurred in the management of the Seller,

                  (vi) there is (A) a material breach by the Seller of any
representation and warranty contained in this Purchase Agreement or the
Underwriting Agreement other than a representation or warranty relating to
particular Mortgage Loans, and the Underwriter has reason to believe in good
faith either that such breach is not curable within two (2) days or that such
breach may not have been cured in all material respects at the expiration of two
(2) days following discovery thereof by the Seller or (B) a failure by the
Seller to make any payment payable by it under this Purchase Agreement or (C)
any other failure by the Seller to observe and perform in any material respect
its material covenants, agreements and obligations with the Company, including
without limitation those contained in this Purchase Agreement, and the Company
has reason to believe in good faith that such failure may not have been cured in
all material respects at the expiration of two (2) days following discovery
thereof by the Seller, or

                  (vii) the Seller fails to provide written notification to the
Underwriter of any change in its loan origination, acquisition or appraisal
guidelines or practices, or the Seller, without the prior consent of the
Underwriter (which shall not be unreasonably withheld), amends in any material
respect its loan origination, acquisition or appraisal guidelines or practices.

            If this Purchase Agreement is terminated pursuant to this Section
7.01(b), such termination shall be without liability of any party to any other
party except as provided in Section 4.02 hereof.

                                       22
<PAGE>

                                  ARTICLE VIII

                            MISCELLANEOUS PROVISIONS

            Section 8.01 Amendment.

            This Purchase Agreement may be amended from time to time by the
Seller, the Company by written agreement signed by the Seller and the Company.

            Section 8.02 Governing Law.

            This Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.

            Section 8.03 Notices.

            All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by registered mail, postage prepaid, addressed as follows:

                (i)      if to the Seller:

                         NovaStar Mortgage, Inc.
                         1901 West 47th Place
                         Suite 105
                         Westwood, Kansas 66205
                         Attention: Scott F. Hartman

or, such other address as may hereafter be furnished to the Company in writing
by the Seller.

                (ii)     if to the Company:

                         NovaStar Mortgage Funding Corporation
                         1901 W. 47th Place
                         Suite 105
                         Westwood, Kansas 66205
                         Attention: Matt Kaltenrieder

or such other address as may hereafter be furnished to the Seller in writing by
the Company.

                (iii)    if to the Certificate Administrator:

                         Wachovia Bank, National Association
                         12th Floor, 401 S. Tryon Street, NC 1179
                         Charlotte, North Carolina 28288-1179
                         Attention: Structured Finance Trust Services (NovaStar
                                    Mortgage Funding Trust, Series 2002-2)

                                       23
<PAGE>

or such other address as may hereafter be furnished to the Seller in writing by
the Certificate Administrator.

                (iv)     if to the Trustee:

                         JPMorgan Chase Bank
                         450 West 33rd Street, 14th Floor
                         New York, NY 10001
                         Attention: Institutional Trust Services (NovaStar
                                    Mortgage Funding Trust, Series 2002-2)

or such other address as may hereafter be furnished to the Seller in writing by
the Trustee.

            Section 8.04 Severability of Provisions.

            If any one or more of the covenants, agreements, provisions or terms
of this Purchase Agreement shall be held invalid for any reason whatsoever, then
such covenants, agreements, provisions or terns shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Purchase
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Purchase Agreement.

            Section 8.05 Relationship of Parties.

            Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto, and the services of the
Seller shall be rendered as an independent contractor and not as agent for the
Company.

            Section 8.06 Counterparts.

            This Purchase Agreement may be executed in two or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original and such counterparts
together shall constitute one and the same agreement.

            Section 8.07 Further Agreements.

            The Company and the Seller each agree to execute and deliver to the
other such additional documents, instruments or agreements as may be necessary
or appropriate to effectuate the purposes of this Purchase Agreement. Each of
the Company and the Seller agrees to use its best reasonable efforts to take all
actions necessary to be taken by it to cause the Class A-1 Certificates to be
rated "Aaa" by Moody's and "AAA" by S&P, the Class A-2 Certificates to be rated
"Aaa" by Moody's and "AAA" by S&P, the Class AIO Certificates to be rated "Aaa"
by Moody's and "AAA" by S&P, the Class M-1 Certificates to be rated "Aa2" by
Moody's and "AA" by S&P, the Class M-2 Certificates to be rated "A2" by Moody's
and "A" by S&P, the Class M-3 Certificates to be rated "Baa2" by Moody's and
"BBB" by S&P, the Class B Certificates to be rated "Ba2" by Moody's and "BB" by
S&P and the class P Certificates to be rated "AAA" by S&P, and each party will
cooperate with the other in connection therewith.

                                       24
<PAGE>

            Section 8.08 Intention of the Parties.

            It is the intention of the parties that (i) the Company is
purchasing on the Closing Date, and the Seller is selling on the Closing Date,
the Closing Date Mortgage Loans, rather than the Company providing to the Seller
a loan secured by the Closing Date Mortgage Loans on the Closing Date, and (ii)
the Trustee is purchasing on the Closing Date, and the Company is selling on the
Closing Date, the Closing Date Mortgage Loans, rather than the Trustee providing
to the Company a loan secured by the Closing Date Mortgage Loans. Accordingly,
the parties hereto each intend to treat these transactions as (i) a sale by the
Seller, and a purchase by the Company, of the Closing Date Mortgage Loans on the
Closing Date, and (ii) a sale by the Company, and a purchase by the Trustee, of
the Closing Date Mortgage Loans on the Closing Date.

            Section 8.09 Successors and Assigns; Assignment of Purchase
Agreement.

            This Purchase Agreement shall bind and inure to the benefit of and
be enforceable by the Seller, the Company, the Trustee, the Certificate
Administrator, and their respective successors and assigns. The obligations of
the Seller under this Purchase Agreement cannot be assigned or delegated to a
third party without the consent of the Company, which consent shall be at the
Company's discretion. The parties hereto acknowledge that the Company is
acquiring the Closing Date Mortgage Loans for the purpose of selling them to the
Trustee, who will in turn pledge the Closing Date Mortgage Loans to the Trustee
for the benefit of the Certificateholders. As an inducement to the Company and
the Trustee to purchase the Mortgage Loans, the Seller acknowledges and consents
to (i) the assignment by the Company to the Trustee of all of the Company's
rights or remedies against the Seller pursuant to this Purchase Agreement and to
(ii) the enforcement or exercise of any rights against the Seller pursuant to
this Purchase Agreement by the Company, the Certificate Administrator and the
Trustee. Such enforcement of a right or remedy by the Company, the Trustee or
the Certificate Administrator, as applicable, shall have the same force and
effect as if the right or remedy had been enforced or exercised by the Company
directly.

            Section 8.10 Survival.

            The representations and warranties made herein by the Seller and the
provisions of Article V hereof shall survive the purchase of the Mortgage Loans
hereunder.

            Section 8.11 Liability of the Trustee.

            The Trustee is entering into the Basic Documents to which it is a
party solely as Trustee, hereunder and thereunder, and not in its individual
capacity, and all persons having any claim against the Trustee by reason of the
transactions contemplated by this Agreement or any other Basic Document shall
look only to the Trust Fund for payment or satisfaction thereof.

                                       25
<PAGE>

                  IN WITNESS WHEREOF, the Seller, the Company, the Certificate
Administrator and the Trustee have caused their names to be signed to this
Mortgage Loan Purchase Agreement by their respective officers thereunto duly
authorized as of the day and year first above written.

                                            NOVASTAR MORTGAGE, INC.
                                            as Seller

                                            By: /s/ Kelly Meinders
                                                --------------------------------
                                            Name:  Kelly Meinders
                                            Title: Vice President

                                            NOVASTAR MORTGAGE FUNDING
                                            CORPORATION
                                            as Company

                                            By: /s/ Kelly Meinders
                                                --------------------------------
                                            Name:  Kelly Meinders
                                            Title: Vice President

                                            WACHOVIA BANK, NATIONAL ASSOCIATION
                                            as Certificate Administrator

                                            By: /s/ Robert Ashbaugh
                                                --------------------------------
                                            Name:  Robert Ashbaugh
                                            Title: Vice President

                                            JPMORGAN CHASE BANK,
                                            not in its individual capacity,
                                            but solely as Trustee

                                            By: /s/ Ryan Biasi
                                                --------------------------------
                                            Name:  Ryan Biasi
                                            Title: Trust Officer

              [Signature Page to Mortgage Loan Purchase Agreement]

<PAGE>

                                    EXHIBIT 1

                       CLOSING DATE MORTGAGE LOAN SCHEDULE

                                 [SEE ATTACHED]<PAGE>
                                                                    EXHIBIT 10.1

                           REVOLVING CREDIT AGREEMENT

                            DATED AS OF MAY 31, 2002

                                      AMONG

                            AMERICAN HEALTHWAYS, INC.
                                   AS BORROWER

                   THE LENDERS FROM TIME TO TIME PARTY HERETO

                                       AND

                                  SUNTRUST BANK
                             AS ADMINISTRATIVE AGENT

================================================================================

<PAGE>

<TABLE>
<S>                        <C>                                                                                 <C>
ARTICLE I                  DEFINITIONS; CONSTRUCTION.............................................................1

         Section 1.1                Definitions..................................................................1

         Section 1.2                Classifications of Loans and Borrowings.....................................16

         Section 1.3                Accounting Terms and Determination..........................................16

         Section 1.4                Terms Generally.............................................................16

ARTICLE II                 AMOUNT AND TERMS OF THE COMMITMENTS..................................................17

         Section 2.1                General Description of Facilities...........................................17

         Section 2.2                Revolving Loans.............................................................17

         Section 2.3                Procedure for Borrowings....................................................17

         Section 2.4                Funding of Borrowings.......................................................18

         Section 2.5                Interest Elections..........................................................18

         Section 2.6                Optional Reduction and Termination of Commitments...........................19

         Section 2.7                Repayment of Loans..........................................................20

         Section 2.8                Evidence of Indebtedness....................................................20

         Section 2.9                Optional Prepayments........................................................20

         Section 2.10               Interest on Loans...........................................................21

         Section 2.11               Fees........................................................................21

         Section 2.12               Computation of Interest and Fees............................................22

         Section 2.13               Inability to Determine Interest Rates.......................................22

         Section 2.14               Illegality..................................................................23

         Section 2.15               Increased Costs.............................................................23

         Section 2.16               Funding Indemnity...........................................................24

         Section 2.17               Taxes.......................................................................25

         Section 2.18               Payments Generally; Pro Rata Treatment; Sharing of Set-Offs.................26

         Section 2.19               Mitigation of Obligations...................................................28

         Section 2.20               Letters of Credit...........................................................28

ARTICLE III                CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT..................................32

         Section 3.1                Conditions To Effectiveness.................................................32

         Section 3.2                Each Credit Event...........................................................33

         Section 3.3                Delivery of Documents.......................................................34
</TABLE>

                                        i
<PAGE>

<TABLE>
<S>                        <C>                                                                                 <C>

ARTICLE IV                 REPRESENTATIONS AND WARRANTIES.......................................................34

         Section 4.1                Existence; Power............................................................34

         Section 4.2                Organizational Power; Authorization.........................................34

         Section 4.3                Governmental Approvals; No Conflicts........................................34

         Section 4.4                Financial Statements........................................................35

         Section 4.5                Litigation and Environmental Matters........................................35

         Section 4.6                Compliance with Laws and Agreements.........................................35

         Section 4.7                Investment Company Act, Etc.................................................36

         Section 4.8                Taxes.......................................................................36

         Section 4.9                Margin Regulations..........................................................36

         Section 4.10               ERISA.......................................................................36

         Section 4.11               Ownership of Property.......................................................36

         Section 4.12               Disclosure..................................................................37

         Section 4.13               Labor Relations.............................................................37

         Section 4.14               Subsidiaries................................................................37

ARTICLE V                  AFFIRMATIVE COVENANTS................................................................37

         Section 5.1                Financial Statements and Other Information..................................37

         Section 5.2                Notices of Material Events..................................................39

         Section 5.3                Existence; Conduct of Business..............................................40

         Section 5.4                Compliance with Laws, Etc...................................................40

         Section 5.5                Payment of Obligations......................................................40

         Section 5.6                Books and Records...........................................................40

         Section 5.7                Visitation, Inspection, Etc.................................................40

         Section 5.8                Maintenance of Properties; Insurance........................................40

         Section 5.9                Use of Proceeds and Letters of Credit.......................................41

         Section 5.10               Bank Accounts...............................................................41

         Section 5.11               Additional Subsidiaries.....................................................41

         Section 5.12               Additional Assets...........................................................41

ARTICLE VI                 FINANCIAL COVENANTS..................................................................41

         Section 6.1                Leverage Ratio..............................................................42

         Section 6.2                Consolidated Fixed Charge Coverage Ratio....................................42

         Section 6.3                Consolidated Net Worth......................................................42
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                        <C>                                                                                 <C>
ARTICLE VII                NEGATIVE COVENANTS...................................................................42

         Section 7.1                Indebtedness................................................................42

         Section 7.2                Negative Pledge.............................................................43

         Section 7.3                Fundamental Changes.........................................................43

         Section 7.4                Investments, Loans, Etc.....................................................44

         Section 7.5                Restricted Payments.........................................................45

         Section 7.6                Sale of Assets..............................................................45

         Section 7.7                Transactions with Affiliates................................................45

         Section 7.8                Restrictive Agreements......................................................46

         Section 7.9                Sale and Leaseback Transactions.............................................46

         Section 7.10               Hedging Agreements..........................................................46

         Section 7.11               Status of Incorporation.....................................................46

         Section 7.12               Accounting Changes..........................................................46

ARTICLE VIII               EVENTS OF DEFAULT....................................................................46

         Section 8.1                Events of Default...........................................................46

ARTICLE IX                 THE ADMINISTRATIVE AGENT.............................................................49

         Section 9.1                Appointment of Administrative Agent.........................................49

         Section 9.2                Nature of Duties of Administrative Agent....................................50

         Section 9.3                Lack of Reliance on the Administrative Agent................................50

         Section 9.4                Certain Rights of the Administrative Agent..................................50

         Section 9.5                Reliance by Administrative Agent............................................51

         Section 9.6                The Administrative Agent in its Individual Capacity.........................51

         Section 9.7                Successor Administrative Agent..............................................51

ARTICLE X                  MISCELLANEOUS........................................................................52

         Section 10.1               Notices.....................................................................52

         Section 10.2               Waiver; Amendments..........................................................53

         Section 10.3               Expenses; Indemnification...................................................54

         Section 10.4               Successors and Assigns......................................................55

         Section 10.5               Governing Law; Jurisdiction; Consent to Service of Process..................58

         Section 10.6               WAIVER OF JURY TRIAL........................................................58

         Section 10.7               Right of Setoff.............................................................59

         Section 10.8               Counterparts; Integration...................................................59

         Section 10.9               Survival....................................................................59
</TABLE>

                                       iii
<PAGE>

<TABLE>
<S>                        <C>                                                                                 <C>

         Section 10.10              Severability................................................................60

         Section 10.11              Confidentiality.............................................................60

         Section 10.12              Interest and Loan Charges Not to Exceed Maximum Amounts Allowed by Law......60
</TABLE>

<TABLE>
<S>      <C>                   <C>  <C>
Schedules

         Schedule 4.5(a)       -    Litigation
         Schedule 4.14         -    Subsidiaries
         Schedule 7.1          -    Outstanding Indebtedness
         Schedule 7.2          -    Existing Liens
         Schedule 7.4          -    Existing Investments

Exhibits

         Exhibit A             -    Revolving Credit Note
         Exhibit B             -    Form of Assignment and Acceptance
         Exhibit C             -    Form of Subsidiary Guarantee Agreement
         Exhibit D             -    Form of Indemnity, Subrogation and Contribution Agreement
         Exhibit E             -    Borrowing Base Certificate

         Exhibit 2.3           -    Notice of Borrowing
         Exhibit 2.5           -    Form of Notice of Continuation/Conversion
         Exhibit 3.1(b)(iv)    -    Form of Secretary's Certificate
         Exhibit 3.1(b)(vii)   -    Form of Officer's Certificate
</TABLE>

                                       iv

<PAGE>

                           REVOLVING CREDIT AGREEMENT

         THIS REVOLVING CREDIT AGREEMENT (this "Agreement") is made and entered
into as of May 31, 2002, by and among AMERICAN HEALTHWAYS, INC., a Delaware
corporation (the "Borrower"), SUNTRUST BANK, and the several banks and other
financial institutions from time to time party hereto (the "Lenders"), and
SUNTRUST BANK, in its capacity as Administrative Agent for the Lenders (the
"Administrative Agent").

                                   WITNESSETH:

         WHEREAS, the Borrower has requested that the Lenders establish a
$27,500,000 revolving credit facility, with a Letter of Credit sublimit for
stand-by Letters of Credit.

         WHEREAS, subject to the terms and conditions of this Agreement, the
Lenders severally, to the extent of their respective Commitments, are willing to
establish the requested revolving credit facility with a Letter of Credit
sublimit for stand-by letters of credit.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Borrower, the Lenders and the Administrative
Agent agree as follows:

                                   ARTICLE I

                            DEFINITIONS; CONSTRUCTION

         SECTION 1.1 Definitions.In addition to the other terms defined herein,
the following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):

         "ADJUSTED LIBO RATE" shall mean, with respect to each Interest Period
for a Eurodollar Borrowing, the rate per annum obtained by dividing (i) LIBOR
for such Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar
Reserve Percentage, to the extent Eurodollar reserves are actually maintained.

         "ADMINISTRATIVE AGENT" shall have the meaning assigned to such term in
the opening paragraph hereof.

         "ADMINISTRATIVE QUESTIONNAIRE" shall mean, with respect to each Lender,
an administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent duly completed by such Lender.

         "AFFILIATE" shall mean, as to any Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such Person.

         "AGGREGATE REVOLVING COMMITMENTS" shall mean the sum of the Revolving
Commitments of all Lenders at any time outstanding. On the Closing Date, the
Aggregate Revolving Commitments equal $27,500,000.00.

<PAGE>

         "APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each
Type of Loan, the "Lending Office" of such Lender (or an Affiliate of such
Lender) designated for such Type of Loan in the Administrative Questionnaire
submitted by such Lender or such other office of such Lender (or an Affiliate of
such Lender) as such Lender may from time to time specify to the Administrative
Agent and the Borrower as the office by which its Loans of such Type are to be
made and maintained.

         "APPLICABLE MARGIN" shall mean with respect to Eurodollar Loans and
Letters of Credit an amount equal to two hundred (200) basis points per annum.

         "APPLICABLE PERCENTAGE" shall mean, with respect to the Facility Fee an
amount equal to one quarter of one percent (.25%) per annum.

         "ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.4(b)) and accepted by the Administrative
Agent, in the form of Exhibit B attached hereto or any other form approved by
the Administrative Agent.

         "AVAILABILITY PERIOD" shall mean the period from the Closing Date to
the Commitment Termination Date.

         "BASE RATE" shall mean the higher of (i) the per annum rate which the
Administrative Agent publicly announces from time to time to be its prime
lending rate, as in effect from time to time, and (ii) the Federal Funds Rate,
as in effect from time to time, plus one-half of one percent (0.50%). The
Administrative Agent's prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers. The
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Administrative Agent's prime lending rate. Each
change in the Administrative Agent's prime lending rate shall be effective from
and including the date such change is publicly announced as being effective.

         "BORROWER" shall have the meaning in the introductory paragraph hereof.

         "BORROWING" shall mean a borrowing consisting of Loans of the same
Type, made, converted or continued on the same date and in case of Eurodollar
Loans, as to which a single Interest Period is in effect.

         "BORROWING BASE" means the sum of: (i) Borrower's Unrestricted Cash and
Cash Equivalents, plus (ii) an amount equal to eighty percent (80%) of Eligible
Accounts Receivable, plus (iii) an amount equal to twenty-five percent (25%) of
Borrower's net property and equipment values, all as set forth on Borrower's
consolidated financial statements.

         "BORROWING BASE CERTIFICATE" means the Certificate in the form of
Exhibit E provided by Borrower to Lender pursuant to Section 5.1(g).

         "BUSINESS DAY" shall mean (i) any day other than a Saturday, Sunday or
other day on which commercial banks in Nashville, Tennessee are authorized or
required by law to close and (ii) if such day relates to a Borrowing of, a
payment or prepayment of principal or interest on, a

<PAGE>

conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice
with respect to any of the foregoing, any day on which dealings in Dollars are
carried on in the London interbank market.

