Document:

Prepared and filed by St Ives Burrups

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	EXECUTION VERSION

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of November 14, 2004

among

BLACK WARRIOR WIRELINE CORP.,

as Borrower,

THE OTHER CREDIT PARTIES FROM TIME TO TIME SIGNATORY HERETO,

as Credit Parties,

THE LENDERS SIGNATORY HERETO

FROM TIME TO TIME,

as Lenders,

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as Agent and Lender

GECC CAPITAL MARKETS GROUP, INC.

as Lead Arranger

 

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TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	1.	AMOUNT AND TERMS OF CREDIT	1
	 	1.1	Credit Facilities.	1
	 	1.2	Intentionally Omitted	3
	 	1.3	Prepayments	3
	 	1.4	Use of Proceeds	4
	 	1.5	Interest and Applicable Margins	5
	 	1.6	Eligible Accounts	6
	 	1.7	Intentionally Omitted	8
	 	1.8	Cash Management Systems	8
	 	1.9	Fees	8
	 	1.10	Receipt of Payments	9
	 	1.11	Application and Allocation of Payments	9
	 	1.12	Loan Account and Accounting	10
	 	1.13	Indemnity	10
	 	1.14	Access	11
	 	1.15	Taxes	11
	 	1.16	Capital Adequacy; Increased Costs; Illegality	12
	 	1.17	Single Loan	13
	2.	CONDITIONS PRECEDENT	13
	 	2.1	Conditions to the Initial Loans	13
	 	2.2	Further Conditions to Each Loan	14
	3.	REPRESENTATIONS AND WARRANTIES	15
	 	3.1	Corporate Existence; Compliance with Law	16
	 	3.2	Executive Offices, Collateral Locations, FEIN, Organizational Number	16
	 	3.3	Corporate Power, Authorization, Enforceable Obligations	16
	 	3.4	Financial Statements and Projections	16
	 	3.5	Material Adverse Effect	17
	 	3.6	Ownership of Property; Liens	17
	 	3.7	Labor Matters	17
	 	3.8	Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness	18
	 	3.9	Government Regulation	18
	 	3.10	Margin Regulations	18
	 	3.11	Taxes	19
	 	3.12	ERISA	19
	 	3.13	No Litigation	20
	 	3.14	Brokers	20
	 	3.15	Intellectual Property	20
	 	3.16	Full Disclosure	20
	 	3.17	Environmental Matters	21
	 	3.18	Insurance	21
	 	3.19	Deposit and Disbursement Accounts	21
	 	3.20	Government Contracts	22
	 	3.21	Customer and Trade Relations	22
	 	3.22	Agreements and Other Documents	22
	 	3.23	Solvency	22

 

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	 	3.24	Subordinated Debt	22
	4.	FINANCIAL STATEMENTS AND INFORMATION	23
	 	4.1	Reports and Notices	23
	 	4.2	Communication with Accountants	23
	5.	AFFIRMATIVE COVENANTS	23
	 	5.1	Maintenance of Existence and Conduct of Business	23
	 	5.2	Payment of Charges	24
	 	5.3	Books and Records	24
	 	5.4	Insurance; Damage to or Destruction of Collateral	24
	 	5.5	Compliance with Laws	26
	 	5.6	Supplemental Disclosure	26
	 	5.7	Intellectual Property	26
	 	5.8	Environmental Matters	26
	 	5.9	Landlords’ Agreements,
      Mortgagee Agreements,
Bailee Letters and Real Estate Purchases	27
	 	5.10	Mortgages	27
	 	5.11	Further Assurances	27
	 	5.12	Certificates of Title	27
	 	5.13	Subordinated Noteholder Consents	27
	6.	NEGATIVE COVENANTS	28
	 	6.1	Mergers, Subsidiaries, Etc.	28
	 	6.2	Investments; Loans and Advances	28
	 	6.3	Indebtedness	28
	 	6.4	Employee Loans and Affiliate Transactions	29
	 	6.5	Capital Structure and Business	29
	 	6.6	Guaranteed Indebtedness	29
	 	6.7	Liens	29
	 	6.8	Sale of Stock and Assets	30
	 	6.9	ERISA	30
	 	6.10	Financial Covenants	30
	 	6.11	Hazardous Materials	30
	 	6.12	Sale-Leasebacks	30
	 	6.13	Cancellation of Indebtedness	31
	 	6.14	Restricted Payments	31
	 	6.15	Change of Corporate Name or Location; Change of Fiscal Year	31
	 	6.16	No Impairment of Intercompany Transfers	31
	 	6.17	No Speculative Transactions	31
	 	6.18	Leases; Real Estate Purchases	31
	 	6.19	Changes Relating to Subordinated Debt; Material Contracts	31
	7.	TERM	32
	 	7.1	Termination	32
	 	7.2	Survival of Obligations Upon Termination of Financing Arrangements	32
	8.	EVENTS OF DEFAULT; RIGHTS AND REMEDIES	32
	 	8.1	Events of Default	32
	 	8.2	Remedies	34
	 	8.3	Waivers by Credit Parties	34

 

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	9.	ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT	35
	 	9.1	Assignment and Participations	35
	 	9.2	Appointment of Agent	37
	 	9.3	Agent’s Reliance, Etc.	37
	 	9.4	GE Capital and Affiliates	38
	 	9.5	Lender Credit Decision	38
	 	9.6	Indemnification	38
	 	9.7	Successor Agent	38
	 	9.8	Setoff and Sharing of Payments	39
	 	9.9	Advances; Payments; Non-Funding Lenders; Information; Actions in Concert	39
	10.	SUCCESSORS AND ASSIGNS	41
	 	10.1	Successors and Assigns	41
	11.	MISCELLANEOUS	42
	 	11.1	Complete Agreement; Modification of Agreement	42
	 	11.2	Amendments and Waivers	42
	 	11.3	Fees and Expenses	44
	 	11.4	No Waiver	45
	 	11.5	Remedies	45
	 	11.6	Severability	45
	 	11.7	Conflict of Terms	45
	 	11.8	Confidentiality	45
	 	11.9	GOVERNING LAW	46
	 	11.10	Notices	46
	 	11.11	Section Titles	47
	 	11.12	Counterparts	47
	 	11.13	WAIVER OF JURY TRIAL	47
	 	11.14	Press Releases and Related Matters	47
	 	11.15	Reinstatement	47
	 	11.16	Advice of Counsel	47
	 	11.17	No Strict Construction	48

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INDEX OF APPENDICES

	Annex A (Recitals)	—	 	Definitions	 
	Annex B (Section 1.8)	—	 	Cash Management System	 
	Annex C (Section 2.1(a))	—	 	Closing Checklist	 
	Annex D (Section 4.1(a))	—	 	Financial Statements and Projections – Reporting	 
	Annex E(Section 4.1(b))	—	 	Collateral Reports	 
	Annex F (Section 6.10)	—	 	Financial Covenants	 
	Annex G (Section 9.9(a))	—	 	Lenders’ Wire Transfer Information	 
	Annex H (Section 11.10)	—	 	Notice Addresses	 
	Annex I (from Annex A -	 	 	 	 
	   Commitments definition)	 	 	Commitments as of Closing Date	 
	Annex J	—	 	Non-Consenting Subordinated Note Holders	 
	 	 	 	 	 
	Exhibit 1.1(a)(i)	—	 	Form of Notice of Revolving Credit Advance	 
	Exhibit 1.1(a)(ii)	—	 	Form of Revolving Note	 
	Exhibit 1.1(b)(i)	—	 	Form of Term Note	 
	Exhibit 1.5(e)	—	 	Form of Notice of Conversion/Continuation	 
	Exhibit 4.1(b)	—	 	Form of Borrowing Base Certificate	 
	Exhibit 9.1(a)	—	 	Form of Assignment Agreement	 
	 	 	 	 	 
	Schedule  1.1	—	 	Agent’s Representatives	 
	 	 	 	 	 
	Disclosure Schedule  1.4	—	 	Sources and Uses; Funds Flow Memorandum	 
	Disclosure Schedule  3.1	—	 	Type of Entity; State of Organization	 
	Disclosure Schedule  3.2	—	 	Executive Offices, Collateral Locations, FEIN	 
	Disclosure Schedule  3.4(A)	—	 	Financial Statements	 
	Disclosure Schedule  3.4(B)	—	 	Pro Forma	 
	Disclosure Schedule  3.4(C)	—	 	Projections	 
	Disclosure Schedule  3.6	—	 	Real Estate and Leases	 
	Disclosure Schedule  3.7	—	 	Labor Matters	 
	Disclosure Schedule  3.8	—	 	Ventures, Subsidiaries and Affiliates; Outstanding Stock 	 
	Disclosure Schedule  3.11	—	 	Tax Matters	 
	Disclosure Schedule  3.12	—	 	ERISA Plans	 
	Disclosure Schedule  3.13	—	 	Litigation	 
	Disclosure Schedule  3.15	—	 	Intellectual Property	 
	Disclosure Schedule  3.17	—	 	Hazardous Materials	 
	Disclosure Schedule  3.18	—	 	Insurance	 
	Disclosure Schedule  3.19	—	 	Deposit and Disbursement Accounts	 
	Disclosure Schedule  3.20	—	 	Government Contracts	 
	Disclosure Schedule  3.21	—	 	Customer and Trade Relations	 
	Disclosure Schedule  3.22	—	 	Material Agreements	 
	Disclosure Schedule  3.24	—	 	Subordinated Notes and Subordinated Note Holders 	 
	Disclosure Schedule  5.1	—	 	Trade Names	 
	Disclosure Schedule  6.3	—	 	Indebtedness	 
	Disclosure Schedule  6.4(a)	—	 	Transactions with Affiliates	 
	Disclosure Schedule  6.7	—	 	Existing Liens	 

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This AMENDED AND RESTATED
    CREDIT AGREEMENT (this “Agreement”), dated as of November
    14, 2004, among BLACK WARRIOR WIRELINE CORP., a Delaware corporation (the “Borrower”);
    the other Credit Parties from time to time signatory hereto; GENERAL ELECTRIC
    CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, “GE
    Capital”), for itself, as Lender, and as Agent for Lenders, and
    the other Lenders signatory hereto from time to time.

RECITALS

  WHEREAS, Borrower, Credit
      Parties, the Lenders and Agent are parties to that certain Credit Agreement
      dated as of September 14, 2001, as amended by that certain First Amendment
      to Credit Agreement, dated as of January 26, 2002, as amended by that certain
      Second Amendment to Credit Agreement, dated as of June 10, 2002, as amended
      by that certain Third Amendment to Credit Agreement, dated as of October
      31, 2002, as amended by that certain Fourth Amendment to Credit Agreement,
      dated as of February 14, 2003, as amended by that certain Fifth Amendment
      to Credit Agreement, dated as of April 30, 2003, as amended by that certain
      Sixth Amendment to Credit Agreement, dated as of January 15, 2004, as amended
      by that certain Seventh Amendment to Credit Agreement, dated as of March
      31, 2004 and as amended by that certain Eighth Amendment to Credit Agreement,
      dated as of June 16, 2004 (as so amended, the “Original Credit Agreement”);
      and

WHEREAS, Borrower has requested that Lenders amend
  and restate the Original Credit Agreement to decrease the revolving credit
  facility to $10,000,000, to modify the term loan facility to contemplate that
  $4,262,185.82 of the current outstanding amount of the original cap ex loan
  remain outstanding as a Term Loan hereunder, with one subsequent draw of up
  to $3,737,814.18 to occur on the Closing Date, as well as to modify the Original
  Credit Agreement in certain other respects, and subject to the terms and conditions
  hereof, the Lenders and Agent are willing to do so;
  WHEREAS, Borrower has agreed
        to continue to secure all of its obligations under the Loan Documents
        with a security interest and lien in favor of Agent, for the benefit
        of Agent and Lenders, upon all of its existing and after-acquired personal
        and real property; and

    WHEREAS, capitalized terms used
        in this Agreement shall have the meanings ascribed to them in Annex
        A and, for purposes of this Agreement and the other Loan Documents,
        the rules of construction set forth in Annex A shall govern.
        All Annexes, Disclosure Schedules, Exhibits and other attachments (collectively, “Appendices”)
        hereto, or expressly identified to this Agreement, are incorporated herein
        by reference, and taken together with this Agreement, shall constitute
        but a single agreement. These Recitals shall be construed as part of
        the Agreement.

    NOW, THEREFORE, in consideration
        of the premises and the mutual covenants hereinafter contained, and for
        other good and valuable consideration, the parties hereto agree that
        the Original Credit Agreement is amended and restated as follows:

1.      AMOUNT AND TERMS OF CREDIT

1.1     Credit Facilities.
  (a)     Revolving Credit
          Facility.  

 

 
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(i)     Subject
    to the terms and conditions hereof, each Revolving Lender agrees to make
    available to Borrower from time to time
  until the Commitment Termination Date its Pro Rata Share of advances (each,
  a “Revolving Credit Advance”). The Pro Rata Share of the
  Revolving Loan of any Revolving Lender shall not at any time exceed its separate
  Revolving Loan Commitment. The obligations of each Revolving Lender hereunder
  shall be several and not joint. Until the Commitment Termination Date, Borrower
  may borrow, repay and reborrow under this Section 1.1(a); provided that
  the amount of any Revolving Credit Advance to be made at any time shall not
  exceed Borrowing Availability at such time. Borrowing Availability may be reduced
  by Reserves imposed by Agent in its reasonable credit judgment. Each Revolving
  Credit Advance shall be made on notice by Borrower to one of the representatives
  of Agent identified in Schedule 1.1 at the address specified therein.
  Any such notice must be given no later than (1) 11:00 a.m. (New York time)
  on the Business Day of the proposed Revolving Credit Advance, in the case of
  an Index Rate Loan, or (2) 11:00 a.m. (New York time) on the date which is
  3 Business Days prior to the proposed Revolving Credit Advance, in the case
  of a LIBOR Loan. Each such notice (a “Notice of Revolving Credit
  Advance”) must be given in writing (by telecopy or overnight courier)
  substantially in the form of Exhibit 1.1(a)(i), and shall include the
  information required in such Exhibit and such other information as may be required
  by Agent. If Borrower desires to have the Revolving Credit Advances bear interest
  by reference to a LIBOR Rate, Borrower must comply with Section 1.5(e).
  (ii) Except as provided in Section
        1.12, Borrower shall execute and deliver to each Revolving Lender
        a note to evidence the Revolving Loan Commitment of that Revolving Lender.
        Each note shall be in the principal amount of the Revolving Loan Commitment
        of the applicable Revolving Lender, dated the Closing Date and substantially
        in the form of Exhibit 1.1(a)(ii) (each a “Revolving
        Note” and, collectively, the “Revolving Notes”).
        Each Revolving Note shall represent the obligation of Borrower to pay
        the amount of the applicable Revolving Lender’s Revolving Loan Commitment
        or, if less, such Revolving Lender’s Pro Rata Share of the aggregate
        unpaid principal amount of all Revolving Credit Advances to Borrower
        together with interest thereon as prescribed in Section 1.5. The
        entire unpaid balance of the aggregate Revolving Loan and all other non-contingent
        Obligations shall be immediately due and payable in full in immediately
        available funds on the Commitment Termination Date.

(b)     Term Loan.

(i)     Subject
    to the terms and conditions hereof, each Term Lender agrees to make a term
    loan (collectively, the “Term Loan”) on the Closing Date
    to Borrower in the amount of the applicable Term Lender’s Term Loan
    Commitment. The obligations of each Term Lender hereunder shall be several
    and not joint. Each such Term Loan shall be evidenced by a promissory note
    substantially in the form of Exhibit 1.1(b)(i) (each a “Term
    Note” and collectively the “Term Notes”), and,
    except as provided in Section 1.12, Borrower shall execute and deliver
    a Term Note to the applicable Term Lender. Each Term Note shall represent
    the obligation of Borrower to pay the applicable Term Lender’s Term
    Loan Commitment, together with interest thereon as prescribed in Section
    1.5. Subject to the terms and conditions hereof, $4,262,185.82 of the “Cap
    Ex Loans” extended under the Original Credit Agreement shall continue
    outstanding hereunder as a portion of the Term Loan, allocated pro rata to
    the Term Lenders based upon their Term Loan Commitment. 

	 	 	 
	 	 	 (ii)     Borrower
      shall repay the Term Loan in thirty-five (35) consecutive monthly installments,
      each in the amount of $133,333 on the first day of each month, commencing
      on December 1, 2004 and continuing thereafter. The final thirty-sixth installment
      shall be due and payable on November 14, 2007, and shall be in the amount
      of $3,333,345 or, if different, the remaining principal balance of the
    Term Loan.

	 	 	 
	 	 	 (iii)     Notwithstanding Section
        1.1(b)(ii), the aggregate outstanding principal
      balance of the Term Loan shall be due and payable in full in immediately
      available funds on the Commitment Termination Date, if not sooner paid
    in full. No payment with respect to the Term Loan may be reborrowed. 

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(iv)     Each payment of
  principal with respect to the Term Loan shall be paid to Agent for the ratable
  benefit of each Term Lender making a Term Loan, ratably in proportion to each
  such Term Lender’s respective Term Loan Commitment.
  (c)     Intentionally
        Omitted. 

  (d)     Intentionally
        Omitted.

  (e)     Reliance
        on Notices. Agent shall be entitled to rely upon, and shall be fully
        protected in relying upon, any Notice of Revolving Credit Advance, Notice
        of Conversion/Continuation or similar notice believed by Agent to be
        genuine. Agent may assume that each Person executing and delivering any
        notice in accordance herewith was duly authorized, unless the responsible
        individual acting thereon for Agent has actual knowledge to the contrary. 

  1.2     Intentionally
        Omitted. 

  1.3     Prepayments.

  (a)     Voluntary
        Prepayments; Termination of Commitments. Borrower may at any time
        on at least 5 days’ prior written notice to Agent voluntarily prepay
        all or part of the Term Loan; provided that any such prepayments
        shall be in a minimum amount of $500,000 and integral multiples of $250,000
        in excess of such amount. In addition, Borrower may at any time on at
        least 10 days’ prior written notice to Agent terminate the Revolving
        Loan Commitment; provided that upon such termination, all Loans
        and other Obligations shall be immediately due and payable in full. Any
        voluntary prepayment of the Term Loan and any termination of the Revolving
        Loan Commitment must be accompanied by payment of the Fee required by
        the GE Capital Fee Letter plus the payment of any LIBOR funding breakage
        costs in accordance with Section 1.13(b). Upon any such termination
        of the Revolving Loan Commitment, Borrower’s right to request Revolving
        Credit Advances shall simultaneously be permanently terminated. Each
        notice of partial prepayment shall designate the Loans or other Obligations
        to which such prepayment is to be applied; provided that any partial
        prepayments of the Term Loan made by or on behalf of Borrower shall be
        applied to prepay the scheduled installments of Borrower’s Term
        Loan in inverse order of maturity. 

  (b)     Mandatory
        Prepayments.

	 	 (i)     If
      at any time the aggregate outstanding balances of the Revolving Loan exceed
      the lesser of (A) the Maximum Revolver Amount and (B) the Borrowing Base,
      Borrower shall immediately repay the aggregate outstanding Revolving Credit
    Advances to the extent required to eliminate such excess. 

	 	 
	 	 (ii)     If
      at any time the aggregate outstanding Term Loan exceeds 70% of the Forced
      Liquidation Value of Eligible Term Equipment, Borrower shall immediately
      repay the aggregate outstanding Term Loan to the extent required to eliminate
    such excess. 

	 	 
	 	 (iii)     Immediately
      upon receipt by any Credit Party of proceeds of any asset disposition (excluding
      proceeds of asset dispositions permitted by Section 6.8(a)) or any
      sale of Stock of any Subsidiary of any Credit Party, Borrower shall prepay
      the Loans in an amount equal to all such proceeds, net of (A) commissions
      and other reasonable and customary transaction costs, fees and expenses
      properly attributable to such transaction and payable by such Credit Party
      in connection therewith (in each case, paid to non-Affiliates), (B) transfer
      taxes, (C) amounts payable to holders of senior Liens (to the extent such
      Liens constitute Permitted Encumbrances hereunder), if any, and (D) an
      appropriate reserve for income taxes in accordance with GAAP in connection
      therewith. Any such prepayment shall be applied in accordance with Section
    1.3(c). 

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	 	 (iv)     If
      Borrower issues Stock or any debt securities, no later than the Business
      Day following the date of receipt of the proceeds thereof, Borrower shall
      prepay the Loans in an amount equal to all such proceeds, net of underwriting
      discounts and commissions and other reasonable costs paid to non-Affiliates
      in connection therewith. Any such prepayment shall be applied in accordance
    with Section 1.3(c). 

	 	 

(c) Application of Certain Mandatory Prepayments.
  Any prepayments made by Borrower pursuant to Sections 1.3(b)(iii) or (b)(iv) above
  shall be applied as follows: first, to Fees and reimbursable expenses
  of Agent then due and payable pursuant to any of the Loan Documents; second,
  to interest then due and payable on the Term Loan; third, to prepay
  the scheduled principal installments of the Term Loan, in inverse order of
  maturity as to installments of principal, until such Term Loan has been prepaid
  in full; fourth, to interest then due and payable on Revolving Credit
  Advances; and fifth, to the principal balance of Revolving Credit Advances
  until the same has been paid in full. The Revolving Loan Commitment shall not
  be permanently reduced by the amount of any such prepayments.
  (d) Application of Prepayments
          from Insurance and Condemnation Proceeds. Prepayments from insurance
          or condemnation proceeds in accordance with Section 5.4(c) shall
          be applied as follows: insurance proceeds from casualties or losses
          to cash or Inventory shall be applied, first, to Revolving Credit Advances;
          insurance or condemnation proceeds from casualties or losses to Equipment,
          Fixtures and Real Estate shall be applied to scheduled installments
          of the Term Loan in inverse order of maturity. The Revolving Loan Commitment
          shall not be permanently reduced by the amount of any such prepayments. 

    (e)     No
          Implied Consent. Nothing in this Section 1.3 shall be construed
          to constitute Agent’s or any Lender’s consent to any transaction
          that is not permitted by other provisions of this Agreement or the
          other Loan Documents.

    1.4     Use
          of Proceeds. Borrower shall utilize the proceeds of the Term Loan
          solely to continue outstanding $4,262,185.82 of the “Cap Ex Loans” made
          under the Original Credit Agreement and for the financing of Borrower’s
          ordinary working capital, capital expenditure and general corporate
          needs. Borrower shall utilize the proceeds of the Revolving Loan, solely
          for the financing of Borrower’s ordinary working capital, capital
          expenditure and general corporate needs. Disclosure Schedule (1.4) contains
          a description of Borrower’s sources and uses of funds as of the
          Closing Date, including Loans to be made on that date, and a funds
          flow memorandum detailing how funds from each source are to be transferred
          to particular uses. Notwithstanding the foregoing, Borrower may use
          up to $1,774,182.41 of the proceeds of the Loans on the Closing Date
          to repay Subordinated Debt if the holders of such Subordinated Debt
          are not willing to consent to an extension of the maturity date of
          their Subordinated Notes in accordance with the terms hereof, so long
          as (i) GE Capital receives a refinancing fee equal to 125 bps on the
          amount of any such notes so repaid and (ii) such proceeds are sent
          by Agent by wire transfer on the Closing Date (A) directly to the holders
          of such Subordinated Debt on the Closing Date or (B) to an escrow account
          at Rosen, Cook, Sledge, Davis, Cade & Shattuck, P.A., counsel for
          the Credit Parties, pursuant to an escrow agreement acceptable to Agent
          for subsequent disbursement to such holders; provided that if
          any such Subordinated Debt is not repaid on or prior to December 5,
          2004, the Credit Parties shall cause such counsel to return all such
          unused funds to Borrower no later than 5:00 p.m. New York time on such
          date and such funds shall be applied by Borrower on such date to the
          principal repayment of the Revolving Loan to the extent thereof. In
          no event may any such unused funds be applied by Borrower to the principal
          installments of the Term Loan.

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1.5     Interest and
    Applicable Margins.
  (a)     Borrower
        shall pay interest to Agent, for the ratable benefit of Lenders, in accordance
        with the various Loans being made by each Lender, in arrears on each
        applicable Interest Payment Date, at the following rates: (i) with respect
        to the Revolving Credit Advances, the Index Rate plus the Applicable
        Revolver Index Margin per annum or, at the election of Borrower, the
        applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum,
        based on the aggregate Revolving Credit Advances outstanding from time
        to time and (ii) with respect to the Term Loan, the Index Rate plus the
        Applicable Term Loan Index Margin per annum or, at the election of Borrower,
        the applicable LIBOR Rate plus the Applicable Term Loan LIBOR Margin
        per annum.

The Applicable Margins are as follows:

	 	Applicable Revolver Index Margin	1.75	%
	 	Applicable Revolver LIBOR Margin	3.25	%
	 	Applicable Term Loan Index Margin	2.50	%
	 	Applicable Term Loan LIBOR Margin	4.00	%
	 	 	 	 

(b)     If
    any payment on any Loan becomes due and payable on a day other than a Business
    Day, the
  maturity thereof will be extended to the next succeeding Business Day (except
  as set forth in the definition of LIBOR Period) and, with respect to payments
  of principal, interest thereon shall be payable at the then applicable rate
  during such extension.
  (c)     All
        computations of Fees calculated on a per annum basis and interest shall
        be made by Agent on the basis of a 360-day year, in each case for the
        actual number of days occurring in the period for which such interest
        and Fees are payable. The Index Rate is a floating rate determined for
        each day. Each determination by Agent of an interest rate and Fees hereunder
        shall be final, binding and conclusive on Borrower, absent manifest error.

    (d)     So
        long as an Event of Default has occurred and is continuing under Section
        8.1(a), (h) or (i), or so long as any other Default or Event of Default
        has occurred and is continuing and at the election of Agent (or upon
        the written request of Requisite Lenders) confirmed by written notice
        from Agent to Borrower, the interest rates applicable to the Loans shall
        be increased by two percentage points (2%) per annum above the rates
        of interest or the rate of such Fees otherwise applicable hereunder (“Default
        Rate”), and all outstanding Obligations shall bear interest
        at the Default Rate applicable to such Obligations. Interest at the Default
        Rate shall accrue from the initial date of such Default or Event of Default
        until that Default or Event of Default is cured or waived and shall be
        payable upon demand. 

    (e)     Subject
        to the conditions precedent set forth in Section 2.2, Borrower
        shall have the option to (i) request that any Revolving Credit Advance
        be made as a LIBOR Loan, (ii) convert at any time all or any part of
        outstanding Loans from Index Rate Loans to LIBOR Loans, (iii) convert
        any LIBOR Loan to an Index Rate Loan, subject to payment of LIBOR breakage
        costs in accordance with Section 1.13(b) if such conversion is
        made prior to the expiration of the LIBOR Period applicable thereto,
        or (iv) continue all or any portion of any Loan as a LIBOR Loan upon
        the expiration of the applicable LIBOR Period and the succeeding LIBOR
        Period of that continued Loan shall commence on the first day after the
        last day of the LIBOR Period of the Loan to be continued. Any Loan or
        group of Loans having the same proposed LIBOR Period to be made or continued
        as, or converted into, a LIBOR Loan must be in a minimum amount of $5,000,000
        and integral multiples of $500,000 in excess of such amount. Any such
        election must be made by 11:00 a.m. (New York time) on the 3rd Business
        Day prior to (1) the date of any proposed Advance which is to bear
        interest at the LIBOR Rate, (2) the end of each LIBOR Period with respect
        to any LIBOR Loans to be continued as such, or (3) the date on which
        Borrower wishes to convert any Index Rate Loan to a LIBOR Loan for a
        LIBOR Period designated by Borrower in such election. If no election
        is received with respect to a LIBOR Loan by 11:00 a.m. (New York time)
        on the 3rd Business Day prior to the end of the LIBOR Period with respect
        thereto (or if a Default or an Event of Default has occurred and is continuing
        or if the additional conditions precedent set forth in Section 2.2 shall
        not have been satisfied), that LIBOR Loan shall be converted to an Index
        Rate Loan at the end of its LIBOR Period. Borrower must make such election
        by notice to Agent in writing, by telecopy or overnight courier. In the
        case of any conversion or continuation, such election must be made pursuant
        to a written notice (a “Notice of Conversion/Continuation”)
        in the form of Exhibit 1.5(e). 

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(f)     Notwithstanding
  anything to the contrary set forth in this Section 1.5, if a court
  of competent jurisdiction determines in a final order that the rate of interest
  payable hereunder exceeds the highest rate of interest permissible under law
  (the “Maximum Lawful Rate”), then so long as the Maximum Lawful
  Rate would be so exceeded, the rate of interest payable hereunder shall be
  equal to the Maximum Lawful Rate; provided, however, that if at any
  time thereafter the rate of interest payable hereunder is less than the Maximum
  Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
  Lawful Rate until such time as the total interest received by Agent, on behalf
  of Lenders, is equal to the total interest that would have been received had
  the interest rate payable hereunder been (but for the operation of this paragraph)
  the interest rate payable since the Closing Date as otherwise provided in this
  Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of interest
  and in the manner provided in Sections 1.5(a) through (e), unless and
  until the rate of interest again exceeds the Maximum Lawful Rate, and at that
  time this paragraph shall again apply. In no event shall the total interest
  received by any Lender pursuant to the terms hereof exceed the amount that
  such Lender could lawfully have received had the interest due hereunder been
  calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
  Lawful Rate is calculated pursuant to this paragraph, such interest shall be
  calculated at a daily rate equal to the Maximum Lawful Rate divided by the
  number of days in the year in which such calculation is made. If, notwithstanding
  the provisions of this Section 1.5(f), a court of competent jurisdiction
  shall finally determine that a Lender has received interest hereunder in excess
  of the Maximum Lawful Rate, Agent shall, to the extent permitted by applicable
  law, promptly apply such excess in the order specified in Section 1.11 and
  thereafter shall refund any excess to Borrower or as a court of competent jurisdiction
  may otherwise order.
  (g)     Notwithstanding
      anything to the contrary set forth in this Section 1.5 or elsewhere
      in this Agreement, Borrower shall not be permitted to borrow, reborrow,
      continue or convert any Loans as or into LIBOR Loans without the prior
      written consent of the Agent. 

  1.6     Eligible
        Accounts. All of the Accounts owned by Borrower and reflected in
        the most recent Borrowing Base Certificate delivered by Borrower to Agent
        shall be “Eligible Accounts” for purposes of this
        Agreement, except any Account to which any of the exclusionary criteria
        set forth below applies. Agent shall have the right to establish, modify
        or eliminate Reserves against Eligible Accounts from time to time in
        its reasonable credit judgment. In addition, Agent reserves the right,
        at any time and from time to time after the Closing Date, to adjust any
        of the criteria set forth below, to establish new criteria and to adjust
        advance rates with respect to Eligible Accounts, in its reasonable credit
        judgment, subject to the approval of Supermajority Revolving Lenders
        in the case of changes in advance rates which have the effect of making
        more credit available. Eligible Accounts shall not include any Account
        of Borrower:

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(a)     that
    does not arise from the sale of goods or the performance of services by Borrower
    in the ordinary
  course of its business;
  (b)     (i)     upon
        which Borrower’s right to receive payment is not absolute or is
        contingent upon the fulfillment of any condition whatsoever or (ii) as
        to which Borrower is not able to bring suit or otherwise enforce its
        remedies against the Account Debtor through judicial process or (iii)
        if the Account represents a progress billing consisting of an invoice
        for goods sold or used or services rendered pursuant to a contract under
        which the Account Debtor’s obligation to pay that invoice is subject
        to Borrower’s completion of further performance under such contract
        or is subject to the equitable lien of a surety bond issuer;

    (c)     in
        the event that any defense, counterclaim, setoff or dispute is asserted
        as to such Account;

    (d)     that
        is not a true and correct statement of bona fide indebtedness incurred
        in the amount of the Account for merchandise sold to or services rendered
        and accepted by the applicable Account Debtor;

    (e)     with
        respect to which an invoice, reasonably acceptable to Agent in form and
        substance, has not been sent to the applicable Account Debtor;

    (f)     that
        (i) is not owned by Borrower or (ii) is subject to any right, claim,
        security interest or other interest of any other Person, other than Liens
        in favor of Agent, on behalf of itself and Lenders;

    (g)     that
        arises from a sale to any director, officer, other employee or Affiliate
        of any Credit Party, or to any entity that has any common officer or
        director with any Credit Party;

    (h)     that
        is the obligation of an Account Debtor that is the United States government
        or a political subdivision thereof, or any state, county or municipality
        or department, agency or instrumentality thereof unless Agent, in its
        sole discretion, has agreed to the contrary in writing and Borrower,
        if necessary or desirable, has complied with respect to such obligation
        with the Federal Assignment of Claims Act of 1940, or any applicable
        state, county or municipal law restricting assignment thereof; 

    (i)     that
        is the obligation of an Account Debtor located in a foreign country other
        than Canada (excluding the province of Newfoundland, the Northwest Territories
        and the Territory of Nunavit) unless payment thereof is assured by a
        letter of credit assigned and delivered to Agent, reasonably satisfactory
        to Agent as to form, amount and issuer; 

    (j)     to
        the extent Borrower or any Subsidiary thereof is liable for goods sold
        or services rendered by the applicable Account Debtor to Borrower or
        any Subsidiary thereof but only to the extent of the potential offset;

    (k)     that
        arises with respect to goods that are delivered on a bill-and-hold, cash-on-delivery
        basis or placed on consignment, guaranteed sale or other terms by reason
        of which the payment by the Account Debtor is or may be conditional;

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(l)     that
    is in default; provided, that, without limiting the generality of
    the foregoing, an Account shall be deemed in default upon the occurrence
    of any of the following:

	 	 	 
	 	 	 (i)     the
      Account is not paid within the earlier of: 60 days following its due date
      or 90 days following its original invoice date; provided that any
      Account with respect to Chevron USA, Exxon USA, Unocal Gulf Region USA,
      Masters Resources LLC and Encore Operating shall be in default if not paid
      within the earlier of 120 days following its due date or 120 days following
    its original invoice date;

	 	 	 	 	 

	 	 	 (ii)     the
      Account Debtor obligated upon such Account suspends business, makes a general
      assignment for the benefit of creditors or fails to pay its debts generally
    as they come due; or

	 	 	 	 	 

	 	 	 
	 	 	 (iii)     a
      petition is filed by or against any Account Debtor obligated upon such
      Account under any bankruptcy law or any other federal, state or foreign
      (including any provincial) receivership, insolvency relief or other law
    or laws for the relief of debtors;

	 	 	 	 	 

(m)     that
    is the obligation of an Account Debtor if 50% or more of the Dollar amount
    of all Accounts owing
  by that Account Debtor are ineligible under the other criteria set forth in
  this Section 1.6;
  (n)     as
        to which Agent’s Lien thereon, on behalf of itself and Lenders,
        is not a first priority perfected Lien;

    (o)     as
        to which any of the representations or warranties in the Loan Documents
        are untrue;

    (p)     to
        the extent such Account is evidenced by a judgment, Instrument or Chattel
        Paper;

    (q)     to
        the extent such Account exceeds any credit limit established by Agent,
        in its reasonable credit judgment;

    (r)     to
        the extent that such Account, together with all other Accounts owing
        by such Account Debtor and its Affiliates as of any date of determination
        exceed 10% of all Eligible Accounts, except for such Account Debtor(s)
        approved in advance by Agent, for which the limit shall be 15%;

    (s)     that
        is payable in any currency other than Dollars; or 

    (t)     that
        is otherwise unacceptable to Agent in its reasonable credit judgment.

    1.7     Intentionally
          Omitted.

    1.8     Cash
          Management Systems. On or prior to the Closing Date, Borrower will
          establish and will maintain until the Termination Date, the cash management
          systems described in Annex B (the “Cash Management
          Systems”). 

1.9     Fees.

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(a)     Borrower
    shall pay to GE Capital, individually, the Fees specified in the GE Capital
    Fee Letter,
  at the times specified for payment therein.
  (b)     As
      additional compensation for the Revolving Lenders, Borrower shall pay to
      Agent, for the ratable
        benefit of such Lenders, in arrears, on the first Business Day of each
        month prior to the Commitment Termination Date and on the Commitment
        Termination Date, a Fee for Borrower’s non-use of available funds
        in an amount equal to one half of one percent (0.50%) per annum (calculated
        on the basis of a 360 day year for actual days elapsed) multiplied by
        the difference between (x) the Maximum Revolver Amount (as it may be
        reduced from time to time) and (y) the average for the period of the
        daily closing balances of the aggregate Revolving Loan outstanding during
        the period for which such Fee is due. 

    (c)     Intentionally
          Omitted.

    1.10     Receipt
          of Payments. Borrower shall make each payment under this Agreement
          not later than 2:00 p.m. (New York time) on the day when due in immediately
          available funds in Dollars to the Collection Account. For purposes
          of computing interest and Fees, all payments shall be deemed received
          on the Business Day immediately following the Business Day on which
          immediately available funds therefor are received in the Collection
          Account prior to 2:00 p.m. New York time. Payments received after 2:00
          p.m. New York time on any Business Day or on a day that is not a Business
          Day shall be deemed to have been received on the following Business
          Day. 

    1.11     Application
          and Allocation of Payments.

    (a)     So
        long as no Default or Event of Default has occurred and is continuing,
        (i) payments consisting of proceeds of Accounts received in the ordinary
        course of business shall be applied, to the Revolving Loan; (ii) payments
        matching specific scheduled payments then due shall be applied to those
        scheduled payments; (iii) voluntary prepayments shall be applied as determined
        by Borrower, subject to the provisions of Section 1.3(a); and
        (iv) mandatory prepayments shall be applied as set forth in Sections
        1.3(c) and 1.3(d). All payments and prepayments applied to a particular
        Loan shall be applied ratably to the portion thereof held by each Lender
        as determined by its Pro Rata Share. As to any other payment, and
        as to all payments made when a Default or Event of Default has occurred
        and is continuing or following the Commitment Termination Date, Borrower
        hereby irrevocably waives the right to direct the application of any
        and all payments received from or on behalf of Borrower, and Borrower
        hereby irrevocably agrees that Agent shall have the continuing exclusive
        right to apply any and all such payments against the Obligations of Borrower
        as Agent may deem advisable notwithstanding any previous entry by Agent
        in the Loan Account or any other books and records. In the absence of
        a specific determination by Agent with respect thereto, payments shall
        be applied in the following order: (1) to Fees and Agent’s expenses
        reimbursable hereunder; (2) to interest on the other Loans, ratably in
        proportion to the interest accrued as to each Loan; (3) to principal
        payments on the other Loans, ratably to the aggregate, combined principal
        balance of the other Loans; and (4) to all other Obligations, including
        expenses of Lenders to the extent reimbursable under Section 11.3. 

    (b)     Agent
        is authorized to, and at its sole election may, charge to the Revolving
        Loan balance on behalf of Borrower and cause to be paid all Fees, expenses,
        Charges, costs (including insurance premiums in accordance with Section
        5.4(a)) and interest and principal, other than principal of the Revolving
        Loan, owing by Borrower under this Agreement or any of the other Loan
        Documents if and to the extent Borrower fails to pay promptly any such
        amounts as and when due, even if the amount of such charges would exceed
        Borrowing Availability at such time. At Agent’s option and to the
        extent permitted by law, any charges so made shall constitute part of
        the Revolving Loan hereunder. 

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1.12     Loan Account
    and Accounting. Agent shall maintain a loan account (the “Loan
    Account”) on its books to record: all Advances and the Term Loan,
    all payments made by Borrower, and all other debits and credits as provided
    in this Agreement with respect to the Loans or any other Obligations. All
    entries in the Loan Account shall be made in accordance with Agent’s
    customary accounting practices as in effect from time to time. The balance
    in the Loan Account, as recorded on Agent’s most recent printout or
    other written statement, shall, absent manifest error, be presumptive evidence
    of the amounts due and owing to Agent and Lenders by Borrower; provided that
    any failure to so record or any error in so recording shall not limit or
    otherwise affect Borrower’s duty to pay the Obligations. Agent shall
    render to Borrower a monthly accounting of transactions with respect to the
    Loans setting forth the balance of the Loan Account. Unless Borrower notifies
    Agent in writing of any objection to any such accounting (specifically describing
    the basis for such objection), within 30 days after the date thereof, each
    and every such accounting shall (absent manifest error) be deemed final,
    binding and conclusive on Borrower in all respects as to all matters reflected
    therein. Only those items expressly objected to in such notice shall be deemed
    to be disputed by Borrower. Notwithstanding any provision herein contained
    to the contrary, any Lender may elect (which election may be revoked) to
    dispense with the issuance of Notes to that Lender and may rely on the Loan
    Account as evidence of the amount of Obligations from time to time owing
    to it. 
  1.13     Indemnity.

        (a)     Each
            Credit Party that is a signatory hereto shall jointly and severally
            indemnify and hold harmless each of Agent, Lenders and their respective
            Affiliates, and each such Person’s respective officers, directors,
            employees, attorneys, agents and representatives (each, an “Indemnified
            Person”), from and against any and all suits, actions,
            proceedings, claims, damages, losses, liabilities and expenses (including
            reasonable attorneys’ fees and disbursements and other costs
            of investigation or defense, including those incurred upon any appeal)
            that may be instituted or asserted by any third party, any Credit
            Party or any Subsidiary of any Credit Party against or incurred by
            any such Indemnified Person as the result of credit having been extended,
            suspended or terminated under this Agreement and the other Loan Documents
            and the administration of such credit, and in connection with or
            arising out of the transactions contemplated hereunder and thereunder
            and any actions or failures to act in connection therewith, including
            any and all Environmental Liabilities and legal costs and expenses
            arising out of or incurred in connection with disputes between or
            among any parties to any of the Loan Documents (collectively, “Indemnified
            Liabilities”); provided, that no such Credit Party shall
            be liable for any indemnification to an Indemnified Person to the
            extent that any such suit, action, proceeding, claim, damage, loss,
            liability or expense results from that Indemnified Person’s
            gross negligence or willful misconduct (as finally determined by
            a court of competent jurisdiction). NO INDEMNIFIED PERSON SHALL BE
            RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY
            SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR
            ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY,
            FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH
            MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED
            OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER
            TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.

