Document:

<PAGE>
                                                                    EXHIBIT 4.14

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                                ELCOR CORPORATION

                                  $120,000,000
                           Aggregate Principal Amount
                                 of Senior Notes

                                   $60,000,000
                          6.99% Senior Notes, Series A
                                due June 15, 2009

                                   $60,000,000
                          7.49% Senior Notes, Series B
                                due June 15, 2012

                                   ----------

                             NOTE PURCHASE AGREEMENT

                                   ----------

                            Dated as of June 1, 2002

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                                TABLE OF CONTENTS

<Table>
<Caption>
Section                                                                                                       Page
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<S>                                                                                                           <C>
1.       AUTHORIZATION OF NOTES..................................................................................1

2.       SALE AND PURCHASE OF NOTES..............................................................................2

3.       CLOSING.................................................................................................2

4.       CONDITIONS TO CLOSING...................................................................................2
         4.1.     Representations and Warranties.................................................................2
         4.2.     Performance; No Default........................................................................2
         4.3.     Compliance Certificates........................................................................3
         4.4.     Opinions of Counsel............................................................................3
         4.5.     Purchase Permitted By Applicable Law, etc......................................................3
         4.6.     Sale of Other Notes............................................................................3
         4.7.     Payment of Special Counsel Fees................................................................4
         4.8.     Private Placement Number.......................................................................4
         4.9.     Changes in Corporate Structure.................................................................4
         4.10.    Subsidiary Guaranty............................................................................4
         4.11.    Proceedings and Documents......................................................................4

5.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................................4
         5.1.     Organization; Power and Authority..............................................................4
         5.2.     Authorization, etc.............................................................................5
         5.3.     Disclosure.....................................................................................5
         5.4.     Organization and Ownership of Shares of Subsidiaries; Affiliates...............................6
         5.5.     Financial Statements...........................................................................6
         5.6.     Compliance with Laws, Other Instruments, etc...................................................7
         5.7.     Governmental Authorizations, etc...............................................................7
         5.8.     Litigation; Observance of Agreements, Statutes and Orders......................................7
         5.9.     Taxes..........................................................................................8
         5.10.    Title to Property; Leases......................................................................8
         5.11.    Licenses, Permits, etc.........................................................................8
         5.12.    Compliance with ERISA..........................................................................9
         5.13.    Private Offering by the Company...............................................................10
         5.14.    Use of Proceeds; Margin Regulations...........................................................10
         5.15.    Existing Debt; Future Liens...................................................................10
         5.16.    Foreign Assets Control Regulations, etc.......................................................11
         5.17.    Status under Certain Statutes.................................................................11
         5.18.    Environmental Matters.........................................................................11
         5.19.    Solvency of Subsidiary Guarantors.............................................................11
</Table>

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<Table>
<S>                                                                                                             <C>
6.       REPRESENTATIONS OF THE PURCHASERS......................................................................12
         6.1.     Purchase for Investment.......................................................................12
         6.2.     Source of Funds...............................................................................12

7.       INFORMATION AS TO COMPANY..............................................................................13
         7.1.     Financial and Business Information............................................................13
         7.2.     Officer's Certificate.........................................................................16
         7.3.     Inspection....................................................................................17

8.       PREPAYMENT OF THE NOTES................................................................................17
         8.1.     No Scheduled Prepayments......................................................................17
         8.2.     Optional Prepayments with Make-Whole Amount...................................................17
         8.3.     Allocation of Partial Prepayments.............................................................18
         8.4.     Maturity; Surrender, etc......................................................................18
         8.5.     Purchase of Notes.............................................................................18
         8.6.     Make-Whole Amount.............................................................................18

9.       AFFIRMATIVE COVENANTS..................................................................................20
         9.1.     Compliance with Law...........................................................................20
         9.2.     Insurance.....................................................................................20
         9.3.     Maintenance of Properties.....................................................................20
         9.4.     Payment of Taxes and Claims...................................................................21
         9.5.     Corporate Existence, etc......................................................................21

10.      NEGATIVE COVENANTS.....................................................................................21
         10.1.    Consolidated Net Debt.........................................................................21
         10.2.    Interest Coverage.............................................................................21
         10.3.    Adjusted Consolidated Net Worth...............................................................21
         10.4.    Debt of Restricted Subsidiaries...............................................................22
         10.5.    Liens.........................................................................................22
         10.6.    Sale of Assets................................................................................24
         10.7.    Mergers, Consolidations, etc..................................................................25
         10.8.    Disposition of Stock of Restricted Subsidiaries...............................................26
         10.9.    Designation of Restricted and Unrestricted Subsidiaries.......................................26
         10.10.   Subsidiary Guaranty...........................................................................27
         10.11.   Nature of Business............................................................................27
         10.12.   Transactions with Affiliates..................................................................27

11.      EVENTS OF DEFAULT......................................................................................27

12.      REMEDIES ON DEFAULT, ETC...............................................................................30
         12.1.    Acceleration..................................................................................30
         12.2.    Other Remedies................................................................................30
         12.3.    Rescission....................................................................................30
         12.4.    No Waivers or Election of Remedies, Expenses, etc.............................................31
</Table>

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<Table>
<S>                                                                                                             <C>
13.      REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..........................................................31
         13.1.    Registration of Notes.........................................................................31
         13.2.    Transfer and Exchange of Notes................................................................31
         13.3.    Replacement of Notes..........................................................................32

14.      PAYMENTS ON NOTES......................................................................................32
         14.1.    Place of Payment..............................................................................32
         14.2.    Home Office Payment...........................................................................33

15.      EXPENSES, ETC..........................................................................................33
         15.1.    Transaction Expenses..........................................................................33
         15.2.    Survival......................................................................................33

16.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT...........................................34

17.      AMENDMENT AND WAIVER...................................................................................34
         17.1.    Requirements..................................................................................34
         17.2.    Solicitation of Holders of Notes..............................................................34
         17.3.    Binding Effect, etc...........................................................................35
         17.4.    Notes held by Company, etc....................................................................35

18.      NOTICES................................................................................................35

19.      REPRODUCTION OF DOCUMENTS..............................................................................36

20.      CONFIDENTIAL INFORMATION...............................................................................36

21.      SUBSTITUTION OF PURCHASER..............................................................................37

22.      RELEASE OF SUBSIDIARY GUARANTOR........................................................................37

23.      MISCELLANEOUS..........................................................................................38
         23.1.    Successors and Assigns........................................................................38
         23.2.    Payments Due on Non-Business Days.............................................................38
         23.3.    Severability..................................................................................38
         23.4.    Construction..................................................................................38
         23.5.    Counterparts..................................................................................38
         23.6.    Governing Law.................................................................................38
</Table>

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SCHEDULE A       --     Information Relating to Purchasers
SCHEDULE B       --     Defined Terms
SCHEDULE B-1     --     Existing Priority Debt
SCHEDULE B-2     --     Existing Investments

SCHEDULE 4.9     --     Changes in Corporate Structure
SCHEDULE 5.3     --     Disclosure Materials
SCHEDULE 5.4     --     Subsidiaries; Affiliates
SCHEDULE 5.5     --     Financial Statements
SCHEDULE 5.8     --     Litigation
SCHEDULE 5.11    --     Licenses, Permits, etc.
SCHEDULE 5.14    --     Use of Proceeds
SCHEDULE 5.15    --     Existing Debt
SCHEDULE 10.5    --     Liens

EXHIBIT 1(a)     --     Form of Senior Note, Series A
EXHIBIT 1(b)     --     Form of Senior Note, Series B
EXHIBIT 1(c)     --     Form of Subsidiary Guaranty
EXHIBIT 4.4(a)   --     Form of Opinion of Counsel for the Company
EXHIBIT 4.4(b)   --     Form of Opinion of Special Counsel for the Purchasers

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                         [ELCOR CORPORATION LETTERHEAD]

                                  $120,000,000
                           Aggregate Principal Amount
                                 of Senior Notes

           $60,000,000 6.99% Senior Notes, Series A, due June 15, 2009
           $60,000,000 7.49% Senior Notes, Series B, due June 15, 2012

                                                       Dated as of June 1, 2002

TO EACH OF THE PURCHASERS LISTED IN
     THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

          ELCOR CORPORATION, a Delaware corporation (the "Company"), agrees with
you as follows:

1.   AUTHORIZATION OF NOTES.

          The Company has authorized the issue and sale of $60,000,000 aggregate
principal amount of its 6.99% Senior Notes, Series A, due June 15, 2009 (the
"Series A Notes") and $60,000,000 aggregate principal amount of its 7.49% Senior
Notes, Series B, due June 15, 2012 (the "Series B Notes" and, collectively with
the Series A Notes, the "Notes", such term to include any such Notes issued in
substitution therefor pursuant to Section 13 of this Agreement). The Notes shall
be substantially in the form set out in Exhibits 1(a) and 1(b) with such changes
therefrom, if any, as may be approved by you, the Other Purchasers and the
Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement. Subject to
Section 22, the Notes will be guaranteed by each Restricted Subsidiary that is
or in the future becomes a signatory to the Bank Guaranty or a borrower under
the Credit Agreement (individually, a "Subsidiary Guarantor" and collectively,
the "Subsidiary Guarantors") pursuant to a guaranty in substantially the form of
Exhibit 1(c) (the "Subsidiary Guaranty"). The Notes shall be unsecured and shall
rank pari passu with the Company's Debt to Banks under the Credit Agreement and
with all other senior unsecured Debt of the Company.

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2.   SALE AND PURCHASE OF NOTES.

          Subject to the terms and conditions of this Agreement, the Company
will issue and sell to you and each of the other purchasers named in Schedule A
(the "Other Purchasers"), and you and the Other Purchasers will purchase from
the Company, at the Closing provided for in Section 3, Notes of the series and
in the principal amount specified opposite your names in Schedule A at the
purchase price of 100% of the principal amount thereof. Your obligation
hereunder and the obligations of the Other Purchasers are several and not joint
obligations and you shall have no liability to any Person for the performance or
non-performance by any Other Purchaser hereunder.

3.   CLOSING.

          The sale and purchase of the Notes to be purchased by you and the
Other Purchasers shall occur at the offices of Gardner, Carton & Douglas, Quaker
Tower, Suite 3400, 321 North Clark Street, Chicago, Illinois 60610 at 9:00 a.m.,
Chicago time, at a closing (the "Closing") on June 10, 2002 or on such other
Business Day thereafter on or prior to June 14, 2002 as may be agreed upon by
the Company and you and the Other Purchasers. At the Closing the Company will
deliver to you the Notes to be purchased by you in the form of a single Note (or
such greater number of Notes in denominations of at least $100,000 as you may
request) dated the date of the Closing and registered in your name (or in the
name of your nominee), against delivery by you to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to
account number 1252603284 at Bank of America, 910 Main Street, Dallas, Texas
75202, ABA #111000012. If at the Closing the Company fails to tender such Notes
to you as provided above in this Section 3, or any of the conditions specified
in Section 4 shall not have been fulfilled to your satisfaction, you shall, at
your election, be relieved of all further obligations under this Agreement,
without thereby waiving any rights you may have by reason of such failure or
such nonfulfillment.

4.   CONDITIONS TO CLOSING.

          Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:

4.1. REPRESENTATIONS AND WARRANTIES.

          The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.

4.2. PERFORMANCE; NO DEFAULT.

          The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after giving effect to the issue and sale
of the Notes (and the application of

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the proceeds thereof as contemplated by Schedule 5.14) no Default or Event of
Default shall have occurred and be continuing. Neither the Company nor any
Restricted Subsidiary shall have entered into any transaction since the date of
the Memorandum that would have been prohibited by Sections 10.1 through 10.12
hereof had such Sections applied since such date.

4.3. COMPLIANCE CERTIFICATES.

          (a) Officer's Certificate. The Company shall have delivered to you an
     Officer's Certificate, dated the date of the Closing, certifying that the
     conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

          (b) Secretary's Certificate. Each of the Company and each Subsidiary
     Guarantor shall have delivered to you a certificate certifying as to the
     resolutions attached thereto and other corporate proceedings relating to
     the authorization, execution and delivery of the Notes and the Agreement or
     the Subsidiary Guaranty, as the case may be.

4.4. OPINIONS OF COUNSEL.

          You shall have received opinions in form and substance satisfactory to
you, dated the date of the Closing (a) from Baker & McKenzie, counsel to the
Company, covering the matters set forth in Exhibit 4.4(a) and covering such
other matters incident to the transactions contemplated hereby as you or your
counsel may reasonably request (and the Company instructs its counsel to deliver
such opinion to you) and (b) from Gardner, Carton & Douglas, your special
counsel in connection with such transactions, substantially in the form set
forth in Exhibit 4.4(b) and covering such other matters incident to such
transactions as you may reasonably request.

4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.

          On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation U, T or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.

4.6. SALE OF OTHER NOTES.

          Contemporaneously with the Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Notes to be purchased by
them at the Closing as specified in Schedule A.

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4.7. PAYMENT OF SPECIAL COUNSEL FEES.

          Without limiting the provisions of Section 15.1, the Company shall
have paid on or before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4, to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.

4.8. PRIVATE PLACEMENT NUMBER.

          A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained by Gardner,
Carton & Douglas for each series of the Notes.

4.9. CHANGES IN CORPORATE STRUCTURE.

          Except as specified in Schedule 4.9, the Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.

4.10. SUBSIDIARY GUARANTY.

          Each Subsidiary Guarantor shall have executed and delivered the
Subsidiary Guaranty in favor of you and the Other Purchasers.

4.11. PROCEEDINGS AND DOCUMENTS.

          All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.

5.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

          The Company represents and warrants to you that:

5.1. ORGANIZATION; POWER AND AUTHORITY.

          The Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and

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proposes to transact, to execute and deliver this Agreement and the Notes and to
perform the provisions hereof and thereof.

5.2. AUTHORIZATION, ETC.

          This Agreement and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will constitute,
a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

          The Subsidiary Guaranty has been duly authorized by all necessary
corporate or partnership action on the part of each Subsidiary Guarantor and
upon execution and delivery thereof will constitute the legal, valid and binding
obligation of each Subsidiary Guarantor, enforceable against each Subsidiary
Guarantor in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

5.3. DISCLOSURE.

          The Company, through its agent, Banc of America Securities LLC, has
delivered to you and each Other Purchaser a copy of a Private Placement
Memorandum, dated May 2002 (the "Memorandum"), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Company and
its Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the
Memorandum, the documents, certificates or other writings delivered to you by or
on behalf of the Company in connection with the transactions contemplated hereby
and the financial statements listed in Schedule 5.5, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Memorandum
or as expressly described in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the financial
statements listed in Schedule 5.5, since June 30, 2001, there has been no change
in the financial condition, operations, business or properties of the Company or
any Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact known
to the Company that could reasonably be expected to have a Material Adverse
Effect that has not been set forth herein or in the Memorandum or in the other
documents, certificates and other writings delivered to you by or on behalf of
the Company specifically for use in connection with the transactions
contemplated hereby.

                                       5
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5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.

          (a) Schedule 5.4 contains (except as noted therein) complete and
     correct lists of: (i) the Company's Subsidiaries, showing, as to each
     Subsidiary, the correct name thereof, the jurisdiction of its organization,
     and the percentage of shares of each class of its capital stock or similar
     equity interests outstanding owned by the Company and each other
     Subsidiary, (ii) the Company's Affiliates, other than Subsidiaries, and
     (iii) the Company's directors and senior officers. Each Subsidiary listed
     in Schedule 5.4 is designated a Restricted Subsidiary by the Company.

          (b) All of the outstanding shares of capital stock or similar equity
     interests of each Subsidiary shown in Schedule 5.4 as being owned by the
     Company and its Subsidiaries have been validly issued, are fully paid and
     nonassessable and are owned by the Company or another Subsidiary free and
     clear of any Lien (except as otherwise disclosed in Schedule 5.4).

          (c) Each Subsidiary identified in Schedule 5.4 is a corporation or
     other legal entity duly organized, validly existing and in good standing
     under the laws of its jurisdiction of organization, and is duly qualified
     as a foreign corporation or other legal entity and is in good standing in
     each jurisdiction in which such qualification is required by law, other
     than those jurisdictions as to which the failure to be so qualified or in
     good standing could not, individually or in the aggregate, reasonably be
     expected to have a Material Adverse Effect. Each such Subsidiary has the
     corporate or other power and authority to own or hold under lease the
     properties it purports to own or hold under lease and to transact the
     business it transacts and proposes to transact.

          (d) No Subsidiary is a party to, or otherwise subject to, any legal
     restriction or any agreement (other than this Agreement, the agreements
     listed on Schedule 5.4 and customary limitations imposed by corporate or
     limited partnership law statutes) restricting the ability of such
     Subsidiary to pay dividends out of profits or make any other similar
     distributions of profits to the Company or any of its Subsidiaries that
     owns outstanding shares of capital stock or similar equity interests of
     such Subsidiary.

5.5. FINANCIAL STATEMENTS.

          The Company has delivered to you and each Other Purchaser copies of
the financial statements of the Company and its Subsidiaries listed on Schedule
5.5. All of said financial statements (including in each case the related
schedules and notes) fairly present in all material respects the consolidated
financial position of the Company and its Subsidiaries as of the respective
dates specified in such Schedule and the consolidated results of their
operations and cash flows for the respective periods so specified and have been
prepared in accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto (subject, in the case of any
interim financial statements, to normal year-end adjustments).

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<PAGE>

5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.

          The execution, delivery and performance by the Company of this
Agreement and the Notes will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of their
respective properties may be bound or affected, (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to the Company or any Subsidiary or (iii) violate any provision of any statute
or other rule or regulation of any Governmental Authority applicable to the
Company or any Subsidiary.

          The execution, delivery and performance by each Subsidiary Guarantor
of the Subsidiary Guaranty will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of such Subsidiary Guarantor under any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter or by-laws,
or any other agreement or instrument to which such Subsidiary Guarantor is bound
or by which such Subsidiary Guarantor or any of its properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to such Subsidiary Guarantor or
(iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to such Subsidiary Guarantor.

          The Company and its Subsidiaries are in compliance with the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA PATRIOT) Act of 2001.

5.7. GOVERNMENTAL AUTHORIZATIONS, ETC.

          No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the Notes
or the execution, delivery or performance by each Subsidiary Guarantor of the
Subsidiary Guaranty.

5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.

          (a) Except as disclosed in Schedule 5.8, there are no actions, suits
     or proceedings pending or, to the knowledge of the Company, threatened
     against or affecting the Company or any Subsidiary or any property of the
     Company or any Subsidiary in any court or before any arbitrator of any kind
     or before or by any Governmental Authority that, individually or in the
     aggregate, could reasonably be expected to have a Material Adverse Effect.

          (b) Neither the Company nor any Subsidiary is in default under any
     term of any agreement or instrument to which it is a party or by which it
     is bound, or any order, judgment, decree or ruling of any court, arbitrator
     or Governmental Authority or is in

                                       7
<PAGE>

     violation of any applicable law, ordinance, rule or regulation (including
     without limitation Environmental Laws) of any Governmental Authority, which
     default or violation, individually or in the aggregate, could reasonably be
     expected to have a Material Adverse Effect.

5.9. TAXES.

          The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (i) the amount of which is not
individually or in the aggregate Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate. The Federal income tax
liabilities of the Company and its Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended June 30, 1994.

5.10. TITLE TO PROPERTY; LEASES.

          The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.

5.11. LICENSES, PERMITS, ETC.

          Except as disclosed in Schedule 5.11,

          (a) the Company and its Subsidiaries own or possess all licenses,
     permits, franchises, authorizations, patents, copyrights, service marks,
     trademarks and trade names, or rights thereto, that individually or in the
     aggregate are Material, without known conflict with the rights of others;

          (b) to the best knowledge of the Company, no product of the Company
     infringes in any material respect any license, permit, franchise,
     authorization, patent, copyright, service mark, trademark, trade name or
     other right owned by any other Person; and

                                       8
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          (c) to the best knowledge of the Company, there is no Material
     violation by any Person of any right of the Company or any of its
     Subsidiaries with respect to any patent, copyright, service mark,
     trademark, trade name or other right owned or used by the Company or any of
     its Subsidiaries.

5.12. COMPLIANCE WITH ERISA.

          (a) The Company and each ERISA Affiliate have operated and
     administered each Plan in compliance with all applicable laws except for
     such instances of noncompliance as have not resulted in and could not
     reasonably be expected to result in a Material Adverse Effect. Neither the
     Company nor any ERISA Affiliate has incurred any liability pursuant to
     Title I or IV of ERISA or the penalty or excise tax provisions of the Code
     relating to employee benefit plans (as defined in Section 3 of ERISA), and
     no event, transaction or condition has occurred or exists that could
     reasonably be expected to result in the incurrence of any such liability by
     the Company or any ERISA Affiliate, or in the imposition of any Lien on any
     of the rights, properties or assets of the Company or any ERISA Affiliate,
     in either case pursuant to Title I or IV of ERISA or to such penalty or
     excise tax provisions or to Section 401(a)(29) or 412 of the Code, other
     than such liabilities or Liens as would not be individually or in the
     aggregate Material.

          (b) The present value of the aggregate benefit liabilities under each
     of the Plans (other than Multiemployer Plans), determined as of the end of
     such Plan's most recently ended plan year on the basis of the actuarial
     assumptions specified for funding purposes in such Plan's most recent
     actuarial valuation report, did not exceed the aggregate current value of
     the assets of such Plan allocable to such benefit liabilities. The term
     "benefit liabilities" has the meaning specified in section 4001 of ERISA
     and the terms "current value" and "present value" have the meaning
     specified in section 3 of ERISA.

          (c) The Company and its ERISA Affiliates have not incurred withdrawal
     liabilities (and are not subject to contingent withdrawal liabilities)
     under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
     individually or in the aggregate are Material.

          (d) The expected postretirement benefit obligation (determined as of
     the last day of the Company's most recently ended fiscal year in accordance
     with Financial Accounting Standards Board Statement No. 106, without regard
     to liabilities attributable to continuation coverage mandated by section
     4980B of the Code) of the Company and its Subsidiaries is not Material.

          (e) The execution and delivery of this Agreement and the issuance and
     sale of the Notes hereunder will not involve any transaction that is
     subject to the prohibitions of section 406 of ERISA or in connection with
     which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the
     Code. The representation by the Company in the first sentence of this
     Section 5.12(e) is made in reliance upon and subject to the accuracy of
     your representation in Section 6.2 as to the sources of the funds used to
     pay the purchase price of the Notes to be purchased by you.

                                       9
<PAGE>

5.13. PRIVATE OFFERING BY THE COMPANY.

          Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any person other than you, the Other Purchasers and not more than 44 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Notes to the registration requirements of Section 5 of the Securities Act.

5.14. USE OF PROCEEDS; MARGIN REGULATIONS.

          The Company will apply the proceeds of the sale of the Notes for
general corporate purposes, including to refinance Debt as set forth in Schedule
5.14. No part of the proceeds from the sale of the Notes will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 1% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 1% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation U.

5.15. EXISTING DEBT; FUTURE LIENS.

          (a) Except as described therein, Schedule 5.15 sets forth a complete
     and correct list of all outstanding Debt of the Company and its
     Subsidiaries as of March 31, 2002, since which date there has been no
     Material change in the amounts, interest rates, sinking funds, installment
     payments or maturities of the Debt of the Company or its Subsidiaries.
     Neither the Company nor any Subsidiary is in default and no waiver of
     default is currently in effect, in the payment of any principal or interest
     on any Debt of the Company or such Subsidiary and no event or condition
     exists with respect to any Debt of the Company or any Subsidiary that would
     permit (or that with notice or the lapse of time, or both, would permit)
     one or more Persons to cause such Debt to become due and payable before its
     stated maturity or before its regularly scheduled dates of payment.

          (b) Except as disclosed in Schedule 5.15, neither the Company nor any
     Subsidiary has agreed or consented to cause or permit in the future (upon
     the happening of a contingency or otherwise) any of its property, whether
     now owned or hereafter acquired, to be subject to a Lien not permitted by
     Section 10.5.

                                       10
<PAGE>

5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC.

          Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.

5.17. STATUS UNDER CERTAIN STATUTES.

          Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended by the
ICC Termination Act, as amended, or the Federal Power Act, as amended.

5.18. ENVIRONMENTAL MATTERS.

          Neither the Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed
to you in writing,

          (a) neither the Company nor any Subsidiary has knowledge of any facts
     which would give rise to any claim, public or private, of violation of
     Environmental Laws or damage to the environment emanating from, occurring
     on or in any way related to real properties now or formerly owned, leased
     or operated by any of them or to other assets or their use, except, in each
     case, such as could not reasonably be expected to result in a Material
     Adverse Effect;

          (b) neither the Company nor any of its Subsidiaries has stored any
     Hazardous Materials on real properties now or formerly owned, leased or
     operated by any of them and has not disposed of any Hazardous Materials in
     a manner contrary to any Environmental Laws in each case in any manner that
     could reasonably be expected to result in a Material Adverse Effect; and

          (c) all buildings on all real properties now owned, leased or operated
     by the Company or any of its Subsidiaries are in compliance with applicable
     Environmental Laws, except where failure to comply could not reasonably be
     expected to result in a Material Adverse Effect.

5.19. SOLVENCY OF SUBSIDIARY GUARANTORS.

          After giving effect to the transactions contemplated herein and after
giving due consideration to any rights of contribution (i) each Subsidiary
Guarantor has received fair consideration and reasonably equivalent value for
the incurrence of its obligations under the

                                       11
<PAGE>

Subsidiary Guaranty, (ii) the fair value of the assets of each Subsidiary
Guarantor (both at fair valuation and at present fair saleable value) exceeds
its liabilities, (ii) each Subsidiary Guarantor is able to and expects to be
able to pay its debts as they mature, and (iii) each Subsidiary Guarantor has
capital sufficient to carry on its business as conducted and as proposed to be
conducted.

6.   REPRESENTATIONS OF THE PURCHASERS.

6.1. PURCHASE FOR INVESTMENT.

          You represent that you are purchasing the Notes for your own account
or for one or more separate accounts maintained by you or for the account of one
or more pension or trust funds and not with a view to the distribution thereof,
provided that the disposition of your or their property shall at all times be
within your or their control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes. You represent that you are an "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
of Regulation D under the Securities Act and you agree that any resale of Notes
by you will comply with the preceding sentence.