         "CAPITAL EXPENDITURES" shall mean for any period, without duplication,
(a) the additions to property, plant and equipment and other capital
expenditures of the Borrower and its Subsidiaries that are (or would be) set
forth on a consolidated statement of cash flows of the Borrower for such period
prepared in accordance with GAAP and (b) Capital Lease Obligations incurred by
the Borrower and its Subsidiaries during such period.

         "CAPITAL LEASE OBLIGATIONS" of any Person shall mean all obligations of
such Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

         "CHANGE IN CONTROL" shall mean the occurrence of one or more of the
following events: (a) any sale, lease, exchange or other transfer (in a single
transaction or a series of related transactions) of all or substantially all of
the assets of the Borrower to any Person or "group" (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder in effect on the date hereof), (b) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
"group" (within the meaning of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
hereof) of 50% or more of the outstanding shares of the voting stock of the
Borrower; or (c) occupation of a majority of the seats (other than vacant seats)
on the board of directors of the Borrower by Persons who were neither (i)
nominated by the current board of directors or (ii) appointed by directors so
nominated.

         "CHANGE IN LAW" shall mean (i) the adoption of any applicable law, rule
or regulation after the date of this Agreement, (ii) any change in any
applicable law, rule or regulation, or any change in the interpretation or
application thereof, by any Governmental Authority after the date of this
Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office)
or the Issuing Bank (or for purposes of Section 2.15(b), by such Lender's or the
Issuing Bank's holding company, if applicable) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement.

         "CLOSING DATE" shall mean the date on which the conditions precedent
set forth in Section 3.1 and Section 3.2 have been satisfied or waived in
accordance with Section 10.2.

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

         "COMMITMENT" shall mean the Revolving Commitment.

         "COMMITMENT TERMINATION DATE" shall mean the earliest of (i) May 31,
2005, (ii) the date on which the Revolving Commitments are terminated pursuant
to Section 2.6 and (iii) the

<PAGE>

date on which all amounts outstanding under this Agreement have been declared or
have automatically become due and payable (whether by acceleration or
otherwise).

         "CONSOLIDATED CASH FLOW" shall mean the sum of Consolidated EBITDAR,
less Maintenance Capital Expenditures.

         "CONSOLIDATED EBITDA" shall mean, for the Borrower and its Subsidiaries
for any period, an amount equal to the sum of (a) Consolidated Net Income for
such period plus (b) to the extent deducted in determining Consolidated Net
Income for such period, (i) Consolidated Interest Expense, (ii) provisions for
taxes based on income, (iii) depreciation expense and (iv) amortization expense,
all determined on a consolidated basis in accordance with GAAP in each case for
such period.

         "CONSOLIDATED EBITDAR" shall mean, for the Borrower and its
Subsidiaries for any period, an amount equal to the sum of (a) Consolidated
EBITDA and (b) Consolidated Lease Expense.

         "CONSOLIDATED FIXED CHARGE COVERAGE RATIO" shall mean the ratio of: (a)
Consolidated Cash Flow to (b) Consolidated Fixed Charges.

         "CONSOLIDATED FIXED CHARGES" shall mean, for the Borrower and its
Subsidiaries for any period, the sum (without duplication) of: (a) Consolidated
Interest Expense for such period, (b) scheduled principal payments made in
respect of Consolidated Total Debt and Capital Lease Obligations during such
period, (c) Restricted Payments paid during such period and (d) Consolidated
Lease Expense for such period.

         "CONSOLIDATED INTEREST EXPENSE" shall mean, for the Borrower and its
Subsidiaries for any period determined on a consolidated basis in accordance
with GAAP, the sum of: (i) total interest expense and Letter of Credit fees and
expenses as set forth in Section 2.11(d) herein, including without limitation
the interest component of any payments in respect of Capital Lease Obligations
capitalized or expensed during such period (whether or not actually paid during
such period) plus (ii) the net amount payable (or minus the net amount
receivable) under Hedging Agreements during such period (whether or not actually
paid or received during such period).

         "CONSOLIDATED LEASE EXPENSE" shall mean, for any period, the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries with respect to leases of real and personal property (excluding
Capital Lease Obligations) determined on a consolidated basis in accordance with
GAAP 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 in accordance with GAAP, but excluding therefrom (to the
extent otherwise included therein) (i) any extraordinary gains or losses (ii)
any gains attributable to write-ups of assets and (iii) any equity interest of
the Borrower or any Subsidiary of the Borrower in the unremitted earnings of any
Person that is not a Subsidiary and (iv) any income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with the Borrower or any Subsidiary or the date that such Person's
assets are acquired by the Borrower or any Subsidiary.

<PAGE>

         "CONSOLIDATED NET WORTH" shall mean, as of any date, (i) the total
assets of the Borrower and its Subsidiaries that would be reflected on the
Borrower's consolidated balance sheet as of such date prepared in accordance
with GAAP, after eliminating all amounts properly attributable to minority
interests, if any, in the stock and surplus of Subsidiaries, minus the sum of
(i) the total liabilities of the Borrower and its Subsidiaries that would be
reflected on the Borrower's consolidated balance sheet as of such date prepared
in accordance with GAAP and (ii) the amount of any write-up in the book value of
any assets resulting from a revaluation thereof or any write-up in excess of the
cost of such assets acquired reflected on the consolidated balance sheet of the
Borrower as of such date prepared in accordance with GAAP.

         "CONSOLIDATED TOTAL DEBT" shall mean, as of any date of determination,
all Indebtedness of the Borrower and its Subsidiaries that would be reflected on
a consolidated balance sheet of the Borrower prepared in accordance with GAAP as
of such date.

         "CONTROL" shall mean the power, directly or indirectly, either to (i)
vote 50% or more of securities having ordinary voting power for the election of
directors (or persons performing similar functions) of a Person or (ii) direct
or cause the direction of the management and policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms "CONTROLLING", "CONTROLLED BY", and "UNDER COMMON CONTROL WITH" have
meanings correlative thereto.

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

         "DEFAULT INTEREST" shall have the meaning set forth in Section 2.10(a).

         "DOLLAR(S)" and the sign "$" shall mean lawful money of the United
States of America.

         "ELIGIBLE ACCOUNTS RECEIVABLE" shall mean accounts receivable owed to
Borrower by non-Affiliated Persons for services rendered by Borrower and which
shall exclude:

                  (a)      accounts receivable which are due and owing for more
         than 90 days from the date of invoice;

                  (b)      accounts receivable owed by any federal, state, or
         local governmental agency or authority;

                  (c)      accounts receivable owed by a Person who is insolvent
         or the subject of a bankruptcy or insolvency proceeding in state or
         federal court;

                  (d)      accounts receivable owed by any Person who has other
         accounts receivable owing to Borrower if: (i) those other accounts
         receivable are more than 90 days past due, (ii) such past due accounts
         receivable constitute more than 20% of the aggregate accounts
         receivable owed by such Person, and (iii) such past due accounts are
         not being disputed reasonably and in good faith; or

                  (e)      accounts receivable subject to any dispute,
         counterclaim, or objection.

<PAGE>

         "ENVIRONMENTAL LAWS" shall mean all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, Release or threatened Release of any
Hazardous Material or to health and safety matters.

         "ENVIRONMENTAL LIABILITY" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
investigation and remediation, costs of administrative oversight, fines, natural
resource damages, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) any actual or alleged
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
any actual or alleged exposure to any Hazardous Materials, (d) the Release or
threatened Release of any Hazardous Materials or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

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

         "ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated), which, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for the purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

         "ERISA EVENT" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator appointed by the PBGC of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.

         "EURODOLLAR" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, bears interest at a
rate determined by reference to the Adjusted LIBO Rate.

         "EURODOLLAR RESERVE PERCENTAGE" shall mean the aggregate of the maximum
reserve percentages (including, without limitation, any emergency, supplemental,
special or other

<PAGE>

marginal reserves) expressed as a decimal (rounded upwards to the next 1/100th
of 1%) in effect on any day to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate pursuant to regulations issued by the Board of
Governors of the Federal Reserve System (or any Governmental Authority
succeeding to any of its principal functions) with respect to eurocurrency
funding (currently referred to as "eurocurrency liabilities" under Regulation
D). Eurodollar Loans shall be deemed to constitute eurocurrency funding and to
be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under Regulation D. The Eurodollar Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

         "EVENT OF DEFAULT" shall have the meaning provided in Article VIII.

         "EXCLUDED TAXES" shall mean with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income, excise or
franchise taxes imposed on (or measured by) its net income or assets, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower is located and (c) in
the case of a Foreign Lender, any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.17(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.17(a).

         "FACILITY FEE" shall mean a fee payable quarterly in arrears and
determined by calculating the Applicable Percentage on the total Revolving
Commitments.

         "FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the next 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with member banks
of the Federal Reserve System arranged by Federal funds brokers, as published by
the Federal Reserve Bank of New York on the next succeeding Business Day or if
such rate is not so published for any Business Day, the Federal Funds Rate for
such day shall be the average rounded upwards, if necessary, to the next 1/100th
of 1% 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.

         "FOREIGN LENDER" shall mean any Lender that is organized under the laws
of a jurisdiction other than that of the Borrower. For purposes of this
definition, the United States of America or any State thereof or the District of
Columbia shall constitute one jurisdiction.

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

         "GOVERNMENTAL AUTHORITY" shall mean the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising

<PAGE>

executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.

         "GUARANTEE" of or by any Person (the "GUARANTOR") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly and including any obligation, direct or indirect, of the guarantor
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued in support of
such Indebtedness or obligation; provided that the term "Guarantee" shall not
include endorsements for collection or deposits in the ordinary course of
business. The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
Guarantee is made or, if not so 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. The term
"Guarantee" used as a verb has a corresponding meaning.

         "HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

         "HEDGING AGREEMENTS" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts, commodity agreements and other similar
agreements or arrangements designed to protect against fluctuations in interest
rates, currency values or commodity values.

         "INDEBTEDNESS" of any Person shall mean, without duplication (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person in respect of the deferred purchase price of
property or services (other than trade payables incurred in the ordinary course
of business; provided that for purposes of Section 8.1(f), trade payables
overdue by more than one hundred twenty (120) days shall be included in this
definition except to the extent that any of such trade payables are being
disputed in good faith and by appropriate measures), (iv) all obligations of
such Person under any conditional sale or other title retention agreement(s)
relating to property acquired by such Person, (v) all Capital Lease Obligations
of such Person, (vi) all obligations, contingent or otherwise, of such Person in
respect of letters of credit, acceptances or similar extensions of credit, (vii)
all Guarantees of such Person of the type of Indebtedness described in clauses
(i) through (vi) above, (viii) all Indebtedness of a third party secured by any
Lien on property owned by such Person, whether or not such Indebtedness has been
assumed by such Person, (ix) all obligations of such Person, contingent or
otherwise, to

<PAGE>

purchase, redeem, retire or otherwise acquire for value any common stock of such
Person, and (x) Off-Balance Sheet Liabilities. The Indebtedness of any Person
shall include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer, except to the extent that
applicable law or the terms of such Indebtedness provide that such Person is not
liable therefor.

         "INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.

         "INDEMNITY AND CONTRIBUTION AGREEMENT" shall mean the Indemnity,
Subrogation and Contribution Agreement, substantially in the form of Exhibit G,
among the Borrower, the Subsidiary Loan Parties and the Administrative Agent.

         "INTEREST PERIOD" shall mean with respect to any Eurodollar Borrowing,
a period of one, two, three, or six months, provided that:

                  (i)      the initial Interest Period for such Borrowing shall
         commence on the date of such Borrowing (including the date of any
         conversion from a Borrowing of another Type) and each Interest Period
         occurring thereafter in respect of such Borrowing shall commence on the
         day on which the next preceding Interest Period expires;

                  (ii)     if any Interest Period would otherwise end on a day
         other than a Business Day, such Interest Period shall be extended to
         the next succeeding Business Day, unless, in the case of a Eurodollar
         Borrowing, such Business Day falls in another calendar month, in which
         case such Interest Period would end on the next preceding Business Day;

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

                  (iv)     no Interest Period may extend beyond the Commitment
         Termination Date.

         "ISSUING BANK" shall mean SunTrust Bank in its capacity as an issuer of
Letters of Credit pursuant to Section 2.20.

         "LC COMMITMENT" shall mean that portion of the Aggregate Revolving
Commitments that may be used by the Borrower for the issuance of Letters of
Credit in an aggregate face amount not to exceed $27,500,000.00.

         "LC COMMITMENT DATE" shall mean May 31, 2004.

         "LC DISBURSEMENT" shall mean a payment made by the Issuing Bank
pursuant to and in compliance with a Letter of Credit.

         "LC DOCUMENTS" shall mean the Letters of Credit and all applications,
agreements and instruments relating to the Letters of Credit.

<PAGE>

         "LC EXPOSURE" shall mean, at any time, the sum of (i) the aggregate
undrawn amount of all outstanding Letters of Credit at such time, plus (ii) the
aggregate amount of all LC Disbursements that have not been reimbursed by or on
behalf of the Borrower at such time. The LC Exposure of any Lender shall be its
Pro Rata Share of the total LC Exposure at such time.

         "LENDERS" shall have the meaning assigned to such term in the opening
paragraph of this Agreement.

         "LETTER OF CREDIT" shall mean any letter of credit issued pursuant to
Section 2.20 by the Issuing Bank for the account of the Borrower pursuant to the
LC Commitment.

         "LEVERAGE RATIO" shall mean, as of any date of determination with
respect to the Borrower, the ratio of (i) Consolidated Total Debt as of such
date to (ii) Consolidated EBITDA as of such date.

         "LIBOR" shall mean, for any applicable Interest Period with respect to
any Eurodollar Loan, the rate per annum for deposits in Dollars for a period
equal to such Interest Period appearing on the display designated as Page 3750
on the Dow Jones Markets Service (or such other page on that service or such
other service designated by the British Banker's Association for the display of
such Association's Interest Settlement Rates for Dollar deposits) as of 11:00
a.m. (London, England time) on the day that is two Business Days prior to the
first day of the Interest Period or if such Page 3750 is unavailable for any
reason at such time, the rate which appears on the Reuters Screen ISDA Page as
of such date and such time; provided that if the Administrative Agent determines
that the relevant foregoing sources are unavailable for the relevant Interest
Period, LIBOR shall mean the rate of interest determined by the Administrative
Agent to be the average (rounded upward, if necessary, to the nearest 1/100th of
1%) of the rates per annum at which deposits in Dollars are offered to the
Administrative Agent two (2) Business Days preceding the first day of such
Interest Period by leading banks in the London interbank market as of 10:00 a.
m. for delivery on the first day of such Interest Period, for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Loan of the Administrative Agent.

         "LIEN" shall mean any mortgage, pledge, security interest, lien
(statutory or otherwise), charge, encumbrance, hypothecation, assignment,
deposit arrangement, or other arrangement having the practical effect of the
foregoing or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
the same economic effect as any of the foregoing).

         "LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Notes,
the LC Documents, all Notices of Borrowing, the Subsidiary Guarantee Agreements,
the Indemnity and Contribution Agreement, the Security Documents, and any and
all other instruments, agreements, documents and writings executed in connection
with any of the foregoing.

         "LOAN PARTIES" shall mean the Borrower and the Subsidiary Loan Parties.

         "LOANS" shall mean all Revolving Loans in the aggregate or any of them,
as the context shall require.

<PAGE>

         "MAINTENANCE CAPITAL EXPENDITURES" shall mean Capital Expenditures
incurred by the Borrower or its Subsidiaries for ordinary and necessary
maintenance of its property, computers, telecommunications equipment,
intellectual property, plant and equipment.

         "MATERIAL ADVERSE EFFECT" shall mean, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences whether or not related, a
material adverse change in, or a material adverse effect on, (i) the business,
results of operations, financial condition, assets, liabilities or prospects of
the Borrower and of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Loan Parties to perform any of their respective obligations under
the Loan Documents, (iii) the rights and remedies of the Administrative Agent,
the Issuing Bank and the Lenders under any of the Loan Documents or (iv) the
legality, validity or enforceability of any of the Loan Documents.

         "MATERIAL INDEBTEDNESS" shall mean Indebtedness (other than the Loans
and Letters of Credit) or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $500,000.00. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of the Borrower
or any Subsidiary in respect to any Hedging Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time.

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

         "MULTIEMPLOYER PLAN" shall have the meaning set forth in Section
4001(a)(3) of ERISA.

         "NOTES" shall mean, collectively, the Revolving Credit Notes.

         "NOTICE OF BORROWING" shall have the meaning as set forth in Section
2.3.

         "NOTICE OF CONVERSION/CONTINUATION" shall mean the notice given by the
Borrower to the Administrative Agent in respect of the conversion or
continuation of an outstanding Borrowing as provided in Section 2.5(b) hereof.

         "OBLIGATIONS" shall mean all amounts owing by the Borrower to the
Administrative Agent, the Issuing Bank or any Lender pursuant to or in
connection with this Agreement or any other Loan Document, including without
limitation, principal, interest (including any interest accruing after the
filing of any petition in bankruptcy or the commencement of any insolvency,
reorganization or like proceeding relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
reimbursement obligations, fees, expenses, indemnification and reimbursement
payments, costs and expenses (including all fees and expenses of counsel to the
Administrative Agent and any Lender incurred pursuant to this Agreement or any
other Loan Document), whether direct or indirect, absolute or contingent,
liquidated or unliquidated, now existing or hereafter arising hereunder or
thereunder, together with all renewals, extensions, modifications or
refinancings thereof.

<PAGE>

         "OFF-BALANCE SHEET LIABILITIES" of any Person shall mean (i) any
repurchase obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (ii) any liability of such Person under
any sale and leaseback transactions which do not create a liability on the
balance sheet of such Person, (iii) any liability of such Person under any
so-called "synthetic" lease transaction or (iv) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the balance
sheet of such Person.

         "PARTICIPANT" shall have the meaning set forth in Section 10.4(c).

         "PAYMENT OFFICE" shall mean the office of the Administrative Agent
located at 201 Fourth Avenue North, Nashville, Tennessee 37219, or such other
location as to which the Administrative Agent shall have given written notice to
the Borrower and the other Lenders.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA, and any successor entity performing similar functions.

         "PERMITTED ENCUMBRANCES" shall mean

                  (i)      Liens imposed by law for taxes not yet due or which
         are being contested in good faith by appropriate proceedings and with
         respect to which adequate reserves are being maintained in accordance
         with GAAP;

                  (ii)     statutory Liens of landlords and Liens of carriers,
         warehousemen, mechanics, materialmen and other Liens imposed by law
         created in the ordinary course of business for amounts not yet due or
         which are being contested in good faith by appropriate proceedings and
         with respect to which adequate reserves are being maintained in
         accordance with GAAP;

                  (iii)    pledges and deposits made in the ordinary course of
         business in compliance with workers' compensation, unemployment
         insurance and other social security laws or regulations;

                  (iv)     deposits to secure the performance of bids, trade
         contracts, leases, statutory obligations, surety and appeal bonds,
         performance bonds and other obligations of a like nature, in each case
         in the ordinary course of business;

                  (v)      judgment and attachment liens not giving rise to an
         Event of Default or Liens created by or existing from any litigation or
         legal proceeding that are currently being contested in good faith by
         appropriate proceedings and with respect to which adequate reserves are
         being maintained in accordance with GAAP;

                  (vi)     easements, zoning restrictions, rights-of-way and
         similar encumbrances on real property imposed by law or arising in the
         ordinary course of business that do not secure any monetary obligations
         and do not materially detract from the value of the affected property
         or materially interfere with the ordinary conduct of business of the
         Borrower and its Subsidiaries taken as a whole;

<PAGE>

                  (vii)    Capital Lease Obligations to the extent permitted
         hereunder;

                  (viii)   Liens securing purchase money indebtedness to the
         extent permitted pursuant to Section 7.1 hereunder;

                  (x)      Liens created by the Security Documents or otherwise
         provided for in this Agreement for the benefit of the Lenders;

                  (xi)     any Lien in favor of the United States of America or
         any department or agency thereof, in favor of any state government or
         political subdivision thereof, or in favor of a prime contractor under
         a government contract of the United States, or of any political
         subdivision thereof, and in each case, resulting from acceptance of
         partial progress, advance or other payments in the ordinary course of
         business under government contracts of the United States, or of any
         state government or political subdivision thereof, or subcontracts
         thereunder; and

                  (xii)    statutory Liens arising under ERISA created in the
         ordinary course of business for amounts not yet due and as to which
         adequate reserves have been established in accordance with GAAP.