        (b)     To
            induce Lenders to provide the LIBOR Rate option on the terms provided
            herein, if (i) any LIBOR Loans are repaid in whole or in part prior
            to the last day of any applicable LIBOR Period (whether that repayment
            is made pursuant to any provision of this Agreement or any other
            Loan Document or occurs as a result of acceleration, by operation
            of law or otherwise); (ii) Borrower shall default in payment when
            due of the principal amount of or interest on any LIBOR Loan; (iii)
            Borrower shall refuse to accept any borrowing of, or shall request
            a termination of, any borrowing of, conversion into or continuation
            of, LIBOR Loans after Borrower has given notice requesting the same
            in accordance herewith; or (iv) Borrower shall fail to make any prepayment
            of a LIBOR Loan after Borrower has given a notice thereof in accordance
            herewith, then Borrower shall indemnify and hold harmless each Lender
            from and against all losses, costs and expenses resulting from or
            arising from any of the foregoing. Such indemnification shall include
            any loss (including loss of margin) or expense arising from the reemployment
            of funds obtained by it or from fees payable to terminate deposits
            from which such funds were obtained. For the purpose of calculating
            amounts payable to a Lender under this subsection, each Lender shall
            be deemed to have actually funded its relevant LIBOR Loan through
            the purchase of a deposit bearing interest at the LIBOR Rate in an
            amount equal to the amount of that LIBOR Loan and having a maturity
            comparable to the relevant LIBOR Period; provided, that each
            Lender may fund each of its LIBOR Loans in any manner it sees fit,
            and the foregoing assumption shall be utilized only for the calculation
            of amounts payable under this subsection. This covenant shall survive
            the termination of this Agreement and the payment of the Notes and
            all other amounts payable hereunder. As promptly as practicable under
            the circumstances, each Lender shall provide Borrower with its written
            calculation of all amounts payable pursuant to this Section 1.13(b),
            and such calculation shall be binding on the parties hereto unless
            Borrower shall object in writing within 10 Business Days of receipt
            thereof, specifying the basis for such objection in detail.

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1.14     Access.
   Each Credit Party that is a party hereto shall, during normal business hours,
  from time to time upon one Business Day’s prior notice as frequently
  as Agent determines to be appropriate: (a) provide Agent and any of its officers,
  employees and agents access to its properties, facilities, advisors and employees
  (including officers) of each Credit Party and to the Collateral, (b) permit
  Agent, and any of its officers, employees and agents, to inspect, audit and
  make extracts from any Credit Party’s books and records, and (c) permit
  Agent, and its officers, employees and agents, to inspect, review, evaluate
  and make test verifications and counts of the Accounts, Inventory and other
  Collateral of any Credit Party. If a Default or Event of Default has occurred
  and is continuing or if access is necessary to preserve or protect the Collateral
  as determined by Agent, each such Credit Party shall provide such access to
  Agent and to each Lender at all times and without advance notice. Furthermore,
  so long as any Event of Default has occurred and is continuing, Borrower shall
  provide Agent and each Lender with access to their suppliers and customers.
  Each Credit Party shall make available to Agent and its counsel, as quickly
  as is possible under the circumstances, originals or copies of all books and
  records that Agent may reasonably request. Each Credit Party shall deliver
  any document or instrument necessary for Agent, as it may from time to time
  reasonably request, to obtain records from any service bureau or other Person
  that maintains records for such Credit Party, and shall maintain duplicate
  records or supporting documentation on media, including computer tapes and
  discs owned by such Credit Party. Agent will give Lenders at least 5 days’ prior
  written notice of regularly scheduled audits. Representatives of other Lenders
  may accompany Agent’s representatives on regularly scheduled audits at
  no charge to Borrower.
  1.15     Taxes.

  (a)     Any
      and all payments by Borrower hereunder (including any payments made pursuant
      to Section 1.13) or under the Notes shall be made, in accordance
      with this Section 1.15, free and clear of and without deduction
      for any and all present or future Taxes. If Borrower shall be required
      by law to deduct any Taxes from or in respect of any sum payable hereunder
      (including any sum payable pursuant to Section 1.13) or under the
      Notes, (i) the sum payable shall be increased as much as shall be necessary
      so that after making all required deductions (including deductions applicable
      to additional sums payable under this Section 1.15) Agent or Lenders,
      as applicable, receive an amount equal to the sum they would have received
      had no such deductions been made, (ii) Borrower shall make such deductions,
      and (iii) Borrower shall pay the full amount deducted to the relevant taxing
      or other authority in accordance with applicable law. Within 30 days after
      the date of any payment of Taxes, Borrower shall furnish to Agent the original
      or a certified copy of a receipt evidencing payment thereof. Agent and
      Lenders shall not be obligated to return or refund any amounts received
pursuant to this Section.

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(b)     Each
    Credit Party that is a signatory hereto shall jointly and severally indemnify
    and, within
  10 days of demand therefor, pay Agent and each Lender for the full amount of
  Taxes (including any Taxes imposed by any jurisdiction on amounts payable under
  this Section 1.15) paid by Agent or such Lender, as appropriate, and
  any liability (including penalties, interest and expenses) arising therefrom
  or with respect thereto, whether or not such Taxes were correctly or legally
  asserted.
  (c)     Each
        Lender organized under the laws of a jurisdiction outside the United
        States (a “Foreign Lender”) as to which payments to be made
        under this Agreement or under the Notes are exempt from United States
        withholding tax under an applicable statute or tax treaty shall provide
        to Borrower and Agent a properly completed and executed IRS Form W-8ECI
        or Form W-8BEN or other applicable form, certificate or document prescribed
        by the IRS or the United States certifying as to such Foreign Lender’s
        entitlement to such exemption (a “Certificate of Exemption”).
        Any foreign Person that seeks to become a Lender under this Agreement
        shall provide a Certificate of Exemption to Borrower and Agent prior
        to becoming a Lender hereunder. No foreign Person may become a Lender
        hereunder if such Person fails to deliver a Certificate of Exemption
        in advance of becoming a Lender.

    1.16     Capital
          Adequacy; Increased Costs; Illegality.

    (a)     If
        any Lender shall have determined that any law, treaty, governmental (or
        quasi-governmental) rule, regulation, guideline or order regarding capital
        adequacy, reserve requirements or similar requirements or compliance
        by any Lender with any request or directive regarding capital adequacy,
        reserve requirements or similar requirements (whether or not having the
        force of law), in each case, adopted after the Closing Date, from any
        central bank or other Governmental Authority increases or would have
        the effect of increasing the amount of capital, reserves or other funds
        required to be maintained by such Lender and thereby reducing the rate
        of return on such Lender’s capital as a consequence of its obligations
        hereunder, then Borrower shall from time to time upon demand by such
        Lender (with a copy of such demand to Agent) pay to Agent, for the account
        of such Lender, additional amounts sufficient to compensate such Lender
        for such reduction. A certificate as to the amount of that reduction
        and showing the basis of the computation thereof submitted by such Lender
        to Borrower and to Agent shall, absent manifest error, be final, conclusive
        and binding for all purposes.

    (b)     If,
        due to either (i) the introduction of or any change in any law or
        regulation (or any change in the interpretation thereof) or (ii) the
        compliance with any guideline or request from any central bank or other
        Governmental Authority (whether or not having the force of law), in each
        case adopted after the Closing Date, there shall be any increase in the
        cost to any Lender of agreeing to make or making, funding or maintaining
        any Loan, then Borrower shall from time to time, upon demand by such
        Lender (with a copy of such demand to Agent), pay to Agent for the account
        of such Lender additional amounts sufficient to compensate such Lender
        for such increased cost. A certificate as to the amount of such increased
        cost, submitted to Borrower and to Agent by such Lender, shall be conclusive
        and binding on Borrower for all purposes, absent manifest error. Each
        Lender agrees that, as promptly as practicable after it becomes aware
        of any circumstances referred to above which would result in any such
        increased cost, the affected Lender shall, to the extent not inconsistent
        with such Lender’s internal policies of general application, use
        reasonable commercial efforts to minimize costs and expenses incurred
by it and payable to it by Borrower pursuant to this Section 1.16(b).

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(c)     Notwithstanding
  anything to the contrary contained herein, if the introduction of or any change
  in any law or regulation (or any change in the interpretation thereof) shall
  make it unlawful, or any central bank or other Governmental Authority shall
  assert that it is unlawful, for any Lender to agree to make or to make or to
  continue to fund or maintain any LIBOR Loan, then, unless that Lender is able
  to make or to continue to fund or to maintain such LIBOR Loan at another branch
  or office of that Lender without, in that Lender’s opinion, adversely
  affecting it or its Loans or the income obtained therefrom, on notice thereof
  and demand therefor by such Lender to Borrower through Agent, (i) the
  obligation of such Lender to agree to make or to make or to continue to fund
  or maintain LIBOR Loans shall terminate and (ii) Borrower shall forthwith
  prepay in full all outstanding LIBOR Loans owing by Borrower to such Lender,
  together with interest accrued thereon, unless Borrower, within 5 Business
  Days after the delivery of such notice and demand, converts all LIBOR Loans
  into Index Rate Loans.
  (d)     Within
      15 days after receipt by Borrower of written notice and demand from any
      Lender (an “Affected Lender”) for payment of additional amounts
      or increased costs as provided in Sections 1.15(a), 1.16(a) or 1.16(b),
      Borrower may, at its option, notify Agent and such Affected Lender of its
      intention to replace the Affected Lender. So long as no Default or Event
      of Default has occurred and is continuing, Borrower, with the consent of
      Agent, may obtain, at Borrower’s expense, a replacement Lender (“Replacement
      Lender”) for the Affected Lender, which Replacement Lender must
      be reasonably satisfactory to Agent. If Borrower obtains a Replacement
      Lender within 90 days following notice of their intention to do so, the
      Affected Lender must sell and assign its Loans and Commitments to such
      Replacement Lender for an amount equal to the principal balance of all
      Loans held by the Affected Lender and all accrued interest and Fees with
      respect thereto through the date of such sale; provided, that Borrower
      shall have reimbursed such Affected Lender for the additional amounts or
      increased costs that it is entitled to receive under this Agreement through
      the date of such sale and assignment. Notwithstanding the foregoing, Borrower
      shall not have the right to obtain a Replacement Lender if the Affected
      Lender rescinds its demand for increased costs or additional amounts within
      15 days following its receipt of Borrower’s notice of intention to
      replace such Affected Lender. Furthermore, if Borrower gives a notice of
      intention to replace and does not so replace such Affected Lender within
      90 days thereafter, Borrower’s rights under this Section 1.16(d) shall
      terminate and Borrower shall promptly pay all increased costs or additional
      amounts demanded by such Affected Lender pursuant to Sections 1.15(a),
      1.16(a) and 1.16(b).

  1.17     Single
        Loan. All Loans to Borrower and all of the other Obligations of Borrower
        arising under this Agreement and the other Loan Documents shall constitute
        one general obligation of Borrower secured, until the Termination Date,
        by all of the Collateral.

CONDITIONS PRECEDENT

2.1     Conditions to
    the Initial Loans. No Lender shall be obligated to make any Loan on the
    Closing Date, or to take, fulfill, or perform any other action hereunder,
    until the following conditions have been satisfied or provided for in a manner
    satisfactory to Agent, or waived in writing by Agent and Lenders:
  (a)     Credit
          Agreement; Loan Documents. This Agreement or counterparts hereof
          shall have been duly executed by, and delivered to, Borrower, Agent
          and Lenders; and Agent shall have received such documents, instruments,
          agreements and legal opinions as Agent shall reasonably request in
          connection with the transactions contemplated by this Agreement and
          the other Loan Documents, including all those listed in the Closing
          Checklist attached hereto as Annex C, each in form and substance
          reasonably satisfactory to Agent. 

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(b)     Intentionally
    Omitted.
  (c)     Approvals.
        Agent shall have received (i) satisfactory evidence that the Credit Parties
        have obtained all required consents and approvals of all Persons including
        all requisite Governmental Authorities, to the execution, delivery and
        performance of this Agreement and the other Loan Documents and the consummation
        of the Related Transactions or (ii) an officer’s certificate in
        form and substance reasonably satisfactory to Agent affirming that no
        such consents or approvals are required.

    (d)     Opening Availability.
        The Eligible Accounts supporting the initial Revolving Credit Advance
        and the amount of the Reserves to be established on the Closing Date
        shall be sufficient in value, as determined by Agent, to provide Borrower
        with Borrowing Availability, after giving effect to the initial Revolving
        Credit Advance made to Borrower and the consummation of the Related Transactions
        (on a pro forma basis, with trade payables being paid consistently with
        Borrower’s historical practice, and expenses and liabilities being
        paid in the ordinary course of business and without acceleration of sales)
        of at least $6,000,000. 

    (e)     Payment
          of Fees. Borrower shall have paid the Fees required to be paid
          on the Closing Date in the respective amounts specified in Section
          1.9 (including the Fees specified in the GE Capital Fee Letter),
          and shall have reimbursed Agent for all fees, costs and expenses of
          closing presented as of the Closing Date.

    (f)     Capital
          Structure: Other Indebtedness. The capital structure of each Credit
          Party and the terms and conditions of all Indebtedness of each Credit
          Party shall be acceptable to Agent in its sole discretion, including
          without limitation, that the maturity of the Subordinated Notes shall
          be extended to no earlier than 90 days after the Commitment Termination
          Date, with no payments of interest or principal prior to such extended
          maturity date.

    (g)     Due
          Diligence. Agent shall have completed its legal due diligence,
          with results reasonably satisfactory to Agent.

    2.2     Further
          Conditions to Each Advance. Except as otherwise expressly provided
          herein, no Lender shall be obligated to fund any Advance, convert or
          continue any Loan as a LIBOR Loan, if, as of the date thereof:

    (a)     any
        representation or warranty by any Credit Party contained herein or in
        any other Loan Document is untrue or incorrect as of such date, except
        to the extent that such representation or warranty expressly relates
        to an earlier date and except for changes therein expressly permitted
        or expressly contemplated by this Agreement and Agent or Requisite Revolving
        Lenders, as the case may be, have determined not to make such Advance,
        convert or continue any Loan as LIBOR Loan as a result of the fact that
        such warranty or representation is untrue or incorrect; 

    (b)     any
        event or circumstance having a Material Adverse Effect has occurred since
        the date hereof as determined by the Requisite Revolving Lenders and
        Agent or Requisite Revolving Lenders have determined not to make such
        Advance, convert or continue any Loan as a LIBOR Loan as a result of
        the fact that such event or circumstance has occurred; 

    (c)     any
        Default or Event of Default has occurred and is continuing or would result
        after giving effect to
        any Advance, and Agent or Requisite Revolving Lenders shall have determined
        not to make any Advance, convert or continue any Loan as a LIBOR Loan
        as a result of that Default or Event of Default; or 

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  (d)     after
      giving effect to any Revolving Advance, the outstanding principal amount
      of the aggregate Revolving Loan would exceed the lesser of the Borrowing
  Base and the Maximum Revolver Amount.

  The request and acceptance by
          Borrower of the proceeds of any Advance or the conversion or continuation
          of any Loan into, or as, a LIBOR Loan shall be deemed to constitute,
          as of the date thereof, (i) a representation and warranty by Borrower
          that the conditions in this Section 2.2 have been satisfied
          and (ii) a reaffirmation by Borrower of the granting and continuance
          of Agent’s
          Liens, on behalf of itself and Lenders, pursuant to the Collateral
          Documents.

  2.3     Effect
          of Amendment and Restatement. Upon this Agreement becoming effective
          pursuant to Section 2.1, from and after the Closing Date: (a)
          the Revolving Credit Commitments shall be decreased in accordance with
          the terms hereof, and the “Cap Ex Loans” outstanding under
          the Original Credit Agreement shall be deemed to be a portion of the
          Term Loan and continue outstanding hereunder; (b) all terms and conditions
          of the Original Credit Agreement and any other “Loan Document” as
          defined therein, as amended by this Agreement and the other Loan Documents
          being executed and delivered on the Closing Date, shall be and remain
          in full force and effect, as so amended, and shall constitute the legal,
          valid, binding and enforceable obligations of the Credit Parties party
          thereto to Lenders and Agent; (c) the terms and conditions of the Original
          Credit Agreement shall be amended as set forth herein and, as so amended,
          shall be restated in their entirety, but only with respect to the rights,
          duties and obligations among Borrower, Lenders and Agent accruing from
          and after the Closing Date; (d) this Agreement shall not in any way
          release or impair the rights, duties, Obligations or Liens created
          pursuant to the Original Credit Agreement or any other Loan Document
          or affect the relative priorities thereof, in each case to the extent
          in force and effect thereunder as of the Closing Date, except as modified
          hereby or by documents, instruments and agreements executed and delivered
          in connection herewith, and all of such rights, duties, Obligations
          and Liens are assumed, ratified and affirmed by the Borrower; (e) all
          indemnification obligations of the Credit Parties under the Original
          Credit Agreement and any other Loan Documents shall survive the execution
          and delivery of this Agreement and shall continue in full force and
          effect for the benefit of Lenders, Agent, and any other Person indemnified
          under the Original Credit Agreement or any other Loan Document at any
          time prior to the Closing Date; (e) the Obligations incurred under
          the Original Credit Agreement shall, to the extent outstanding on the
          Closing Date, continue outstanding under this Agreement and shall not
          be deemed to be paid, released, discharged or otherwise satisfied by
          the execution of this Agreement, and this Agreement shall not constitute
          a refinancing, substitution or novation of such Obligations or any
          of the other rights, duties and obligations of the parties hereunder;
          (f) the execution, delivery and effectiveness of this Agreement
          shall not operate as a waiver of any right, power or remedy of Lenders
          or Agent under the Original Credit Agreement, nor constitute a waiver
          of any covenant, agreement or obligation under the Original Credit
          Agreement, except to the extent that any such covenant, agreement or
          obligation is no longer set forth herein or is modified hereby; (g) any
          and all references in the Loan Documents to the Original Credit Agreement
          shall, without further action of the parties, be deemed a reference
          to the Original Credit Agreement, as amended and restated by this Agreement,
          and as this Agreement shall be further amended or amended and restated
          from time to time hereafter and (h) any and all references in any Loan
          Document which is not being amended and restated on the date hereof
          to the “Closing Date” shall, without further action of
the parties, be deemed a reference to the Original Closing Date.

3.     REPRESENTATIONS AND WARRANTIES

To induce Lenders to
    make the Loans, the Credit Parties executing this Agreement, jointly and
    severally, make the following representations and warranties to Agent and
    each Lender with respect to all Credit Parties, each and all of which shall
    survive the execution and delivery of this Agreement.

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3.1     Corporate Existence;
    Compliance with Law. Each Credit Party (a) is a corporation, limited
    liability company or limited partnership duly organized, validly existing
    and in good standing under the laws of its respective jurisdiction of incorporation
    or organization set forth in Disclosure Schedule (3.1); (b) is duly
    qualified to conduct business and is in good standing in each other jurisdiction
    where its ownership or lease of property or the conduct of its business requires
    such qualification, except where the failure to be so qualified would not
    result in exposure to losses, damages or liabilities in excess of $50,000;
    (c) has the requisite power and authority and the legal right to own, pledge,
    mortgage or otherwise encumber and operate its properties, to lease the property
    it operates under lease and to conduct its business as now, heretofore and
    proposed to be conducted; (d) subject to specific representations regarding
    Environmental Laws, has all material licenses, permits, consents or approvals
    from or by, and has made all material filings with, and has given all material
    notices to, all Governmental Authorities having jurisdiction, to the extent
    required for such ownership, operation and conduct; (e) is in compliance
    with its charter and bylaws or partnership or operating agreement, as applicable;
    and (f) subject to specific representations set forth herein regarding ERISA,
    Environmental Laws, tax and other laws, is in compliance with all applicable
    provisions of law, except where the failure to comply, individually or in
    the aggregate, could not reasonably be expected to have a Material Adverse
    Effect.
  3.2     Executive Offices, Collateral
          Locations, FEIN, Organizational Number. As of the Closing Date,
          the current location of each Credit Party’s chief executive office
          and the warehouses and premises at which any Collateral is located
          are set forth in Disclosure Schedule (3.2), and, except as set
          forth in Disclosure Schedule (3.2) none of such locations has
          changed within the 12 months preceding the Closing Date. In addition, Disclosure
          Schedule (3.2) lists the federal employer identification number
          and organizational number of each Credit Party.

    3.3     Corporate
          Power, Authorization, Enforceable Obligations. The execution, delivery
          and performance by each Credit Party of the Loan Documents to which
          it is a party and the creation of all Liens provided for therein: (a)
          are within such Person’s power; (b) have been duly authorized
          by all necessary corporate, limited liability company or limited partnership
          action; (c) do not contravene any provision of such Person’s
          charter, bylaws or partnership or operating agreement as applicable;
          (d) do not violate any law or regulation, or any order or decree of
          any court or Governmental Authority; (e) do not conflict with or result
          in the breach or termination of, constitute a default under or accelerate
          or permit the acceleration of any performance required by, any indenture,
          mortgage, deed of trust, lease, agreement or other instrument to which
          such Person is a party or by which such Person or any of its property
          is bound; (f) do not result in the creation or imposition of any Lien
          upon any of the property of such Person other than those in favor of
          Agent, on behalf of itself and Lenders, pursuant to the Loan Documents;
          and (g) do not require the consent or approval of any Governmental
          Authority or any other Person, except those referred to in Section
          2.1(c), all of which will have been duly obtained, made or complied
          with prior to the Closing Date. Each of the Loan Documents shall be
          duly executed and delivered by each Credit Party that is a party thereto
          and each such Loan Document shall constitute a legal, valid and binding
          obligation of such Credit Party enforceable against it in accordance
          with its terms.

    3.4     Financial
          Statements and Projections. Except for the Projections all Financial
          Statements concerning Borrower that are referred to below have been
          prepared in accordance with GAAP consistently applied throughout the
          periods covered (except as disclosed therein and except, with respect
          to unaudited Financial Statements, for the absence of footnotes, a
          statement of owners’ equity and normal year-end audit adjustments)
          and present fairly in all material respects the financial position
          of the Persons covered thereby as at the dates thereof and the results
          of their operations and cash flows for the periods then ended.

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(a)     Financial Statements.
  The following Financial Statements attached hereto as Disclosure Schedule
  (3.4(a)) have been delivered on the date hereof:
  (i)     The
        audited balance sheets at December 31, 2002 and 2003 and the related
        statements of income and cash flows of Borrower for the Fiscal Years
        then ended, certified by the Chief Financial Officer of Borrower.

    (ii)     The
        unaudited balance sheet(s) at September 30, 2004 and the related statement(s)
        of income and cash flows of Borrower for the two Fiscal Quarters then
        ended.

    (b)     Pro
          Forma. The Pro Forma delivered on the date hereof and attached
          hereto as Disclosure Schedule (3.4(b)) was prepared by Borrower
          giving pro forma effect to the Related Transactions, was based on the
          unaudited balance sheets of Borrower dated June 30, 2004, and was prepared
          in accordance with GAAP, with only such adjustments thereto as would
          be required in accordance with GAAP.

    (c)     Projections. The Projections
        delivered on the date hereof and attached hereto as Disclosure Schedule
        (3.4(c)) have been prepared by Borrower in light of the past operations
        of its businesses and reflect projections for the three year period beginning
        on January 1, 2005 on a month-by-month basis for Fiscal Year 2005, and
        on an annual basis for Fiscal Years 2006 and 2007. The Projections are
        based upon estimates and assumptions stated therein, all of which Borrower
        believes to be reasonable and fair in light of current conditions and
        current facts known to Borrower and, as of the Closing Date, reflect
        Borrower’s good faith and reasonable estimates of the future financial
        performance of Borrower and of the other information projected therein
        for the period set forth therein.

    3.5     Material
          Adverse Effect. Between December 31, 2003 and the Closing Date:
          (a) no Credit Party has incurred any obligations, contingent or noncontingent
          liabilities, liabilities for Charges, long-term leases or unusual forward
          or long-term commitments that are not reflected in the Pro Forma and
          that, alone or in the aggregate, could reasonably be expected to have
          a Material Adverse Effect, (b) no contract, lease or other agreement
          or instrument has been entered into by any Credit Party or has become
          binding upon any Credit Party’s assets and no law or regulation
          applicable to any Credit Party has been adopted that has had or could
          reasonably be expected to have a Material Adverse Effect, and (c) no
          Credit Party is in default and to the best of Borrower’s knowledge
          no third party is in default under any material contract, lease or
          other agreement or instrument, that alone or in the aggregate could
          reasonably be expected to have a Material Adverse Effect. Between December
          31, 2003 and the Closing Date no event has occurred, that alone or
          together with other events, could reasonably be expected to have a
          Material Adverse Effect. 

    3.6     Ownership
          of Property; Liens. As of the Closing Date, the real estate (“Real
          Estate”) listed in Disclosure Schedule (3.6) constitutes
          all of the real property owned, leased, subleased, or used by any Credit
          Party. Each Credit Party owns good and marketable fee simple title
          to all of its owned Real Estate, and valid and marketable leasehold
          interests in all of its leased Real Estate, all as described on Disclosure
          Schedule (3.6), and copies of all such leases or a summary of terms
          thereof reasonably satisfactory to Agent have been delivered to Agent. Disclosure
          Schedule (3.6) further describes any Real Estate with respect to
          which any Credit Party is a lessor, sublessor or assignor as of the
          Closing Date. Each Credit Party also has good and marketable title
          to, or valid leasehold interests in, all of its personal property and
          assets. As of the Closing Date, none of the properties and assets of
          any Credit Party are subject to any Liens other than Permitted Encumbrances,
          and there are no facts, circumstances or conditions known to any Credit
          Party that may result in any Liens (including Liens arising under Environmental
          Laws) other than Permitted Encumbrances. Each Credit Party has received
          all deeds, assignments, waivers, consents, nondisturbance and attornment
          or similar agreements, bills of sale and other documents, and has duly
          effected all recordings, filings and other actions necessary to establish,
          protect and perfect such Credit Party’s right, title and interest
          in and to all such Real Estate and other properties and assets. Disclosure
          Schedule (3.6) also describes any purchase options, rights of first
          refusal or other similar contractual rights pertaining to any Real
          Estate. As of the Closing Date, no portion of any Credit Party’s
          Real Estate has suffered any material damage by fire or other casualty
          loss that has not heretofore been repaired and restored in all material
          respects to its original condition or otherwise remedied. As of the
          Closing Date, all material permits required to have been issued or
          appropriate to enable the Real Estate to be lawfully occupied and used
          for all of the purposes for which it is currently occupied and used
          have been lawfully issued and are in full force and effect. 

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  3.7     Labor
        Matters. As of the Closing Date (a) no strikes or other material
        labor disputes against any Credit Party are pending or, to any Credit
        Party’s knowledge, threatened; (b) hours worked by and payment
        made to employees of each Credit Party comply with the Fair Labor Standards
        Act and each other federal, state, local or foreign law applicable to
        such matters; (c) all payments due from any Credit Party for employee
        health and welfare insurance have been paid or accrued as a liability
        on the books of such Credit Party; (d) except as set forth in Disclosure
        Schedule (3.7), no Credit Party is a party to or bound by any collective
        bargaining agreement, management agreement, consulting agreement, employment
        agreement, bonus, restricted stock, stock option, or stock appreciation
        plan or agreement or any similar plan, agreement or arrangement (and
        true and complete copies of any agreements described on Disclosure
        Schedule (3.7) have been delivered to Agent); (e) there is no organizing
        activity involving any Credit Party pending or, to any Credit Party’s
        knowledge, threatened by any labor union or group of employees; (f) there
        are no representation proceedings pending or, to any Credit Party’s
        knowledge, threatened with the National Labor Relations Board, and no
        labor organization or group of employees of any Credit Party has made
        a pending demand for recognition; and (g) except as set forth in Disclosure
        Schedule (3.7), there are no material complaints or charges against
        any Credit Party pending or, to the knowledge of any Credit Party, threatened
        to be filed with any Governmental Authority or arbitrator based on, arising
        out of, in connection with, or otherwise relating to the employment or termination of employment by any Credit Party of any individual.

  3.8     Ventures,
          Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.
          Except as set forth in Disclosure Schedule (3.8), as of the Closing
          Date, no Credit Party has any Subsidiaries, is engaged in any joint venture
          or partnership with any other Person, or is an Affiliate of any other
          Person. All of the issued and outstanding Stock of each Credit Party
          is owned by each of the Stockholders and in the amounts set forth in Disclosure
          Schedule (3.8). Except as set forth in Disclosure Schedule (3.8),
          there are no outstanding rights to purchase, options, warrants or similar
          rights or agreements pursuant to which any Credit Party may be required
          to issue, sell, repurchase or redeem any of its Stock or other equity
          securities or any Stock or other equity securities of its Subsidiaries.
          All outstanding Indebtedness and Guaranteed Indebtedness of each Credit
          Party as of the Closing Date (except for the Obligations) is described
          in Section 6.3 (including Disclosure Schedule (6.3)). 

  3.9     Government
        Regulation. No Credit Party is an “investment company” or
        an “affiliated person” of, or “promoter” or “principal
        underwriter” for, an “investment company,” as such
        terms are defined in the Investment Company Act of 1940. No Credit Party
        is subject to regulation under the Public Utility Holding Company Act
        of 1935, the Federal Power Act, or any other federal or state statute
        that restricts or limits its ability to incur Indebtedness or to perform
        its obligations hereunder. The making of the Loans by Lenders to Borrower,
        the application of the proceeds thereof and repayment thereof and the
        consummation of the Related Transactions will not violate any provision
        of any such statute or any rule, regulation or order issued by the Securities
and Exchange Commission.

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3.10     Margin Regulations.
  No Credit Party is engaged, nor will it engage, principally or as one of its
  important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin
  stock” as such terms are defined in Regulation U of the Federal Reserve
  Board as now and from time to time hereafter in effect (such securities being
  referred to herein as “Margin Stock”). No Credit Party owns
  any Margin Stock, and none of the proceeds of the Loans or other extensions
  of credit under this Agreement will be used, directly or indirectly, for the
  purpose of purchasing or carrying any Margin Stock, for the purpose of reducing
  or retiring any Indebtedness that was originally incurred to purchase or carry
  any Margin Stock or for any other purpose that might cause any of the Loans
  or other extensions of credit under this Agreement to be considered a “purpose
  credit” within the meaning of Regulations T, U or X of the Federal Reserve
  Board. No Credit Party will take or permit to be taken any action that might
  cause any Loan Document to violate any regulation of the Federal Reserve Board.
  3.11     Taxes.
      All tax returns, reports and statements, including information returns,
      required by any Governmental Authority to be filed by any Credit Party
      have been filed with the appropriate Governmental Authority and all Charges
      have been paid prior to the date on which any fine, penalty, interest or
      late charge may be added thereto for nonpayment thereof (or any such fine,
      penalty, interest, late charge or loss has been paid), excluding Charges
      or other amounts being contested in accordance with Section 5.2(b).
      Proper and accurate amounts have been withheld by each Credit Party from
      its respective employees for all periods in full and complete compliance
      with all applicable federal, state, local and foreign laws and such withholdings
      have been timely paid to the respective Governmental Authorities. Disclosure
      Schedule (3.11) sets forth as of the Closing Date those taxable years
      for which any Credit Party’s tax returns are currently being audited
      by the IRS or any other applicable Governmental Authority, and any assessments
      or threatened assessments in connection with such audit, or otherwise currently
      outstanding. Except as described in Disclosure Schedule (3.11),
      no Credit Party has executed or filed with the IRS or any other Governmental
      Authority any agreement or other document extending, or having the effect
      of extending, the period for assessment or collection of any Charges. None
      of the Credit Parties and their respective predecessors are liable for
      any Charges: (a) under any agreement (including any tax sharing agreements)
      or (b) to each Credit Party’s knowledge, as a transferee. As of the
      Closing Date, no Credit Party has agreed or been requested to make any
      adjustment under IRC Section 481(a), by reason of a change in accounting
      method or otherwise, which would have a Material Adverse Effect.

  3.12     ERISA.

  (a)     Disclosure
        Schedule (3.12) lists (i) all ERISA Affiliates and (ii) all Plans
        and separately identifies all Pension Plans, including Title IV Plans,
        Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree Welfare
        Plans. Copies of all such listed Plans, together with a copy of the latest
        IRS/DOL 5500-series form for each such Plan, have been delivered to Agent.
        Except with respect to Multiemployer Plans, each Qualified Plan has been
        determined by the IRS to qualify under Section 401 of the IRC, the trusts
        created thereunder have been determined to be exempt from tax under the
        provisions of Section 501 of the IRC, and nothing has occurred that would
        cause the loss of such qualification or tax-exempt status. Each Plan
        is in compliance with the applicable provisions of ERISA and the IRC,
        including the timely filing of all reports required under the IRC or
        ERISA, including the statement required by 29 CFR Section 2520.104-23.
        Neither any Credit Party nor ERISA Affiliate has failed to make any contribution
        or pay any amount due as required by either Section 412 of the IRC or
        Section 302 of ERISA or the terms of any such Plan. Neither any Credit
        Party nor ERISA Affiliate has engaged in a “prohibited transaction,” as
        defined in Section 406 of ERISA and Section 4975 of the IRC, in connection
        with any Plan, that would subject any Credit Party to a material tax
        on prohibited transactions imposed by Section 502(i) of ERISA or Section
        4975 of the IRC. 

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  (b)     Except
      as set forth in Disclosure Schedule (3.12): (i) no Title IV Plan
      has any Unfunded Pension Liability; (ii) no ERISA Event or event described
      in Section 4062(e) of ERISA with respect to any Title IV Plan has occurred
      or is reasonably expected to occur; (iii) there are no pending, or to the
      knowledge of any Credit Party, threatened claims (other than claims for
      benefits in the normal course), sanctions, actions or lawsuits, asserted
      or instituted against any Plan or any Person as fiduciary or sponsor of
      any Plan; (iv) no Credit Party or ERISA Affiliate has incurred or reasonably
      expects to incur any liability as a result of a complete or partial withdrawal
      from a Multiemployer Plan; (v) within the last five years no Title IV Plan
      of any Credit Party or ERISA Affiliate has been terminated, whether or
      not in a “standard termination” as that term is used in Section
      4041(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party or any
      ERISA Affiliate (determined at any time within the last five years) with
      Unfunded Pension Liabilities been transferred outside of the “controlled
      group” (within the meaning of Section 4001(a)(14) of ERISA) of any
      Credit Party or ERISA Affiliate (determined at such time); (vi) except
      in the case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates
      makes up, in the aggregate, no more than 10% of fair market value of the
      assets of any Plan measured on the basis of fair market value as of the
      latest valuation date of any Plan; and (vii) no liability under any Title
      IV Plan has been satisfied with the purchase of a contract from an insurance
      company that is not rated AAA by the Standard & Poor’s Corporation or an equivalent rating by another nationally recognized rating agency.

  3.13     No
        Litigation. No action, claim, lawsuit, demand, investigation or proceeding
        is now pending or, to the knowledge of any Credit Party, threatened against
        any Credit Party, before any Governmental Authority or before any arbitrator
        or panel of arbitrators (collectively, “Litigation”),
        (a) that challenges any Credit Party’s right or power to enter
        into or perform any of its obligations under the Loan Documents to which
        it is a party, or the validity or enforceability of any Loan Document
        or any action taken thereunder, or (b) that has a reasonable risk of
        being determined adversely to any Credit Party and that, if so determined,
        could be reasonably be expected to have a Material Adverse Effect. Except
        as set forth on Disclosure Schedule (3.13), as of the Closing
        Date there is no Litigation pending or, to any Credit Party’s knowledge,
        threatened, that seeks damages in excess of $100,000 or injunctive relief
        against, or alleges criminal misconduct of, any Credit Party. 

  3.14     Brokers.
      No broker or finder brought about the obtaining, making or closing of the
      Loans or the Related Transactions, and no Credit Party or Affiliate thereof
      has any obligation to any Person in respect of any finder’s or brokerage
      fees in connection therewith.

  3.15     Intellectual
        Property. As of the Closing Date, each Credit Party owns or has rights
        to use all Intellectual Property necessary to continue to conduct its
        business as now or heretofore conducted by it or proposed to be conducted
        by it, and each Patent, Trademark, Copyright and License is listed, together
        with application or registration numbers, as applicable, in Disclosure
        Schedule (3.15). Each Credit Party conducts its business and affairs
        without infringement of or interference with any Intellectual Property
        of any other Person in any material respect. Except as set forth in Disclosure
        Schedule (3.15), no Credit Party is aware of any infringement claim
        by any other Person with respect to any Intellectual Property. 

  3.16     Full
        Disclosure. No information contained in this Agreement, any of the
        other Loan Documents, any Projections, Financial Statements or Collateral
        Reports or other written reports from time to time delivered hereunder
        or any written statement furnished by or on behalf of any Credit Party
        to Agent or any Lender pursuant to the terms of this Agreement contains
        or will contain any untrue statement of a material fact or omits or will
        omit to state a material fact necessary to make the statements contained
        herein or therein not misleading in light of the circumstances under
        which they were made. The Liens granted to Agent, on behalf of itself
        and Lenders, pursuant to the Collateral Documents will at all times be
        fully perfected first priority Liens in and to the Collateral described
therein, subject, as to priority, only to Permitted Encumbrances.

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3.17     Environmental
    Matters.
  (a)     Except
        as set forth in Disclosure Schedule (3.17), as of the Closing
        Date: (i) the Real Estate is free of contamination from any Hazardous
        Material except for such contamination that would not adversely impact
        the value or marketability of such Real Estate and which would not result
        in Environmental Liabilities, which could reasonably be expected to exceed
        $100,000; (ii) no Credit Party has caused or suffered to occur any Release
        of Hazardous Materials on, at, in, under, above, to, from or about any
        of its Real Estate; (iii) the Credit Parties are and have been in compliance
        with all Environmental Laws, except for such noncompliance that would
        not result in Environmental Liabilities which could reasonably be expected
        to exceed $100,000; (iv) the Credit Parties have obtained, and are in
        compliance with, all Environmental Permits required by Environmental
        Laws for the operations of their respective businesses as presently conducted
        or as proposed to be conducted, except where the failure to so obtain
        or comply with such Environmental Permits would not result in Environmental
        Liabilities that could reasonably be expected to exceed $100,000, and
        all such Environmental Permits are valid, uncontested and in good standing;
        (v) no Credit Party is involved in operations or knows of any facts,
        circumstances or conditions, including any Releases of Hazardous Materials,
        that are likely to result in any Environmental Liabilities of such Credit
        Party which could reasonably be expected to exceed $100,000, and no Credit
        Party has permitted any current or former tenant or occupant of the Real
        Estate to engage in any such operations; (vi) there is no Litigation
        arising under or related to any Environmental Laws, Environmental Permits
        or Hazardous Material that seeks damages, penalties, fines, costs or
        expenses in excess of $25,000 or injunctive relief against, or that alleges
        criminal misconduct by, any Credit Party; (vii) no notice has been received
        by any Credit Party identifying it as a “potentially responsible
        party” or requesting information under CERCLA or analogous state
        statutes, and to the knowledge of the Credit Parties, there are no facts,
        circumstances or conditions that may result in any Credit Party being
        identified as a “potentially responsible party” under CERCLA
        or analogous state statutes; and (viii) the Credit Parties have provided
        to Agent copies of all existing environmental reports, reviews and audits
        and all written information pertaining to actual or potential Environmental
        Liabilities, in each case relating to any Credit Party. 

    (b)     Each
        Credit Party hereby acknowledges and agrees that Agent (i) is not now,
        and has not ever been, in control of any of the Real Estate or any Credit
        Party’s affairs, and (ii) does not have the capacity through the
        provisions of the Loan Documents or otherwise to influence any Credit
        Party’s conduct with respect to the ownership, operation or management
        of any of its Real Estate or compliance with Environmental Laws or Environmental
        Permits. 

    3.18     Insurance. Disclosure
          Schedule (3.18) lists all insurance policies of any nature maintained,
          as of the Closing Date, for current occurrences by each Credit Party,
          as well as a summary of the terms of each such policy.

    3.19     Deposit
          and Disbursement Accounts. Disclosure Schedule (3.19) lists
          all banks and other financial institutions at which any Credit Party
          maintains deposit or other accounts as of the Closing Date, including
          any Disbursement Accounts, and such Schedule correctly identifies the
          name, address and telephone number of each depository, the name in
          which the account is held, a description of the purpose of the account,
          and the complete account number therefor.

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  3.20     Government
        Contracts. Except as set forth in Disclosure Schedule (3.20),
        as of the Closing Date, no Credit Party is a party to any contract or
        agreement with any Governmental Authority and no Credit Party’s Accounts are subject to the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any similar state or local law.

  3.21     Customer
            and Trade Relations. Except as set forth in Disclosure Schedule
            (3.21), as of the Closing Date, there exists no actual or, to the
            knowledge of any Credit Party, threatened termination or cancellation
            of, or any material adverse modification or change in the business
            relationship of any Credit Party with any customer or group of customers
            whose purchases during the preceding 12 months caused them to be ranked
            among the ten largest customers of such Credit Party; or the business
            relationship of any Credit Party with any supplier material to its
            operations.

  3.22     Agreements
          and Other Documents. As of the Closing Date, each Credit Party
          has provided to Agent or its counsel, on behalf of Lenders, accurate
          and complete copies (or summaries) of all of the following agreements
          or documents to which it is subject and each of which is listed in Disclosure
          Schedule (3.22): supply agreements and purchase agreements not
          terminable by such Credit Party within 60 days following written notice
          issued by such Credit Party and involving transactions in excess of
          $1,000,000 per annum; leases of Equipment having a remaining term of
          one year or longer and requiring aggregate rental and other payments
          in excess of $500,000 per annum; licenses and permits held by the Credit
          Parties, the absence of which could be reasonably likely to have a
          Material Adverse Effect; instruments and documents evidencing any Indebtedness
          or Guaranteed Indebtedness of such Credit Party and any Lien granted
          by such Credit Party with respect thereto; and instruments and agreements
          evidencing the issuance of any equity securities, warrants, rights
          or options to purchase equity securities of such Credit Party. 

    3.23     Solvency.
        Both before and after giving effect to (a) the Loans to be made or incurred
        on the Closing Date or such other date as Loans requested hereunder are
        made or incurred; (b) the disbursement of the proceeds of such Loans
        pursuant to the instructions of Borrower; (c) the consummation of the
        other Related Transactions; and (d) the payment and accrual of all transaction
        costs in connection with the foregoing, each Credit Party is and will
        be Solvent.