6.2. SOURCE OF FUNDS.

          You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:

          (a) the Source is an "insurance company general account" as such term
     is defined in the Department of Labor Prohibited Transaction Exemption
     ("PTE") 95-60 (issued July 12, 1995) ("PTE 95-60") and as of the date of
     this Agreement there is no "employee benefit plan" with respect to which
     the aggregate amount of such general account's reserves and liabilities for
     the contracts held by or on behalf of such employee benefit plan and all
     other employee benefit plans maintained by the same employer (and
     affiliates thereof as defined in Section V(a)(1) of PTE 95-60) or by the
     same employee organization (in each case determined in accordance with the
     provisions of PTE 95-60) exceeds 10% of the total reserves and liabilities
     of such general account (as determined under PTE 95-60) (exclusive of
     separate account liabilities) plus surplus as set forth in the National
     Association of Insurance Commissioners Annual Statement filed with your
     state of domicile; or

          (b) the Source is either (i) an insurance company pooled separate
     account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
     a bank collective investment fund, within the meaning of PTE 91-38 (issued
     July 12, 1991) and, except as you have disclosed to the Company in writing
     pursuant to this paragraph (b), no employee benefit plan or group of plans
     maintained by the same employer or employee

                                       12
<PAGE>

     organization beneficially owns more than 10% of all assets allocated to
     such pooled separate account or collective investment fund; or

          (c) the Source constitutes assets of an "investment fund" (within the
     meaning of Part V of the QPAM Exemption) managed by a "qualified
     professional asset manager" or "QPAM" (within the meaning of Part V of the
     QPAM Exemption), no employee benefit plan's assets that are included in
     such investment fund, when combined with the assets of all other employee
     benefit plans established or maintained by the same employer or by an
     affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
     such employer or by the same employee organization and managed by such
     QPAM, exceed 20% of the total client assets managed by such QPAM, the
     conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
     neither the QPAM nor a person controlling or controlled by the QPAM
     (applying the definition of "control" in Section V(e) of the QPAM
     Exemption) owns a 5% or more interest in the Company and (i) the identity
     of such QPAM and (ii) the names of all employee benefit plans whose assets
     are included in such investment fund have been disclosed to the Company in
     writing pursuant to this paragraph (c); or

          (d) the Source is a governmental plan; or

          (e) the Source is one or more employee benefit plans, or a separate
     account or trust fund comprised of one or more employee benefit plans, each
     of which has been identified to the Company in writing pursuant to this
     paragraph (e); or

          (f) the Source is the assets of one or more employee benefit plans
     that are managed by an "in-house asset manager," as that term is defined in
     PTE 96-23 and such purchase and holding of the Notes is exempt under PTE
     96-23; or

          (g) the Source does not include assets of any employee benefit plan,
     other than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.

7.   INFORMATION AS TO COMPANY.

7.1. FINANCIAL AND BUSINESS INFORMATION

          The Company will deliver to each holder of Notes that is an
Institutional Investor:

          (a) Quarterly Statements -- within 50 days (or such other shorter
     period within which Quarterly Reports on Form 10-Q are required to be
     timely filed with the Securities and Exchange Commission, including any
     extension permitted by Rule 12b-25 of the Exchange Act) after the end of
     each quarterly fiscal period in each fiscal year of the Company (other than
     the last quarterly fiscal period of each such fiscal year), duplicate
     copies of,

                                       13
<PAGE>

               (i) consolidated balance sheet of the Company and its
          Subsidiaries as at the end of such quarter,

               (ii) consolidated statements of income of the Company and its
          Subsidiaries for such quarter and (in the case of the second and third
          quarters) for the portion of the fiscal year ending with such quarter,
          and

               (iii) consolidated statements of cash flows of the Company and
          its Subsidiaries for such quarter or (in the case of the second and
          third quarters) for the portion of the fiscal year ending with such
          quarter,

     setting forth in each case in comparative form the figures for the
     corresponding periods in the previous fiscal year, all in reasonable
     detail, prepared in accordance with GAAP applicable to quarterly financial
     statements generally, and certified by a Senior Financial Officer as fairly
     presenting, in all material respects, the financial position of the
     companies being reported on and their results of operations and cash flows,
     subject to changes resulting from year-end adjustments, provided that
     delivery within the time period specified above of copies of the Company's
     Quarterly Report on Form 10-Q prepared in compliance with the requirements
     therefor and filed with the Securities and Exchange Commission shall be
     deemed to satisfy the requirements of this Section 7.1(a);

          (b) Annual Statements -- within 105 days (or such other shorter period
     within which Annual Reports on Form 10-K are required to be timely filed
     with the Securities and Exchange Commission, including any extension
     permitted by Rule 12b-25 of the Exchange Act) after the end of each fiscal
     year of the Company, duplicate copies of,

               (i) consolidated balance sheet of the Company and its
          Subsidiaries, as at the end of such year, and

               (ii) consolidated statements of income, changes in shareholders'
          equity and cash flows of the Company and its Subsidiaries, for such
          year,

     setting forth in each case in comparative form the figures for the previous
     fiscal year, all in reasonable detail, prepared in accordance with GAAP,
     and accompanied by an opinion of independent certified public accountants
     of recognized national standing, which opinion shall state that such
     financial statements present fairly, in all material respects, the
     financial position of the companies being reported upon and their results
     of operations and cash flows and have been prepared in conformity with
     GAAP, and that the examination of such accountants in connection with such
     financial statements has been made in accordance with generally accepted
     auditing standards, and that such audit provides a reasonable basis for
     such opinion in the circumstances, provided that the delivery within the
     time period specified above of the Company's Annual Report on Form 10-K for
     such fiscal year (together with the Company's annual report to
     shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange
     Act) prepared in accordance with the requirements therefor and filed with
     the Securities and Exchange Commission shall be deemed to satisfy the
     requirements of this Section 7.1(b);

                                       14
<PAGE>

          (c) Unrestricted Subsidiaries -- if, at the time of delivery of any
     financial statements pursuant to Section 7.1(a) or (b), Unrestricted
     Subsidiaries account for more than 10% of (i) the consolidated total assets
     of the Company and its Subsidiaries reflected in the balance sheet included
     in such financial statements or (ii) the consolidated revenues of the
     Company and its Subsidiaries reflected in the consolidated statement of
     income included in such financial statements, an unaudited balance sheet
     for all Unrestricted Subsidiaries taken as whole as at the end of the
     fiscal period included in such financial statements and the related
     unaudited statements of income, stockholders' equity and cash flows for
     such Unrestricted Subsidiaries for such period, together with consolidating
     statements reflecting all eliminations or adjustments necessary to
     reconcile such group financial statements to the consolidated financial
     statements of the Company and its Subsidiaries shall be delivered together
     with the financial statements required pursuant to Sections 7.1(a) and (b);

          (d) SEC and Other Reports -- promptly upon their becoming available,
     one copy of (i) each financial statement, report, notice or proxy statement
     sent by the Company or any Restricted Subsidiary to public securities
     holders generally, and (ii) each regular or periodic report, each
     registration statement other than registration statements on Form S-8
     (without exhibits except as expressly requested by such holder), and each
     prospectus and all amendments thereto filed by the Company or any
     Restricted Subsidiary with the Securities and Exchange Commission and of
     all press releases and other statements made available generally by the
     Company or any Restricted Subsidiary to the public concerning developments
     that are Material;

          (e) Notice of Default or Event of Default -- promptly, and in any
     event within five days after a Responsible Officer becoming aware of the
     existence of any Default or Event of Default or that any Person has given
     any notice or taken any action with respect to a claimed default hereunder
     or that any Person has given notice or taken any action with respect to a
     claimed default of the type referred to in Section 11(f), a written notice
     specifying the nature and period of existence thereof and what action the
     Company is taking or proposes to take with respect thereto;

          (f) ERISA Matters -- promptly, and in any event within five Business
     Days after a Responsible Officer becoming aware of any of the following, a
     written notice setting forth the nature thereof and the action, if any,
     that the Company or an ERISA Affiliate proposes to take with respect
     thereto:

               (i) with respect to any Plan, any reportable event, as defined in
          section 4043(b) of ERISA and the regulations thereunder, for which
          notice thereof has not been waived pursuant to such regulations as in
          effect on the date hereof; or

               (ii) the taking by the PBGC of steps to institute, or the
          threatening by the PBGC of the institution of, proceedings under
          section 4042 of ERISA for the termination of, or the appointment of a
          trustee to administer, any Plan, or the receipt by the Company or any
          ERISA Affiliate of a notice from a Multiemployer

                                       15
<PAGE>

          Plan that such action has been taken by the PBGC with respect to such
          Multiemployer Plan; or

               (iii) any event, transaction or condition that could result in
          the incurrence of any liability by the Company or any ERISA Affiliate
          pursuant to Title I or IV of ERISA or the penalty or excise tax
          provisions of the Code relating to employee benefit plans, or in the
          imposition of any Lien on any of the rights, properties or assets of
          the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
          or such penalty or excise tax provisions, if such liability or Lien,
          taken together with any other such liabilities or Liens then existing,
          could reasonably be expected to have a Material Adverse Effect;

          (g) Notices from Governmental Authority -- promptly, and in any event
     within 30 days of receipt thereof, copies of any notice to the Company or
     any Subsidiary from any Federal or state Governmental Authority relating to
     any order, ruling, statute or other law or regulation that could reasonably
     be expected to have a Material Adverse Effect; and

          (h) Requested Information -- with reasonable promptness, such other
     data and information relating to the business, operations, affairs,
     financial condition, assets or properties of the Company or any of its
     Subsidiaries or relating to the ability of the Company to perform its
     obligations hereunder and under the Notes as from time to time may be
     reasonably requested by any such holder of Notes.

7.2. OFFICER'S CERTIFICATE.

          Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or (b) shall be accompanied by a certificate of a
Senior Financial Officer setting forth:

          (a) Covenant Compliance -- the information (including detailed
     calculations) required in order to establish whether the Company was in
     compliance with the requirements of Section 10.1 through Section 10.12,
     inclusive, during the quarterly or annual period covered by the statements
     then being furnished (including with respect to each such Section, where
     applicable, the calculations of the maximum or minimum amount, ratio or
     percentage, as the case may be, permissible under the terms of such
     Sections, and the calculation of the amount, ratio or percentage then in
     existence); and

          (b) Event of Default -- a statement that such officer has reviewed the
     relevant terms hereof and has made, or caused to be made, under his or her
     supervision, a review of the transactions and conditions of the Company and
     its Subsidiaries from the beginning of the quarterly or annual period
     covered by the statements then being furnished to the date of the
     certificate and that such review shall not have disclosed the existence
     during such period of any condition or event that constitutes a Default or
     an Event of Default or, if any such condition or event existed or exists
     (including any such event or condition resulting from the failure of the
     Company or any Subsidiary to comply

                                       16
<PAGE>

     with any Environmental Law), specifying the nature and period of existence
     thereof and what action the Company shall have taken or proposes to take
     with respect thereto.

7.3. INSPECTION.

          The Company will permit the representatives of each holder of Notes
that is an Institutional Investor:

          (a) No Default -- if no Default or Event of Default then exists, at
     the expense of such holder and upon reasonable prior notice to the Company,
     to visit the principal executive office of the Company, to discuss the
     affairs, finances and accounts of the Company and its Subsidiaries with the
     Company's officers, and (with the consent of the Company, which consent
     will not be unreasonably withheld) its independent public accountants, and
     (with the consent of the Company, which consent will not be unreasonably
     withheld) to visit the other offices and properties of the Company and each
     Restricted Subsidiary, all at such reasonable times and as often as may be
     reasonably requested in writing; and

          (b) Default -- if a Default or Event of Default then exists, at the
     expense of the Company, to visit and inspect any of the offices or
     properties of the Company or any Subsidiary, to examine all their
     respective books of account, records, reports and other papers, to make
     copies and extracts therefrom, and to discuss their respective affairs,
     finances, and accounts with their respective officers and independent
     public accountants (and by this provision the Company authorizes said
     accountants to discuss the affairs, finances and accounts of the Company
     and its Subsidiaries), all at such times and as often as may be requested.

Each holder agrees to treat any information obtained in connection with any
inspection pursuant to this Section 7 as Confidential Information subject to
Section 20 so as to avoid any disclosure obligation on the Company under
Regulation FD under the Exchange Act.

8.   PREPAYMENT OF THE NOTES.

8.1. NO SCHEDULED PREPAYMENTS.

          No regularly scheduled prepayments are due on the Notes prior to their
stated maturity.

8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.

          The Company may, at its option, upon notice as provided below, prepay
at any time all, or from time to time any part of, the Notes in an amount not
less than $1,000,000 in the aggregate in the case of a partial prepayment, at
100% of the principal amount so prepaid, plus the Make-Whole Amount determined
for the prepayment date with respect to such principal amount. The Company will
give each holder of Notes written notice of each optional prepayment under this
Section 8.2 not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment. Each such notice shall specify such date, the
aggregate principal

                                       17
<PAGE>

amount of the Notes to be prepaid on such date, the principal amount of each
Note held by such holder to be prepaid (determined in accordance with Section
8.3), and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid, and shall be accompanied by a certificate of a
Senior Financial Officer as to the estimated Make-Whole Amount due in connection
with such prepayment (calculated as if the date of such notice were the date of
the prepayment), setting forth the details of such computation. Two Business
Days prior to such prepayment, the Company shall deliver to each holder of Notes
a certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.

8.3. ALLOCATION OF PARTIAL PREPAYMENTS.

          In the case of each partial prepayment of the Notes pursuant to this
Section 8, the principal amount of the Notes to be prepaid shall be allocated
among all of the Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not theretofore
called for prepayment.

8.4. MATURITY; SURRENDER, ETC.

          In the case of each prepayment of Notes pursuant to this Section 8,
the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and canceled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

8.5. PURCHASE OF NOTES.

          The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.

8.6. MAKE-WHOLE AMOUNT.

          The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:

                                       18
<PAGE>

          "CALLED PRINCIPAL" means, with respect to any Note, the principal of
     such Note that is to be prepaid pursuant to Section 8.2 or has become or is
     declared to be immediately due and payable pursuant to Section 12.1, as the
     context requires.

          "DISCOUNTED VALUE" means, with respect to the Called Principal of any
     Note, the amount obtained by discounting all Remaining Scheduled Payments
     with respect to such Called Principal from their respective scheduled due
     dates to the Settlement Date with respect to such Called Principal, in
     accordance with accepted financial practice and at a discount factor
     (applied on the same periodic basis as that on which interest on the Notes
     is payable) equal to the Reinvestment Yield with respect to such Called
     Principal.

          "REINVESTMENT YIELD" means, with respect to the Called Principal of
     any Note, .50% over the yield to maturity implied by (i) the yields
     reported, as of 10:00 A.M. (New York City time) on the second Business Day
     preceding the Settlement Date with respect to such Called Principal, on the
     display designated as the "PX1 Screen" on the Bloomberg Financial Market
     Service (or such other display as may replace the PX1 Screen on Bloomberg
     Financial Market Service) for actively traded U.S. Treasury securities
     having a maturity equal to the Remaining Average Life of such Called
     Principal as of such Settlement Date, or (ii) if such yields are not
     reported as of such time or the yields reported as of such time are not
     ascertainable, the Treasury Constant Maturity Series Yields reported, for
     the latest day for which such yields have been so reported as of the second
     Business Day preceding the Settlement Date with respect to such Called
     Principal, in Federal Reserve Statistical Release H.15 (519) (or any
     comparable successor publication) for actively traded U.S. Treasury
     securities having a constant maturity equal to the Remaining Average Life
     of such Called Principal as of such Settlement Date. Such implied yield
     will be determined, if necessary, by (a) converting U.S. Treasury bill
     quotations to bond-equivalent yields in accordance with accepted financial
     practice and (b) interpolating linearly between (1) the actively traded
     U.S. Treasury security with the maturity closest to and greater than the
     Remaining Average Life and (2) the actively traded U.S. Treasury security
     with the maturity closest to and less than the Remaining Average Life.

          "REMAINING AVERAGE LIFE" means, with respect to any Called Principal,
     the number of years (calculated to the nearest one-twelfth year) obtained
     by dividing (i) such Called Principal into (ii) the sum of the products
     obtained by multiplying (a) the principal component of each Remaining
     Scheduled Payment with respect to such Called Principal by (b) the number
     of years (calculated to the nearest one-twelfth year) that will elapse
     between the Settlement Date with respect to such Called Principal and the
     scheduled due date of such Remaining Scheduled Payment.

          "REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
     Principal of any Note, all payments of such Called Principal and interest
     thereon that would be due after the Settlement Date with respect to such
     Called Principal if no payment of such Called Principal were made prior to
     its scheduled due date, provided that if such Settlement Date is not a date
     on which interest payments are due to be made under the terms of the Notes,
     then the amount of the next succeeding scheduled interest payment

                                       19
<PAGE>

     will be reduced by the amount of interest accrued to such Settlement Date
     and required to be paid on such Settlement Date pursuant to Section 8.2 or
     12.1.

          "SETTLEMENT DATE" means, with respect to the Called Principal of any
     Note, the date on which such Called Principal is to be prepaid pursuant to
     Section 8.2 or has become or is declared to be immediately due and payable
     pursuant to Section 12.1, as the context requires.

9.   AFFIRMATIVE COVENANTS.

          The Company covenants that so long as any of the Notes are
outstanding:

9.1. COMPLIANCE WITH LAW.

          The Company will, and will cause each Subsidiary to, comply with all
laws, ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, Environmental Laws, and will obtain and
maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

9.2. INSURANCE.

          The Company will, and will cause each Restricted Subsidiary to,
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.

9.3. MAINTENANCE OF PROPERTIES.

          The Company will and will cause each Restricted Subsidiary to maintain
and keep, or cause to be maintained and kept, their respective properties in
good repair, working order and condition (other than ordinary wear and tear), so
that the business carried on in connection therewith may be properly conducted
at all times, provided that this Section shall not prevent the Company or any
Restricted Subsidiary from discontinuing the operation and the maintenance of
any of its properties if such discontinuance is desirable in the conduct of its
business and the Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

                                       20
<PAGE>

9.4. PAYMENT OF TAXES AND CLAIMS.

          The Company will, and will cause each Subsidiary to, file all income
tax or similar tax returns required to be filed in any jurisdiction and to pay
and discharge all taxes shown to be due and payable on such returns and all
other taxes, assessments, governmental charges, or levies imposed on them or any
of their properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary need pay any such tax or assessment
or claims if (i) the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.

9.5. CORPORATE EXISTENCE, ETC.

          The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Sections 10.6, 10.7 and 10.8, the
Company will at all times preserve and keep in full force and effect the
corporate existence of each of its Restricted Subsidiaries (unless merged into
the Company or a Restricted Subsidiary) and all rights and franchises of the
Company and its Restricted Subsidiaries unless, in the good faith judgment of
the Company, the termination of or failure to preserve and keep in full force
and effect such corporate existence, right or franchise could not, individually
or in the aggregate, have a Material Adverse Effect.

10.  NEGATIVE COVENANTS.

          The Company covenants that so long as any of the Notes are
outstanding:

10.1. CONSOLIDATED NET DEBT.

          The Company will not incur, and will not permit any Restricted
Subsidiary to incur, any Debt if, after giving effect thereto and to the
application of the proceeds therefrom, Consolidated Net Debt would exceed 55% of
Consolidated Total Capitalization.

10.2. INTEREST COVERAGE.

          The Company will not permit the ratio of Consolidated EBITDA to
Consolidated Interest Expense (in each case for the Company's then most recently
completed four fiscal quarters) to be less than 2.0 to 1.0 at any time.

10.3. ADJUSTED CONSOLIDATED NET WORTH.

          The Company will not permit at any time its Adjusted Consolidated Net
Worth as of the end of any fiscal year to be less than $130,000,000 plus the
cumulative sum of 50% of

                                       21
<PAGE>

Consolidated Net Income (but only if a positive number) for each fiscal year
ending after June 30, 2001.

10.4. DEBT OF RESTRICTED SUBSIDIARIES.

          The Company will not permit any Restricted Subsidiary that is not a
Subsidiary Guarantor to create, assume, incur or otherwise become liable for,
directly or indirectly, any Debt, other than:

          (a) Debt owed to the Company or another Restricted Subsidiary;

          (b) Debt of a Restricted Subsidiary secured by Liens permitted under
     Sections 10.5(g) or (h);

          (c) Debt of a Subsidiary outstanding at the time of its acquisition by
     the Company and initial designation as a Restricted Subsidiary, provided
     that (i) such Debt was not incurred in contemplation of such Subsidiary
     becoming a Restricted Subsidiary and (ii) immediately after giving effect
     to the designation of such Subsidiary as a Restricted Subsidiary, no
     Default or Event of Default would exist; provided, however, that such Debt
     may not be extended, renewed or refunded unless such Debt could be incurred
     under clause (d) below; and

          (d) Additional Debt, provided that after giving effect to the
     incurrence thereof and the application of the proceeds thereof, Priority
     Debt does not exceed 15% of Adjusted Consolidated Net Worth, and any
     renewals or extension of such Debt, provided that (i) there is no increase
     in the principal amount or decrease in maturity of such Debt at the time of
     such extension or renewal and (ii) immediately after such extension or
     renewal no Default or Event of Default would exist.

10.5. LIENS.

          The Company will not, and will not permit any Restricted Subsidiary
to, permit to exist, create, assume or incur, directly or indirectly, any Lien
on its properties or assets, whether now owned or hereafter acquired, except:

          (a) Liens for taxes, assessments or governmental charges not then due
     and delinquent or the nonpayment of which is permitted by Section 9.4;

          (b) Liens incidental to the conduct of business or the ownership of
     properties and assets (including landlords', lessors', carriers',
     warehousemen's, mechanics', materialmen's and other similar Liens) and
     Liens to secure the performance of bids, tenders, leases or trade
     contracts, or to secure statutory obligations (including obligations under
     workers compensation, unemployment insurance and other social security
     legislation), surety or appeal bonds or other Liens of like general nature
     incurred in the ordinary course of business and not in connection with the
     borrowing of money;

          (c) any attachment or judgment Lien, unless the judgment it secures
     has not, within 60 days after the entry thereof, been discharged or
     execution thereof stayed

                                       22
<PAGE>

     pending appeal, or has not been discharged within 60 days after the
     expiration of any such stay;

          (d) Liens securing Debt of a Restricted Subsidiary owed to the Company
     or to another Restricted Subsidiary;

          (e) Liens securing Debt existing on property or assets of the Company
     or any Restricted Subsidiary as of the date of this Agreement that are
     described in Schedule 10.5;

          (f) encumbrances in the nature of leases, subleases, zoning
     restrictions, easements, rights of way, minor survey exceptions and other
     rights and restrictions of record on the use of real property and defects
     in title arising or incurred in the ordinary course of business, which,
     individually and in the aggregate, do not materially impair the use of the
     property or assets subject thereto by the Company or such Restricted
     Subsidiary in their business or which relate only to assets that in the
     aggregate are not Material;

          (g) Liens (i) existing on property at the time of its acquisition by
     the Company or a Restricted Subsidiary and not created in contemplation
     thereof, whether or not the Debt secured by such Lien is assumed by the
     Company or a Restricted Subsidiary; or (ii) on property created
     contemporaneously with its acquisition or within 180 days of the
     acquisition or completion of construction or improvements thereof to secure
     or provide for all or a portion of the purchase price or cost of
     construction or improvements of such property after the date of Closing; or
     (iii) existing on property of a Person at the time such Person is merged or
     consolidated with, or becomes a Restricted Subsidiary of, or substantially
     all of its assets are acquired by, the Company or a Restricted Subsidiary
     and not created in contemplation thereof; provided that in the case of
     clauses (i), (ii) and (iii) such Liens do not extend to additional property
     of the Company or any Restricted Subsidiary (other than property that is an
     improvement to or is acquired for specific use in connection with the
     subject property) and, in the case of clause (ii) only, that the aggregate
     principal amount of Debt secured by each such Lien does not exceed the
     lesser of cost of acquisition or construction or the fair market value
     (determined in good faith by one or more officers of the Company to whom
     authority to enter into the transaction has been delegated by the board of
     directors of the Company) of the property subject thereto;

          (h) Liens resulting from extensions, renewals or replacements of Liens
     permitted by paragraphs (e) and (g), provided that (i) there is no increase
     in the principal amount or decrease in maturity of the Debt secured thereby
     at the time of such extension, renewal or replacement, (ii) any new Lien
     attaches only to the same property theretofore subject to such earlier Lien
     and (iii) immediately after such extension, renewal or replacement no
     Default or Event of Default would exist; and

          (i) Liens securing Debt not otherwise permitted by paragraphs (a)
     through (h) above, provided that, after giving effect to the incurrence of
     the Debt so secured, Priority Debt does not exceed 15% of Adjusted
     Consolidated Net Worth, and any renewals or

                                       23
<PAGE>

     extensions of Liens securing such Debt, provided that (i) there is no
     increase in the principal amount or decrease in maturity of the Debt
     secured thereby at the time of such renewal or extension, (ii) any new Lien
     attaches only to the same property theretofore subject to such earlier Lien
     and (iii) immediately after such renewal or extension no Default or Event
     of Default would exist.

10.6. SALE OF ASSETS.

          Except as permitted by Section 10.7, the Company will not, and will
not permit any Restricted Subsidiary to, sell, lease, transfer or otherwise
dispose of, including by way of merger (collectively a "Disposition"), any
assets, including capital stock of Restricted Subsidiaries, in one or a series
of transactions, to any Person, other than:

          (a) Dispositions in the ordinary course of business;

          (b) Dispositions by the Company to a Restricted Subsidiary, by a
     Subsidiary Guarantor to the Company or to another Subsidiary Guarantor or
     by a Restricted Subsidiary that is not a Subsidiary Guarantor to the
     Company or a Restricted Subsidiary; or

          (c) Dispositions not otherwise permitted by Section 10.6(a) or (b),
     provided that:

               (i) each such Disposition is made in an arms length transaction
          for a consideration at least equal to the fair market value of the
          property subject thereto;

               (ii) the aggregate net book value of all assets disposed of in
          any period of 365 consecutive days pursuant to this Section 10.6(c)
          does not exceed 10% of Consolidated Total Assets as of the end of the
          immediately preceding fiscal quarter; and

               (iii) at the time of such Disposition and after giving effect
          thereto no Default or Event of Default shall have occurred and be
          continuing.

Notwithstanding the foregoing, the Company may, or may permit any Restricted
Subsidiary to, make a Disposition and the assets subject to such Disposition
shall not be subject to or included in the foregoing limitation and computation
contained in Section 10.6(c)(ii) of the preceding sentence to the extent that
(i) each such Disposition is for a consideration at least equal to the fair
market value of the property subject thereto, and

          (A) such assets are leased back by the Company or any Restricted
     Subsidiary, as lessee, within 365 days of the original acquisition or
     construction thereof by the Company or such Restricted Subsidiary; or

          (B) the net after tax proceeds from such Disposition are within 365
     days of such Disposition:

                                       24
<PAGE>

               (i) reinvested in productive assets used or useful in carrying on
          the business of the Company and its Restricted Subsidiaries; or

               (ii) applied to the payment or prepayment of any outstanding Debt
          of the Company or any Restricted Subsidiary that is pari passu with or
          senior to the Notes, including the Notes.

     If any prepayment of the Notes is to be made pursuant to foregoing clause
     (ii), the Company may offer to prepay (on a date not less than 30 or more
     than 60 days following such offer) at a price of 100% of the principal
     amount of the Notes to be prepaid (without any Make-Whole Amount), together
     with interest accrued to the date of prepayment; provided that if any
     holder of the Notes declines such offer, the proceeds that would have been
     paid to such holder shall be offered pro rata to the other holders of the
     Notes that have accepted the offer. A failure by a holder of Notes to
     respond at least 10 days prior to the proposed prepayment date shall be
     deemed to constitute a rejection of such offer by such holder. If at the
     time of making such offer to prepay and following such prepayment there is
     no Debt of the Company or any Restricted Subsidiary outstanding other than
     the Notes, any net proceeds remaining unapplied shall not be subject to or
     included in the limitation and computation contained in Section
     10.6(c)(ii).