         "PERMITTED INVESTMENTS" shall mean:

                  (i)      direct obligations of, or obligations the principal
         of and interest on which are unconditionally guaranteed by, the United
         States (or by any agency thereof to the extent such obligations are
         backed by the full faith and credit of the United States), in each case
         maturing within one year from the date of acquisition thereof;

                  (ii)     commercial paper having the highest rating, at the
         time of acquisition thereof, of S&P or Moody's and in either case
         maturing within six months from the date of acquisition thereof;

                  (iii)    certificates of deposit, bankers' acceptances and
         time deposits maturing within 180 days of the date of acquisition
         thereof issued or guaranteed by or placed with, and money market
         deposit accounts issued or offered by, any domestic office of any
         commercial bank organized under the laws of the United States or any
         state thereof which has a combined capital and surplus and undivided
         profits of not less than $500,000,000;

                  (iv)     fully collateralized repurchase agreements with a
         term of not more than 90 days for securities described in clause (i)
         above and entered into with a financial institution satisfying the
         criteria described in clause (iii) above;

                  (v)      mutual funds investing solely in any one or more of
         the Permitted Investments described in clauses (i) through (iv) above;

                  (vi)     investments in obligations the return with respect to
         which is excludable from gross income under Section 103 of the Code,
         having a maturity of not more than six (6) months or providing the
         holder the right to put such obligations for purchase at par

<PAGE>

         upon not more than twenty-eight (28) days' notice, and which are rated
         at least A-1 by S&P or P-1 by Moody's;

                  (vii)    investments in tax free money market funds all of
         whose assets consist of securities of the types described in the
         foregoing clause (vi) above; and

                  (viii)   investments, redeemable upon not more than seven (7)
         days' notice, in money market preferred municipal bond funds that are
         rated at least AAA by S&P or Aaa by Moody's.

         "PERSON" shall mean any individual, partnership, firm, corporation,
association, joint venture, limited liability company, trust or other entity, or
any Governmental Authority.

         "PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.

         "PRO RATA SHARE" shall mean, with respect to any Lender at any time, a
percentage, the numerator of which shall be the sum of such Lender's Revolving
Commitment and the denominator of which shall be the sum of all Lenders'
Revolving Commitments.

         "REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to time, and any
successor regulations.

         "RELATED PARTIES" shall mean, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees, and
agents of such Person and such Person's Affiliates.

         "RELEASE" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.

         "REQUIRED LENDERS" shall mean, at any time, Lenders holding 70% of the
aggregate outstanding Revolving Credit Exposures at such time or if the Lenders
have no Revolving Credit Exposure outstanding, then Lenders holding 70% of the
Aggregate Revolving Commitments.

         "RESPONSIBLE OFFICER" shall mean any of the president, the chief
executive officer, the chief operating officer, the chief financial officer, the
controller or a vice president of the Borrower or such other representative of
the Borrower as may be designated in writing by any one of the foregoing with
the consent of the Administrative Agent; and, with respect to the financial
covenants only, the president, the chief executive officer, the chief financial
officer or the controller of the Borrower.

         "RESTRICTED PAYMENT" shall have the meaning set forth in Section 7.5.

<PAGE>

         "REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
obligation of such Lender to make Revolving Loans to the Borrower and to
participate in Letters of Credit in an aggregate principal amount not exceeding
the amount set forth with respect to such Lender on the signature pages to this
Agreement, or in the case of a Person becoming a Lender after the Closing Date,
the amount of the assigned "Revolving Commitment" as provided in the Assignment
and Acceptance Agreement executed by such Person as an assignee, as the same may
be changed pursuant to terms hereof.

         "REVOLVING CREDIT EXPOSURE" shall mean, with respect to any Lender at
any time, the sum of the outstanding principal amount of such Lender's Revolving
Loans, plus such Lender's LC Exposure.

         "REVOLVING CREDIT NOTE" shall mean a revolving credit note of the
Borrower payable to the order of a Lender in the principal amount of such
Lender's Revolving Commitment, in substantially the form of Exhibit A.

         "REVOLVING LOAN" shall mean a loan made by a Lender to the Borrower
under its Revolving Commitment, which may either be a Base Rate Loan or a
Eurodollar Loan.

         "S&P" shall mean Standard & Poor's.

         "SECURITY DOCUMENTS" shall mean the Assignment and Security Agreements
executed by the Borrower and all other Loan Parties and the Administrative Agent
dated of even date, as such may be amended, from time to time, and all financing
statements filed in connection with such Security Agreements.

         "SUBSIDIARY" shall mean, with respect to any Person (the "PARENT"), any
corporation, partnership, joint venture, limited liability company, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of the date of preparation,
as well as any other corporation, partnership, joint venture, limited liability
company, association or other entity (i) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power, or in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, Controlled or held,
or (ii) that is, as of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent. Unless otherwise indicated, all references to "Subsidiary" hereunder
shall mean a Subsidiary of the Borrower.

         "SUBSIDIARY GUARANTEE AGREEMENT" shall mean the Subsidiary Guarantee
Agreement, substantially in the form of Exhibit F, made by the Subsidiary Loan
Parties in favor of the Administrative Agent for the benefit of the Lenders.

         "SUBSIDIARY LOAN PARTY" shall mean any presently existing or hereafter
created Subsidiary.

         "TAXES" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority in respect of the

<PAGE>

execution, delivery, or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document or any payment to the Administrative Agent,
the Lenders, or the Issuing Bank hereunder or thereunder.

         "TYPE", when used in reference to a Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Base
Rate.

         "UNRESTRICTED CASH AND CASH EQUIVALENTS" means cash and cash
equivalents that are not subject to any lien, encumbrance, pledge, or escrow
arrangement, except for liens and encumbrances in favor of Administrative Agent
for the benefit of Lenders.

         "WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.

         SECTION 1.2 Classifications of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Type (e.g. a
"Eurodollar Loan" or "Base Rate Loan").

         SECTION 1.3 Accounting Terms and Determination. Unless otherwise
defined or specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP as in effect from time to time, applied on a basis
consistent (except for such changes approved by the Borrower's independent
public accountants) with the most recent audited consolidated financial
statement of the Borrower delivered pursuant to Section 5.1(a); provided that if
the Borrower notifies the Administrative Agent that the Borrower wishes to amend
any covenant in Article VI to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required Lenders wish to amend Article VI for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders.

         SECTION 1.4 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall". In
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the word "to" means "to but
excluding". Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as it was
originally executed or as it may from time to time be amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (ii) any reference herein to any Person
shall be construed to include such Person's successors and permitted assigns,
(iii) the words "hereof", "herein" and

<PAGE>

"hereunder" and words of similar import shall be construed to refer to this
Agreement as a whole and not to any particular provision hereof, (iv) all
references to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v)
all references to a specific time shall be construed to refer to the time in the
city and state of the Administrative Agent's principal office, unless otherwise
indicated.

                                   ARTICLE II

                       AMOUNT AND TERMS OF THE COMMITMENTS

         SECTION 2.1 General Description of Facilities. Subject to and upon the
terms and conditions herein set forth, (i) the Lenders hereby establish in favor
of the Borrower a revolving credit facility pursuant to which the Lenders
severally agree (to the extent of each Lender's Pro Rata Share up to such
Lender's Revolving Commitment) to make Revolving Loans to the Borrower in
accordance with Section 2.2, (ii) the Issuing Bank agrees to issue Letters of
Credit in accordance with Section 2.20, and (iii) each Lender agrees to purchase
a participation interest in the Letters of Credit pursuant to the terms and
conditions hereof; provided that in no event shall the aggregate principal
amount of all outstanding Revolving Loans, plus the outstanding LC Obligations
exceed at any time the lesser of: (a) the Borrowing Base, and (b) the Aggregate
Revolving Commitments from time to time in effect.

         SECTION 2.2 Revolving Loans. Subject to the terms and conditions set
forth herein, each Lender severally agrees to make Revolving Loans to the
Borrower, from time to time during the Availability Period, in an aggregate
principal amount outstanding at any time that will not result in (a) such
Lender's Revolving Credit Exposure exceeding such Lender's Revolving Commitment
or (b) the sum of the Loans and the LC Exposure exceeding the lesser of: (i) the
Aggregate Revolving Commitments, or (ii) the Borrowing Base. During the
Availability Period, the Borrower shall be entitled to borrow, prepay and
reborrow Revolving Loans in accordance with the terms and conditions of this
Agreement; provided that the Borrower may not borrow or reborrow should there
exist a Default or Event of Default.

         SECTION 2.3 Procedure for Borrowings. The Borrower shall give the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing substantially in the form of Exhibit 2.3 attached
hereto (a "NOTICE OF BORROWING") (x) prior to 11:00 a.m. one (1) Business Day
prior to the requested date of each Base Rate Borrowing and (y) prior to 11:00
a.m. three (3) Business Days prior to the requested date of each Eurodollar
Borrowing. Each Notice of Borrowing shall be irrevocable and shall specify: (i)
the aggregate principal amount of such Borrowing, (ii) the date of such
Borrowing (which shall be a Business Day), (iii) the Type of such Revolving Loan
comprising such Borrowing and (iv) in the case of a Eurodollar Borrowing, the
duration of the initial Interest Period applicable thereto (subject to the
provisions of the definition of Interest Period). Each Borrowing shall consist
entirely of Base Rate Loans or Eurodollar Loans, as the Borrower may request.
The aggregate principal amount of each Eurodollar Borrowing shall be not less
than $1,000,000 or a larger multiple of $500,000, and the aggregate principal
amount of each Base Rate Borrowing shall not be less than $500,000 or a larger
multiple of $100,000; provided that Base Rate Loans made pursuant to Section
2.20(d) may be made in lesser amounts as provided therein. At no time shall the
total number of Eurodollar Borrowings outstanding at any time exceed five (5).
Promptly following the receipt of

<PAGE>

a Notice of Borrowing in accordance herewith, the Administrative Agent shall
advise each Lender of the details thereof and the amount of such Lender's
Revolving Loan to be made as part of the requested Borrowing.

         SECTION 2.4 Funding of Borrowings

                  (a)      Each Lender will make available each Loan to be made
         by it hereunder on the proposed date thereof by wire transfer in
         immediately available funds by 11:00 a.m. to the Administrative Agent
         at the Payment Office. The Administrative Agent will make such Loans
         available to the Borrower by promptly crediting the amounts that it
         receives, in like funds by the close of business on such proposed date,
         to an account maintained by the Borrower with the Administrative Agent.

                  (b)      Unless the Administrative Agent shall have been
         notified by any Lender prior to 5 p.m. one (1) Business Day prior to
         the date of a Borrowing in which such Lender is participating that such
         Lender will not make available to the Administrative Agent such
         Lender's share of such Borrowing, the Administrative Agent may assume
         that such Lender has made such amount available to the Administrative
         Agent on such date, and the Administrative Agent, in reliance on such
         assumption, may make available to the Borrower on such date a
         corresponding amount. If such corresponding amount is not in fact made
         available to the Administrative Agent by such Lender on the date of
         such Borrowing, the Administrative Agent shall be entitled to recover
         such corresponding amount on demand from such Lender together with
         interest at the Federal Funds Rate for up to two (2) days and
         thereafter at the rate specified for such Borrowing. 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 together with
         interest at the rate specified for such Borrowing. Nothing in this
         subsection shall be deemed to relieve any Lender from its obligation to
         fund its Pro Rata Share of any Borrowing hereunder or to prejudice any
         rights which the Borrower may have against any Lender as a result of
         any default by such Lender hereunder.

                  (c)      All Borrowings shall be made by the Lenders on the
         basis of their respective Pro Rata Shares. No Lender shall be
         responsible for any default by any other Lender in its obligations
         hereunder, and each Lender shall be obligated to make its Loans
         provided to be made by it hereunder, regardless of the failure of any
         other Lender to make its Loans hereunder.

         SECTION 2.5 Interest Elections.

                  (a)      Each Borrowing initially shall be of the Type
         specified in the applicable Notice of Borrowing, and in the case of a
         Eurodollar Borrowing, shall have an initial Interest Period as
         specified in such Notice of Borrowing. Thereafter, the Borrower may
         elect to convert such Borrowing into a different Type or to continue
         such Borrowing, and in the case of a Eurodollar Borrowing, may elect
         Interest Periods therefor, all as provided in this Section. The
         Borrower may elect different options with respect to different portions
         of the affected Borrowing, in which case each such portion shall be
         allocated

<PAGE>

         ratably among the Lenders holding Loans comprising such Borrowing, and
         the Loans comprising each such portion shall be considered a separate
         Borrowing.

                  (b)      To make an election pursuant to this Section, the
         Borrower shall give the Administrative Agent prior written notice (or
         telephonic notice promptly confirmed in writing) of each Borrowing (a
         "NOTICE OF CONVERSION/CONTINUATION") that is to be converted or
         continued, as the case may be, (x) prior to 11:00 a.m. one (1) Business
         Day prior to the requested date of a conversion into a Base Rate
         Borrowing and (y) prior to 11:00 a.m. three (3) Business Days prior to
         a continuation of or conversion into a Eurodollar Borrowing. Each such
         Notice of Conversion/Continuation shall be irrevocable and shall
         specify (i) the Borrowing to which such Notice of
         Continuation/Conversion applies and if different options are being
         elected with respect to different portions thereof, the portions
         thereof that are to be allocated to each resulting Borrowing (in which
         case the information to be specified pursuant to clauses (iii) and (iv)
         shall be specified for each resulting Borrowing); (ii) the effective
         date of the election made pursuant to such Notice of
         Continuation/Conversion, which shall be a Business Day, (iii) whether
         the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar
         Borrowing; and (iv) if the resulting Borrowing is to be a Eurodollar
         Borrowing, the Interest Period applicable thereto after giving effect
         to such election, which shall be a period contemplated by the
         definition of "Interest Period". If any such Notice of
         Continuation/Conversion requests a Eurodollar Borrowing but does not
         specify an Interest Period, the Borrower shall be deemed to have
         selected an Interest Period of one month. The principal amount of any
         resulting Borrowing shall satisfy the minimum borrowing amount for
         Eurodollar Borrowings and Base Rate Borrowings set forth in Section
         2.3.

                  (c)      If, on the expiration of any Interest Period in
         respect of any Eurodollar Borrowing, the Borrower shall have failed to
         deliver a Notice of Conversion/ Continuation, then, unless such
         Borrowing is repaid as provided herein, the Borrower shall be deemed to
         have elected to convert such Borrowing to a Base Rate Borrowing. No
         Borrowing may be converted into, or continued as, a Eurodollar
         Borrowing if a Default or an Event of Default exists, unless the
         Administrative Agent and each of the Lenders shall have otherwise
         consented in writing. No conversion of any Eurodollar Loans shall be
         permitted except on the last day of the Interest Period in respect
         thereof.

                  (d)      Upon receipt of any Notice of
         Conversion/Continuation, the Administrative Agent shall promptly notify
         each Lender of the details thereof and of such Lender's portion of each
         resulting Borrowing.

         SECTION 2.6 Optional Reduction and Termination of Commitments.

                  (a)      Unless previously terminated, all Revolving
         Commitments shall terminate on the Commitment Termination Date.

                  (b)      Upon at least three (3) Business Days' prior written
         notice (or telephonic notice promptly confirmed in writing) to the
         Administrative Agent (which notice shall be irrevocable), the Borrower
         may reduce the Aggregate Revolving Commitments in part or terminate the
         Aggregate Revolving Commitments in whole; provided that (i) any partial
<PAGE>

         reduction shall apply to reduce proportionately and permanently the
         Revolving Commitment of each Lender, (ii) any partial reduction
         pursuant to this Section 2.6 shall be in an amount of at least
         $1,000,000 and any larger multiple of $1,000,000, and (iii) no such
         reduction shall be permitted which would reduce the Aggregate Revolving
         Commitments to an amount less than the outstanding Revolving Credit
         Exposures of all Lenders. Any such reduction in the Aggregate Revolving
         Commitments shall result in a proportionate reduction (rounded to the
         next lowest integral multiple of $100,000) LC Commitment.

         SECTION 2.7 Repayment of Loans. The outstanding principal amount of all
Revolving Loans shall be due and payable (together with accrued and unpaid
interest thereon) on the Commitment Termination Date.

         SECTION 2.8 Evidence of Indebtedness.

                  (a)      Each Lender shall maintain in accordance with its
         usual practice appropriate records evidencing the indebtedness of the
         Borrower to such Lender resulting from each Loan made by such Lender
         from time to time, including the amounts of principal and interest
         payable thereon and paid to such Lender from time to time under this
         Agreement. The Administrative Agent shall maintain appropriate records
         in which shall be recorded (i) the Revolving Commitment of each Lender,
         (ii) the amount of each Loan made hereunder by each Lender, the Type
         thereof and the Interest Period applicable thereto, (iii) the date of
         each continuation thereof pursuant to Section 2.5, (iv) the date of
         each conversion of all or a portion thereof to another Type pursuant to
         Section 2.5, (v) the date and amount of any principal or interest due
         and payable or to become due and payable from the Borrower to each
         Lender hereunder in respect of such Loans and (vi) both the date and
         amount of any sum received by the Administrative Agent hereunder from
         the Borrower in respect of the Loans and each Lender's Pro Rata Share
         thereof. The entries made in such records shall be prima facie evidence
         of the existence and amounts of the obligations of the Borrower therein
         recorded; provided that the failure or delay of any Lender or the
         Administrative Agent in maintaining or making entries into any such
         record or any error therein shall not in any manner affect the
         obligation of the Borrower to repay the Loans (both principal and
         unpaid accrued interest) of such Lender in accordance with the terms of
         this Agreement.

                  (b)      The Borrower agrees that it will execute and deliver
         to each Lender a Revolving Credit Note, payable to the order of such
         Lender, in the amount of such Lender's Revolving Commitment.

         SECTION 2.9 Optional Prepayments. The Borrower shall have the right at
any time and from time to time to prepay any Borrowing, in whole or in part,
without premium or penalty, by giving irrevocable written notice (or telephonic
notice promptly confirmed in writing) to the Administrative Agent no later than
(i) in the case of prepayment of any Eurodollar Borrowing, 11:00 a.m. not less
than three (3) Business Days prior to any such prepayment, and (ii) in the case
of any prepayment of any Base Rate Borrowing, not less than one (1) Business Day
prior to the date of such prepayment. Each such notice shall be irrevocable and
shall specify the proposed date of such prepayment and the principal amount of
each Borrowing or portion thereof to be

<PAGE>

prepaid. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each affected Lender of the contents thereof and of such
Lender's Pro Rata Share of any such prepayment. If such notice is given, the
aggregate amount specified in such notice shall be due and payable on the date
designated in such notice, together with accrued interest to such date on the
amount so prepaid in accordance with Section 2.10(b); provided that if a
Eurodollar Borrowing is prepaid on a date other than the last day of an Interest
Period applicable thereto, the Borrower shall also pay all amounts required
pursuant to Section 2.16. Each partial prepayment of any Loan shall be in an
amount not less than the minimum amount that would be permitted in the case of
an advance of a Borrowing of the same Type pursuant to Section 2.2. Each
prepayment of a Borrowing shall be applied ratably to the Loans comprising such
Borrowing.

         SECTION 2.10 Interest on Loans.

                  (a)      While an Event of Default exists or after
         acceleration, at the option of the Required Lenders, the Borrower shall
         pay interest ("DEFAULT INTEREST") with respect to all Eurodollar Loans
         at the rate otherwise applicable for the then-current Interest Period
         plus an additional two percent (2%) per annum until the last day of
         such Interest Period, and thereafter, and with respect to all Base Rate
         Loans and all other Obligations hereunder (other than Loans), at the
         rate in effect from time to time for Base Rate Loans, plus an
         additional two percent (2%) per annum.

                  (b)      Interest on the principal amount of all Loans shall
         accrue from the date such Loans are made to the date of any repayment
         thereof. Interest on all outstanding Base Rate Loans shall be payable
         in arrears on the last day of each calendar month and on the Commitment
         Termination Date. Interest on all outstanding Eurodollar Loans shall be
         payable on the last day of each Interest Period applicable thereto,
         and, in the case of any Eurodollar Loans having an Interest Period in
         excess of three months or ninety (90) days, respectively, on each day
         which occurs every three months or ninety (90) days, as the case may
         be, after the initial date of such Interest Period, and on the
         Commitment Termination Date. All Default Interest shall be payable on
         demand.