    3.24     Subordinated
          Debt. As of the Closing Date, Borrower has provided to Agent or
          its counsel, on behalf of Lenders, accurate and complete copies of
          all Subordinated Notes (including all schedules, exhibits, amendments,
          supplements, modifications, assignments and all other documents delivered
          pursuant thereto or in connection therewith), each of which is listed
          in Disclosure Schedule (3.24). Disclosure Schedule (3.24) also
          sets forth a true and correct list of all Subordinated Note Holders.
          Borrower had the corporate power and authority to incur the Indebtedness
          evidenced by the Subordinated Notes and to enter into the amendment
          to the Subordinated Notes contemplated as a condition to the closing
          of this Credit Agreement. The Subordination Agreement is enforceable
          against the holders of the Subordinated Notes by Agent and Lenders.
          All Obligations constitute senior Indebtedness entitled to the benefits
          of the subordination provisions contained in the Subordination Agreement.
          Borrower acknowledges that Agent and each Lender are entering into
          this Agreement and are extending the Commitments in reliance upon the
          subordination provisions contained in the Subordination Agreement and
this Section 3.23. 

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  3.25     OFAC.
      No Credit Party (i) is a person whose property or interest in property
      is blocked or subject to blocking pursuant to Section 1 of Executive Order
      13224 of September 23, 2001 Blocking Property and Prohibiting Transactions
      With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed.
      Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited
      by Section 2 of such executive order, or is otherwise associated with any
      such person in any manner violative of Section 2, or (iii) is a person
      on the list of Specially Designated Nationals and Blocked Persons or subject
      to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

  3.26     Patriot
          Act. Each Credit Party is in compliance, in all material respects,
          with the (i) the Trading with the Enemy Act, as amended, and each
          of the foreign assets control regulations of the United States Treasury
          Department (31 CFR, Subtitle B, Chapter V, as amended) and any other
          enabling legislation or executive order relating thereto, and (ii)
          the Uniting And Strengthening America By Providing Appropriate Tools
          Required
          To Intercept And Obstruct Terrorism (USA Patriot Act of 2001). No part
          of the proceeds of the Loans will be used, directly or indirectly,
          for any payments to any governmental official or employee, political
          party,
          official of a political party, candidate for political office, or anyone
          else acting in an official capacity, in order to obtain, retain or
          direct business or obtain any improper advantage, in violation of the
          United
  States Foreign Corrupt Practices Act of 1977, as amended.  

4.      FINANCIAL STATEMENTS AND INFORMATION

4.1     Reports and
    Notices.
  (a)     Each
        Credit Party executing this Agreement hereby agrees that from and after
        the Closing Date and until the Termination Date, it shall deliver to
        Agent or to Agent and Lenders, as required, the Financial Statements,
        notices, Projections and other information at the times, to the Persons
        and in the manner set forth in Annex D.

    (b)     Each
        Credit Party executing this Agreement hereby agrees that, from and after
        the Closing Date and until the Termination Date, it shall deliver to
        Agent or to Agent and Lenders, as required, the various Collateral Reports
        (including Borrowing Base Certificates in the form of Exhibit 4.1(b))
        at the times, to the Persons and in the manner set forth in Annex
        E.

    4.2     Communication
          with Accountants. Each Credit Party executing this Agreement authorizes
          (a) Agent and (b) so long as an Event of Default has occurred and is
          continuing, each Lender, to communicate directly with its independent
          certified public accountants, including Grant Thornton LLP, and authorizes
          and, at Agent’s request, shall instruct those accountants and
          advisors to disclose and make available to Agent and each Lender any
          and all Financial Statements and other supporting financial documents,
          schedules and information relating to any Credit Party (including copies
          of any issued management letters) with respect to the business, financial
          condition and other affairs of any Credit Party.

5.      AFFIRMATIVE COVENANTS

Each Credit Party executing this Credit Agreement
  jointly and severally agrees as to all Credit Parties that from and after the
  date hereof and until the Termination Date:
  
  5.1     Maintenance
          of Existence and Conduct of Business. Each Credit Party shall:
          do or cause to be done all things necessary to preserve and keep in
          full force and effect its corporate existence and its rights and franchises;
          continue to conduct its business substantially as now conducted or
          as otherwise permitted hereunder; at all times maintain, preserve and
          protect all of its assets and properties used or useful in the conduct
          of its business, and keep the same in good repair, working order and
          condition in all material respects (taking into consideration ordinary
          wear and tear) and from time to time make, or cause to be made, all
          necessary or appropriate repairs, replacements and improvements thereto
          consistent with industry practices; and transact business only in such
          corporate and trade names as are set forth in Disclosure Schedule
          (5.1).

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5.2     Payment of Charges.
  (a)     Subject
        to Section 5.2(b), each Credit Party shall pay and discharge or
        cause to be paid and discharged promptly all Charges payable by it, including
        (i) Charges imposed upon it, its income and profits, or any of its property
        (real, personal or mixed) and all Charges with respect to tax, social
        security and unemployment withholding with respect to its employees,
        (ii) lawful claims for labor, materials, supplies and services or otherwise,
        and (iii) all storage or rental charges payable to warehousemen or bailees,
        in each case, before any thereof shall become past due.

    (b)     Each
        Credit Party may in good faith contest, by appropriate proceedings, the
        validity or amount of any Charges, Taxes or claims described in Section
        5.2(a); provided, that (i) adequate reserves with respect
        to such contest are maintained on the books of such Credit Party, in
        accordance with GAAP; (ii) no Lien shall be imposed to secure payment
        of such Charges (other than payments to warehousemen and/or bailees)
        that is superior to any of the Liens securing the Obligations and such
        contest is maintained and prosecuted continuously and with diligence
        and operates to suspend collection or enforcement of such Charges; (iii)
        none of the Collateral becomes subject to forfeiture or loss as a result
        of such contest; (iv) such Credit Party shall promptly pay or discharge
        such contested Charges, Taxes or claims and all additional charges, interest,
        penalties and expenses, if any, and shall deliver to Agent evidence reasonably
        acceptable to Agent of such compliance, payment or discharge, if such
        contest is terminated or discontinued adversely to such Credit Party
        or the conditions set forth in this Section 5.2(b) are no longer
        met; and (v) Agent has not advised Borrower in writing that Agent reasonably
        believes that nonpayment or nondischarge thereof could have or result
        in a Material Adverse Effect.

    5.3     Books
          and Records. Each Credit Party shall keep adequate books and records
          with respect to its business activities in which proper entries, reflecting
          all financial transactions, are made in accordance with GAAP and on
          a basis consistent with the Financial Statements attached as Disclosure
          Schedule (3.4(a)).

    5.4     Insurance;
          Damage to or Destruction of Collateral.

    (a)     The
        Credit Parties shall, at their sole cost and expense, maintain the policies
        of insurance described on Disclosure Schedule (3.18) as in
        effect on the date hereof or otherwise in form and amounts and with insurers
        reasonably acceptable to Agent. Such policies of insurance (or the loss
        payable and additional insured endorsements delivered to Agent) shall
        contain provisions pursuant to which the insurer agrees to provide 30
        days prior written notice to Agent in the event of any non-renewal, cancellation
        or amendment of any such insurance policy. If any Credit Party at any
        time or times hereafter shall fail to obtain or maintain any of the policies
        of insurance required above, or to pay all premiums relating thereto,
        Agent may at any time or times thereafter obtain and maintain such policies
        of insurance and pay such premiums and take any other action with respect
        thereto that Agent deems advisable. Agent shall have no obligation to
        obtain insurance for any Credit Party or pay any premiums therefor. By
        doing so, Agent shall not be deemed to have waived any Default or Event
        of Default arising from any Credit Party’s failure to maintain
        such insurance or pay any premiums therefor. All sums so disbursed, including
        reasonable attorneys’ fees, court costs and other charges related
        thereto, shall be payable on demand by Borrower to Agent and shall be
        additional Obligations hereunder secured by the Collateral. 

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(b)     Agent reserves
  the right at any time upon any change in any Credit Party’s risk profile
  (including any change in the product mix maintained by any Credit Party or
  any laws affecting the potential liability of such Credit Party) to require
  additional forms and limits of insurance to, in Agent’s opinion, adequately
  protect both Agent’s and Lender’s interests in all or any portion
  of the Collateral and to ensure that each Credit Party is protected by insurance
  in amounts and with coverage customary for its industry. If reasonably requested
  by Agent, each Credit Party shall deliver to Agent from time to time a report
  of a reputable insurance broker, reasonably satisfactory to Agent, with respect
  to its insurance policies.
  (c)     Each
        Credit Party shall deliver to Agent, in form and substance reasonably
        satisfactory to Agent, endorsements to (i) all “All Risk” and
        business interruption insurance naming Agent, on behalf of itself and
        Lenders, as loss payee, and (ii) all general liability and other liability
        policies naming Agent, on behalf of itself and Lenders, as additional
        insured. Each Credit Party irrevocably makes, constitutes and appoints
        Agent (and all officers, employees or agents designated by Agent), so
        long as any Default or Event of Default has occurred and is continuing
        or the anticipated insurance proceeds exceed $500,000, as such Credit
        Party’s true and lawful agent and attorney-in-fact for the purpose
        of making, settling and adjusting claims under such “All Risk” policies
        of insurance, endorsing the name of such Credit Party on any check or
        other item of payment for the proceeds of such “All Risk” policies
        of insurance and for making all determinations and decisions with respect
        to such “All Risk” policies of insurance. Agent shall have
        no duty to exercise any rights or powers granted to it pursuant to the
        foregoing power-of-attorney. Borrower shall promptly notify Agent of
        any loss, damage, or destruction to the Collateral in the amount of $250,000
        or more, whether or not covered by insurance. After deducting from such
        proceeds the expenses, if any, incurred by Agent in the collection or
        handling thereof, Agent may, at its option, apply such proceeds to the
        reduction of the Obligations in accordance with Section 1.3(d);
        or permit or require the applicable Credit Party to use such money, or
        any part thereof, to replace, repair, restore or rebuild the Collateral
        in a diligent and expeditious manner with materials and workmanship of
        substantially the same quality as existed before the loss, damage or
        destruction. Notwithstanding the foregoing, if the casualty giving rise
        to such insurance proceeds could not reasonably be expected to have a
        Material Adverse Effect and such insurance proceeds do not exceed $500,000
        in the aggregate, Agent shall permit the applicable Credit Party to replace,
        restore, repair or rebuild the property; provided that if such
        Credit Party shall not have completed or entered into binding agreements
        to complete such replacement, restoration, repair or rebuilding within
        180 days of such casualty, Agent may apply such insurance proceeds to
        the Obligations in accordance with Section 1.3(d). All insurance
        proceeds that are to be made available to Borrower to replace, repair,
        restore or rebuild the Collateral shall be applied by Agent to reduce
        the outstanding principal balance of the Revolving Loan (which application
        shall not result in a permanent reduction of the Revolving Loan Commitment)
        and upon such application, Agent shall establish a Reserve against the
        Borrowing Base in an amount equal to the amount of such proceeds so applied.
        All insurance proceeds made available to any Credit Party that is not
        a Borrower to replace, repair, restore or rebuild Collateral shall be
        deposited in a cash collateral account. Thereafter, such funds shall
        be made available to such Credit Party provide funds to replace, repair,
        restore or rebuild the Collateral as follows: (i) Borrower shall request
        a Revolving Credit Advance or a release from the cash collateral account
        be made to such Credit Party in the amount requested to be released;
        (ii) so long as the conditions set forth in Section 2.2 have been
        met, Revolving Lenders shall make such Revolving Credit Advance or Agent
        shall release funds from the cash collateral account; and (iii) in the
        case of insurance proceeds applied against the Revolving Loan, the Reserve
        established with respect to such insurance proceeds shall be reduced
        by the amount of such Revolving Credit Advance. To the extent not used
        to replace, repair, restore or rebuild the Collateral, such insurance
        proceeds shall be applied in accordance with Section 1.3(d). 

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(d)     The
    Credit Parties shall, at their sole cost and expense, maintain (i) key-man
    life insurance
  policies in the amount of $1.0 million and $1.0 million on the lives of William
  Jenkins and Danny Thornton respectively, all in form and with insurers reasonably
  acceptable to Agent and (ii) assignments of such key-man life insurance policies
  to Agent, all in form acceptable to Agent.
  5.5     Compliance
          with Laws. Each Credit Party shall comply with all federal, state,
          local and foreign laws and regulations applicable to it, including
          those relating to ERISA and labor matters and Environmental Laws and
          Environmental Permits, except to the extent that the failure to comply,
          individually or in the aggregate, could not reasonably be expected
          to have a Material Adverse Effect. 

    5.6     Supplemental
          Disclosure. From time to time as may be reasonably requested by
          Agent (which request will not be made more frequently than once each
          year absent the occurrence and continuance of a Default or an Event
          of Default), the Credit Parties shall supplement each Disclosure Schedule
          hereto, or any representation herein or in any other Loan Document,
          with respect to any matter hereafter arising that, if existing or occurring
          at the date of this Agreement, would have been required to be set forth
          or described in such Disclosure Schedule or as an exception to such
          representation or that is necessary to correct any information in such
          Disclosure Schedule or representation which has been rendered inaccurate
          thereby (and, in the case of any supplements to any Disclosure Schedule,
          such Disclosure Schedule shall be appropriately marked to show the
          changes made therein); provided that (a) no such supplement
          to any such Disclosure Schedule or representation shall amend, supplement
          or otherwise modify any Disclosure Schedule or representation, or be
          or be deemed a waiver of any Default or Event of Default resulting
          from the matters disclosed therein, except as consented to by Agent
          and Requisite Lenders in writing, and (b) no supplement shall be required
          or permitted as to representations and warranties that relate solely
          to the Closing Date.

    5.7     Intellectual
          Property. Each Credit Party will conduct its business and affairs
          without infringement of or interference with any Intellectual Property
          of any other Person in any material respect.

    5.8     Environmental
          Matters. Each Credit Party shall and shall cause each Person within
          its control to: (a) conduct its operations and keep and maintain its
          Real Estate in compliance with all Environmental Laws and Environmental
          Permits other than noncompliance that could not reasonably be expected
          to have a Material Adverse Effect; (b) implement any and all investigation,
          remediation, removal and response actions that are appropriate or necessary
          to maintain the value and marketability of the Real Estate or to otherwise
          comply with Environmental Laws and Environmental Permits pertaining
          to the presence, generation, treatment, storage, use, disposal, transportation
          or Release of any Hazardous Material on, at, in, under, above, to,
          from or about any of its Real Estate; (c) notify Agent promptly after
          such Credit Party becomes aware of any violation of Environmental Laws
          or Environmental Permits or any Release on, at, in, under, above, to,
          from or about any Real Estate that is reasonably likely to result in
          Environmental Liabilities in excess of $25,000; and (d) promptly forward
          to Agent a copy of any order, notice, request for information or any
          communication or report received by such Credit Party in connection
          with any such violation or Release or any other matter relating to
          any Environmental Laws or Environmental Permits that could reasonably
          be expected to result in Environmental Liabilities in excess of $25,000,
          in each case whether or not the Environmental Protection Agency or
          any Governmental Authority has taken or threatened any action in connection
          with any such violation, Release or other matter. If Agent at any time
          has a reasonable basis to believe that there may be a violation of
          any Environmental Laws or Environmental Permits by any Credit Party
          or any Environmental Liability arising thereunder, or a Release of
          Hazardous Materials on, at, in, under, above, to, from or about any
          of its Real Estate, that, in each case, could reasonably be expected
          to have a Material Adverse Effect, then each Credit Party shall, upon
          Agent’s written request (i) cause the performance of such environmental
          audits including subsurface sampling of soil and groundwater, and preparation
          of such environmental reports, at Borrower’s expense, as Agent
          may from time to time reasonably request, which shall be conducted
          by reputable environmental consulting firms reasonably acceptable to
          Agent and shall be in form and substance reasonably acceptable to Agent,
          and (ii) permit Agent or its representatives to have access to all
          Real Estate for the purpose of conducting such environmental audits
          and testing as Agent deems appropriate, including subsurface sampling
          of soil and groundwater. Borrower shall reimburse Agent for the costs
          of such audits and tests and the same will constitute a part of the
          Obligations secured hereunder. 

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  5.9     Landlords’ Agreements,
        Mortgagee Agreements, Bailee Letters and Real Estate Purchases. Each
        Credit Party shall obtain a landlord’s agreement, mortgagee agreement
        or bailee letter, as applicable, from the lessor of each leased property,
        mortgagee of owned property or bailee with respect to any warehouse,
        processor or converter facility or other location where Collateral is
        stored or located, which agreement or letter shall contain a waiver or
        subordination of all Liens or claims that the landlord, mortgagee or
        bailee may assert against the Collateral at that location, and shall
        otherwise be reasonably satisfactory in form and substance to Agent.
        After the Closing Date, no real property or warehouse space shall be
        leased by any Credit Party and no Inventory shall be shipped to a processor
        or converter under arrangements established after the Closing Date without
        the prior written consent of Agent or, unless and until a reasonably
        satisfactory landlord agreement or bailee letter, as appropriate, shall
        first have been obtained with respect to such location. Each Credit Party shall timely and fully pay and perform its obligations under all leases and other agreements with respect to each leased location or public warehouse where any Collateral is or may be located.

  5.10     Mortgages.
          At the request of Agent, each Credit Party executing this Agreement
      agrees that it shall and shall cause each other Credit Party to, at such
      Credit
          Party’s expense and upon request of Agent, to provide to Agent
          a mortgage or deed of trust granting Agent a first priority Lien on
          such Real Estate, together with environmental audits, mortgage title
          insurance
          commitment and policy, real property survey, local counsel opinion(s),
          and, if required by Agent, supplemental casualty insurance and flood
          insurance, and such other documents, instruments or agreements reasonably
          requested by Agent, in each case, in form and substance reasonably
          satisfactory to Agent. To the extent otherwise permitted hereunder,
          if any Credit
          Party proposes to acquire a fee ownership interest in Real Estate after
          Agent has requested that the Credit Parties deliver a mortgage or deed
          of trust pursuant to the foregoing sentence, it shall notify Agent,
          and if the Agent requests, provide to Agent a mortgage or deed of trust
          granting
          Agent a first priority Lien on such Real Estate, together with environmental
          audits, mortgage title insurance commitment, real property survey,
          local counsel opinion(s), and, if required by Agent, supplemental casualty
          insurance and flood insurance, and such other documents, instruments
          or agreements reasonably requested by Agent, in each case, in form
          and
          substance reasonably satisfactory to Agent. 

  5.11     Further
          Assurances. Each Credit Party executing this Agreement agrees that
          it shall and shall cause each other Credit Party to, at such Credit
          Party’s expense and upon request of Agent, duly execute and deliver,
          or cause to be duly executed and delivered, to Agent such further instruments
          and do and cause to be done such further acts as may be necessary or
          proper in the reasonable opinion of Agent to carry out more effectively
          the provisions and purposes of this Agreement or any other Loan Document. 

    5.12     Certificates
          of Title. As of the Closing Date, Borrower shall have delivered
          to the Agent applications for new certificates of title for all Equipment
          of Borrower that can be titled evidencing the Lien granted to Agent
          under the Loan Documents in such Equipment, and as of one Business
          Day immediately following the Closing Date, Borrower shall have caused
          all existing certificates of title for all Equipment of Borrower that
          can be titled to be delivered to Agent, with any Liens noted thereon
          released by the holder of such Lien. If Borrower acquires any Equipment
          after the Closing Date that can be titled, Borrower shall cause a certificate
          of title to be issued for such Equipment, with the Lien of the Agent
          noted thereon, and shall cause such certificate to be delivered to
the Agent or its designee directly. 

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5.13     Post Closing
    Covenant.
  (a)     No
        later than December 31, 2004, the Credit Parties shall, at their sole
        cost and expense, (i) establish an additional key-man life insurance
        policy in the amount of $1.0 million on the life of William Jenkins,
        in form and with an insurer reasonably acceptable to Agent and (ii) deliver
        to Agent an assignment of such key-man life insurance policy to Agent,
        all in form acceptable to Agent.

    (b)     No
        later than 120 days after the Closing Date, the Credit Parties shall,
        at their sole cost and expense, (i) establish key-man life insurance
        policies in the amount of $1.0 million on the life of Ron Whitter, in
        form and with insurers reasonably acceptable to Agent and (ii) deliver
        to Agent assignments of such key-man life insurance policies to Agent,
        all in form acceptable to Agent. 

    (c)     No
        later than November 30, 2004, the Credit Parties shall, at their sole
        cost and expense, deliver or cause to be delivered to Agent a good standing
        certificate as of a recent date for Borrower, issued by the Secretary
        of State of the State of Mississippi.

    (d)     No
        later than November 30, 2004, the Credit Parties shall, at their sole
        cost and expense, provide to Agent written evidence confirming that the
        key-man life insurance policies of Borrower in the amount of $1.0 million
        and $1.0 million on the lives of William Jenkins and Danny Thornton,
        respectively, which are in existence on the Closing Date, are in full
        force and effect and that the premiums therefor have been paid current.

6.      NEGATIVE COVENANTS

Each Credit Party executing this Agreement jointly
  and severally agrees as to all Credit Parties that from and after the date
  hereof until the Termination Date:
  6.1     Mergers,
          Subsidiaries, Etc. No Credit Party shall directly or indirectly,
          by operation of law or otherwise, (a) form or acquire any Subsidiary,
          or (b) merge with, consolidate with, acquire all or substantially all
          of the assets or Stock of, or otherwise combine with or acquire, any
          Person. 

    6.2     Investments;
          Loans and Advances. Except as otherwise expressly permitted by
          this Section 6, no Credit Party shall make or permit to exist
          any investment in, or make, accrue or permit to exist loans or advances
          of money to, any Person, through the direct or indirect lending of
          money, holding of securities or otherwise, except that: (a) Borrower
          may hold investments comprised of notes payable, or stock or other
          securities issued by Account Debtors to Borrower pursuant to negotiated
          agreements with respect to settlement of such Account Debtor’s
          Accounts in the ordinary course of business, so long as the aggregate
          amount of such Accounts so settled by Borrower does not exceed $250,000;
          and (b) other investments not exceeding $1,000,000 in the aggregate
          at any time outstanding. 

6.3     Indebtedness.

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  (a)     No
      Credit Party shall create, incur, assume or permit to exist any Indebtedness,
      except (without duplication) (i) Indebtedness secured by purchase money
      security interests and Capital Leases permitted in Section 6.7(c),
      (ii) the Loans and the other Obligations, (iii) unfunded pension fund and
      other employee benefit plan obligations and liabilities to the extent they
      are permitted to remain unfunded under applicable law, (iv) existing Indebtedness
      described in Disclosure Schedule (6.3) and refinancings thereof
      or amendments or modifications thereto that do not have the effect of increasing
      the principal amount thereof or changing the amortization thereof (other
      than to extend the same) and that are otherwise on terms and conditions
      no less favorable to any Credit Party, Agent or any Lender, as determined
      by Agent, than the terms of the Indebtedness being refinanced, amended or modified, (v) Permitted Insurance Premium Indebtedness in an aggregate amount not to exceed $2,400,000 at any one time outstanding and (vi) Indebtedness specifically permitted under Section 6.17;

  (b)     No
        Credit Party shall, directly or indirectly, voluntarily purchase, redeem,
        defease or prepay any principal of, premium, if any, interest or other
        amount payable in respect of any Indebtedness, other than (i) the Obligations;
        (ii) Indebtedness secured by a Permitted Encumbrance if the asset securing
        such Indebtedness has been sold or otherwise disposed of in accordance
        with Sections 6.8(b) or (c); and (iii) Indebtedness permitted by Section
        6.3(a)(iv) upon any refinancing thereof in accordance with Section
        6.3(a)(iv).

  6.4     Employee
        Loans and Affiliate Transactions.

  (a)     No
      Credit Party shall enter into or be a party to any transaction with any
      other Credit Party or any Affiliate thereof except in the ordinary course
      of and pursuant to the reasonable requirements of such Credit Party’s
      business and upon fair and reasonable terms that are no less favorable
      to such Credit Party than would be obtained in a comparable arm’s
      length transaction with a Person not an Affiliate of such Credit Party.
      All such transactions existing as of the date hereof are described in Disclosure
      Schedule (6.4(a)).

  (b)     No
      Credit Party shall enter into any lending or borrowing transaction with
      any employees of any Credit Party, except loans to its respective employees
      in the ordinary course of business consistent with past practices for travel
      and entertainment expenses, relocation costs and similar purposes up to
      a maximum of $50,000 to any employee and up to a maximum of $250,000 in
      the aggregate at any one time outstanding. 

  6.5     Capital
        Structure and Business. No Credit Party shall (a) make any changes
        in any of its business objectives, purposes or operations that could
        in any way adversely affect the repayment of the Loans or any of the
        other Obligations or could reasonably be expected to have or result in
        a Material Adverse Effect, (b) make any change in its capital structure
        as described in Disclosure Schedule (3.8), including the issuance
        or sale of any shares of Stock, warrants or other securities convertible
        into Stock or any revision of the terms of its outstanding Stock, except
        for payments to holders of Subordinated Debt permitted by Section
        1.4 options granted under existing or future employee incentive stock
        option plans; or (c) amend its charter or bylaws in a manner that would
        adversely affect Agent or Lenders or such Credit Party’s duty or
        ability to repay the Obligations. No Credit Party shall engage in any
        business other than the businesses currently engaged in by it.

  6.6     Guaranteed
        Indebtedness. No Credit Party shall create, incur, assume or permit
        to exist any Guaranteed Indebtedness except (a) by endorsement of instruments
        or items of payment for deposit to the general account of any Credit
        Party, and (b) for Guaranteed Indebtedness incurred for the benefit of
        any other Credit Party if the primary obligation is expressly permitted
by this Agreement.

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  6.7     Liens.
      No Credit Party shall create, incur, assume or permit to exist any Lien
      on or with respect to its Accounts or any of its other properties or assets
      (whether now owned or hereafter acquired) except for (a) Permitted Encumbrances;
      (b) Liens in existence on the date hereof and summarized on Disclosure
      Schedule (6.7) securing the Indebtedness described on Disclosure
      Schedule (6.3) and permitted refinancings, extensions and renewals
      thereof, including extensions or renewals of any such Liens; provided that
      the principal amount of the Indebtedness so secured is not increased and
      the Lien does not attach to any other property; (c) Liens created after
      the date hereof by conditional sale or other title retention agreements
      (including Capital Leases) or in connection with purchase money Indebtedness
      with respect to Equipment and Fixtures acquired by any Credit Party in
      the ordinary course of business, involving the incurrence of an aggregate
      amount of purchase money Indebtedness and Capital Lease Obligations of
      not more than $1,000,000 outstanding at any one time for all such Liens
      (provided that such Liens attach only to the assets subject to such
      purchase money debt and such Indebtedness is incurred within 20 days following
      such purchase and does not exceed 100% of the purchase price of the subject
      assets). In addition, no Credit Party shall become a party to any agreement,
      note, indenture or instrument, or take any other action, that would prohibit
      the creation of a Lien on any of its properties or other assets in favor
      of Agent, on behalf of itself and Lenders, as additional collateral for the Obligations, except operating leases, Capital Leases or Licenses which prohibit Liens upon the assets that are subject thereto.

  6.8     Sale of Stock and Assets. No Credit Party shall sell, transfer, convey,
        assign or otherwise dispose of any of its properties or other assets,
        including the Stock of any of its Subsidiaries (whether in a public or
        a private offering or otherwise) or any of its Accounts, other than (a)
        the sale of Inventory in the ordinary course of business, and (b) the
        sale, transfer, conveyance or other disposition by a Credit Party of
        Equipment or Fixtures that are obsolete or no longer used or useful in
        such Credit Party’s business and having an appraised value not
        exceeding $100,000 in any single transaction or $250,000 in the aggregate
        in any Fiscal Year; and (c) other Equipment and Fixtures having a value
        not exceeding $100,000 in any single transaction or $250,000 in the aggregate
        in any Fiscal Year. With respect to any disposition of assets or other
        properties permitted pursuant to clauses (b) and (c) above,
        subject to Section 1.3(b), Agent agrees on reasonable prior
        written notice to release its Lien on such assets or other properties
        in order to permit the applicable Credit Party to effect such disposition
        and shall execute and deliver to Borrower, at Borrower’s expense,
        appropriate UCC termination statements and other releases as reasonably
        requested by Borrower.

  6.9     ERISA.
      No Credit Party shall, or shall cause or permit any ERISA Affiliate to,
      cause or permit to occur an event that could result in the imposition of
      a Lien under Section 412 of the IRC or Section 302 or 4068 of ERISA or
      cause or permit to occur an ERISA Event to the extent such ERISA Event
      could reasonably be expected to have a Material Adverse Effect.

  6.10     Financial
        Covenants. Borrower shall not breach or fail to comply with any of
        the Financial Covenants.

  6.11     Hazardous
        Materials. No Credit Party shall cause or permit a Release of any
        Hazardous Material on, at, in, under, above, to, from or about any of
        the Real Estate where such Release would (a) violate in any respect,
        or form the basis for any Environmental Liabilities under, any Environmental
        Laws or Environmental Permits or (b) otherwise adversely impact the value
        or marketability of any of the Real Estate or any of the Collateral,
        other than such violations or Environmental Liabilities that could not
        reasonably be expected to have a Material Adverse Effect.

  6.12     Sale-Leasebacks.
      No Credit Party shall engage in any sale-leaseback, synthetic lease or
similar transaction involving any of its assets.

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6.13     Cancellation
    of Indebtedness. No Credit Party shall cancel any claim or debt owing
    to it, except for reasonable consideration negotiated on an arm’s length
    basis and in the ordinary course of its business consistent with past practices.
  6.14     Restricted
          Payments. No Credit Party shall make any Restricted Payment, except
          (a) dividends and distributions by Subsidiaries of Borrower paid to
          Borrower and (b) employee loans permitted under Section 6.4(b).

    6.15     Change
          of Corporate Name or Location; Change of Fiscal Year

    No Credit Party shall (a) change
        its name as it appears in official filings in the state of its incorporation
        or other organization, (b) change its chief executive office, principal
        place of business, corporate offices or warehouses or locations at which
        Collateral is held or stored, or the location of its records concerning
        the Collateral, (c) change the type of entity that it is, (d) change
        its organization identification number, if any, issued by its state of
        incorporation or other organization, or (e) change its state of incorporation
        or organization, in each case without at least 30 days prior written
        notice to Agent and after Agent’s written acknowledgment that any
        reasonable action requested by Agent in connection therewith, including
        to continue the perfection of any Liens in favor of Agent, on behalf
        of Lenders, in any Collateral, has been completed or taken, and provided that
        any such new location shall be in the continental United States. Without
        limiting the foregoing, no Credit Party shall change its name, identity
        or corporate structure in any manner that might make any financing or
        continuation statement filed in connection herewith seriously misleading
        within the meaning of Section 9-402(7) of the Code or any other then
        applicable provision of the Code except upon prior written notice to
        Agent and Lenders and after Agent’s written acknowledgment that
        any reasonable action requested by Agent in connection therewith, including
        to continue the perfection of any Liens in favor of Agent, on behalf
        of Lenders, in any Collateral, has been completed or taken. No Credit
        Party shall change its Fiscal Year.

    6.16     No
          Impairment of Intercompany Transfers. No Credit Party shall directly
          or indirectly enter into or become bound by any agreement, instrument,
          indenture or other obligation (other than this Agreement and the other
          Loan Documents) that could directly or indirectly restrict, prohibit
          or require the consent of any Person with respect to the payment of
          dividends or distributions or the making or repayment of intercompany
          loans by a Subsidiary of Borrower to Borrower.

    6.17     No
          Speculative Transactions. No Credit Party shall engage in any transaction
          involving commodity options, futures contracts or similar transactions,
          except solely to hedge against fluctuations in the prices of commodities
          owned or purchased by it and the values of foreign currencies receivable
          or payable by it and interest swaps, caps or collars.

    6.18     Real
          Estate Purchases. No Credit Party shall purchase a fee simple ownership
          interest in Real Estate with an aggregate purchase price in excess
          of $250,000.

    6.19     Changes
          Relating to Subordinated Debt; Material Contracts. No Credit Party
          shall change or amend the terms of any Subordinated Debt (or any indenture
          or agreement in connection therewith) if the effect of such amendment
          is to: (a) increase the interest rate on such Subordinated Debt; (b)
          change the dates upon which payments of principal or interest are due
          on such Subordinated Debt other than to extend such dates; (c) change
          any default or event of default other than to delete or make less restrictive
          any default provision therein, or add any covenant with respect to
          such Subordinated Debt; (d) change the redemption or prepayment provisions
          of such Subordinated Debt other than to extend the dates therefor or
          to reduce the premiums payable in connection therewith; (e) grant any
          security or collateral to secure payment of such Subordinated Debt;
          or (f) change or amend any other term if such change or amendment would
          materially increase the obligations of the Credit Party thereunder
          or confer additional material rights on the holder of such Subordinated
          Debt in a manner adverse to any Credit Party, Agent or any Lender.

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7.      TERM

7.1     Termination.
  The financing arrangements contemplated hereby shall be in effect until the
  Commitment Termination Date, and the Loans and all other Obligations shall
  be automatically due and payable in full on such date.
  7.2     Survival
          of Obligations Upon Termination of Financing Arrangements

    Except as otherwise expressly
        provided for in the Loan Documents, no termination or cancellation (regardless
        of cause or procedure) of any financing arrangement under this Agreement
        shall in any way affect or impair the obligations, duties and liabilities
        of the Credit Parties or the rights of Agent and Lenders relating to
        any unpaid portion of the Loans or any other Obligations, due or not
        due, liquidated, contingent or unliquidated, or any transaction or event
        occurring prior to such termination, or any transaction or event, the
        performance of which is required after the Commitment Termination Date.
        Except as otherwise expressly provided herein or in any other Loan Document,
        all undertakings, agreements, covenants, warranties and representations
        of or binding upon the Credit Parties, and all rights of Agent and each
        Lender, all as contained in the Loan Documents, shall not terminate or
        expire, but rather shall survive any such termination or cancellation
        and shall continue in full force and effect until the Termination Date; provided,
        that the provisions of Section 11, the payment obligations under Sections
        1.15 and 1.16, and the indemnities contained in the Loan Documents
        shall survive the Termination Date.

8.      EVENTS OF DEFAULT; RIGHTS AND REMEDIES

8.1     Events of Default.
  The occurrence of any one or more of the following events (regardless of the
  reason therefor) shall constitute an “Event of Default” hereunder:
  (a)     Borrower
        (i) fails to make any payment of principal of, or interest on, or Fees
        owing in respect of, the Loans or any of the other Obligations when due
        and payable, or (ii) fails to pay or reimburse Agent or Lenders for any
        expense reimbursable hereunder or under any other Loan Document within
        10 days following Agent’s demand for such reimbursement or payment
        of expenses.

    (b)     Any
        Credit Party fails or neglects to perform, keep or observe any of the
        provisions of Sections 1.4, 1.8, 5.4(a), 5.12, 5.13 or 6, or any
        of the provisions set forth in Annexes B or F, respectively. 

    (c)     Borrower
        fails or neglects to perform, keep or observe any of the provisions of Section
        4 or any provisions set forth in Annexes D or E, respectively,
        and the same shall remain unremedied for (i) 3 days or more with respect
        to any report, certificate or other information required to be delivered
        weekly and (i) 5 days or more with respect to all other reports, certificates
        and information. 

    (d)     Any
        Credit Party fails or neglects to perform, keep or observe any other
        provision of this Agreement or of any of the other Loan Documents (other
        than any provision embodied in or covered by any other clause of this Section
        8.1) and the same shall remain unremedied for 20 days or more.

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  (e)     A
      default or breach occurs under any other agreement, document or instrument
      to which any Credit Party is a party that is not cured within any applicable
      grace period therefor, and such default or breach (i) involves the failure
      to make any payment when due in respect of any Indebtedness or Guaranteed
      Indebtedness (other than the Obligations) of any Credit Party in excess
      of $250,000 in the aggregate (including (x) undrawn committed or available
      amounts and (y) amounts owing to all creditors under any combined or syndicated
      credit arrangements), or (ii) causes, or permits any holder of such Indebtedness
      or Guaranteed Indebtedness or a trustee to cause, Indebtedness or Guaranteed
      Indebtedness or a portion thereof in excess of $250,000 in the aggregate
      to become due prior to its stated maturity or prior to its regularly scheduled
      dates of payment, or cash collateral in respect thereof to be demanded, in each case, regardless of whether such default is waived, or such right is exercised, by such holder or trustee.

  (f)     Any
            information contained in any Borrowing Base Certificate is untrue
      or incorrect in any respect in any Borrowing Base Certificate), or any
        representation or warranty herein or in any Loan Document or in any written
        statement, report, financial statement or certificate (other than a Borrowing
        Base Certificate) made or delivered to Agent or any Lender by any Credit
        Party is untrue or incorrect in any material respect as of the date when
        made or deemed made.

  (g)     Assets
        of any Credit Party are attached, seized, levied upon or subjected to
        a writ or distress warrant, or come within the possession of any receiver,
        trustee, custodian or assignee for the benefit of creditors of any Credit
        Party and such condition continues for 30 days or more.

    (h)     A
        case or proceeding is commenced against any Credit Party seeking a decree
        or order in respect of such Credit Party (i) under the Bankruptcy Code,
        or any other applicable federal, state or foreign bankruptcy or other
        similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
        trustee or sequestrator (or similar official) for such Credit Party or
        for any substantial part of any such Credit Party’s assets, or
        (iii) ordering the winding-up or liquidation of the affairs of such Credit
        Party, and such case or proceeding shall remain undismissed or unstayed
        for 60 days or more or a decree or order granting the relief sought in
        such case or proceeding shall be entered by a court of competent jurisdiction.

    (i)     Any
        Credit Party (i) files a petition seeking relief under the Bankruptcy
        Code, or any other applicable federal, state or foreign bankruptcy or
        other similar law, (ii) consents to or fails to contest in a timely and
        appropriate manner the institution of proceedings thereunder or the filing
        of any such petition or the appointment of or taking possession by a
        custodian, receiver, liquidator, assignee, trustee or sequestrator (or
        similar official) for such Credit Party or for any substantial part of
        any such Credit Party’s assets, (iii) makes an assignment for the
        benefit of creditors, (iv) takes any action in furtherance of any of
        the foregoing; or (v) admits in writing its inability to, or is generally
        unable to, pay its debts as such debts become due.

    (j)     A
        final judgment or judgments for the payment of money in excess of $250,000
        in the aggregate at any time are outstanding against one or more of the
        Credit Parties and the same are not, within 30 days after the entry thereof,
        discharged or execution thereof stayed or bonded pending appeal, or such
        judgments are not discharged prior to the expiration of any such stay.

    (k)     Any
        material provision of any Loan Document for any reason ceases to be valid,
        binding and enforceable in accordance with its terms (or any Credit Party
        shall challenge the enforceability of any Loan Document or shall assert
        in writing, or engage in any action or inaction based on any such assertion,
        that any provision of any of the Loan Documents has ceased to be or otherwise
        is not valid, binding and enforceable in accordance with its terms),
        or any Lien created under any Loan Document ceases to be a valid and
        perfected first priority Lien (except as otherwise permitted herein or
therein) in any of the Collateral purported to be covered thereby.

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(l)     Any
    Change of Control occurs.
  (m)     Any
        Material Adverse Effect occurs.

    (n)     William Jenkins ceases to
        serve as, or to perform the duties and functions of the office of, the
        chief executive officer of Borrower, unless he dies or becomes incapacitated
        or unless otherwise agreed to by the Agent.

	 	 	 (o)     The
      Subordinated Debt owing to any of the Subordinated Note Holders listed
      on Annex J is unpaid by Borrower at any time after December 5, 2004, unless
      on or prior to such date, such Subordinated Note Holder shall have consented
      to the transaction contemplated by this Agreement in a form permitted by
      the Escrow Agreement of even date herewith to which Borrower and GE Capital
    are parties.

	 	 	 

8.2     Remedies.
  (a)     If
        any Default or Event of Default has occurred and is continuing, Agent
        may (and at the written request of the Requisite Revolving Lenders shall),
        without notice, suspend the Revolving Loan Commitment with respect to
        additional Revolving Advances, whereupon any additional Revolving Advances
        shall be made or incurred in Agent’s sole discretion (or in the
        sole discretion of the Requisite Revolving Lenders, if such suspension
        occurred at their direction) so long as such Default or Event of Default
        is continuing. If any Default or Event of Default has occurred and is
        continuing, Agent may (and at the written request of Requisite Lenders
        shall), without notice except as otherwise expressly provided herein,
        increase the rate of interest applicable to the Loans to the Default
        Rate.

    (b)     If
        any Event of Default has occurred and is continuing, Agent may (and at
        the written request of the Requisite Lenders shall), without notice:
        (i) terminate the Revolving Loan Commitment with respect to further Advances;
        (ii) declare all or any portion of the Obligations, including all or
        any portion of any Loan to be forthwith due and payable, all without
        presentment, demand, protest or further notice of any kind, all of which
        are expressly waived by Borrower and each other Credit Party; or (iii)
        exercise any rights and remedies provided to Agent under the Loan Documents
        or at law or equity, including all remedies provided under the Code; provided,
        that upon the occurrence of an Event of Default specified in Sections
        8.1(h) or (i), the Revolving Loan Commitment shall be immediately
        terminated and all of the Obligations, including the aggregate Revolving
        Loan, shall become immediately due and payable without declaration, notice
        or demand by any Person.

    8.3     Waivers
          by Credit Parties. Except as otherwise provided for in this Agreement
          or by applicable law, each Credit Party waives (including for purposes
          of Section 12): (a) presentment, demand and protest and notice
          of presentment, dishonor, notice of intent to accelerate, notice of
          acceleration, protest, default, nonpayment, maturity, release, compromise,
          settlement, extension or renewal of any or all commercial paper, accounts,
          contract rights, documents, instruments, chattel paper and guaranties
          at any time held by Agent on which any Credit Party may in any way
          be liable, and hereby ratifies and confirms whatever Agent may do in
          this regard, (b) all rights to notice and a hearing prior to Agent’s
          taking possession or control of, or to Agent’s replevy, attachment
          or levy upon, the Collateral or any bond or security that might be
          required by any court prior to allowing Agent to exercise any of its
          remedies, and (c) the benefit of all valuation, appraisal, marshaling
          and exemption laws.