10.7. MERGERS, CONSOLIDATIONS, ETC.

          The Company will not, and will not permit any Restricted Subsidiary
to, consolidate with or merge with any other Person or convey, transfer, sell or
lease all or substantially all of its assets in a single transaction or series
of transactions to any Person except that:

          (a) the Company may consolidate or merge with any other Person or
     convey, transfer, sell or lease all or substantially all of its assets in a
     single transaction or series of transactions to any Person, provided that:

               (i) the successor formed by such consolidation or the survivor of
          such merger or the Person that acquires by conveyance, transfer, sale
          or lease all or substantially all of the assets of the Company as an
          entirety, as the case may be, is a solvent corporation organized and
          existing under the laws of the United States or any state thereof
          (including the District of Columbia), and, if the Company is not such
          corporation, such corporation (y) shall have executed and delivered to
          each holder of any Notes its assumption of the due and punctual
          performance and observance of each covenant and condition of this
          Agreement and the Notes and (z) shall have caused to be delivered to
          each holder of any Notes an opinion of independent counsel reasonably
          satisfactory to the Required Holders, to the effect that all
          agreements or instruments effecting such assumption are enforceable in
          accordance with their terms and comply with the terms hereof; and

               (ii) immediately after giving effect to such transaction, the
          successor formed by such consolidation or the survivor of such merger
          or the Person that acquires by conveyance, transfer, sale or lease all
          or substantially all of the assets

                                       25
<PAGE>

          of the Company as an entirety, as the case may be, can incur $1.00 of
          additional Debt; and

               (iii) immediately before and after giving effect to such
          transaction, no Default or Event of Default shall have occurred and be
          continuing; and

          (b) Any Restricted Subsidiary may (x) merge into the Company (provided
     that the Company is the surviving corporation) or a Restricted Subsidiary
     or (y) sell, transfer or lease all or any part of its assets to the Company
     or a Restricted Subsidiary, or (z) merge or consolidate with, or sell,
     transfer or lease all or substantially all of its assets to, any Person in
     a transaction that is permitted by Section 10.6 or, as a result of which,
     such Person becomes a Restricted Subsidiary; provided in each instance set
     forth in clauses (x) through (z) that, (1) immediately before and after
     giving effect thereto, there shall exist no Default or Event of Default and
     (2) a Subsidiary Guarantor may engage in any of the foregoing transactions
     only with the Company or another Subsidiary Guarantor.

No such conveyance, transfer, sale or lease of all or substantially all of the
assets of the Company shall have the effect of releasing the Company or any
successor corporation that shall theretofore have become such in the manner
prescribed in this Section 10.7 from its liability under this Agreement or the
Notes.

10.8. DISPOSITION OF STOCK OF RESTRICTED SUBSIDIARIES.

          (a) The Company will not permit any Restricted Subsidiary to issue its
     capital stock, or any warrants, rights or options to purchase, or
     securities convertible into or exchangeable for, such capital stock, to any
     Person other than the Company or a Restricted Subsidiary, except in the
     case of Foreign Restricted Subsidiaries (i) for directors' qualifying
     shares or (ii) to satisfy local ownership requirements.

          (b) The Company will not, and will not permit any Restricted
     Subsidiary to, sell, transfer or otherwise dispose of any shares of capital
     stock of a Restricted Subsidiary if such sale would be prohibited by
     Section 10.6, except in the case of Foreign Restricted Subsidiaries (i) for
     directors' qualifying shares or (ii) to satisfy local ownership
     requirements.

          (c) If a Restricted Subsidiary at any time ceases to be such as a
     result of a sale or issuance of its capital stock, any Liens on property of
     the Company or any other Restricted Subsidiary securing Debt owed to such
     Restricted Subsidiary, which is not contemporaneously repaid, together with
     such Debt, shall be deemed to have been incurred by the Company or such
     other Restricted Subsidiary, as the case may be, at the time such
     Restricted Subsidiary ceases to be a Restricted Subsidiary.

10.9. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.

          The Company may designate any Restricted Subsidiary as an Unrestricted
Subsidiary and any Unrestricted Subsidiary as a Restricted Subsidiary; provided
that,

                                       26
<PAGE>

          (a) if such Subsidiary initially is designated a Restricted
     Subsidiary, then such Restricted Subsidiary may be subsequently designated
     as an Unrestricted Subsidiary and such Unrestricted Subsidiary may be
     subsequently designated as a Restricted Subsidiary, but no further changes
     in designation may be made;

          (b) if such Subsidiary initially is designated an Unrestricted
     Subsidiary, then such Unrestricted Subsidiary may be subsequently
     designated as a Restricted Subsidiary and such Restricted Subsidiary may be
     subsequently designated as an Unrestricted Subsidiary, but no further
     changes in designation may be made;

          (c) the Company may not designate a Restricted Subsidiary as an
     Unrestricted Subsidiary unless: (i) such Restricted Subsidiary does not
     own, directly or indirectly, any Debt or capital stock of the Company or
     any other Restricted Subsidiary, (ii) such designation, considered as a
     sale of assets, is permitted pursuant to Sections 10.6, 10.7 and 10.8,
     (iii) immediately before and after such designation there exists no Default
     or Event of Default; and

          (d) a Subsidiary Guarantor may not be designated an Unrestricted
     Subsidiary.

10.10. SUBSIDIARY GUARANTY.

          The Company will not permit any Restricted Subsidiary to become a
borrower or a guarantor of Debt owed to banks under the Credit Agreement unless
such Restricted Subsidiary is, or concurrently therewith becomes, a party to the
Subsidiary Guaranty.

10.11. NATURE OF BUSINESS.

          The Company will not, and will not permit any Restricted Subsidiary
to, engage in any business if, as a result, the general nature of the business
in which the Company and its Restricted Subsidiaries, taken as a whole, would
then be engaged would be substantially changed from the general nature of the
business in which the Company and its Restricted Subsidiaries, taken as a whole,
are engaged on the date of this Agreement as described in the Memorandum.

10.12. TRANSACTIONS WITH AFFILIATES.

          The Company will not and will not permit any Restricted Subsidiary to
enter into directly or indirectly any Material transaction or Material group of
related transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Restricted Subsidiary), except in
the ordinary course of the Company's or such Restricted Subsidiary's business
and upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.

11.  EVENTS OF DEFAULT.

          An "Event of Default" shall exist if any of the following conditions
or events shall occur and be continuing:

                                       27
<PAGE>

          (a) the Company defaults in the payment of any principal or Make-Whole
     Amount, if any, on any Note when the same becomes due and payable, whether
     at maturity or at a date fixed for prepayment or by declaration or
     otherwise; or

          (b) the Company defaults in the payment of any interest on any Note
     for more than five Business Days after the same becomes due and payable; or

          (c) the Company defaults in the performance of or compliance with any
     term contained in Sections 10.1 through 10.12; or

          (d) the Company defaults in the performance of or compliance with any
     term contained herein (other than those referred to in paragraphs (a), (b)
     and (c) of this Section 11) and such default is not remedied within 30 days
     after the earlier of (i) a Responsible Officer obtaining actual knowledge
     of such default or (ii) the Company receiving written notice of such
     default from any holder of a Note; or

          (e) any representation or warranty made in writing by or on behalf of
     the Company or any Subsidiary Guarantor or by any officer of the Company or
     a Subsidiary Guarantor in this Agreement, the Subsidiary Guaranty or in any
     writing furnished in connection with the transactions contemplated hereby
     or thereby proves to have been false or incorrect in any material respect
     on the date as of which made; or

          (f) (i) the Company or any Restricted Subsidiary is in default (as
     principal or as guarantor or other surety) in the payment of any principal
     of or premium or make-whole amount or interest on any Debt that is
     outstanding in an aggregate principal amount of at least $5,000,000 beyond
     any period of grace provided with respect thereto, or (ii) the Company or
     any Restricted Subsidiary is in default in the performance of or compliance
     with any term of any evidence of any Debt that is outstanding in an
     aggregate principal amount of at least $5,000,000 or of any mortgage,
     indenture or other agreement relating thereto or any other condition
     exists, and as a consequence of such default or condition such Debt has
     become, or has been declared, due and payable before its stated maturity or
     before its regularly scheduled dates of payment; or

          (g) the Company or any Restricted Subsidiary (i) is generally not
     paying, or admits in writing its inability to pay, its debts as they become
     due, (ii) files, or consents by answer or otherwise to the filing against
     it of, a petition for relief or reorganization or arrangement or any other
     petition in bankruptcy, for liquidation or to take advantage of any
     bankruptcy, insolvency, reorganization, moratorium or other similar law of
     any jurisdiction, (iii) makes an assignment for the benefit of its
     creditors, (iv) consents to the appointment of a custodian, receiver,
     trustee or other officer with similar powers with respect to it or with
     respect to any substantial part of its property, (v) is adjudicated as
     insolvent or to be liquidated, or (vi) takes corporate action for the
     purpose of any of the foregoing; or

          (h) a court or governmental authority of competent jurisdiction enters
     an order appointing, without consent by the Company or any Restricted
     Subsidiary, a custodian,

                                       28
<PAGE>

     receiver, trustee or other officer with similar powers with respect to it
     or with respect to any substantial part of its property, or constituting an
     order for relief or approving a petition for relief or reorganization or
     any other petition in bankruptcy or for liquidation or to take advantage of
     any bankruptcy or insolvency law of any jurisdiction, or ordering the
     dissolution, winding-up or liquidation of the Company or any Restricted
     Subsidiary, or any such petition shall be filed against the Company or any
     Restricted Subsidiary and such petition shall not be dismissed within 60
     days; or

          (i) a final judgment or judgments for the payment of money aggregating
     at least $5,000,000 are rendered against one or more of the Company and its
     Restricted Subsidiaries, which judgments are not, within 60 days after
     entry thereof, bonded, discharged or stayed pending appeal, or are not
     discharged within 60 days after the expiration of such stay; or

          (j) if (i) any Plan shall fail to satisfy the minimum funding
     standards of ERISA or the Code for any plan year or part thereof or a
     waiver of such standards or extension of any amortization period is sought
     or granted under section 412 of the Code, (ii) a notice of intent to
     terminate any Plan shall have been or is reasonably expected to be filed
     with the PBGC or the PBGC shall have instituted proceedings under ERISA
     section 4042 to terminate or appoint a trustee to administer any Plan or
     the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
     may become a subject of any such proceedings, (iii) the aggregate "amount
     of unfunded benefit liabilities" (within the meaning of section 4001(a)(18)
     of ERISA) under all Plans determined in accordance with Title IV of ERISA,
     shall be at least $5,000,000, (iv) the Company or any ERISA Affiliate shall
     have incurred or is reasonably expected to incur any liability pursuant to
     Title I or IV of ERISA or the penalty or excise tax provisions of the Code
     relating to employee benefit plans, (v) the Company or any ERISA Affiliate
     withdraws from any Multiemployer Plan, or (vi) the Company or any
     Subsidiary establishes or amends any employee welfare benefit plan that
     provides post-employment welfare benefits in a manner that would increase
     the liability of the Company or any Subsidiary thereunder; and any such
     event or events described in clauses (i) through (vi) above, either
     individually or together with any other such event or events, could
     reasonably be expected to have a Material Adverse Effect; or

          (k) any Subsidiary Guarantor defaults in the performance of or
     compliance with any term contained in the Subsidiary Guaranty, and such
     default continues beyond any period of grace in respect thereof, or the
     Subsidiary Guaranty ceases to be in full force and effect, except as
     provided in Section 22, or is declared to be null and void in whole or in
     material part by a court or other governmental or regulatory authority
     having jurisdiction or the validity or enforceability thereof shall be
     contested by any of the Company or any Subsidiary Guarantor or any of them
     renounces any of the same or denies that it has any or further liability
     thereunder.

As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.

                                       29
<PAGE>

12.  REMEDIES ON DEFAULT, ETC.

12.1. ACCELERATION.

          (a) If an Event of Default with respect to the Company described in
     paragraph (g) or (h) of Section 11 (other than an Event of Default
     described in clause (i) of paragraph (g) or described in clause (vi) of
     paragraph (g) by virtue of the fact that such clause encompasses clause (i)
     of paragraph (g)) has occurred, all the Notes then outstanding shall
     automatically become immediately due and payable.

          (b) If any other Event of Default has occurred and is continuing,
     holders of a majority or more in principal amount of the Notes at the time
     outstanding may at any time at its or their option, by notice or notices to
     the Company, declare all the Notes then outstanding to be immediately due
     and payable.

          (c) If any Event of Default described in paragraph (a) or (b) of
     Section 11 has occurred and is continuing, any holder or holders of Notes
     at the time outstanding affected by such Event of Default may at any time,
     at its or their option, by notice or notices to the Company, declare all
     the Notes held by it or them to be immediately due and payable.

          Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

12.2. OTHER REMEDIES.

          If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.

12.3. RESCISSION.

          At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the holders of a majority in
principal amount of the Notes then

                                       30
<PAGE>

outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) any overdue interest in
respect of the Notes, at the Default Rate, (b) all Events of Default and
Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.

12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.

          No course of dealing and no delay on the part of any holder of any
Note in exercising any right, power or remedy shall operate as a waiver thereof
or otherwise prejudice such holder's rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 15, the
Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.

13.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

13.1. REGISTRATION OF NOTES.

          The Company shall keep at its principal executive office a register
for the registration and registration of transfers of Notes. The name and
address of each holder of one or more Notes, each transfer thereof and the name
and address of each transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the owner
and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor, promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.

13.2. TRANSFER AND EXCHANGE OF NOTES.

          Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as

                                       31
<PAGE>

requested by the holder thereof) of the same series in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1(a) or
1(b), as appropriate. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $500,000, provided that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $500,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representations and agreement set
forth in Section 6.

13.3. REPLACEMENT OF NOTES.

          Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and

          (a) in the case of loss, theft or destruction, of indemnity reasonably
     satisfactory to it (provided that if the holder of such Note is, or is a
     nominee for, an original Purchaser or another Institutional Investor holder
     of a Note with a minimum net worth of at least $50,000,000, such Person's
     own unsecured agreement of indemnity shall be deemed to be satisfactory),
     or

          (b) in the case of mutilation, upon surrender and cancellation
     thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same series, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.

14.  PAYMENTS ON NOTES.

14.1. PLACE OF PAYMENT.

          Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in
Chicago, Illinois at the principal office of Bank of America in such
jurisdiction. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.

                                       32
<PAGE>

14.2. HOME OFFICE PAYMENT.

          So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by you under this Agreement and
that has made the same agreement relating to such Note as you have made in this
Section 14.2.

15.  EXPENSES, ETC.

15.1. TRANSACTION EXPENSES.

          Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys'
fees of one special counsel and, if reasonably required, local or other counsel)
incurred by you and each Other Purchaser or holder of a Note in connection with
such transactions and in connection with any amendments, waivers or consents
under or in respect of this Agreement, the Notes or the Subsidiary Guaranty
(whether or not such amendment, waiver or consent becomes effective), including:
(a) the costs and expenses incurred in enforcing or defending (or determining
whether or how to enforce or defend) any rights under this Agreement, the Notes
or the Subsidiary Guaranty or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement, the Notes or the Subsidiary Guaranty, or by reason of being a holder
of any Note, and (b) the costs and expenses, including financial advisors' fees,
incurred in connection with the insolvency or bankruptcy of the Company or any
Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes. The Company will pay, and
will save you and each other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses if any, of brokers and finders (other
than those retained by you).

15.2. SURVIVAL.

          The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.

                                       33
<PAGE>

16.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

          All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.

17.  AMENDMENT AND WAIVER.

17.1. REQUIREMENTS.

          This Agreement, the Notes and the Subsidiary Guaranty may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to you unless consented to by you
in writing, and (b) no such amendment or waiver may, without the written consent
of the holder of each Note at the time outstanding affected thereby, (i) subject
to the provisions of Section 12 relating to acceleration or rescission, change
the amount or time of any prepayment or payment of principal of, or reduce the
rate or change the time of payment or method of computation of interest or of
the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or
20.

17.2. SOLICITATION OF HOLDERS OF NOTES.

          (a) Solicitation. The Company will provide each holder of the Notes
     (irrespective of the amount of Notes then owned by it) with sufficient
     information, sufficiently far in advance of the date a decision is
     required, to enable such holder to make an informed and considered decision
     with respect to any proposed amendment, waiver or consent in respect of any
     of the provisions hereof or of the Notes. The Company will deliver executed
     or true and correct copies of each amendment, waiver or consent effected
     pursuant to the provisions of this Section 17 to each holder of outstanding
     Notes promptly following the date on which it is executed and delivered by,
     or receives the consent or approval of, the requisite holders of Notes.

          (b) Payment. The Company will not directly or indirectly pay or cause
     to be paid any remuneration, whether by way of supplemental or additional
     interest, fee or otherwise, or grant any security, to any holder of Notes
     as consideration for or as an inducement to the entering into by any holder
     of Notes or any waiver or amendment of

                                       34
<PAGE>

     any of the terms and provisions hereof unless such remuneration is
     concurrently paid, or security is concurrently granted, on the same terms,
     ratably to each holder of Notes then outstanding even if such holder did
     not consent to such waiver or amendment.

17.3. BINDING EFFECT, ETC.

          Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of any holder of such Note. As used herein, the term
"this Agreement" or "the Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.

17.4. NOTES HELD BY COMPANY, ETC.

          Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.

18.  NOTICES.

          All notices and communications provided for hereunder shall be in
writing and sent (a) by facsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:

               (i) if to you or your nominee, to you or it at the address
          specified for such communications in Schedule A, or at such other
          address as you or it shall have specified to the Company in writing,

               (ii) if to any other holder of any Note, to such holder at such
          address as such other holder shall have specified to the Company in
          writing, or

               (iii) if to the Company, to the Company at its address set forth
          at the beginning hereof to the attention of the Chief Financial
          Officer, or at such other address as the Company shall have specified
          to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

                                       35
<PAGE>

19.  REPRODUCTION OF DOCUMENTS.

          This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.

20.  CONFIDENTIAL INFORMATION.

          For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary or confidential in nature and that was clearly
marked or labeled or otherwise adequately identified when received by you as
being confidential information of the Company or such Subsidiary, provided that
such term does not include information that (a) was publicly known or otherwise
known to you prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by you or any person acting on your
behalf, (c) otherwise becomes known to you other than through disclosure by the
Company or any Subsidiary or from a third party that was not known to you to be
prohibited from making such disclosure or (d) constitutes financial statements
delivered to you under Section 7.1 that are otherwise publicly available. You
will maintain the confidentiality of such Confidential Information in accordance
with procedures adopted by you in good faith to protect confidential information
of third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, trustees, officers, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your Notes), (ii)
your financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 20), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other Person to which
such delivery or disclosure may be

                                       36
<PAGE>

necessary or appropriate (w) to effect compliance with any law, rule, regulation
or order applicable to you, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which you are a party or (z)
if an Event of Default has occurred and is continuing, to the extent you may
reasonably determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of the rights and remedies under your
Notes and this Agreement. Each holder of a Note, by its acceptance of a Note,
will be deemed to have agreed to be bound by and to be entitled to the benefits
of this Section 20 as though it were a party to this Agreement. On reasonable
request by the Company in connection with the delivery to any holder of a Note
of information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.

21.  SUBSTITUTION OF PURCHASER.

          You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.

22.  RELEASE OF SUBSIDIARY GUARANTOR.

          You and each subsequent holder of a Note agree to release any
Subsidiary Guarantor from the Subsidiary Guaranty (i) if such Subsidiary
Guarantor ceases to be such as a result of a disposition permitted by Sections
10.6, 10.7 or 10.8 or (ii) at such time as the banks party to the Credit
Agreement release such Subsidiary from the Bank Guaranty and any other holders
of Debt guaranteed by such Subsidiary release such Subsidiary from such
Guaranties; provided, however, that you and each subsequent holder will not be
required to release a Subsidiary Guarantor from the Subsidiary Guaranty under
the circumstances contemplated by clause (ii), if (A) a Default or Event of
Default has occurred and is continuing, (B) such Subsidiary Guarantor is to
become a borrower under the Credit Agreement or (C) such release is part of a
plan of financing that contemplates such Subsidiary Guarantor guaranteeing any
other Debt of the Company. Your obligation to release a Subsidiary Guarantor
from the Subsidiary Guaranty is conditioned upon your prior receipt of a
certificate from a Senior Financial Officer of the Company stating that none of
the circumstances described in clauses (A), (B) and (C) above are true.

                                       37
<PAGE>

23.  MISCELLANEOUS.

23.1. SUCCESSORS AND ASSIGNS.

          All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.

23.2. PAYMENTS DUE ON NON-BUSINESS DAYS.

          Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.

23.3. SEVERABILITY.

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

23.4. CONSTRUCTION.

          Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.

23.5. COUNTERPARTS.

          This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.

23.6. GOVERNING LAW.

          This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.

                                       38
<PAGE>

          If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.

                                Very truly yours,

                                ELCOR CORPORATION

                                By:        /s/ Harold R. Beattie, Jr.
                                    -----------------------------------------
                                Name:      Harold R. Beattie, Jr.
                                      ---------------------------------------
                                Title: Senior Vice President, Chief Financial
                                       --------------------------------------
                                       Officer and Treasurer
                                       --------------------------------------

                                      S-1
<PAGE>

The foregoing is agreed
to as of the date thereof.

TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA

By:       /s/ Cynthia P. Bush
    -------------------------------
Name:     Cynthia P. Bush
      -----------------------------
Title:    Associate Director
       ----------------------------
          Private Placements
       ----------------------------

                                      S-2
<PAGE>

METROPOLITAN LIFE INSURANCE
COMPANY

By:       /s/ Claudia Cromie
    -----------------------------------------
Name:     Claudia Cromie
      ---------------------------------------
Title:    Director
       --------------------------------------

METROPOLITAN INSURANCE AND ANNUITY
COMPANY

By:       /s/ Claudia Cromie
    -----------------------------------------
Name:     Claudia Cromie
      ---------------------------------------
Title:    Authorized Signatory
       --------------------------------------

METLIFE INVESTORS USA INSURANCE
COMPANY

     By: Metropolitan Life Insurance Company,
     as Investment Manager

     By:       /s/ Claudia Cromie
         ------------------------------------
     Name:     Claudia Cromie
           ----------------------------------
     Title:    Director
            ---------------------------------

GENERAL AMERICAN LIFE INSURANCE
COMPANY

     By: Metropolitan Life Insurance Company,
     as Investment Manager

     By:       /s/ Claudia Cromie
         ------------------------------------
     Name:     Claudia Cromie
           ----------------------------------
     Title:    Director
            ---------------------------------

                                      S-3
<PAGE>

MASSMUTUAL ASIA LIMITED

By:        /s/ Richard C. Morrison
    -----------------------------------
Name:      Richard C. Morrison
      ---------------------------------
Title:     Managing Director
       --------------------------------

MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY

By:        /s/ Richard C. Morrison
    -----------------------------------
Name:      Richard C. Morrison
      ---------------------------------
Title:     Managing Director
       --------------------------------

C.M. LIFE INSURANCE COMPANY

By:        /s/ Richard C. Morrison
    -----------------------------------
Name:      Richard C. Morrison
      ---------------------------------
Title:     Managing Director
       --------------------------------

                                      S-4
<PAGE>

PRINCIPAL LIFE INSURANCE
COMPANY
an Iowa corporation

     By: Principal Capital Management, LLC
     A Delaware limited liability
     company, its authorized signatory

By:        /s/ Jon C. Heiny
    --------------------------------------
Name:      Jon C. Heiny
      ------------------------------------
Title:     Counsel
       -----------------------------------

By:        /s/ James C. Fifield
    --------------------------------------
Name:      James C. Fifield
      ------------------------------------
Title:     Counsel
       -----------------------------------

CGU LIFE INSURANCE COMPANY OF
AMERICA

     By: Principal Capital Management, LLC
     A Delaware limited liability company,
     its attorney-in-fact

By:        /s/ Jon C. Heiny
    --------------------------------------
Name:      Jon C. Heiny
      ------------------------------------
Title:     Counsel
       -----------------------------------

By:        /s/ James C. Fifield
    --------------------------------------
Name:      James C. Fifield
      ------------------------------------
Title:     Counsel
       -----------------------------------

                                      S-5
<PAGE>

THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES

By:        /s/ Teresa McCarthy
    --------------------------------------
Name:      Teresa McCarthy
      ------------------------------------
Title:     Investment Officer
       -----------------------------------

                                      S-6
<PAGE>

MONY LIFE INSURANCE COMPANY

By: MONY Capital Management, Inc.,
    as Investment Adviser

By:    /s/ Barry Scheinholtz
    -----------------------------------
Name: Barry Scheinholtz
Title: Managing Director

                                      S-7
<PAGE>

STATE FARM LIFE INSURANCE
COMPANY

By:        /s/ Lyle Triebwasser
    -----------------------------------------
Name:      Lyle Triebwasser
      ---------------------------------------
Title:     Senior Investment Officer
       --------------------------------------

By:        /s/ Larry Rottunda
    -----------------------------------------
Name:      Larry Rottunda
      ---------------------------------------
Title:     Assistant Secretary
       --------------------------------------

                                      S-8
<PAGE>

AMERICAN FAMILY LIFE INSURANCE
COMPANY

By:        /s/ Phillip Hannifan
    -----------------------------------------
Name:      Phillip Hannifan
      ---------------------------------------
Title:     Investment Director
       --------------------------------------

                                      S-9
<PAGE>

THE CANADA LIFE ASSURANCE
COMPANY

By:        /s/ C. Paul English
    -----------------------------------------
Name:      C. Paul English
      ---------------------------------------
Title:     Associate Treasurer
       --------------------------------------

                                      S-10
<PAGE>

CLARICA LIFE INSURANCE
COMPANY-- U.S.

By:        /s/ Kevin M. Heil
    ----------------------------------------
Name:      Kevin M. Heil
      --------------------------------------
Title:     Chief Financial Officer
       -------------------------------------

                                      S-11
<PAGE>

                                                                      SCHEDULE A

                       INFORMATION RELATING TO PURCHASERS

This information is confidential and is not included.

                                   Schedule A
<PAGE>
                                                                      SCHEDULE B

                                  DEFINED TERMS

          As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:

          "AFFILIATE" means, at any time, and with respect to any Person, (a)
any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company. Notwithstanding anything in the
foregoing to the contrary, a Person that (i) would be an Affiliate of the
Company solely by virtue of its ownership of voting or equity interests of the
Company and (ii) is eligible pursuant to Rule 13d-1(b) under the Exchange Act to
file a statement with the Securities and Exchange Commission on Schedule 13G,
shall not be deemed to be an Affiliate.