                  (c)      The Administrative Agent shall determine each
         interest rate applicable to the Loans hereunder and shall promptly
         notify the Borrower and the Lenders of such rate in writing (or by
         telephone, promptly confirmed in writing). Any such determination shall
         be conclusive and binding for all purposes, absent manifest error.

         SECTION 2.11 Fees.

                  (a)      Administrative Agent Fees. The Borrower shall pay to
         the Administrative Agent for its own account fees in the amounts and at
         the times previously agreed upon the Borrower and the Administrative
         Agent.

                  (b)      Facility Fee. The Borrower agrees to pay to the
         Administrative Agent a facility fee equal to one quarter of one percent
         (.25%) per annum on the Aggregate Revolving Commitments. The Facility
         Fee shall be payable in arrears on the last day of each March, June,
         September, and December of each year and on the Commitment Termination
         Date.

<PAGE>

                  (c)      Payments. Accrued fees shall be payable quarterly in
         arrears on the last day of each March, June, September, and December
         (commencing June 30, 2002) of each year and on the Commitment
         Termination Date.

                  (d)      Letter of Credit Fees. The Borrower agrees to pay (i)
         to the Administrative Agent, for the account of each Lender, a letter
         of credit fee with respect to its participation in each Letter of
         Credit, which shall accrue at the Applicable Margin on the average
         daily amount of such Lender's LC Exposure (excluding any portion
         thereof attributable to unreimbursed LC Disbursements) attributable to
         such Letter of Credit during the period from the date of issuance of
         such Letter of Credit to the date on which such Letter of Credit
         expires or is drawn in full (including without limitation any LC
         Exposure that remains outstanding after the Commitment Termination
         Date) and (ii) to the Issuing Bank for its own account a fronting fee,
         which shall accrue at the rate of .125% per annum on the average daily
         amount of the LC Exposure (excluding any portion thereof attributable
         to Unreimbursed LC Disbursements) during the Availability Period (or
         until the date that such Letter of Credit is irrevocably canceled,
         whichever is later), as well as the Issuing Bank's standard
         administrative fees with respect to issuance, amendment, renewal or
         extension of any Letter of Credit or processing of drawings thereunder.

         SECTION 2.12 Computation of Interest and Fees. All computations of
interest and 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)
occurring in the period for which such interest or fees are payable (to the
extent computed on the basis of days elapsed). Each determination by the
Administrative Agent of an interest amount or fee hereunder shall be made in
good faith and, except for manifest error, shall be presumed correct for all
purposes.

         SECTION 2.13 Inability to Determine Interest Rates. If prior to the
commencement of any Interest Period for any Eurodollar Borrowing,

                  (a)      the Administrative Agent shall have determined (which
         determination shall be conclusive and binding upon the Borrower) that,
         by reason of circumstances affecting the relevant interbank market,
         adequate means do not exist for ascertaining LIBOR for such Interest
         Period, or

                  (b)      the Administrative Agent shall have received notice
         from the Required Lenders that the Adjusted LIBO Rate does not
         adequately and fairly reflect the cost to such Lenders (or Lender, as
         the case may be) of making, funding or maintaining their (or its, as
         the case may be) Eurodollar Loans for such Interest Period,

the Administrative Agent shall give written notice (or telephonic notice,
promptly confirmed in writing) to the Borrower and to the Lenders as soon as
practicable thereafter. In the case of Eurodollar Loans, until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) the obligations of
the Lenders to make Eurodollar Revolving Loans or to continue or convert
outstanding Loans as or into Eurodollar Loans shall be suspended and (ii) all
such affected Loans shall be converted into Base Rate Loans on the last day of
the then current Interest Period applicable thereto unless the

<PAGE>

Borrower prepays such Loans in accordance with this Agreement. Unless the
Borrower notifies the Administrative Agent at least one Business Day before the
date of any Eurodollar Borrowing for which a Notice of Borrowing has previously
been given that it elects not to borrow on such date, then such Borrowing shall
be made as a Base Rate Borrowing.

         SECTION 2.14 Illegality. If any Change in Law shall make it unlawful or
impossible for any Lender to make, maintain or fund any Eurodollar Loan and such
Lender shall so notify the Administrative Agent, the Administrative Agent shall
promptly give notice thereof to the Borrower and the other Lenders, whereupon
until such Lender notifies the Administrative Agent and the Borrower that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Lender to make Eurodollar Revolving Loans, or to continue or convert
outstanding Loans as or into Eurodollar Revolving Loans, shall be suspended. In
the case of the making of a Eurodollar Borrowing, such Lender's Loan shall be
made as a Base Rate Loan as part of the same Borrowing for the same Interest
Period and if the affected Eurodollar Loan is then outstanding, such Loan shall
be converted to a Base Rate Loan either (i) on the last day of the then current
Interest Period applicable to such Eurodollar Loan if such Lender may lawfully
continue to maintain such Loan to such date or (ii) immediately if such Lender
shall determine that it may not lawfully continue to maintain such Eurodollar
Loan to such date. Notwithstanding the foregoing, the affected Lender shall,
prior to giving such notice to the Administrative Agent, designate a different
Applicable Lending Office if such designation would avoid the need for giving
such notice and if such designation would not otherwise be disadvantageous to
such Lender in the good faith exercise of its discretion.

         SECTION 2.15 Increased Costs.

                  (a)      If any Change in Law shall:

                           (i)      impose, modify or deem applicable any
                  reserve, special deposit or similar requirement that is not
                  otherwise included in the determination of the Adjusted LIBO
                  Rate hereunder against assets of, deposits with or for the
                  account of, or credit extended by, any Lender (except any such
                  reserve requirement reflected in the Adjusted LIBO Rate) or
                  the Issuing Bank; or

                           (ii)     impose on any Lender or on the Issuing Bank
                  or the eurodollar interbank market any other condition
                  affecting this Agreement or any Eurodollar Loans made by such
                  Lender or any Letter of Credit or any participation therein;

         and the result of the foregoing is to increase the actual cost to such
         Lender of making, converting into, continuing or maintaining a
         Eurodollar Loan or to increase the cost to such Lender or the Issuing
         Bank of participating in or issuing any Letter of Credit or to reduce
         the amount received or receivable by such Lender or the Issuing Bank
         hereunder (whether of principal, interest or any other amount), then
         the Borrower shall promptly pay, upon written notice from and demand by
         such Lender on the Borrower (with a copy of such notice and demand to
         the Administrative Agent), to the Administrative Agent for the account
         of such Lender, within five (5) Business Days after the date of such
         notice and demand, additional amount or amounts sufficient to
         compensate such Lender or the

<PAGE>

         Issuing Bank, as the case may be, for such additional costs actually
         incurred or reduction actually suffered.

                  (b)      If any Lender or the Issuing Bank shall have
         determined that on or after the date of this Agreement any Change in
         Law regarding capital requirements has or would have the effect of
         actually reducing the rate of return on such Lender's or the Issuing
         Bank's capital (or on the capital of such Lender's or the Issuing
         Bank's parent corporation) as a consequence of its obligations
         hereunder or under or in respect of any Letter of Credit to a level
         below that which such Lender or the Issuing Bank or such Lender's or
         the Issuing Bank's parent corporation could have achieved but for such
         Change in Law (taking into consideration such Lender's or the Issuing
         Bank's policies or the policies of such Lender's or the Issuing Bank's
         parent corporation with respect to capital adequacy) then, from time to
         time, within five (5) Business Days after receipt by the Borrower of
         written demand by such Lender (with a copy thereof to the
         Administrative Agent), the Borrower shall pay to such Lender such
         additional amounts as will compensate such Lender or the Issuing Bank
         or such Lender's or the Issuing Bank's parent corporation for any such
         reduction actually suffered.

                  (c)      A certificate of a Lender or the Issuing Bank setting
         forth the amount or amounts necessary to compensate such Lender or the
         Issuing Bank or such Lender's or the Issuing Bank's parent corporation,
         as the case may be, specified in paragraph (a) or (b) of this Section
         shall be delivered to the Borrower (with a copy to the Administrative
         Agent) and shall be presumed correct, absent manifest error. The
         Borrower shall pay any such Lender or the Issuing Bank, as the case may
         be, such amount or amounts within ten (10) days after receipt thereof.

                  (d)      Failure or delay on the part of any Lender or the
         Issuing Bank to demand compensation pursuant to this Section shall not
         constitute a waiver of such Lender's or the Issuing Bank's right to
         demand such compensation.

         SECTION 2.16 Funding Indemnity. In the event of: (a) the payment of any
principal of a Eurodollar Loan other than on the last day of the Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion or continuation of a Eurodollar Loan other than on the last day of
the Interest Period applicable thereto, or (c) the failure by the Borrower to
borrow, prepay, convert or continue any Eurodollar Loan on the date specified in
any applicable Notice of Borrowing (regardless of whether such notice is
withdrawn or revoked), then, in any such event, the Borrower shall compensate
each Lender, within five (5) Business Days after written demand from such
Lender, for any loss, cost or expense attributable to such event. In the case of
a Eurodollar Loan, such loss, cost or expense shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (A) the amount of
interest that would have accrued on the principal amount of such Eurodollar Loan
if such event had not occurred at the Adjusted LIBO Rate applicable to such
Eurodollar Loan for the period from the date of such event to the last day of
the then current Interest Period therefor (or in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period for such Eurodollar Loan) over (B) the amount of interest that would
accrue on the principal amount of such Eurodollar Loan for the same period if
the Adjusted LIBO Rate were set on the date such Eurodollar Loan was prepaid or
converted or the date on which the Borrower failed to

<PAGE>

borrow, convert or continue such Eurodollar Loan. A certificate as to any
additional amount payable under this Section 2.16 submitted to the Borrower by
any Lender shall be presumed correct, absent manifest error.

         SECTION 2.17 Taxes.

                  (a)      Any and all payments by or on account of any
         obligation of the Borrower hereunder shall be made free and clear of
         and without deduction for any Indemnified Taxes; provided that if the
         Borrower shall be required to deduct any Indemnified Taxes from such
         payments, then (i) the sum payable shall be increased as necessary so
         that after making all required deductions (including deductions
         applicable to additional sums payable under this Section) the
         Administrative Agent, any Lender or the Issuing Bank (as the case may
         be) shall receive an amount equal to the sum it would have received had
         no such deductions been made, (ii) the Borrower shall make such
         deductions and (iii) the Borrower shall pay the full amount deducted to
         the relevant Governmental Authority in accordance with applicable law.

                  (b)      In addition, the Borrower shall be responsible for
         the payment of any Indemnified Taxes to the relevant Governmental
         Authority in accordance with applicable law.

                  (c)      The Borrower shall indemnify the Administrative
         Agent, each Lender and the Issuing Bank, within five (5) Business Days
         after written demand therefor, for the full amount of any Indemnified
         Taxes paid by the Administrative Agent, such Lender or the Issuing
         Bank, as the case may be, on or with respect to any payment by or on
         account of any obligation of the Borrower hereunder (including
         Indemnified Taxes imposed or asserted on or attributable to amounts
         payable under this Section) and any penalties, interest and reasonable
         expenses arising therefrom or with respect thereto as a result of the
         Borrower's failure to comply with this Section 2.17(c) in a timely
         manner. A certificate as to the amount of such payment or liability
         delivered to the Borrower by a Lender or the Issuing Bank, or by the
         Administrative Agent on its own behalf or on behalf of a Lender or the
         Issuing Bank, shall be presumed correct absent manifest error.

                  (d)      As soon as practicable after any payment of
         Indemnified Taxes by the Borrower to a Governmental Authority, the
         Borrower shall deliver to the Administrative Agent the original or a
         certified copy of a receipt issued by such Governmental Authority
         evidencing such payment, a copy of the return reporting such payment or
         other evidence of such payment reasonably satisfactory to the
         Administrative Agent.

                  (e)      Any Foreign Lender that is entitled to an exemption
         from or reduction of withholding tax under the law of the jurisdiction
         in which the Borrower is located, or any treaty to which such
         jurisdiction is a party, with respect to payments under this Agreement
         shall deliver to the Borrower (with a copy to the Administrative
         Agent), at the time or times prescribed by applicable law, such
         properly completed and executed documentation prescribed by applicable
         law or reasonably requested by the Borrower as will permit such
         payments to be made without withholding or at a reduced rate. Without
         limiting the generality of the foregoing, each Foreign Lender agrees
         that it will deliver to

<PAGE>

         the Administrative Agent and the Borrower (or in the case of a
         Participant, to the Lender from which the related participation shall
         have been purchased) two (2) duly completed copies of Internal Revenue
         Service Form 1001 or 4224, or any successor form thereto, as the case
         may be, certifying in each case that such Foreign Lender is entitled to
         receive payments made by the Borrower hereunder and under the Notes
         payable to it, without deduction or withholding of any United States
         federal income taxes and (ii) a duly completed Internal Revenue Service
         Form W-8 or W-9, or any successor form thereto, as the case may be, to
         establish an exemption from United State backup withholding tax. Each
         such Foreign Lender shall deliver to the Borrower and the
         Administrative Agent such forms on or before the date that it becomes a
         party to this Agreement (or in the case of a Participant, on or before
         the date such Participant purchases the related participation). In
         addition, each such Lender shall deliver such forms promptly upon the
         obsolescence or invalidity of any form previously delivered by such
         Lender. Each such Lender shall promptly notify the Borrower and the
         Administrative Agent at any time that it determines that it is no
         longer in a position to provide any previously delivered certificate to
         the Borrower (or any other form of certification adopted by the U.S.
         taxing authorities for such purpose).

         SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of
Set-Offs.

                  (a)      The Borrower shall make each payment required to be
         made by it hereunder (whether of principal, interest, fees or
         reimbursement of LC Disbursements, or of amounts payable under Section
         2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, on the Business
         Day when due, in immediately available funds, without set-off or
         counterclaim. Any amounts received after such time on any date may, in
         the discretion of the Administrative Agent, be deemed to have been
         received on the next succeeding Business Day for purposes of
         calculating interest thereon. All such payments shall be made to the
         Administrative Agent at the Payment Office, except payments to be made
         directly to the Issuing Bank as expressly provided herein and except
         that payments pursuant to Sections 2.15, 2.16 and 2.17 and 10.3 shall
         be made directly to the Persons entitled thereto. The Administrative
         Agent shall distribute any such payments received by it for the account
         of any other Person to the appropriate recipient promptly following
         receipt thereof. If any payment hereunder shall be due on a day that is
         not a Business Day, the date for payment shall be extended to the next
         succeeding Business Day, and, in the case of any payment accruing
         interest, interest thereon shall be made payable for the period of such
         extension. All payments hereunder shall be made in Dollars.

                  (b)      If at any time insufficient funds are received by and
         available to the Administrative Agent to pay fully all amounts of
         principal, unreimbursed LC Disbursements, interest and fees then due
         hereunder, such funds shall be applied (i) first, towards payment of
         interest and fees then due hereunder, ratably among the parties
         entitled thereto in accordance with the amounts of interest and fees
         then due to such parties, and (ii) second, towards payment of principal
         and unreimbursed LC Disbursements then due hereunder, ratably among the
         parties entitled thereto in accordance with the amounts of principal
         and unreimbursed LC Disbursements then due to such parties.

<PAGE>

                  (c)      If any Lender shall, by exercising any right of
         set-off or counterclaim or otherwise, obtain payment in respect of any
         principal of or interest on any of its Revolving Loans or
         participations in LC Disbursements that would result in such Lender
         receiving payment of a greater proportion of the aggregate amount of
         its Revolving Loans and participations in LC Disbursements and accrued
         interest thereon than the proportion received by any other Lender, then
         the Lender receiving such greater proportion shall purchase (for cash
         at face value) participations in the Revolving Loans and participations
         in LC Disbursements of other Lenders to the extent necessary so that
         the benefit of all such payments shall be shared by the Lenders ratably
         in accordance with the aggregate amount of principal of and accrued
         interest on their respective Revolving Loans and participations in LC
         Disbursements; provided that (i) if any such participations are
         purchased and all or any portion of the payment giving rise thereto is
         recovered, such participations shall be rescinded and the purchase
         price restored to the extent of such recovery, without interest, and
         (ii) the provisions of this paragraph shall not be construed to apply
         to any payment made by the Borrower pursuant to and in accordance with
         the express terms of this Agreement or any payment obtained by a Lender
         as consideration for the assignment of or sale of a participation in
         any of its Loans or participations in LC Disbursements to any assignee
         or participant, other than to the Borrower or any Subsidiary or
         Affiliate thereof (as to which the provisions of this paragraph shall
         apply). The Borrower consents to the foregoing and agrees, to the
         extent it may effectively do so under applicable law, that any Lender
         acquiring a participation pursuant to the foregoing arrangements may
         exercise against the Borrower rights of set-off and counterclaim with
         respect to such participation as fully as if such Lender were a direct
         creditor of the Borrower in the amount of such participation.

                  (d)      Unless the Administrative Agent shall have received
         notice from the Borrower prior to the date on which any payment is due
         to the Administrative Agent for the account of the Lenders or the
         Issuing Bank hereunder that the Borrower will not make such payment,
         the Administrative Agent may assume that the Borrower has made such
         payment on such date in accordance herewith and may, in reliance upon
         such assumption, distribute to the Lenders or the Issuing Bank, as the
         case may be, the amount or amounts due. In such event, if the Borrower
         has not in fact made such payment, then each of the Lenders or the
         Issuing Bank, as the case may be, severally agrees to repay to the
         Administrative Agent forthwith on demand the amount so distributed to
         such Lender or Issuing Bank with interest thereon, for each day from
         and including the date such amount is distributed to it to but
         excluding the date of payment to the Administrative Agent, at the
         greater of the Federal Funds Effective Rate and a rate determined by
         the Administrative Agent in accordance with banking industry rules on
         interbank compensation.

                  (e)      If any Lender shall fail to make any payment required
         to be made by it pursuant to Section 2.20(d) or (e), 2.18(d) or
         10.3(d), then the Administrative Agent may, in its discretion
         (notwithstanding any contrary provision hereof), apply any amounts
         thereafter received by the Administrative Agent for the account of such
         Lender to satisfy such Lender's obligations under such Sections until
         all such unsatisfied obligations are fully paid.

<PAGE>

         SECTION 2.19 Mitigation of Obligations. If any Lender requests
compensation under Section 2.15, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.17, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable under
Section 2.17 or Section 2.15, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all costs and expenses incurred by any Lender in connection with such
designation or assignment.

         SECTION 2.20 Letters of Credit.

                  (a)      During the Availability Period, the Issuing Bank, in
         reliance upon the agreements of the other Lenders pursuant to Section
         2.20(d), agrees to issue, at the request of the Borrower, Letters of
         Credit for the account of the Borrower on the terms and conditions
         hereinafter set forth; provided that (i) each Letter of Credit shall
         expire no later than five (5) days prior to the Commitment Termination
         Date; (ii) each Letter of Credit shall be in a stated amount of at
         least $250,000.00; and (iii) the Borrower may not request any Letter of
         Credit, if, after giving effect to such issuance (A) the aggregate LC
         Exposure would exceed the LC Commitment or (B) the aggregate LC
         Exposure, plus the aggregate outstanding Revolving Loans of all
         Lenders, would exceed the Aggregate Revolving Commitments. Upon the
         issuance of each Letter of Credit each Lender shall be deemed to, and
         hereby irrevocably and unconditionally agrees to, purchase from the
         Issuing Bank without recourse a participation in such Letter of Credit
         equal to such Lender's Pro Rata Share of the aggregate amount available
         to be drawn under such Letter of Credit. Each issuance of a Letter of
         Credit shall be deemed to utilize the Revolving Commitment of each
         Lender by an amount equal to the amount of such participation.