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9.      ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT

9.1     Assignment and
    Participations.
  (a)     Subject
        to the terms of this Section 9.1, any Lender may make an assignment
        to a Qualified Assignee of, or sell participations in, at any time or
        times, the Loan Documents, Loans and any Commitment or any portion thereof
        or interest therein, including any Lender’s rights, title, interests,
        remedies, powers or duties thereunder. Any assignment by a Lender shall:
        (i) require the consent of Agent (which consent shall not be unreasonably
        withheld or delayed with respect to a Qualified Assignee) and the execution
        of an assignment agreement (an “Assignment Agreement”) substantially
        in the form attached hereto as Exhibit 9.1(a) and otherwise in
        form and substance reasonably satisfactory to, and acknowledged by, Agent;
        (ii) be conditioned on such assignee Lender representing to the assigning
        Lender and Agent that it is purchasing the applicable Loans to be assigned
        to it for its own account, for investment purposes and not with a view
        to the distribution thereof; (iii) after giving effect to any such partial
        assignment, the assignee Lender shall have Commitments in an amount at
        least equal to $5,000,000 and the assigning Lender shall have retained
        Commitments in an amount at least equal to $5,000,000 (unless it assigns
        its entire Commitments); (iv) include a payment to Agent of an assignment
        fee of $3,500; and (v) so long as no Event of Default has occurred and
        is continuing, require the consent of Borrower, which shall not be unreasonably
        withheld or delayed; provided that no such consent shall
        be required for an assignment to a Qualified Assignee. In the case of
        an assignment by a Lender under this Section 9.1, the assignee
        shall have, to the extent of such assignment, the same rights, benefits
        and obligations as all other Lenders hereunder. The assigning Lender
        shall be relieved of its obligations hereunder with respect to its Commitments
        or assigned portion thereof from and after the date of such assignment.
        Borrower hereby acknowledges and agrees that any assignment shall give
        rise to a direct obligation of Borrower to the assignee and that the
        assignee shall be considered to be a “Lender”. In all instances,
        each Lender’s liability to make Loans hereunder shall be several
        and not joint and shall be limited to such Lender’s Pro Rata Share
        of the applicable Commitment. In the event Agent or any Lender assigns
        or otherwise transfers all or any part of the Obligations, Agent or any
        such Lender shall so notify Borrower and Borrower shall, upon the request
        of Agent or such Lender, execute new Notes in exchange for the Notes,
        if any, being assigned. Notwithstanding the foregoing provisions of this Section
        9.1(a), any Lender may at any time pledge the Obligations held by
        it and such Lender’s rights under this Agreement and the other
        Loan Documents to a Federal Reserve Bank, and any Lender that is an investment
        fund may assign the Obligations held by it and such Lender’s rights
        under this Agreement and the other Loan Documents to another investment
        fund managed by the same investment advisor; provided, that no
        such pledge to a Federal Reserve Bank shall release such Lender from
        such Lender’s obligations hereunder or under any other Loan Document. 

    (b)     Any
        participation by a Lender of all or any part of its Commitments shall
        be made with the understanding that all amounts payable by Borrower hereunder
        shall be determined as if that Lender had not sold such participation,
        and that the holder of any such participation shall not be entitled to
        require such Lender to take or omit to take any action hereunder except
        actions directly affecting (i) any reduction in the principal amount
        of, or interest rate or Fees payable with respect to, any Loan in which
        such holder participates, (ii) any extension of the scheduled amortization
        of the principal amount of any Loan in which such holder participates
        or the final maturity date thereof, and (iii) any release of all or substantially
        all of the Collateral (other than in accordance with the terms of this
        Agreement, the Collateral Documents or the other Loan Documents). Solely
        for purposes of Sections 1.13, 1.15, 1.16 and 9.8, Borrower acknowledges
        and agrees that a participation shall give rise to a direct obligation
        of Borrower to the participant and the participant shall be considered
        to be a “Lender”. Except as set forth in the preceding sentence,
        no Credit Party shall have any obligation or duty to any participant.
        Neither Agent nor any Lender (other than the Lender selling a participation)
        shall have any duty to any participant and may continue to deal solely
        with the Lender selling a participation as if no such sale had occurred.

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(c)     Except
    as expressly provided in this Section 9.1, no Lender shall, as between Borrower and
  that Lender, or Agent and that Lender, be relieved of any of its obligations
  hereunder as a result of any sale, assignment, transfer or negotiation of, or granting of participation in, all or any part of the Loans, the Notes or other Obligations owed to such Lender.

  (d)     Each Credit Party executing this Agreement shall assist any Lender permitted
        to sell assignments or participations under this Section 9.1 as
        reasonably required to enable the assigning or selling Lender to effect
        any such assignment or participation, including the execution and delivery
        of any and all agreements, notes and other documents and instruments
        as shall be requested and, if requested by Agent, the preparation of
        informational materials for, and the participation of management in meetings
        with, potential assignees or participants. Each Credit Party executing
        this Agreement shall certify the correctness, completeness and accuracy
        of all descriptions of the Credit Parties and their respective affairs
        contained in any selling materials provided by them and all other information
        provided by them and included in such materials, except that any Projections
        delivered by Borrower shall only be certified by Borrower as having been
        prepared by Borrower in compliance with the representations contained
        in Section 3.4(c).

    (e)     Any
        Lender may furnish any information concerning Credit Parties in the possession
        of such Lender from time to time to assignees and participants (including
        prospective assignees and participants); provided that such Lender
        shall obtain from assignees or participants confidentiality covenants
        substantially equivalent to those contained in Section 11.8.

    (f)     Notwithstanding
        anything to the contrary contained herein, any Lender (a “Granting
        Lender”), may grant to a special purpose funding vehicle (an “SPC”),
        identified as such in writing by the Granting Lender to Agent and Borrower,
        the option to provide to Borrower all or any part of any Loans that such
        Granting Lender would otherwise be obligated to make to Borrower pursuant
        to this Agreement; provided that (i) nothing herein shall constitute
        a commitment by any SPC to make any Loan; and (ii) if an SPC elects not
        to exercise such option or otherwise fails to provide all or any part
        of such Loan, the Granting Lender shall be obligated to make such Loan
        pursuant to the terms hereof. The making of a Loan by an SPC hereunder
        shall utilize the Commitment of the Granting Lender to the same extent,
        and as if such Loan were made by such Granting Lender. No SPC shall be
        liable for any indemnity or similar payment obligation under this Agreement
        (all liability for which shall remain with the Granting Lender). Any
        SPC may (i) with notice to, but without the prior written consent of,
        Borrower and 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 Borrower and Agent)
        providing liquidity and/or credit support to or for the account of such
        SPC 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 SPC. This Section
        9.1(g) may not be amended without the prior written consent of each
        Granting Lender, all or any of whose Loans are being funded by an SPC
        at the time of such amendment. For the avoidance of doubt, the Granting
        Lender shall for all purposes, including without limitation, the approval
        of any amendment or waiver of any provision of any Loan Document or the
        obligation to pay any amount otherwise payable by the Granting Lender
        under the Loan Documents, continue to be the Lender of record hereunder.

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  9.2     Appointment
    of Agent. GE Capital is hereby appointed to act on behalf of all Lenders
    as Agent under this Agreement and the other Loan Documents. The provisions
    of this Section 9.2 are solely for the benefit of Agent and Lenders
    and no Credit Party nor any other Person shall have any rights as a third
    party beneficiary of any of the provisions hereof. In performing its functions
    and duties under this Agreement and the other Loan Documents, Agent shall
    act solely as an agent of Lenders and does not assume and shall not be deemed
    to have assumed any obligation toward or relationship of agency or trust
    with or for any Credit Party or any other Person. Agent shall have no duties
    or responsibilities except for those expressly set forth in this Agreement
    and the other Loan Documents. The duties of Agent shall be mechanical and
    administrative in nature and Agent shall not have, or be deemed to have,
    by reason of this Agreement, any other Loan Document or otherwise a fiduciary
    relationship in respect of any Lender. Except as expressly set forth in this
    Agreement and the other Loan Documents, Agent shall not have any duty to
    disclose, and shall not be liable for failure to disclose, any information
    relating to any Credit Party or any of their respective Subsidiaries or any
    Account Debtor that is communicated to or obtained by GE Capital or any of
    its Affiliates in any capacity. Neither Agent nor any of its Affiliates nor
    any of their respective officers, directors, employees, agents or representatives
    shall be liable to any Lender for any action taken or omitted to be taken
    by it hereunder or under any other Loan Document, or in connection herewith
    or therewith, except for damages caused by its or their own gross negligence
    or willful misconduct.
  If Agent shall request instructions
        from Requisite Lenders, Requisite Revolving Lenders, Supermajority Revolving
        Lenders or all affected Lenders with respect to any act or action (including
        failure to act) in connection with this Agreement or any other Loan Document,
        then Agent shall be entitled to refrain from such act or taking such
        action unless and until Agent shall have received instructions from Requisite
        Lenders, Requisite Revolving Lenders, Supermajority Revolving Lenders
        or all affected Lenders, as the case may be, and Agent shall not incur
        liability to any Person by reason of so refraining. Agent shall be fully
        justified in failing or refusing to take any action hereunder or under
        any other Loan Document (a) if such action would, in the opinion of Agent,
        be contrary to law or the terms of this Agreement or any other Loan Document,
        (b) if such action would, in the opinion of Agent, expose Agent to Environmental
        Liabilities or (c) if Agent shall not first be indemnified to its satisfaction
        against any and all liability and expense which may be incurred by it
        by reason of taking or continuing to take any such action. Without limiting
        the foregoing, no Lender shall have any right of action whatsoever against
        Agent as a result of Agent acting or refraining from acting hereunder
        or under any other Loan Document in accordance with the instructions
        of Requisite Lenders, Requisite Revolving Lenders, Supermajority Revolving
        Lenders or all affected Lenders, as applicable.

    9.3     Agent’s
          Reliance, Etc. Neither Agent nor any of its Affiliates nor any
          of their respective directors, officers, agents or employees shall
          be liable for any action taken or omitted to be taken by it or them
          under or in connection with this Agreement or the other Loan Documents,
          except for damages caused by its or their own gross negligence or willful
          misconduct. Without limiting the generality of the foregoing, Agent:
          (a) may treat the payee of any Note as the holder thereof until Agent
          receives written notice of the assignment or transfer thereof signed
          by such payee and in form reasonably satisfactory to Agent; (b) may
          consult with legal counsel, independent public accountants and other
          experts selected by it and shall not be liable for any action taken
          or omitted to be taken by it in good faith in accordance with the advice
          of such counsel, accountants or experts; (c) makes no warranty or representation
          to any Lender and shall not be responsible to any Lender for any statements,
          warranties or representations made in or in connection with this Agreement
          or the other Loan Documents; (d) shall not have any duty to ascertain
          or to inquire as to the performance or observance of any of the terms,
          covenants or conditions of this Agreement or the other Loan Documents
          on the part of any Credit Party or to inspect the Collateral (including
          the books and records) of any Credit Party; (e) shall not be responsible
          to any Lender for the due execution, legality, validity, enforceability,
          genuineness, sufficiency or value of this Agreement or the other Loan
          Documents or any other instrument or document furnished pursuant hereto
          or thereto; and (f) shall incur no liability under or in respect of
          this Agreement or the other Loan Documents by acting upon any notice,
          consent, certificate or other instrument or writing (which may be by
          telecopy, telegram, cable or telex) believed by it to be genuine and
          signed or sent by the proper party or parties.

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9.4     GE Capital and
    Affiliates. With respect to its Commitments hereunder, GE Capital
    shall have the same rights and powers under this Agreement and the other
    Loan Documents as any other Lender and may exercise the same as though it
    were not Agent; and the term “Lender” or “Lenders” shall,
    unless otherwise expressly indicated, include GE Capital in its individual
    capacity. GE Capital and its Affiliates may lend money to, invest in, and
    generally engage in any kind of business with, any Credit Party, any of their
    Affiliates and any Person who may do business with or own securities of any
    Credit Party or any such Affiliate, all as if GE Capital were not Agent and
    without any duty to account therefor to Lenders. GE Capital and its Affiliates
    may accept fees and other consideration from any Credit Party for services
    in connection with this Agreement or otherwise without having to account
    for the same to Lenders. Each Lender acknowledges the potential conflict
    of interest between GE Capital as a Lender holding disproportionate interests
    in the Loans and GE Capital as Agent.
  9.5     Lender
          Credit Decision. Each Lender acknowledges that it has, independently
          and without reliance upon Agent or any other Lender and based on the
          Financial Statements referred to in Section 3.4(a) and such
          other documents and information as it has deemed appropriate, made
          its own credit and financial analysis of the Credit Parties and its
          own decision to enter into this Agreement. Each Lender also acknowledges
          that it will, independently and without reliance upon Agent or any
          other Lender and based on such documents and information as it shall
          deem appropriate at the time, continue to make its own credit decisions
          in taking or not taking action under this Agreement. Each Lender acknowledges
          the potential conflict of interest of each other Lender as a result
          of Lenders holding disproportionate interests in the Loans, and expressly
          consents to, and waives any claim based upon, such conflict of interest.

    9.6     Indemnification.
        Lenders agree to indemnify Agent (to the extent not reimbursed by Credit
        Parties and without limiting the obligations of Borrower hereunder),
        ratably according to their respective Pro Rata Shares, from and against
        any and all liabilities, obligations, losses, damages, penalties, actions,
        judgments, suits, costs, expenses or disbursements of any kind or nature
        whatsoever that may be imposed on, incurred by, or asserted against Agent
        in any way relating to or arising out of this Agreement or any other
        Loan Document or any action taken or omitted to be taken by Agent in
        connection therewith; provided, that no Lender shall be liable
        for any portion of such liabilities, obligations, losses, damages, penalties,
        actions, judgments, suits, costs, expenses or disbursements resulting
        from Agent’s gross negligence or willful misconduct. Without limiting
        the foregoing, each Lender agrees to reimburse Agent promptly upon demand
        for its ratable share of any out-of-pocket expenses (including reasonable
        counsel fees) incurred by Agent in connection with the preparation, execution,
        delivery, administration, modification, amendment or enforcement (whether
        through negotiations, legal proceedings or otherwise) of, or legal advice
        in respect of rights or responsibilities under, this Agreement and each
        other Loan Document, to the extent that Agent is not reimbursed for such
        expenses by Credit Parties. 

    9.7     Successor
          Agent. Agent may resign at any time by giving not less than 30
          days’ prior written notice thereof to Lenders and Borrower. Upon
          any such resignation, the Requisite Lenders shall have the right to
          appoint a successor Agent. If no successor Agent shall have been so
          appointed by the Requisite Lenders and shall have accepted such appointment
          within 30 days after the resigning Agent’s giving notice of resignation,
          then the resigning Agent may, on behalf of Lenders, appoint a successor
          Agent, which shall be a Lender, if a Lender is willing to accept such
          appointment, or otherwise shall be a commercial bank or financial institution
          or a subsidiary of a commercial bank or financial institution if such
          commercial bank or financial institution is organized under the laws
          of the United States of America or of any State thereof and has a combined
          capital and surplus of at least $300,000,000. If no successor Agent
          has been appointed pursuant to the foregoing, within 30 days after
          the date such notice of resignation was given by the resigning Agent,
          such resignation shall become effective and the Requisite Lenders shall
          thereafter perform all the duties of Agent hereunder until such time,
          if any, as the Requisite Lenders appoint a successor Agent as provided
          above. Any successor Agent appointed by Requisite Lenders hereunder
          shall be subject to the approval of Borrower, such approval not to
          be unreasonably withheld or delayed; provided that such approval
          shall not be required if a Default or an Event of Default has occurred
          and is continuing. Upon the acceptance of any appointment as Agent
          hereunder by a successor Agent, such successor Agent shall succeed
          to and become vested with all the rights, powers, privileges and duties
          of the resigning Agent. Upon the earlier of the acceptance of any appointment
          as Agent hereunder by a successor Agent or the effective date of the
          resigning Agent’s resignation, the resigning Agent shall be discharged
          from its duties and obligations under this Agreement and the other
          Loan Documents, except that any indemnity rights or other rights in
          favor of such resigning Agent shall continue. After any resigning Agent’s
          resignation hereunder, the provisions of this Section 9 shall
          inure to its benefit as to any actions taken or omitted to be taken
          by it while it was acting as Agent under this Agreement and the other
          Loan Documents. 

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9.8     Setoff and Sharing
    of Payments. In addition to any rights now or hereafter granted under
    applicable law and not by way of limitation of any such rights, upon the
    occurrence and during the continuance of any Event of Default and subject
    to Section 9.9(f), each Lender is hereby authorized at any time or
    from time to time, without notice to any Credit Party or to any other Person,
    any such notice being hereby expressly waived, to offset and to appropriate
    and to apply any and all balances held by it at any of its offices for the
    account of any Credit Party (regardless of whether such balances are then
    due to such Credit Party) and any other properties or assets at any time
    held or owing by that Lender or that holder to or for the credit or for the
    account of any Credit Party against and on account of any of the Obligations
    that are not paid when due. Any Lender exercising a right of setoff or otherwise
    receiving any payment on account of the Obligations in excess of its Pro
    Rata Share thereof shall purchase for cash (and the other Lenders or holders
    shall sell) such participations in each such other Lender’s or holder’s
    Pro Rata Share of the Obligations as would be necessary to cause such Lender
    to share the amount so offset or otherwise received with each other Lender
    or holder in accordance with their respective Pro Rata Shares (other than
    offset rights exercised by any Lender with respect to Sections 1.13, 1.15
    or 1.16). Each Credit Party agrees, to the fullest extent permitted by
    law, that (a) any Lender may exercise its right to offset with respect to
    amounts in excess of its Pro Rata Share of the Obligations and may sell participations
    in such amounts so offset to other Lenders and holders and (b) any Lender
    so purchasing a participation in the Loans made or other Obligations held
    by other Lenders or holders may exercise all rights of offset, bankers’ lien,
    counterclaim or similar rights with respect to such participation as fully
    as if such Lender or holder were a direct holder of the Loans and the other
    Obligations in the amount of such participation. Notwithstanding the foregoing,
    if all or any portion of the offset amount or payment otherwise received
    is thereafter recovered from the Lender that has exercised the right of offset,
    the purchase of participations by that Lender shall be rescinded and the
    purchase price restored without interest.
  9.9     Advances;
        Payments; Non-Funding Lenders; Information; Actions in Concert.

  (a)     Advances;
        Payments.

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(i)      Each Revolving
  Lender shall make the amount of such Lender’s Pro Rata Share of such
  Revolving Credit Advance available to Agent in same day funds by wire transfer
  to Agent’s account as set forth in Annex G not later than 3:00
  p.m. (New York time) on the requested funding date, in the case of an Index
  Rate Loan, and not later than 11:00 a.m. (New York time) on the requested funding
  date, in the case of a LIBOR Loan. After receipt of such wire transfers (or,
  in the Agent’s sole discretion, before receipt of such wire transfers),
  subject to the terms hereof, Agent shall make the requested Revolving Credit
  Advance to the Borrower designated by Borrower in the Notice of Revolving Credit
  Advance. All payments by each Revolving Lender shall be made without setoff,
  counterclaim or deduction of any kind.
  (ii)      On
        the 2nd Business Day of each calendar week or more frequently at Agent’s
        election (each, a “Settlement Date”), Agent shall
        advise each Lender by telephone, or telecopy of the amount of such Lender’s
        Pro Rata Share of principal, interest and Fees paid for the benefit of
        Lenders with respect to each applicable Loan. Provided that each Lender
        has funded all payments or Advances required to be made by it and has
        purchased all participations required to be purchased by it under this
        Agreement and the other Loan Documents as of such Settlement Date, Agent
        shall pay to each Lender such Lender’s Pro Rata Share of principal,
        interest and Fees paid by Borrower since the previous Settlement Date
        for the benefit of such Lender on the Loans held by it. To the extent
        that any Lender (a “Non-Funding Lender”) has failed
        to fund all such payments and Advances or failed to fund the purchase
        of all such participations, Agent shall be entitled to set off the funding
        short-fall against that Non-Funding Lender’s Pro Rata Share
        of all payments received from Borrower. Such payments shall be made by
        wire transfer to such Lender’s account (as specified by such Lender
        in Annex G or the applicable Assignment Agreement) not later than
        2:00 p.m. (New York time) on the next Business Day following each Settlement
        Date. 

    (b)     Availability
          of Lender’s Pro Rata Share. Agent may assume that each Revolving
          Lender will make its Pro Rata Share of each Revolving Credit Advance
          available to Agent on each funding date. If such Pro Rata Share is
          not, in fact, paid to Agent by such Revolving Lender when due, Agent
          will be entitled to recover such amount on demand from such Revolving
          Lender without setoff, counterclaim or deduction of any kind. If any
          Revolving Lender fails to pay the amount of its Pro Rata Share forthwith
          upon Agent’s demand, Agent shall promptly notify Borrower and
          Borrower shall immediately repay such amount to Agent. Nothing in this Section
          9.9(b) or elsewhere in this Agreement or the other Loan Documents
          shall be deemed to require Agent to advance funds on behalf of any
          Revolving Lender or to relieve any Revolving Lender from its obligation
          to fulfill its Commitments hereunder or to prejudice any rights that
          Borrower may have against any Revolving Lender as a result of any default
          by such Revolving Lender hereunder. To the extent that Agent advances
          funds to Borrower on behalf of any Revolving Lender and is not reimbursed
          therefor on the same Business Day as such Advance is made, Agent shall
          be entitled to retain for its account all interest accrued on such
          Advance until reimbursed by the applicable Revolving Lender.

    (c)     Return
          of Payments.

    (i)      If
        Agent pays an amount to a Lender under this Agreement in the belief or
        expectation that a related payment has been or will be received by Agent
        from Borrower and such related payment is not received by Agent, then
        Agent will be entitled to recover such amount from such Lender on demand
        without setoff, counterclaim or deduction of any kind.

    (ii)      If
        Agent determines at any time that any amount received by Agent under
        this Agreement must be returned to Borrower or paid to any other Person
        pursuant to any insolvency law or otherwise, then, notwithstanding any
        other term or condition of this Agreement or any other Loan Document,
        Agent will not be required to distribute any portion thereof to any Lender.
        In addition, each Lender will repay to Agent on demand any portion of
        such amount that Agent has distributed to such Lender, together with
        interest at such rate, if any, as Agent is required to pay to Borrower
        or such other Person, without setoff, counterclaim or deduction of any
        kind.

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(d)     Non-Funding
    Lenders. The failure of any Non-Funding Lender to make any Revolving
    Credit Advance or any payment required by it hereunder on the date specified
    therefor shall not relieve any other Lender (each such other Revolving Lender,
    an “Other Lender”) of its obligations to make such Advance or
    purchase such participation on such date, but neither any Other Lender nor
    Agent shall be responsible for the failure of any Non-Funding Lender to make
    an Advance, purchase a participation or make any other payment required hereunder.
    Notwithstanding anything set forth herein to the contrary, a Non-Funding
    Lender shall not have any voting or consent rights under or with respect
    to any Loan Document or constitute a “Lender” or a “Revolving
    Lender” (or be included in the calculation of “Requisite Lenders”, “Requisite
    Revolving Lenders” or “Supermajority Revolving Lenders” hereunder)
    for any voting or consent rights under or with respect to any Loan Document.
    At Borrower’s request, Agent or a Person reasonably acceptable to Agent
    shall have the right with Agent’s consent and in Agent’s sole
    discretion (but shall have no obligation) to purchase from any Non-Funding
    Lender, and each Non-Funding Lender agrees that it shall, at Agent’s
    request, sell and assign to Agent or such Person, all of the Commitments
    of that Non-Funding Lender for an amount equal to the principal balance of
    all Loans held by such Non-Funding Lender and all accrued interest and fees
    with respect thereto through the date of sale, such purchase and sale to
    be consummated pursuant to an executed Assignment Agreement.
  (e)     Dissemination
        of Information. Agent shall use reasonable efforts to provide Lenders
        with any notice of Default or Event of Default received by Agent from,
        or delivered by Agent to, any Credit Party, with notice of any Event
        of Default of which Agent has actually become aware and with notice of
        any action taken by Agent following any Event of Default; provided,
        that Agent shall not be liable to any Lender for any failure to do so,
        except to the extent that such failure is attributable to Agent’s
        gross negligence or willful misconduct. Lenders acknowledge that Borrower
        is required to provide Financial Statements and Collateral Reports to
        Lenders in accordance with Annexes D and E hereto and agree that
        Agent shall have no duty to provide the same to Lenders.

  (f)     Actions
        in Concert. Anything in this Agreement to the contrary notwithstanding,
        each Lender hereby agrees with each other Lender that no Lender shall
        take any action to protect or enforce its rights arising out of this
        Agreement or the Notes (including exercising any rights of setoff) without
        first obtaining the prior written consent of Agent and Requisite Lenders,
        it being the intent of Lenders that any such action to protect or enforce
        rights under this Agreement and the Notes shall be taken in concert and
        at the direction or with the consent of Agent or Requisite Lenders.

10.      SUCCESSORS AND ASSIGNS

10.1     Successors
      and Assigns. This Agreement and the other Loan Documents shall be binding
      on and shall inure to the benefit of each Credit Party, Agent, Lenders
      and their respective successors and assigns (including, in the case of
      any Credit Party, a debtor-in-possession on behalf of such Credit Party),
      except as otherwise provided herein or therein. No Credit Party may assign,
      transfer, hypothecate or otherwise convey its rights, benefits, obligations
      or duties hereunder or under any of the other Loan Documents without the
      prior express written consent of Agent and Lenders. Any such purported
      assignment, transfer, hypothecation or other conveyance by any Credit Party
      without the prior express written consent of Agent and Lenders shall be
      void. The terms and provisions of this Agreement are for the purpose of
      defining the relative rights and obligations of each Credit Party, Agent
      and Lenders with respect to the transactions contemplated hereby and no
      Person shall be a third party beneficiary of any of the terms and provisions
      of this Agreement or any of the other Loan Documents.

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11.      MISCELLANEOUS

11.1     Complete Agreement;
    Modification of Agreement. The Loan Documents constitute the complete
    agreement between the parties with respect to the subject matter thereof
    and may not be modified, altered or amended except as set forth in Section
    11.2. Any letter of interest, commitment letter or fee letter (other
    than the GE Capital Fee Letter) or confidentiality agreement, if any, between
    any Credit Party and Agent or any Lender or any of their respective Affiliates,
    predating this Agreement and relating to a financing of substantially similar
    form, purpose or effect shall be superseded by this Agreement.
    
  11.2     Amendments
          and Waivers.

    (a)     Except
        for actions expressly permitted to be taken by Agent, no amendment, modification,
        termination or waiver of any provision of this Agreement or any other
        Loan Document, or any consent to any departure by any Credit Party therefrom,
        shall in any event be effective unless the same shall be in writing and
        signed by Agent and Borrower, and by Requisite Lenders, Requisite Revolving
        Lenders, Supermajority Revolving Lenders or all affected Lenders, as
        applicable. Except as set forth in clauses (b) and (c) below, all such
        amendments, modifications, terminations or waivers requiring the consent
        of any Lenders shall require the written consent of Requisite Lenders. 

    (b)     No
        amendment, modification, termination or waiver of or consent with respect
        to any provision of this Agreement that increases the percentage advance
        rates set forth in the definition of the Borrowing Base, or that makes
        less restrictive the nondiscretionary criteria for exclusion from Eligible
        Accounts set forth in Section 1.6, shall be effective unless the
        same shall be in writing and signed by Agent, Supermajority Revolving
        Lenders and Borrower. No amendment, modification, termination or waiver
        of or consent with respect to any provision of this Agreement that waives
        compliance with the conditions precedent set forth in Section 2.2 to
        the making of any Loan shall be effective unless the same shall be in
        writing and signed by Agent, Requisite Revolving Lenders and Borrower.
        Notwithstanding anything contained in this Agreement to the contrary,
        no waiver or consent with respect to any Default or any Event of Default
        shall be effective for purposes of the conditions precedent to the making
        of Loans set forth in Section 2.2 and Section 2.3 unless
        the same shall be in writing and signed by Agent, Requisite Revolving
        Lenders and Borrower.

    (c)     No
        amendment, modification, termination or waiver shall, unless in writing
        and signed by Agent and each Lender directly affected thereby: (i) increase
        the principal amount of any Lender’s Commitment (which action shall
        be deemed to directly affect all Lenders; (ii) reduce the principal of,
        rate of interest on or Fees payable with respect to any Loan of any affected
        Lender; (iii) extend any scheduled payment date (other than payment dates
        of mandatory prepayments under Section 1.3(b)(ii)-(iv)) or final
        maturity date of the principal amount of any Loan of any affected Lender;
        (iv) waive, forgive, defer, extend or postpone any payment of interest
        or Fees as to any affected Lender; (v) release any Guaranty or, except
        as otherwise permitted herein or in the other Loan Documents, release,
        or permit any Credit Party to sell or otherwise dispose of, any Collateral
        with a value exceeding $5,000,000 in the aggregate (which action shall
        be deemed to directly affect all Lenders); (vi) change the percentage
        of the Commitments or of the aggregate unpaid principal amount of the
        Loans that shall be required for Lenders or any of them to take any action
        hereunder; and (vii) amend or waive this Section 11.2 or the definitions
        of the terms “Requisite Lenders”, “Requisite Revolving
        Lenders” or “Supermajority Revolving Lenders” insofar
        as such definitions affect the substance of this Section 11.2.
        Furthermore, no amendment, modification, termination or waiver affecting
        the rights or duties of Agent under this Agreement or any other Loan
        Document shall be effective unless in writing and signed by Agent, in
        addition to Lenders required hereinabove to take such action. Each amendment,
        modification, termination or waiver shall be effective only in the specific
        instance and for the specific purpose for which it was given. No amendment,
        modification, termination or waiver shall be required for Agent to take
        additional Collateral pursuant to any Loan Document. No amendment, modification,
        termination or waiver of any provision of any Note shall be effective
        without the written concurrence of the holder of that Note. No notice
        to or demand on any Credit Party in any case shall entitle such Credit
        Party or any other Credit Party to any other or further notice or demand
        in similar or other circumstances. Any amendment, modification, termination,
        waiver or consent effected in accordance with this Section 11.2 shall
        be binding upon each holder of the Notes at the time outstanding and
        each future holder of the Notes. 

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(d)     If, in connection
  with any proposed amendment, modification, waiver or termination (a “Proposed
  Change”):
  (i)      requiring
        the consent of all affected Lenders, the consent of Requisite Lenders
        is obtained, but the consent of other Lenders whose consent is required
        is not obtained (any such Lender whose consent is not obtained as described
        in this clause (i) and in clauses (ii), (iii) and (iv) below
        being referred to as a “Non-Consenting Lender”), 

    (ii)      requiring
        the consent of Supermajority Revolving Lenders, the consent of Requisite
        Revolving Lenders is obtained, but the consent of Supermajority Revolving
        Lenders is not obtained, 

    (iii)      requiring
        the consent of Requisite Revolving Lenders, the consent of Revolving
        Lenders holding 51% or more of the aggregate Revolving Loan Commitments
        is obtained, but the consent of Requisite Revolving Lenders is not obtained,
        or

    (iv)      requiring
        the consent of Requisite Lenders, the consent of Lenders holding 51%
        or more of the aggregate Commitments is obtained, but the consent of
        Requisite Lenders is not obtained, 

    then, so long as Agent is not
        a Non-Consenting Lender, at Borrower’s request, Agent or a Person
        reasonably acceptable to Agent shall have the right, with Agent’s
        consent and in Agent’s sole discretion (but with no obligation
        by Agent) to purchase from such Non-Consenting Lenders, and such Non-Consenting
        Lenders agree that they shall, upon Agent’s request, sell and assign
        to Agent or such Person, all of the Commitments of such Non-Consenting
        Lenders for an amount equal to the principal balance of all Loans held
        by the Non-Consenting Lenders and all accrued interest and Fees with
        respect thereto through the date of sale, such purchase and sale to be
        consummated pursuant to an executed Assignment Agreement.

    (e)     Upon
        payment in full in cash and performance of all of the Obligations (other
        than indemnification Obligations), termination of the Commitments and
        a release of all claims against Agent and Lenders, and so long as no
        suits, actions, proceedings or claims are pending or threatened against
        any Indemnified Person asserting any damages, losses or liabilities that
        are Indemnified Liabilities, Agent shall deliver to Borrower termination
        statements, mortgage releases and other documents necessary or appropriate
        to evidence the termination of the Liens securing payment of the Obligations.

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11.3     Fees and Expenses.
  Borrower shall reimburse (i) Agent for all fees, costs and expenses (including
  the reasonable fees and expenses of all of its counsel, advisors, consultants
  and auditors) and (ii) Agent (and, with respect to clauses (c) and (d) below,
  all Lenders) for all fees, costs and expenses, including the reasonable fees,
  costs and expenses of counsel or other advisors (including environmental and
  management consultants and appraisers), incurred in connection with the negotiation
  and preparation of the Loan Documents and incurred in connection with:
  (a)     the
        forwarding to Borrower or any other Person on behalf of Borrower by Agent
        of the proceeds of any Loan (including a wire transfer fee of $25 per
        wire transfer);

    (b)     any
        amendment, modification or waiver of, consent with respect to, or termination
        of, any of the Loan Documents or Related Transactions Documents or advice
        in connection with the syndication and administration of the Loans made
        pursuant hereto or its rights hereunder or thereunder;

    (c)     any
        litigation, contest, dispute, suit, proceeding or action (whether instituted
        by Agent, any Lender, Borrower or any other Person and whether as a party,
        witness or otherwise) in any way relating to the Collateral, any of the
        Loan Documents or any other agreement to be executed or delivered in
        connection herewith or therewith, including any litigation, contest,
        dispute, suit, case, proceeding or action, and any appeal or review thereof,
        in connection with a case commenced by or against any or all of the Borrower
        or any other Person that may be obligated to Agent by virtue of the Loan
        Documents; including any such litigation, contest, dispute, suit, proceeding
        or action arising in connection with any work-out or restructuring of
        the Loans during the pendency of one or more Events of Default; provided that
        in the case of reimbursement of counsel for Lenders other than Agent,
        such reimbursement shall be limited to one counsel for all such Lenders; provided,
        further, that no Person shall be entitled to reimbursement under this
        clause (c) in respect of any litigation, contest, dispute, suit, proceeding
        or action to the extent any of the foregoing results from such Person’s
        gross negligence or willful misconduct;

    (d)     any
        attempt to enforce any remedies of Agent against any or all of the Credit
        Parties or any other Person that may be obligated to Agent or any Lender
        by virtue of any of the Loan Documents, including any such attempt to
        enforce any such remedies in the course of any work-out or restructuring
        of the Loans during the pendency of one or more Events of Default; provided,
        that in the case of reimbursement of counsel for Lenders other than Agent,
        such reimbursement shall be limited to one counsel for all such Lenders;

    (e)     any
        workout or restructuring of the Loans during the pendency of one or more
        Events of Default; and

    (f)     efforts
        to (i) monitor the Loans or any of the other Obligations, (ii) evaluate,
        observe or assess any of the Credit Parties or their respective affairs,
        and (iii) verify, protect, evaluate, assess, appraise, collect, sell,
        liquidate or otherwise dispose of any of the Collateral;

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including, as to each of clauses (a) through (f) above, all reasonable attorneys’ and other professional and service providers’ fees arising from such services and other advice, assistance or other representation, including those in connection with any appellate proceedings, and all expenses, costs, charges and other fees incurred by such counsel and others in connection with or relating to any of the events or actions described in this Section 11.3, all of which shall be payable, on demand, by Borrower to Agent.  Without limiting the generality of the foregoing, such expenses, costs, charges and fees may include: fees, costs and expenses of accountants, environmental advisors, appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses; photocopying and duplication expenses; court reporter fees, costs and expenses; long distance telephone charges; air express charges; telegram or telecopy charges; secretarial overtime charges; and expenses for travel, lodging and food paid or incurred in connection with the performance of such legal or other advisory services.  

11.4     No Waiver.
  Agent’s or any Lender’s failure, at any time or times, to require
  strict performance by the Credit Parties of any provision of this Agreement
  or any other Loan Document shall not waive, affect or diminish any right of
  Agent or such Lender thereafter to demand strict compliance and performance
  herewith or therewith. Any suspension or waiver of an Event of Default shall
  not suspend, waive or affect any other Event of Default whether the same is
  prior or subsequent thereto and whether the same or of a different type. Subject
  to the provisions of Section 11.2, none of the undertakings, agreements,
  warranties, covenants and representations of any Credit Party contained in
  this Agreement or any of the other Loan Documents and no Default or Event of
  Default by any Credit Party shall be deemed to have been suspended or waived
  by Agent or any Lender, unless such waiver or suspension is by an instrument
  in writing signed by an officer of or other authorized employee of Agent and
  the applicable required Lenders, and directed to Borrower specifying such suspension
  or waiver.
  11.5     Remedies.
        Agent’s and Lenders’ rights and remedies under this Agreement
        shall be cumulative and nonexclusive of any other rights and remedies
        that Agent or any Lender may have under any other agreement, including
        the other Loan Documents, by operation of law or otherwise. Recourse
        to the Collateral shall not be required.

    11.6     Severability.
        Wherever possible, each provision of this Agreement and the other Loan
        Documents shall be interpreted in such a manner as to be effective and
        valid under applicable law, but if any provision of this Agreement or
        any other Loan Document shall be prohibited by or invalid under applicable
        law, such provision shall be ineffective only to the extent of such prohibition
        or invalidity without invalidating the remainder of such provision or
        the remaining provisions of this Agreement or such other Loan Document.

    11.7     Conflict
          of Terms. Except as otherwise provided in this Agreement or any
          of the other Loan Documents by specific reference to the applicable
          provisions of this Agreement, if any provision contained in this Agreement
          conflicts with any provision in any of the other Loan Documents, the
          provision contained in this Agreement shall govern and control.

    11.8     Confidentiality.
        Agent and each Lender agree to use commercially reasonable efforts (equivalent
        to the efforts Agent or such Lender applies to maintaining the confidentiality
        of its own confidential information) to maintain as confidential all
        confidential information provided to them by the Credit Parties and designated
        as confidential for a period of 2 years following receipt thereof, except
        that Agent and any Lender may disclose such information (a) to Persons
        employed or engaged by Agent or such Lender; (b) to any bona fide assignee
        or participant or potential assignee or participant that has agreed to
        comply with the covenant contained in this Section 11.8 (and any
        such bona fide assignee or participant or potential assignee or participant
        may disclose such information to Persons employed or engaged by them
        as described in clause (a) above); (c) as required or requested
        by any Governmental Authority or reasonably believed by Agent or such
        Lender to be compelled by any court decree, subpoena or legal or administrative
        order or process; (d) as, on the advice of Agent’s or such Lender’s
        counsel, is required by law; (e) in connection with the exercise of any
        right or remedy under the Loan Documents or in connection with any Litigation
        to which Agent or such Lender is a party; or (f) that ceases to be confidential
        through no fault of Agent or any Lender. 

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11.9     GOVERNING LAW.
  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL
  RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
  THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED
  AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
  APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE
  LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND
  AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF
  NEW YORK, NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE
  ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS PERTAINING
  TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING
  OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED,
  THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM
  THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY; PROVIDED FURTHER,
  THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT
  FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
  REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
  ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT. EACH CREDIT PARTY
  EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION
  OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY
  OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
  IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS
  TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE
  BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
  COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
  SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
  OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX
  H OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
  UPON THE EARLIER OF SUCH CREDIT PARTY’S ACTUAL RECEIPT THEREOF OR 3 DAYS
  AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID. 
  11.10     Notices.
      Except as otherwise provided herein, whenever it is provided herein that
      any notice, demand, request, consent, approval, declaration or other communication
      shall or may be given to or served upon any of the parties by any other
      parties, or whenever any of the parties desires to give or serve upon any
      other parties any communication with respect to this Agreement, each such
      notice, demand, request, consent, approval, declaration or other communication
      shall be in writing and shall be deemed to have been validly served, given
      or delivered: (a) upon the earlier of actual receipt and 3 Business Days
      after deposit in the United States Mail, registered or certified mail,
      return receipt requested, with proper postage prepaid; (b) upon transmission,
      when sent by telecopy or other similar facsimile transmission (with such
      telecopy or facsimile promptly confirmed by delivery of a copy by personal
      delivery or United States Mail as otherwise provided in this Section
      11.10); (c) 1 Business Day after deposit with a reputable overnight
      courier with all charges prepaid or (d) when delivered, if hand-delivered
      by messenger, all of which shall be addressed to the party to be notified
      and sent to the address or facsimile number indicated in Annex H or
      to such other address (or facsimile number) as may be substituted by notice
      given as herein provided. The giving of any notice required hereunder may
      be waived in writing by the party entitled to receive such notice. Failure
      or delay in delivering copies of any notice, demand, request, consent,
      approval, declaration or other communication to any Person (other than
      Borrower or Agent) designated in Annex H to receive copies shall
      in no way adversely affect the effectiveness of such notice, demand, request,
      consent, approval, declaration or other communication.

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11.11     Section Titles.
  The Section titles and Table of Contents contained in this Agreement are and
  shall be without substantive meaning or content of any kind whatsoever and
  are not a part of the agreement between the parties hereto.
  11.12     Counterparts.
        This Agreement may be executed in any number of separate counterparts,
        each of which shall collectively and separately constitute one agreement.

    11.13     WAIVER
          OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
          FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY
          AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE
          AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
          DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE
          LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
          THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL
          RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
          RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE,
          AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED
          WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
          THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
          OR THE TRANSACTIONS RELATED THERETO.

    11.14     Press
          Releases and Related Matters. Each Credit Party executing this
          Agreement agrees that neither it nor its Affiliates will in the future
          issue any press releases or other public disclosure using the name
          of GE Capital or its affiliates or referring to this Agreement, the
          other Loan Documents or the Related Transactions Documents without
          at least 2 Business Days’ prior notice to GE Capital and without
          the prior written consent of GE Capital unless (and only to the extent
          that) such Credit Party or Affiliate is required to do so under law
          and then, in any event, such Credit Party or Affiliate will consult
          with GE Capital before issuing such press release or other public disclosure.
          Each Credit Party consents to the publication by Agent or any Lender
          of a tombstone or similar advertising material relating to the financing
          transactions contemplated by this Agreement. Agent reserves the right
          to provide to industry trade organizations information necessary and
          customary for inclusion in league table measurements.

    11.15     Reinstatement.
        This Agreement shall remain in full force and effect and continue to
        be effective should any petition be filed by or against Borrower for
        liquidation or reorganization, should Borrower become insolvent or make
        an assignment for the benefit of any creditor or creditors or should
        a receiver or trustee be appointed for all or any significant part of
        Borrower’s assets, and shall continue to be effective or to be
        reinstated, as the case may be, if at any time payment and performance
        of the Obligations, or any part thereof, is, pursuant to applicable law,
        rescinded or reduced in amount, or must otherwise be restored or returned
        by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent
        conveyance,” or otherwise, all as though such payment or performance
        had not been made. In the event that any payment, or any part thereof,
        is rescinded, reduced, restored or returned, the Obligations shall be
        reinstated and deemed reduced only by such amount paid and not so rescinded,
        reduced, restored or returned.