          "ADJUSTED CONSOLIDATED NET WORTH" means, as of any date, consolidated
stockholders' equity of the Company and its Restricted Subsidiaries on such date
(including, without duplication, minority interests in Restricted Subsidiaries),
less the amount by which outstanding Restricted Investments on such date exceed
20% of consolidated stockholders' equity of the Company and its Restricted
Subsidiaries on such date; provided, however, that the effects on shareholders'
equity of any changes recorded by the Company and its Restricted Subsidiaries
related to the impairment of goodwill and other intangibles as may be required
under Statement of Financial Accounting Standards No. 142 shall not be taken
into account in determining Adjusted Consolidated Net Worth.

          "BANK GUARANTY" means the Subsidiary Guaranty dated as of November 30,
2000 of the Subsidiary Guarantors of Debt outstanding under the Credit
Agreement, as such Guaranty may be amended, restated or otherwise modified, and
any successor thereto.

          "BANKS" means the banks party to the Credit Agreement, including Bank
of America, N.A., as administrative agent for such banks.

          "BUSINESS DAY" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Chicago, Illinois or New York City are required
or authorized to be closed.

                                        1

                                   Schedule B
<PAGE>

          "CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

          "CLOSING" is defined in Section 3.

          "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.

          "COMPANY" means Elcor Corporation, a Delaware corporation.

          "CONFIDENTIAL INFORMATION" is defined in Section 20.

          "CONSOLIDATED EBIT" means, for any period, the sum of Consolidated Net
Income for such period, plus, to the extent deducted in determining such
Consolidated Net Income, (i) federal, state, local and foreign income, value
added and similar taxes and (ii) Consolidated Interest Expense.

          "CONSOLIDATED EBITDA" means, for any period, the sum of Consolidated
EBIT for such period, (i) plus, to the extent deducted in determining
Consolidated Net Income, any (a) depreciation and amortization expense, (b)
extraordinary expenses or losses, (c) charges recorded by the Company and its
Restricted Subsidiaries related to the impairment of goodwill and other
intangibles as may be required under Statement of Financial Accounting Standards
No. 142, (d) other non-cash charges, (ii) minus, to the extent included in
Consolidated Net Income, any (x) extraordinary income or gains and (y) other
non-cash income. If, during the period for which Consolidated EBITDA is being
calculated, the Company or a Restricted Subsidiary has (i) acquired one or more
Persons (or the assets thereof) or (ii) disposed of one or more Restricted
Subsidiaries (or substantially all of the assets thereof), Consolidated EBITDA
shall be calculated on a pro forma basis as if all of such acquisitions (other
than acquisitions by or resulting in Unrestricted Subsidiaries) and all such
dispositions had occurred on the first day of such period.

          "CONSOLIDATED INTEREST EXPENSE" means, for any period, the
consolidated interest expense of the Company and its Restricted Subsidiaries for
such period determined in accordance with GAAP. If, during the period for which
Consolidated Interest Expense is being calculated, the Company or a Restricted
Subsidiary has (i) acquired one or more Persons (or the assets thereof) or (ii)
disposed of one or more Restricted Subsidiaries (or substantially all of the
assets thereof), Consolidated Interest Expense shall be calculated on a pro
forma basis as if (i) all of such acquisitions (other than acquisitions by or
resulting in Unrestricted Subsidiaries) and all such dispositions had occurred
on the first day of such period and (ii) any Debt incurred, assumed, repaid,
replaced or refinanced in connection therewith had been so incurred, assumed,
repaid, replaced or refinanced on the first day of such period.

          "CONSOLIDATED NET DEBT" means, as of any date, outstanding Debt of the
Company and its Restricted Subsidiaries as determined on a consolidated basis in
accordance with GAAP (excluding valuation effects of FAS 133) less cash in
excess of $2,000,000.

                                        2

                                   Schedule B
<PAGE>

          "CONSOLIDATED NET INCOME" means, for any period, the net income or
loss of the Company and its Restricted Subsidiaries for such period (including,
without duplication, income attributed to minority interests) determined on a
consolidated basis in accordance with GAAP.

          "CONSOLIDATED TOTAL ASSETS" means, as of any date, the assets and
properties of the Company and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP.

          "CONSOLIDATED TOTAL CAPITALIZATION" means, as of any date, the sum of
Consolidated Net Debt and Adjusted Consolidated Net Worth as of such date.

          "CREDIT AGREEMENT" means the Credit Agreement dated as of November 30,
2000, as amended by the First Amendment dated as of March 31, 2001, among the
Company and Bank of America, N.A., as Administrative Agent, Swing Line Lender
and L/C Issuer, Bank One, Texas, N.A., as Documentation Agent, First Union
National Bank, as Syndication Agent, and the other lenders party thereto, as
such agreement may be hereafter amended, modified, restated, supplemented,
refinanced, increased or reduced from time to time, and any successor credit
agreement or similar facilities.

          "DEBT" with respect to any Person means, at any time, without
duplication,

          (a) its liabilities for borrowed money;

          (b) its liabilities for the deferred purchase price of property
     acquired by such Person (excluding accounts payable and other accrued
     liabilities arising in the ordinary course of business but including all
     liabilities created or arising under any conditional sale or other title
     retention agreement with respect to any such property);

          (c) all liabilities appearing on its balance sheet in accordance with
     GAAP in respect of Capital Leases; and

          (d) all liabilities for borrowed money secured by any Lien with
     respect to any property owned by such Person (whether or not it has assumed
     or otherwise become liable for such liabilities); and

          (e) any Guaranty of such Person with respect to liabilities of a type
     described in any of clauses (a) through (d) hereof.

          "DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.

          "DEFAULT RATE" means that rate of interest that is the greater of (i)
2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2% over the rate of interest publicly announced
by Bank of America in Chicago, Illinois as its "base" or "prime" rate.

                                        3

                                   Schedule B
<PAGE>

          "DISPOSITION" is defined in Section 10.6.

          "ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

          "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.

          "EVENT OF DEFAULT" is defined in Section 11.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

          "FOREIGN RESTRICTED SUBSIDIARY" means any Restricted Subsidiary
organized under the laws of a jurisdiction other than the United States or any
state thereof (including the District of Columbia).

          "GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.

          "GOVERNMENTAL AUTHORITY" means

          (a) the government of

               (i) the United States of America or any State or other political
          subdivision thereof, or

               (ii) any jurisdiction in which the Company or any Subsidiary
          conducts all or any part of its business, or which asserts
          jurisdiction over any properties of the Company or any Subsidiary, or

          (b) any entity exercising executive, legislative, judicial, regulatory
     or administrative functions of, or pertaining to, any such government.

          "GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including

                                        4

                                   Schedule B
<PAGE>

(without limitation) obligations incurred through an agreement, contingent or
otherwise, by such Person:

          (a) to purchase such indebtedness or obligation or any property
     constituting security therefor;

          (b) to advance or supply funds (i) for the purchase or payment of such
     indebtedness or obligation, or (ii) to maintain any working capital or
     other balance sheet condition or any income statement condition of any
     other Person or otherwise to advance or make available funds for the
     purchase or payment of such indebtedness or obligation;

          (c) to lease properties or to purchase properties or services
     primarily for the purpose of assuring the owner of such indebtedness or
     obligation of the ability of any other Person to make payment of the
     indebtedness or obligation; or

          (d) otherwise to assure the owner of such indebtedness or obligation
     against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

          "HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).

          "HOLDER" means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 13.1.

          "INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of more than $2,000,000 in aggregate principal amount of the
Notes at the time outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.

          "INVESTMENTS" means all investments made, in cash or by delivery of
property, directly or indirectly, by any Person, in any other Person, whether by
acquisition of shares of capital stock, indebtedness or other obligations or
securities or by loan, Guaranty, advance, capital contribution or otherwise.

          "LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention

                                        5

                                   Schedule B
<PAGE>

agreement or Capital Lease, upon or with respect to any property or asset of
such Person (including in the case of stock, stockholder agreements, voting
trust agreements and all similar arrangements).

          "MAKE-WHOLE AMOUNT" is defined in Section 8.6.

          "MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Restricted Subsidiaries taken as a whole.

          "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement and the Notes, or
(c) the ability of any Subsidiary to perform its obligations under the
Subsidiary Guaranty, or (d) the validity or enforceability of this Agreement,
the Notes or the Subsidiary Guaranty.

          "MEMORANDUM" is defined in Section 5.3.

          "MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).

          "NOTES" is defined in Section 1.

          "OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.

          "OTHER PURCHASERS" is defined in Section 2.

          "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

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

          "PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.

          "PRIORITY DEBT" means, as of any date, the sum (without duplication)
of (a) outstanding unsecured Debt of Restricted Subsidiaries that are not
Subsidiary Guarantors other than (i) Debt owed to the Company or another
Restricted Subsidiary, (ii) Debt of a Person

                                        6

                                   Schedule B
<PAGE>

that is not an Unrestricted Subsidiary outstanding at the time it becomes a
Restricted Subsidiary and (iii) Debt of Restricted Subsidiaries outstanding on
the date of this Agreement that is described in Schedule B-1 and (b) Debt of the
Company and its Restricted Subsidiaries secured by Liens not otherwise permitted
by Sections 10.5(a) through (h).

          "PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.

          "PURCHASER" means each purchaser listed in Schedule A.

          "QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.

          "REQUIRED HOLDERS" means, at any time, the holders of at least a
majority in principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Affiliates).

          "RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.

          "RESTRICTED INVESTMENTS" means all Investments of the Company and its
Restricted Subsidiaries, other than:

          (a) property or assets to be used or consumed in the ordinary course
     of business;

          (b) current assets arising from the sale of goods or services in the
     ordinary course of business;

          (c) Investments in Restricted Subsidiaries or in any Person that, as a
     result thereof, becomes a Restricted Subsidiary;

          (d) Investments in common stock of the Company;

          (e) Investments existing as of the date of this Agreement that are
     listed in the attached Schedule B-2; and

          (f) Investments in:

               (i) obligations, maturing within one year from the date of
          acquisition, of or fully guaranteed by the United States of America,
          or an agency thereof, or Canada, or any province thereof;

                                        7

                                   Schedule B
<PAGE>

               (ii) state, or municipal securities having an effective maturity
          within one year from the date of acquisition that are rated in one of
          the top two rating classifications by at least one nationally
          recognized rating agency;

               (iii) certificates of deposit or banker's acceptances maturing
          within one year from the date of acquisition of or issued by
          commercial banks whose long-term unsecured debt obligations (or the
          long-term unsecured debt obligations of the bank holding company
          owning all of the capital stock of such bank) are rated in one of the
          top two rating classifications by at least one nationally recognized
          rating agency;

               (iv) commercial paper maturing within 270 days from the date of
          issuance that, at the time of acquisition, is rated in one of the top
          two rating classifications by at least one credit rating agency of
          recognized national standing;

               (v) repurchase agreements; and

               (vi) money market instrument programs that are properly
          classified as current assets in accordance with GAAP.

          "RESTRICTED SUBSIDIARY" means any Subsidiary (a) of which at least a
majority of the voting securities are owned by the Company and/or one or more
Restricted Subsidiaries and (b) that the Company has not designated an
Unrestricted Subsidiary by notice in writing given to the holders of the Notes
pursuant to Section 10.9 hereof.

          "SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.

          "SENIOR FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.

          "SERIES A NOTES" is defined in Section 1.

          "SERIES B NOTES" is defined in Section 1.

          "SOURCE" is defined in Section 6.2.

          "SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership, limited liability
company or joint venture if more than a 50% interest in the profits or capital
thereof is owned by such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries (unless such partnership, limited
liability company or joint venture can and does ordinarily take major business
actions without the prior approval of such Person or one or more of its
Subsidiaries).

                                        8

                                   Schedule B
<PAGE>

Unless the context otherwise clearly requires, any reference to a "Subsidiary"
is a reference to a Subsidiary of the Company.

          "SUBSIDIARY GUARANTOR" is defined in Section 1.

          "SUBSIDIARY GUARANTY" is defined in Section 1.

          "THIS AGREEMENT" OR "THE AGREEMENT" is defined in Section 17.3.

          "UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that has
been so designated by notice in writing given to the holders of the Notes.

                                        9

                                   Schedule B
<PAGE>

                                                                    SCHEDULE B-1

                             EXISTING PRIORITY DEBT

None.

                                  Schedule B-1
<PAGE>

                                                                    SCHEDULE B-2

                              EXISTING INVESTMENTS

None.

                                  Schedule B-2
<PAGE>

                                                                    SCHEDULE 4.9

                         CHANGES IN CORPORATE STRUCTURE

This information is confidential and is not included.

                                  Schedule 4.9
<PAGE>

                                                                    SCHEDULE 5.3

                              DISCLOSURE MATERIALS

See Schedule 5.8.

                                  Schedule 5.3
<PAGE>

                                                                    SCHEDULE 5.4

                           SUBSIDIARIES AND AFFILIATES

(a)  SUBSIDIARIES AND AFFILIATES

     (i) SUBSIDIARIES

The Company has the Subsidiaries shown on the attached organizational chart
(domicile of organization is shown parenthetically for each Subsidiary). Except
as otherwise indicated on such organizational chart, line relationships indicate
ownership of 100% of the common stock or other voting securities of the
underlying Subsidiary.

     (ii) AFFILIATES

Except as shown above in part (a)(i) of this Schedule 5.4, the Company has no
equity investments in any other corporation or entity.

     (iii) DIRECTORS AND SENIOR OFFICERS OF COMPANY

Directors:        James E. Hall*         Richard A. Nowak
                  Thomas D. Karol        David W. Quinn***
                  Dale V. Kesler**       Harold K. Work
                  Michael L. McMahan

                  *    Chair of Corporate Governance Committee
                  **   Chair of Compensation Committee
                  ***  Chair of Audit Committee

<Table>
<S>                                      <C>
Senior Officers:  Thomas D. Karol        Chairman of the Board and Chief Executive Officer
                  Richard A. Nowak       President and Chief Operating Officer
                  Harold R. Beattie      Senior Vice President, Chief Financial Officer and Treasurer
                  Gregory J. Fisher      Senior Vice President and Controller
                  Matti Kiik             Senior Vice President- Research and Development
                  W. Greg Orler          Senior Vice President and Chief Information Officer
                  David G. Sisler        Senior Vice President, General Counsel and Secretary
                  James J. Waibel        Senior Vice President- Administration
</Table>

The organizational chart is confidential and is not included.

                                  Schedule 5.4
<PAGE>

                                                                    SCHEDULE 5.5

                              FINANCIAL STATEMENTS

1.   The financial statements and the notes thereto included in the SEC Form
     10-K for each of the fiscal years ended June 30, 1997, 1998, 1999, 2000 and
     2001.

2.   The financial statements and the notes thereto included in the SEC Form
     10-Q for the fiscal quarter ended March 31, 2002.

                                  Schedule 5.5
<PAGE>

                                                                    SCHEDULE 5.8

                                                                    CONFIDENTIAL

                                   LITIGATION

This information is confidential and is not included.

                                  Schedule 5.8
<PAGE>

                                                                   SCHEDULE 5.11

                             LICENSES, PERMITS, ETC.

See the disclosure in Schedule 5.8 titled "Patent Infringement Litigation."

                                  Schedule 5.11
<PAGE>

                                                                   SCHEDULE 5.14

                                 USE OF PROCEEDS

Net proceeds from the Notes will be used to repay a portion of the indebtedness
outstanding under the Credit Agreement. Approximately $130,000,000 is expected
to be outstanding under the Credit Agreement at Closing.

                                  Schedule 5.14
<PAGE>

                                                                   SCHEDULE 5.15

                                  EXISTING DEBT

Debt of the Company and its Subsidiaries as of March 31, 2002:

<Table>
<S>                                                                                  <C>
Elcor Corporation                   Loans outstanding under the Credit Agreement     $ 106,000,000
Cybershield of Georgia, Inc.        Capital Lease Obligation                         $      63,000
                                                                                     -------------
                                                                                     $ 106,063,000
</Table>

In addition, the Subsidiaries guarantee the Company's obligations under the
Credit Agreement.

Since March 31, 2002, loans outstanding under the Credit Agreement have
increased to approximately $130,000,000 as a result of seasonal increases in
working capital requirements. In addition, there are letters of credit
outstanding under the Credit Agreement in the amount of $2,584,000.

                                  Schedule 5.15
<PAGE>

                                                                   SCHEDULE 10.5

                                 EXISTING LIENS

<Table>
<S>                                <C>                                  <C>
Cybershield of Georgia, Inc.       Capital Lease of Equipment           $63,000

Cybershield of Georgia, Inc.       The real property comprising Cybershield of
                                   Georgia, Inc.'s Canton, Georgia facility was
                                   conveyed to Cherokee County, Georgia and
                                   leased-back for nominal consideration in
                                   exchange for tax abatements granted by
                                   Cherokee County. At the conclusion of the tax
                                   abatement, Cybershield of Georgia, Inc. may
                                   obtain title to the property for nominal or
                                   no consideration.
</Table>

                                  Schedule 10.5
<PAGE>

                                                                    EXHIBIT 1(a)

                         [FORM OF SERIES A SENIOR NOTE]

                                ELCOR CORPORATION

                           6.99% SENIOR NOTE, SERIES A
                                DUE JUNE 15, 2009

No. AR-[_____]                                                            [Date]
$[_______]                                                  PPN: [             ]

          FOR VALUE RECEIVED, the undersigned, ELCOR CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, promises to pay to [ ], or registered assigns, the principal sum of
$[ ] on June 15, 2009, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6.99% per
annum from the date hereof, payable semiannually, on June 15 and December 15 in
each year, commencing with the June or December next succeeding the date hereof
(except that no interest payment shall be made on June 15, 2002), until the
principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreement referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 8.99% or (ii) 2% over the rate of interest publicly announced by Bank of
America, or its successor, from time to time in Chicago, Illinois as its "base"
or "prime" rate.

          Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America in Chicago, Illinois or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.

          This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase Agreement dated as of June 1, 2002
(as from time to time amended, the "Note Purchase Agreement"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representations and agreement set forth in Section 6 of the Note Purchase
Agreement.

                                  Exhibit 1(a)
<PAGE>

          This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

          This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement but not otherwise.

          If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.

          Payment of the principal of, and interest and Make-Whole Amount, if
any, on this Note, and all other amounts due under the Note Purchase Agreement,
is guaranteed pursuant to the terms of a Guaranty dated as of June 1, 2002 of
certain subsidiaries of the Company.*

          This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.

                                       ELCOR CORPORATION

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

----------

*    This paragraph must be removed at such time as there are no Subsidiary
     Guarantors.

                                        2

                                  Exhibit 1(a)
<PAGE>

                                                                    EXHIBIT 1(b)

                         [FORM OF SERIES B SENIOR NOTE]

                                ELCOR CORPORATION

                           7.49% SENIOR NOTE, SERIES B
                                DUE JUNE 15, 2012

No. BR-[_____]                                                            [Date]
$[_______]                                                  PPN:  [            ]

          FOR VALUE RECEIVED, the undersigned, ELCOR CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, promises to pay to [ ], or registered assigns, the principal sum of
$[ ] on June 15, 2012, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate of 7.49% per
annum from the date hereof, payable semiannually, on June 15 and December 15 in
each year, commencing with the June or December next succeeding the date hereof
(except that no interest payment shall be made on June 15, 2002), until the
principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreement referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.49% or (ii) 2% over the rate of interest publicly announced by Bank of
America, or its successor, from time to time in Chicago, Illinois as its "base"
or "prime" rate.

          Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America in Chicago, Illinois or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.

          This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase Agreement dated as of June 1, 2002
(as from time to time amended, the "Note Purchase Agreement"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representations and agreement set forth in Section 6 of the Note Purchase
Agreement.

                                  Exhibit 1(b)
<PAGE>

          This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

          This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement but not otherwise.

          If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.

          Payment of the principal of, and interest and Make-Whole Amount, if
any, on this Note, and all other amounts due under the Note Purchase Agreement,
is guaranteed pursuant to the terms of a Guaranty dated as of June 1, 2002 of
certain subsidiaries of the Company.*

          This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.

                                       ELCOR CORPORATION

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

----------

*    This paragraph must be removed at such time as there are no Subsidiary
     Guarantors.

                                        2

                                  Exhibit 1(b)
<PAGE>

                                                                    EXHIBIT 1(c)

                          [FORM OF SUBSIDIARY GUARANTY]

          THIS GUARANTY (this "Guaranty") dated as of June 1, 2002 is made by
the undersigned (each, a "Guarantor"), in favor of the holders from time to time
of the Notes hereinafter referred to, including each purchaser named in the Note
Purchase Agreement hereinafter referred to, and their respective successors and
assigns (collectively, the "Holders" and each individually, a "Holder").

                                   WITNESSETH:

          WHEREAS, ELCOR CORPORATION, a Delaware corporation (the "Company"),
and the initial Holders have entered into a Note Purchase Agreement dated as of
June 1, 2002 (the Note Purchase Agreement as amended, supplemented, restated or
otherwise modified from time to time in accordance with its terms and in effect,
the "Note Purchase Agreement");

          WHEREAS, the Note Purchase Agreement provides for the issuance by the
Company of $120,000,000 aggregate principal amount of Notes (as defined in the
Note Purchase Agreement);

          WHEREAS, the Company owns, directly or indirectly, all of the issued
and outstanding capital stock or partnership interests of each Guarantor and, by
virtue of such ownership and otherwise, each Guarantor will derive substantial
benefits from the purchase by the Holders of the Company's Notes;

          WHEREAS, it is a condition precedent to the obligation of the Holders
to purchase the Notes that each Guarantor shall have executed and delivered this
Guaranty to the Holders; and

          WHEREAS, each Guarantor desires to execute and deliver this Guaranty
to satisfy the conditions described in the preceding paragraph;

          NOW, THEREFORE, in consideration of the premises and other benefits to
each Guarantor, and of the purchase of the Company's Notes by the Holders, and
for other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, each Guarantor makes this Guaranty as follows:

          SECTION 1. Definitions. Any capitalized terms not otherwise herein
defined shall have the meanings attributed to them in the Note Purchase
Agreement.

          SECTION 2. Guaranty. Each Guarantor, jointly and severally with each
other Guarantor, unconditionally and irrevocably guarantees to the Holders the
due, prompt and complete payment by the Company of the principal of, Make-Whole
Amount, if any, and interest on, and each other amount due under, the Notes or
the Note Purchase Agreement, when and as the same shall become due and payable
(whether at stated maturity or by required or optional prepayment or by
declaration or otherwise) in accordance with the terms of the Notes and the Note
Purchase Agreement (the Notes and the Note Purchase Agreement being sometimes

                                  Exhibit 1(c)
<PAGE>

hereinafter collectively referred to as the "Note Documents" and the amounts
payable by the Company under the Note Documents, and all other monetary
obligations of the Company thereunder, being sometimes collectively hereinafter
referred to as the "Obligations"). This Guaranty is a guaranty of payment and
not just of collectibility and is in no way conditioned or contingent upon any
attempt to collect from the Company or upon any other event, contingency or
circumstance whatsoever. If for any reason whatsoever the Company shall fail or
be unable duly, punctually and fully to pay such amounts as and when the same
shall become due and payable, each Guarantor, without demand, presentment,
protest or notice of any kind, will forthwith pay or cause to be paid such
amounts to the Holders under the terms of such Note Documents, in lawful money
of the United States, at the place specified in the Note Purchase Agreement, or
perform or comply with the same or cause the same to be performed or complied
with, together with interest (to the extent provided for under such Note
Documents) on any amount due and owing from the Company. Each Guarantor,
promptly after demand, will pay to the Holders the reasonable costs and expenses
of collecting such amounts or otherwise enforcing this Guaranty, including,
without limitation, the reasonable fees and expenses of counsel. Notwithstanding
the foregoing, the right of recovery against each Guarantor under this Guaranty
is limited to the extent it is judicially determined with respect to any
Guarantor that entering into this Guaranty would violate Section 548 of the
United States Bankruptcy Code or any comparable provisions of any state law, in
which case such Guarantor shall be liable under this Guaranty only for amounts
aggregating up to the largest amount that would not render such Guarantor's
obligations hereunder subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of any state law.

          SECTION 3. Guarantor's Obligations Unconditional. The obligations of
each Guarantor under this Guaranty shall be primary, absolute and unconditional
obligations of each Guarantor, shall not be subject to any counterclaim,
set-off, deduction, diminution, abatement, recoupment, suspension, deferment,
reduction or defense based upon any claim each Guarantor or any other person may
have against the Company or any other person, and to the full extent permitted
by applicable law shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not each Guarantor or the Company shall have
any knowledge or notice thereof), including:

               (a) any termination, amendment or modification of or deletion
          from or addition or supplement to or other change in any of the Note
          Documents or any other instrument or agreement applicable to any of
          the parties to any of the Note Documents;

               (b) any furnishing or acceptance of any security, or any release
          of any security, for the Obligations, or the failure of any security
          or the failure of any person to perfect any interest in any
          collateral;

               (c) any failure, omission or delay on the part of the Company to
          conform or comply with any term of any of the Note Documents or any
          other instrument or agreement referred to in paragraph (a) above,
          including, without limitation, failure to give notice to any Guarantor
          of the occurrence of a "Default" or an "Event of Default" under any
          Note Document;

                                        2

                                  Exhibit 1(c)
<PAGE>

               (d) any waiver of the payment, performance or observance of any
          of the obligations, conditions, covenants or agreements contained in
          any Note Document, or any other waiver, consent, extension,
          indulgence, compromise, settlement, release or other action or
          inaction under or in respect of any of the Note Documents or any other
          instrument or agreement referred to in paragraph (a) above or any
          obligation or liability of the Company, or any exercise or
          non-exercise of any right, remedy, power or privilege under or in
          respect of any such instrument or agreement or any such obligation or
          liability;

               (e) any failure, omission or delay on the part of any of the
          Holders to enforce, assert or exercise any right, power or remedy
          conferred on such Holder in this Guaranty, or any such failure,
          omission or delay on the part of such Holder in connection with any
          Note Document, or any other action on the part of such Holder;

               (f) any voluntary or involuntary bankruptcy, insolvency,
          reorganization, arrangement, readjustment, assignment for the benefit
          of creditors, composition, receivership, conservatorship,
          custodianship, liquidation, marshaling of assets and liabilities or
          similar proceedings with respect to the Company, any Guarantor or to
          any other person or any of their respective properties or creditors,
          or any action taken by any trustee or receiver or by any court in any
          such proceeding;

               (g) any discharge, termination, cancellation, frustration,
          irregularity, invalidity or unenforceability, in whole or in part, of
          any of the Note Documents or any other agreement or instrument
          referred to in paragraph (a) above or any term hereof;

               (h) any merger or consolidation of the Company or any Guarantor
          into or with any other corporation, or any sale, lease or transfer of
          any of the assets of the Company or any Guarantor to any other person;

               (i) any change in the ownership of any shares of capital stock of
          the Company or any change in the corporate relationship between the
          Company and any Guarantor, or any termination of such relationship;

               (j) any release or discharge, by operation of law, of any
          Guarantor from the performance or observance of any obligation,
          covenant or agreement contained in this Guaranty; or

               (k) any other occurrence, circumstance, happening or event
          whatsoever, whether similar or dissimilar to the foregoing, whether
          foreseen or unforeseen, and any other circumstance which might
          otherwise constitute a legal or equitable defense or discharge of the
          liabilities of a guarantor or surety or which might otherwise limit
          recourse against any Guarantor.