                  (b)      To request the issuance of a Letter of Credit (or any
         amendment, renewal or extension of an outstanding Letter of Credit),
         the Borrower shall give the Issuing Bank and the Administrative Agent
         irrevocable written notice at least three (3) Business Days prior to
         the requested date of such issuance specifying the date (which shall be
         a Business Day) such Letter of Credit is to be issued (or amended,
         extended or renewed, as the case may be), the expiration date of such
         Letter of Credit, the amount of such Letter of Credit , the name and
         address of the beneficiary thereof and such other information as shall
         be necessary to prepare, amend, renew or extend such Letter of Credit.
         In addition to the satisfaction of the conditions in Article III, the
         issuance of such Letter of Credit (or any amendment which increases the
         amount of such Letter of Credit) will be subject to the further
         conditions that such Letter of Credit shall be in such form and contain
         such terms as the Issuing Bank shall approve (such approval not to be
         withheld unreasonably) and that the Borrower shall have executed and
         delivered any additional applications, agreements and instruments
         relating to such Letter of Credit as the Issuing Bank shall reasonably
         require; provided that in the event of any conflict between such
         applications, agreements or instruments and this Agreement, the terms
         of this Agreement shall control.

<PAGE>

                  (c)      At least two (2) Business Days prior to the issuance
         of any Letter of Credit, the Issuing Bank will confirm with the
         Administrative Agent (by telephone or in writing) that the
         Administrative Agent has received such notice and if not, the Issuing
         Bank will provide the Administrative Agent with a copy thereof. Unless
         the Issuing Bank has received notice from the Administrative Agent on
         or before the Business Day immediately preceding the date the Issuing
         Bank is to issue the requested Letter of Credit directing the Issuing
         Bank not to issue the Letter of Credit because such issuance is not
         then permitted hereunder because of the limitations set forth in
         Section 2.20(a) or that one or more conditions specified in Article III
         are not then satisfied, then, subject to the terms and conditions
         hereof, the Issuing Bank shall, on the requested date, issue such
         Letter of Credit in accordance with the Issuing Bank's usual and
         customary business practices.

                  (d)      The Issuing Bank shall examine all documents
         purporting to represent a demand for payment under a Letter of Credit
         promptly following its receipt thereof. The Issuing Bank shall notify
         the Borrower and the Administrative Agent of such demand for payment
         and whether the Issuing Bank has made or will make a LC Disbursement
         thereunder; provided that any failure to give or delay in giving such
         notice shall not relieve the Borrower of its obligation to reimburse
         the Issuing Bank and the Lenders with respect to such LC Disbursement.
         The Borrower shall be irrevocably and unconditionally obligated to
         reimburse the Issuing Bank for any LC Disbursements paid by the Issuing
         Bank in respect of such drawing, without presentment, demand or other
         formalities of any kind. Unless the Borrower shall have notified the
         Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the
         Business Day immediately prior to the date on which such drawing is
         honored that the Borrower intends to reimburse the Issuing Bank for the
         amount of such drawing in funds other than from the proceeds of
         Revolving Loans, the Borrower shall be deemed to have timely given a
         Notice of Borrowing to the Administrative Agent requesting the Lenders
         to make a Base Rate Borrowing on the date on which such drawing is
         honored in an exact amount due to the Issuing Bank; provided that for
         purposes solely of such Borrowing, the conditions precedent set forth
         in Section 3.2 hereof shall not be applicable. The Administrative Agent
         shall notify the Lenders of such Borrowing in accordance with Section
         2.3, and each Lender shall make the proceeds of its Base Rate Loan
         included in such Borrowing available to the Administrative Agent for
         the account of the Issuing Bank in accordance with Section 2.4. The
         proceeds of such Borrowing shall be applied directly by the
         Administrative Agent to reimburse the Issuing Bank for such LC
         Disbursement.

                  (e)      If for any reason a Base Rate Borrowing may not be
         (as determined in the sole discretion of the Administrative Agent), or
         is not, made in accordance with the foregoing provisions, then each
         Lender (other than the Issuing Bank) shall be obligated to fund the
         participation that such Lender purchased pursuant to subsection (a) in
         an amount equal to its Pro Rata Share of such LC Disbursement on and as
         of the date which such Base Rate Borrowing should have occurred. Each
         Lender's obligation to fund its participation shall be absolute and
         unconditional and shall not be affected by any circumstance, including,
         without limitation, (i) any setoff, counterclaim, recoupment, defense
         or other right that such Lender or any other Person may have against
         the Issuing Bank or any other Person for any reason whatsoever, (ii)
         the existence of a Default or an

<PAGE>

         Event of Default or the termination of the Aggregate Revolving
         Commitments, (iii) any adverse change in the condition (financial or
         otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach
         of this Agreement by the Borrower or any other Lender, (v) any
         amendment, renewal or extension of any Letter of Credit, or (vi) any
         other circumstance, happening or event whatsoever, whether or not
         similar to any of the foregoing. On the date that such participation is
         required to be funded, each Lender shall promptly transfer, in
         immediately available funds, the amount of its participation to the
         Administrative Agent for the account of the Issuing Bank. Whenever, at
         any time after the Issuing Bank has received from any such Lender the
         funds for its participation in a LC Disbursement, the Issuing Bank (or
         the Administrative Agent on its behalf) receives any payment on account
         thereof, the Administrative Agent or the Issuing Bank, as the case may
         be, will distribute to such Lender its Pro Rata Share of such payment;
         provided that if such payment is required to be returned for any reason
         to the Borrower or to a trustee, receiver, liquidator, custodian or
         similar official in any bankruptcy proceeding, such Lender will return
         to the Administrative Agent or the Issuing Bank any portion thereof
         previously distributed by the Administrative Agent or the Issuing Bank
         to it.

                  (f)      To the extent that any Lender shall fail to pay any
         amount required to be paid pursuant to paragraph (d) of this Section
         2.20 on the due date therefor, such Lender shall pay interest to the
         Issuing Bank (through the Administrative Agent) on such amount from
         such due date to the date such payment is made at a rate per annum
         equal to the Federal Funds Rate; provided that if such Lender shall
         fail to make such payment to the Issuing Bank within three (3) Business
         Days of such due date, then, retroactively to the due date, such Lender
         shall be obligated to pay interest on such amount at the Default Rate.

                  (g)      If any Event of Default shall occur and be
         continuing, on the Business Day that the Borrower receives notice from
         the Administrative Agent or the Required Lenders demanding the deposit
         of cash collateral pursuant to this paragraph, the Borrower shall
         deposit in an account with the Administrative Agent, in the name of the
         Administrative Agent and for the benefit of the Lenders, an amount in
         cash equal to 105% of the LC Exposure as of such date plus any accrued
         and unpaid interest thereon; provided that the obligation to deposit
         such cash collateral shall become effective immediately, and such
         deposit shall become immediately due and payable, with demand or notice
         of any kind, upon the occurrence of any Event of Default with respect
         to the Borrower described in clause (g) or (h) of Section 8.1. Such
         deposit shall be held by the Administrative Agent as collateral for the
         payment and performance of the obligations of the Borrower under this
         Agreement. The Administrative Agent shall have exclusive dominion and
         control, including the exclusive right of withdrawal, over such
         account. Other than any interest earned on the investment of such
         deposits, which investments shall be made at the option and sole
         discretion of the Administrative Agent and at the Borrower's risk and
         expense, such deposits shall not bear interest. Interest and profits,
         if any, on such investments shall accumulate in such account. Moneys in
         such account shall applied by the Administrative Agent to reimburse the
         Issuing Bank for LC Disbursements for which it had not been reimbursed
         and to the extent so applied, shall be held for the satisfaction of the
         reimbursement obligations of the Borrower for the LC Exposure at such
         time or, if the maturity of the Loans has been accelerated, with the
         consent of the Required Lenders, be

<PAGE>

         applied to satisfy other obligations of the Borrower under this
         Agreement. If the Borrower is required to provide an amount of cash
         collateral hereunder as a result of the occurrence of an Event of
         Default, such amount (to the extent not so applied as aforesaid) shall
         be returned to the Borrower within three (3) Business Days after all
         Events of Default have been cured or waived.

                  (h)      Omitted by Agreement.

                           (i)      The Borrower's obligation to reimburse LC
                  Disbursements hereunder shall be absolute, unconditional and
                  irrevocable and shall be performed strictly in accordance with
                  the terms of this Agreement under all circumstances whatsoever
                  and irrespective of any of the following circumstances:

                           (i)      Any lack of validity or enforceability of
                  any Letter of Credit or this Agreement;

                           (ii)     The existence of any claim, set-off, defense
                  or other right which the Borrower or any Subsidiary or
                  Affiliate of the Borrower may have at any time against a
                  beneficiary or any transferee of any Letter of Credit (or any
                  Persons or entities for whom any such beneficiary or
                  transferee may be acting), any Lender (including the Issuing
                  Bank) or any other Person, whether in connection with this
                  Agreement or the Letter of Credit or any document related
                  hereto or thereto or any unrelated transaction;

                           (iii)    Any draft or other document presented under
                  a Letter of Credit proving to be forged, fraudulent or invalid
                  in any respect or any statement therein being untrue or
                  inaccurate in any respect, if such documents on their faces
                  appear to be in order;

                           (iv)     Payment by the Issuing Bank under a Letter
                  of Credit against presentation of a draft or other document to
                  the Issuing Bank that does not comply with the terms of such
                  Letter of Credit;

                           (v)      Any other event or circumstance whatsoever,
                  whether or not similar to any of the foregoing, that might,
                  but for the provisions of this Section, constitute a legal or
                  equitable discharge of, or provide a right of setoff against,
                  the Borrower's obligations hereunder; or

                           (vi)     The existence of a Default or an Event of
                  Default.

         Neither the Administrative Agent, the Issuing Bank, the Lenders nor any
         Related Party of any of the foregoing shall have any liability or
         responsibility by reason of or in connection with the issuance or
         transfer of any Letter of Credit or any payment or failure to make any
         payment thereunder (irrespective of any of the circumstances referred
         to above), or any error, omission, interruption, loss or delay in
         transmission or delivery of any draft, notice or other communication
         under or relating to any Letter of Credit (including any document
         required to make a drawing thereunder), any error in interpretation of
         technical terms or any consequence arising from causes beyond the
<PAGE>

         control of the Issuing Bank; provided that the foregoing shall not be
         construed to excuse the Issuing Bank from liability to the Borrower to
         the extent of any direct damages (as opposed to consequential damages,
         claims in respect of which are hereby waived by the Borrower to the
         extent permitted by applicable law) suffered by the Borrower that are
         caused by the Issuing Bank's failure to exercise care when determining
         whether drafts or other documents presented under a Letter of Credit
         comply with the terms thereof. The parties hereto expressly agree, that
         in the absence of gross negligence or willful misconduct on the part of
         the Issuing Bank (as finally determined by a court of competent
         jurisdiction), the Issuing Bank shall be deemed to have exercised care
         in each such determination. In furtherance of the foregoing and without
         limiting the generality thereof, the parties agree that, with respect
         to documents presented that appear on their face to be in substantial
         compliance with the terms of a Letter of Credit, the Issuing Bank may,
         in its sole discretion, either accept and make payment upon such
         documents without responsibility for further investigation, regardless
         of any notice or information to the contrary, or refuse to accept and
         make payment upon such documents if such documents are not in strict
         compliance with the terms of such Letter of Credit.

                  (j)      Each Letter of Credit shall be subject to the Uniform
         Customs and Practices for Documentary Credits (1993 Revision),
         International Chamber of Commerce Publication No.500, as the same may
         be amended from time to time, and, to the extent not inconsistent
         therewith, the governing law of this Agreement set forth in Section
         10.5.

                                  ARTICLE III

               CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT

         SECTION 3.1 Conditions To Effectiveness. The obligations of the Lenders
to make Loans and the obligation of the Issuing Bank to issue any Letter of
Credit hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.2).

                  (a)      The Administrative Agent shall have received all fees
         and other amounts due and payable on or prior to the Closing Date,
         including reimbursement or payment of all out-of-pocket expenses
         (including reasonable fees, charges and disbursements of counsel to the
         Administrative Agent) required to be reimbursed or paid by the Borrower
         hereunder, under any other Loan Document and under any agreement with
         the Administrative Agent.

                  (b)      The Administrative Agent (or its counsel) shall have
         received the following:

                           (i)      a counterpart of this Agreement signed by or
                  on behalf of each party thereto or written evidence
                  satisfactory to the Administrative Agent (which may include
                  telecopy transmission of a signed signature page of this
                  Agreement) that such party has signed a counterpart of this
                  Agreement;

                           (ii)     duly executed Notes payable to such Lender;

<PAGE>

                           (iii)    a duly executed Subsidiary Guarantee
                  Agreement and Indemnity and Contribution Agreement;

                           (iv)     duly executed Security Documents;

                           (v)      a certificate of the Secretary or Assistant
                  Secretary of each Loan Party, attaching and certifying copies
                  of its bylaws and of the resolutions of its boards of
                  directors, authorizing the execution, delivery and performance
                  of the Loan Documents to which it is a party and certifying
                  the name, title and true signature of each officer of such
                  Loan Party executing the Loan Documents to which it is a
                  party;

                           (vi)     certified copies of the articles of
                  incorporation or other charter documents of each Loan Party,
                  together with certificates of good standing or existence, as
                  may be available from the Secretary of State of the
                  jurisdiction of incorporation of such Loan Party and each
                  other jurisdiction where such Loan Party is required to be
                  qualified to do business as a foreign corporation;

                           (vii)    a favorable written opinion of Bass, Berry &
                  Sims PLC, counsel to the Loan Parties, addressed to the
                  Administrative Agent and each of the Lenders, and covering
                  such matters relating to the Loan Parties, the Loan Documents
                  and the transactions contemplated therein as the
                  Administrative Agent or the Required Lenders shall reasonably
                  request;

                           (viii)   a certificate, dated the Closing Date and
                  signed by a Responsible Officer, confirming compliance with
                  the conditions set forth in paragraphs (a), (b) and (c) of
                  Section 3.2; and

                           (ix)     duly executed Notices of Borrowing, if
                  applicable.

         SECTION 3.2 Each Credit Event. The obligation of each Lender to make a
Loan on the occasion of any Borrowing and of the Issuing Bank to issue, amend,
renew or extend any Letter of Credit is subject to the satisfaction of the
following conditions:

                  (a)      at the time of and immediately after giving effect to
         such Borrowing or the issuance, amendment, renewal or extension of such
         Letter of Credit, as applicable, no Default or Event of Default shall
         exist; and

                  (b)      all representations and warranties of each Loan Party
         set forth in the Loan Documents shall be true and correct in all
         material respects on and as of the date of such Borrowing or the date
         of issuance, amendment, extension or renewal of such Letter of Credit,
         in each case before and after giving effect thereto, except for (i)
         representations and warranties effective as of a specified date, which
         shall remain true and correct as of such specified date, and (ii)
         changes in facts and circumstances that are not prohibited by the terms
         of this Agreement;

<PAGE>

                  (c)      since the date of the most recent financial
         statements of the Borrower described in Section 5.1(a), there shall
         have been no change which has had or could reasonably be expected to
         have a Material Adverse Effect; and

                  (d)      the Administrative Agent shall have received such
         other documents, certificates, information or legal opinions as the
         Administrative Agent or the Required Lenders may reasonably request,
         all in form and substance reasonably satisfactory to the Administrative
         Agent or the Required Lenders.

         Each Borrowing and each issuance, amendment, extension or renewal of
any Letter of Credit shall be deemed to constitute a representation and warranty
by the Borrower on the date thereof as to the matters specified in paragraphs
(a), (b) and (c) of this Section 3.2.

         SECTION 3.3 Delivery of Documents. All of the Loan Documents,
certificates, legal opinions and other documents and papers referred to in this
Article III, unless otherwise specified, shall be delivered to the
Administrative Agent 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 satisfactory in all respects to the Administrative Agent.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

         The Borrower represents and warrants to the Administrative Agent and
each Lender as follows:

         SECTION 4.1 Existence; Power. The Borrower and each of its
Subsidiaries: (i) is duly organized, validly existing and in good standing as a
corporation under the laws of the jurisdiction of its organization, (ii) has all
requisite power and authority to carry on its business as now conducted, and
(iii) is duly qualified to do business, and is in good standing, in each
jurisdiction where such qualification is required, except where a failure to be
so qualified could not reasonably be expected to result in a Material Adverse
Effect.

         SECTION 4.2 Organizational Power; Authorization. The execution,
delivery and performance by each Loan Party of the Loan Documents to which it is
a party are within such Loan Party's organizational powers and have been duly
authorized by all necessary organizational action. This Agreement has been duly
executed and delivered by the Borrower, and constitutes, and each other Loan
Document to which any Loan Party is a party, when executed and delivered by such
Loan Party, will constitute, valid and binding obligations of the Borrower or
such Loan Party (as the case may be), enforceable against it in accordance with
their respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.

         SECTION 4.3 Governmental Approvals; No Conflicts. The execution,
delivery and performance by the Borrower of this Agreement, and by each Loan
Party of the other Loan Documents to which it is a party (a) do not require any
consent or approval of, registration or filing with, or any action by, any
Governmental Authority, except those as have been obtained or

<PAGE>

made and are in full force and effect or where the failure to do so,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, (b) will not violate any applicable law or regulation
or the charter, by-laws or other organizational documents of the Borrower or any
of its Subsidiaries or any order of any Governmental Authority, (c) will not
violate or result in a default under any indenture, material agreement or other
material instrument binding on the Borrower or any of its Subsidiaries or any of
its material assets or give rise to a right thereunder to require any payment to
be made by the Borrower or any of its Subsidiaries and (d) will not result in
the creation or imposition of any Lien on any asset of the Borrower or any of
its Subsidiaries, except Liens (if any) created under the Loan Documents.

         SECTION 4.4 Financial Statements. The Borrower has furnished to each
Lender: (i) the audited consolidated balance sheet of the Borrower and its
Subsidiaries as of August 31, 2001 and the related consolidated statements of
income, shareholders' equity and cash flows for the fiscal year then ended
audited by Deloitte & Touche LLP and (ii) the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of February 28, 2002,
and the related unaudited consolidated statements of income and cash flows for
the fiscal quarter and year-to-date period then ending, certified by a
Responsible Officer. Such financial statements fairly present the consolidated
financial condition of the Borrower and its Subsidiaries as of such dates and
the consolidated results of operations for such periods in conformity with GAAP
consistently applied, subject to year end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii). Since August
31, 2001, there have been no changes with respect to the Borrower and its
Subsidiaries which have had or could reasonably be expected to have, singly or
in the aggregate, a Material Adverse Effect.

         SECTION 4.5 Litigation and Environmental Matters.

                  (a)      Except as set forth on Schedule 4.5(a), no
         litigation, investigation or proceeding of or before any arbitrators or
         Governmental Authorities is pending against or, to the knowledge of the
         Borrower, threatened against or affecting the Borrower or any of its
         Subsidiaries: (i) as to which there is a reasonable possibility of an
         adverse determination that could reasonably be expected to have, either
         individually or in the aggregate, a Material Adverse Effect, or (ii)
         which in any manner draws into question the validity or enforceability
         of this Agreement or any other Loan Document.

                  (b)      Except as to any matter which would not have a
         Material Adverse Effect, neither the Borrower nor any of its
         Subsidiaries: (i) has failed to comply with any Environmental Law or to
         obtain, maintain or comply with any permit, license or other approval
         required under any Environmental Law, (ii) has become subject to any
         Environmental Liability, (iii) has received notice of any claim with
         respect to any Environmental Liability, or (iv) knows of any basis for
         any Environmental Liability.

         SECTION 4.6 Compliance with Laws and Agreements. The Borrower and each
Subsidiary is in compliance with (a) all applicable laws, rules, regulations and
orders of any Governmental Authority, and (b) all indentures, agreements or
other instruments binding upon it or its properties, except where
non-compliance, either singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

<PAGE>
         SECTION 4.7       Investment Company Act, Etc. Neither the Borrower
nor any of its Subsidiaries is (a) an "investment company", as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended,
(b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended, or (c) otherwise
subject to any other regulatory scheme limiting its ability to incur debt.

         SECTION 4.8       Taxes. The Borrower and its Subsidiaries have timely
filed or caused to be filed (or have obtained permitted extensions for) all
Federal income tax returns and, to the knowledge of the Borrower, have filed or
caused to be filed (or have obtained permitted extensions for) all other
material tax returns that are required to be filed by them, and have paid all
taxes shown to be due and payable on such returns or on any assessments made
against it or its property and all other taxes, fees or other charges imposed
on it or any of its property by any Governmental Authority, except (i) to the
extent the failure to do so would not have a Material Adverse Effect, or (ii)
where the same are currently being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as the case may be,
has set aside on its books adequate reserves.