    11.16     Advice
          of Counsel. Each of the parties represents to each other party
          hereto that it has discussed this Agreement and, specifically, the
          provisions of Sections 11.9 and 11.13, with its counsel.

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11.17     No Strict
    Construction. The parties hereto have participated jointly in the negotiation
    and drafting of this Agreement. In the event an ambiguity or question of
    intent or interpretation arises, this Agreement shall be construed as if
    drafted jointly by the parties hereto and no presumption or burden of proof
    shall arise favoring or disfavoring any party by virtue of the authorship
    of any provisions of this Agreement.
    
  11.18     Reaffirmation
          of Security Documents.  In connection
          with this amendment and restatement of the Original Credit Agreement,
          each Credit Party reaffirms and ratifies acknowledges and reaffirms
          that (a) all liens and security interests granted to the Agent under
          the Security Agreement remain in full force and effect and shall continue
          to secure the Obligations (as modified by this Agreement) and (b) the
          validity, perfection or priority of the security interests will not
          be impaired by amendment and restatement of the Original Credit Agreement
          or the execution and delivery of this Agreement. Each Credit Party
          hereby acknowledges and affirms that all references to the Original
          Credit Agreement contained in the Security Documents are deemed to
          be references to this Agreement, and that all capitalized terms defined
          by reference to the Original Credit Agreement, shall have the meanings
          assigned to such terms in this Agreement. The defined term “Obligations” shall
          be deemed to include without limitation the Revolving Credit Commitments,
          the Term Loan Commitments and the Loans under this Agreement.

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IN WITNESS WHEREOF,
    this Agreement has been duly executed as of the date first written above.

  BLACK WARRIOR WIRELINE CORP., as Borrower
      
  

   

  By: /S/ William L. Jenkins          

    Name:William L. Jenkins

  Title:      Chief
  Executive Officer

     

    GENERAL ELECTRIC CAPITAL CORPORATION,
        as Agent and Lender

  By: /S/ Samantha Farber             

             Samantha Farber

           Duly Authorized Signatory  

 

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ANNEX A (Recitals)

to

CREDIT AGREEMENT

DEFINITIONS

Capitalized terms used in the Loan Documents shall
  have (unless otherwise provided elsewhere in the Loan Documents) the following
  respective meanings, and all references to Sections, Exhibits, Schedules or
  Annexes in the following definitions shall refer to Sections, Exhibits, Schedules
  or Annexes of or to the Agreement:
  “Acceptable Appraiser” shall
        mean Superior Auctioneers & Marketing, Inc. (unless Agent has notified
        Borrower in writing that Superior Auctioneers & Marketing, Inc. shall
        no longer constitute an acceptable appraiser to Agent) and each other
        appraisal firm approved by the Agent in its sole discretion.

    “Account Debtor” means
        any Person who may become obligated to any Credit Party under, with respect
        to, or on account of, an Account, Chattel Paper or General Intangibles
        (including a payment intangible).

    “Accounting Changes” has
        the meaning ascribed thereto in Annex F.

    “Accounts” means
        all “accounts,” as such term is defined in the Code, now
        owned or hereafter acquired by any Credit Party, including (a) all accounts
        receivable, other receivables, book debts and other forms of obligations
        (other than forms of obligations evidenced by Chattel Paper, or Instruments),
        (including any such obligations that may be characterized as an account
        or contract right under the Code), (b) all of each Credit Party’s
        rights in, to and under all purchase orders or receipts for goods or
        services, (c) all of each Credit Party’s rights to any goods represented
        by any of the foregoing (including unpaid sellers’ rights of rescission,
        replevin, reclamation and stoppage in transit and rights to returned,
        reclaimed or repossessed goods), (d) all rights to payment due to any
        Credit Party for property sold, leased, licensed, assigned or otherwise
        disposed of, for a policy of insurance issued or to be issued, for a
        secondary obligation incurred or to be incurred, for energy provided
        or to be provided, for the use or hire of a vessel under a charter or
        other contract, arising out of the use of a credit card or charge card,
        or for services rendered or to be rendered by such Credit Party or in
        connection with any other transaction (whether or not yet earned by performance
        on the part of such Credit Party), (e) all health care insurance receivables
        and (f) all collateral security of any kind, given by any Account Debtor
        or any other Person with respect to any of the foregoing.

    “Advance” means
        any Revolving Credit Advance.

    “Affiliate” means,
        with respect to any Person, (a) each Person that, directly or indirectly,
        owns or controls, whether beneficially, or as a trustee, guardian or
        other fiduciary, 5% or more of the Stock having ordinary voting power
        in the election of directors of such Person, (b) each Person that controls,
        is controlled by or is under common control with such Person, (c) each
        of such Person’s officers, directors, joint venturers and partners
        and (d) in the case of Borrower, the immediate family members, spouses
        and lineal descendants of individuals who are Affiliates of Borrower.
        For the purposes of this definition, “control” of
        a Person shall mean the possession, directly or indirectly, of the power
        to direct or cause the direction of its management or policies, whether
        through the ownership of voting securities, by contract or otherwise; provided, however,
        that the term “Affiliate” shall specifically exclude
Agent and each Lender.  

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“Agent” means
    GE Capital in its capacity as Agent for Lenders or its successor appointed
    pursuant to Section
  9.7.
  “Agreement” means
        the Credit Agreement by and among Borrower, the other Credit Parties
        party thereto, GE Capital, as Agent and Lender and the other Lenders
        from time to time party thereto, as the same may be amended, supplemented,
        restated or otherwise modified from time to time.

    “Appendices” has
        the meaning ascribed to it in the recitals to the Agreement.

     “Applicable Margins” means
        collectively the Applicable Unused Line Fee Margin, the Applicable Revolver
        Index Margin, the Applicable Term Loan Index Margin, the Applicable Revolver
        LIBOR Margin and the Applicable Term Loan LIBOR Margin.

    “Applicable Revolver
          Index Margin” means the per annum interest rate margin from
          time to time in effect and payable in addition to the Index Rate applicable
          to the Revolving Loan, as determined by reference to Section 1.5(a).

    “Applicable Revolver
          LIBOR Margin” means the per annum interest rate from time
          to time in effect and payable in addition to the LIBOR Rate applicable
          to the Revolving Loan, as determined by reference to Section 1.5(a).

    “Applicable Term Loan
          Index Margin” means the per annum interest rate from time
          to time in effect and payable in addition to the Index Rate applicable
          to the Term Loan, as determined by reference to Section 1.5(a).

    “Applicable Term Loan
          LIBOR Margin” means the per annum interest rate from time
          to time in effect and payable in addition to the LIBOR Rate applicable
          to the Term Loan, as determined by reference to Section 1.5(a).

    “Applicable Unused Line
          Fee Margin” means the per annum fee, from time to time in
          effect, payable in respect of Borrower’s non-use of committed
          funds pursuant to Section 1.9(b), which fee is determined by
          reference to Section 1.5(a).

    “Assignment Agreement” has
        the meaning ascribed to it in Section 9.1(a).

    “Bankruptcy Code” means
        the provisions of Title 11 of the United States Code, 11 U.S.C. §§101 et seq. 

     “Blocked Accounts” has
        the meaning ascribed to it in Annex B.

    “Borrower” has
        the respective meaning ascribed thereto in the preamble to the Agreement.

    “Borrowing Availability” means
        as of any date of determination the lesser of (i) the Maximum Revolver
        Amount and (ii) the Borrowing Base, in each case, less the aggregate
        Revolving Loan then outstanding.

    “Borrowing Base” means,
        as of any date of determination by Agent, from time to time, an amount
        equal to 85% of the book value of Eligible Accounts, less any Reserves
established by Agent at such time.  

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“Borrowing Base Certificate” means
  a certificate to be executed and delivered from time to time by Borrower in
  the form attached to the Agreement as Exhibit 4.1(b).
   “Business Day” means
        any day that is not a Saturday, a Sunday or a day on which banks are
        required or permitted to be closed in the State of New York and in reference
        to LIBOR Loans shall mean any such day that is also a LIBOR Business
        Day. 

     “Capital Expenditures” means,
        with respect to any Person, all expenditures (by the expenditure of cash
        or the incurrence of Indebtedness) by such Person during any measuring
        period for any fixed assets or improvements or for replacements, substitutions
        or additions thereto that have a useful life of more than one year and
        that are required to be capitalized under GAAP.

    “Capital Lease” means,
        with respect to any Person, any lease of any property (whether real,
        personal or mixed) by such Person as lessee that, in accordance with
        GAAP, would be required to be classified and accounted for as a capital
        lease on a balance sheet of such Person.

    “Capital Lease Obligation” means,
        with respect to any Capital Lease of any Person, the amount of the obligation
        of the lessee thereunder that, in accordance with GAAP, would appear
        on a balance sheet of such lessee in respect of such Capital Lease.

    “Cash Management Systems” has
        the meaning ascribed to it in Section 1.8.

    “Change of Control” means
        any of the following: (a) any person or group of persons (within the
        meaning of the Securities Exchange Act of 1934,) shall have acquired,
        after the Closing Date, beneficial ownership (within the meaning of Rule
        13d-3 promulgated by the Securities and Exchange Commission under the
        Securities Exchange Act of 1934,) of 20% or more of the issued and outstanding
        shares of capital Stock of Borrower having the right to vote for the
        election of directors of Borrower under ordinary circumstances; (b) during
        any period of twelve consecutive calendar months, individuals who at
        the beginning of such period constituted the board of directors of Borrower
        (together with any new directors whose election by the board of directors
        of Borrower or whose nomination for election by the Stockholders of Borrower
        was approved by a vote of at least two-thirds of the directors then still
        in office who either were directors at the beginning of such period or
        whose election or nomination for election was previously so approved)
        cease for any reason other than death or disability to constitute a majority
        of the directors then in office; or (c) Borrower ceases to own and control
        all of the economic and voting rights associated with all of the outstanding
        capital Stock of any of its Subsidiaries. 

    “Charges” means
        all federal, state, county, city, municipal, local, foreign or other
        governmental taxes (including taxes owed to the PBGC at the time due
        and payable), levies, assessments, charges, liens, claims or encumbrances
        upon or relating to (a) the Collateral, (b) the Obligations, (c) the
        employees, payroll, income or gross receipts of any Credit Party, (d)
        any Credit Party’s ownership or use of any properties or other
        assets, or (e) any other aspect of any Credit Party’s business.

    “Chattel Paper” means
        any “chattel paper,” as such term is defined in the Code,
        including electronic chattel paper, now owned or hereafter acquired by
        any Credit Party.

    “Closing Checklist” means
        the schedule, including all appendices, exhibits or schedules thereto,
        listing certain documents and information to be delivered in connection
        with the Agreement, the other Loan Documents and the transactions contemplated
thereunder, substantially in the form attached hereto as Annex B.  

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“Closing Date” means
    November 14, 2004.
  “Code” means
        the Uniform Commercial Code as the same may, from time to time, be enacted
        and in effect in the State of New York; provided, that to the
        extent that the Code is used to define any term herein or in any Loan
        Document and such term is defined differently in different Articles or
        Divisions of the Code, the definition of such term contained in Article
        or Division 9 shall govern; provided further, that in the
        event that, by reason of mandatory provisions of law, any or all of the
        attachment, perfection or priority of, or remedies with respect to, Agent’s
        or any Lender’s Lien on any Collateral is governed by the Uniform
        Commercial Code as enacted and in effect in a jurisdiction other than
        the State of New York, the term “Code” shall mean
        the Uniform Commercial Code as enacted and in effect in such other jurisdiction
        solely for purposes of the provisions thereof relating to such attachment,
        perfection, priority or remedies and for purposes of definitions related
        to such provisions.

    “Collateral” means
        the property covered by the Security Agreement and the other Collateral
        Documents and any other property, real or personal, tangible or intangible,
        now existing or hereafter acquired, that may at any time be or become
        subject to a security interest or Lien in favor of Agent, on behalf of
        itself and Lenders, to secure the Obligations.

    “Collateral Documents” means
        the Security Agreement, the Patent Security Agreement, the Trademark
        Security Agreement, the Copyright Security Agreement and all similar
        agreements entered into guaranteeing payment of, or granting a Lien upon
        property as security for payment of, the Obligations.

    “Collateral Reports” means
        the reports with respect to the Collateral referred to in Annex D.

    “Collection Account” means
        that certain account of Agent, account number 502-328-54 in the name
        of Agent at Bankers Trust Company in New York, New York ABA No. 021 001
        033, or such other account as may be specified in writing by Agent as
        the “Collection Account.”.

    “Commitment Termination
          Date” means the earliest of (a) November 14, 2007, (b) the
          date of termination of Lenders’ obligations to make Advances
          or permit existing Loans to remain outstanding pursuant to Section
          8.2(b), and (c) the date of indefeasible prepayment in full by
          Borrower of the Loans, and the permanent reduction of all Commitments
          to zero dollars ($0).

    “Commitments” means
        (a) as to any Lender, the aggregate of such Lender’s Revolving
        Loan Commitment and Term Loan Commitment as set forth on Annex I to
        the Agreement or in the most recent Assignment Agreement executed by
        such Lender and (b) as to all Lenders, the aggregate of all Lenders’ Revolving
        Loan Commitments and Term Loan Commitments, which aggregate commitment
        shall be Eighteen Million Dollars ($18,000,000) on the Closing Date,
        as to each of clauses (a) and (b), as such Commitments may be reduced,
        amortized or adjusted from time to time in accordance with the Agreement.

    “Compliance Certificate” has
        the meaning ascribed to it in Annex C.

    “Concentration Accounts” has
        the meaning ascribed to it in Annex B.

    “Contracts” means
        all “contracts,” as such term is defined in the Code, now
        owned or hereafter acquired by any Credit Party, in any event, including
        all contracts, undertakings, or agreements (other than rights evidenced
        by Chattel Paper, Documents or Instruments) in or under which any Credit
        Party may now or hereafter have any right, title or interest, including
        any agreement relating to the terms of payment or the terms of performance
of any Account.  

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“Control Letter” means
    a letter agreement between Agent and (i) the issuer of uncertificated securities
    with
  respect to uncertificated securities in the name of any Credit Party, (ii)
  a securities intermediary with respect to securities, whether certificated
  or uncertificated, securities entitlements and other financial assets held
  in a securities account in the name of any Credit Party, (iii) a futures commission
  merchant or clearing house, as applicable, with respect to commodity accounts
  and commodity contracts held by any Credit Party, whereby, among other things,
  the issuer, securities intermediary or futures commission merchant disclaims
  any security interest in the applicable financial assets, acknowledges the
  Lien of Agent, on behalf of itself and Lenders, on such financial assets, and
  agrees to follow the instructions or entitlement orders of Agent without further
  consent by the affected Credit Party.
  “Copyright License” means
        any and all rights now owned or hereafter acquired by any Credit Party
        under any written agreement granting any right to use any Copyright or
        Copyright registration.

    “Copyright Security
          Agreements” means the Copyright Security Agreements made
          in favor of Agent, on behalf of itself and Lenders, by each applicable
          Credit Party.

    “Copyrights” means
        all of the following now owned or hereafter adopted or acquired by any
        Credit Party: (a) all copyrights and General Intangibles of like nature
        (whether registered or unregistered), all registrations and recordings
        thereof, and all applications in connection therewith, including all
        registrations, recordings and applications in the United States Copyright
        Office or in any similar office or agency of the United States, any state
        or territory thereof, or any other country or any political subdivision
        thereof, and (b) all reissues, extensions or renewals thereof.

    “Credit Parties” means
        Borrower and each of its Subsidiaries.

     “Default” means
        any event that, with the passage of time or notice or both, would, unless
        cured or waived, become an Event of Default.

    “Default Rate” has
        the meaning ascribed to it in Section 1.5(d).

    “Deposit Accounts” means
        all “deposit accounts” as such term is defined in the Code,
        now or hereafter held in the name of any Credit Party.

    “Disbursement Accounts” has
        the meaning ascribed to it in Annex B.

    “Disclosure Schedules” means
        the Schedules prepared by Borrower and denominated as Disclosure Schedules
        (1.4) through (6.7) in the Index to the Agreement.

    “Documents” means
        all “documents,” as such term is defined in the Code, now
        owned or hereafter acquired by any Credit Party, wherever located.

    “Dollars” or “$” means
lawful currency of the United States of America.  

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“EBITDA” means,
    with respect to any Person for any fiscal period, without duplication, an
    amount equal to
  (a) consolidated net income of such Person for such period determined in accordance
  with GAAP, minus (b) the sum of (i) income tax benefits, (ii) interest
  income, (iii) gain from extraordinary items for such period, (iv) any aggregate
  net gain (but not any aggregate net loss) during such period arising from the
  sale, exchange or other disposition of capital assets by such Person (including
  any fixed assets, whether tangible or intangible, all inventory sold in conjunction
  with the disposition of fixed assets and all securities), and (v) any other
  non-cash gains that have been added in determining consolidated net income,
  in each case to the extent included in the calculation of consolidated net
  income of such Person for such period in accordance with GAAP, but without
  duplication, plus (c) the sum of (i) any provision for income taxes,
  (ii) Interest Expense, (iii) loss from extraordinary items for such period,
  (iv) the amount of non-cash charges (including depreciation and amortization)
  for such period, (v) amortized debt discount for such period, and (vi) the
  amount of any deduction to consolidated net income as the result of any grant
  to any members of the management of such Person of any Stock, in each case
  to the extent included in the calculation of consolidated net income of such
  Person for such period in accordance with GAAP, but without duplication. For
  purposes of this definition, the following items shall be excluded in determining
  consolidated net income of a Person: (1) the income (or deficit) of any other
  Person accrued prior to the date it became a Subsidiary of, or was merged or
  consolidated into, such Person or any of such Person’s Subsidiaries;
  (2) the income (or deficit) of any other Person (other than a Subsidiary) in
  which such Person has an ownership interest, except to the extent any such
  income has actually been received by such Person in the form of cash dividends
  or distributions; (3) the undistributed earnings of any Subsidiary of such
  Person to the extent that the declaration or payment of dividends or similar
  distributions by such Subsidiary is not at the time permitted by the terms
  of any contractual obligation or requirement of law applicable to such Subsidiary;
  (4) any restoration to income of any contingency reserve, except to the extent
  that provision for such reserve was made out of income accrued during such
  period; (5) any write-up of any asset; (6) any net gain from the collection
  of the proceeds of life insurance policies; (7) any net gain arising from the
  acquisition of any securities, or the extinguishment, under GAAP, of any Indebtedness,
  of such Person, (8) in the case of a successor to such Person by consolidation
  or merger or as a transferee of its assets, any earnings of such successor
  prior to such consolidation, merger or transfer of assets, and (9) any deferred
  credit representing the excess of equity in any Subsidiary of such Person at
  the date of acquisition of such Subsidiary over the cost to such Person of
  the investment in such Subsidiary.
  “Eligible Accounts” has
      the meaning ascribed to it in Section 1.6.

   “Eligible Term Equipment” means
      all Equipment of Borrower and Inventory of Borrower consisting of tools
      and parts for Equipment existing on the Closing Date and subject to the
      appraisal performed on July 23, 2004 by Superior Asset Appraisals, Inc.
      on behalf of the Agent. 

  “Environmental Laws” means
      all applicable federal, state, local and foreign laws, statutes, ordinances,
      codes, rules, standards and regulations, now or hereafter in effect, and
      any applicable judicial or administrative interpretation thereof, including
      any applicable judicial or administrative order, consent decree, order
      or judgment, imposing liability or standards of conduct for or relating
      to the regulation and protection of human health, safety, the environment
      and natural resources (including ambient air, surface water, groundwater,
      wetlands, land surface or subsurface strata, wildlife, aquatic species
      and vegetation). Environmental Laws include the Comprehensive Environmental
      Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 et
      seq.) (“CERCLA”); the Hazardous Materials Transportation
      Authorization Act of 1994 (49 U.S.C. §§ 5101 et seq.);
      the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et
      seq.); the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et
      seq.); the Toxic Substance Control Act (15 U.S.C. §§ 2601 et
      seq.); the Clean Air Act (42 U.S.C. §§ 7401 et seq.);
      the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et
      seq.); the Occupational Safety and Health Act (29 U.S.C. §§ 651 et
      seq.); and the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et
      seq.), and any and all regulations promulgated thereunder, and all
      analogous state, local and foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.

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“Environmental Liabilities” means,
  with respect to any Person, all liabilities, obligations, responsibilities,
  response, remedial and removal costs, investigation and feasibility study costs,
  capital costs, operation and maintenance costs, losses, damages, punitive damages,
  property damages, natural resource damages, consequential damages, treble damages,
  costs and expenses (including all reasonable fees, disbursements and expenses
  of counsel, experts and consultants), fines, penalties, sanctions and interest
  incurred as a result of or related to any claim, suit, action, investigation,
  proceeding or demand by any Person, whether based in contract, tort, implied
  or express warranty, strict liability, criminal or civil statute or common
  law, including any arising under or related to any Environmental Laws, Environmental
  Permits, or in connection with any Release or threatened Release or presence
  of a Hazardous Material whether on, at, in, under, from or about or in the
  vicinity of any real or personal property.
  “Environmental Permits” means
        all permits, licenses, authorizations, certificates, approvals or registrations
        required by any Governmental Authority under any Environmental Laws.

    “Equipment” means
        all “equipment,” as such term is defined in the Code, now
        owned or hereafter acquired by any Credit Party, wherever located and,
        in any event, including all such Credit Party’s machinery and equipment,
        including processing equipment, conveyors, machine tools, data processing
        and computer equipment, including embedded software and peripheral equipment
        and all engineering, processing and manufacturing equipment, office machinery,
        furniture, materials handling equipment, tools, attachments, accessories,
        automotive equipment, trailers, trucks, forklifts, molds, dies, stamps,
        motor vehicles, rolling stock and other equipment of every kind and nature,
        trade fixtures and fixtures not forming a part of real property, together
        with all additions and accessions thereto, replacements therefor, all
        parts therefor, all substitutes for any of the foregoing, fuel therefor,
        and all manuals, drawings, instructions, warranties and rights with respect
        thereto, and all products and proceeds thereof and condemnation awards
        and insurance proceeds with respect thereto.

    “ERISA” means
        the Employee Retirement Income Security Act of 1974, as amended from
        time to time, and any regulations promulgated thereunder.

    “ERISA Affiliate” means,
        with respect to any Credit Party, any trade or business (whether or not
        incorporated) that, together with such Credit Party, are treated as a
        single employer within the meaning of Sections 414(b), (c), (m) or (o)
        of the IRC.

    “ERISA Event” means,
        with respect to any Credit Party or any ERISA Affiliate, (a) any event
        described in Section 4043(c) of ERISA with respect to a Title IV Plan;
        (b) the withdrawal of any Credit Party or ERISA Affiliate from a Title
        IV Plan subject to Section 4063 of ERISA during a plan year in which
        it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
        (c) the complete or partial withdrawal of any Credit Party or any ERISA
        Affiliate from any Multiemployer Plan; (d) the filing of a notice of
        intent to terminate a Title IV Plan or the treatment of a plan amendment
        as a termination under Section 4041 of ERISA; (e) the institution of
        proceedings to terminate a Title IV Plan or Multiemployer Plan by the
        PBGC; (f) the failure by any Credit Party or ERISA Affiliate to make
        when due required contributions to a Multiemployer Plan or Title IV Plan
        unless such failure is cured within 30 days; (g) any other event or condition
        that might reasonably be expected to constitute grounds under Section
        4042 of ERISA for the termination of, or the appointment of a trustee
        to administer, any Title IV Plan or Multiemployer Plan or for the imposition
        of liability under Section 4069 or 4212(c) of ERISA; (h) the termination
        of a Multiemployer Plan under Section 4041A of ERISA or the reorganization
        or insolvency of a Multiemployer Plan under Section 4241 or 4245 of ERISA;
        or (i) the loss of a Qualified Plan’s qualification or tax exempt
        status; or (j) the termination of a Plan described in Section 4064 of
ERISA.  

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“ESOP” means
    a Plan that is intended to satisfy the requirements of Section 4975(e)(7)
    of the IRC.
  “Event of Default” has
        the meaning ascribed to it in Section 8.1.

    “Fair Labor Standards
          Act” means the Fair Labor Standards Act, 29 U.S.C. §201 et seq. 

     “Federal Funds Rate” means,
        for any day, a floating rate equal to the weighted average of the rates
        on overnight Federal funds transactions among members of the Federal
        Reserve System, as determined by Agent in its sole discretion, which
        determination shall be final, binding and conclusive (absent manifest
        error).

    “Federal Reserve Board” means
        the Board of Governors of the Federal Reserve System.

    “Fees” means
        any and all fees payable to Agent or any Lender pursuant to the Agreement
        or any of the other Loan Documents.

    “Financial Covenants” means
        the financial covenants set forth in Annex H.

    “Financial Statements” means
        the consolidated and consolidating income statements, statements of cash
        flows and balance sheets of Borrower delivered in accordance with Section
        3.4 and Annex C.

    “Fiscal Month” means
        any of the monthly accounting periods of Borrower.

    “Fiscal Quarter” means
        any of the quarterly accounting periods of Borrower, ending on March
        31, June 30, September 30 and December 31 of each year.

    “Fiscal Year” means
        any of the annual accounting periods of Borrower ending on December 31
        of each year.

    “Fixed Charges” means,
        with respect to any Person for any fiscal period, (a) the aggregate
        of all Interest Expense paid in cash during such period, plus (b) scheduled
        payments of principal with respect to Indebtedness (other than Permitted
        Insurance Premium Indebtedness to the extent that such payments are characterized
        as operating expenses of the Borrower and payments made to holders of
        Subordinated Debt to the extent permitted under Section 1.4) during
        such period, plus (c) Capital Expenditures paid in cash during such period,
        plus (d) income taxes paid in cash during such period.

    “Fixed Charge Coverage
          Ratio” means, with respect to any Person for any fiscal period,
          the ratio of EBITDA to Fixed Charges. 

    “Fixtures” means
        all “fixtures” as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party.  

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“Forced Liquidation Value” means,
  with respect to any Equipment, the “forced liquidation value” of
  such Equipment as determined by the most recent appraisal performed by or at
  the request of the Agent, by an Acceptable Appraiser.
  “Funded Debt” means,
        with respect to any Person, without duplication, all Indebtedness for
        borrowed money evidenced by notes, bonds, debentures, or similar evidences
        of Indebtedness that by its terms matures more than one year from, or
        is directly or indirectly renewable or extendible at such Person’s
        option under a revolving credit or similar agreement obligating the lender
        or lenders to extend credit over a period of more than one year from
        the date of creation thereof, and specifically including Capital Lease
        Obligations, current maturities of long-term debt, revolving credit and
        short-term debt extendible beyond one year at the option of the debtor,
        and also including, in the case of Borrower, the Obligations and, without
        duplication, Guaranteed Indebtedness consisting of guaranties of Funded
        Debt of other Persons.

    “GAAP” means
        generally accepted accounting principles in the United States of America
        consistently applied, as such term is further defined in Annex H to
        the Agreement.

    “GE Capital” means
        General Electric Capital Corporation, a Delaware corporation.

    “GE Capital Fee Letter” means
        that certain letter, dated as of the Closing Date, between GE Capital
        and Borrower with respect to certain Fees to be paid from time to time
        by Borrower to GE Capital.

    “General Intangibles” means
        all “general intangibles,” as such term is defined in the
        Code, now owned or hereafter acquired by any Credit Party, including
        all right, title and interest that such Credit Party may now or hereafter
        have in or under any Contract, all payment intangibles, customer lists,
        Licenses, Copyrights, Trademarks, Patents, and all applications therefor
        and reissues, extensions or renewals thereof, rights in Intellectual
        Property, interests in partnerships, joint ventures and other business
        associations, licenses, permits, copyrights, trade secrets, proprietary
        or confidential information, inventions (whether or not patented or patentable),
        technical information, procedures, designs, knowledge, know-how, software,
        data bases, data, skill, expertise, experience, processes, models, drawings,
        materials and records, goodwill (including the goodwill associated with
        any Trademark or Trademark License), all rights and claims in or under
        insurance policies (including insurance for fire, damage, loss and casualty,
        whether covering personal property, real property, tangible rights or
        intangible rights, all liability, life, key man and business interruption
        insurance, and all unearned premiums), uncertificated securities, choses
        in action, deposit, checking and other bank accounts, rights to receive
        tax refunds and other payments, rights to receive dividends, distributions,
        cash, Instruments and other property in respect of or in exchange for
        pledged Stock and Investment Property, rights of indemnification, all
        books and records, correspondence, credit files, invoices and other papers,
        including without limitation all tapes, cards, computer runs and other
        papers and documents in the possession or under the control of such Credit
        Party or any computer bureau or service company from time to time acting
        for such Credit Party.

    “Goods” means
        all “goods” as defined in the Code, now owned or hereafter
        acquired by any Credit Party, wherever located, including embedded software
        to the extent included in “goods” as defined in the Code,
        manufactured homes, standing timber that is cut and removed for sale
        and unborn young of animals.

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“Governmental Authority” means
  any nation or government, any state or other political subdivision thereof,
  and any agency, department or other entity exercising executive, legislative,
  judicial, regulatory or administrative functions of or pertaining to government.
  “Guaranteed Indebtedness” means
        as to any Person, any obligation of such Person guaranteeing, providing
        comfort or otherwise supporting any Indebtedness, lease, dividend, or
        other obligation (“primary obligation”) of any other
        Person (the “primary obligor”) in any manner, including
        any obligation or arrangement of such Person to (a) purchase or repurchase
        any such primary obligation, (b) advance or supply funds (i) for the
        purchase or payment of any such primary obligation or (ii) to maintain
        working capital or equity capital of the primary obligor or otherwise
        to maintain the net worth or solvency or any balance sheet condition
        of the primary obligor, (c) purchase property, securities or services
        primarily for the purpose of assuring the owner of any such primary obligation
        of the ability of the primary obligor to make payment of such primary
        obligation, (d) protect the beneficiary of such arrangement from loss
        (other than product warranties given in the ordinary course of business)
        or (e) indemnify the owner of such primary obligation against loss in
        respect thereof. The amount of any Guaranteed Indebtedness at any time
        shall be deemed to be an amount equal to the lesser at such time of (x)
        the stated or determinable amount of the primary obligation in respect
        of which such Guaranteed Indebtedness is incurred and (y) the maximum
        amount for which such Person may be liable pursuant to the terms of the
        instrument embodying such Guaranteed Indebtedness, or, if not stated
        or determinable, the maximum reasonably anticipated liability (assuming
        full performance) in respect thereof.

    “Guaranties” means,
        collectively, each guaranty executed by any Guarantor in favor of Agent
        and Lenders in respect of the Obligations.

    “Guarantors” means
        each Subsidiary of Borrower, and each other Person, if any, that executes
        a guaranty or other similar agreement in favor of Agent, for itself and
        the ratable benefit of Lenders, in connection with the transactions contemplated
        by the Agreement and the other Loan Documents.

    “Hazardous Material” means
        any substance, material or waste that is regulated by, or forms the basis
        of liability now or hereafter under, any Environmental Laws, including
        any material or substance that is (a) defined as a “solid waste,” “hazardous
        waste,” “hazardous material,” “hazardous substance,” “extremely
        hazardous waste,” “restricted hazardous waste,” “pollutant,” “contaminant,” “hazardous
        constituent,” “special waste,” “toxic substance” or
        other similar term or phrase under any Environmental Laws, or (b) petroleum
        or any fraction or by-product thereof, asbestos, polychlorinated biphenyls
        (PCB’s), or any radioactive substance.

    “Indebtedness” means,
        with respect to any Person, without duplication, (a) all indebtedness
        of such Person for borrowed money or for the deferred purchase price
        of property payment for which is deferred 6 months or more, but excluding
        obligations to trade creditors incurred in the ordinary course of business
        that are unsecured and not overdue by more than 6 months unless being
        contested in good faith, (b) all reimbursement and other obligations
        with respect to letters of credit, bankers’ acceptances and surety
        bonds, whether or not matured, (c) all obligations evidenced by notes,
        bonds, debentures or similar instruments, (d) all indebtedness created
        or arising under any conditional sale or other title retention agreement
        with respect to property acquired by such Person (even though the rights
        and remedies of the seller or lender under such agreement in the event
        of default are limited to repossession or sale of such property), (e)
        all Capital Lease Obligations and the present value (discounted at the
        Index Rate as in effect on the Closing Date) of future rental payments
        under all synthetic leases, (f) all obligations of such Person under
        commodity purchase or option agreements or other commodity price hedging
        arrangements, in each case whether contingent or matured, (g) all obligations
        of such Person under any foreign exchange contract, currency swap agreement,
        interest rate swap, cap or collar agreement or other similar agreement
        or arrangement designed to alter the risks of that Person arising from
        fluctuations in currency values or interest rates, in each case whether
        contingent or matured, (h) all Indebtedness referred to above secured
        by (or for which the holder of such Indebtedness has an existing right,
        contingent or otherwise, to be secured by) any Lien upon or in property
        or other assets (including accounts and contract rights) owned by such
        Person, even though such Person has not assumed or become liable for
        the payment of such Indebtedness, and (i) the Obligations.

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“Indemnified Liabilities” has
  the meaning ascribed to it in Section 1.13.
  “Indemnified Person” has
        the meaning ascribed to in Section 1.13.

    “Index Rate” means,
        for any day, a floating rate equal to the higher of (i) the rate publicly
        quoted from time to time by The Wall Street Journal as
        the “base rate on corporate loans posted by at least 75% of the
        nation’s 30 largest banks” (or, if The Wall Street
        Journal ceases quoting a base rate of the type described, the highest
        per annum rate of interest published by the Federal Reserve Board in
        Federal Reserve statistical release H.15 (519) entitled “Selected
        Interest Rates” as the Bank prime loan rate or its equivalent),
        and (ii) the Federal Funds Rate plus 50 basis points per annum. Each
        change in any interest rate provided for in the Agreement based upon
        the Index Rate shall take effect at the time of such change in the Index
        Rate.

    “Index Rate Loan” means
        a Loan or portion thereof bearing interest by reference to the Index
        Rate.

    “Instruments” means
        all “instruments,” as such term is defined in the Code, now
        owned or hereafter acquired by any Credit Party, wherever located, and,
        in any event, including all certificated securities, all certificates
        of deposit, and all promissory notes and other evidences of indebtedness,
        other than instruments that constitute, or are a part of a group of writings
        that constitute, Chattel Paper.

    “Intellectual Property” means
        any and all Licenses, Patents, Copyrights, Trademarks, and the goodwill
        associated with such Trademarks.

    “Intercompany Notes” has
        the meaning ascribed to it in Section 6.3.

    "Interest Expense" means,
        with respect to any Person for any fiscal period, interest expense of
        such Person paid in cash determined in accordance with GAAP for the relevant
        period ended on such date, including, interest expense with respect to
        any Funded Debt of such Person but excluding interest expense with respect
        to any Permitted Insurance Premium Indebtedness of such Person.

     “Interest Payment Date” means
        (a) as to any Index Rate Loan, the first Business Day of each month to
        occur while such Loan is outstanding, and (b) as to any LIBOR Loan, the
        last day of the applicable LIBOR Period; provided that, in addition
        to the foregoing, each of (x) the date upon which all of the Commitments
        have been terminated and the Loans have been paid in full and (y) the
        Commitment Termination Date shall be deemed to be an “Interest
        Payment Date” with respect to any interest that has then accrued
        under the Agreement.

    “Inventory” means
        all “inventory,” as such term is defined in the Code, now
        owned or hereafter acquired by any Credit Party, wherever located, and
        in any event including inventory, merchandise, goods and other personal
        property that are held by or on behalf of any Credit Party for sale or
        lease or are furnished or are to be furnished under a contract of service,
        or that constitute raw materials, work in process, finished goods, returned
        goods, or materials or supplies of any kind, nature or description used
        or consumed or to be used or consumed in such Credit Party’s business
        or in the processing, production, packaging, promotion, delivery or shipping
of the same, including all supplies and embedded software.  

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“Investment Property” means all “investment
  property” as such term is defined in the Code now owned or hereafter
  acquired by any Credit Party, wherever located, including (i) all securities,
  whether certificated or uncertificated, including stocks, bonds, interests
  in limited liability companies, partnership interests, treasuries, certificates
  of deposit, and mutual fund shares; (ii) all securities entitlements of any
  Credit Party, including the rights of any Credit Party to any securities account
  and the financial assets held by a securities intermediary in such securities
  account and any free credit balance or other money owing by any securities
  intermediary with respect to that account; (iii) all securities accounts of
  any Credit Party; (iv) all commodity contracts of any Credit Party; and (v)
  all commodity accounts held by any Credit Party.
  “IRC” means
        the Internal Revenue Code of 1986 and all regulations promulgated thereunder.

    “IRS” means
        the Internal Revenue Service.

    “Lenders” means
        GE Capital, the other Lenders named on the signature pages of the Agreement,
        and, if any such Lender shall decide to assign all or any portion of
        the Obligations, such term shall include any assignee of such Lender.

    “Letter-of-Credit Rights” means “letter-of-credit
        rights” as such term is defined in the Code, now owned or hereafter
        acquired by any Credit Party, including rights to payment or performance
        under a letter of credit, whether or not such Credit Party, as beneficiary,
        has demanded or is entitled to demand payment or performance.

    “LIBOR Business Day” means
        a Business Day on which banks in the City of London are generally open
        for interbank or foreign exchange transactions.

    “LIBOR Loan” means
        a Loan or any portion thereof bearing interest by reference to the LIBOR
        Rate.

    “LIBOR Period” means,
        with respect to any LIBOR Loan, each period commencing on a LIBOR Business
        Day selected by Borrower pursuant to the Agreement and ending one, two
        or three months thereafter, as selected by Borrower’s irrevocable
        notice to Agent as set forth in Section 1.5(e); provided, that
        the foregoing provision relating to LIBOR Periods is subject to the following:

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

	 	 
	 	
       (b)      any LIBOR Period that would otherwise extend beyond the Commitment Termination Date shall end 2 LIBOR Business Days prior to such date;

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       (c)      any LIBOR Period that begins on the last LIBOR 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 LIBOR Period) shall end on the last LIBOR Business Day of a calendar month;

	 	 
	 	
       (d)      Borrower shall select LIBOR Periods so as not to require a payment or prepayment of any LIBOR Loan during a LIBOR Period for such Loan; and

	 	 
	 	
       (e)      Borrower shall select LIBOR Periods so that there shall be no more than 3 separate LIBOR Loans in existence at any one time.
	 	 

“LIBOR Rate” means
    for each LIBOR Period, a rate of interest determined by Agent equal to:

	 	 
	 	
       (a)      the offered rate for deposits in United States Dollars for the applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m. (London time), on the second full LIBOR Business Day next preceding the first day of such LIBOR Period (unless such date is not a Business Day, in which event the next succeeding Business Day will be used); divided by

	 	 
	 	
       (b)      a number equal to 1.0 minus the aggregate (but without duplication) of the rates (expressed as a decimal fraction) of reserve requirements in effect on the day that is 2 LIBOR Business Days prior to the beginning of such LIBOR Period (including basic, supplemental, marginal and emergency reserves under any regulations of the Federal Reserve Board or other Governmental Authority having jurisdiction with respect thereto, as now and from time to time in effect) for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Federal Reserve Board) that are required to be maintained by a member bank of the Federal Reserve System.  
	 	 

If such interest rates shall cease to be available
  from Telerate News Service, the LIBOR Rate shall be determined from such financial
  reporting service or other information as shall be mutually acceptable to Agent
  and Borrower.
  “License” means
        any Copyright License, Patent License, Trademark License or other license
        of rights or interests now held or hereafter acquired by any Credit Party.

    “Lien” means
        any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
        arrangement, lien, charge, claim, security interest, easement or encumbrance,
        or preference, priority or other security agreement or preferential arrangement
        of any kind or nature whatsoever (including any lease or title retention
        agreement, any financing lease having substantially the same economic
        effect as any of the foregoing, and the filing of, or agreement to give,
        any financing statement perfecting a security interest under the Code
        or comparable law of any jurisdiction).

    “Litigation” has
        the meaning ascribed to it in Section 3.13.

    “Loan Account” has
        the meaning ascribed to it in Section 1.12.

    “Loan Documents” means
        the Agreement, the Notes, the Collateral Documents, and all other agreements,
        instruments, documents and certificates identified in the Closing Checklist
        executed and delivered to, or in favor of, Agent or any Lenders and including
        all other pledges, powers of attorney, consents, assignments, contracts,
        notices, and all other written matter whether heretofore, now or hereafter
        executed by or on behalf of any Credit Party, or any employee of any
        Credit Party, and delivered to Agent or any Lender in connection with
        the Agreement or the transactions contemplated thereby. Any reference
        in the Agreement or any other Loan Document to a Loan Document shall
        include all appendices, exhibits or schedules thereto, and all amendments,
        restatements, supplements or other modifications thereto, and shall refer
        to the Agreement or such Loan Document as the same may be in effect at
any and all times such reference becomes operative.  

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“Loans” means
    the Revolving Loan and the Term Loan.
  “Lock Boxes” has
        the meaning ascribed to it in Annex B.

    “Margin Stock” has
        the meaning ascribed to in Section 3.10.

    “Material Adverse Effect” means
        a material adverse effect on (a) the business, assets, operations, prospects
        or financial or other condition of any Credit Party, (b) any Credit Party’s
        ability to pay any of the Loans or any of the other Obligations in accordance
        with the terms of this Agreement or any other Loan Document, (c) the
        Collateral or Agent’s Liens, on behalf of itself and Lenders, on
        the Collateral or the priority of such Liens, or (d) Agent’s or
        any Lender’s rights and remedies under the Agreement and the other
        Loan Documents. Without limiting the generality of the foregoing, it
        shall also constitute a Material Adverse Effect if at any time the “Average
        Rig Count” for the United States (excluding Canada and International
        rigs) published from time to time by Baker Hughes, Inc. falls below 675
        for 12 consecutive weeks.

     “Maximum Revolver Amount” means,
        as of any date of determination, an amount equal to the Revolving Loan
        Commitment of all Lenders as of that date.

    “Multiemployer Plan” means
        a “multiemployer plan” as defined in Section 4001(a)(3) of
        ERISA, and to which any Credit Party or ERISA Affiliate is making, is
        obligated to make or has made or been obligated to make, contributions
        on behalf of participants who are or were employed by any of them.