                                        3

                                  Exhibit 1(c)
<PAGE>

          SECTION 4. Full Recourse Obligations. The obligations of each
Guarantor set forth herein constitute the full recourse obligations of such
Guarantor enforceable against it to the full extent of all its assets and
properties.

          SECTION 5. Waiver. Each Guarantor unconditionally waives, to the
extent permitted by applicable law, (a) notice of any of the matters referred to
in Section 3, (b) notice to such Guarantor of the incurrence of any of the
Obligations, notice to such Guarantor or the Company of any breach or default by
such Company with respect to any of the Obligations or any other notice that may
be required, by statute, rule of law or otherwise, to preserve any rights of the
Holders against such Guarantor, (c) presentment to or demand of payment from the
Company or the Guarantor with respect to any amount due under any Note Document
or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion or exercise by any of the Holders of any right, power, privilege or
remedy conferred in the Note Purchase Agreement or any other Note Document or
otherwise, (e) any requirement of diligence on the part of any of the Holders,
(f) any requirement to exhaust any remedies or to mitigate the damages resulting
from any default under any Note Document, (g) any notice of any sale, transfer
or other disposition by any of the Holders of any right, title to or interest in
the Note Purchase Agreement or in any other Note Document and (h) any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or which might otherwise
limit recourse against such Guarantor.

          SECTION 6. Subrogation, Contribution, Reimbursement or Indemnity.
Until one year and one day after all Obligations have been indefeasibly paid in
full, each Guarantor agrees not to take any action pursuant to any rights which
may have arisen in connection with this Guaranty to be subrogated to any of the
rights (whether contractual, under the United States Bankruptcy Code, as
amended, including Section 509 thereof, under common law or otherwise) of any of
the Holders against the Company or against any collateral security or guaranty
or right of offset held by the Holders for the payment of the Obligations. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any contractual, common
law, statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Company which may have
arisen in connection with this Guaranty. So long as the Obligations remain, if
any amount shall be paid by or on behalf of the Company to any Guarantor on
account of any of the rights waived in this paragraph, such amount shall be held
by such Guarantor in trust, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the Holders
(duly endorsed by such Guarantor to the Holders, if required), to be applied
against the Obligations, whether matured or unmatured, in such order as the
Holders may determine. The provisions of this paragraph shall survive the term
of this Guaranty and the payment in full of the Obligations.

          SECTION 7. Effect of Bankruptcy Proceedings, etc. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time payment, in whole or in part, of any of the sums due to any of the
Holders pursuant to the terms of the Note Purchase Agreement or any other Note
Document is rescinded or must otherwise be restored or returned by such Holder
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the

                                        4

                                  Exhibit 1(c)
<PAGE>

Company or any other person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Company or other person or any substantial part of its property, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of the maturity of the principal amount of the Notes shall at
any time have occurred and be continuing, and such acceleration shall at such
time be prevented by reason of the pendency against the Company or any other
person of a case or proceeding under a bankruptcy or insolvency law, each
Guarantor agrees that, for purposes of this Guaranty and its obligations
hereunder, the maturity of the principal amount of the Notes and all other
Obligations shall be deemed to have been accelerated with the same effect as if
any Holder had accelerated the same in accordance with the terms of the Note
Purchase Agreement or other applicable Note Document, and such Guarantor shall
forthwith pay such principal amount, Make-Whole Amount, if any, and interest
thereon and any other amounts guaranteed hereunder without further notice or
demand.

          SECTION 8. Term of Agreement. This Guaranty and all guaranties,
covenants and agreements of each Guarantor contained herein shall continue in
full force and effect and shall not be discharged until such time as all of the
Obligations shall be paid and performed in full and all of the agreements of
such Guarantor hereunder shall be duly paid and performed in full.

          SECTION 9. Representations and Warranties. Each Guarantor represents
and warrants to each Holder that:

               (a) such Guarantor is duly organized, validly existing and in
          good standing under the laws of its jurisdiction of organization and
          has the requisite power and authority to own and operate its property,
          to lease the property it operates as lessee and to conduct the
          business in which it is currently engaged;

               (b) such Guarantor has the requisite power and authority and the
          legal right to execute and deliver, and to perform its obligations
          under, this Guaranty, and has taken all necessary action to authorize
          its execution, delivery and performance of this Guaranty;

               (c) this Guaranty constitutes a legal, valid and binding
          obligation of such Guarantor enforceable in accordance with its terms,
          except as enforceability may be limited by bankruptcy, insolvency,
          reorganization, moratorium or similar laws affecting the enforcement
          of creditors' rights generally and by general equitable principles
          (regardless of whether such enforceability is considered in a
          proceeding in equity or at law);

               (d) the execution, delivery and performance of this Guaranty will
          not (i) contravene, result in any breach of, or constitute a default
          under, or result in the creation of any Lien in respect of any
          property of such Guarantor under any indenture, mortgage, deed of
          trust, loan, credit agreement, corporate charter or by-laws, or any
          other agreement evidencing Debt, (ii) contravene, result in any breach
          of, or constitute a default under, or result in the creation of any
          Lien in respect of any property of such Guarantor under, any other
          agreement or instrument to which such Guarantor is bound or by which

                                        5

                                  Exhibit 1(c)
<PAGE>

          such Guarantor or any of its properties may be bound or affected,
          except as could not reasonably be expected to have a Material Adverse
          Effect, (iii) conflict with or result in a breach of any of the terms,
          conditions or provisions of any order, judgment, decree, or ruling of
          any court, arbitrator or Governmental Authority applicable to such
          Guarantor, except as could not reasonably be expected to have a
          Material Adverse Effect, or (iv) violate any provision of any statute
          or other rule or regulation of any Governmental Authority applicable
          to such Guarantor, except as could not reasonably be expected to have
          a Material Adverse Effect;

               (e) no consent, approval or authorization of, or registration,
          filing or declaration with, any Governmental Authority is required in
          connection with the execution, delivery or performance by such
          Guarantor of this Guaranty;

               (f) except as disclosed in Section 5.8 of the Note Purchase
          Agreement, no litigation, investigation or proceeding of or before any
          arbitrator or governmental authority is pending or, to the knowledge
          of such Guarantor, threatened by or against such Guarantor or any of
          its properties or revenues (i) with respect to this Guaranty or any of
          the transactions contemplated hereby or (ii) which could reasonably be
          expected to have a Material Adverse Effect;

               (g) such Guarantor (after giving due consideration to any rights
          of contribution) has received fair consideration and reasonably
          equivalent value for the incurrence of its obligations hereunder or as
          contemplated hereby and after giving effect to the transactions
          contemplated herein, (i) the fair value of the assets of such
          Guarantor (both at fair valuation and at present fair saleable value)
          exceeds its liabilities, (ii) such Guarantor is able to and expects to
          be able to pay its debts as they mature, and (iii) such Guarantor has
          capital sufficient to carry on its business as conducted and as
          proposed to be conducted.

          SECTION 10. Notices. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by facsimile if the sender
on the same day sends a confirming copy of such notice by a recognized overnight
delivery service (charges prepaid), mailed by registered or certified mail with
return receipt requested (postage prepaid), or sent by a recognized overnight
delivery service, charges prepaid, addressed (a) if to the Company or any Holder
at the address set forth in, the Note Purchase Agreement or (b) if to a
Guarantor, in care of the Company at the Company's address set forth in the Note
Purchase Agreement, or in each case at such other address as the Company, any
Holder or such Guarantor shall from time to time designate in writing to the
other parties. Any notice so addressed shall be deemed to be given when actually
received.

          SECTION 11. Survival. All warranties, representations and covenants
made by each Guarantor herein or in any certificate or other instrument
delivered by it or on its behalf hereunder shall be considered to have been
relied upon by the Holders and shall survive the execution and delivery of this
Guaranty, regardless of any investigation made by any of the

                                        6

                                  Exhibit 1(c)
<PAGE>

Holders. All statements in any such certificate or other instrument shall
constitute warranties and representations by such Guarantor hereunder.

          SECTION 12. Submission to Jurisdiction. Each Guarantor irrevocably
submits to the jurisdiction of the courts of the State of Illinois and of the
courts of the United States of America having jurisdiction in the State of
Illinois for the purpose of any legal action or proceeding in any such court
with respect to, or arising out of, this Guaranty, the Note Purchase Agreement
or the Notes. Each Guarantor consents to process being served in any suit,
action or proceeding by mailing a copy thereof by registered or certified mail,
postage prepaid, return receipt requested. Each Guarantor agrees that such
service upon receipt (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to such Guarantor.

          SECTION 13. Miscellaneous. Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, each Guarantor hereby waives any provision of law that
renders any provisions hereof prohibited or unenforceable in any respect. The
terms of this Guaranty shall be binding upon, and inure to the benefit of, each
Guarantor and the Holders and their respective successors and assigns. No term
or provision of this Guaranty may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by each Guarantor and the
Required Holders. The section and paragraph headings in this Guaranty are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof, and all references herein to numbered
sections, unless otherwise indicated, are to sections in this Guaranty. This
Guaranty shall in all respects be governed by, and construed in accordance with,
the laws of the State of Illinois, including all matters of construction,
validity and performance.

                                        7

                                  Exhibit 1(c)
<PAGE>

          IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed as of the day and year first above written.

                                       Chromium Corporation

                                       Cybershield, Inc.

                                       Cybershield of Georgia, Inc.

                                       Cybershield International, Inc.

                                       Cybershield of Texas, Inc.

                                       Elcor Management Corporation

                                       Elk Corporation of Alabama

                                       Elk Corporation of America

                                       Elk Corporation of Arkansas

                                       Elk Corporation of Dallas

                                       Elk Corporation of Texas

                                       OEL, Ltd.

                                       -----------------------------------------
                                       Harold R. Beattie, Jr.
                                       Vice President

                                       Elcor Service Limited Partnership

                                       By:  Elcor Management Corporation,
                                       Its General Partner

                                       -----------------------------------------
                                       Harold R. Beattie, Jr.
                                       Vice President

                                        8

                                  Exhibit 1(c)
<PAGE>

                                       NELPA, Inc.

                                       -----------------------------------------
                                       Monte L. Miller
                                       President, Secretary and Treasurer

                                        9

                                  Exhibit 1(c)
<PAGE>

                     FORM OF JOINDER TO SUBSIDIARY GUARANTY

          The undersigned (the "Guarantor"), joins in the Subsidiary Guaranty
dated as of June 1, 2002 from the Guarantors named therein in favor of the
Holders, as defined therein, and agrees to be bound by all of the terms thereof
and represents and warrants to the Holders that:

          (a) the Guarantor is duly organized, validly existing and in good
     standing under the laws of its jurisdiction of organization and has the
     requisite power and authority to own and operate its property, to lease the
     property it operates as lessee and to conduct the business in which it is
     currently engaged;

          (b) the Guarantor has the requisite power and authority and the legal
     right to execute and deliver this Joinder to Subsidiary Guaranty
     ("Joinder") and to perform its obligations hereunder and under the
     Subsidiary Guaranty and has taken all necessary action to authorize its
     execution and delivery of this Joinder and its performance of the
     Subsidiary Guaranty;

          (c) the Subsidiary Guaranty constitutes a legal, valid and binding
     obligation of the Guarantor enforceable in accordance with its terms,
     except as enforceability may be limited by bankruptcy, insolvency,
     reorganization, moratorium or similar laws affecting the enforcement of
     creditors' rights generally and by general equitable principles (regardless
     of whether such enforceability is considered in a proceeding in equity or
     at law);

          (d) the execution, delivery and performance of this Joinder will not
     (i) contravene, result in any breach of, or constitute a default under, or
     result in the creation of any Lien in respect of any property of such
     Guarantor under any indenture, mortgage, deed of trust, loan, credit
     agreement, corporate charter or by-laws, or any other agreement evidencing
     Debt, (ii) contravene, result in any breach of, or constitute a default
     under, or result in the creation of any Lien in respect of any property of
     such Guarantor under, any other agreement or instrument to which such
     Guarantor is bound or by which such Guarantor or any of its properties may
     be bound or affected, except as could not reasonably be expected to have a
     Material Adverse Effect, (iii) conflict with or result in a breach of any
     of the terms, conditions or provisions of any order, judgment, decree, or
     ruling of any court, arbitrator or Governmental Authority applicable to
     such Guarantor, except as could not reasonably be expected to have a
     Material Adverse Effect, or (iv) violate any provision of any statute or
     other rule or regulation of any Governmental Authority applicable to such
     Guarantor, except as could not reasonably be expected to have a Material
     Adverse Effect;

          (e) no consent, approval or authorization of, or registration, filing
     or declaration with, any Governmental Authority is required in connection
     with the execution, delivery or performance by such Guarantor of this
     Joinder;

                                       10

                                  Exhibit 1(c)
<PAGE>

          (f) except as disclosed in writing to the Holders, no litigation,
     investigation or proceeding of or before any arbitrator or governmental
     authority is pending or, to the knowledge of the Guarantor, threatened by
     or against the Guarantor or any of its properties or revenues (i) with
     respect to this Joinder, the Subsidiary Guaranty or any of the transactions
     contemplated hereby or (ii) that could reasonably be expected to have a
     Material Adverse Effect;

          (g) such Guarantor (after giving due consideration to any rights of
     contribution) has received fair consideration and reasonably equivalent
     value for the incurrence of its obligations hereunder or as contemplated
     hereby and after giving effect to the transactions contemplated herein, (i)
     the fair value of the assets of such Guarantor (both at fair valuation and
     at present fair saleable value) exceeds its liabilities, (ii) such
     Guarantor is able to and expects to be able to pay its debts as they
     mature, and (iii) such Guarantor has capital sufficient to carry on its
     business as conducted and as proposed to be conducted.

Capitalized Terms used but not defined herein have the meanings ascribed in the
Subsidiary Guaranty.

          IN WITNESS WHEREOF, the undersigned has caused this Joinder to
Subsidiary Guaranty to be duly executed as of __________, ____.

                                       [Name of Guarantor]

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

                                       11

                                  Exhibit 1(c)
<PAGE>

                                                                  EXHIBIT 4.4(a)

                           FORM OF OPINION OF COUNSEL
                                 TO THE COMPANY

          The opinion of Baker & McKenzie, counsel to the Company, shall be to
the effect that:

          1. Each of the Company and each Subsidiary Guarantor is a corporation
or limited partnership validly existing and in good standing under the laws of
its jurisdiction of organization, and each has all requisite corporate or
partnership power and authority to own and operate its properties, to carry on
its business as now conducted, and, in the case of the Company, to enter into
and perform the Agreement and to issue and sell the Notes and, in the case of
each Subsidiary Guarantor, to enter into and perform the Subsidiary Guaranty.

          2. The Agreement and the Notes have been duly authorized by proper
corporate action on the part of the Company, have been duly executed and
delivered by an authorized officer of the Company and constitute the legal,
valid and binding agreements of the Company, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, regardless of whether enforcement is
sought in a proceeding in equity or at law.

          3. The Subsidiary Guaranty has been duly authorized by proper
corporate or partnership action on the part of each Subsidiary Guarantor, has
been duly executed and delivered by an authorized officer of each such
Subsidiary Guarantor (or the General Partner thereof) and constitutes the legal,
valid and binding obligation of each Subsidiary Guarantor, enforceable in
accordance with its terms, except to the extent the enforcement thereof may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws of general application relating to or
affecting the enforcement of the rights of creditors or by equitable principles,
regardless of whether enforcement is sought in a proceeding in equity or at law.

          4. A Texas court, or a Federal court sitting in Texas, would honor the
choice of Illinois law to govern the Agreement, the Notes and the Subsidiary
Guaranty.

          5. Based on the representations set forth in the Agreement, the offer,
sale and delivery of the Notes and delivery of the Subsidiary Guaranty do not
require the registration of the Notes or the Subsidiary Guaranty under the
Securities Act of 1933, as amended, or the qualification of an indenture under
the Trust Indenture Act of 1939, as amended.

          6. No authorization, approval or consent of, and no designation,
filing, declaration, registration and/or qualification with, any Governmental
Authority is necessary or required in connection with the execution, delivery
and performance by the Company of the Note Purchase

                                 Exhibit 4.4(a)
<PAGE>

Agreement or the offer, issuance and sale by the Company of the Notes, and no
authorization, approval or consent of, and no designation, filing, declaration,
registration and/or qualification with, any Governmental Authority is necessary
or required in connection with the execution, delivery and performance by any
Subsidiary Guarantor of the Subsidiary Guaranty.

          7. The issuance and sale of the Notes by the Company, and the
execution, delivery and performance by the Company of the terms and conditions
of the Notes and the Agreement do not result in any breach or violation of any
of the provisions of, or constitute a default under, or result in the creation
or imposition of any Lien on, the property of the Company or any Subsidiary
pursuant to the provisions of (i) the certificate or articles of incorporation
or bylaws of the Company or any Subsidiary, (ii) any loan agreement to which the
Company or any Subsidiary is a party or by which any of them or their property
is bound that is filed (or incorporated by reference) as an exhibit to the
Company's Annual Report on Form 10-K for its fiscal year ended June 30, 2001 or
any other report or registration statement subsequently filed by the Company
with the Securities and Exchange Commission, (iii) any other Material agreement
or instrument to which the Company or any Subsidiary is a party or by which any
of them or their property is bound that is filed (or incorporated by reference)
as an exhibit to the Company's Annual Report on Form 10-K for its fiscal year
ended June 30, 2001 or any other report or registration statement subsequently
filed by the Company with the Securities and Exchange Commission, (iv) any law
(including usury laws) or regulation applicable to the Company, or (v) to the
knowledge of such counsel, any order, writ, injunction or decree of any court or
Governmental Authority applicable to the Company.

          8. The execution, delivery and performance of the Subsidiary Guaranty
do not result in any breach or violation of any of the provisions of, or
constitute a default under, or result in the creation or imposition of any Lien
on, the property of any Subsidiary Guarantor pursuant to the provisions of (i)
its certificate or articles of incorporation or by-laws, (ii) any loan agreement
to which any Subsidiary Guarantor is a party or by which it or its property is
bound that is filed (or incorporated by reference) as an exhibit to the
Company's Annual Report on Form 10-K for its fiscal year ended June 30, 2001 or
any other report or registration statement subsequently filed by the Company
with the Securities and Exchange Commission, (iii) any other Material agreement
or instrument to which any Subsidiary Guarantor is a party or by which it or its
property is bound that is filed (or incorporated by reference) as an exhibit to
the Company's Annual Report on Form 10-K for its fiscal year ended June 30, 2001
or any other report or registration statement subsequently filed by the Company
with the Securities and Exchange Commission, (iv) any law or regulation
applicable to any Subsidiary Guarantor, or (v) to the knowledge of such counsel,
any order, writ, injunction or decree of any court or Governmental Authority
applicable to any Subsidiary Guarantor.

          9. Except as disclosed in Schedule 5.8 to the Note Purchase Agreement,
to such counsel's knowledge there are no actions, suits or proceedings pending,
or threatened against the Company or any Subsidiary, at law or in equity or
before or by any Governmental Authority, that are likely to result, individually
or in the aggregate, in a Material Adverse Effect.

                                        2

                                 Exhibit 4.4(a)
<PAGE>

          9. Neither the Company nor any Subsidiary is (i) a "public utility
company" or a "holding company," or a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility Holding Company Act of
1935, as amended, (ii) a "public utility" as defined in the Federal Power Act,
as amended, or (iii) an "investment company" or a company "controlled" by an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.

          10. The issuance of the Notes and the intended use of the proceeds of
the sale of the Notes do not violate or conflict with Regulation U, T or X of
the Board of Governors of the Federal Reserve System.

The opinion of Baker & McKenzie shall cover such other matters relating to the
sale of the Notes as the Purchasers may reasonably request. With respect to
matters of fact on which such opinion is based, such counsel shall be entitled
to rely on appropriate certificates of public officials and officers of the
Company. With respect to matters governed by the laws of any jurisdiction other
than the United States of America and the States of Delaware and Texas, such
counsel may rely upon the opinions of counsel deemed (and stated in their
opinion to be deemed) by them to be competent and reliable; provided that, with
respect to the opinions in numbered paragraphs 2 and 3, such counsel may assume
that the laws of the State of Illinois are the same as the laws of the State of
Texas. Such opinion shall state that subsequent transferees and assignees of the
Notes may rely thereon.

                                        3

                                 Exhibit 4.4(a)
<PAGE>

                                                                  EXHIBIT 4.4(b)

                       FORM OF OPINION OF SPECIAL COUNSEL
                                TO THE PURCHASERS

          The opinion of Gardner, Carton & Douglas, special counsel to the
Purchasers, shall be to the effect that:

          1. The Company is a corporation organized and validly existing in good
standing under the laws of the State of Delaware, with requisite corporate power
and authority to enter into the Agreement and to issue and sell the Notes.

          2. The Agreement and the Notes have been duly authorized, executed and
delivered by and constitute the legal, valid and binding agreements of the
Company, enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application relating to or
affecting the enforcement of the rights of creditors or by equitable principles,
regardless of whether enforcement is sought in a proceeding in equity or at law.

          3. The Subsidiary Guaranty constitutes the legal, valid and binding
obligation of each Subsidiary Guarantor, enforceable in accordance with their
terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws of general application relating to or affecting the
enforcement of the rights of creditors or by equitable principles, regardless of
whether enforcement is sought in a proceeding in equity or at law.

          4. Based upon the representations set forth in the Agreement, the
offer, sale and delivery of the Notes and delivery of the Subsidiary Guaranty do
not require the registration of the Notes or the Subsidiary Guaranty under the
Securities Act of 1933, as amended, nor the qualification of an indenture under
the Trust Indenture Act of 1939, as amended.

          5. The issuance and sale of the Notes and compliance with the terms
and provisions of the Notes and the Agreement do not conflict with or result in
any breach of any of the provisions of the Certificate of Incorporation or
By-Laws of the Company.

          6. No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any governmental body, Federal or
state, is necessary in connection with the execution and delivery of the Note
Purchase Agreement or the Notes.

The opinion of Gardner, Carton & Douglas shall state that the opinion of Baker &
McKenzie delivered to you pursuant to the Agreement, is satisfactory in form and
scope to Gardner, Carton & Douglas, and, in its opinion, the Purchasers are
justified in relying thereon. The opinion shall state that subsequent
transferees and assignees of the Notes may rely thereon. The opinion also shall
cover such other matters relating to the sale of the Notes as the Purchasers may
reasonably request.

                                 Exhibit 4.4(b)<PAGE>
                                                                    EXHIBIT 10.1

                            STOCK PURCHASE AGREEMENT

                                      AMONG

                               FLEET NATIONAL BANK

                               FLEET HOLDING CORP.

                                       AND

                       AFFILIATED COMPUTER SERVICES, INC.

                   RELATING TO THE PURCHASE AND SALE OF ALL OF
                     THE OUTSTANDING SHARES OF CAPITAL STOCK
                            OF AFSA DATA CORPORATION

                                      dated

                                  May 16, 2002

<PAGE>

                                TABLE OF CONTENTS

<Table>
<S>               <C>                                                                                           <C>
ARTICLE I             DEFINITIONS.................................................................................1

Section 1.1       General Provisions..............................................................................1
Section 1.2       Definitions.....................................................................................2

ARTICLE II            PURCHASE AND SALE OF SHARES.................................................................8

Section 2.1       Purchase and Sale of Shares.....................................................................8
Section 2.2       Purchase Price..................................................................................9
Section 2.3       Amount Payable at Closing.......................................................................9
Section 2.4       Final Closing Balance Sheet.....................................................................9
Section 2.5       Adjustment to Purchase Price...................................................................11
Section 2.6       Payment and Interest...........................................................................11

ARTICLE III           THE CLOSING................................................................................11

Section 3.1       Time and Place of Closing......................................................................11
Section 3.2       Deliveries at Closing..........................................................................12

ARTICLE IV            REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER AND SELLER PARENT......................13

Section 4.1       Organization...................................................................................13
Section 4.2       Authorization of Transaction...................................................................13
Section 4.3       Noncontravention...............................................................................14
Section 4.4       Consents.......................................................................................14
Section 4.5       Brokers' Fees..................................................................................15
Section 4.6       The Company Shares.............................................................................15

ARTICLE V             REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY.......................................15

Section 5.1       Organization, Qualification, and Corporate Power...............................................15
Section 5.2       Capitalization and Subsidiary..................................................................16
Section 5.3       Noncontravention with respect to the Company...................................................17
Section 5.4       Brokers' Fees..................................................................................17
Section 5.5       Title and Related Matters......................................................................17
Section 5.6       Insurance......................................................................................18
Section 5.7       Financial Statements...........................................................................18
Section 5.8       Absence of Undisclosed Liabilities.............................................................18
Section 5.9       Events Subsequent to December 31, 2001.........................................................18
Section 5.10      Legal Compliance...............................................................................18
Section 5.11      Intellectual Property..........................................................................18
Section 5.12      Contracts......................................................................................18
Section 5.13      Servicing......................................................................................18
Section 5.14      Litigation.....................................................................................18
Section 5.15      Licenses, Registrations or  Permits............................................................18
Section 5.16      Labor Relations................................................................................18
</Table>

<PAGE>

<Table>
<S>               <C>                                                                                           <C>
Section 5.17      Affiliate Transactions.........................................................................18
Section 5.18      Bank Accounts; Lock Boxes......................................................................18
Section 5.19      Officers and Directors.........................................................................18
Section 5.20      Books and Records..............................................................................18
Section 5.21      Environmental Compliance.......................................................................18
Section 5.22      Accounts Receivable............................................................................18

ARTICLE VI            REPRESENTATIONS AND WARRANTIES REGARDING THE BUYER.........................................18

Section 6.1       Organization...................................................................................18
Section 6.2       Authorization of Transaction...................................................................18
Section 6.3       Noncontravention...............................................................................18
Section 6.4       Consents.......................................................................................18
Section 6.5       Brokers' Fees..................................................................................18
Section 6.6       Investment.....................................................................................18
Section 6.7       Financing......................................................................................18

ARTICLE VII           INTERIM COVENANTS..........................................................................18

Section 7.1       Notices and Consents...........................................................................18
Section 7.2       Assignment of Contracts, Approvals, Etc........................................................18
Section 7.3       Full Access....................................................................................18
Section 7.4       Conduct of Business Prior to Closing...........................................................18
Section 7.5       Control of Business............................................................................18
Section 7.6       Insurance; Indemnity Obligations...............................................................18
Section 7.7       Intercompany Borrowings........................................................................18
Section 7.8       Public Announcements...........................................................................18
Section 7.9       Schedule Supplements...........................................................................18
Section 7.10      Exclusivity....................................................................................18
Section 7.11      Corporate Names................................................................................18
Section 7.12      The Trust......................................................................................18
Section 7.13      Transition Services............................................................................18
Section 7.14      Outsourcing Agreement..........................................................................18
Section 7.15      Sublease.......................................................................................18
Section 7.16      Trademark Assignment Agreement.................................................................18
Section 7.17      Loan Servicing Agreements......................................................................18
Section 7.18      Closing........................................................................................18