         SECTION 4.9       Margin Regulations. None of the proceeds of any of
the Loans or Letters of Credit will be used for "purchasing" or "carrying" any
"margin stock" within the respective meanings of each of such terms under
Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the applicable Margin Regulations.

         SECTION 4.10      ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such amounts, exceed by
more than $300,000.00 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $300,000.00 the fair market value
of the assets of all such underfunded Plans.

         SECTION 4.11      Ownership of Property.

                  (a)      Each of the Borrower and its Subsidiaries has good
         title to, or valid leasehold interests in, all of its real and
         personal property material to the operation of its business.

                  (b)      Each of the Borrower and its Subsidiaries owns, or
         is licensed, or otherwise has the right, to use, all material patents,
         trademarks, service marks, tradenames, copyrights and other
         intellectual property material to its business, and the use thereof by
         the Borrower and its Subsidiaries does not infringe on the rights of
         any other Person, except for any such infringements that, individually
         or in the aggregate, would not have a Material Adverse Effect.

<PAGE>

         SECTION 4.12      Disclosure.

                  (a)      The Borrower has disclosed to the Lenders all
         agreements, instruments, and corporate or other restrictions to which
         the Borrower or any of its Subsidiaries is subject, and all other
         matters known to any of them, that, individually or in the aggregate,
         could reasonably be expected to result in a Material Adverse Effect.
         None of the reports (including without limitation all reports that the
         Borrower is required to file with the Securities and Exchange
         Commission), financial statements, certificates or other information
         furnished by or on behalf of the Borrower to the Administrative Agent
         or any Lender in connection with the negotiation or syndication of
         this Agreement or any other Loan Document or delivered hereunder or
         thereunder (as modified or supplemented by any other information so
         furnished) contains any material misstatement of fact or omits to
         state any material fact necessary to make the statements therein,
         taken as a whole, in light of the circumstances under which they were
         made, not misleading.

                  (b)      The financial projections and other pro forma
         financial information contained in the information referred to in
         subsection (a) above were based on good faith estimates and
         assumptions believed by the Borrower to be reasonable at the time made
         and at the time furnished to the Administrative Agent and the Lenders,
         it being recognized by the Administrative Agent and the Lenders that
         such projections and other pro forma financial information as to
         future events may differ from the actual results for such period or
         periods.

         SECTION 4.13      Labor Relations. There are no strikes, lockouts or
other labor disputes or grievances against the Borrower or any of its
Subsidiaries, or, to the Borrower's knowledge, threatened against or affecting
the Borrower or any of its Subsidiaries, and no unfair labor practice, charges
or grievances are pending against the Borrower or any of its Subsidiaries, or
to the Borrower's knowledge, threatened against any of them before any
Governmental Authority, which individually or in the aggregate, would result in
a Material Adverse Effect. All payments due from the Borrower or any of its
Subsidiaries pursuant to the provisions of any collective bargaining agreement
have been paid or accrued as a liability on the books of the Borrower or any
such Subsidiary, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

         SECTION 4.14      Subsidiaries. Schedule 4.14 sets forth the name of,
the ownership interest of the Borrower in, the jurisdiction of incorporation
of, and the type of, each Subsidiary and identifies each Subsidiary that is a
Subsidiary Loan Party, in each case as of the Closing Date.

                                   ARTICLE V

                             AFFIRMATIVE COVENANTS

         The Borrower covenants and agrees that so long as any Lender has a
Commitment hereunder or the principal of and interest on any Loan or any fee or
any LC Disbursement remains unpaid or any Letter of Credit remains outstanding:

         SECTION 5.1       Financial Statements and Other Information. The
Borrower will deliver to the Administrative Agent and each Lender:

<PAGE>

                  (a)      as soon as available and in any event within ninety
         (90) days after the end of each fiscal year of Borrower, a copy of the
         annual audited report for such fiscal year for the Borrower and its
         Subsidiaries, containing a consolidated balance sheet of the Borrower
         and its Subsidiaries as of the end of such fiscal year and the related
         consolidated statements of income, stockholders' equity and cash flows
         (together with all footnotes thereto) of the Borrower and its
         Subsidiaries for such fiscal year, setting forth in each case in
         comparative form the figures for the previous fiscal year, all in
         reasonable detail and reported on by Deloitte & Touche LLP or other
         independent public accountants of nationally recognized standing
         (without a "going concern" or like qualification, exception or
         explanation and without any qualification or exception as to scope of
         such audit) to the effect that such financial statements present
         fairly in all material respects the financial condition and the
         results of operations of the Borrower and its Subsidiaries for such
         fiscal year on a consolidated basis in accordance with GAAP and that
         the examination by such accountants in connection with such
         consolidated financial statements has been made in accordance with
         generally accepted auditing standards;

                  (b)      as soon as available and in any event within
         forty-five (45) days after the end of each of the first three fiscal
         quarters of each fiscal year of the Borrower, an unaudited
         consolidated balance sheet of the Borrower and its Subsidiaries as of
         the end of such fiscal quarter and the related unaudited consolidated
         statements of income and cash flows of the Borrower and its
         Subsidiaries for such fiscal quarter and the then elapsed portion of
         such fiscal year, setting forth in each case in comparative form the
         figures for the corresponding quarter and the corresponding portion of
         Borrower's previous fiscal year, all certified by a Responsible
         Officer as presenting fairly in all material respects the financial
         condition and results of operations of the Borrower and its
         Subsidiaries on a consolidated basis in accordance with GAAP, subject
         to normal year-end audit adjustments and the absence of footnotes;

                  (c)      concurrently with the delivery of the financial
         statements referred to in clauses (a) and (b) above, a certificate of
         a Responsible Officer, (i) certifying as to whether there exists a
         Default or Event of Default on the date of such certificate, and if a
         Default or an Event of Default then exists, specifying the details
         thereof and the action which the Borrower has taken or proposes to
         take with respect thereto, (ii) setting forth in reasonable detail
         calculations demonstrating compliance with Article VI, and (iii)
         stating whether any change in GAAP or the application thereof has
         occurred since the date of the Borrower's audited financial statements
         referred to in Section 4.4 and, if any change has occurred, specifying
         the effect of such change on the financial statements accompanying
         such certificate;

                  (d)      concurrently with the delivery of the financial
         statements referred to in clause (a) above, a certificate of the
         accounting firm that reported on such financial statements stating
         whether they obtained any knowledge during the course of their
         examination of such financial statements of any Default or Event of
         Default (which certificate may be limited to the extent required by
         accounting rules or guidelines);

                  (e)      promptly after the same become publicly available,
         copies of all periodic and other reports, proxy statements and other
         materials filed with the Securities and

<PAGE>

         Exchange Commission, or any Governmental Authority succeeding to any
         or all functions of said Commission, or with any national securities
         exchange, or distributed by the Borrower to its shareholders
         generally, as the case may be;

                  (f)      concurrently with the delivery of the financial
         statements referred to in clause (a) above, a copy of the Borrower's
         proposed annual budget and financial projections;

                  (g)      concurrently with a request for a Borrowing or a
         request for the issuance of a Letter of Credit and on the fifteenth
         (15th) day of each March, June, September, and December, the Borrower
         shall deliver to the Administrative Agent a Borrowing Base
         Certificate;

                  (h)      on the fifteenth (15th) day of each March, June,
         September, and December, the Borrower shall deliver to the
         Administrative Agent, in a form reasonably acceptable to the
         Administrative Agent, a listing and aging of Borrower's accounts
         receivable; and

                  (i)      promptly following any request therefor, such other
         information regarding the results of operations, business affairs and
         financial condition of the Borrower or any Subsidiary as the
         Administrative Agent or any Lender may reasonably request.

         SECTION 5.2       Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of
the following:

                  (a)      the occurrence of any Default or Event of Default;

                  (b)      the filing or commencement of any action, suit or
         proceeding by or before any arbitrator or Governmental Authority
         against or, to the knowledge of the Borrower, affecting the Borrower
         or any Subsidiary which, if adversely determined, could reasonably be
         expected to result in a Material Adverse Effect;

                  (c)      the occurrence of any event or any other development
         by which the Borrower or any of its Subsidiaries (i) fails to comply
         with any Environmental Law or to obtain, maintain or comply with any
         permit, license or other approval required under any Environmental
         Law, (ii) becomes subject to any Environmental Liability, (iii)
         receives notice of any claim with respect to any Environmental
         Liability, or (iv) becomes aware of any basis for any Environmental
         Liability, and in each of the preceding clauses, which individually or
         in the aggregate could reasonably be expected to result in a Material
         Adverse Effect;

                  (d)      the occurrence of any ERISA Event that alone, or
         together with any other ERISA Events that have occurred, could
         reasonably be expected to result in liability of the Borrower and its
         Subsidiaries in an aggregate amount exceeding $300,000.00; and

                  (e)      any other development that results in, or could
         reasonably be expected to result in, a Material Adverse Effect.

<PAGE>

         Each notice delivered under this Section shall be accompanied by a
written statement of a Responsible Officer setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.

         SECTION 5.3       Existence; Conduct of Business. The Borrower will,
and will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and maintain in full force and effect its legal
existence and its respective rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
business, where the failure to do so would have a Material Adverse Effect, and
will continue to engage in substantially the same business as presently
conducted or such other businesses that are reasonably related thereto;
provided that nothing in this Section shall prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 7.3.

         SECTION 5.4       Compliance with Laws, Etc. The Borrower will, and
will cause each of its Subsidiaries to, comply with all laws, rules,
regulations and requirements of any Governmental Authority applicable to its
properties, except where the failure to do so, either individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

         SECTION 5.5       Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay and discharge at or before maturity, all
of its obligations and liabilities (including without limitation all tax
liabilities and claims that could result in a statutory Lien) before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP, and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.

         SECTION 5.6       Books and Records. The Borrower will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries shall be made of all material dealings and
transactions in relation to its business and activities to the extent necessary
to prepare the consolidated financial statements of Borrower in conformity with
GAAP.

         SECTION 5.7       Visitation, Inspection, Etc. The Borrower will, and
will cause each of its Subsidiaries to, permit any representative of the
Administrative Agent or any Lender, to visit and inspect its properties, to
examine its books and records and to make copies and take extracts therefrom,
and to discuss its affairs, finances and accounts with any of its officers and
with its independent certified public accountants, all at such reasonable times
and as often as the Administrative Agent or any Lender may reasonably request
after reasonable prior notice to the Borrower.

         SECTION 5.8       Maintenance of Properties; Insurance. The Borrower
will, and will cause each of its Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, except for ordinary wear and tear and except where the failure to do
so, either individually or it the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, and (b) maintain with financially sound
and reputable insurance companies, insurance with respect to its properties and
business, and the

<PAGE>

properties and business of its Subsidiaries, against loss or damage of the
kinds customarily insured against by companies in the same or similar
businesses operating in the same or similar locations.

         SECTION 5.9       Use of Proceeds and Letters of Credit. The Borrower
will use the proceeds of all Loans to finance working capital needs and for
other general corporate purposes of the Borrower and its Subsidiaries,
including, but not limited to, the use of Letters of Credit to guarantee
performance of fee refund provisions under contracts entered into by Borrower
with health plans. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that would violate any rule or
regulation of the Board of Governors of the Federal Reserve System, including
Regulations T, U or X. All Letters of Credit will be used for general corporate
purposes.

         SECTION 5.10      Bank Accounts. In consideration for the interest
rate offered herein and as additional collateral for the Loans, the Borrower
shall, and shall cause its Subsidiaries, to maintain its bank accounts and
investment accounts with the Administrative Agent; provided that it is
understood and agreed that the Borrower shall deposit as escrow monies up to
$6,000,000 with Chase Manhattan Bank, N.A. pursuant to the terms of the
Administrative Services Agreement dated as of February 15, 2002, as amended, by
and among American Healthways Services, Inc., Oxford Health Plans, Inc. and
related entities. Upon the occurrence of an Event of Default, the
Administrative Agent is authorized to set-off (without prior notice to the
Borrower or its Subsidiaries) against all such bank accounts and to apply the
proceeds thereof to the Obligations.

         SECTION 5.11      Additional Subsidiaries. If any additional
Subsidiary is acquired or formed after the Closing Date, the Borrower will,
within ten (10) business days after such Subsidiary is acquired or formed,
notify the Administrative Agent and the Lenders thereof and will cause such
Subsidiary to become a Subsidiary Loan Party by executing agreements in the
form of Annex I to Exhibit F and Annex I to Exhibit G in form and substance
satisfactory to the Administrative Agent and the Required Lenders and will
cause such Subsidiary to deliver simultaneously therewith similar documents
applicable to such Subsidiary required under Section 3.1 as reasonably
requested by the Administrative Agent.

         SECTION 5.12      Additional Assets. Within ten (10) days after
receipt of written notice from the Administrative Agent, the Borrower and any
Subsidiary Loan Party shall execute such security agreements, collateral
assignments, deeds of trust, mortgages, pledge agreements, or similar
agreements, and take all such necessary steps (including filings and recordings
with appropriate governmental offices), all at the Borrower's expense, as
reasonably requested by the Administrative Agent to obtain on behalf of the
Lenders a Lien against any presently existing or hereafter acquired material
asset of the Borrower and each Subsidiary Loan Party.

<PAGE>

                                  ARTICLE VI

                              FINANCIAL COVENANTS

         The Borrower covenants and agrees that so long as any Lender has a
Commitment hereunder or the principal of or interest on or any Loan remains
unpaid or any fee or any LC Disbursement remains unpaid or any Letter of Credit
remains outstanding:

         SECTION 6.1       Leverage Ratio. The Borrower will have, as of the
end of each fiscal quarter (calculated for such quarter and the three prior
fiscal quarters) of the Borrower, a Leverage Ratio of not greater than 2.0 to
1.0:

         SECTION 6.2       Consolidated Fixed Charge Coverage Ratio. The
Borrower will have, as of the end of each fiscal quarter (calculated for such
quarter and the three prior fiscal quarters) of the Borrower, a Consolidated
Fixed Charge Coverage Ratio of not less than 2.0 to 1.0:

         SECTION 6.3       Consolidated Net Worth The Borrower will not permit
its Consolidated Net Worth at any time to be less than the sum of: (i)
$50,000,000.00, plus (ii) one hundred percent (100%) of the amount by which the
Borrower's "total stockholders' equity" is increased as a result of any public
or private offering of common stock of the Borrower after the Closing Date,
plus (iii) seventy-five percent (75%) of Consolidated Net Income on a
cumulative basis for all preceding fiscal quarters of the Borrower, commencing
with the fiscal quarter ended February 28, 2002; provided that if Consolidated
Net Income is negative in any fiscal quarter the amount attributed to
Consolidated Net Income for such fiscal quarter shall be zero and such negative
Consolidated Net Income shall not reduce the amount of Consolidated Net Income
added from any previous fiscal quarter. Promptly upon the consummation of any
public or private offering of common stock, the Borrower shall notify the
Administrative Agent in writing of the amount of such increase in "total
stockholders' equity".

         SECTION 6.4       MINIMUM LIQUIDITY. The Borrower will maintain at all
times at least $8,000,000.00 in cash, marketable securities, and unused
availability under the Revolving Commitments.

                                  ARTICLE VII

                               NEGATIVE COVENANTS

         The Borrower covenants and agrees that so long as any Lender has a
Commitment hereunder or the principal of or interest on any Loan remains unpaid
or any fee or any LC Disbursement remains unpaid or any Letter of Credit
remains outstanding:

         SECTION 7.1       Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness, except:

                  (a)      Indebtedness created pursuant to the Loan Documents;

                  (b)      Indebtedness existing on the date hereof and set
         forth on Schedule 7.1 and extensions, renewals and replacements of any
         such Indebtedness that do not increase the outstanding principal
         amount thereof (immediately prior to giving effect to such extension,
         renewal or replacement) or shorten the maturity or the weighted
         average life thereof;

<PAGE>

                  (c)      Indebtedness of the Borrower owing to any Subsidiary
         and of any Subsidiary owing to the Borrower or any other Subsidiary;
         provided that any such Indebtedness that is owed to a Subsidiary or by
         a Subsidiary shall be a domestic Subsidiary created and existing under
         the laws of a State of the United States, and provided, further, that
         any such Indebtedness that is owed to a Subsidiary that is not a
         Subsidiary Loan Party shall be subject to Section 7.4;

                  (d)      Indebtedness in respect of obligations under Hedging
         Agreements permitted by Section 7.10;

                  (e)      other unsecured Indebtedness in an aggregate
         principal amount not to exceed $1,000,000.00 at any time outstanding;
         and

                  (f)      Capital Lease Obligations and secured purchase money
         indebtedness not in excess of $2,000,000 in the aggregate.

         SECTION 7.2       Negative Pledge. Except for Liens granted to
Administrative Agent to secure the Indebtedness, the Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Lien on any of its assets or property now owned or hereafter acquired
or, except:

                  (a)      Permitted Encumbrances;

                  (b)      any Liens on any property or asset of the Borrower
         or any Subsidiary existing on the Closing Date set forth on Schedule
         7.2; provided that such Lien shall not apply to any other property or
         asset of the Borrower or any Subsidiary;

                  (c)      any Lien (i) existing on any asset of any Person at
         the time such Person becomes a Subsidiary of the Borrower, (ii)
         existing on any asset of any Person at the time such Person is merged
         with or into the Borrower or any Subsidiary of the Borrower or (iii)
         existing on any asset prior to the acquisition thereof by the Borrower
         or any Subsidiary of the Borrower; provided that any such Lien was not
         created in the contemplation of any of the foregoing and any such Lien
         secures only those obligations which it secures on the date that such
         Person becomes a Subsidiary or the date of such merger or the date of
         such acquisition; and

                  (d)      extensions, renewals, or replacements of any Lien
         referred to in paragraphs (a) through (c) of this Section; provided
         that the principal amount of the Indebtedness secured thereby is not
         increased and that any such extension, renewal or replacement is
         limited to the assets originally encumbered thereby.

         SECTION 7.3       Fundamental Changes.

                  (a)      The Borrower will not, and will not permit any
         Subsidiary to, merge into or consolidate into any other Person, or
         permit any other Person to merge into or consolidate with it, or sell,
         lease, transfer or otherwise dispose of (in a single transaction or a
         series of transactions) all or substantially all of its assets (in
         each case, whether now owned or hereafter acquired) or all or
         substantially all of the stock of any of its

<PAGE>

         Subsidiaries (in each case, whether now owned or hereafter acquired)
         or liquidate or dissolve; provided that if at the time thereof and
         immediately after giving effect thereto, no Default or Event of
         Default shall have occurred and be continuing (i) the Borrower or any
         Subsidiary may merge with a Person if the Borrower (or such Subsidiary
         if the Borrower is not a party to such merger) is the surviving
         Person, (ii) any Subsidiary may merge into another Subsidiary;
         provided that if any party to such merger is a Subsidiary Loan Party,
         a Subsidiary Loan Party shall be the surviving Person, (iii) any
         Subsidiary may sell, transfer, lease or otherwise dispose of all or
         substantially all of its assets to the Borrower or to a Subsidiary
         Loan Party and (iv) any Subsidiary (other than a Subsidiary Loan
         Party) may liquidate or dissolve if the Borrower determines in good
         faith that such liquidation or dissolution is in the best interests of
         the Borrower and is not materially disadvantageous to the Lenders;
         provided that any such merger involving a Person that is not a
         wholly-owned Subsidiary immediately prior to such merger shall not be
         permitted unless the corresponding Investment (as such term is defined
         in Section 7.4 below), if any, is also permitted by Section 7.4.

                  (b)      The Borrower will not, and will not permit any of
         its Subsidiaries to, engage to any material extent in any business
         other than businesses of the type conducted by the Borrower and its
         Subsidiaries on the date hereof and businesses reasonably related
         thereto.