    “Multi-Shot Division” means
        the portion of Borrower’s business related to land-based directional
        drilling, onshore and offshore downhole surveying, measurement while
        drilling, steering tools, motor rentals to oil and gas operators that
        was sold by Borrower to Multi-Shot, LLC, a Texas limited liability company,
        in August, 2004.

    “Non-Funding Lender” has
        the meaning ascribed to it in Section 9.9(a)(ii).

    “Notes” means,
        collectively, the Revolving Notes and the Term Notes.

     “Notice of Conversion/Continuation” has

        the meaning ascribed to it in Section 1.5(e).

    “Notice of Revolving
          Credit Advance” has the meaning ascribed to it in Section
          1.1(a).

    “Obligations” means
        all loans, advances, debts, liabilities and obligations for the performance
        of covenants, tasks or duties or for payment of monetary amounts (whether
        or not such performance is then required or contingent, or such amounts
        are liquidated or determinable) owing by any Credit Party to Agent or
        any Lender, and all covenants and duties regarding such amounts, of any
        kind or nature, present or future, whether or not evidenced by any note,
        agreement or other instrument, arising under the Agreement or any of
        the other Loan Documents. This term includes all principal, interest
        (including all interest that accrues after the commencement of any case
        or proceeding by or against any Credit Party in bankruptcy, whether or
        not allowed in such case or proceeding), Fees, Charges, expenses, attorneys’ fees
        and any other sum chargeable to any Credit Party under the Agreement
or any of the other Loan Documents.  

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“Original Closing Date” means
  September 14, 2001.
  “Original Credit Agreement” has
        the meaning assigned to such term in the recitals of this Agreement.

    “Patent License” means
        rights under any written agreement now owned or hereafter acquired by
        any Credit Party granting any right with respect to any invention on
        which a Patent is in existence.

    “Patent Security Agreements” means
        the Patent Security Agreements made in favor of Agent, on behalf of itself
        and Lenders, by each applicable Credit Party.

    “Patents” means
        all of the following in which any Credit Party now holds or hereafter
        acquires any interest: (a) all letters patent of the United States or
        of any other country, all registrations and recordings thereof, and all
        applications for letters patent of the United States or of any other
        country, including registrations, recordings and applications in the
        United States Patent and Trademark Office or in any similar office or
        agency of the United States, any State, or any other country, and (b)
        all reissues, continuations, continuations-in-part or extensions thereof.

    “PBGC” means
        the Pension Benefit Guaranty Corporation.

    “Pension Plan” means
        a Plan described in Section 3(2) of ERISA.

    “Permitted Encumbrances” means
        the following encumbrances: (a) Liens for taxes or assessments or other
        governmental Charges not yet due and payable or which are being contested
        in accordance with Section 5.2(b); (b) pledges or deposits of
        money securing statutory obligations under workmen’s compensation,
        unemployment insurance, social security or public liability laws or similar
        legislation (excluding Liens under ERISA); (c) pledges or deposits of
        money securing bids, tenders, contracts (other than contracts for the
        payment of money) or leases to which any Credit Party is a party as lessee
        made in the ordinary course of business; (d) inchoate and unperfected
        workers’, mechanics’ or similar liens arising in the ordinary
        course of business, so long as such Liens attach only to Equipment, Fixtures
        and/or Real Estate; (e) carriers’, warehousemen’s, suppliers’ or
        other similar possessory liens arising in the ordinary course of business
        and securing liabilities in an outstanding aggregate amount not in excess
        of $50,000 at any time, so long as such Liens attach only to Inventory;
        (f) deposits securing, or in lieu of, surety, appeal or customs bonds
        in proceedings to which any Credit Party is a party; (g) any attachment
        or judgment lien not constituting an Event of Default under Section
        8.1(j); (h) zoning restrictions, easements, licenses, or other restrictions
        on the use of any Real Estate or other minor irregularities in title
        (including leasehold title) thereto, so long as the same do not materially
        impair the use, value, or marketability of such Real Estate; (i) presently
        existing or hereafter created Liens in favor of Agent, on behalf of Lenders;
        and (j) Liens expressly permitted under clauses (b) and (c) of Section
        6.7 of the Agreement.

    “Permitted Insurance
          Premium Indebtedness” shall mean Indebtedness of the Borrower
          incurred to finance insurance premiums of the Borrower in the ordinary
          course of business.

    “Person” means
        any individual, sole proprietorship, partnership, joint venture, trust,
        unincorporated organization, association, corporation, limited liability
        company, institution, public benefit corporation, other entity or government
        (whether federal, state, county, city, municipal, local, foreign, or
        otherwise, including any instrumentality, division, agency, body or department
thereof).  

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“Plan” means, at any time, an “employee
  benefit plan”, as defined in Section 3(3) of ERISA, that any Credit Party
  or ERISA Affiliate maintains, contributes to or has an obligation to contribute
  to or has maintained, contributed to or had an obligation to contribute to
  at any time within the past 7 years on behalf of participants who are or were
  employed by any Credit Party or ERISA Affiliate.
   “Proceeds” means “proceeds,” as
        such term is defined in the Code, including (a) any and all proceeds
        of any insurance, indemnity, warranty or guaranty payable to any Credit
        Party from time to time with respect to any of the Collateral, (b) any
        and all payments (in any form whatsoever) made or due and payable to
        any Credit Party from time to time in connection with any requisition,
        confiscation, condemnation, seizure or forfeiture of all or any part
        of the Collateral by any Governmental Authority (or any Person acting
        under color of governmental authority), (c) any claim of any Credit Party
        against third parties (i) for past, present or future infringement of
        any Patent or Patent License, or (ii) for past, present or future infringement
        or dilution of any Copyright, Copyright License, Trademark or Trademark
        License, or for injury to the goodwill associated with any Trademark
        or Trademark License, (d) any recoveries by any Credit Party against
        third parties with respect to any litigation or dispute concerning any
        of the Collateral including claims arising out of the loss or nonconformity
        of, interference with the use of, defects in, or infringement of rights
        in, or damage to, Collateral, (e) all amounts collected on, or distributed
        on account of, other Collateral, including dividends, interest, distributions
        and Instruments with respect to Investment Property and pledged Stock,
        and (f) any and all other amounts, rights to payment or other property
        acquired upon the sale, lease, license, exchange or other disposition
        of Collateral and all rights arising out of Collateral.

    “Pro Forma” means
        the unaudited consolidated and consolidating balance sheet of Borrower
        and its Subsidiaries as of June 30, 2004 after giving pro forma effect
        to the Related Transactions.

    “Projections” means
        Borrower’s forecasted consolidated and consolidating: (a) balance
        sheets; (b) profit and loss statements; (c) cash flow statements; and
        (d) capitalization statements, all prepared on a division-by-division
        basis, if applicable, and otherwise consistent with the historical Financial
        Statements of Borrower, together with appropriate supporting details
        and a statement of underlying assumptions.

    “Pro Rata Share” means
        with respect to all matters relating to any Lender, (a) with respect
        to the Revolving Loan, the percentage obtained by dividing (i) the Revolving
        Loan Commitment of that Lender by (ii) the aggregate Revolving Loan Commitments
        of all Lenders, (b) with respect to the Term Loan(s), the percentage
        obtained by dividing (i) the Term Loan Commitment of that Lender by (ii)
        the aggregate Term Loan Commitments of all Lenders, as any such percentages
        may be adjusted by assignments permitted pursuant to Section 9.1,
        (c) with respect to all Loans, the percentage obtained by dividing (i)
        the aggregate Commitments of that Lender by (ii) the aggregate Commitments
        of all Lenders, and (d) with respect to all Loans on and after the Commitment
        Termination Date, the percentage obtained by dividing (i) the aggregate
        outstanding principal balance of the Loans held by that Lender, by (ii)
        the outstanding principal balance of the Loans held by all Lenders.

    “Qualified Plan” means
        a Pension Plan that is intended to be tax-qualified under Section 401(a)
        of the IRC.

    “Qualified Assignee” means
        (a) any Lender, any Affiliate of any Lender and, with respect to any
        Lender that is an investment fund that invests in commercial loans, any
        other investment fund that invests in commercial loans and that is managed
        or advised by the same investment advisor as such Lender or by an Affiliate
        of such investment advisor, and (b) any commercial bank, savings and
        loan association or savings bank or any other entity which is an “accredited
        investor” (as defined in Regulation D under the Securities Act
        of 1933) which extends credit or buys loans as one of its businesses,
        including insurance companies, mutual funds, lease financing companies
        and commercial finance companies, in each case, which has a rating of
        BBB or higher from S&P and a rating of Baa2 or higher from Moody’s
        at the date that it becomes a Lender and which, through its applicable
        lending office, is capable of lending to Borrower without the imposition
        of any withholding or similar taxes; provided that no Person determined
        by Agent to be acting in the capacity of a vulture fund or distressed
        debt purchaser shall be a Qualified Assignee, and no Person or Affiliate
        of such Person (other than a Person that is already a Lender) holding
        Subordinated Debt or Stock issued by any Credit Party shall be a Qualified
Assignee.  

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“Ratable Share” has
    the meaning ascribed to it in Section 1.1(b).
  “Real Estate” has
        the meaning ascribed to it in Section 3.6.

     “Related Transactions” means
        the initial Revolving Credit Advance and the Term Loan on the Closing
        Date, extension of the maturity date of the Subordinated Notes to a date
        no earlier than 90 days after the Commitment Termination Date, the payment
        of all fees, costs and expenses associated with all of the foregoing
        and the execution and delivery of all of the Related Transactions Documents. 

    “Related Transactions
          Documents” means the Loan Documents, the Subordination Agreement,
          Subordinated Notes and all other agreements or instruments executed
          in connection with the Related Transactions.

    “Release” means
        any release, threatened release, spill, emission, leaking, pumping, pouring,
        emitting, emptying, escape, injection, deposit, disposal, discharge,
        dispersal, dumping, leaching or migration of Hazardous Material in the
        indoor or outdoor environment, including the movement of Hazardous Material
        through or in the air, soil, surface water, ground water or property.

    “Requisite Lenders” means
        Lenders having (a) more than 66 2/3% of the Commitments of all Lenders,
        or (b) if the Commitments have been terminated, more than 66 2/3%
        of the aggregate outstanding amount of all Loans. 

    “Requisite Revolving
          Lenders” means Lenders having (a) more than 66 2/3% of the
          Revolving Loan Commitments of all Lenders, or (b) if the Revolving
          Loan Commitments have been terminated, more than 66 2/3% of the aggregate
          outstanding amount of the Revolving Loan. 

    “Reserves” means
        (a) reserves established pursuant to Section 5.4(c), and (b) such
        other reserves against Eligible Accounts or Borrowing Availability that
        Agent may, in its reasonable credit judgment, establish from time to
        time. Without limiting the generality of the foregoing, Reserves established
        to ensure the payment of accrued Interest Expenses or Indebtedness shall
        be deemed to be a reasonable exercise of Agent’s credit judgment. 

    “Restricted Payment” means,
        with respect to any Credit Party (a) the declaration or payment of any
        dividend or the incurrence of any liability to make any other payment
        or distribution of cash or other property or assets in respect of Stock;
        (b) any payment on account of the purchase, redemption, defeasance, sinking
        fund or other retirement of such Credit Party’s Stock or any other
        payment or distribution made in respect thereof, either directly or indirectly;
        (c) any payment or prepayment of principal of, premium, if any, or interest,
        fees or other charges on or with respect to, and any redemption, purchase,
        retirement, defeasance, sinking fund or similar payment and any claim
        for rescission with respect to, any Subordinated Debt; (d) any payment
        made to redeem, purchase, repurchase or retire, or to obtain the surrender
        of, any outstanding warrants, options or other rights to acquire Stock
        of such Credit Party now or hereafter outstanding; (e) any payment of
        a claim for the rescission of the purchase or sale of, or for material
        damages arising from the purchase or sale of, any shares of such Credit
        Party’s Stock or of a claim for reimbursement, indemnification
        or contribution arising out of or related to any such claim for damages
        or rescission; (f) any payment, loan, contribution, or other transfer
        of funds or other property to any Stockholder of such Credit Party other
        than payment of compensation in the ordinary course of business to Stockholders
        who are employees of such Person and (g) any payment of management fees
        (or other fees of a similar nature) by such Credit Party to any Stockholder
of such Credit Party or its Affiliates.  

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“Retiree Welfare Plan” means,
  at any time, a Welfare Plan that provides for continuing coverage or benefits
  for any participant or any beneficiary of a participant after such participant’s
  termination of employment, other than continuation coverage provided pursuant
  to Section 4980B of the IRC and at the sole expense of the participant or the
  beneficiary of the participant.
  “Revolving Credit Advance” has
        the meaning ascribed to it in Section 1.1(a)(i).

    “Revolving Lenders” means,
        as of any date of determination, Lenders having a Revolving Loan Commitment.

    “Revolving Loan” means,
        at any time, the aggregate amount of Revolving Credit Advances outstanding
        to Borrower. 

    “Revolving Loan Commitment” means
        (a) as to any Lender, the aggregate commitment of such Lender to make
        Revolving Credit Advances as set forth on Annex I to the
        Agreement or in the most recent Assignment Agreement executed by such
        Lender and (b) as to all Lenders, the aggregate commitment of all Lenders
        to make Revolving Credit Advances, which aggregate commitment shall be
        Ten Million ($10,000,000) on the Closing Date, as such amount may be
        adjusted, if at all, from time to time in accordance with the Agreement.

    “Revolving Note” has
        the meaning ascribed to it in Section 1.1(a)(ii).

    “Security Agreement” means
        the Security Agreement dated as of the Original Closing Date entered
        into by and among Agent, on behalf of itself and Lenders, and each Credit
        Party that is a signatory thereto.

     “Software” means
        all “software” as such term is defined in the Code, now owned
        or hereafter acquired by any Credit Party, other than software embedded
        in any category of Goods, including all computer programs and all supporting
        information provided in connection with a transaction related to any
        program.

    “Solvent” means,
        with respect to any Person on a particular date, that on such date (a)
        the fair value of the property of such Person is greater than the total
        amount of liabilities, including contingent liabilities, of such Person;
        (b) the present fair salable value of the assets of such Person is not
        less than the amount that will be required to pay the probable liability
        of such Person on its debts as they become absolute and matured; (c)
        such Person does not intend to, and does not believe that it will, incur
        debts or liabilities beyond such Person’s ability to pay as such
        debts and liabilities mature; and (d) such Person is not engaged in a
        business or transaction, and is not about to engage in a business or
        transaction, for which such Person’s property would constitute
        an unreasonably small capital. The amount of contingent liabilities (such
        as litigation, guaranties and pension plan liabilities) at any time shall
        be computed as the amount that, in light of all the facts and circumstances
        existing at the time, represents the amount that can be reasonably be
expected to become an actual or matured liability.  

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“St. James” means,
    collectively, St. James Capital Corp., a Delaware corporation, SJMB, LP,
    a Texas Limited
  Partnership, and SJMB, LLC, a Texas Limited Liability Company.
  “Stock” means
        all shares, options, warrants, general or limited partnership interests,
        membership interests or other equivalents (regardless of how designated)
        of or in a corporation, partnership, limited liability company or equivalent
        entity whether voting or nonvoting, including common stock, preferred
        stock or any other “equity security” (as such term is defined
        in Rule 3a11-1 of the General Rules and Regulations promulgated by the
        Securities and Exchange Commission under the Securities Exchange Act
        of 1934).

    “Stockholder” means,
        with respect to any Person, each holder of Stock of such Person.

    “Subordinated Debt” means
        the Indebtedness of Borrower evidenced by the Subordinated Notes and
        any other Indebtedness of any Credit Party subordinated to the Obligations
        in a manner and form satisfactory to Agent and Lenders in their sole
        discretion, as to right and time of payment and as to any other rights
        and remedies thereunder.

    “Subordinated Note Holders” shall
        mean each of the Persons listed on Disclosure Schedule 3.24. 

    “Subordinated Notes” means
        those certain promissory notes issued by Borrower and described on Disclosure
        Schedule 3.24. 

    “Subordination Agreement” shall
        mean the Subordination Agreement, dated as of the Original Closing Date,
        by and among the Subordinated Note Holders, the Agent, the Lenders and
        Borrower.

    “Subsidiary” means,
        with respect to any Person, (a) any corporation of which an aggregate
        of more than 50% of the outstanding Stock having ordinary voting power
        to elect a majority of the board of directors of such corporation (irrespective
        of whether, at the time, Stock of any other class or classes of such
        corporation shall have or might have voting power by reason of the happening
        of any contingency) is at the time, directly or indirectly, owned legally
        or beneficially by such Person or one or more Subsidiaries of such Person,
        or with respect to which any such Person has the right to vote or designate
        the vote of 50% or more of such Stock whether by proxy, agreement, operation
        of law or otherwise, and (b) any partnership or limited liability company
        in which such Person and/or one or more Subsidiaries of such Person shall
        have an interest (whether in the form of voting or participation in profits
        or capital contribution) of more than 50% or of which any such Person
        is a general partner or may exercise the powers of a general partner.
        Unless the context otherwise requires, each reference to a Subsidiary
        shall be a reference to a Subsidiary of a Borrower.

    “Supermajority Revolving
          Lenders” means Lenders having (a) 80% or more of the Revolving
          Loan Commitments of all Lenders, or (b) if the Revolving Loan Commitments
          have been terminated, 80% or more of the aggregate outstanding amount
          of the Revolving Loan.

    “Supporting Obligations” means
        all “supporting obligations” as such term is defined in the
        Code, including letters of credit and guaranties issued in support of
        Accounts, Chattel Paper, Documents, General Intangibles, Instruments,
        or Investment Property.

     “Taxes” means
        taxes, levies, imposts, deductions, Charges or withholdings, and all
        liabilities with respect thereto, excluding taxes imposed on or measured
        by the net income of Agent or a Lender by the jurisdictions under the
        laws of which Agent and Lenders are organized or conduct business or
any political subdivision thereof.  

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“Termination Date” means
    the date on which (a) the Loans have been indefeasibly repaid in full, (b)
    all
  other Obligations under the Agreement and the other Loan Documents have been
  completely discharged, and (c) Borrower shall have no further right to borrow
  any monies under the Agreement.
  “Term Lenders” means
        those Lenders having Term Loan Commitments.

    “Term Loan” has
        the meaning assigned to it in Section 1.1(b)(i).

    “Term Loan Commitment” means
        (a) as to any Lender with a Term Loan Commitment, the commitment of such
        Lender to make its Pro Rata Share of the Term Loan as set forth on Annex
        I to the Agreement or in the most recent Assignment Agreement executed
        by such Lender, and (b) as to all Lenders with a Term Loan Commitment,
        the aggregate commitment of all Lenders to make the Term Loan, which
        aggregate commitment shall be Eight Million ($8,000,000) on the Closing
        Date. After advancing the Term Loan, each reference to a Lender’s
        Term Loan Commitment shall refer to that Lender’s Pro Rata Share
        of the outstanding Term Loan.

    “Term Note” has
        the meaning assigned to it in Section 1.1(b)(i).

    “Title IV Plan” means
        a Pension Plan (other than a Multiemployer Plan), that is covered by
        Title IV of ERISA, and that any Credit Party or ERISA Affiliate maintains,
        contributes to or has an obligation to contribute to on behalf of participants
        who are or were employed by any of them.

    “Trademark Security
          Agreements” means the Trademark Security Agreements made
          in favor of Agent, on behalf of Lenders, by each applicable Credit
          Party.

    “Trademark License” means
        rights under any written agreement now owned or hereafter acquired by
        any Credit Party granting any right to use any Trademark.

    “Trademarks” means
        all of the following now owned or hereafter existing or adopted or acquired
        by any Credit Party: (a) all trademarks, trade names, corporate names,
        business names, trade styles, service marks, logos, other source or business
        identifiers, prints and labels on which any of the foregoing have appeared
        or appear, designs and general intangibles of like nature (whether registered
        or unregistered), all registrations and recordings thereof, and all applications
        in connection therewith, including registrations, recordings and applications
        in the United States Patent and Trademark Office or in any similar office
        or agency of the United States, any state or territory thereof, or any
        other country or any political subdivision thereof; (b) all reissues,
        extensions or renewals thereof; and (c) all goodwill associated with
        or symbolized by any of the foregoing.

    “Unfunded Pension Liability” means,
        at any time, the aggregate amount, if any, of the sum of (a) the amount
        by which the present value of all accrued benefits under each Title IV
        Plan exceeds the fair market value of all assets of such Title IV Plan
        allocable to such benefits in accordance with Title IV of ERISA, all
        determined as of the most recent valuation date for each such Title IV
        Plan using the actuarial assumptions for funding purposes in effect under
        such Title IV Plan, and (b) for a period of 5 years following a transaction
        which might reasonably be expected to be covered by Section 4069 of ERISA,
        the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.  

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  “Welfare Plan” means
      a Plan described in Section 3(i) of ERISA.

  Rules of construction with respect to accounting
    terms used in the Agreement or the other Loan Documents shall be as set forth
    in Annex H. All other undefined terms contained in any of the Loan
    Documents shall, unless the context indicates otherwise, have the meanings
    provided for by the Code to the extent the same are used or defined therein;
    in the event that any term is defined differently in different Articles or
    Divisions of the Code, the definition contained in Article or Division 9
    shall control. Unless otherwise specified, references in the Agreement or
    any of the Appendices to a Section, subsection or clause refer to such Section,
    subsection or clause as contained in the Agreement. The words “herein,” “hereof” and “hereunder” and
    other words of similar import refer to the Agreement as a whole, including
    all Annexes, Exhibits and Schedules, as the same may from time to time be
    amended, restated, modified or supplemented, and not to any particular section,
    subsection or clause contained in the Agreement or any such Annex, Exhibit
    or Schedule.
    Wherever from the context
              it appears appropriate, each term stated in either the singular
              or plural shall include the singular and the plural, and pronouns
              stated in the masculine, feminine or neuter gender shall include
              the masculine, feminine and neuter genders. The words “including”, “includes” and “include” shall
              be deemed to be followed by the words “without limitation”;
              the word “or” is not exclusive; references to Persons
              include their respective successors and assigns (to the extent
              and only to the extent permitted by the Loan Documents) or, in
              the case of governmental Persons, Persons succeeding to the relevant
              functions of such Persons; and all references to statutes and related
              regulations shall include any amendments of the same and any successor
              statutes and regulations. Whenever any provision in any Loan Document
              refers to the knowledge (or an analogous phrase) of any Credit
              Party, such words are intended to signify that such Credit Party
              has actual knowledge or awareness of a particular fact or circumstance
              or that such Credit Party, if it had exercised reasonable diligence,
would have known or been aware of such fact or circumstance.         

  

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ANNEX B (Section 1.8)

to

CREDIT AGREEMENT

CASH MANAGEMENT SYSTEM

Borrower shall, and shall cause its Subsidiaries
  to, establish and maintain the Cash Management Systems described below:
  (a)      On
        or before the Closing Date and until the Termination Date, Borrower shall
        (i) establish lock boxes (“Lock Boxes”) or at Agent’s
        discretion, blocked accounts (“Blocked Accounts”) at one
        or more of the banks set forth in Disclosure Schedule (3.19),
        and shall request in writing and otherwise take such reasonable steps
        to ensure that all Account Debtors forward payment directly to such Lock
        Boxes, and (ii) deposit and cause its Subsidiaries to deposit or cause
        to be deposited promptly, and in any event no later than the first Business
        Day after the date of receipt thereof, all cash, checks, drafts or other
        similar items of payment relating to or constituting payments made in
        respect of any and all Collateral (whether or not otherwise delivered
        to a Lock Box) into one or more Blocked Accounts in Borrower’s
        name or any such Subsidiary’s name and at a bank identified in Disclosure
        Schedule (3.19) (each, a “Relationship Bank”).
        On or before the Closing Date, Borrower shall have established a concentration
        account in its name (the “Concentration Account”)
        at the bank that shall be designated as the Concentration Account bank
        in Disclosure Schedule (3.19) (the “Concentration Account
        Bank”) which bank shall be reasonably satisfactory to Agent.

    (b)      Borrower
        may maintain, in its name, an account (each a “Disbursement
        Account” and collectively, the “Disbursement Accounts”)
        at a bank reasonably acceptable to Agent into which Agent shall, from
        time to time, deposit proceeds of Revolving Credit Advances made to Borrower
        pursuant to Section 1.1 for use by Borrower solely in accordance
        with the provisions of Section 1.4.

    (c)      On
        or before the Closing Date (or such later date as Agent shall consent
        to in writing), the Concentration Account Bank, each bank where a Disbursement
        Account is maintained and all other Relationship Banks, shall have entered
        into tri-party blocked account agreements with Agent, for the benefit
        of itself and Lenders, and Borrower, in form and substance reasonably
        acceptable to Agent, which shall become operative on or prior to the
        Closing Date. Each such blocked account agreement shall provide, among
        other things, that (i) all items of payment deposited in such account
        and proceeds thereof deposited in the Concentration Account are held
        by such bank as agent or bailee-in-possession for Agent, on behalf of
        itself and Lenders, (ii) the bank executing such agreement has no rights
        of setoff or recoupment or any other claim against such account, as the
        case may be, other than for payment of its service fees and other charges
        directly related to the administration of such account and for returned
        checks or other items of payment, and (iii) from and after the Closing
        Date (A) with respect to banks at which a Blocked Account is maintained,
        such bank agrees to forward immediately all amounts in each Blocked Account
        to the Concentration Account Bank and to commence the process of daily
        sweeps from such Blocked Account into the Concentration Account and (B)
        with respect to the Concentration Account Bank, such bank agrees to immediately
        forward all amounts received in the Concentration Account to the Collection
        Account through daily sweeps from the Concentration Account into the
        Collection Account. Borrower shall not cause or permit any of its Subsidiaries
        to, accumulate or maintain cash in Disbursement Accounts or payroll accounts
        as of any date of determination in excess of checks outstanding against
        such accounts as of that date and amounts necessary to meet minimum balance
requirements.  

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(d)      So
    long as no Default or Event of Default has occurred and is continuing, Borrower
    may amend Disclosure
  Schedule (3.19) to add or replace a Relationship Bank, Lock Box or Blocked
  Account or to replace the Concentration Account or any Disbursement Account; provided,
  that (i) Agent shall have consented in writing in advance to the opening of
  such account or Lock Box with the relevant bank and (ii) prior to the time
  of the opening of such account or Lock Box, Borrower or its Subsidiaries, as
  applicable, and such bank shall have executed and delivered to Agent a tri-party
  blocked account agreement, in form and substance reasonably satisfactory to
  Agent. Borrower shall close any of its accounts (and establish replacement
  accounts in accordance with the foregoing sentence) promptly and in any event
  within 30 days following notice from Agent that the creditworthiness of any
  bank holding an account is no longer acceptable in Agent’s reasonable
  judgment, or as promptly as practicable and in any event within 60 days following
  notice from Agent that the operating performance, funds transfer or availability
  procedures or performance with respect to accounts or Lock Boxes of the bank
  holding such accounts or Agent’s liability under any tri-party blocked
  account agreement with such bank is no longer acceptable in Agent’s reasonable
  judgment.
  (e)      The
      Lock Boxes, Blocked Accounts, Disbursement Accounts and the Concentration
      Account shall be cash collateral accounts, with all cash, checks and other
      similar items of payment in such accounts securing payment of the Loans
      and all other Obligations, and in which Borrower and each of its Subsidiaries
      shall have granted a Lien to Agent, on behalf of itself and Lenders, pursuant
      to the Security Agreement.

  (f)      All
      amounts deposited in the Collection Account shall be deemed received by
      Agent in accordance with Section 1.10 and shall be applied (and
      allocated) by Agent in accordance with Section 1.11. In no event
      shall any amount be so applied unless and until such amount shall have
      been credited in immediately available funds to the Collection Account.

  (g)      Borrower
      shall and shall cause its Affiliates, officers, employees, agents, directors
      or other Persons acting for or in concert with Borrower (each a “Related
      Person”) to (i) hold in trust for Agent, for the benefit of itself
      and Lenders, all checks, cash and other items of payment received by Borrower
      or any such Related Person, and (ii) within 1 Business Day after receipt
      by Borrower or any such Related Person of any checks, cash or other items
      of payment, deposit the same into a Blocked Account of Borrower. Borrower
      and each Related Person thereof acknowledges and agrees that all cash,
      checks or other items of payment constituting proceeds of Collateral are
      part of the Collateral. All proceeds of the sale or other disposition of
      any Collateral, shall be deposited directly into the applicable Blocked
      Accounts.

  (h)      Notwithstanding
      the foregoing, the Borrower may maintain a certificate of deposit with
      AmSouth Bank in Account No. 9003134551, without such account being subject
      to the foregoing provisions, provided that such account is used solely
      for credit card retainers and the aggregate funds in such account do not
exceed $50,000 at any time. 

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ANNEX C (Section 2.1(a))

to

CREDIT AGREEMENT

CLOSING CHECKLIST

In addition to, and not in limitation of, the conditions
  described in Section 2.1 of the Agreement, pursuant to Section 2.1(a),
  the following items must be received by Agent in form and substance satisfactory
  to Agent on or prior to the Closing Date (each capitalized term used but not
  otherwise defined herein shall have the meaning ascribed thereto in Annex
  A to the Agreement):
  A.      Appendices.
        All Appendices to the Agreement, in form and substance satisfactory to
        Agent.

    B.      Revolving
          Notes and Term Notes. Duly executed originals of the Revolving
          Notes and Term Notes for each applicable Lender, dated the Closing
          Date.

    C.      Reaffirmations.
        Duly executed originals of a Reaffirmation of the Security Agreement
        and Subsidiary Guaranty, dated the Closing Date, executed by each Loan
        Party party to either the Security Agreement or the Subsidiary Guaranty.

    D.      Insurance.
        Satisfactory evidence that the insurance policies required by Section
        5.4 are in full force and effect, together with appropriate evidence
        showing loss payable and/or additional insured clauses or endorsements,
        as requested by Agent, in favor of Agent, on behalf of Lenders, and assignments
        of all key-man life insurance policies executed by Borrower in form and
        substance satisfactory to Agent.

    E.      Security
          Interests and Code Filings.

             (a)      Evidence
        satisfactory to Agent that Agent (for the benefit of itself and Lenders)
        has a valid and perfected first priority security interest in the Collateral
        subject to Permitted Encumbrances, including (i) such documents duly
        executed or authorized (with respect to financing statements) by each
        Credit Party (including financing statements under the Code and other
        applicable documents under the laws of any jurisdiction with respect
        to the perfection of Liens) as Agent may request in order to perfect
        its security interests in the Collateral, and (ii) copies of Code search
        reports listing all effective financing statements that name any Credit
        Party as debtor, together with copies of such financing statements, none
        of which shall cover the Collateral, except for Permitted Encumbrances.

             (b)      Evidence
        satisfactory to Agent, including copies, of all UCC and other financing
        statements filed in favor of any Credit Party with respect to each location,
        if any, at which Inventory may be consigned.

             (c)      Control
        Letters from (i) all issuers of uncertificated securities and financial
        assets held by Borrower, (ii) all securities intermediaries with respect
        to all securities accounts and securities entitlements of Borrower, and
        (iii) all futures commission agents and clearing houses with respect
to all commodities contracts and commodities accounts held by Borrower.  

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F.      Initial Borrowing
    Base Certificate. Duly executed originals of an initial Borrowing Base
    Certificate from Borrower, dated the Closing Date, reflecting information
    concerning Eligible Accounts of Borrower as of a date not more than 7 days
    prior to the Closing Date.
  G.      Letter
          of Direction. Duly executed originals of a letter of direction
          from Borrower addressed to Agent, on behalf of itself and Lenders,
          with respect to the disbursement on the Closing Date of the proceeds
          of the Term Loan. 

    H.      Cash
          Management System; Blocked Account Agreements. Evidence satisfactory
          to Agent that, as of the Closing Date, Cash Management Systems complying
          with Annex B to the Agreement have been established and are
          currently being maintained in the manner set forth in such Annex
          B, together with copies of duly executed tri-party blocked account
          and lock box agreements, reasonably satisfactory to Agent, with the
          banks as required by Annex B.

    I.      Charter
          and Good Standing. For each Credit Party, such Person’s (a)
          charter and all amendments thereto, (b) good standing certificates
          (including verification of tax status) in its state of incorporation
          and (c) good standing certificates (including verification of tax status)
          and certificates of qualification to conduct business in each jurisdiction
          where its ownership or lease of property or the conduct of its business
          requires such qualification, each dated a recent date prior to the
          Closing Date and certified by the applicable Secretary of State or
          other authorized Governmental Authority.

    J.      Bylaws
          and Resolutions. For each Credit Party, (a) such Person’s
          bylaws, together with all amendments thereto and (b) resolutions of
          such Person’s Board of Directors approving and authorizing the
          execution, delivery and performance of the Loan Documents to which
          such Person is a party and the transactions to be consummated in connection
          therewith, each certified as of the Closing Date by such Person’s
          corporate secretary or an assistant secretary as being in full force
          and effect without any modification or amendment.

    K.      Incumbency
          Certificates. For each Credit Party, signature and incumbency certificates
          of the officers of each such Person executing any of the Loan Documents,
          certified as of the Closing Date by such Person’s corporate secretary
          or an assistant secretary as being true, accurate, correct and complete.

    L.      Opinions
          of Counsel. Duly executed originals of opinions of Rosen, Cook,
          Sledge, Davis, Cade & Shattuck, P.A., counsel for the Credit Parties,
          together with any local counsel opinions reasonably requested by Agent,
          each in form and substance reasonably satisfactory to Agent and its
          counsel, dated the Closing Date, and each accompanied by a letter addressed
          to such counsel from the Credit Parties, authorizing and directing
          such counsel to address its opinion to Agent, on behalf of Lenders,
          and to include in such opinion an express statement to the effect that
          Agent and Lenders are authorized to rely on such opinion.

    M.      Accountants’ Letters.
        A letter from the Credit Parties to their independent auditors authorizing
        the independent certified public accountants of the Credit Parties to
        communicate with Agent and Lenders in accordance with Section 4.2.

    N.      Appointment
          of Agent for Service. An appointment of CT Corporation as each
          Credit Party’s agent for service of process.

    O.      Fee
Letter. Duly executed originals of the GE Capital Fee Letter.  

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P.      Officer’s
    Certificate. Agent shall have received duly executed originals of a certificate
    of the Chief Executive Officer and Chief Financial Officer of Borrower, dated
    the Closing Date, stating that, since December 31, 2003 (a) no event or condition
    has occurred or is existing which could reasonably be expected to have a
    Material Adverse Effect; (b) there has been no material adverse change in
    the industry in which Borrower operates; (c) no Litigation has been commenced
    which, if successful, would have a Material Adverse Effect or could challenge
    any of the transactions contemplated by the Agreement and the other Loan
    Documents; (d) there have been no Restricted Payments made by any Credit
    Party; and (e) there has been no material increase in liabilities, liquidated
    or contingent, and no material decrease in assets of Borrower or any of its
    Subsidiaries.
  Q.      Waivers.
        Agent, on behalf of Lenders, shall have received landlord waivers and
        consents, bailee letters and mortgagee agreements in form and substance
        reasonably satisfactory to Agent, in each case as required pursuant to Section
        5.9. 

    R.      Reaffirmations
          of Subordination Agreements. Agent and Lenders shall have received
          Reaffirmations of the Subordination Agreements, duly executed by all
          parties to the Subordination Agreements and in form and substance satisfactory
          to Agent, in its sole discretion; together with certified copies of
          amendments to the Subordinated Notes extending the maturity date of
          the Subordinated Notes to no earlier than 90 days after the Commitment
          Termination Date and consenting to the Borrower incurring the Indebtedness
          and granting the Liens contemplated under the Loan Documents, such
          amendments to be in form and substance satisfactory to Agent in its
          sole discretion executed by all holders of the Subordinated Notes. 

    S.      Audited
          Financials; Financial Condition. Agent shall have received a copy
          of Borrower’s Form 10-Q/A filed with the Securities and Exchange
          Commission for the Fiscal Quarter ending June 30, 2004, the Financial
          Statements, Projections and other materials set forth in Section
          3.4, all certified by Borrower’s Chief Financial Officer,
          in each case in form and substance reasonably satisfactory to Agent,
          and Agent shall be satisfied, in its sole discretion, with all of the
          foregoing. Agent shall have further received a certificate of the Chief
          Executive Officer and/or the Chief Financial Officer of Borrower, based
          on such Pro Forma and Projections, to the effect that (a) Borrower
          will be Solvent upon the consummation of the transactions contemplated
          herein; (b) the Pro Forma fairly presents the financial condition of
          Borrower as of the date thereof after giving effect to the transactions
          contemplated by the Loan Documents; (c) the Projections are based upon
          estimates and assumptions stated therein, all of which Borrower believes
          to be reasonable and fair in light of current conditions and current
          facts known to Borrower and, as of the Closing Date, reflect Borrower’s
          good faith and reasonable estimates of its future financial performance
          and of the other information projected therein for the period set forth
          therein; and (d) containing such other statements with respect to the
          solvency of Borrower and matters related thereto as Agent shall request.

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T.      Mortgages and
    Amendments Thereto. If requested by Agent, Mortgages covering all of
    the Real Estate owned by the Credit Parties, including without limitation
    amendment to all Mortgages granted to the Agent prior to the Closing Date
    pursuant to the Original Credit Agreement, reflecting the restructuring of
    the Commitments under this Agreement, to the extent necessary or desirable,
    together with: (a) endorsements to title insurance policies issued to the
    Agent prior to the Closing Date, in satisfactory in form and substance to
    Agent, in its sole discretion; (b) evidence that counterparts of the Mortgages
    and amendments thereto have been recorded in all places to the extent necessary
    or desirable, in the judgment of Agent, to create a valid and enforceable
    first priority lien (subject to Permitted Encumbrances) on each parcel of
    such Real Estate in favor of Agent for the benefit of itself and Lenders
    (or in favor of such other trustee as may be required or desired under local
    law) securing the Commitments and Obligations; and (c) an opinion of counsel
    in each state in which any such Real Estate is located in form and substance
    and from counsel reasonably satisfactory to Agent.
  U.      Other
              Documents. Such other certificates, documents and agreements
              respecting any Credit Party as Agent may, in its sole discretion,
              request.

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ANNEX D (Section 4.1(a))

to

CREDIT AGREEMENT

FINANCIAL STATEMENTS AND PROJECTIONS – REPORTING

  Borrower shall deliver
      or cause to be delivered to Agent or to Agent and Lenders, as indicated,
      the following:

  (a)      Monthly Financials.
  To Agent and Lenders, within 30 days after the end of each Fiscal Month, financial
  information regarding Borrower and its Subsidiaries, certified by the Chief
  Financial Officer of Borrower, consisting of consolidated and consolidating
  (i) unaudited balance sheets as of the close of such Fiscal Month and the related
  statements of income and cash flows for that portion of the Fiscal Year ending
  as of the close of such Fiscal Month; (ii) unaudited statements of income and
  cash flows for such Fiscal Month, setting forth in comparative form the figures
  for the corresponding period in the prior year and the figures contained in
  the Projections for such Fiscal Year, all prepared in accordance with GAAP
  (subject to normal year-end adjustments, and without footnotes or disclosures
  required by GAAP); and (iii) a summary of the outstanding balance of all Intercompany
  Notes as of the last day of that Fiscal Month. Such financial information shall
  be accompanied by (A) a statement in reasonable detail (each, a “Compliance
  Certificate”) showing the calculations used in determining compliance
  with each Financial Covenant that is tested on a monthly basis, and (B) the
  certification of the Chief Financial Officer of Borrower that (i) such financial
  information presents fairly in accordance with GAAP (subject to normal year-end
  adjustments) the financial position and results of operations of Borrower and
  its Subsidiaries, on a consolidated and consolidating basis, in each case as
  at the end of such Fiscal Month and for that portion of the Fiscal Year then
  ended and (ii) any other information presented is true, correct and complete
  in all material respects and that there was no Default or Event of Default
  in existence as of such time or, if a Default or Event of Default has occurred
  and is continuing, describing the nature thereof and all efforts undertaken
  to cure such Default or Event of Default.  

  (b)      Operating
        Plan. To Agent and Lenders, as soon as available, but not later than
        30 days after the end of each Fiscal Year, an annual operating plan for
        Borrower, on a consolidated and consolidating basis, approved by the
        Board of Directors of Borrower, for the following Fiscal Year, which
        (i) includes a statement of all of the material assumptions on which
        such plan is based, (ii) includes monthly balance sheets, income statements
        and statements of cash flows for the following year and (iii) integrates
        sales, gross profits, operating expenses, operating profit, cash flow
        projections and Borrowing Availability projections, all prepared on the
        same basis and in similar detail as that on which operating results are
        reported (and in the case of cash flow projections, representing management’s
        good faith estimates of future financial performance based on historical
        performance), and including plans for personnel, Capital Expenditures
        and facilities. 

  (d)      Annual
        Audited Financials. To Agent and Lenders, within 105 days after the
        end of each Fiscal Year, audited Financial Statements for Borrower and
        its Subsidiaries on a consolidated and (unaudited) consolidating basis,
        consisting of balance sheets and statements of income and retained earnings
        and cash flows, setting forth in comparative form in each case the figures
        for the previous Fiscal Year, which Financial Statements shall be prepared
        in accordance with GAAP and certified without qualification, by an independent
        certified public accounting firm of national standing or otherwise acceptable
        to Agent. Such Financial Statements shall be accompanied by (i) a statement
        prepared in reasonable detail showing the calculations used in determining
        compliance with each of the Financial Covenants, (ii) a report from such
        accounting firm to the effect that, in connection with their audit examination,
        nothing has come to their attention to cause them to believe that a Default
        or Event of Default has occurred (or specifying those Defaults and Events
        of Default that they became aware of), it being understood that such
        audit examination extended only to accounting matters and that no special
        investigation was made with respect to the existence of Defaults or Events
        of Default, (iii) a letter addressed to Agent, on behalf of itself and
        Lenders, in substantially the form of Disclosure Schedule 4.1(a) signed
        by such accounting firm, (iv) the annual letters to such accountants
        in connection with their audit examination detailing contingent liabilities
        and material litigation matters, and (v) the certification of the Chief
        Executive Officer or Chief Financial Officer of Borrower that all such
        Financial Statements present fairly in accordance with GAAP the financial
        position, results of operations and statements of cash flows of Borrower
        and its Subsidiaries on a consolidated and consolidating basis, as at
        the end of such Fiscal Year and for the period then ended, and that there
        was no Default or Event of Default in existence as of such time or, if
        a Default or Event of Default has occurred and is continuing, describing
        the nature thereof and all efforts undertaken to cure such Default or
Event of Default.