ARTICLE VIII          POST-CLOSING COVENANTS.....................................................................18

Section 8.1       General........................................................................................18
Section 8.2       Litigation Support.............................................................................18
Section 8.3       Non-Competition Agreement......................................................................18
Section 8.4       Nonsolicitation of the Buyer's Employees.......................................................18
Section 8.5       Nondisclosure..................................................................................18
Section 8.6       Reformation....................................................................................18
Section 8.7       Relief.........................................................................................18
Section 8.8       Special Post-Effective Date, Pre-Closing Interim Covenant......................................18
Section 8.9       Treatment of Certain Accounts Receivable.......................................................18
</Table>

                                      -ii-
<PAGE>

<Table>
<S>               <C>                                                                                           <C>
ARTICLE IX             TAXES.....................................................................................18

Section 9.1       Tax Representations............................................................................18
Section 9.2       Section 338 Elections and Forms................................................................18
Section 9.3       Tax Indemnity by Seller........................................................................18
Section 9.4       Tax Indemnity by Buyer.........................................................................18
Section 9.5       Allocation of Certain Taxes....................................................................18
Section 9.6       Filing Responsibility..........................................................................18
Section 9.7       Refunds........................................................................................18
Section 9.8       Cooperation and Exchange of Information........................................................18
Section 9.9       Tax Sharing Agreements.........................................................................18
Section 9.10      Payments.......................................................................................18
Section 9.11      Other Taxes....................................................................................18
Section 9.12      Survival Periods...............................................................................18

ARTICLE X             EMPLOYEES AND EMPLOYEE MATTERS.............................................................18

Section 10.1      Employee Benefit Plans.........................................................................18
Section 10.2      Establishment of Company Group Health Plans....................................................18
Section 10.3      Employment of Transferred Employees............................................................18
Section 10.4      401(k) Matching Contribution...................................................................18
Section 10.5      Transferred Employee Benefit Matters...........................................................18
Section 10.6      Vacation Benefits..............................................................................18
Section 10.7      No Third Party Rights..........................................................................18
Section 10.8      Warn Act Requirements..........................................................................18
Section 10.9      Special Provisions for Certain Employees.......................................................18

ARTICLE XI            CONDITIONS TO CLOSING......................................................................18

Section 11.1      Conditions to Obligation of the Buyer..........................................................18
Section 11.2      Conditions to Obligations of the Seller and Seller Parent......................................18

ARTICLE XII           SURVIVAL, INDEMNIFICATION..................................................................18

Section 12.1      Survival of Representations and Warranties, Covenants and Agreements...........................18
Section 12.2      Indemnification................................................................................18
Section 12.3      Limitations....................................................................................18
Section 12.4      Remedies Exclusive.............................................................................18
Section 12.5      Mitigation.....................................................................................18
Section 12.6      Treatment of Payments..........................................................................18

ARTICLE XIII          TERMINATION................................................................................18

Section 13.1      Termination of Agreement.......................................................................18
Section 13.2      Effect of Termination..........................................................................18

ARTICLE XIV           MISCELLANEOUS..............................................................................18

Section 14.1      No Third-party Beneficiaries...................................................................18
Section 14.2      Entire Agreement...............................................................................18
</Table>

                                      -iii-
<PAGE>
<Table>
<S>               <C>                                                                                            <C>
Section 14.3      Succession and Assignment......................................................................18
Section 14.4      Counterparts...................................................................................18
Section 14.5      Headings.......................................................................................18
Section 14.6      Notices........................................................................................18
Section 14.7      Governing Law..................................................................................18
Section 14.8      Waiver Of Jury Trial...........................................................................18
Section 14.9      Amendments and Waivers.........................................................................18
Section 14.10     Severability...................................................................................18
Section 14.11     Expenses.......................................................................................18
Section 14.12     Construction...................................................................................18
Section 14.13     Incorporation of Exhibits and Disclosure Schedules and Confidentiality Agreement...............18
Section 14.14     Disclaimer of Warranties.......................................................................18
</Table>

                                      -iv-
<PAGE>

                        SELLER'S DISCLOSURE SCHEDULE

Schedule 5.1               Organization, Qualification and Corporate Power
Schedule 5.3               Noncontravention with Respect to the Company
Schedule 5.5(b)            Leases
Schedule 5.5(d)            Property Exceptions
Schedule 5.6               Insurance
Schedule 5.7               Financial Statements
Schedule 5.9               Events Subsequent to December 31, 2001
Schedule 5.11(a)           Intellectual Property - Owned Intangible Property
Schedule 5.11(b)           Intellectual Property - Licensed Intangible Property
Schedule 5.11(c)           Exceptions to Intellectual Property
Schedule 5.12              Contracts
Schedule 5.14              Litigation
Schedule 5.15              Licenses, Permits and Exemptions
Schedule 5.16              Labor Relations
Schedule 5.17              Affiliate Transactions
Schedule 5.18              Bank Accounts
Schedule 5.19              Officers and Directors
Schedule 5.22              Accounts Receivable Exceptions
Schedule 7.3(b)            Representatives of Seller
Schedule 7.4(a)            Conduct of Business Prior to Closing
Schedule 7.6(c)            Guaranties
Schedule 7.16              Trademarks to be Assigned
Schedule 9.1               Taxes
Schedule 10.1(a)           Employee Benefits
Schedule 10.1(d)           Change of Control Agreements
Schedule 10.1(e)           Financial Accounting Standards Number 112
Schedule 10.1(g)           Retiree Medical Benefits
Schedule 10.3(a)           Employment Agreements

                        BUYER'S DISCLOSURE SCHEDULE

Schedule 7.4(c)            Representatives of Buyer

                                      -v-
<PAGE>

                                    EXHIBITS

Exhibit A                           Outsourcing Agreement Terms
Exhibit B                           Education Lending Employees
Exhibit C                           Company Severance Plan
Exhibit C-1                         Subsidiary Severance Plan
Exhibit D                           Loan Servicing Agreement Amendments Terms
Exhibit E                           Monthly Plan

                                      -vi-
<PAGE>

                            STOCK PURCHASE AGREEMENT

         This Agreement is entered into as of May 16, 2002 (the "Agreement"), by
and among Affiliated Computer Services, Inc., a Delaware corporation (the
"Buyer"), Fleet Holding Corp., a Rhode Island corporation (the "Seller"), and
Fleet National Bank, a national banking association (the "Seller Parent").

         WHEREAS, the Seller is the owner of 100 shares of common stock,
constituting all of the issued and outstanding shares of capital stock of AFSA
Data Corporation, a Delaware corporation (the "Company"); and

         WHEREAS, this Agreement contemplates a transaction in which the Buyer
will purchase from the Seller, and the Seller will sell to the Buyer, all of the
issued and outstanding shares of capital stock of the Company held by the Seller
for the consideration and on the terms and conditions set forth herein; and

         WHEREAS, the parties will make an election under Section 338(h)(10) of
the Internal Revenue Code.

         NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows.

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.1 General Provisions. For all purposes of this Agreement,
except as otherwise expressly provided:

         (a) The terms defined in this Article I have the meanings assigned to
them in this Article I and include the plural as well as the singular.

         (b) All accounting terms used herein have the meanings assigned to them
under GAAP, except to the extent otherwise provided herein.

         (c) All references herein to designated "Articles," "Sections" and
other subdivisions and to "Exhibits" and "Disclosure Schedules" are to the
designated Articles, Sections and other subdivisions of the body of this
Agreement and to the exhibits and other schedules to this Agreement.

         (d) Pronouns of either gender or neuter shall include, as appropriate,
the other pronoun forms.

         (e) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.

<PAGE>

         (f) All references herein to the Seller's "knowledge" or "knowledge of
Seller" shall mean the actual personal knowledge of Douglas A. Leafstedt, Steven
E. Snyder, Colleen Cain, John A. Fassbender, Steven P. Allen and Kent Schnacker.

         (g) On or prior to the date hereof, the Seller, on the one hand, and
the Buyer, on the other, have delivered to each other schedules (respectively,
its "Disclosure Schedule") setting forth, among other things, items the
disclosure of which is necessary or appropriate either (i) in response to an
express informational requirement contained in a provision hereof or (ii) as an
exception to one or more representations, warranties or covenants contained in a
section of this Agreement. The inclusion of an item on a Disclosure Schedule in
response to a disclosure obligation or as an exception to a representation or
warranty shall not be deemed an admission by the disclosing party that such item
represents a material exception or fact, event or circumstance or that such item
is reasonably likely to result in a Material Adverse Effect on the disclosing
party.

         (h) "Previously Disclosed" means information set forth in a Disclosure
Schedule, whether in response to an express informational requirement or as an
exception to one or more representations, warranties or covenants. An item
disclosed in one section of a Disclosure Schedule shall be deemed to be
disclosed both under such section and under any other section to which such
disclosure reasonably relates for all purposes under the Agreement. To the
extent information is Previously Disclosed pursuant to the foregoing, the
applicable representation, warranty or covenant shall be deemed to be modified
by such Previously Disclosed information and references herein to such
applicable representation, warranty or covenant shall be deemed to be references
to such representation, warranty or covenant as so modified.

         Section 1.2 Definitions. As used in this Agreement, except as may be
otherwise stated herein or in an Exhibit or Disclosure Schedule hereto, the
following capitalized terms shall have the meanings set forth below:

         "Action" means any action, suit, petition, arbitration, inquiry,
proceeding or investigation, whether civil or criminal, in law or in equity, by
or before any arbitrator or Governmental Entity.

         "Affiliate" (and, with a correlative meaning, "Affiliated") means, with
respect to any Person, any other Person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, such first Person. As used in this definition, "control"
(including, with correlative meanings, "controlled by" and "under common control
with") shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).

         "Agreement" has the meaning set forth in the preface above.

         "Allocation Agreement" has the meaning set forth in Section 9.2(c)
hereof.

         "Applicable Law" means any domestic federal, state or local statute,
law, ordinance, rule, administrative interpretation, regulation, order, writ,
injunction, directive, judgment, decree,

                                      -2-
<PAGE>

policy, administrative or judicial doctrine, guideline or other requirement
applicable to the Buyer, the Seller Parent, the Seller, the Company or the
Subsidiary, as the case may be.

         "Assets of the Company" means the assets owned by the Company at any
given time.

         "Business Day" means any day other than a Saturday, Sunday or a day on
which the banks in Massachusetts or Texas are authorized by law or executive
order to be closed.

         "Buyer" has the meaning set forth in the preface above.

         "Buyer's Representatives" has the meaning set forth in Section 7.4(c)
hereof.

         "Buyer Savings Plan" has the meaning set forth in Section 10.5(a)
hereof.

         "Buyer Welfare Plans" has the meaning set forth in Section 10.5(b)(i)
hereof.

         "Closing " has the meaning set forth in Section 3.1 hereof.

         "Closing Date" has the meaning set forth in Section 3.1 hereof.

         "COBRA" has the meaning set forth in Section 10.1(g) hereof.

         "Code" means the Internal Revenue Code of 1986, as amended, and any
successor thereto.

         "Company" has the meaning set forth in the preface above.

         "Company Benefit Plans" has the meaning set forth in Section 10.1(a)
hereof.

         "Company Employees" means the employees of the Company or the
Subsidiary at any given time from the date hereof through the Effective Time.

         "Company Shares" means 100 shares of common stock, par value $10.00 per
share, of the Company held by the Seller.

         "Company Severance Plan" has the meaning set forth in Section
10.4(b)(v) hereof.

         "Confidentiality Agreement" means that certain letter agreement dated
as of March 26, 2002 by and between Buyer and Ultimate Parent.

         "Current Company Employees" has the meaning set forth in Section 10.3
hereof.

         "Damages" means all costs, damages, disbursements or expenses
(including, but not limited to interest and reasonable legal, accounting and
other professional fees and expenses incurred in the investigation, collection,
prosecution and defense of claims and amounts paid in settlement) that are
actually imposed or otherwise actually incurred or suffered by the indemnified
person, but shall not include incidental, consequential or other special
damages.

                                      -3-
<PAGE>

         "Disclosure Schedule" has the meaning set forth in Section 1.1(g)
hereof.

         "Effective Time" means 11:59 PM (Eastern Time) on the last day of the
month prior to the month in which the Closing occurs.

         "Effective Time Receivables" has the meaning set forth in Section 8.9
hereof.

         "Environmental Claim" means any written notice, claim, demand, action,
suit, complaint, proceeding or other written communication by any Person
alleging liability or potential liability under or relating to any Environmental
Laws.

         "Environmental Laws" means all federal, state and local statutes, laws
and regulations relating to pollution or protection of human health or the
environment (including air, surface water, ground water, land surface and
subsurface strata), including laws and regulations that create duties or
obligations regarding the discharge or release, collection, storage,
transportation for disposal, treatment or disposal of wastes, materials or
substances in the interest of protecting human health or the environment.

         "Environmental Permits" means any license, permit, franchise,
certificate of authority or order, or any extension, modification, amendment or
waiver of the foregoing, required to be issued by any Governmental Entity
pursuant to any applicable Environmental Laws.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any rules and regulations thereunder.

         "ERISA Plans" shall have the meaning set forth in Section 10.1(a)
hereof.

         "Estimated Net Book Value" has the meaning set forth in Section 2.3(b)
hereof.

         "Evaluation Materials" has the meaning set forth in the Confidentiality
Agreement.

         "Final Closing Balance Sheet" has the meaning set forth in Section
2.4(b) hereof.

         "Financial Statements" has the meaning set forth in Section 5.7 hereof.

         "FSA" has the meaning set forth in Section 10.5(b)(iv) hereof.

         "GAAP" means United States generally accepted accounting principles and
practices as in effect from time to time and applied consistently by the Company
and the Subsidiary throughout the periods involved.

         "Governmental Entity" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal,
or other instrumentality of any government, whether federal, state or local,
domestic or foreign.

         "Guaranties" has the meaning set forth in Section 7.6(c) hereof.

                                      -4-
<PAGE>

         "Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the related regulations and published
interpretations.

         "Leases" has the meaning set forth in Section 5.5(b) hereof.

         "Liabilities" means any and all debts, losses, liabilities, offsets,
claims, damages, fines, obligations, payments and accounts payable (including,
without limitation, those arising out of any award, demand, assessment,
settlement, judgment or compromise relating to any Action), and accruals for
out-of-pocket costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses incurred in investigating, preparing or defending
any Action).

         "Licensed Intangible Properties" has the meaning set forth in Section
5.11 hereof.

         "Lien" means any lien, pledge, security interest, mortgage, deed of
trust, claim, encumbrance, easement, servitude, encroachment, charge or similar
right of any other Person of any kind or nature whatsoever, other than those
that customarily arise under securities laws in private transactions.

         "Loan Servicing Agreement Amendments" has the meaning set forth in
Section 7.17 hereof.

         "LOA Employee" has the meaning set forth in Section 10.3 hereof.

         "LTD Recipient" has the meaning set forth in Section 10.9 hereof.

         "Material Adverse Effect" means (a) with respect to the Company, any
change, effect, event or occurrence resulting in a material adverse effect on
the business, financial condition or results of operations of the Company and
the Subsidiary, taken as a whole, other than any change, effect, event or
occurrence relating to (i) the announcement of the transactions contemplated by
this Agreement, or (ii) the breach, default under, acceleration, modification,
or amendment or the creation in any Person of a right to accelerate, modify or
amend United States Government Contract No. PM94017001, as amended, modified or
extended, by and between the United States Department of Education and ACS
Government Services, Inc. (as successor to Computer Data Systems, Inc.) and any
related subcontracts, or (b) with respect to the Seller or Seller Parent, any
change, effect, event or occurrence resulting in a material adverse effect on
Seller's or Seller Parent's ability to consummate the transactions contemplated
hereby on a timely basis; and (c) with respect to Buyer, any change, event or
occurrence resulting in a material adverse effect on Buyer's ability to
consummate the transactions contemplated hereby on a timely basis.

         "Material Contracts" has the meaning set forth in Section 5.12 hereof.

         "Material Governmental Consent" has the meaning set forth in Section
7.2(c) hereof.

         "Maximum Indemnification Amount" has the meaning set forth in Section
12.3(a) hereof.

         "Monthly Plan" shall have the meaning set forth in Section 8.8 hereof.

                                      -5-
<PAGE>

         "Names" has the meaning set forth in Section 7.11 hereof.

         "Net Book Value" means the book value of all Assets of the Company
minus the book value of all Liabilities of the Company as reflected on the books
and records of the Company as of the Effective Time, all as determined in
accordance with GAAP (except no current or deferred income taxes, whether
payable or receivable shall be included).

         "Neutral Auditors" means Ernst & Young, LLP.

         "Ordinary Course of Business" means the ordinary course of business of
a Person consistent with past customs and practice.

         "Other Taxes" has the meaning set forth in Section 9.11 hereof.

         "Outsourcing Agreement" has the meaning set forth in Section 7.14
hereof.

         "Owned Intangible Properties" has the meaning set forth in Section 5.11
hereof.

         "Parent 401(k) Plan" has the meaning set forth in Section 10.4 hereof.

         "Parent LTD Plan" has the meaning set forth in Section 10.9 hereof.

         "Parent Savings Plans" has the meaning set forth in Section 10.5(a)
hereof.

         "Parent Welfare Plans" has the meaning set forth in Section 10.5(b)(i)
hereof.

         "Permitted Liens" means all imperfections of title or Liens (a) that
are reflected or reserved against or disclosed on the Financial Statements of
the Company, (b) that arise out of Taxes not in default and payable without
penalty or interest, (c) of carriers, warehousemen, mechanics, materialmen and
other similar Persons or otherwise imposed by law incurred in the Ordinary
Course of Business for sums not yet delinquent, (d) that relate to deposits made
in the Ordinary Course of Business in connection with workers' compensation,
unemployment insurance and other types of social security, (e) in connection
with Licensed Intangible Property and Owned Intangible Property the grant of a
non-exclusive license for use or other grant of rights with respect to the use
of any property under agreements, contracts, leases, licenses, instruments and
other arrangements, which grants do not interfere with the current operation or
use of the property subject to such Lien, or (f) that are not filed of record
and are not material in amount either individually or when aggregated with other
Permitted Liens.

         "Person" means an individual, a partnership (limited or general), a
corporation, an association, a company, a trust, a joint venture, an
unincorporated organization, a private agency or a Governmental Entity.

         "Policies" has the meaning set forth in Section 5.6 hereof.

         "Post-Effective Time Receivables" has the meaning set forth in Section
8.9 hereof.

         "Preliminary Closing Balance Sheet" has the meaning set forth in
Section 2.4(a) hereof.

                                      -6-
<PAGE>

         "Purchase Price" has the meaning set forth in Section 2.2 hereof.

         "Regulated Substance" means (a) any "hazardous substance" or
"pollutant" or "contaminant," as such terms are defined in the Comprehensive
Environmental Response, Compensation and Liability Act (Title 42 United States
Code Section 9601 et seq.), or Title 40 Code of Federal Regulations Part 302,
(b) any toxic or hazardous substance, material or waste (whether solid, liquid
or gaseous), (c) "petroleum," as that term is defined in the Resource
Conservation and Recovery Act, as amended (Title 42 United States Code Section
6691 et seq.), or Title 40 Code of Federal Regulations Section 280.1, or (d) any
other substance or waste which is regulated under any applicable Environmental
Laws with respect to its discharge or release, collection, storage,
transportation for disposal, treatment or disposal.

         "Returns" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto.

         "Section 338 Elections" means an election under Section 338 of the Code
or any comparable election under other applicable Tax Laws.

         "Section 338 Forms" means all Returns, documents, statements, and other
forms that are required to be submitted to any federal, state, county or other
local Taxing Authority in connection with a Section 338 Election. Section 338
Forms shall include, without limitation, any "statement of Section 338 election"
and Internal Revenue Service Form 8023 (together with any schedules or
attachments thereto) that are required pursuant to Treasury Regulation Section
1.338-1 or Treasury Regulation Section 1.338(h)(10)--1.

         "Section 338(h)(10) Election" means an election described in Section
338(h)(10) of the Code with respect to the Seller's sale of the Company Shares
to the Buyer pursuant to this Agreement. Section 338(h)(10) Election shall
include any corresponding election under any other relevant Tax Laws for which a
separate election is permissible with respect to the Buyer's acquisition of the
Company Shares from the Seller under this Agreement.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Seller" has the meaning set forth in the preface above.

         "Seller Parent" has the meaning set forth in the preface above.

         "Seller Representatives" has the meaning set forth in Section 7.3(b)
hereof.

         "Specified Receivable Trigger Date" has the meaning set forth in
Section 8.9 hereof.

         "Specified Receivables" has the meaning set forth in Section 8.9(a)
hereof.

         "Straddle Period" has the meaning set forth in Section 9.5(b) hereof.

         "Sublease" has the meaning set forth in Section 7.15 hereof.

                                      -7-
<PAGE>

         "Subsidiary" means Concera Corporation, an Oregon corporation.

         "Subsidiary Severance Plan" has the meaning set forth in Section
10.5(b)(v) hereof.

         "Tax Audit" has the meaning set forth in Section 9.8(d) hereof.

         "Tax Laws" means the Code, U.S. federal, state, county or local, or
foreign laws relating to Taxes, and any regulations or official administrative
pronouncements released thereunder.

         "Taxes" means (a) all taxes (whether U.S. federal, state or local or
foreign) based upon or measured by income and any other tax whatsoever,
including, without limitation, gross receipts, profits, capital, sales, use,
occupation, value added, ad valorem, transfer, franchise, withholding, payroll,
social security, disability, employment, excise, asset, severance, documentary,
stamp, or property taxes, duties and similar governmental charges, assessments,
fees or levies imposed by or on behalf of any Governmental Entity together with
any interest, penalties or additions to tax imposed with respect thereto, (b)
any obligations under any agreements or arrangements with respect to any Taxes
described in clause (a), and (c) any transferee or secondary liability or joint
or several liability in respect of any amounts described in clause (a) imposed
by law or as a result of being a member of any affiliated, consolidated,
combined, unitary or similar group.

         "Taxing Authority" means any federal, state, local or foreign
governmental authority, quasi-governmental authority, instrumentality or
political or other subdivision, department or branch of any of the foregoing,
with the legal authority to impose, assess or collect Taxes.

         "Threshold" has the meaning set forth in Section 12.3(a) hereof.

         "Trademark Assignment Agreement" has the meaning set forth in Section
7.16 hereof.

         "Transferred Employees" has the meaning set forth in Section 10.3
hereof.

         "Trust" shall mean AFSA Data Corporation Trust.

         "TSA" has the meaning set forth in Section 7.13 hereof.

         "Ultimate Parent" means FleetBoston Financial Corporation, a Rhode
Island corporation.

         "Unresolved Changes" has the meaning set forth in Section 2.4(c)(iii)
hereof.

                                   ARTICLE II

                           PURCHASE AND SALE OF SHARES

         Section 2.1 Purchase and Sale of Shares. Upon the terms and subject to
the conditions of this Agreement, at the Closing the Buyer shall purchase,
acquire and accept from the Seller, and the Seller shall sell, convey, transfer,
assign and deliver to the Buyer, the Company Shares, for the consideration
specified herein.

                                      -8-
<PAGE>

         Section 2.2 Purchase Price. The total purchase price (the "Purchase
Price") payable to the Seller by the Buyer for all of the Company Shares shall
be Four Hundred Ten Million Dollars ($410,000,000); provided, however, that if
the Net Book Value reflected in the notice given pursuant to Section 2.3(b) or
on the Final Closing Balance Sheet exceeds Ninety-Three Million Six Hundred
Twelve Thousand Five Hundred Dollars ($93,612,500), then the Purchase Price
shall be adjusted upward "dollar for dollar" in an amount equal to such excess,
and if such Net Book Value is less than Ninety-Three Million Six Hundred Twelve
Thousand Five Hundred Dollars ($93,612,500) then the Purchase Price shall be
adjusted downward "dollar for dollar" in an amount equal to such shortfall.

         Section 2.3 Amount Payable at Closing.

         (a) At the Closing, the Buyer shall pay to Seller Parent, as agent for
the Seller, Four Hundred Ten Million Dollars ($410,000,000).

         (b) No later than two (2) Business Days prior to the Closing Date, the
Seller shall prepare and deliver to the Buyer a notice setting forth the
Seller's good faith estimate of the Net Book Value (the "Estimated Net Book
Value") as of the Effective Time, together with a schedule setting forth in
detail the calculations supporting the Seller's computation thereof. At Closing,
if the Estimated Net Book Value exceeds Ninety-Three Million Six Hundred Twelve
Thousand Five Hundred Dollars ($93,612,500), then Purchaser shall pay to Seller
an amount equal to such excess, and if Estimated Net Book Value is less than
Ninety-Three Million Six Hundred Twelve Thousand Five Hundred Dollars
($93,612,500), then the Seller shall pay to the Purchaser the amount of such
shortfall.

         (c) All amounts payable pursuant to this Section 2.3 shall be paid by
wire transfer of immediately available funds to such account as has been
designated by Seller Parent to the Buyer at least two (2) Business Days prior to
the Closing Date.

         Section 2.4 Final Closing Balance Sheet.

         (a) Not later than sixty (60) days after the Closing Date, the Seller
shall cause the consolidated balance sheet of the Company to be prepared as of
the Effective Time in accordance with GAAP (however, no current or deferred
income taxes, payable or receivable, shall be reflected on such balance sheet),
and shall deliver such balance sheet to the Buyer (the "Preliminary Closing
Balance Sheet"). The Seller shall also prepare and deliver to the Buyer with the
Preliminary Closing Balance Sheet a schedule setting forth its calculation of
Net Book Value based on the Preliminary Closing Balance Sheet as of the
Effective Time.

         (b) If, within thirty (30) days following its receipt of the
Preliminary Closing Balance Sheet, the Buyer does not dispute the Preliminary
Closing Balance Sheet and/or the Seller's calculation of Net Book Value, such
balance sheet shall be deemed to be the closing balance sheet of the Company
(the "Final Closing Balance Sheet") for all purposes under this Agreement.

         (c) In the event the Buyer has any dispute with regard to the
calculation of Net Book Value, such dispute shall be resolved in the following
manner.

                                      -9-
<PAGE>

                  (i) The Buyer shall notify the Seller in writing within thirty
(30) days after the Buyer's receipt of the Preliminary Closing Balance Sheet,
which notice shall specify in reasonable detail the nature of the dispute.

                  (ii) During the thirty (30) day period following the Seller's
receipt of such notice, the Buyer and the Seller shall attempt to resolve such
dispute and to determine the final calculation of Net Book Value.

                  (iii) If, at the end of the thirty (30) day period specified
in subsection (c) (ii) above, the Buyer and the Seller shall have failed to
reach a written agreement with respect to all or a portion of such dispute
(those items that remain in dispute at the end of such period are the
"Unresolved Changes"), the matter shall be referred to the Neutral Auditors
within ten (10) days of the end of such period.