         SECTION 7.4       Investments, Loans, Etc. The Borrower will not, and
will not permit any of its Subsidiaries to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a wholly-owned
Subsidiary prior to such merger), any common stock, evidence of indebtedness or
other securities (including any option, warrant, or other right to acquire any
of the foregoing) of, make or permit to exist any loans or advances to,
Guarantee any obligations of, or make or permit to exist any investment or any
other interest in, any other Person (all of the foregoing being collectively
called "INVESTMENTS"), or purchase or otherwise acquire (in one transaction or
a series of transactions) any assets of any other Person that constitute a
business unit, except:

                  (a)      Investments (other than Permitted Investments)
         existing on the date hereof and set forth on Schedule 7.4 (including
         Investments in Subsidiaries);

                  (b)      Permitted Investments;

                  (c)      Guarantees with respect to or constituting
         Indebtedness permitted by Section 7.1;

                  (d)      loans or advances to employees, officers or
         directors of the Borrower or any Subsidiary in the ordinary course of
         business for travel, relocation and related expenses;

                  (e)      Hedging Agreements permitted by Section 7.10; and

                  (f)      Investments in any Person in which the consideration
         paid or exchanged in such Investment is not in excess of whichever of
         the following applies: (i) $2,000,000, if the sole consideration paid
         or exchanged is cash; (ii) an amount equal to fifteen percent

<PAGE>

         (15%) of Consolidated Net Worth, as calculated at the end of the most
         recent fiscal quarter, if the sole consideration paid or exchanged is
         stock; and (iii) $2,000,000 in cash and fifteen percent (15%) of
         Consolidated Net Worth, as calculated at the end of the most recent
         fiscal quarter, if the consideration paid or exchanged consists of a
         combination of cash and stock.

         SECTION 7.5       Restricted Payments. The Borrower will not, and will
not permit its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any dividend on any class of its stock, or make any
payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, retirement, defeasance or other acquisition
of, any shares of common stock or Indebtedness subordinated to the Obligations
of the Borrower or any options, warrants, or other rights to purchase such
common stock or such Indebtedness, whether now or hereafter outstanding (each,
a "RESTRICTED PAYMENT"), except for (i) dividends payable by the Borrower
solely in shares of any class of its common stock, (ii) Restricted Payments
made by any Subsidiary to the Borrower, and (iii) cash redemptions of the
common stock of the Borrower; provided that (a) no Default or Event of Default
has occurred and is continuing at the time such redemption is made, and (b) no
more than $3,000,000.00 in the aggregate is paid for stock redemptions during
the term of the Revolving Loans.

         SECTION 7.6       Sale of Assets. The Borrower will not, and will not
permit any of its Subsidiaries to, convey, sell, lease, assign, transfer or
otherwise dispose of, any of its assets, business or property, whether now
owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell
any shares of such Subsidiary's common stock to any Person other than the
Borrower or any Subsidiary of the Borrower, except:

                  (a)      the sale or other disposition for fair market value
         of obsolete or worn out property or other property not necessary for
         operations disposed of in the ordinary course of business;

                  (b)      the sale of inventory and Permitted Investments in
         the ordinary course of business; and

                  (c)      transactions permitted by Section 7.3(a) herein.

         SECTION 7.7       Transactions with Affiliates. The Borrower will not,
and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with,
any of its Affiliates, except (a) in the ordinary course of business at prices
and on terms and conditions not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm's-length basis from unrelated third
parties, (b) transactions between or among the Borrower and its Subsidiaries
not involving any other Affiliates, or (c) any Restricted Payment permitted by
Section 7.5.

         SECTION 7.8       Restrictive Agreements. The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement that prohibits, restricts or imposes any
condition upon (a) the ability of the Borrower or any Subsidiary to create,
incur or permit any Lien upon any of its assets or properties, whether now

<PAGE>

owned or hereafter acquired, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to its common stock, to make or
repay loans or advances to the Borrower or any other Subsidiary, to Guarantee
Indebtedness of the Borrower or any other Subsidiary or to transfer any of its
property or assets to the Borrower or any Subsidiary of the Borrower; provided
that (i) the foregoing shall not apply to restrictions or conditions imposed by
law or by this Agreement or any other Loan Document, (ii) the foregoing shall
not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is sold and such
sale is permitted hereunder, (iii) clause (a) shall not apply to restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions and conditions apply only to
the property or assets securing such Indebtedness and (iv) clause (a) shall not
apply to customary provisions in real property or equipment leases restricting
the assignment thereof.

         SECTION 7.9       Sale and Leaseback Transactions. The Borrower will
not, and will not permit any of the Subsidiaries to, enter into any
arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned
or hereinafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred.

         SECTION 7.10      Hedging Agreements. Unless such is approved by the
Administrative Agent in the exercise of its reasonable discretion, the Borrower
will not, and will not permit any of the Subsidiaries to, enter into any
Hedging Agreement.

         SECTION 7.11      Status of Incorporation. The Borrower will not nor
will it permit any Subsidiary to change its state of incorporation.

         SECTION 7.12      Accounting Changes. Subject to Section 1.3, the
Borrower will not, and will not permit any Subsidiary to, make any significant
change in accounting treatment or reporting practices, except as required by
GAAP, or change the fiscal year of the Borrower or of any Subsidiary, except to
change the fiscal year of a Subsidiary to conform its fiscal year to that of
the Borrower.

                                 ARTICLE VIII

                               EVENTS OF DEFAULT

         SECTION 8.1       Events of Default. If any of the following events
(each an "Event of Default") shall occur:

                  (a)      the Borrower shall fail to pay any principal of any
         Loan or of any reimbursement obligation in respect of any LC
         Disbursement within ten (10) days following the date such payment
         became due and payable, whether at the due date thereof or at a date
         fixed for prepayment or otherwise; or

                  (b)      the Borrower shall fail to pay any interest on any
         Loan or any fee or any other amount (other than an amount payable
         under clause (a) of this Article) payable under this Agreement or any
         other Loan Document, when and as the same shall become

<PAGE>

         due and payable, and such failure shall continue unremedied for a
         period of ten (10) Business Days; or

                  (c)      any representation or warranty made or deemed made
         by or on behalf of the Borrower or any Subsidiary in or in connection
         with this Agreement or any other Loan Document (including the
         Schedules attached thereto) and any amendments or modifications hereof
         or waivers hereunder, or in any certificate, report, financial
         statement or other document submitted to the Administrative Agent or
         the Lenders by any Loan Party or any representative of any Loan Party
         pursuant to or in connection with this Agreement or any other Loan
         Document shall prove to be incorrect when made or deemed made or
         submitted; or

                  (d)      the Borrower shall fail to observe or perform any
         covenant or agreement contained in Sections 5.2, 5.3 (with respect to
         the Borrower's existence) or Articles VI or VII; or

                  (e)      any Loan Party shall fail to observe or perform any
         covenant or agreement contained in this Agreement (other than those
         referred to in clauses (a), (b) and (d) above) or any other Loan
         Document, and such failure shall remain unremedied for 30 days after
         the earlier of (i) any Responsible Officer obtains actual knowledge or
         reasonably should have obtained actual knowledge of such failure, or
         (ii) written notice thereof shall have been given to the Borrower by
         the Administrative Agent or any Lender; or

                  (f)      the Borrower or any Subsidiary (whether as primary
         obligor or as guarantor or other surety) shall fail to pay any
         principal of or premium or interest on any Material Indebtedness that
         is outstanding, when and as the same shall become due and payable
         (whether at scheduled maturity, required prepayment, acceleration,
         demand or otherwise), and such failure shall continue after the
         applicable grace period, if any, specified in the agreement or
         instrument evidencing such Indebtedness; or any other event shall
         occur or condition shall exist under any agreement or instrument
         relating to such Indebtedness and shall continue after the applicable
         grace period, if any, specified in such agreement or instrument, if
         the effect of such event or condition is to accelerate, or permit the
         acceleration of, the maturity of such Indebtedness; or any such
         Indebtedness shall be declared to be due and payable; or required to
         be prepaid or redeemed (other than by a regularly scheduled required
         prepayment or redemption), purchased or defeased, or any offer to
         prepay, redeem, purchase or defease such Indebtedness shall be
         required to be made, in each case prior to the stated maturity
         thereof; or

                  (g)      the Borrower or any Subsidiary shall (i) commence a
         voluntary case or other proceeding or file any petition seeking
         liquidation, reorganization or other relief under any federal, state
         or foreign bankruptcy, insolvency or other similar law now or
         hereafter in effect or seeking the appointment of a custodian,
         trustee, receiver, liquidator or other similar official of it or any
         substantial part of its property, (ii) consent to the institution of,
         or fail to contest in a timely and appropriate manner, any proceeding
         or petition described in clause (i) of this Section, (iii) apply for
         or consent to the appointment of a custodian, trustee, receiver,
         liquidator or other similar official for the Borrower or any such
         Subsidiary or for a substantial part of its assets, (iv) file an
         answer

<PAGE>

         admitting the material allegations of a petition filed against it in
         any such proceeding, (v) make a general assignment for the benefit of
         creditors, or (vi) take any action for the purpose of effecting any of
         the foregoing; or

                  (h)      an involuntary proceeding shall be commenced or an
         involuntary petition shall be filed seeking (i) liquidation,
         reorganization or other relief in respect of the Borrower or any
         Subsidiary or its debts, or any substantial part of its assets, under
         any federal, state or foreign bankruptcy, insolvency or other similar
         law now or hereafter in effect or (ii) the appointment of a custodian,
         trustee, receiver, liquidator or other similar official for the
         Borrower or any Subsidiary or for a substantial part of its assets,
         and in any such case, such proceeding or petition shall remain
         undismissed for a period of 60 days or an order or decree approving or
         ordering any of the foregoing shall be entered; or

                  (i)      the Borrower or any Subsidiary shall admit in
         writing its inability to pay its debts as they become due; or

                  (j)      an ERISA Event shall have occurred that, in the
         opinion of the Required Lenders, when taken together with other ERISA
         Events that have occurred, could reasonably be expected to result in
         liability to the Borrower and the Subsidiaries in an aggregate amount
         exceeding $300,000.00; or

                  (k)      any judgment or order for the payment of money in
         excess of $300,000.00 in the aggregate shall be rendered against the
         Borrower or any Subsidiary, and either (i) enforcement proceedings
         shall have been commenced by any creditor upon such judgment or order
         or (ii) there shall be a period of thirty (30) consecutive days during
         which a stay of enforcement of such judgment or order, by reason of a
         pending appeal or otherwise, shall not be in effect; or

                  (l)      any non-monetary judgment or order shall be rendered
         against the Borrower or any Subsidiary that could reasonably be
         expected to have a Material Adverse Effect, and there shall be a
         period of thirty (30) consecutive days during which a stay of
         enforcement of such judgment or order, by reason of a pending appeal
         or otherwise, shall not be in effect; or

                  (m)      a Change in Control shall occur or exist; or

                  (n)      any provision of any Subsidiary Guarantee Agreement
         shall for any reason cease to be valid and binding on, or enforceable
         against, any Subsidiary Loan Party, or any Subsidiary Loan Party shall
         so state in writing, or any Subsidiary Loan Party shall seek to
         terminate its Subsidiary Guarantee Agreement without the written
         consent of the Lenders; or

                  (o)      an Event of Default shall occur under any other
         agreements evidencing Indebtedness owed to any of the Lenders or under
         any Hedging Agreement executed with any of the Lenders (taking into
         account any applicable notice and cure or grace period provisions
         thereof);

<PAGE>

then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Section) and at any time thereafter
during the continuance of such event, the Administrative Agent may, and upon
the written request of the Required Lenders shall, by notice to the Borrower,
take any or all of the following actions, at the same or different times: (i)
terminate the Commitments, whereupon the Commitment of each Lender shall
terminate immediately; (ii) declare the principal of and any accrued interest
on the Loans, and all other Obligations owing hereunder, to be, whereupon the
same shall become due and payable immediately, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower and (iii) exercise all remedies contained in any other Loan Document;
and that, if an Event of Default specified in either clause (g) or (h) shall
occur, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon, and all fees,
and all other Obligations shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.

                                  ARTICLE IX

                            THE ADMINISTRATIVE AGENT

         SECTION 9.1       Appointment of Administrative Agent.

                  (a)      Each Lender irrevocably appoints SunTrust Bank as
         the Administrative Agent and authorizes it to take such actions on its
         behalf and to exercise such powers as are delegated to the
         Administrative Agent under this Agreement and the other Loan
         Documents, together with all such actions and powers that are
         reasonably incidental thereto. The Administrative Agent may perform
         any of its duties hereunder by or through any one or more sub-agents
         appointed by the Administrative Agent. The Administrative Agent and
         any such sub-agent may perform any and all of its duties and exercise
         its rights and powers through their respective Related Parties. The
         exculpatory provisions set forth in this Article shall apply to any
         such sub-agent and the Related Parties of the Administrative Agent and
         any such sub-agent and shall apply to their respective activities in
         connection with the syndication of the credit facilities provided for
         herein as well as activities as Administrative Agent.

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

<PAGE>

         SECTION 9.2       Nature of Duties of Administrative Agent. The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether
a Default or an Event of Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action
or exercise any discretionary powers, except those discretionary rights and
powers expressly contemplated by the Loan Documents that the Administrative
Agent is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.2), and (c) except as expressly set
forth in the Loan Documents, the Administrative Agent shall not have any duty
to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the Administrative Agent or any of its
Affiliates in any capacity. The Administrative Agent shall not be liable for
any action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 10.2) or in the
absence of its own gross negligence or willful misconduct. The Administrative
Agent shall not be deemed to have knowledge of any Default or Event of Default
unless and until written notice thereof is given to the Administrative Agent by
the Borrower or any Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or thereunder or in connection herewith or therewith, (iii)
the performance or observance of any of the covenants, agreements, or other
terms and conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article III or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to the Administrative
Agent.

         SECTION 9.3       Lack of Reliance on the Administrative Agent. Each
of the Lenders and the Issuing Bank acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each of the Lenders,
and the Issuing Bank also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, continue to make its
own decisions in taking or not taking of any action under or based on this
Agreement, any related agreement or any document furnished hereunder or
thereunder.

         SECTION 9.4       Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any action or actions (including the failure to act) in connection
with this Agreement, the Administrative Agent shall be entitled to refrain from
such act or taking such act, unless and until it shall have received
instructions from such Lenders; and the Administrative Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent

<PAGE>

acting or refraining from acting hereunder in accordance with the instructions
of the Required Lenders where required by the terms of this Agreement.

         SECTION 9.5       Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and to have been signed,
sent or made by the proper Person. The Administrative Agent may also rely upon
any statement made to it orally or by telephone and believed by it to be made
by the proper Person and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or not taken by it in accordance with
the advice of such counsel, accountants or experts.

         SECTION 9.6       The Administrative Agent in its Individual Capacity.
The bank serving as the Administrative Agent shall have the same rights and
powers under this Agreement and any other Loan Document in its capacity as a
Lender as any other Lender and may exercise or refrain from exercising the same
as though it were not the Administrative Agent; and the terms "Lenders",
"Required Lenders", "holders of Notes", or any similar terms shall, unless the
context clearly otherwise indicates, include the Administrative Agent in its
individual capacity. The bank acting as the Administrative Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if it were not the Administrative Agent hereunder.

         SECTION 9.7       Successor Administrative Agent.

                  (a)      The Administrative Agent may resign at any time by
         giving notice thereof to the Lenders and the Borrower. Upon any such
         resignation, the Required Lenders shall have the right to appoint a
         successor Administrative Agent, subject to the approval by the
         Borrower provided that no Default or Event of Default shall exist at
         such time. If no successor Administrative Agent shall have been so
         appointed, and shall have accepted such appointment within 30 days
         after the retiring Administrative Agent gives notice of resignation,
         then the retiring Administrative Agent may, on behalf of the Lenders
         and the Issuing Bank, appoint a successor Administrative Agent, which
         shall be a commercial bank organized under the laws of the United
         States of America or any state thereof or a bank which maintains an
         office in the United States, having a combined capital and surplus of
         at least $500,000,000.

                  (b)      Upon the acceptance of its appointment as the
         Administrative Agent hereunder by a successor, such successor
         Administrative Agent shall thereupon succeed to and become vested with
         all the rights, powers, privileges and duties of the retiring
         Administrative Agent, and the retiring Administrative Agent shall be
         discharged from its duties and obligations under this Agreement and
         the other Loan Documents. If within 45 days after written notice is
         given of the retiring Administrative Agent's resignation under this
         Section 9.7 no successor Administrative Agent shall have been
         appointed and shall have accepted such appointment, then on such 45th
         day (i) the retiring Administrative Agent's resignation shall become
         effective, (ii) the retiring Administrative Agent shall thereupon be
         discharged from its duties and obligations under the Loan Documents,
         and

<PAGE>

         (iii) the Required Lenders shall thereafter perform all duties of the
         retiring Administrative Agent under the Loan Documents until such time
         as the Required Lenders appoint a successor Administrative Agent as
         provided above. After any retiring Administrative Agent's resignation
         hereunder, the provisions of this Article IX shall continue in effect
         for the benefit of such retiring Administrative Agent and its
         representatives and agents in respect of any actions taken or not
         taken by any of them while it was serving as the Administrative Agent.

                                   ARTICLE X

                                 MISCELLANEOUS

         SECTION 10.1      Notices.

                  (a)      Except in the case of notices and other
         communications expressly permitted to be given by telephone, all
         notices and other communications to any party herein to be effective
         shall be in writing and shall be delivered by hand or overnight
         courier service, mailed by certified or registered mail or sent by
         telecopy, as follows:

                  To the Borrower:

                  To the Administrative Agent  SunTrust Bank
                  For All Purposes other than  201 Fourth Avenue North
                  Advances:                    P.O. Box 305110
                                               Mail Code: NA
                                                             ------------------
                                               Nashville, Tennessee 37230-5110
                                               Attention: Bill Priester
                                               Telecopy Number: (615)
                                                                     ----------

                  To the Administrative Agent  SunTrust Bank
                  For Advances Only:           201 Fourth Avenue North
                                               P.O. Box 305110
                                               Mail Code: NA
                                                             ------------------
                                               Nashville, Tennessee 37230-5110
                                               Attention: Leigh Ann Gregory
                                               Telecopy Number: (615)
                                                                     ----------

                  To the Issuing Bank:         SunTrust Bank
                                               201 Fourth Avenue North
                                               P.O. Box 305110
                                               Mail Code: NA
                                                             ------------------
                                               Nashville, Tennessee 37230-5110
                                               Attention: Bill Priester
                                               Telecopy Number: (615)
                                                                     ----------

                  To any other Lender:         the address set forth in the
                                               Administrative Questionnaire

<PAGE>

         Any party hereto may change its address or telecopy number for notices
         and other communications hereunder by notice to the other parties
         hereto. All such notices and other communications shall, when
         transmitted by overnight delivery, or faxed, be effective when
         delivered for overnight (next-day) delivery, or transmitted in legible
         form by facsimile machine, respectively, or if mailed, upon the third
         Business Day after the date deposited into the mails or if delivered,
         upon delivery; provided that notices delivered to the Administrative
         Agent, or the Issuing Bank shall not be effective until actually
         received by such Person at its address specified in this Section 10.1.

                  (b)      Any agreement of the Administrative Agent and the
         Lenders herein to receive certain notices by telephone or facsimile is
         solely for the convenience and at the request of the Borrower. The
         Administrative Agent and the Lenders shall be entitled to rely on the
         authority of any Person purporting to be a Person authorized by the
         Borrower to give such notice and the Administrative Agent and Lenders
         shall not have any liability to the Borrower or other Person on
         account of any action taken or not taken by the Administrative Agent
         or the Lenders in reliance upon such telephonic or facsimile notice.
         The obligation of the Borrower to repay the Loans and all other
         Obligations hereunder shall not be affected in any way or to any
         extent by any failure of the Administrative Agent and the Lenders to
         receive written confirmation of any telephonic or facsimile notice or
         the receipt by the Administrative Agent and the Lenders of a
         confirmation which is at variance with the terms understood by the
         Administrative Agent and the Lenders to be contained in any such
         telephonic or facsimile notice.

         SECTION 10.2      Waiver; Amendments.

                  (a)      No failure or delay by the Administrative Agent, the
         Issuing Bank or any Lender in exercising any right or power hereunder
         or any other Loan Document, and no course of dealing between the
         Borrower and the Administrative Agent or any Lender, shall operate as
         a waiver thereof, nor shall any single or partial exercise of any such
         right or power or any abandonment or discontinuance of steps to
         enforce such right or power, preclude any other or further exercise
         thereof or the exercise of any other right or power hereunder or
         thereunder. The rights and remedies of the Administrative Agent, the
         Issuing Bank and the Lenders hereunder and under the other Loan
         Documents are cumulative and are not exclusive of any rights or
         remedies provided by law. No waiver of any provision of this Agreement
         or any other Loan Document or consent to any departure by the Borrower
         therefrom shall in any event be effective unless the same shall be
         permitted by paragraph (b) of this Section, and then such waiver or
         consent shall be effective only in the specific instance and for the
         purpose for which given. Without limiting the generality of the
         foregoing, the making of a Loan or the issuance of a Letter of Credit
         shall not be construed as a waiver of any Default or Event of Default,
         regardless of whether the Administrative Agent, any Lender or the
         Issuing Bank may have had notice or knowledge of such Default or Event
         of Default at the time.