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(e)      Management
    Letters. To Agent and Lenders, within 5 Business Days after receipt thereof
    by any Credit Party, copies of all management letters, exception reports
    or similar letters or reports received by such Credit Party from its independent
    certified public accountants.
  (f)      Default
          Notices. To Agent and Lenders, as soon as practicable, and in any
          event within 5 Business Days after an executive officer of Borrower
          has actual knowledge of the existence of any Default, Event of Default
          or other event that has had a Material Adverse Effect, telephonic or
          telecopied notice specifying the nature of such Default or Event of
          Default or other event, including the anticipated effect thereof, which
          notice, if given telephonically, shall be promptly confirmed in writing
          on the next Business Day.

    (g)      SEC
          Filings and Press Releases. To Agent and Lenders, promptly upon
          their becoming available, copies of: (i) all Financial Statements,
          reports, notices and proxy statements made publicly available by any
          Credit Party to its security holders; (ii) all regular and periodic
          reports and all registration statements and prospectuses, if any, filed
          by any Credit Party with any securities exchange or with the Securities
          and Exchange Commission or any governmental or private regulatory authority;
          and (iii) all press releases and other statements made available by
          any Credit Party to the public concerning material changes or developments
          in the business of any such Person.

    (h)      Subordinated
          Debt and Equity Notices. To Agent, as soon as practicable, copies
          of all material written notices given or received by any Credit Party
          with respect to any Subordinated Debt or Stock of such Person, and,
          within 2 Business Days after any Credit Party obtains knowledge of
          any matured or unmatured event of default with respect to any Subordinated
          Debt, notice of such event of default.

    (i)      Supplemental
          Schedules. To Agent, supplemental disclosures, if any, required
          by Section 5.6.

    (j)      Litigation.
        To Agent in writing, promptly upon learning thereof, notice of any Litigation
        commenced or threatened against any Credit Party that (i) seeks damages
        in excess of $100,000, (ii) seeks injunctive relief, (iii) is asserted
        or instituted against any Plan, its fiduciaries or its assets or against
        any Credit Party or ERISA Affiliate in connection with any Plan, (iv)
        alleges criminal misconduct by any Credit Party, (v) alleges the violation
        of any law regarding, or seeks remedies in connection with, any Environmental
        Liabilities or (vi) involves any product recall.

    (k)      Insurance
          Notices. To Agent, disclosure of losses or casualties required
          by Section 5.4. 

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(l)      Lease Default
    Notices. To Agent, within 2 Business Days after receipt thereof, copies
    of (i) any and all default notices received under or with respect to any
    leased location or public warehouse where Collateral is located, and (ii)
    such other notices or documents as Agent may reasonably request.
  (m)      Lease
          Amendments. To Agent, within 2 Business Days after receipt thereof,
          copies of all material amendments to real estate leases.

    (n)      Other
          Documents. To Agent and Lenders, such other financial and other
          information respecting any Credit Party’s business or financial
          condition as Agent or any Lender shall from time to time reasonably
          request.

    (o)      Weekly
          Accounts Payable Reports. To Agent and Lenders, as soon as available,
          but not later than 3 Business Days after the end of each week, a report
          setting forth an aging of accounts payable. 

    (p)      Cash
          Budgets. To Agent and Lenders, as soon as available, but not later
          than 3 Business Days after the end of each week, a weekly cash budget
          for the immediately following thirteen (13) week period, in form an
          substance satisfactory to the Agent in its sole discretion.

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ANNEX E (Section 4.1(b))

to

CREDIT AGREEMENT

COLLATERAL REPORTS

Borrower shall deliver or cause to be delivered the
following:

(a)      To
    Agent, upon its request, and in any event no less frequently than 12:00 p.m.
    (New York time) on Wednesday of each week (together with a copy of all or
    any part of the following reports requested by any Lender in writing after
    the Closing Date), each of the following reports, each of which shall be
    prepared by the applicable Borrower as of the last day of the immediately
    preceding week:

	 	 
	 	 (i)      a
      Borrowing Base Certificate with respect to Borrower, accompanied by such
      supporting detail and documentation as shall be requested by Agent in its
    reasonable discretion;

	 	 
	 	 (ii)      with
      respect to Borrower, a monthly trial balance showing Accounts outstanding
      aged from invoice date as follows: 1 to 30 days, 31 to 60 days, 61 to 90
      days and 91 days or more, accompanied by such supporting detail and documentation
    as shall be requested by Agent in its reasonable discretion.

	 	 

(b)      To
    Agent, on a weekly basis or at such more frequent intervals as Agent may
    request from time
  to time (together with a copy of all or any part of such delivery requested
  by any Lender in writing after the Closing Date), collateral reports with respect
  to Borrower, including all additions and reductions (cash and non-cash) with
  respect to Accounts of Borrower, in each case accompanied by such supporting
  detail and documentation as shall be requested by Agent in its reasonable discretion
  each of which shall be prepared by Borrower as of the last day of the immediately
  preceding week or the date 2 days prior to the date of any such request;
  (c)      To
        Agent, at the time of delivery of each of the monthly Financial Statements
        delivered pursuant to Annex D:

	 	(i)      a
      reconciliation of the Accounts trial balance of Borrower to its most recent
      Borrowing Base Certificate, general ledger and monthly Financial Statements
      delivered pursuant to Annex D, in each case accompanied by such
      supporting detail and documentation as shall be requested by Agent in its
    reasonable discretion;

	 	 
	 	 (ii)      a
      cumulative roll-forward of Borrower’s inventory balance since the
      date of the most recent physical inventory taken by Borrower, accompanied
      by such supporting detail and documentation as shall be requested by Agent
    in its reasonable discretion;

	 	 
	 	 (iii)      an
      aging of accounts payable and a reconciliation of that accounts payable
      aging to Borrower’s general ledger and monthly Financial Statements
      delivered pursuant to Annex D, accompanied by such supporting detail
    and documentation as shall be requested by Agent in its reasonable discretion;

	 	 
	 	 (iv)      a
      reconciliation of the outstanding Loans as set forth in the monthly Loan
      Account statement provided by Agent to Borrower’s general ledger
      and monthly Financial Statements delivered pursuant to Annex D,
      accompanied by such supporting detail and documentation as shall be requested
    by Agent in its reasonable discretion;

	 	 

(e)      To
    Agent, within 30 days after the end of each Fiscal Quarter, a detailed list
    of all Equipment of Borrower, setting forth additions and deletions of Equipment
    since the end of the previous Fiscal Quarter; 

 

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(f)      To
    Agent, at the time of delivery of each of the annual Financial Statements
    delivered pursuant
  to Annex D, (i) a listing of government contracts of Borrower subject
  to the Federal Assignment of Claims Act of 1940; and (ii) a list of any applications
  for the registration of any Patent, Trademark or Copyright filed by any Credit
  Party with the United States Patent and Trademark Office, the United States
  Copyright Office or any similar office or agency in the prior Fiscal Quarter;
  (g)      Borrower,
        at its own expense, shall deliver to Agent the results of each physical
        verification, if any, that Borrower or any of its Subsidiaries may in
        their discretion have made, or caused any other Person to have made on
        their behalf, of all or any portion of their Inventory (including all
        Inventory consisting of tools), which Borrower shall conduct no less
        frequently than semi-annually (and, if a Default or an Event of Default
        has occurred and is continuing, Borrower shall, upon the request of Agent,
        conduct, and deliver the results of, such physical verifications as Agent
        may require);

    (h)      Borrower,
        at its own expense, shall deliver to Agent such appraisals of the Forced
        Liquidation Value (and other values if requested by Agent) of the Eligible
        Term Equipment performed by Acceptable Appraisers, promptly upon Agent’s
        request, such appraisals to be conducted no more frequently than twice
        per year, unless a Default or Event of Default has occurred and is continuing,
        and then as frequently as Agent may request, such appraisals to be in
        form and substance reasonably satisfactory to Agent; Borrower, at its
        own expense, shall also deliver such appraisals of its other assets to
        Agent after the occurrence and during the continuance of a Default or
        an Event of Default promptly upon Agent’s request, such appraisals
        to be conducted by an appraiser, and in form and substance, reasonably
        satisfactory to Agent; and

    (i)      Such
        other reports, statements and reconciliations with respect to the Borrowing
        Base, Collateral or Obligations of any or all Credit Parties as Agent
        shall from time to time request in its reasonable discretion.

    All reports, statements and reconciliations
        described in this Annex E shall be delivered to Agent at its address
        set forth on Annex H, with no copies to its outside or internal
        counsel, but with copies to:
    

    

GE Corporate Financial Services

  201 Merritt 7

  Norwalk, CT 06856-5201

  Attention: Operations Department

  Telecopier No.: (203) 229-5792

 

E-2

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ANNEX F (Section 6.10)

to

CREDIT AGREEMENT

FINANCIAL COVENANTS

  Borrower shall not breach or fail to comply with
    any of the following financial covenants, each of which shall be calculated
    in accordance with GAAP consistently applied:

  (a)      Maximum Capital
      Expenditures. Borrower and its Subsidiaries on a consolidated basis
      shall not make Capital Expenditures during any Fiscal Year in an aggregate
      amount in excess of $3,000,000.
    (b)      Minimum
                  Fixed Charge Coverage Ratio. Borrower and its Subsidiaries
                  shall have on a consolidated basis at the end of each Fiscal
                  Month, commencing with the Fiscal Month ending December 31,
                  2004and continuing thereafter, a Fixed Charge Coverage
                  Ratio for the 12-month period then ended of not less than 1.5:1.0.  

  Notwithstanding the foregoing, for the purpose
    of calculating the Fixed Charge Coverage Ratio (1) Fixed Charges for the
    twelve month period ending December 31, 2004 shall be calculated as Fixed
    Charges for the one month period then ending multiplied by twelve,
    (2) Fixed Charges for the twelve month period ending January 31, 2005 shall
    be calculated as Fixed Charges for the two month period then ending multiplied by
    six, (3) Fixed Charges for the twelve month period ending February 28, 2005
    shall be calculated as Fixed Charges for the three month period then ending multiplied by
    four, (4) Fixed Charges for the twelve month period ending March 31, 2005
    shall be calculated as Fixed Charges for the four month period then ending multiplied by
    three, (5) Fixed Charges for the twelve month period ending April 30, 2005
    shall be calculated as Fixed Charges for the five month period then ending multiplied by
    12/5, (6) Fixed Charges for the twelve month period ending May 31, 2005 shall
    be calculated as Fixed Charges for the six month period then ending multiplied by
    two, (7) Fixed Charges for the twelve month period ending June 30, 2005 shall
    be calculated as Fixed Charges for the seven month period then ending multiplied by
    12/7, (8) Fixed Charges for the twelve month period ending July 31, 2005
    shall be calculated as Fixed Charges for the eight month period then ending multiplied by
    3/2, (9) Fixed Charges for the twelve month period ending August 31, 2005
    shall be calculated as Fixed Charges for the nine month period then ending multiplied by
    4/3, (10) Fixed Charges for the twelve month period ending September 30,
    2005 shall be calculated as Fixed Charges for the ten month period then ending multiplied by
    6/5, and (11) Fixed Charges for the twelve month period ending October 31,
    2005 shall be calculated as Fixed Charges for the eleven month period then
    ending multiplied by 12/11, (12) EBITDA of the Multi-Shot Division
    shall be excluded from the calculation of the Fixed Charge Coverage Ratio
    and (13) EBITDA of the Borrower and its Subsidiaries on a consolidated basis
    for each of the first eight Fiscal Months of Fiscal Year 2004 shall be increased
    by $75,000.

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to Contents

Unless
    otherwise specifically provided herein, any accounting term used in the Agreement
    shall have the meaning customarily given
  such term in accordance with GAAP, and all financial computations hereunder
  shall be computed in accordance with GAAP consistently applied. That certain
  items or computations are explicitly modified by the phrase “in accordance
  with GAAP” shall in no way be construed to limit the foregoing. If any “Accounting
  Changes” (as defined below) occur and such changes result in a change
  in the calculation of the financial covenants, standards or terms used in the
  Agreement or any other Loan Document, then Borrower, Agent and Lenders agree
  to enter into negotiations in order to amend such provisions of the Agreement
  so as to equitably reflect such Accounting Changes with the desired result
  that the criteria for evaluating Borrower’s and its Subsidiaries’ financial
  condition shall be the same after such Accounting Changes as if such Accounting
  Changes had not been made; provided, however, that the agreement
  of Requisite Lenders to any required amendments of such provisions shall be
  sufficient to bind all Lenders. “Accounting Changes” means
  (i) changes in accounting principles required by the promulgation of any rule,
  regulation, pronouncement or opinion by the Financial Accounting Standards
  Board of the American Institute of Certified Public Accountants (or successor
  thereto or any agency with similar functions), (ii) changes in accounting principles
  concurred in by Borrower’s certified public accountants; (iii) purchase
  accounting adjustments under A.P.B. 16 or 17 and EITF 88-16, and the application
  of the accounting principles set forth in FASB 109, including the establishment
  of reserves pursuant thereto and any subsequent reversal (in whole or in part)
  of such reserves; and (iv) the reversal of any reserves established as a result
  of purchase accounting adjustments. All such adjustments resulting from expenditures
  made subsequent to the Closing Date (including capitalization of costs and
  expenses or payment of pre-Closing Date liabilities) shall be treated as expenses
  in the period the expenditures are made and deducted as part of the calculation
  of EBITDA in such period. If Agent, Borrower and Requisite Lenders agree upon
  the required amendments, then after appropriate amendments have been executed
  and the underlying Accounting Change with respect thereto has been implemented,
  any reference to GAAP contained in the Agreement or in any other Loan Document
  shall, only to the extent of such Accounting Change, refer to GAAP, consistently
  applied after giving effect to the implementation of such Accounting Change.
  If Agent, Borrower and Requisite Lenders cannot agree upon the required amendments
  within 30 days following the date of implementation of any Accounting Change,
  then all Financial Statements delivered and all calculations of financial covenants
  and other standards and terms in accordance with the Agreement and the other
  Loan Documents shall be prepared, delivered and made without regard to the
  underlying Accounting Change. For purposes of Section 8.1, a breach
  of a Financial Covenant contained in this Annex F shall be deemed to
  have occurred as of any date of determination by Agent or as of the last day
  of any specified measurement period, regardless of when the Financial Statements
  reflecting such breach are delivered to Agent.

F-2

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ANNEX G (Section 9.9(a))

to

CREDIT AGREEMENT

WIRE TRANSFER INFORMATION

	 	Name:	General Electric Capital Corporation
	 	Bank:	Bankers Trust Company
	 	 	New York, New York
	 	ABA #	021001033
	 	Account #:	50232854
	 	Account Name:	GECC/CAF Depository
	 	Reference: 	CFA6078
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

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ANNEX H (Section 11.10)

to

CREDIT AGREEMENT

NOTICE ADDRESSES

     

	(A) 	If to Agent or GE
    Capital, at
	 	General Electric Capital Corporation

	 	500 West Monroe

	 	Chicago, Illinois 60661

	 	Attention: Black Warrior Wireline Corp. Account Manager

	 	Telecopier No.:  (312) 463-3840

	 	Telephone No.:  (312) 441-7599
	 	 

	 	with copies to:

	 	 
	 	King & Spalding LLP

	 	191 Peachtree Street, N.E.

	 	Atlanta, Georgia  30303-1763

	 	Attention: Carolyn Z. Alford, Esq.

	 	Telecopier No.: (404) 572-5100

	 	Telephone No.: (404) 572-4600
	 	 

	 	and

	 	 
	 	GE Corporate Financial Services 
201 Merritt 7
Norwalk, Connecticut 06856-5201
Attention: Corporate Counsel
Telecopier No.: (203) 956-4001

	 	Telephone No.:  (203) 956-4379

	 	 
	(B)	If to Borrower,
    at
	 	 
	 	Black Warrior Wireline Corp.

	 	100 Rosecrest Lane

	 	Columbus, Mississippi  39701

	 	Attention: William L. Jenkins

	 	Telecopier No.: 662-329-1089

	 	Telephone No.: 662-329-1047

 

Back to Contents

	 	 
	 	with copies to:

	 	 
	 	Rosen, Cook, Sledge, Davis,
    Cade & Shattuck, P.A. 
	 	2117 Jack Warner Parkway
	 	Tuscaloosa, AL  35401

	 	Attention: James J. Sledge, Esq. 

	 	Telecopier No.: 205-758-8358

	 	Telephone No.: 205-344-5000

 

H-2

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ANNEX I (from Annex A – Commitments definition)

to

CREDIT AGREEMENT

	 	 	Lender(s)

	 	Revolving Loan Commitment

    $10,000,000    	General Electric Capital Corporation

	 	 	

	 	Term Loan Commitment:

    $8,000,000    	General Electric Capital Corporation

     

 

     

 

     

 

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ANNEX J

to

CREDIT AGREEMENT

NON-CONSENTING SUBORDINATED NOTE HOLDERS 

Douglas E. Heltne

Allen Neel

Douglas B. Nelson and Jessica M. Swift

CR Puryear Living Trust

Katherine H. Buchanan

William Lear IRA

Woodrow & Barbara
Chamberlain

Barry O’Brien IRA

David and Nancy Frej

Delaware Charter Trust Trustee FBO: Frank Harrison IRA

Kenneth H. Buchanan

Harry Bookey

 

2<PAGE>

                                                                     EXHIBIT 4.1

                       INTERACTIVE SYSTEMS WORLDWIDE INC.

                   CERTIFICATE OF DESIGNATION OF PREFERENCES,
                             RIGHTS AND LIMITATIONS
                                       OF
                    SERIES B 6% CONVERTIBLE PREFERRED STOCK

                         PURSUANT TO SECTION 151 OF THE
                        DELAWARE GENERAL CORPORATION LAW

         The undersigned, Bernard Albanese and James McDade, do hereby certify
that:

               1. They are the President and Secretary, respectively, of
          Interactive Systems Worldwide Inc., a Delaware corporation (the
          "Corporation").

               2. The Corporation is authorized to issue 2,000,000 shares of
          preferred stock, 60,000 of which have been issued.

               3. The following resolutions were duly adopted by the Board of
          Directors:

         WHEREAS, the Certificate of Incorporation of the Corporation provides
for a class of its authorized stock known as preferred stock, comprised of
2,000,000 shares, $0.001 par value, issuable from time to time in one or more
series;

         WHEREAS, the Board of Directors of the Corporation is authorized to fix
the dividend rights, dividend rate, voting rights, conversion rights, rights and
terms of redemption and liquidation preferences of any wholly unissued series of
preferred stock and the number of shares constituting any Series and the
designation thereof, of any of them; and

         WHEREAS, it is the desire of the Board of Directors of the Corporation,
pursuant to its authority as aforesaid, to fix the rights, preferences,
restrictions and other matters relating to a series of the preferred stock,
which shall consist of, except as otherwise set forth in the Securities Purchase
Agreement, dated as of November 12, 2004 (the "Purchase Agreement"), 3,000
shares of the preferred stock which the Corporation has the authority to issue,
as follows:

        NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide for the issuance of a series of preferred stock for cash or exchange of
other securities, rights or property and does hereby fix and determine the
rights, preferences, restrictions and other matters relating to such series of
preferred stock as follows:

                                       1
<PAGE>

                            TERMS OF PREFERRED STOCK

         Section 1. Definitions.

         (a) Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in
the Purchase Agreement. For the purposes hereof, the following terms shall have
the following meanings:

          "Acquiring Corporation" shall have the meaning set forth in Section
     7(d).

          "Acquiring Corporation Common Stock" shall have the meaning set forth
     in Section 7(d).

          "Acquisition Closing" shall have the meaning set forth in Section
     7(d).

          "Alternate Consideration" shall have the meaning set forth in Section
     7(d).

          "Automatic Conversion Fundamental Transaction" shall have the meaning
     set forth in Section 7(d).

          "Bankruptcy Event" means the Corporation or any of its Subsidiaries
     (other than any inactive Subsidiary so designated on the Disclosure
     Schedule to the Purchase Agreement, unless they have become active in the
     business or finances of the Corporation) ("Subsidiary") shall commence, or
     there shall be commenced against the Corporation or any such Subsidiary, a
     case under any applicable bankruptcy or insolvency laws as now or hereafter
     in effect or any successor thereto, or the Corporation commences any other
     similar proceeding under any reorganization, arrangement, adjustment of
     debt, relief of debtors, dissolution, insolvency or liquidation or similar
     law of any jurisdiction whether now or hereafter in effect relating to the
     Corporation or any Subsidiary thereof or there is commenced against the
     Corporation or any Subsidiary thereof any such bankruptcy, insolvency or
     other proceeding which remains undismissed for a period of 60 days; or the
     Corporation or any Subsidiary thereof is adjudicated insolvent or bankrupt;
     or any order of relief or other similar order approving any such case or
     proceeding is entered; or the Corporation or any Subsidiary thereof suffers
     any appointment of any custodian or the like for it or any substantial part
     of its property which continues undischarged or unstayed for a period of 60
     days; or the Corporation or any Subsidiary thereof makes a general
     assignment for the benefit of creditors; or the Corporation shall fail to
     pay, or shall state that it is unable to pay, or shall be unable to pay,
     its debts generally as they become due; or the Corporation or any
     Subsidiary thereof shall call a meeting of its creditors with a view to
     arranging a composition, adjustment or restructuring of its debts; or the
     Corporation or any Subsidiary thereof shall by any act or failure to act
     expressly indicate its consent to, approval of or acquiescence in any of
     the foregoing; or any corporate or other action is taken by the Corporation
     or any Subsidiary thereof for the purpose of effecting any of the
     foregoing.

                                       2
<PAGE>

          "Base Conversion Price" shall have the meaning set forth in Section
     7(b).

          "Buy-In" shall have the meaning set forth in Section 6(e)(iii).

          "Capital Shares" means the Common Stock and any shares of any other
     class of common stock or preferred stock, whether now or hereafter
     authorized, having the right to participate in the distribution of earnings
     and assets of the Corporation.

          "Capital Shares Equivalents" means any securities, rights or
     obligations that are convertible into or exchangeable for or give any right
     to subscribe for or purchase, directly or indirectly, any Capital Shares or
     any warrants, options or other rights to subscribe for or purchase,
     directly or indirectly, Capital Shares or any such convertible or
     exchangeable securities.

          "Change of Control Transaction" means the occurrence after the date
     hereof of any of (i) an acquisition after the date hereof by an individual
     or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated
     under the Exchange Act) of effective control (whether through legal or
     beneficial ownership of capital stock of the Corporation, by contract or
     otherwise) of in excess of 40% of the voting securities of the Corporation
     other than by any of the Holders and/or their Affiliates acting alone or
     with any other Person, or (ii) a replacement at one time or within a one
     year period of more than one-half of the members of the Corporation's board
     of directors which is not approved by a majority of those individuals who
     are members of the board of directors on the date hereof (or by those
     individuals who are serving as members of the board of directors on any
     date whose nomination to the board of directors was approved by a majority
     of the members of the board of directors who are members on the date
     hereof), or (iii) the execution by the Corporation of an agreement to which
     the Corporation is a party or by which it is bound, providing for any of
     the events set forth above in (i) or (ii).

          "Closing Date" means the Trading Day when all of the Transaction
     Documents have been executed and delivered by the applicable parties
     thereto, and all conditions precedent to (i) the Holders' obligations to
     pay the Subscription Amount and (ii) the Corporation's obligations to
     deliver the Securities, have been satisfied or waived.

          "Commission" means the Securities and Exchange Commission.

          "Common Stock" means the Corporation's common stock, par value $0.001
     per share, and stock of any other class into which such shares may
     hereafter have been reclassified or changed.

          "Conversion Amount" means the sum of the Stated Value at issue.

                                       3
<PAGE>

          "Conversion Date" shall have the meaning set forth in Section 6(a).

          "Conversion Price" shall have the meaning set forth in Section 6(b).

          "Conversion Shares" means, collectively, the shares of Common Stock
     into which the shares of Preferred Stock are convertible in accordance with
     the terms hereof.

          "Dividend Payment Date" shall have the meaning set forth in Section
     3(a).

          "Dilutive Issuance" shall have the meaning set forth in Section 7(b).

          "Dilutive Issuance Notice" shall have the meaning set forth in Section
     7(b).

          "Effective Date" means the date that the Registration Statement is
     first declared effective by the Commission.

          "Equity Conditions" shall mean, during the period in question, (i) the
     Corporation is not in default in honoring all conversions and redemptions
     scheduled to occur or occurring by virtue of one or more Notices of
     Conversion, if any, (ii) all liquidated damages and other amounts owing in
     respect of the Preferred Stock shall have been paid; (iii) there is an
     effective Registration Statement pursuant to which the Holder is permitted
     to utilize the prospectus thereunder to resell all of the shares of Common
     Stock issuable pursuant to the Transaction Documents (and the Corporation
     has no knowledge that such effectiveness will not continue for the
     foreseeable future) subject to the provisions of Section 2(b) of the
     Registration Rights Agreement, (iv) the Common Stock is trading on the
     Principal Market and all of the shares issuable pursuant to the Transaction
     Documents are listed for trading on a Principal Market (and the Corporation
     has no knowledge that trading of the Common Stock on a Principal Market
     will not continue for the foreseeable future), (v) there is a sufficient
     number of authorized but unissued and otherwise unreserved shares of Common
     Stock for the issuance of all of the shares issuable pursuant to the
     Transaction Documents, (vi) there is then existing no Event of Default or
     event which, with the passage of time or the giving of notice, would
     constitute and Event of Default and (vii) all of the shares issued and
     still owned by a Holder or issuable pursuant to the Transaction Documents
     in full, ignoring for such purposes any conversion or exercise limitation
     therein, would not violate the limitations set forth in Sections 6(c) and
     6(d) and (viii) no public announcement of a pending or proposed Fundamental
     Transaction or material acquisition transaction has occurred that has not
     been consummated.

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

                                       4
<PAGE>

          "Exempt Issuance" means (a) the granting, exercise or issuance of
     Capital Shares or Capital Shares Equivalents to employees, officers,
     directors, or consultants (provided that in the case of consultants, such
     issuance of Capital Shares and/or grants of Capital Share Equivalents does
     not exceed, in the aggregate, 200,000 Capital Shares or Capital Shares
     Equivalents convertible into or exchangeable for 200,000 Capital Shares,
     per any 12 month period) pursuant to any stock option plan agreement or
     arrangement duly adopted or approved by a majority of the non-employee
     members of the Board of Directors of the Corporation or a majority of the
     members of a committee of non-employee directors established for such
     purpose, or (b) upon the conversion of any Preferred Stock or any Warrant
     or security issued by the Corporation in connection with the offer and sale
     of the Corporation's Securities pursuant to the Purchase Agreement, or (c)
     the issuance of any Common Stock as payment of interest with respect to any
     shares of Preferred Stock or for payment of principal of, or interest on,
     the Corporation's 7.5% Convertible Debentures due April 1, 2006 ("Prior
     Debentures"), or (d) upon the exercise of or conversion of any Capital
     Shares Equivalents (including the Prior Debentures and the warrants issued
     by the Corporation in November, 2003), rights, options or warrants issued
     and outstanding on the Original Issue Date, provided, other than with
     respect to issuances of Common Stock in lieu of monthly cash redemption
     payments to the holders of the Prior Debenture, such securities have not
     been amended in order to reduce the exercise or conversion price thereof or
     increase the number of shares issuable thereunder since the date of the
     Purchase Agreement except as a result of the Purchase Agreement, or (e)
     issuance of securities in connection with acquisitions, mergers, joint
     ventures, strategic investments, or strategic partnering arrangements, the
     primary purpose of which is not to raise capital.

          "Fundamental Transaction" shall have the meaning set forth in Section
     7(d).

          "Holder" shall have the meaning given such term in Section 2.

          "Junior Securities" means the Common Stock and all other equity or
     equity equivalent securities of the Corporation other than those securities
     that are (a) outstanding on the Original Issue Date and (b) which are
     explicitly senior or pari passu in rights or liquidation preference to the
     Preferred Stock.

          "Liquidation" shall have the meaning given such term in Section 5.

          "New York Courts" shall have the meaning given such term in Section
     10(d).

          "Notice of Conversion" shall have the meaning given such term in
     Section 6(a).

          "Original Issue Date" shall mean the date of the Purchase Agreement.

                                       5
<PAGE>

          "Person" means an individual or corporation, partnership, trust,
     incorporated or unincorporated association, joint venture, limited
     liability company, joint stock company, government (or an agency or
     subdivision thereof) or other entity of any kind.

          "Principal Market" means any of the following markets or exchanges on
     which the Common Stock is listed or quoted for trading on the date in
     question: the Nasdaq SmallCap Market, the American Stock Exchange, the New
     York Stock Exchange or the Nasdaq National Market and, with respect to
     Section 7(d) as to Acquiring Corporation Common Stock, any of the
     aforementioned markets or exchanges and the London Stock Exchange.

          "Prior Debenture" means the Company's 7.5% Convertible Debentures due
     April 24, 2006.

          "Purchase Agreement" means the Securities Purchase Agreement, dated as
     of November 12, 2004, to which the Corporation and the original Holders are
     parties, as amended, modified or supplemented from time to time in
     accordance with its terms.

          "Registration Rights Agreement" means the Registration Rights
     Agreement, dated as of the date of the Purchase Agreement, to which the
     Corporation and the original Holder are parties, as amended, modified or
     supplemented from time to time in accordance with its terms.

          "Registration Statement" means a registration statement that meets the
     requirements of the Registration Rights Agreement and registers the resale
     of all of the Conversion Shares by each of the Holders, who shall be named
     as a "selling stockholder" thereunder, all as provided in the Registration
     Rights Agreement.

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

          "Share Delivery Date" shall have the meaning given such term in
     Section 6(e).

          "Stated Value" shall have the meaning given such term in Section 2.

          "Subscription Amount" shall mean, as to each Purchaser, the amount to
     be paid by such Purchaser for the Preferred Stock purchased pursuant to the
     Purchase Agreement and as specified below such Purchaser's name on the
     signature page of the Purchase Agreement and next to the heading
     "Subscription Amount", in United States Dollars and in immediately
     available funds.

          "Subsidiary" shall have the meaning given to such term in the Purchase
     Agreement.

                                       6
<PAGE>

          "Trading Day" means a day on which the Principal Market shall be open
     for business.

          "Transaction Documents" shall have the meaning set forth in the
     Purchase Agreement.

          "Triggering Event" shall have the meaning set forth in Section 9(a).

          "Triggering Redemption Amount" for each share of Preferred Stock means
     the sum of (i) the greater of (A) 120% of the Stated Value and (B) the
     product of (a) the average of the 5 VWAPs of Common Stock for the Trading
     Days immediately preceding the date of the Triggering Event and (b) the
     Stated Value divided by the then Conversion Price, (ii) all accrued but
     unpaid dividends thereon and (iii) all liquidated damages and other amounts
     due in respect of the Preferred Stock.

          "Triggering Redemption Payment Date" shall have the meaning set forth
     in Section 9(b).

          "VWAP" means, for any date, the price determined by the first of the
     following clauses that applies: (a) if the Common Stock is then listed or
     quoted on a Principal Market, the daily volume weighted average price of
     the Common Stock for such date (or the nearest preceding date) on the
     Principal Market on which the Common Stock is then listed or quoted as
     reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m.
     Eastern Time to 4:02 p.m. Eastern Time); (b) if the Common Stock is not
     then listed or quoted on a Principal Market and if prices for the Common
     Stock are then quoted on the OTC Bulletin Board, the volume weighted
     average price of the Common Stock for such date (or the nearest preceding
     date) on the OTC Bulletin Board; (c) if the Common Stock is not then listed
     or quoted on the OTC Bulletin Board and if prices for the Common Stock are
     then reported in the "Pink Sheets" published by the National Quotation
     Bureau Incorporated (or a similar organization or agency succeeding to its
     functions of reporting prices), the most recent bid price per share of the
     Common Stock so reported prior to the day in question; or (d) in all other
     cases, the fair market value of a share of Common Stock as determined by an
     independent appraiser selected in good faith by a majority in interest of
     the Holders and reasonably acceptable to the Corporation.

          (b) Interpretation. Unless the context otherwise requires, the terms
     defined in this Section 1 shall have the meanings herein specified for all
     purposes of this Certificate of Designation or the Purchase Agreement,
     applicable to both the singular and plural forms of any of the terms
     defined herein. When a reference is made in this Certificate of Designation
     to a Section, such reference shall be to a Section of this Certificate of
     Designation unless otherwise indicated. Whenever the words "include,"
     "includes" or "including" are used in this Certificate of Designation, they
     shall be deemed to be followed by the words "without limitation." The use
     of any gender herein shall be deemed to include the neuter, masculine and
     feminine genders wherever necessary or appropriate. When any matter is
     disclosed (a) in any Transaction Document (including any exhibit or
     schedule thereto), (b) any place in the Disclosure Schedule, or (c) except
     with respect to Sections 3.1(g), 3.1(s), 3.1(u), 3.1(v), 3.1(w), 3.1(dd),
     3.1(ee), and 3.1(ff) of the Purchase Agreement and with respect to Section
     6(b) and Section 6(c) of the Registration Rights Agreement, the
     Corporation's Form 10-KSB for the year ended September 30, 2003, the Proxy
     Statement for the 2004 Annual Meeting of Shareholders, the Forms 10-QSB for
     the quarters ended December 31, 2003, March 31, 2004 and June 30, 2004, and
     all press releases issued after the filing of the Form 10-QSB for the
     quarter ended June 30, 2004 and prior to the Closing Date, such matter
     shall be deemed to have been disclosed to all of the Purchasers for all
     purposes pursuant to all of the Transaction Documents. If any period of
     time for the performance under the Transaction Documents ends on a day that
     is not a Trading Day, such period of time shall be automatically extended
     to end at the end of the next succeeding Trading Day.

                                       7
<PAGE>

          Section 2. Designation, Amount and Par Value. The series of preferred
     stock shall be designated as its Series B 6% Convertible Preferred Stock
     (the "Preferred Stock") and the number of shares so designated shall be
     3,000 (which shall not be subject to increase without the consent of all of
     the holders of the Preferred Stock (each, a "Holder" and collectively, the
     "Holders")). Each share of Preferred Stock shall have a par value of $0.001
     per share and a stated value equal to $1,000 (the "Stated Value").
     Capitalized terms not otherwise defined herein shall have the meaning given
     such terms in Section 1 hereof.

         Section 3. Dividends.

          a) Holders shall be entitled to receive and the Corporation shall pay,
     cumulative dividends at the rate per share (as a percentage of the Stated
     Value per share) of 6% per annum (subject to increase pursuant to Section
     9(b)), payable quarterly on January 1, April 1, July 1 and October 1,
     beginning with the first such date after the Original Issue Date and on any
     Conversion Date as to the Stated Value of the shares being converted
     (except that, if such date is not a Trading Day, the payment date shall be
     the next succeeding Trading Day)(each such date, a "Dividend Payment
     Date"). The form of dividend payments to each Holder shall be made in the
     following order: (i) if funds are legally available for the payment of
     dividends and the Equity Conditions have not been met, in cash only, (ii)
     if funds are legally available for the payment of dividends and the Equity
     Conditions have been met, at the sole election of the Corporation, in cash
     or shares of Common Stock which shall be valued solely for such purpose at
     90% of the average of the 20 VWAPs immediately prior to the Dividend
     Payment Date; (iii) if funds are not legally available for the payment of
     dividends and the Equity Conditions have been met, in shares of Common
     Stock which shall be valued at 90% of the average of the 20 VWAPs
     immediately prior to the Dividend Payment Date; (iv) if funds are not
     legally available for the payment of dividends and the Equity Conditions
     relating to registration have been waived by such Holder, as to such Holder
     only, in unregistered shares of Common Stock which shall be valued at 90%
     of the average of the 20 VWAPs immediately prior to the Dividend Payment
     Date; and (v) if funds are not legally available for the payment of
     dividends and the Equity Conditions have not been met, then, at the
     election of such Holder, such dividends shall accrue to the next Dividend
     Payment Date or shall be accreted to the outstanding Stated Value. The
     Holders shall have the same rights and remedies with respect to the
     delivery of any such shares as if such shares were being issued pursuant to
     Section 6. Within 3 Trading Days after the Closing Date the Corporation
     shall have notified the Holders whether or not it may lawfully pay cash
     dividends. The Corporation shall promptly notify the Holders at any time
     the Corporation shall become able or unable, as the case may be, to
     lawfully pay cash dividends. If at any time the Corporation has the right
     to pay dividends in cash or Common Stock, the Corporation must provide the
     Holder with at least 20 Trading Days' notice of its election to pay a
     regularly scheduled dividend in Common Stock (the Corporation may indicate
     in such notice that such election shall continue for subsequent dividend
     payments until revised by the Corporation). Dividends on the Preferred
     Stock shall be calculated on the basis of a 360-day year, shall accrue
     daily commencing on the Original Issue Date, and shall be deemed to accrue
     from such date whether or not earned or declared and whether or not there
     are profits, surplus or other funds of the Corporation legally available
     for the payment of dividends. Except as otherwise provided herein, if at
     any time the Corporation pays dividends partially in cash and partially in
     shares, then such payment shall be distributed ratably among the Holders
     based upon the number of shares of Preferred Stock held by each Holder. Any
     dividends, whether paid in cash or shares, that are not paid within three
     Trading Days following a Dividend Payment Date shall continue to accrue and
     shall entail a late fee, which must be paid in cash, at the rate of 12% per
     annum or the lesser rate permitted by applicable law (such fees to accrue
     daily, from the Dividend Payment Date through and including the date of
     payment).

                                       8
<PAGE>

          b) So long as any Preferred Stock shall remain outstanding, neither
     the Corporation nor any Subsidiary thereof shall redeem, purchase or
     otherwise acquire directly or indirectly any Junior Securities. So long as
     any Preferred Stock shall remain outstanding, neither the Corporation nor
     any Subsidiary thereof shall directly or indirectly pay or declare any
     dividend or make any distribution (other than a dividend or distribution
     described in Section 6 or dividends due and paid in the ordinary course on
     preferred stock of the Corporation at such times when the Corporation is in
     compliance with its payment and other obligations hereunder) upon, nor
     shall any distribution be made in respect of, any Junior Securities so long
     as any dividends due on the Preferred Stock remain unpaid, nor shall any
     monies be set aside for or applied to the purchase or redemption (through a
     sinking fund or otherwise) of any Junior Securities or shares pari passu
     with the Preferred Stock.

          c) The Corporation acknowledges and agrees that the capital of the
     Corporation (as such term is used in Section 154 of the General Corporation
     Law of Delaware) in respect of the Preferred Stock and any future issuances
     of the Corporation's capital stock shall be equal to the aggregate par
     value of such Preferred Stock or capital stock, as the case may be, and
     that, on or after the date of the Purchase Agreement, it shall not increase
     the capital of the Corporation with respect to any shares of the
     Corporation's capital stock issued and outstanding on such date. The
     Corporation also acknowledges and agrees that it shall not create any
     special reserves under Section 171 of the General Corporation Law of
     Delaware without the prior written consent of each Holder.

                                       9
<PAGE>

         Section 4. Voting Rights. Except as otherwise provided herein and as
otherwise required by law, the Preferred Stock shall have no voting rights.
However, so long as any shares of Preferred Stock are outstanding, the
Corporation shall not, without the affirmative vote of the Holders of the shares
of the Preferred Stock then outstanding, (a) alter or change adversely the
powers, preferences or rights given to the Preferred Stock or alter or amend
this Certificate of Designation, (b) authorize or create any class of stock
ranking as to dividends, redemption or distribution of assets upon a Liquidation
(as defined in Section 5) senior to or otherwise pari passu with the Preferred
Stock, (c) amend its certificate of incorporation or other charter documents so
as to affect adversely any rights of the Holders, (d) increase the authorized
number of shares of Preferred Stock, or (e) enter into any agreement with
respect to the foregoing.

         Section 5. Liquidation. Upon any liquidation, dissolution or winding-up
of the Corporation, whether voluntary or involuntary (a "Liquidation"), the
Holders shall be entitled to receive out of the assets of the Corporation,
whether such assets are capital or surplus, for each share of Preferred Stock an
amount equal to the Stated Value per share plus any accrued and unpaid dividends
thereon and any other fees or liquidated damages owing thereon before any
distribution or payment shall be made to the holders of any Junior Securities,
and if the assets of the Corporation shall be insufficient to pay in full such
amounts, then the entire assets to be distributed to the Holders shall be
distributed among the Holders ratably in accordance with the respective amounts
that would be payable on such shares if all amounts payable thereon were paid in
full. A Fundamental Transaction or Change of Control Transaction shall not be
treated as an event of Liquidation. The Corporation shall mail written notice of
any such Liquidation, not less than 45 days prior to the payment date stated
therein, to each record Holder.

         Section 6. Conversion.

          a) Conversions at Option of Holder. Each share of Preferred Stock
     shall be convertible into that number of shares of Common Stock (subject to
     the limitations set forth in Sections 6(c) and (d)) determined by dividing
     the Stated Value of such share of Preferred Stock by the Conversion Price,
     at the option of the Holder, at any time and from time to time from and
     after the Original Issue Date. Holders shall effect conversions by
     delivering to the Corporation the form of conversion notice attached hereto
     as Annex A (a "Notice of Conversion"). Each Notice of Conversion shall
     specify the number of shares of Preferred Stock to be converted, which
     shall not be less than $50,000 Stated Value of Preferred Stock unless less
     than $50,000 of Stated Value of such Holder's Preferred Stock remains
     outstanding, in which case it shall be for the full amount outstanding, the
     number of shares of Preferred Stock owned prior to the conversion at issue,
     the number of shares of Preferred Stock owned subsequent to the conversion
     at issue and the date on which such conversion is to be effected, which
     date may not be prior to the date the Holder delivers such Notice of
     Conversion to the Corporation by facsimile and shall not be more than 10
     Trading Days after the delivery of the Notice of Conversion (the
     "Conversion Date"). If no Conversion Date is specified in a Notice of
     Conversion, the Conversion Date shall be the date that such Notice of
     Conversion to the Corporation is deemed delivered hereunder. To effect
     conversions of shares of Preferred Stock, a Holder shall not be required to
     physically surrender the certificate(s) representing such shares of
     Preferred Stock to the Corporation unless all of the shares of Preferred
     Stock represented thereby are so converted, in which case the Holder shall
     deliver the certificate representing such share of Preferred Stock promptly
     following the Conversion Date at issue. Shares of Preferred Stock converted
     into Common Stock or redeemed in accordance with the terms hereof shall be
     canceled and may not be reissued.