                  (iv) Each party hereto agrees to execute, if requested by the
Neutral Auditors, a reasonable engagement letter. All fees and expenses relating
to the work, if any, to be performed by the Neutral Auditors shall be borne pro
rata by the Seller and the Buyer in proportion to the allocation of the dollar
amount of the Unresolved Changes, in the aggregate, between the Buyer and the
Seller made by the Neutral Auditors such that the party with whom the Neutral
Auditors agree more closely pays a lesser proportion of the fees and expenses.
The Neutral Auditors shall act as an arbitrator to determine, based solely on
the provisions of this Agreement and the presentations by the Seller and the
Buyer, or representatives thereof, and not by independent review, only the
resolution of the Unresolved Changes. The Neutral Auditors' resolution of the
Unresolved Changes, which for each of the Unresolved Changes shall be within the
range of values of the amount claimed by either party as to any of the
Unresolved Changes, shall be made within thirty (30) days of the submission of
the Unresolved Changes to the Neutral Auditors, shall be set forth in a written
statement delivered to the Seller and the Buyer and shall be deemed to be
mutually agreed upon by the Buyer and the Seller for all purposes of this
Agreement. Any changes to the Preliminary Closing Balance Sheet resulting from
such resolution of the Unresolved Changes shall be made, and such Preliminary
Closing Balance Sheet, as so changed shall be the Final Closing Balance Sheet.

         (d) During the preparation of the Preliminary Closing Balance Sheet and
the period of any dispute within the contemplation of this Section 2.4, the
Buyer shall, and shall cause the Company to, (i) provide the Seller and the
Seller's authorized representatives with full access to the books, records,
facilities and employees of the Company and the Subsidiary, (ii) provide the
Seller, within ten (10) Business Days after the Closing Date, with month-end
financial information as of the Effective Time, including any information on
magnetic tape or diskette requested by the Seller (such information to be
consistent with that prepared by the Company in the Ordinary Course of Business
prior to the Closing), (iii) cooperate fully with the Seller and the Seller's
authorized representatives, including providing, on a timely basis, all
information necessary or useful in preparing the Preliminary Closing Balance
Sheet, and require Company Employees who become employees of the Buyer to assist
the Seller and the Seller's authorized representatives in the preparation of the
Preliminary Closing Balance Sheet.

                                      -10-
<PAGE>

         Section 2.5 Adjustment to Purchase Price. If, pursuant to the Final
Closing Balance Sheet, Net Book Value exceeds Estimated Net Book Value, the
Buyer shall pay the Seller, as an adjustment to the Purchase Price, in a manner
and with interest as provided in Section 2.6, the amount of such excess. If,
pursuant to the Final Closing Balance Sheet, Estimated Net Book Value exceeds
Net Book Value, the Seller shall pay to the Buyer, as an adjustment to the
Purchase Price, in a manner and with interest as provided in Section 2.6, the
amount of such excess.

         Section 2.6 Payment and Interest.

         (a) Any payments pursuant to Section 2.5 and this Section 2.6 shall be
made within five (5) days after Net Book Value has been finally determined, by
wire transfer to the Buyer or the Seller, as the case may be, of immediately
available funds from such party to a designated account of such other party.

         (b) The amount of any payment pursuant to Section 2.5 shall bear
interest from and including the day on which the Effective Time occurs but
excluding the date of payment at a rate per annum equal for each day during such
period to the federal funds effective rate as published daily by the Federal
Reserve System.

                                   ARTICLE III

                                   THE CLOSING

         Section 3.1 Time and Place of Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Edwards & Angell, 101 Federal Street, 23rd Floor, Boston, Massachusetts,
commencing at 10:00 a.m. local time on the second (2nd) Business Day following
the date on which all conditions to the obligations of the parties to consummate
the transactions contemplated hereby (other than conditions with respect to
actions the respective parties will take at the Closing itself) are satisfied,
or on such other date as the Buyer and the Seller may mutually determine (the
"Closing Date"). Upon consummation, except as specifically provided for herein,
the Closing shall be deemed to be effective for all purposes, including without
limitation, for tax, accounting, financial, risk allocation and liability
purposes at the Effective Time and each of Seller Parent, Seller and Buyer
hereby agree to take such action and to execute such documents as may be
reasonably required to effect such intent.

         Section 3.2 Deliveries at Closing.

         (a) At the Closing, the Seller shall deliver to the Buyer:

                  (i) Certificates representing all of the Company Shares, duly
endorsed in blank or accompanied by duly executed stock powers, together with
the certificates representing the Subsidiary shares, minute books, stock record
books and other corporate documents relating to the Company and the Subsidiary;

                                      -11-
<PAGE>

                  (ii) Written tenders of resignation of the Chief Executive
Officer of the Company, of each director of each of the Company and the
Subsidiary, and of the Secretary of each of the Company and the Subsidiary and
of the persons listed on Exhibit B hereto;

                  (iii) The closing documents described in Sections 11.1(c) and
(g) hereof;

                  (iv) The Sublease;

                  (v) The Outsourcing Agreement;

                  (vi) The Trademark Assignment Agreement;

                  (vii) The Loan Servicing Agreement Amendments;

                  (viii) The TSA;

                  (ix) An opinion of counsel of Seller Parent and Seller, dated
as of the Closing Date, in form and substance reasonably satisfactory to Buyer
to the effect that: (1) Each of Seller Parent, Seller, the Company and the
Subsidiary is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation; (2) Each of Seller
Parent and Seller has the corporate power and authority to enter into and
perform its obligations under this Agreement; (3) This Agreement and the other
closing documents delivered and executed by any of the Seller Parent or Seller
have been duly and validly authorized, executed and delivered by each of Seller
Parent and Seller and (assuming due authorization, execution and delivery by
Buyer) are legal, valid and binding obligations of each of Seller Parent and
Seller to the extent it is a party thereto, enforceable against each of Seller
Parent and Seller in accordance with their respective terms, except as
enforcement may be limited by receivership, conservatorship, and supervisory
powers of bank regulatory agencies generally as well as bankruptcy, insolvency,
reorganization, moratorium or other laws of general applicability relating to or
affecting creditor's rights, or the limiting effect of rules of law governing
specific performance, equitable relief and other equitable remedies or the
waiver of rights or remedies; and

                  (x) All other documents, instruments and writings required to
be delivered by Seller at or prior to the Closing Date pursuant to this
Agreement or otherwise reasonably requested by Buyer in connection herewith.

         (b) At the Closing, the Buyer shall deliver to Seller Parent, as agent
for the Seller:

                  (i) The closing documents described in Section 11.2(c) and (f)
hereof;

                  (ii) The Sublease;

                  (iii) The Outsourcing Agreement;

                  (iv) The Loan Servicing Agreement Amendments;

                                      -12-
<PAGE>

                  (v) The TSA;

                  (vi) An opinion of counsel of Buyer, dated as of the Closing
Date, in form and substance reasonably satisfactory to Seller to the effect
that: (1) Buyer is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation; (2) Buyer has the corporate
power and authority to enter into and perform its obligations under the
Agreement; (3) This Agreement and the other closing documents delivered and
executed by Buyer have been duly and validly authorized, executed and delivered
by Buyer and (assuming due authorization, execution and delivery by Buyer) are
legal, valid and binding obligations of Buyer, enforceable against Buyer in
accordance with their respective terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws of general
applicability relating to or affecting creditor's rights, or the limiting effect
of rules of law governing specific performance, equitable relief and other
equitable remedies or the waiver of rights or remedies; and

                  (vii) All other documents, instruments and writings required
to be delivered by Buyer at or prior to the Closing Date pursuant to this
Agreement or otherwise reasonably requested by Seller in connection herewith.

                                   ARTICLE IV

      REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER AND SELLER PARENT

         As a material inducement to the Buyer to enter into this Agreement,
Seller Parent and the Seller hereby represent and warrant to the Buyer as
follows:

         Section 4.1 Organization. The Seller is a corporation and Seller Parent
is a national banking association, each of which is duly organized, validly
existing and in good standing under the laws of their respective jurisdictions
of incorporation.

         Section 4.2 Authorization of Transaction. The Seller and Seller Parent
each has the necessary corporate power and authority to execute and deliver this
Agreement and the other documents and instruments to be executed by each of them
hereunder, to perform its respective obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement,
the performance by the Seller and Seller Parent of their respective obligations
hereunder and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part of the
Seller and Seller Parent. No other corporate action or proceeding on the part of
the Seller or Seller Parent is necessary to authorize this Agreement or the
other documents and instruments to be executed and delivered by the Seller or
Seller Parent pursuant hereto or the consummation by the Seller or Seller Parent
of the transactions contemplated hereby. When fully executed and delivered, this
Agreement and each of the other documents and instruments to be executed and
delivered by the Seller or Seller Parent pursuant hereto will constitute valid
and binding agreements of the Seller and Seller Parent, enforceable against each
of them in accordance with their respective terms, subject to the effect of
receivership, conservatorship or supervisory

                                      -13-
<PAGE>

powers of bank regulatory agencies and subject to the effect of bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to or affecting the enforcement of creditors' rights generally
and subject to general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity).

         Section 4.3 Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will directly or indirectly (with or without notice, lapse of time or both) (a)
violate any injunction, judgment, order, decree, ruling or other restriction of
any Governmental Entity to which the Seller or Seller Parent is subject or any
provision of Applicable Law or the charter or bylaws of the Seller or Seller
Parent, (b) conflict with, result in a breach of, constitute a default under, or
result in the acceleration of, create in any party the right to accelerate,
terminate, modify or cancel, or require any notice or consent under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Seller or Seller Parent is a party or by which it is bound, except where any
such violation, conflict, breach, default, acceleration, termination,
modification, cancellation or failure to give notice or obtain consent would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Seller or Seller Parent, or (c) result in the imposition
of any Lien against the Company Shares or any Lien (other than Permitted Liens)
against any of the Assets of the Company or any of the assets of the Subsidiary.

         Section 4.4 Governmental Consents. In connection with the consummation
of the sale of the Company Shares by the Seller to the Buyer, no registrations,
filings, applications, notices, consents, approvals, orders, qualifications or
waivers are required to be made, filed, given or obtained by the Seller or any
of its Affiliates, to or from any Governmental Entity, except for those (a) that
become applicable solely as a result of the specific regulatory status of the
Buyer or its Affiliates, (b) in connection with the applicable requirements, if
any, of the Hart-Scott-Rodino Act, (c) pursuant to requirements of any
agreement, contract, lease, instrument or other arrangement that Seller or any
of its Affiliates (other than the Company or the Subsidiary) are party to, (d)
except as set forth on Sections 5.3 and 5.15 of Seller's Disclosure Schedule,
pursuant to state registration, licensing or notice requirements that may apply
to the Company or the Subsidiary in connection with the sale of the Company
Shares by the Seller to the Buyer or (e) that the failure to make, file, give or
obtain would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Seller, the Seller Parent or the
Company. As of the date hereof, neither Seller Parent nor the Seller is aware of
any reason why any consent, approval or waiver necessary to permit consummation
of the transactions contemplated by this Agreement, including without limitation
all consents, approvals or waivers of any Governmental Entities, will not be
received on a timely basis.

         Section 4.5 Brokers' Fees. Except for Morgan Stanley & Co., whose fees
and expenses Seller Parent agrees will be paid by Seller Parent, neither the
Seller nor Seller Parent has any liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Buyer, the Company or the
Subsidiary, could become liable or obligated.

                                      -14-
<PAGE>

         Section 4.6 The Company Shares.

         (a) The Seller holds of record and owns beneficially all of the issued
and outstanding shares of capital stock of the Company, free and clear of all
Liens. Other than such capital stock, there are no outstanding equity securities
of the Company. The Seller is not a party to any option, warrant, purchase
right, or other contract or commitment that could require the Seller to sell,
transfer, or otherwise dispose of any of the Company Shares (other than this
Agreement) or requiring the Seller to repurchase, redeem or otherwise acquire,
or requiring the registration for sale of any of the capital stock of the
Company or the Subsidiary. The Seller is not a party to any voting trust, proxy,
or other agreement or understanding with respect to the voting of any of the
Company Shares.

         (b) The delivery at the Closing by Seller to Buyer of the certificates
representing the Company Shares, duly endorsed for transfer or accompanied by
duly endorsed stock powers, will vest Buyer on the Closing Date with good and
marketable title to all of the Company Shares, free and clear of all Liens,
other than Liens created by the Buyer or its Affiliates. Seller has the full
power, right and authority to vote and transfer the Company Shares and, on the
Closing Date, Seller will have the full power, right and authority to vote and
transfer the Company Shares. At the Closing, the Company will have good and
marketable title to all of the shares of capital stock of the Subsidiary, free
and clear of all Liens, other than Liens created by Buyer or its Affiliates.

                                    ARTICLE V

              REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY

         As a material inducement to the Buyer to enter into this Agreement, the
Seller Parent and the Seller hereby represent and warrant to the Buyer as
follows:

         Section 5.1 Organization, Qualification, and Corporate Power. Each of
the Company and the Subsidiary is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation. Each of the Company and the Subsidiary is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required, except where the lack of such
authorization, qualification or good standing would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company. Each of the Company and the Subsidiary has full corporate power and
authority to carry on the businesses in which it is currently engaged and to own
and use the properties currently owned and used by each in the conduct of its
respective businesses. Section 5.1 of Seller's Disclosure Schedule lists each of
the states where each of the Company and the Subsidiary is qualified to do
business as of the date of this Agreement.

         Section 5.2 Capitalization and Subsidiary.

         (a) The entire authorized capital stock of the Company consists of 100
shares of common stock, par value $10.00 per share, of which 100 shares are
issued and outstanding and zero shares are held in treasury. All of the issued
and outstanding shares of capital stock of the Company have been duly
authorized, are validly issued, fully paid and nonassessable. None of

                                      -15-
<PAGE>

the Company Shares has been issued in violation of any Applicable Law or
preemptive right. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require the Company to issue, sell, or
otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, or similar rights
with respect to the capital stock of the Company. The Company is not under any
obligation to repurchase, redeem or otherwise acquire or requiring registration
for sale of any of the capital stock of the Company or the Subsidiary. There are
no preemptive rights in respect of any of the capital stock of the Company.

         (b) The entire authorized capital stock of the Subsidiary consists of
100,000 shares of common stock, par value $1.00 per share, of which 32,380
shares are issued and outstanding and zero shares are held in treasury. Other
than such capital stock, there are no outstanding equity securities of the
Subsidiary. All of the issued and outstanding shares of capital stock of the
Subsidiary have been duly authorized and are validly issued, fully paid and
nonassessable and are held of record and owned beneficially by the Company free
and clear of all Liens. None of the outstanding shares of capital stock of the
Subsidiary has been issued in violation of any Applicable Law or preemptive
right. There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require the Subsidiary to issue, sell, or
otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, or similar rights
with respect to the capital stock of the Subsidiary. The Subsidiary is not under
any obligation to repurchase, redeem or otherwise acquire or requiring
registration for sale of any of the capital stock of the Subsidiary. There are
no voting trusts, proxies, or other agreements or understandings with respect to
the voting of any of the capital stock of the Subsidiary. There are no
preemptive rights in respect of any capital stock of the Subsidiary.

         (c) The Company does not own (or have any agreement to acquire),
directly or indirectly, any beneficial interest (except as creditor in the
Ordinary Course of Business) in any Person other than in the Subsidiary and the
Trust. The Subsidiary does not own (or have any agreement to acquire), directly
or indirectly, any beneficial interest (except as creditor in the Ordinary
Course of Business) in any Person.

         Section 5.3 Noncontravention with respect to the Company. Neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will directly or indirectly (with or without
notice, lapse of time or both) (a) violate any injunction, judgment, order,
decree, or ruling, of any Governmental Entity to which the Company or the
Subsidiary is subject or any provision of Applicable Law or the respective
charters or bylaws of the Company or of the Subsidiary, (b) except as set forth
in Section 5.3 of Seller's Disclosure Schedule, conflict with, result in a
breach of, constitute a default under, or result in the acceleration of, create
in any party the right to accelerate, terminate, modify or terminate, cancel, or
require any notice or consent under any material agreement, contract, lease,
license, instrument, or other arrangement to which the Company or the Subsidiary
is a party or by which any of them are bound, or (c) result in the imposition of
any Lien against any of the Assets of the Company or any of the assets of the
Subsidiary (other than a Permitted Lien).

                                      -16-
<PAGE>

         Section 5.4 Brokers' Fees. Neither the Company nor the Subsidiary has
any liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.

         Section 5.5 Title and Related Matters.

         (a) With the exception of properties disposed of in the Ordinary Course
of Business since December 31, 2001, the Company or the Subsidiary has good
title to, or holds by valid and existing lease or license, free and clear of all
Liens other than Permitted Liens, each piece of real and personal property
reflected on the Financial Statements and each piece of real and personal
property acquired by the Company or the Subsidiary since December 31, 2001.
Neither the Company nor the Subsidiary owns any real property.

         (b) Section 5.5(b) of Seller's Disclosure Schedule sets forth a list of
all leases (including subleases) of real property to which the Company or the
Subsidiary is a party (the "Leases"). The Leases are in full force and effect in
all material respects and, as of the date hereof, neither the Company nor the
Subsidiary has received a notice of default or termination with respect to any
of the Leases. Except as set forth in Section 5.5(b) of Seller's Disclosure
Schedule, there has not occurred any event which would constitute a material
breach by the Company or the Subsidiary of, or material default by the Company
or the Subsidiary in, the performance of any covenant, agreement or condition
contained in any Lease, and to the Seller's knowledge, no lessor under a Lease
is in material breach or default in the performance of any covenant, agreement
or condition contained in such Lease. The Company or the Subsidiary has paid all
rents and other charges to the extent due under the Leases.

         (c) With respect to material personal property used by the Company and
the Subsidiary in its respective businesses and leased by the Company or the
Subsidiary, the Company or the Subsidiary is not in default under the terms of
any such lease.

         (d) The material tangible personal property used by the Company and the
Subsidiary are adequate to conduct their respective businesses in all material
respects as currently conducted. Except as set forth in Section 5.5(d) of
Seller's Disclosure Schedule, to Seller's knowledge, the material items of
tangible personal property owned or leased by the Company or the Subsidiary, and
the improvements and structures (and the fixtures and appurtenances thereto)
located on the real property subject to the Leases are generally in good working
order, reasonable wear and tear excepted, and at all times during the past two
years have been.

         (e) The Company and the Subsidiary have good and marketable title to or
other right to use, free and clear of all Liens other than Permitted Liens, all
tangible assets and property that are material to the business and operations of
each of the Company and the Subsidiary as currently conducted.

         Section 5.6 Insurance. As of the date hereof, the Company and the
Subsidiary are, and at all times during the past two years have been, covered by
valid and currently effective insurance policies issued in favor of the Seller,
Seller Parent and/or the Company and the Subsidiary that, in the judgment of the
Seller, are customary for companies of similar size in the

                                      -17-
<PAGE>

industry and locale in which the Company or the Subsidiary operate. Section 5.6
of Seller's Disclosure Schedule sets forth a complete and accurate list of all
insurance policies issued in favor of the Ultimate Parent, Seller, Seller Parent
and/or the Company and the Subsidiary in connection with the business and
operations of the Company and the Subsidiary (the "Policies"). None of the
Ultimate Parent, Seller, Seller Parent, the Company or the Subsidiary is in
material default with respect to the Policies, and none of the Ultimate Parent,
Seller, Seller Parent, the Company or the Subsidiary has received any notice of
a cancellation with respect to any of the Policies and, within the last year,
none of the Ultimate Parent, Seller, Seller Parent, the Company or the
Subsidiary has been refused any insurance coverage sought or applied for with
respect to the business of the Company or the Subsidiary.

         Section 5.7 Financial Statements. Set forth in Section 5.7 of Seller's
Disclosure Schedule are true and complete copies of the following: The audited
consolidated balance sheets of the Company as of December 31, 2001 and the
related consolidated statements of income and cash flows for the years ended
December 31, 2001, together with the notes thereto, and the unaudited
consolidated balance sheets of the Company as of March 31, 2002 and the related
consolidated statements of income for the year 2002 through March 31, 2002
(collectively, the "Financial Statements"). The Financial Statements (a) are
based on the books and records of the Company and the Subsidiary and (b) present
fairly in all material respects the consolidated financial position and results
of operations of the Company and the Subsidiary for the period or as of the date
set forth therein, in each case, in accordance with GAAP consistently applied
(except as otherwise indicated therein and except that the March 31, 2002
statements are not accompanied by notes or other textual disclosure required by
GAAP). The balance sheets included in the Financial Statements do not reflect
any material write-up or revaluation not separately identified increasing the
book value of any assets other than write-ups or revaluations made in the
Ordinary Course of Business, nor have there been any transactions since December
31, 2001 giving rise to any such material special or nonrecurring income or any
such material write-up or revaluation other than those made in the Ordinary
Course of Business.

         Section 5.8 Absence of Undisclosed Liabilities. Neither the Company nor
the Subsidiary has any Liabilities in excess of $750,000, individually or in the
aggregate, that would be required to be recorded under GAAP except Liabilities
(a) that are reflected or disclosed on the Financial Statements, (b) that are
disclosed in or contemplated by this Agreement, or (c) that were incurred after
March 31, 2002 in the Ordinary Course of Business, and that individually or in
the aggregate, would not reasonably be expected to cause a Material Adverse
Effect.

         Section 5.9 Events Subsequent to December 31, 2001. Since December 31,
2001, there have been no events that, individually or in the aggregate, have had
or would be reasonably expected to have a Material Adverse Effect on the Company
nor has there been any sale, assignment or transfer of any of the material
Assets of the Company, or material assets of the Subsidiary, other than sales,
assignments or transfers of assets in the Ordinary Course of Business. Except
with respect to activities undertaken in connection with the transactions
contemplated by this Agreement, including the public announcement of the sale of
the Company, since December 31, 2001 each of the Company and the Subsidiary has
carried on its respective business in all material respects in the Ordinary
Course of Business. Except as set forth in Section 5.9 of Seller's Disclosure
Schedule, since December 31, 2001, the Company and the

                                      -18-
<PAGE>

Subsidiary have not suffered any material loss, damage, destruction or other
casualty to any of the Assets of the Company or assets of the Subsidiary that
were not replaced or covered by insurance.

         Section 5.10 Legal Compliance. Each of the Company and the Subsidiary
has complied in all material respects with all Applicable Laws, except where
noncompliance would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company. It is the intent of the
parties that this representation and warranty not apply to matters relating to
student loan servicing, Taxes or employees, which are the subjects of Sections
5.13, 9.1 and 10.1, respectively.

         Section 5.11 Intellectual Property. Set forth in Section 5.11(a) of
Seller's Disclosure Schedule hereto is a true and complete listing of all
material intangible assets and properties owned by the Company and the
Subsidiary as of the date hereof (the "Owned Intangible Properties"). Set forth
in Section 5.11(b) of Seller's Disclosure Schedule is a true and complete
listing of all material intangible assets and properties which the Company or
the Subsidiary licenses or otherwise has the right to use from third parties
(the "Licensed Intangible Properties"). The Owned Intangible Properties and the
Licensed Intangible Properties constitute all material intangible assets and
properties used or necessary in connection with the conduct of the businesses of
the Company and the Subsidiary. Except as set forth in Section 5.11(c) of
Seller's Disclosure Schedule, the Company or the Subsidiary has good and
marketable title to the Owned Intangible Properties, free and clear of all
Liens, other than Permitted Liens. Except as set forth in Section 5.11(c) of
Seller's Disclosure, either the Company or the Subsidiary has the valid and
enforceable right to use the Licensed Intangible Properties in the manner the
Licensed Intangible Properties are used in connection with the business of the
Company or the Subsidiary as currently conducted, free and clear of all Liens,
other than Permitted Liens, except where the failure to have such valid and
enforceable rights would not result in a Material Adverse Effect on the Company.
To Seller's knowledge, none of the Owned Intangible Properties, nor the
Company's or the Subsidiary's use of the Licensed Intangible Properties,
violates or infringes against the rights of any third party, except where such
violations or infringements would not reasonably be expected to have,
individually or in the aggregate a Material Adverse Effect on the Company. To
Seller's knowledge, no third party is violating or infringing upon the Owned
Intangible Properties. Neither the Company nor the Subsidiary has specifically
agreed to indemnify any Person against any charge of infringement with respect
to the Owned Intangible Properties or the Licensed Intangible Properties, other
than (a) subcontractors, customers, persons granted the right to use such
property and software developers engaged by the Company or the Subsidiary, (b)
employees, officers and directors of the Company or the Subsidiary, or (c) as
set forth in any written agreement granting the Company or the Subsidiary the
right to use the Licensed Intangible Properties.

         Section 5.12 Contracts. Section 5.12 of Seller's Disclosure Schedule
hereto lists all oral and written agreements to which the Company or the
Subsidiary is a party:

                  (a) That generated annual revenue in excess of $200,000 during
the year 2001 or that are expected to generate revenue in excess of $200,000 and
have been entered into since January 1, 2002;

                                      -19-
<PAGE>

                  (b) That commit the Company or the Subsidiary to expend in
excess of $200,000 during the year 2002 (but excluding agreements that are
dependent upon the volume or number of transactions or services processed or
delivered, unless such agreement contains a commitment to expend a minimum
amount in excess of $200,000);

                  (c) Limits or restricts the ability of the Company or the
Subsidiary to compete or otherwise to conduct its business in any material
manner or place;

                  (d) Involves an obligation for borrowed money, a capitalized
lease, or provides for a guaranty or surety by the Company or the Subsidiary in
respect of any Person other than the Company or the Subsidiary;

                  (e) Contains restrictions with respect to payment of dividends
or any other distribution in respect of capital stock;

                  (f) Relates to any loan or advance to, or investment in, any
Person by the Company or the Subsidiary or to the making of any such loan,
advance or investment in each case involving an amount in excess of $50,000; or

                  (g) Effecting a divestiture or acquisition of any Person or
any material Assets of the Company or material assets of the Subsidiary where
the agreement provides that the Company or the Subsidiary is subject to
indemnity obligations or obligations to perform material services (but excluding
all such agreements relating to outsourcing, servicing, servicing acquisition or
similar agreements entered into in the Ordinary Course of Business).

The agreements set forth in Section 5.12 of Seller's Disclosure Schedule are
referred to herein as the "Material Contracts". Except as set forth in Section
5.12 of Seller's Disclosure Schedule, each Material Contract is valid and in
full force and effect according to its terms and the Company or the Subsidiary,
as applicable, has duly performed in all material respects all its obligations
under each Material Contract to the extent that such obligations to perform have
accrued, and no breach or default, or, to the Seller's knowledge, alleged breach
or default or event which would (with the passage of time, notice or both)
constitute a breach or default by the Company or the Subsidiary thereunder, or,
to the Seller's knowledge, any other party or obligor with respect thereto, has
occurred (and neither the Company or the Subsidiary has received any formal cure
notice or written allegation of any intention to terminate or cancel any
Material Contract, other than those that have been rescinded). True copies of
each of the written agreements identified in Section 5.12 of Seller's Disclosure
Schedule, including all substantive amendments, waivers and modifications
thereto have been made available to Buyer.

         Section 5.13 Servicing. The Company is in compliance with Applicable
Laws relating to the servicing of student loans, except where noncompliance
would not have a Material Adverse Effect on the Company.