                  (b)      No amendment or waiver of any provision of this
         Agreement or the other Loan Documents, nor consent to any departure by
         the Borrower therefrom, shall in any event be effective unless the
         same shall be in writing and signed by the Borrower and the Required
         Lenders or the Borrower and the Administrative Agent with the consent
         of the

<PAGE>

         Required Lenders and then such waiver or consent shall be effective
         only in the specific instance and for the specific purpose for which
         given; provided that no amendment or waiver shall: (i) increase the
         Commitment of any Lender without the written consent of such Lender,
         (ii) reduce the principal amount of any Loan or LC Disbursement or
         reduce the rate of interest thereon, or reduce any fees payable
         hereunder, without the written consent of each Lender affected
         thereby, (iii) postpone the date fixed for any payment of any
         principal of, or interest on, any Loan or LC Disbursement or interest
         thereon or any fees hereunder or reduce the amount of, waive or excuse
         any such payment, or postpone the scheduled date for the termination
         or reduction of any Commitment, without the written consent of each
         Lender affected thereby, (iv) change Section 2.18(c) in a manner that
         would alter the pro rata sharing of payments required thereby ,
         without the written consent of each Lender, (v) change any of the
         provisions of this Section or the definition of "Required Lenders" or
         any other provision hereof specifying the number or percentage of
         Lenders which are required to waive, amend or modify any rights
         hereunder or make any determination or grant any consent hereunder,
         without the consent of each Lender; (vi) release any guarantor or
         limit the liability of any such guarantor under any guaranty
         agreement; (vii) release all or substantially all collateral (if any)
         securing any of the Obligations; provided further, that no such
         agreement shall amend, modify or otherwise affect the rights, duties
         or obligations of the Administrative Agent, or the Issuing Bank
         without the prior written consent of such Person.

         SECTION 10.3      Expenses; Indemnification.

                  (a)      The Borrower shall pay (i) all reasonable,
         out-of-pocket costs and expenses of the Administrative Agent,
         including the reasonable fees, charges and disbursements of counsel
         for the Administrative Agent, in connection with the syndication of
         the credit facilities provided for herein, the preparation and
         administration of the Loan Documents and any amendments, modifications
         or waivers thereof (whether or not the transactions contemplated in
         this Agreement or any other Loan Document shall be consummated), (ii)
         all reasonable out-of-pocket expenses incurred by the Issuing Bank in
         connection with the issuance, amendment, renewal or extension of any
         Letter of Credit or any demand for payment thereunder and (iii) all
         out-of-pocket costs and expenses (including, without limitation, the
         reasonable fees, charges and disbursements of outside counsel and the
         allocated cost of inside counsel) incurred by the Administrative Agent
         or the Issuing Bank in connection with the enforcement or protection
         of its rights in connection with this Agreement, including its rights
         under this Section, or in connection with the Loans made or any
         Letters of Credit issued hereunder, including all such out-of-pocket
         expenses incurred during any workout, restructuring or negotiations in
         respect of such Loans or Letters of Credit.

                  (b)      The Borrower shall indemnify the Administrative
         Agent, the Issuing Bank and each Lender, and each Related Party of any
         of the foregoing (each, an "INDEMNITEE") against, and hold each of
         them harmless from, any and all costs, losses, liabilities, claims,
         damages and related expenses, including the fees, charges and
         disbursements of any counsel for any Indemnitee, which may be
         reasonably incurred by or asserted against any Indemnitee arising out
         of, in connection with or as a result of (i) the execution or delivery
         of this Agreement or any other agreement or instrument contemplated
         hereby, the

<PAGE>

         performance by the parties hereto of their respective obligations
         hereunder or the consummation of any of the transactions contemplated
         hereby, (ii) any Loan or Letter of Credit or any actual or proposed
         use of the proceeds therefrom (including any refusal by the Issuing
         Bank to honor a demand for payment under a Letter of Credit if the
         documents presented in connection with such demand do not strictly
         comply with the terms of such Letter of Credit), (iii) any actual or
         alleged presence or release of Hazardous Materials on or from any
         property owned by the Borrower or any Subsidiary or any Environmental
         Liability related in any way to the Borrower or any Subsidiary or (iv)
         any actual or prospective claim, litigation, investigation or
         proceeding relating to any of the foregoing, whether based on
         contract, tort or any other theory and regardless of whether any
         Indemnitee is a party thereto; provided that the Borrower shall not be
         obligated to indemnify any Indemnitee for any of the foregoing arising
         out of such Indemnitee's gross negligence or willful misconduct as
         determined by a court of competent jurisdiction in a final and
         nonappealable judgment.

                  (c)      The Borrower shall pay, and hold the Administrative
         Agent and each of the Lenders harmless from and against, any and all
         present and future stamp, documentary, indebtedness taxes, and other
         similar taxes incurred with respect to perfecting its and their Liens
         in and against the Collateral.

                  (d)      To the extent that the Borrower fails to pay any
         amount required to be paid to the Administrative Agent, or the Issuing
         Bank under clauses (a), (b) or (c) hereof, each Lender severally
         agrees to pay to the Administrative Agent, or the Issuing Bank, as the
         case may be, such Lender's Pro Rata Share (determined as of the time
         that the unreimbursed expense or indemnity payment is sought) of such
         unpaid amount; provided that the unreimbursed expense or indemnified
         payment, claim, damage, liability or related expense, as the case may
         be, was incurred by or asserted against the Administrative Agent, the
         Issuing Bank in its capacity as such.

                  (e)      To the extent permitted by applicable law, the
         Borrower shall not assert, and hereby waives, any claim against any
         Indemnitee, on any theory of liability, for special, indirect,
         consequential or punitive damages (as opposed to actual or direct
         damages) arising out of, in connection with or as a result of, this
         Agreement or any agreement or instrument contemplated hereby, the
         transactions contemplated therein, any Loan or any Letter of Credit or
         the use of proceeds thereof.

                  (f)      All amounts due under this Section shall be payable
         promptly after written demand therefor.

         SECTION 10.4      Successors and Assigns.

                  (a)      The provisions of this Agreement shall be binding
         upon and inure to the benefit of the parties hereto and their
         respective successors and assigns, except that the Borrower may not
         assign or transfer any of its rights hereunder without the prior
         written consent of each Lender (and any attempted assignment or
         transfer by the Borrower without such consent shall be null and void).

<PAGE>

                  (b)      Any Lender may at any time assign to one or more
         assignees all or a portion of its rights and obligations under this
         Agreement and the other Loan Documents (including all or a portion of
         its Commitment and the Loans and LC Exposure at the time owing to it);
         provided that (i) except in the case of an assignment to a Lender or
         an Affiliate of a Lender, each of the Borrower and the Administrative
         Agent (and, in the case of an assignment of all or a portion of a
         Commitment or any Lender's obligations in respect of its LC Exposure,
         the Issuing Bank) must give their prior written consent (which consent
         shall not be unreasonably withheld or delayed), (ii) except in the
         case of an assignment to a Lender or an Affiliate of a Lender or an
         assignment of the entire amount of the assigning Lender's Commitment
         hereunder or an assignment while an Event of Default has occurred and
         is continuing, the amount of the Commitment of the assigning Lender
         subject to each such assignment (determined as of the date the
         Assignment and Acceptance with respect to such assignment is delivered
         to the Administrative Agent) shall not be less than $5,000,000.00
         (unless the Borrower and the Administrative Agent shall otherwise
         consent), (iii) each partial assignment shall be made as an assignment
         of a proportionate part of all the assigning Lender's rights and
         obligations under this Agreement and the other Loan Documents, (iv)
         the assigning Lender and the assignee shall execute and deliver to the
         Administrative Agent an Assignment and Acceptance, together with a
         processing and recordation fee payable by the assigning Lender or the
         assignee (as determined between such Persons) in an amount equal to
         $3,500 and (v) such assignee, if it is not a Lender, shall deliver a
         duly completed Administrative Questionnaire to the Administrative
         Agent; provided that any consent of the Borrower otherwise required
         hereunder shall not be required if an Event of Default has occurred
         and is continuing. Upon the execution and delivery of the Assignment
         and Acceptance and payment by such assignee to the assigning Lender of
         an amount equal to the purchase price agreed between such Persons,
         such assignee shall become a party to this Agreement and any other
         Loan Documents to which such assigning Lender is a party and, to the
         extent of such interest assigned by such Assignment and Acceptance,
         shall have the rights and obligations of a Lender under this
         Agreement, and the assigning Lender shall be released from its
         obligations hereunder to a corresponding extent (and, in the case of
         an Assignment and Acceptance covering all of the assigning Lender's
         rights and obligations under this Agreement, such Lender shall cease
         to be a party hereto but shall continue to be entitled to the benefits
         of Sections 2.14, 2.15 and 2.16 and 10.3. Upon the consummation of any
         such assignment hereunder, the assigning Lender, the Administrative
         Agent and the Borrower shall make appropriate arrangements to have new
         Notes issued if so requested by either or both the assigning Lender or
         the assignee. Any assignment or other transfer by a Lender that does
         not fully comply with the terms of this clause (b) shall be treated
         for purposes of this Agreement as a sale of a participation pursuant
         to clause (c) below.

                  (c)      Any Lender may at any time, without the consent of
         the Borrower, the Administrative Agent, or the Issuing Bank, sell
         participations to one or more banks or other entities (a
         "Participant") in all or a portion of such Lender's rights and
         obligations under this Agreement (including all or a portion of its
         Commitment, the Loans owing to it and its LC Exposure); provided that
         (i) such Lender's obligations under this Agreement shall remain
         unchanged, (ii) such Lender shall remain solely responsible to the
         other parties hereto for the performance of its obligations hereunder,
         and (iii) the Borrower, the

<PAGE>

         Administrative Agent, the Issuing Bank and the other Lenders shall
         continue to deal solely and directly with such Lender in connection
         with such Lender's rights and obligations under this Agreement and the
         other Loan Documents. Any agreement between such Lender and the
         Participant with respect to such participation shall provide that such
         Lender shall retain the sole right and responsibility to enforce this
         Agreement and the other Loan Documents and the sole right to approve
         any amendment, modification, consent, or waiver regarding this
         Agreement and the other Loan Documents; provided that such
         participation agreement may provide that such Lender will not, without
         the consent of the Participant, agree to any amendment, modification
         or waiver of this Agreement described in the first proviso of Section
         10.2(b) that affects the Participant.

                  (d)      Any Lender may at any time pledge or assign a
         security interest in all or any portion of its rights under this
         Agreement and its Notes (if any) to secure its obligations to a
         Federal Reserve Bank without complying with this Section; provided
         that no such pledge or assignment shall release a Lender from any of
         its obligations hereunder or substitute any such pledgee or assignee
         for such Lender as a party hereto.

                  (e)      Notwithstanding anything to the contrary contained
         herein, any Lender (a "Granting Lender") may grant to a special
         purpose funding vehicle (an "SPV"), identified as such in writing from
         time to time by the Granting Lender to the Administrative Agent and
         the Borrower, the option to provide to the Borrower all or any part of
         any Loan that such Granting Lender would otherwise be obligated to
         make to the Borrower pursuant to this Agreement; provided that (i)
         nothing herein shall constitute a commitment by any SPV to make any
         Loan and (ii) if an SPV elects not to exercise such option or
         otherwise fails to provide all or any part of any Loan, the Granting
         Lender shall be obligated to make such Loan pursuant to the terms
         hereof. The making of a Loan by an SPV hereunder shall utilize the
         Commitment of the Granting Lender to the same extent, and as if such
         Loan were made by such Granting Lender. Each party hereto hereby
         agrees that no SPV shall be liable for any indemnity or similar
         payment obligation under this Agreement (all liability for which shall
         remain with the Granting Lender). In furtherance of the foregoing,
         each party hereto hereby agrees (which agreement shall survive the
         termination of this Agreement) that, prior to the date that is one
         year and one day after the payment in full of all outstanding
         commercial paper or other senior indebtedness of any SPV, it will not
         institute against, or join any other person in instituting against,
         such SPV any bankruptcy, reorganization, arrangement, insolvency or
         liquidation proceedings under the laws of the United States or any
         State. Notwithstanding anything to the contrary contained in this
         Section 10.4, any SPV may (i) with notice to, but without the prior
         written consent of, the Borrower and the Administrative Agent and
         without paying any processing fee therefor, assign all or a portion of
         its interests in any Loans to the Granting Lender or to any financial
         institutions (consented to by the Borrower and the Administrative
         Agent) providing liquidity and/or credit support to or for the account
         of such SPV to support the funding or maintenance of Loans and (ii)
         disclose on a confidential basis any non-public information relating
         to its Loans to any rating agency, commercial paper dealer or provider
         of any surety, guarantee or credit or liquidity enhancement to such
         SPV. As this Section 10.4(e) applies to any particular SPV, this
         Section may not be amended without the written consent of such SPV.

<PAGE>

         SECTION 10.5      Governing Law; Jurisdiction; Consent to Service of
Process.

                  (a)      This Agreement and the other Loan Documents shall be
         construed in accordance with and be governed by the law (without
         giving effect to the conflict of law principles thereof) of the State
         of Tennessee.

                  (b)      The Borrower hereby irrevocably and unconditionally
         submits, for itself and its property, to the non-exclusive
         jurisdiction of the United States District Court of the Middle
         District of Tennessee, and of any state court of the State of
         Tennessee located in Davidson County and any appellate court from any
         thereof, in any action or proceeding arising out of or relating to
         this Agreement or any other Loan Document or the transactions
         contemplated hereby or thereby, or for recognition or enforcement of
         any judgment, and each of the parties hereto hereby irrevocably and
         unconditionally agrees that all claims in respect of any such action
         or proceeding may be heard and determined in such Tennessee state
         court or, to the extent permitted by applicable law, such Federal
         court. Each of the parties hereto agrees that a final judgment in any
         such action or proceeding may be enforced in other jurisdictions by
         suit on the judgment or in any other manner provided by law. Nothing
         in this Agreement or any other Loan Document shall affect any right
         that the Administrative Agent, the Issuing Bank or any Lender may
         otherwise have to bring any action or proceeding relating to this
         Agreement or any other Loan Document against the Borrower or its
         properties in the courts of any jurisdiction.

                  (c)      The Borrower irrevocably and unconditionally waives
         any objection which it may now or hereafter have to the laying of
         venue of any such suit, action or proceeding described in paragraph
         (b) of this Section and brought in any court referred to in paragraph
         (b) of this Section. Each of the parties hereto irrevocably waives, to
         the fullest extent permitted by applicable law, the defense of an
         inconvenient forum to the maintenance of such action or proceeding in
         any such court.

                  (d)      Each party to this Agreement irrevocably consents to
         the service of process in the manner provided for notices in Section
         10.1. Nothing in this Agreement or in any other Loan Document will
         affect the right of any party hereto to serve process in any other
         manner permitted by law.

         SECTION 10.6      WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

<PAGE>

         SECTION 10.7      Right of Setoff. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, each Lender and the Issuing Bank shall have the right, at any time or
from time to time upon the occurrence and during the continuance of an Event of
Default, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, to set off
and apply against all deposits (general or special, time or demand, provisional
or final) of the Borrower at any time held or other obligations at any time
owing by such Lender and the Issuing Bank to or for the credit or the account
of the Borrower against any and all Obligations held by such Lender or the
Issuing Bank, as the case may be, irrespective of whether such Lender or the
Issuing Bank shall have made demand hereunder and although such Obligations may
be unmatured. Each Lender and the Issuing Bank agree promptly to notify the
Administrative Agent and the Borrower after any such set-off and any
application made by such Lender and the Issuing Bank, as the case may be;
provided that the failure to give such notice shall not affect the validity of
such set-off and application.

         SECTION 10.8      Counterparts; Integration. This Agreement may be
executed by one or more of the parties to this Agreement on any number of
separate counterparts (including by telecopy), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. This
Agreement, the other Loan Documents, and any separate letter agreement(s)
relating to any fees payable to the Administrative Agent constitute the entire
agreement among the parties hereto and thereto regarding the subject matters
hereof and thereof and supersede all prior agreements and understandings, oral
or written, regarding such subject matters.

         SECTION 10.9      Survival. All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect
as long as the principal of or any accrued interest on any Loan or any fee or
any other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.15, 2.16, 2.17, and 10.3 and
Article IX shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

         SECTION 10.10     Severability. Any provision of this Agreement or any
other Loan Document held to be illegal, invalid or unenforceable in any
jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of
such illegality, invalidity or unenforceability without affecting the legality,
validity or enforceability of the remaining provisions hereof or thereof; and
the illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

<PAGE>

         SECTION 10.11     Confidentiality. Each of the Administrative Agent,
the Issuing Bank and each Lender agrees to take normal and reasonable
precautions to maintain the confidentiality of any information designated in
writing as confidential and provided to it by the Borrower or any Subsidiary,
except that such information may be disclosed (i) to any Related Party of the
Administrative Agent, the Issuing Bank or any such Lender, including without
limitation accountants, legal counsel and other advisors, (ii) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (iii) to the extent requested by any regulatory agency or authority
having jurisdiction, (iv) to the extent that such information becomes publicly
available other than as a result of a breach of this Section, or which becomes
available to the Administrative Agent, the Issuing Bank, any Lender or any
Related Party of any of the foregoing on a nonconfidential basis from a source
other than the Borrower, (v) in connection with the exercise of any remedy
hereunder or any suit, action or proceeding relating to this Agreement or the
enforcement of rights hereunder, and (ix) subject to provisions substantially
similar to this Section 10.11, to any actual or prospective assignee or
Participant, or (vi) with the consent of the Borrower. Any Person required to
maintain the confidentiality of any information as provided for in this Section
shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of
such information as such Person would accord its own confidential information.

         SECTION 10.12     Interest and Loan Charges Not to Exceed Maximum
Amounts Allowed by Law. Anything in this Agreement, the Notes, the Security
Documents or any of the other Loan Documents to the contrary notwithstanding,
in no event whatsoever, whether by reason of advancement of proceeds of the
Loans, acceleration of the maturity of the unpaid balance of the Loans or
otherwise, shall the interest and loan charges agreed to be paid to any Lender
for the use of the money advanced or to be advanced hereunder exceed the
maximum amounts collectible under applicable laws in effect from time to time.
It is understood and agreed by the parties that, if for any reason whatsoever
the interest or loan charges paid or contracted to be paid by Borrower in
respect of the Loans shall exceed the maximum amounts collectible under
applicable laws in effect from time to time, then ipso facto, the obligation to
pay such interest and/or loan charges shall be reduced to the maximum amounts
collectible under applicable laws in effect from time to time, and any amounts
collected by any Lender that exceed such maximum amounts shall be applied to
the reduction of the principal balance of the Loans and/or refunded to Borrower
so that at no time shall the interest or loan charges paid or payable in
respect of the Loans exceed the maximum amounts permitted from time to time by
applicable law.

                  (remainder of page left intentionally blank)

<PAGE>

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

                                    AMERICAN HEALTHWAYS, INC.

                                    By: /s/ Mary A. Chaput
                                       ----------------------------------------
                                             Name: Mary A. Chaput
                                                   ----------------------------
                                             Title: Executive Vice President/
                                                    Chief Financial Officer
                                                    ---------------------------

                                    SUNTRUST BANK
                                    as Administrative Agent, as Issuing Bank,
                                    as a Lender

                                    By: /s/ William D. Priester
                                       ----------------------------------------
                                             Name: William D. Priester
                                                   ----------------------------
                                             Title: Vice President
                                                    ---------------------------

                                    Revolving Commitment: $17,500,000.00

                                    LC Commitment: $17,500,000.00

<PAGE>

                                    BANK OF AMERICA, N.A.

                                    By: /s/ Sandra G. Hamrick
                                       ----------------------------------------
                                             Name: Sandra G. Hamrick
                                                   ----------------------------
                                             Title: Senior Vice President
                                                    ---------------------------

                                    Revolving Commitment: $10,000,000.00

                                    LC Commitment: $10,000,000.00

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