                                       10
<PAGE>

          b) Conversion Price. The conversion price for the Preferred Stock
     shall equal $3.07 (the "Conversion Price"), subject to adjustment herein.

          c) Beneficial Ownership Limitation. The Corporation shall not effect
     any conversion or issuance of Common Stock of shares of Preferred Stock and
     a Holder shall not have the right to convert any shares of Preferred Stock,
     pursuant to Section 6(a) or otherwise, to the extent that after giving
     effect to such conversion or issuance, such Holder (together with such
     Holder's affiliates) would beneficially own in excess of 4.99% of the
     number of shares of the Common Stock outstanding immediately after giving
     effect to such conversion or issuance. For purposes of the foregoing
     sentence, the number of shares of Common Stock beneficially owned by such
     Holder and its affiliates shall include the number of shares of Common
     Stock issuable upon conversion of the shares of Preferred Stock or
     otherwise issuable pursuant to this Certificate of Designation with respect
     to which the determination of such sentence is being made, but shall
     exclude the number of shares of Common Stock which would be issuable upon
     (A) conversion of the remaining, nonconverted shares of Preferred Stock
     beneficially owned by the Holder or any of its affiliates or otherwise
     issuable pursuant to the outstanding shares of Preferred Stock not subject
     to such issuance beneficially owned by such Holder or any of its affiliates
     and (B) exercise or conversion of the unexercised or nonconverted portion
     of any other securities of the Corporation (including any other debentures,
     warrants, Preferred Stock or the Warrants) subject to a limitation on
     conversion or exercise analogous to the limitation contained herein
     beneficially owned by such Holder or any of its affiliates. Except as set
     forth in the preceding sentence, for purposes of this Section 6(b),
     beneficial ownership shall be calculated in accordance with Section 13(d)
     of the Exchange Act. (To the extent that the limitation contained in this
     Section 6(b) applies, the determination of whether Preferred Stock is
     convertible (in relation to other securities owned by such Holder together
     with any affiliates) and of which shares of Preferred Stock are convertible
     shall be in the sole discretion of such Holder, and the submission of a
     Notice of Conversion shall be deemed to be such Holder's determination of
     whether the Preferred Stock may be converted (in relation to other
     securities owned by such Holder) and which shares of Preferred Stock are
     convertible, in each case subject to such aggregate percentage limitations.
     To ensure compliance with this restriction, each Holder shall be deemed to
     represent to the Corporation each time it delivers a Notice of Conversion
     that such Notice of Conversion has not violated the restrictions set forth
     in this paragraph and the Corporation shall have no obligation to verify or
     confirm the accuracy of such determination. For purposes of this Section
     6(b), in determining the number of outstanding shares of Common Stock, the
     Holder may rely on the number of outstanding shares of Common Stock as
     reflected in the most recent of the following: (x) the Corporation's most
     recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public
     announcement by the Corporation or (z) any other notice by the Corporation
     or the Corporation's transfer agent setting forth the number of shares of
     Common Stock outstanding. Upon the written or oral request of a Holder, the
     Corporation shall within two Trading Days confirm orally and in writing to
     such Holder the number of shares of Common Stock then outstanding. In any
     case, the number of outstanding shares of Common Stock shall be determined
     after giving effect to the conversion or exercise of securities of the
     Corporation, including the Preferred Stock, by a Holder or its affiliates
     since the date as of which such number of outstanding shares of Common
     Stock was reported. The provisions of this Section 6(b) may be waived by
     any Holder upon, at the election of such Holder, not less than 61 days'
     prior notice to the Corporation, and the provisions of this Section 6(b)
     shall continue to apply until such 61st day (or such later date, as
     determined by such Holder, as may be specified in such notice of waiver).

                                       11
<PAGE>

          d) Limitation on Number of Shares Issuable. Notwithstanding anything
     herein to the contrary, if the Corporation has not obtained Shareholder
     Approval (as defined below), if required by the applicable rules and
     regulations of the Principal Market (or any successor entity), then the
     Corporation may not issue upon conversion of the Preferred Stock, in the
     aggregate, in excess of (1) 19.999% of the number of shares of Common Stock
     outstanding on the Trading Day immediately preceding the Original Issue
     Date, less (2) any shares of Common Stock issued (i) as payment of
     dividends, or (ii) upon exercise of the Warrants issued to Holders of the
     Preferred Stock, and (iii) any shares of Common Stock issued to Holders
     pursuant to the Purchase Agreement (such number of shares, the "Issuable
     Maximum"). Each Holder shall be entitled to a portion of the Issuable
     Maximum equal to the quotient obtained by dividing (x) the aggregate Stated
     Value of Preferred Stock issued and sold to such Holder on the Original
     Issue Date by (y) the aggregate Stated Value of all Preferred Stock issued
     and sold by the Corporation on the Original Issue Date. If any Holder shall
     no longer holds shares of Preferred Stock, then such Holder's remaining
     portion of the Issuable Maximum shall be allocated pro-rata among the
     remaining Holders. If on any Conversion Date: (1) the applicable Conversion
     Price then in effect is such that the shares issuable under the Preferred
     Stock on any Conversion Date together with the aggregate number of shares
     of Common Stock that would then be issuable upon conversion in full of all
     then outstanding shares of Preferred Stock would exceed the Issuable
     Maximum, and (2) the Corporation's shareholders shall not have previously
     approved the transactions contemplated by the Transaction Documents, as may
     be required by the applicable rules and regulations of the Principal Market
     (or any successor entity), if any (the "Shareholder Approval"), then the
     Corporation shall issue to the Holder requesting a conversion a number of
     shares of Common Stock equal to such Holder's pro-rata portion (which shall
     be calculated pursuant to the terms hereof) of the Issuable Maximum and,
     with respect to the remainder of the aggregate Stated Value of Preferred
     Stock (including any accrued dividends) then held by such Holder for which
     a conversion in accordance with the applicable conversion price would
     result in an issuance of shares of Common Stock in excess of such Holder's
     pro-rata portion (which shall be calculated pursuant to the terms hereof)
     of the Issuable Maximum (the "Excess Principal"), the Corporation shall be
     prohibited from converting such Excess Principal, and shall notify the
     Holder of the reason therefor. The Preferred Stock shall thereafter be
     unconvertible to such extent until and unless Shareholder Approval is
     subsequently obtained or is otherwise not required, but this Certificate of
     Designation shall otherwise remain in full force and effect.

                                       12
<PAGE>

          e) Mechanics of Conversion

          i. Delivery of Certificate Upon Conversion. Not later than five
     Trading Days after each Conversion Date (the "Share Delivery Date"), the
     Corporation shall deliver to the Holder (A) a certificate or certificates
     which, after the Effective Date, shall be free of restrictive legends and
     trading restrictions (other than those required by the Purchase Agreement)
     representing the number of shares of Common Stock being acquired upon the
     conversion of shares of Preferred Stock, and (B) a check in the amount of
     accrued and unpaid dividends (if the Corporation has elected or is required
     to pay accrued dividends in cash) on the Stated Value of the Preferred
     Stock then being converted. After the Effective Date, the Corporation
     shall, upon request of the Holder, use commercially reasonable efforts
     deliver any certificate or certificates required to be delivered by the
     Corporation under this Section electronically through the Depository Trust
     Company or another established clearing corporation performing similar
     functions. If in the case of any Notice of Conversion such certificate or
     certificates are not delivered to or as directed by the applicable Holder
     by the seventh Trading Day after the Conversion Date, the Holder shall be
     entitled to elect by written notice to the Corporation at any time on or
     before its receipt of such certificate or certificates thereafter, to
     rescind such conversion, in which event the Corporation shall immediately
     return the certificates representing the shares of Preferred Stock tendered
     for conversion.

          ii. Obligation Absolute; Partial Liquidated Damages. The Corporation's
     obligations to issue and deliver the Conversion Shares upon conversion of
     Preferred Stock in accordance with the terms hereof are absolute and
     unconditional, irrespective of any action or inaction by the Holder to
     enforce the same, any waiver or consent with respect to any provision
     hereof, the recovery of any judgment against any Person or any action to
     enforce the same, or any setoff, counterclaim, recoupment, limitation or
     termination, or any breach or alleged breach by the Holder or any other
     Person of any obligation to the Corporation, and irrespective of any other
     circumstance which might otherwise limit such obligation of the Corporation
     to the Holder in connection with the issuance of such Conversion Shares;
     provided, however, such delivery shall not operate as a waiver by the
     Corporation of any such action the Corporation may have against the Holder.
     In the event a Holder shall elect to convert any or all of the Stated Value
     of its Preferred Stock, the Corporation may not refuse conversion based on
     any claim that such Holder or any one associated or affiliated with the
     Holder of has been engaged in any violation of law, agreement or for any
     other reason, unless, an injunction from a court, on notice, restraining
     and or enjoining conversion of all or part of this Preferred Stock shall
     have been sought and obtained. In the event any such injunction is issued,
     all time periods applicable to the Corporation relating to conversion of
     Preferred Stock shall be tolled until such injunction is removed. In the
     absence of an injunction precluding the same, the Corporation shall issue
     Conversion Shares or, if applicable, cash, upon a properly noticed
     conversion. If the Corporation fails to deliver to the Holder such
     certificate or certificates pursuant to Section 6(e)(i) on or before the
     Share Delivery Date applicable to such conversion, the Corporation shall
     pay to such Holder, in cash, as liquidated damages and not as a penalty,
     for each $5,000 of Stated Value of Preferred Stock being converted, $25 per
     Trading Day (increasing to $50 per Trading Day after 3 Trading Days after
     such damages begin to accrue and increasing to $100 per Trading Day 6
     Trading Days after such damages begin to accrue) for each Trading Day after
     the Share Delivery Date until such certificates are delivered. Nothing
     herein shall limit a Holder's right to pursue actual damages for the
     Corporation's failure to deliver certificates representing shares of Common
     Stock upon conversion within the period specified herein and such Holder
     shall have the right to pursue all remedies available to it hereunder, at
     law or in equity including, without limitation, a decree of specific
     performance and/or injunctive relief.

                                       13
<PAGE>

          iii. Compensation for Buy-In on Failure to Timely Deliver Certificates
     Upon Conversion. If the Corporation fails to deliver to the Holder such
     certificate or certificates pursuant to Section 6(e)(i) by the applicable
     Share Delivery Date, and if after such Share Delivery Date the Holder is
     required by its brokerage firm to purchase (in an open market transaction
     or otherwise) Common Stock to deliver in satisfaction of a sale by such
     Holder of the Conversion Shares which the Holder anticipated receiving, and
     was entitled to receive, upon the conversion relating to such Share
     Delivery Date (a "Buy-In"), then the Corporation shall pay in cash to the
     Holder the amount by which (x) the Holder's total purchase price (including
     brokerage commissions, if any) for the Common Stock so purchased exceeds
     (y) the product of (1) the aggregate number of shares of Common Stock that
     such Holder was entitled to receive from the conversion at issue multiplied
     by (2) the actual sale price of the Common Stock at the time of the sale
     (including brokerage commissions, if any) at which the sell order giving
     rise to such purchase obligation was executed. For example, if the Holder
     purchases Common Stock having a total purchase price of $11,000 to cover a
     Buy-In with respect to an attempted conversion of shares of Preferred Stock
     with respect to which the aggregate sale price (including brokerage
     commissions, if any) giving rise to such purchase obligation is $10,000,
     the Corporation shall be required to pay the Holder $1,000. The Holder
     shall provide the Corporation written notice indicating the amounts payable
     to the Holder in respect of the Buy-In, together with documentary evidence
     of the actual Buy-In and other evidence reasonably requested by the
     Corporation. Nothing herein shall limit a Holder's right to pursue any
     other remedies available to it hereunder, at law or in equity including,
     without limitation, a decree of specific performance and/or injunctive
     relief with respect to the Corporation's failure to timely deliver
     certificates representing shares of Common Stock upon conversion of the
     shares of Preferred Stock as required pursuant to the terms hereof.
     Notwithstanding anything contained herein to the contrary, if a Holder
     requires the Corporation to make a payment in respect of a Buy-In for the
     failure to timely deliver certificates hereunder and the Corporation timely
     pays in full such payment, the Corporation shall not be required to pay
     such Holder liquidated damages under Section 6(e)(ii) in respect of the
     certificates resulting in such Buy-In.

                                       14
<PAGE>

          iv. Reservation of Shares Issuable Upon Conversion. The Corporation
     covenants that it will at all times reserve and keep available out of its
     authorized and unissued shares of Common Stock solely for the purpose of
     issuance upon conversion of the Preferred Stock and payment of dividends on
     the Preferred Stock, each as herein provided, free from preemptive rights
     or any other actual contingent purchase rights of persons other than the
     Holders, not less than such number of shares of the Common Stock as shall
     (subject to any additional requirements of the Corporation as to
     reservation of such shares set forth in the Purchase Agreement) be issuable
     (taking into account the adjustments and restrictions of Section 7) upon
     the conversion of all outstanding shares of Preferred Stock. The
     Corporation covenants that all shares of Common Stock that shall be so
     issuable shall, upon issue, be duly and validly authorized, issued and
     fully paid, nonassessable and, if the Registration Statement is then
     effective under the Securities Act, registered for public sale in
     accordance with such Registration Statement.

          v. Fractional Shares. Upon a conversion hereunder, the Corporation
     shall not be required to issue stock certificates representing fractions of
     shares of the Common Stock, but may if otherwise permitted, make a cash
     payment in respect of any final fraction of a share based on the VWAP at
     such time. If the Corporation elects not, or is unable, to make such a cash
     payment, the Holder shall be entitled to receive, in lieu of the final
     fraction of a share, one whole share of Common Stock.

                                       15
<PAGE>

          vi. Transfer Taxes. The issuance of certificates for shares of the
     Common Stock on conversion of the Preferred Stock shall be made without
     charge to the Holders thereof for any documentary stamp or similar taxes
     that may be payable in respect of the issue or delivery of such
     certificate, provided that the Corporation shall not be required to pay any
     tax that may be payable in respect of any transfer involved in the issuance
     and delivery of any such certificate upon conversion in a name other than
     that of the Holder of such shares of Preferred Stock so converted and the
     Corporation shall not be required to issue or deliver such certificates
     unless or until the person or persons requesting the issuance thereof shall
     have paid to the Corporation the amount of such tax or shall have
     established to the satisfaction of the Corporation that such tax has been
     paid.

         Section 7. Certain Adjustments.

          a) Stock Dividends and Stock Splits. If the Corporation, at any time
     while the Preferred Stock is outstanding: (A) shall pay a stock dividend or
     otherwise make a distribution or distributions on shares of its Common
     Stock or any other equity or equity equivalent securities payable in shares
     of Common Stock (which, for avoidance of doubt, shall not include any
     shares of Common Stock issued by the Corporation pursuant to this Preferred
     Stock, including as payment of the dividend thereon, or the Prior
     Debentures, including as payment of the interest thereon), (B) subdivide
     its outstanding shares of Common Stock into a larger number of shares, (C)
     combine (including by way of reverse stock split) outstanding shares of
     Common Stock into a smaller number of shares, or (D) issue by
     reclassification of shares of the Common Stock any shares of capital stock
     of the Corporation, then the Conversion Price shall be multiplied by a
     fraction of which the numerator shall be the number of shares of Common
     Stock (excluding treasury shares, if any) outstanding before such event and
     of which the denominator shall be the number of shares of Common Stock
     (excluding treasury shares, if any) outstanding after such event. Any
     adjustment made pursuant to this Section 7(a) shall become effective
     immediately after the record date for the determination of stockholders
     entitled to receive such dividend or distribution and shall become
     effective immediately after the effective date in the case of a
     subdivision, combination or re-classification.

          b) Subsequent Equity Sales. If the Corporation or any Subsidiary
     thereof, as applicable, at any time while Preferred Stock is outstanding,
     issues or sells, or is deemed to have issued or sold, any Common Stock or
     Capital Shares Equivalents entitling any Person to acquire shares of Common
     Stock, at an effective price per share less than the then Conversion Price
     (such lower price, the "Base Conversion Price" and such issuances
     collectively, a "Dilutive Issuance"), as adjusted hereunder (if the holder
     of the Common Stock or Capital Shares Equivalents so issued shall at any
     time, whether by operation of purchase price adjustments, reset provisions
     (but excluding customary anti-dilution protection), floating conversion,
     exercise or exchange prices or otherwise, or due to warrants, options or
     rights per share which is issued in connection with such issuance, be
     entitled to receive shares of Common Stock at an effective price per share
     which is less than the Conversion Price, such issuance shall be deemed to
     have occurred for less than the Conversion Price), then the Conversion
     Price shall be reduced to equal the Base Conversion Price. The Corporation
     shall notify the Holder in writing, no later than 3 Trading Days following
     the issuance of any Common Stock or Capital Shares Equivalents subject to
     this section, indicating therein the applicable issuance price, or of
     applicable reset price, exchange price, conversion price and other pricing
     terms (such notice the "Dilutive Issuance Notice"). For purposes of
     clarification, whether or not the Corporation provides a Dilutive Issuance
     Notice pursuant to this Section 7(b), upon the occurrence of any Dilutive
     Issuance, after the date of such Dilutive Issuance the Holder is entitled
     to receive a number of Conversion Shares based upon the Base Conversion
     Price regardless of whether the Holder accurately refers to the Base
     Conversion Price in the Notice of Conversion. Notwithstanding the
     foregoing, to the extent Conversion Shares (or securities convertible into
     or exchangeable for shares of Common Stock) are not delivered, upon 5
     Trading Days prior written notice to the Holder, the Conversion Price shall
     be readjusted after the expiration of such rights, options, or warrants
     (but only with respect to Preferred Stock exercised after such expiration),
     to the Conversion Price which would then be in effect had the adjustments
     made upon the issuance of such rights, options or warrants been made upon
     the basis of delivery of only the number of shares of Conversion Shares (or
     securities convertible into or exchangeable for such Conversion Shares)
     actually issued. In case any subscription price may be paid in a
     consideration part or all of which shall be in a form other than cash, the
     value of such consideration shall be as determined in good faith by the
     Board of Directors of the Corporation, whose determination shall be
     conclusive absent manifest error.

                                       16
<PAGE>

          c) Pro Rata Distributions. If the Corporation, at any time while
     Preferred Stock is outstanding, shall distribute to all holders of Common
     Stock (and not to Holders) evidences of its indebtedness or assets or
     rights or warrants to subscribe for or purchase any security, then in each
     such case the Conversion Price shall be determined by multiplying such
     Conversion Price in effect immediately prior to the record date fixed for
     determination of stockholders entitled to receive such distribution by a
     fraction of which the denominator shall be the VWAP determined as of the
     record date mentioned above, and of which the numerator shall be such VWAP
     on such record date less the then fair market value at such record date of
     the portion of such assets or evidence of indebtedness so distributed
     applicable to one outstanding share of the Common Stock as determined by
     the Board of Directors in good faith. In either case the adjustments shall
     be described in a statement provided to the Holders of the portion of
     assets or evidences of indebtedness so distributed or such subscription
     rights applicable to one share of Common Stock. Such adjustment shall be
     made whenever any such distribution is made and shall become effective
     immediately after the record date mentioned above. Notwithstanding the
     foregoing, to the extent Conversion Shares (or securities convertible into
     or exchangeable for shares of Common Stock) are not delivered, upon 5
     Trading Days prior written notice to the Holder, the Conversion Price shall
     be readjusted after the expiration of such rights, options, or warrants
     (but only with respect to Preferred Stock exercised after such expiration),
     to the Conversion Price which would then be in effect had the adjustments
     made upon the issuance of such rights, options or warrants been made upon
     the basis of delivery of only the number of shares of Conversion Shares (or
     securities convertible into or exchangeable for such Conversion Shares)
     actually issued. In case any subscription price may be paid in a
     consideration part or all of which shall be in a form other than cash, the
     value of such consideration shall be as determined in good faith by the
     Board of Directors of the Corporation, whose determination shall be
     conclusive absent manifest error.

                                       17
<PAGE>

          d) Fundamental Transaction. If, at any time while this Preferred Stock
     is outstanding, (A) the Corporation effects any merger or consolidation of
     the Corporation with or into another Person in which the Corporation is not
     the surviving entity, (B) the Corporation effects any sale of all or
     substantially all of its assets in one or a series of related transactions,
     (C) any tender offer or exchange offer (whether by the Corporation or
     another Person) is completed pursuant to which holders of Common Stock are
     permitted to tender or exchange their shares for other securities, cash or
     property, or (D) the Corporation effects any reclassification of the Common
     Stock or any compulsory share exchange pursuant to which the Common Stock
     is effectively converted into or exchanged for other securities, cash or
     property (in any such case, a "Fundamental Transaction"), then upon any
     subsequent conversion of this Preferred Stock, the Holder shall have the
     right to receive, for each Conversion Share that would have been issuable
     upon such conversion absent such Fundamental Transaction, the same kind and
     amount of securities, cash or property as it would have been entitled to
     receive upon the occurrence of such Fundamental Transaction if it had been,
     immediately prior to such Fundamental Transaction, the holder of one share
     of Common Stock (the "Alternate Consideration"). For purposes of any such
     conversion, the determination of the Conversion Price shall be
     appropriately adjusted to apply to such Alternate Consideration based on
     the amount of Alternate Consideration issuable in respect of one share of
     Common Stock in such Fundamental Transaction, and the Corporation shall
     apportion the Conversion Price among the Alternate Consideration in a
     reasonable manner reflecting the relative value of any different components
     of the Alternate Consideration. If holders of Common Stock are given any
     choice as to the securities, cash or property to be received in a
     Fundamental Transaction, then the Holder shall be given the same choice as
     to the Alternate Consideration it receives upon any conversion of this
     Preferred Stock following such Fundamental Transaction. To the extent
     necessary to effectuate the foregoing provisions, any successor to the
     Corporation or surviving entity in such Fundamental Transaction shall file
     a new Certificate of Designation with the same terms and conditions and
     issue to the Holder new preferred stock consistent with the foregoing
     provisions and evidencing the Holder's right to convert such preferred
     stock into Alternate Consideration. The terms of any agreement pursuant to
     which a Fundamental Transaction is effected shall include terms requiring
     any such successor or surviving entity to comply with the provisions of
     this Section 7(d) and ensuring that this Preferred Stock (or any such
     replacement security) will be similarly adjusted upon any subsequent
     transaction analogous to a Fundamental Transaction. Notwithstanding
     anything herein to the contrary, if (i) the Corporation effects any
     Fundamental Transaction with another corporation in which the Corporation
     is not the surviving entity (such corporation, the "Acquiring Corporation")
     pursuant to which the shareholders of the Corporation receive free trading
     shares of common stock of the Acquiring Corporation ("Acquiring Corporation
     Common Stock") and (ii) the daily trading volume of the Acquiring
     Corporation Common Stock on a Principal Market equals or exceeds $500,000
     for each of the 20 Trading Days immediately prior to the date on which
     definitive agreements relating to such Fundamental Transaction have been
     signed (such date, the "Acquisition Signing", such period, "Threshold
     Period" and a transaction meeting the conditions set forth in clauses (i)
     and (ii) above, an "Automatic Conversion Fundamental Transaction")), then,
     on the date such Fundamental Acquisition closes ("Fundamental Acquisition
     Closing"), each share of outstanding Preferred Stock shall automatically
     convert into a number of shares of free trading Acquiring Corporation
     Common Stock equal to 120% the Stated Value divided by the average of the
     daily volume weighted average price of the Acquiring Corporation Common
     Stock during the 20 Trading Days immediately prior to the date of the
     Fundamental Acquisition Closing (or the nearest preceding date). The daily
     volume weighted average price of the Acquiring Corporation Common Stock
     shall be determined on the Principal Market on which the Acquiring
     Corporation Common Stock is then listed or quoted as reported by Bloomberg
     Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02
     p.m. Eastern Time). Prior to the date of the Fundamental Acquisition
     Closing, the Holders shall have the right to voluntarily convert their
     shares of Preferred Stock into Conversion Shares pursuant to Section 4(a).

                                       18
<PAGE>

          e) Exempt Issuance. Notwithstanding the foregoing, no adjustment will
     be made under this Section 7 in respect of an Exempt Issuance.

          f) Calculations. All calculations under this Section 7 shall be made
     to the nearest cent or the nearest 1/100th of a share, as the case may be.
     The number of shares of Common Stock outstanding at any given time shall
     not include shares owned or held by or for the account of the Corporation,
     and the description of any such shares of Common Stock shall be considered
     on issue or sale of Common Stock. For purposes of this Section 7, the
     number of shares of Common Stock deemed to be issued and outstanding as of
     a given date shall be the sum of the number of shares of Common Stock
     (excluding treasury shares, if any) issued and outstanding.

          g) Notice to Holders.

          i. Adjustment to Conversion Price. Whenever the Conversion Price is
     adjusted pursuant to any of this Section 7, the Corporation shall promptly
     mail to each Holder a notice setting forth the Conversion Price after such
     adjustment and setting forth a brief statement of the facts requiring such
     adjustment. If the Corporation issues enters into a Variable Rate
     Transaction (as defined in the Purchase Agreement) or an MFN Transaction
     (as defined in the Purchase Agreement), despite the prohibition thereon in
     the Purchase Agreement, the Corporation shall be deemed to have issued
     Common Stock or Capital Shares Equivalents at the lowest possible
     conversion or exercise price at which such securities may be converted or
     exercised in the case of a Variable Rate Transaction, or the lowest
     possible adjustment price in the case of an MFN Transaction.

                                       19
<PAGE>

          ii. Notice to Allow Conversion by Holder. If (A) the Corporation shall
     declare a dividend (or any other distribution) on the Common Stock; (B) the
     Corporation shall declare a special nonrecurring cash dividend on or a
     redemption of the Common Stock; (C) the Corporation shall authorize the
     granting to all holders of the Common Stock rights or warrants to subscribe
     for or purchase any shares of capital stock of any class or of any rights;
     (D) the approval of any stockholders of the Corporation shall be required
     in connection with any reclassification of the Common Stock, any
     consolidation or merger to which the Corporation is a party, any sale or
     transfer of all or substantially all of the assets of the Corporation, of
     any compulsory share exchange whereby the Common Stock is converted into
     other securities, cash or property; (E) the Corporation shall authorize the
     voluntary or involuntary dissolution, liquidation or winding up of the
     affairs of the Corporation; then, in each case, the Corporation shall cause
     to be filed at each office or agency maintained for the purpose of
     conversion of the Preferred Stock, and shall cause to be mailed to the
     Holders at their last addresses as they shall appear upon the stock books
     of the Corporation, at least 10 calendar days prior to the applicable
     record or effective date hereinafter specified, a notice stating (x) the
     date on which a record is to be taken for the purpose of such dividend,
     distribution, redemption, rights or warrants, or if a record is not to be
     taken, the date as of which the holders of the Common Stock of record to be
     entitled to such dividend, distributions, redemption, rights or warrants
     are to be determined or (y) the date on which such reclassification,
     consolidation, merger, sale, transfer or share exchange is expected to
     become effective or close, and the date as of which it is expected that
     holders of the Common Stock of record shall be entitled to exchange their
     shares of the Common Stock for securities, cash or other property
     deliverable upon such reclassification, consolidation, merger, sale,
     transfer or share exchange; provided, that the failure to mail such notice
     or any defect therein or in the mailing thereof shall not affect the
     validity of the corporate action required to be specified in such notice.
     Holders are entitled to convert the Conversion Amount of Preferred Stock
     during the 10-day period commencing the date of such notice to the
     effective date of the event triggering such notice.

         Section 8. Forced Conversion. Notwithstanding anything herein to the
contrary, if after the one year anniversary of the Original Issue Date the VWAP
for each of any 20 consecutive Trading Days ("Threshold Period"), which 20
consecutive Trading Day period shall have commenced only after such anniversary
date, exceeds the then Conversion Price (as adjusted from time to time as
provided herein) by 200%, the Corporation may, within 3 Trading Days after any
such Threshold Period, deliver a notice to the Holder (a "Forced Conversion
Notice" and the date such notice is received by the Holder, the "Forced
Conversion Notice Date") to cause the Holders to immediately convert all or part
of the then outstanding Stated Value of Preferred Stock certificates pursuant to
Section 6(a) and the Holders shall surrender (if all of their Preferred Stock is
converted) their Preferred Stock to the Corporation for conversion within 5
Trading Days of the Forced Conversion Notice Date. The Corporation may only
effect a Forced Conversion Notice if during the Threshold Period and until the
3rd Trading Day following the Forced Conversion Notice Date, all of the Equity
Conditions shall have been met. If any of the Equity Conditions shall cease to
be satisfied at any time during the required period, then the Forced Conversion
Notice shall be null and void, ab initio. Any Forced Conversions hereunder shall
be applied ratably to all Holders based on their initial purchases of Preferred
Stock.

                                       20
<PAGE>

         Section 9. Redemption Upon Triggering Events.

          a) "Triggering Event" means any one or more of the following events
     (whatever the reason and whether it shall be voluntary or involuntary or
     effected by operation of law or pursuant to any judgment, decree or order
     of any court, or any order, rule or regulation of any administrative or
     governmental body):

               i. the failure of a Registration Statement to be declared
          effective by the Commission on or prior to the 180th calendar day
          after the Original Issue Date;

               ii. if, during the Effectiveness Period, the effectiveness of the
          Registration Statement lapses for any reason for more than an
          aggregate of 25 Trading Days (which need not be consecutive days)
          during any 12 month period, or the Holder shall not be permitted to
          resell Registrable Securities under the Registration Statement for
          more than an aggregate of 25 Trading Days (which need not be
          consecutive days) during any 12 month period; provided, however, that
          in the event that the Corporation is negotiating a merger,
          consolidation, acquisition or sale of all or substantially all of its
          assets or a similar transaction and in the written opinion of counsel
          to the Corporation, the Registration Statement, would be required to
          be amended to include information concerning such transactions or the
          parties thereto that is not available or may not be publicly disclosed
          at the time, the Corporation shall be permitted an additional 20
          consecutive Trading Days during any 12 month period relating to such
          an event;

               iii. the Corporation shall fail to deliver certificates
          representing Conversion Shares issuable upon a conversion hereunder
          that comply with the provisions hereof on or prior to the 5th Trading
          Day after such shares are required to be delivered hereunder, or the
          Corporation shall provide written notice to any Holder, including by
          way of public announcement, at any time, of its intention not to
          comply with requests for conversion of any shares of Preferred Stock
          in accordance with the terms hereof, which default is not cured if
          possible to cure within 3 Trading Days of the notice of such default
          sent by the Holder;

                                       21
<PAGE>

               iv. one of the Events (as defined in the Registration Rights
          Agreement) described in subsections (i), (ii) or (iii) of Section 2(b)
          of the Registration Rights Agreement shall not have been cured to the
          reasonable satisfaction of the Holders prior to the expiration of 30
          days from the Event Date (as defined in the Registration Rights
          Agreement) relating thereto;

               v. the Corporation shall fail for any reason to pay in full the
          amount of cash due pursuant to a Buy-In within 10 Trading Days after
          notice therefor is delivered hereunder;

               vi. the Corporation shall fail to have available a sufficient
          number of authorized and unreserved shares of Common Stock to issue to
          such Holder upon a conversion hereunder;

               vii. the Corporation shall fail to observe or perform any other
          covenant, agreement or warranty contained in, or otherwise commit any
          material breach of the Transaction Documents, and such failure or
          breach shall not, if subject to the possibility of a cure by the
          Corporation, have been remedied within 10 Trading Days after the date
          on which written notice of such failure or breach shall have been
          given;

               viii. any breach of the agreements delivered to the initial
          Holders at the Closing pursuant to Section 2.2(a)(v) of the Purchase
          Agreement;

               ix. the Corporation shall be party to a Change of Control
          Transaction, Fundamental Transaction (other than an Automatic
          Conversion Fundamental Transaction) or shall agree to sell or dispose
          of all or in excess of 33% of its assets in one or more transactions
          (whether or not such sale would constitute a Change of Control
          Transaction) or shall redeem or repurchase its outstanding shares of
          Common Stock or other equity securities of the Corporation for an
          aggregate purchase price in excess of $250,000 (other than redemption
          of Conversion Shares and repurchases of shares of Common Stock or
          other equity securities of departing officers and directors of the
          Corporation; provided no repurchase shall exceed $100,000 for any
          officer or director);

               x. there shall have occurred a Bankruptcy Event;

               xi. the Common Stock shall fail to be listed or quoted for
          trading on a Principal Market for more than 10 consecutive Trading
          Days; or

                                       22
<PAGE>

               xii. the Common Stock shall fail to be listed or quoted for
          trading on a Principal Market for more than 10 Trading Days, which
          need not be consecutive Trading Days, and the Company shall not
          promptly have the Common Stock quoted on the OTC Bulletin Board or
          shall not use commercially reasonable efforts to have the Common Stock
          re-listed or re-quoted on the Principal Market or listed or quoted on
          another Principal Market as soon as reasonably practicable.

               b) Upon the occurrence of a Triggering Event, each Holder shall
          (in addition to all other rights it may have hereunder or under
          applicable law) have the right, exercisable at the sole option of such
          Holder, to require the Corporation to, (i) with respect to the
          Triggering Events set forth in Sections 9(a)(iii), (v), (ix) (as to
          such transactions approved by the Board of Directors of the Company),
          (x)(as to voluntary filings only) and (xii), redeem all of the
          Preferred Stock then held by such Holder for a redemption price, in
          cash, equal to the Triggering Redemption Amount; or, (ii) at the
          option of the Holder and with respect to the Triggering Events set
          forth in Sections 9(a)(i), (ii), (iv), (vi), (vii), (viii), (ix) (as
          to such transactions not approved by the Board of Directors of the
          Company), (x)(as to involuntary filings only) and (xi), either (A)
          redeem all of the Preferred Stock then held by such Holder for a
          redemption price, in shares of Common Stock, equal to a number of
          shares of Common Stock equal to the Triggering Redemption Amount
          divided by 90% of the average of the 10 VWAPs immediately prior to the
          date of election hereunder or (B) increase the dividend on all of the
          outstanding Preferred Stock held by such Holder to equal 12% per annum
          thereafter. The Triggering Redemption Amount, in cash or in shares, if
          the Corporation elects clauses (i) or (ii)(B) above, shall be due and
          payable or issuable, as the case may be, within 10 Trading Days of the
          date on which the notice for the payment therefor is provided by a
          Holder (the "Triggering Redemption Payment Date"). If the Corporation
          fails to pay the Triggering Redemption Amount hereunder in full
          pursuant to this Section on the date such amount is due in accordance
          with this Section (whether in cash or shares of Common Stock), the
          Corporation will pay interest thereon at a rate of 15% per annum (or
          such lesser amount permitted by applicable law), accruing daily from
          such date until the Triggering Redemption Amount, plus all such
          interest thereon, is paid in full. For purposes of this Section, a
          share of Preferred Stock is outstanding until such date as the Holder
          shall have received Conversion Shares upon a conversion (or attempted
          conversion) thereof that meets the requirements hereof or has been
          paid the Triggering Redemption Amount plus all accrued but unpaid
          dividends and all accrued but unpaid liquidated damages in cash.

                                       23
<PAGE>

         Section 10. Miscellaneous.

               a) Notices. Any and all notices or other communications or
          deliveries to be provided by the Holders hereunder, including, without
          limitation, any Notice of Conversion, shall be in writing and
          delivered personally, by facsimile, sent by a nationally recognized
          overnight courier service, addressed to the Corporation, at the
          address set forth above, facsimile number (973) 256-8211, ATTN: CHIEF
          FINANCIAL OFFICER or such other addresses or facsimile numbers as the
          Corporation may specify for such purposes by notice to the Holders
          delivered in accordance with this Section 4(g), WITH COPIES THEREOF
          (WHICH COPIES SHALL BE REQUIRED TO BE DELIVERED FOR SUCH NOTICE TO BE
          EFFECTIVE) TO EACH OF (1) FRIEDMAN KAPLAN SEILER & ADELMAN LLP, 1633
          BROADWAY, 46TH FLOOR, NEW YORK, NY 10019-6708, ATTENTION: RICHARD M.
          HOFFMAN, ESQ., FACSIMILE NUMBER (212) 833-1250, AND GLOBAL INTERACTIVE
          GAMING LTD., CENTRE POINT TOWER, 103 NEW OXFORD STREET, LONDON WC1A
          100, ATTENTION: STEVEN SALMON, FACSIMILE NUMBER +44-207-663-8951. Any
          and all notices or other communications or deliveries to be provided
          by the Corporation hereunder shall be in writing and delivered
          personally, by facsimile, sent by a nationally recognized overnight
          courier service addressed to each Holder at the facsimile telephone
          number or address of such Holder appearing on the books of the
          Corporation, or if no such facsimile telephone number or address
          appears, at the principal place of business of the Holder. Any notice
          or other communication or deliveries hereunder shall be deemed given
          and effective on the earliest of (i) the date of transmission, if such
          notice or communication is delivered via facsimile at the facsimile
          telephone number specified in this Section prior to 5:30 p.m. (New
          York City time) on a Trading Day and an electronic confirmation of
          delivery is received by the sender, (ii) the next Trading Day after
          the date of transmission, if such notice or communication is delivered
          via facsimile at the facsimile telephone number specified in this
          Section on a day that is not a Trading Day or later than 5:30 p.m.
          (New York City time) on any Trading Day, (iii) three Trading Days
          following the date of mailing, if sent by nationally recognized
          overnight courier service, or (iv) upon actual receipt by the party to
          whom such notice is required to be given. The address for such notices
          and communications are those set forth on the signature pages hereof,
          or such other address as may be designated in writing hereafter, in
          the same manner, by such Person.

               b) Absolute Obligation. Except as expressly provided herein, no
          provision of this Certificate of Designation shall alter or impair the
          obligation of the Corporation, which is absolute and unconditional, to
          pay the liquidated damages (if any) on, the shares of Preferred Stock
          at the time, place, and rate, and in the coin or currency, herein
          prescribed.

               c) Lost or Mutilated Preferred Stock Certificate. If a Holder's
          Preferred Stock certificate shall be mutilated, lost, stolen or
          destroyed, the Corporation shall issue or caused to be issued in
          exchange and substitution for and upon cancellation thereof, or in
          lieu of and substitution therefor, a new certificate for the shares of
          Preferred Stock so mutilated, lost, stolen or destroyed but only upon
          receipt of evidence of such loss, theft or destruction of such
          certificate, and of the ownership hereof, and indemnity, if requested,
          all reasonably satisfactory to the Corporation.

                                       24
<PAGE>

               d) Governing Law. All questions concerning the construction,
          validity, enforcement and interpretation of this Certificate of
          Designation shall be governed by and construed and enforced in
          accordance with the internal laws of the State of New York, without
          regard to the principles of conflicts of law thereof. Each party
          agrees that all legal proceedings concerning the interpretations,
          enforcement and defense of the transactions contemplated by this
          Certificate of Designation and any other Transaction Documents
          (whether brought against a party hereto or its respective affiliates,
          directors, officers, shareholders, employees or agents) shall be
          commenced exclusively in the state and federal courts sitting in the
          City of New York, borough of Manhattan (the "New York Courts"). Each
          party hereby irrevocably submits to the exclusive jurisdiction of the
          New York Courts for the adjudication of any dispute hereunder or in
          connection herewith or with any transaction contemplated hereby or
          discussed herein (including with respect to the enforcement of any of
          the Transaction Documents), and hereby irrevocably waives, and agrees
          not to assert in any suit, action or proceeding, any claim that it is
          not personally subject to the jurisdiction of any such court, or that
          the New York Courts are an improper or inconvenient venue for such
          proceeding. Each party hereby irrevocably waives personal service of
          process and consents to process being served in any such suit, action
          or proceeding by mailing a copy thereof via registered or certified
          mail or overnight delivery (with evidence of delivery) to such party
          at the address in effect for notices to it under this Certificate of
          Designation and agrees that such service shall constitute good and
          sufficient service of process and notice thereof. Nothing contained
          herein shall be deemed to limit in any way any right to serve process
          in any manner permitted by law. The parties hereto hereby irrevocably
          waive, to the fullest extent permitted by applicable law, any and all
          right to trial by jury in any legal proceeding arising out of or
          relating to this Certificate of Designation or the transactions
          contemplated hereby. If either party shall commence an action or
          proceeding to enforce any provisions of this Certificate of
          Designation, then the prevailing party in such action or proceeding
          shall be reimbursed by the other party for its attorneys fees and
          other costs and expenses incurred with the investigation, preparation
          and prosecution of such action or proceeding.

               e) Waiver. Any waiver by the Corporation or the Holder of a
          breach of any provision of this Certificate of Designation shall not
          operate as or be construed to be a waiver of any other breach of such
          provision or of any breach of any other provision of this Certificate
          of Designation. The failure of the Corporation or the Holder to insist
          upon strict adherence to any term of this Certificate of Designation
          on one or more occasions shall not be considered a waiver or deprive
          that party of the right thereafter to insist upon strict adherence to
          that term or any other term of this Certificate of Designation. Any
          waiver must be in writing.

               f) Severability. If any provision of this Certificate of
          Designation is invalid, illegal or unenforceable, the balance of this
          Certificate of Designation shall remain in effect, and if any
          provision is inapplicable to any person or circumstance, it shall
          nevertheless remain applicable to all other persons and circumstances.
          If it shall be found that any interest or other amount deemed interest
          due hereunder violates applicable laws governing usury, the applicable
          rate of interest due hereunder shall automatically be lowered to equal
          the maximum permitted rate of interest.

                                       25
<PAGE>

               g) Next Trading Day. Whenever any payment or other obligation
          hereunder shall be due on a day other than a Trading Day, such payment
          shall be made on the next succeeding Trading Day.

               h) Headings. The headings contained herein are for convenience
          only, do not constitute a part of this Certificate of Designation and
          shall not be deemed to limit or affect any of the provisions hereof.

                              *********************

                                       26
<PAGE>

RESOLVED, FURTHER, the Chief Executive Officer, President, Chief Financial
Officer and Secretary of the Corporation be, and each of them acting
individually hereby is, authorized and empowered in the name and on behalf of
the Corporation, to prepare and file a Certificate of Designation of
Preferences, Rights and Limitations in accordance with the foregoing resolution
and the provisions of Delaware law.

        IN WITNESS WHEREOF, the undersigned have executed this Certificate this
12th day of November 2004.

/s/ James McDade                                        /s/ Bernard Albanese
Name: James McDade                                      Name:  Bernard Albanese
Title:  Chief Financial Officer                         Title:  President

                                       27

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