         Section 5.14 Litigation. Except as set forth in Section 5.14 of
Seller's Disclosure Schedule, there are no Actions pending or, to the Seller's
knowledge, threatened against the Company or the Subsidiary or against any Asset
of the Company or asset of the Subsidiary, that

                                      -20-
<PAGE>

(a) would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company, (b) enjoins or seeks to enjoin any
significant activity of the Company or the Subsidiary or (c) involves a claim of
liability against the Company or the Subsidiary in excess of $250,000. To
Seller's knowledge, there does not exist any fact or circumstance that would be
reasonably expected to give rise to any such Action. There are no judgments or
outstanding orders, injunctions, decrees, stipulations or awards (whether
rendered by a court or administrative agency, or by arbitration) against the
Company or the Subsidiary. There is no actual or, to the Seller's knowledge,
threatened Action which presents a claim to restrain, condition or prohibit the
transactions contemplated herein.

         Section 5.15 Licenses, Registrations or Permits. Each of the Company
and the Subsidiary hold all material licenses, registrations or permits (or
exemptions therefrom) necessary to conduct the business and operations of the
Company and the Subsidiary as presently conducted. Section 5.15 of Seller's
Disclosure Schedule sets forth all licenses, registrations or permits held by
the Company or the Subsidiary. Each such material license, registration and
permit is in full force and effect. No Action is pending, or to the Seller's
knowledge, is threatened, seeking the revocation, cancellation, suspension or
limitation of any such license registration, permit or exemption.

         Section 5.16 Labor Relations. There is no organized labor strike,
dispute, slowdown or stoppage, or collective bargaining or unfair labor practice
claim pending, or to the Seller's knowledge, threatened against or affecting the
Company or the Subsidiary. Neither the Company nor the Subsidiary is a party to
a collective bargaining agreement or other similar contract or agreement or
understanding with any labor organization, group or association. To the Seller's
knowledge, no labor organization, collective bargaining representative or group
of employees claims to represent a majority of the employees of the Company or
the Subsidiary in an appropriate unit of the Company and the Subsidiary. Except
as set forth in Section 5.16 of the Seller's Disclosure Schedule, within the
last two (2) years prior to the date hereof, neither the Company nor the
Subsidiary has been the subject to any representational campaign by any union or
other organization or group seeking to become the collective bargaining
representative of any of the employees of the Company or of the Subsidiary or
been subject to, or to the Seller's knowledge, threatened with any strike or
other concerted labor activity or dispute. Each of the Company and the
Subsidiary is in material compliance with all Applicable Laws respecting
employment practices, terms and conditions of employment and wages and hours and
has not engaged in any unfair labor practices.

         Section 5.17 Affiliate Transactions. Except as set forth in Section
5.17 of Seller's Disclosure Schedule or in the Financial Statements, (a) none of
the Seller or any of its Affiliates (other than the Company and the Subsidiary)
provides or causes to be provided to the Company or the Subsidiary any material
assets, services or facilities and (b) none of the Company or the Subsidiary
provides or causes to be provided to the Seller or any of its Affiliates (other
than the Company and the Subsidiary) any material assets, services or
facilities, in either the case of (a) or (b) other than administrative and
corporate services such as financial reporting, treasury, tax compliance, risk
management, payroll, cash management, human resources and benefits
administration, legal, information technology, corporate sponsored training,
group purchasing and other similar services provided by a parent company to its
operating subsidiaries. Other than

                                      -21-
<PAGE>

as provided for by this Agreement, the consummation of the transactions
contemplated hereby will not (either alone, or upon the occurrence of any act or
event, or with the lapse of time, or both) result in any payment arising or
becoming due from the Company or the Subsidiary to Seller or any of its
Affiliates (other than the Company or the Subsidiary).

         Section 5.18 Bank Accounts; Lock Boxes. Section 5.18 of Seller's
Disclosure Schedule sets forth a list of all banks or other financial
institutions with which the Company or the Subsidiary have an account or
maintain a lock box or safe deposits box, showing the type and account number of
each such account, lock box and safe deposit box.

         Section 5.19 Officers and Directors. Section 5.19 of Seller's
Disclosure Schedule lists all of the current directors and senior officers of
each of the Company and the Subsidiary.

         Section 5.20 Books and Records. The minute books and records of the
Company and the Subsidiary contain true, complete and correct records of all
actions taken at all meetings and by all written consents in lieu of meetings of
the Board of Directors, or any committees thereof, and stockholders of the
Company and the Subsidiary since January 1, 2001.

         Section 5.21 Environmental Compliance. The Company and the Subsidiary
have obtained all Environmental Permits required to carry on their respective
businesses as now conducted, are in compliance with the terms and conditions of
all such Environmental Permits and are in compliance with all applicable
Environmental Laws, except for any of the foregoing as would not reasonably be
expected to result, individually or in the aggregate, in material liability
under or relating to the Environmental Laws. Neither the Company nor the
Subsidiary has received any Environmental Claim and neither the Company nor the
Subsidiary is aware of any Environmental Claim that has been threatened in
writing. Neither the Company nor the Subsidiary has entered into, has agreed to,
or is subject to as a party any Environmental Claim that has been received by
the Company or the Subsidiary, any material order of any Governmental Entity
received by the Company or the Subsidiary, or any material order of any
Governmental Entity issued to Company or the Subsidiary under or relating to any
Environmental Laws. To the knowledge of the Seller, except as would not
reasonably be expected to result, individually or in the aggregate, in material
liability under or relating to Environmental Laws, Regulated Substances have not
been generated, transported, treated, stored, disposed of, arranged to be
disposed of, released or threatened to be released by the Company or the
Subsidiary at, on, from or under any of the properties or facilities currently
or formerly (within the past two years) owned or leased by the Company or the
Subsidiary, in material violation of, or in a manner to a location that would
reasonably be expected to give rise to material liability to the Company or the
Subsidiary under or relating to, any Environmental Laws.

         Section 5.22 Accounts Receivable. Except as set forth in Section 5.22
of Seller's Disclosure Schedule, all of the accounts receivable that are
recorded on the books of the Company or the Subsidiary are bona fide and
represent amounts validly due; provided, however, that this representation shall
not apply to any accounts receivables or any other amounts due from Buyer or its
Affiliates to the Company or its Subsidiary.

                                      -22-
<PAGE>

                                   ARTICLE VI

               REPRESENTATIONS AND WARRANTIES REGARDING THE BUYER

         As a material inducement to the Seller and Seller Parent to enter into
this Agreement, the Buyer hereby represents and warrants to the Seller and
Seller Parent as follows:

         Section 6.1 Organization. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation.

         Section 6.2 Authorization of Transaction. The Buyer has the necessary
corporate power and authority to execute and deliver this Agreement and the
other documents and instruments to be executed by it hereunder, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement, the performance by the Buyer of
its obligations hereunder and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of the Buyer. No other corporate action or proceeding on the part of
the Buyer is necessary to authorize this Agreement or the other documents and
instruments to be executed and delivered by the Buyer pursuant hereto or the
consummation by the Buyer of the transactions contemplated hereby. When fully
executed and delivered, this Agreement and each of the other documents and
instruments to be executed and delivered by the Buyer pursuant hereto will
constitute valid and binding agreements of the Buyer, enforceable against it in
accordance with their respective terms, subject to the effect of applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to or affecting the enforcement of creditors'
rights generally and subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).

         Section 6.3 Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will directly or indirectly (with or without notice, lapse of time or both) (a)
violate any injunction, judgment, order, decree, ruling or other restriction of
any Governmental Entity to which the Buyer is subject or any provision of
Applicable Law or the charter or bylaws of the Buyer or (b) conflict with,
result in a breach of, constitute a default under, or result in the acceleration
of, create in any party the right to accelerate, terminate, modify or cancel, or
require any notice or consent under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is a party or by which it is
bound, except where any such violation, conflict, breach, default, acceleration,
termination, modification, cancellation or failure to give such notices or
obtain such consents would not reasonably be expected to have a Material Adverse
Effect on the Buyer.

         Section 6.4 Governmental Consents. In connection with the consummation
of the purchase of the Company Shares by the Buyer from the Seller, no
registrations, filings, applications, notices, consents, approvals, orders,
qualifications or waivers are required to be made, filed, given or obtained by
the Buyer or any of its Affiliates, to or from any Governmental Entity except
for those (a) that become applicable solely either as a result of the specific
regulatory status of the Seller or its Affiliates, (b) in connection with the
applicable requirements, if any, of the Hart-Scott-Rodino Act, or (c) the
failure to make, file, give or obtain would not

                                      -23-
<PAGE>

have a Material Adverse Effect on the Buyer. As of the date hereof, the Buyer is
not aware of any reason why any consent, approval or waiver necessary to permit
consummation of the transactions contemplated by this Agreement, including
without limitation all consents, approvals or waivers of any Governmental
Entities, will not be received on a timely basis.

         Section 6.5 Brokers' Fees. Except for Goldman, Sachs & Co., whose fees
and expenses will be paid by the Buyer, the Buyer has no liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which the Seller or Seller
Parent could become liable or obligated.

         Section 6.6 Investment. The Buyer is acquiring the Company Shares for
investment and not with a view toward or for sale in connection with any
distribution thereof, or with any present intention of distributing or selling
the Company Shares. The Buyer agrees that the Company Shares may not be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of
without registration under the Securities Act, except pursuant to an exemption
from such registration available under such act, and without compliance with
state securities laws, in each case, to the extent applicable.

         Section 6.7 Financing. The Buyer has immediate access to all funds
necessary to pay the Purchase Price and related fees and expenses, and the Buyer
has the financial capacity to perform all of its other obligations under this
Agreement.

                                   ARTICLE VII

                                INTERIM COVENANTS
         The parties agree as follows with respect to the period between the
time of execution of this Agreement and the Closing.

         Section 7.1 Notices and Consents.

         (a) From the date hereof through the Closing, subject to the terms and
conditions herein provided, including Section 7.2, each of the Seller, Seller
Parent, and the Buyer agrees to use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and to cooperate in
good faith with the other in connection with the foregoing, including using its
reasonable best efforts (i) to obtain all consents, approvals and authorizations
that are required to be obtained under any Applicable Law, (ii) to lift or
rescind any injunction or restraining order or other order adversely affecting
the ability of the parties hereto to consummate the transactions contemplated
hereby, (iii) to effect all necessary registrations and filings, including, but
not limited to, filings under the Hart-Scott-Rodino Act and submissions of
information requested by Governmental Entities, and (iv) to fulfill all
conditions to this Agreement.

         (b) In addition to the foregoing, and not in limitation thereof, each
of the Seller, Seller Parent and Buyer covenants and agrees to file the notices
required to be filed with any Person in connection with the transactions
contemplated hereby within five (5) Business Days of the date

                                      -24-
<PAGE>

hereof, including but not limited to, filing premerger notification under the
Hart-Scott-Rodino Act (which shall be filed within two (2) Business Days of the
date hereof and each party shall request early termination of the waiting
period) and all other notices, registrations, applications or other filings that
may be required with any other Governmental Entities. The Seller, Seller Parent,
and the Buyer further covenant and agree, with respect to a threatened or
pending preliminary or permanent injunction or other order, decree or ruling or
statute, rule, regulation or executive order that would adversely affect the
ability of the parties hereto to consummate the transactions contemplated
hereby, to use their respective reasonable best efforts to prevent the entry,
enactment or promulgation thereof, as the case may be. Further, each of Buyer
and Seller will be given notice of and a reasonable opportunity to participate
in contacts with any Governmental Entity regarding antitrust or merger control
matters. To the extent permitted by Applicable Law, Buyer and Seller shall
provide the other the opportunity to make copies of all material correspondence,
filings or communications (or memoranda setting forth the substance thereof)
between such party or its representatives, on the one hand, and any Governmental
Entity, on the other hand, with respect to this Agreement or the transactions
contemplated by this Agreement, except for documents filed pursuant to Item 4(c)
of the Hart-Scott-Rodino Notification and Report Form or communications
regarding the same or documents or information submitted in response to any
request for additional information or documents pursuant to the
Hart-Scott-Rodino Act which reveal Seller's or Buyer's negotiating objectives or
strategies or purchase price expectations. Buyer and Seller acknowledge that all
such information provided pursuant to the foregoing sentence shall be subject to
the terms of the Confidentiality Agreement.

         (c) Buyer and Seller shall notify and keep the other advised as to (i)
any material communication from the Federal Trade Commission, the United States
Department of Justice or any other Governmental Entity regarding any of the
transactions contemplated hereby and (ii) any Action pending and known to such
party or, to its knowledge, threatened, which challenges the transactions
contemplated hereby. Except as provided herein, Buyer, Seller and Seller Parent
shall not take any action inconsistent with their obligations under this
Agreement which would materially hinder or delay the consummation of the
transactions contemplated by this Agreement.

         (d) All documents required to be filed by any of Buyer or Seller or any
of their respective Affiliates with any Governmental Entity in connection with
this Agreement or the transactions contemplated by this Agreement will comply in
all material respects with the provisions of Applicable Law.

         Section 7.2 Assignment of Contracts, Approvals, Etc.

         (a) Anything in this Agreement to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign any contract or permit, or
any claim, right or benefit arising thereunder or resulting therefrom, if
pursuant to the terms of such contract or permit the purchase and sale of the
Company Shares would constitute an attempted assignment thereof, that without
the consent of a third party thereto, would constitute a breach or other
contravention thereof, be ineffective with respect to any party thereto, or in
any way adversely affect the rights of the Buyer, the Company, the Subsidiary or
the Seller thereunder.

                                      -25-
<PAGE>

         (b) With respect to any contract or permit that by its terms requires
the consent of a third party to the purchase and sale of the Company Shares,
subject to the provisions of Section 7.2(c) the Seller and the Buyer will use
reasonable good faith efforts to obtain as expeditiously as possible the written
consent of the other party or parties to such contract or permit.

         (c) It is, and the Buyer acknowledges that it shall be, the obligation
of the Seller (and not the Buyer) to obtain all required consents with respect
to any agreement, contract, lease, instrument, arrangement or permit, but that
the Seller shall not be obligated to pay any money to any Person or to offer or
grant other financial or other accommodations to any Person in connection with
obtaining any consent, waiver, confirmation, novation or approval with respect
to any contract or permit. The Buyer will use reasonable good faith efforts to
assist the Seller in obtaining the required consents. Notwithstanding the
foregoing, the failure by the parties to obtain any required consent (other than
the failure to obtain any material non-contractual consent to the transfer of
the Shares from any Governmental Entity possessing competent regulatory
jurisdiction over the Seller or the Seller Parent to the transfer of the Company
Shares from Seller to Buyer (the "Material Governmental Consents") and other
than the expiration of the waiting period under the Hart-Scott-Rodino Act),
waiver, confirmation, novation or approval with respect to any agreement,
contract, lease, instrument, arrangement or permit shall not relieve either
party from its obligation to consummate at the Closing the transactions
contemplated by this Agreement. In addition, no action taken by any third party
amending, modifying, terminating or altering performance under any agreement,
contract, lease, instrument, arrangement or permit or indicating an intention of
doing any of the foregoing shall relieve either party from its obligation to
consummate at the Closing the transactions contemplated by the Agreement.

         (d) For one hundred eighty (180) days following the Closing Date, the
Buyer and Seller shall continue to use their commercially reasonable efforts,
and shall cooperate with each other, to obtain the aforementioned consents,
however, Seller shall not be obligated to pay any money to any Person or to
offer or grant other financial or other accommodations to any Person in
connection with obtaining any consent, waiver, confirmation, novation or
approval with respect to any contract or permit.

         Section 7.3 Full Access.

         (a) From the date hereof through the Closing Date, the Seller will
permit and will cause the Company and the Subsidiary to permit, representatives
of the Buyer to have full access during normal business hours, upon two (2)
Business Days' prior notice and in a manner so as not to interfere with the
normal business operations of the Company and the Subsidiary, to all premises,
properties, personnel, books, records, contracts, and documents of or pertaining
to the Company and the Subsidiary, provided, however, that under no
circumstances shall the Seller be required to provide to the Buyer and its
representatives access to, nor shall any of them have rights to make copies of,
(i) tax returns filed by any of the Seller's Affiliates (other than the Company
and the Subsidiary), (ii) any information or materials subject to
confidentiality agreements with third parties or required to be kept
confidential by law, or (iii) any privileged attorney-client communication or
document. The Buyer (i) will treat and hold any information it

                                      -26-
<PAGE>

receives from the Seller, the Company, or the Subsidiary in the course of the
reviews contemplated by this Section 7.3 as Evaluation Materials in accordance
with, and subject to the terms of the Confidentiality Agreement, which is hereby
incorporated in this Section 7.3(a) as though fully set forth herein, (ii) will
not use any of the Evaluation Materials except in connection with this
Agreement, and, (iii) if this Agreement is terminated for any reason whatsoever,
upon the written request of the Seller will return to Seller Parent all copies
of such Evaluation Materials which are in its possession. The Seller shall not
be required to permit any such access or provide any such information to the
extent such access or the disclosure of such information in the sole judgment of
Seller unreasonably interferes with the Seller, the Company or the Subsidiary or
would, in the sole judgment of the Seller, violate or prejudice the rights of
the borrowers (including, but not limited to, privacy rights) or other third
parties, jeopardize any attorney-client privilege of the Seller or any of its
Affiliates, including the Company or the Subsidiary, or contravene any law,
rule, regulation, order, judgment or decree binding upon, or any agreement,
contract or other arrangement, entered into by, the Seller or any of its
Affiliates, the Company or the Subsidiary or jeopardize the Company's or the
Subsidiary's rights under any such agreement, contract or other arrangement.

         (b) All requests for access to the offices, plants, properties, books,
and records relating to the business and the affairs of the Company and the
Subsidiary shall be made to the representatives of the Seller set forth on the
date hereof in Section 7.3(b) of Seller's Disclosure Schedule or to such other
representatives as the Seller shall designate in writing to the Buyer (the
"Seller Representatives"), who shall be solely responsible for coordinating all
such requests and all access permitted hereunder. It is further understood and
agreed that neither the Buyer nor its authorized representatives shall contact
any of the employees, customers, suppliers, contractors of the Seller or the
Company or the Subsidiary or any of the borrowers or anyone else with whom the
Company or the Subsidiary has a business relationship in connection with the
transactions contemplated hereby, whether in person or by telephone, mail or
other means of communication, without the prior authorization of the Seller
Representatives.

         Section 7.4 Conduct of Business Prior to Closing.

         (a) From the date hereof until the Closing, except as set forth on the
date hereof in Section 7.4(a) of Seller's Disclosure Schedule, Seller shall
cause the Company and the Subsidiary to carry on their respective businesses in
the Ordinary Course of Business and shall use commercially reasonable efforts to
preserve intact their current business organization, maintain their assets in
good working order (reasonable wear and tear excepted), keep available the
services of their current officers and employees and maintain existing relations
and goodwill with their suppliers, brokers, customers, landlords, creditors,
employees and agents having business relationships with any of them. Without
limiting the generality of the foregoing, except as otherwise specifically
provided by this Agreement, without the prior consent of the Buyer, Seller will
not permit the Company or the Subsidiary to, and neither the Company nor the
Subsidiary will, do (nor will any of them authorize or propose or enter into any
contract, agreement, commitment or arrangement to do) any of the following:

                  (i) Authorize any direct or indirect redemption or acquisition
of any shares of its capital stock;

                                      -27-
<PAGE>

                  (ii) Split, combine or reclassify any capital stock or issue
any other security in respect of, in lieu of or in substitution for shares of
capital stock or repurchase, redeem or otherwise acquire any shares of capital
stock;

                  (iii) Issue, deliver, pledge, encumber, sell, or purchase any
shares of capital stock or securities convertible into, or rights, warrants or
options to acquire, any shares of capital stock or other convertible securities;

                  (iv) Acquire or agree to acquire by merging or consolidating
with, or by purchasing any portion of the capital stock or assets of, or by any
other manner, any business, corporation, partnership, association or other
business organization, or any division thereof;

                  (v) Amend its Articles of Incorporation or By-laws;

                  (vi) Grant any increase in the compensation or benefits of, or
pay any bonus to, any officer or employee (whether general or otherwise) other
than those committed to, by contract or otherwise (other than in the Ordinary
Course of Business);

                  (vii) Enter into any employment or compensation agreement with
any officer or employee (other than in connection with the hiring of new
employees in the Ordinary Course of Business), or terminate the employment of
any officer or employee (other than in the Ordinary Course of Business);

                  (viii) Except as provided in Section 10.2 hereof relating to
the establishment of group health plans for Company Employees, modify, cancel or
establish any Company Benefit Plan in regard to any of its current employees
except to the extent required by any Applicable Law;

                  (ix) Except in the Ordinary Course of Business or as required
by their terms, amend or terminate any Material Contract;

                  (x) Terminate or fail to use reasonable efforts to renew or
preserve any license, permit or registration except where the failure to hold
any such license, permit or registration would not reasonably be likely to have,
individually or in the aggregate, a Material Adverse Effect;

                  (xi) Sell, transfer, lease, license, mortgage, encumber or
otherwise dispose of any assets, rights or liabilities, except (A) in the
Ordinary Course of Business, (B) for dispositions of property not greater than
$100,000 individually or $500,000 in the aggregate, or (C) as contemplated in
connection with this Agreement;

                  (xii) Change any financial or Tax accounting methods,
principles, practices or policies, except as required by GAAP; provided, that
notwithstanding anything to the contrary herein, no adjustments shall be made to
any accruals or reserves reflected in the Financial Statements in contemplation
of the transactions contemplated hereby;

                                      -28-
<PAGE>

                  (xiii) Make any capital expenditure, or commitments with
respect thereto, except for capital expenditures that do not exceed $250,000
individually (other than in furtherance of projects already commenced or planned
or in the Ordinary Course of Business);

                  (xiv) Incur, assume or guarantee any indebtedness (except for
borrowings from the Seller, Seller Parent or any of its Affiliates) or capital
leases, or create or permit to become effective any Lien or charge of any kind
upon its assets (except pursuant to borrowings from the Seller, Seller Parent or
any of its Affiliates) (other than in the Ordinary Course of Business);

                  (xv) (A) Pay, discharge, settle or satisfy any claims,
liabilities, obligations or litigation, where such payment, discharge,
settlement or satisfaction would have an adverse effect on the Company's
financial condition in excess of $250,000, other than the payment, discharge,
settlement or satisfaction, in the Ordinary Course of Business or in accordance
with their terms, of liabilities reflected or reserved against in the Financial
Statements (or the notes thereto) or incurred since the date of such financial
statements in the Ordinary Course of Business, or (B) waive any claims or rights
of substantial value; or

                  (xvi) Agree to or make any commitment to take any actions
prohibited by this Section 7.4.

         (b) Notwithstanding the provisions of this Section 7.4, nothing in this
Agreement shall be construed or interpreted to prevent the Seller, the Company
or the Subsidiary from (1) paying or making any cash dividends, (2) making or
accepting intercompany or intracompany advances to, from or with the Seller or
any of its Affiliates, or (3) engaging in any transaction incident to the normal
cash management procedures of the Seller and its Affiliates in the Ordinary
Course of Business.

         (c) Buyer hereby designates the two officers of Buyer or its Affiliates
listed on Section 7.4(c) of Buyer's Disclosure Schedule, or such other officers
as Buyer may designate upon written notice to Sellers (the "Buyer's
Representatives"), to be responsible for determining whether consent to any
action prohibited by this Section 7.4 shall be given by Buyer. The Seller
Representatives may contact Buyer Representatives with any requests for consent
to any action prohibited by this Section 7.4. The Buyer Representatives shall
respond promptly in writing to any request for consent to the taking of any
action under this Section 7.4. If the Buyer Representatives do not respond to
any request within five (5) Business Days of its delivery, such consent will be
deemed to have been given. Seller may rely on any consent given in writing by
any of the Buyer Representatives. The time periods within which the Buyer
Representatives must respond shall commence on the date on which either of the
Buyer Representatives is delivered a written request for consent.

         Section 7.5 Control of Business. Nothing in this Agreement shall give
Buyer, directly or indirectly, the right to control or direct the Company's or
the Subsidiary's operations prior to Closing.

                                      -29-
<PAGE>

         Section 7.6 Insurance; Indemnity Obligations.

         (a) Seller Parent and its Affiliates shall maintain in effect until the
Closing Date all casualty and liability insurance policies in connection with
the Company's business (or comparable replacement policies). Effective at 12:00
a.m. eastern time on the day after the Closing Date, all insurance coverage and
self-insurance maintained by Seller Parent and its Affiliates (excluding the
Company and the Subsidiary) under which the Company and the Subsidiary are
insured or self-insured, including any and all bonds or other indemnity
obligations (other than Guaranties), shall be cancelled and terminated (except
to the extent that they may not, by their terms, be so cancelled or terminated).
All premium refunds paid to Seller Parent or its Affiliates (excluding the
Company and the Subsidiary) relating to insurance covering the Company and the
Subsidiary for all periods ending prior to the Effective Time shall be the
property of Seller Parent or its Affiliates, as the case may be, whether such
refunds are paid on, before or after the Effective Time. All premium refunds
paid to Seller Parent or its Affiliates (excluding the Company or the
Subsidiary) relating to insurance covering the Company or the Subsidiary for all
periods beginning after the Closing Date shall be the property of the Company
whether such refunds are paid on, before or after the Closing Date. From and
after the Closing Date, Seller Parent and the Buyer shall cooperate in
connection with the adjustment and administration of claims under all such
insurance coverage.

         (b) From the date hereof through the Closing Date, the Buyer and Seller
Parent shall cooperate to ensure that no certificate of insurance indicating
coverage by Seller Parent or its Affiliates shall be issued after the Closing
Date and that all such insurance certificates which are outstanding as of the
Closing Date are promptly returned to Seller Parent or its Affiliates, as
applicable. Except to the extent indemnifiable by the Seller Parent in
accordance with Article IX, Article X or Article XII of this Agreement, in the
event that Seller Parent or any of its Affiliates is unable to cancel or
terminate any such coverage as of the Closing Date, and Seller Parent or any of
its Affiliates thereafter receives a claim or purported claim under any such
coverage, the Buyer shall be responsible for all Liabilities incurred by Seller
Parent or any of its Affiliates in respect of the same, to the extent that such
claim relates to an insurable event which occurs after the Closing Date.

         (c) From the date hereof until the date that is 150 days after the
Closing Date, Seller, Seller Parent and Buyer shall cooperate for the purpose of
causing Buyer or one of its Affiliates to be substituted (or such other Person
as may be acceptable to the obligee thereunder) in respect of all obligations of
the Seller or any of its Affiliates under each of the guaranties, bonds, letters
of credit, letters of comfort and other indemnity obligations (the "Guaranties")
set forth in Section 7.6(c) of Seller's Disclosure Schedule which by its terms
may not be terminated or cancelled, for the Seller or its Affiliates, as the
case may be, and to cause the Seller and its Affiliates to be forever released
from all liability under such Guaranties for events which occur after the
Closing Date. The Seller or its Affiliates will terminate or cancel as of the
Closing Date all guaranties, bonds, letters of credit, letters of comfort and
other indemnity obligations which by their terms may be terminated or cancelled,
so long as such termination or cancellation does not result in a termination or
cancellation of the related contract or agreement.

                                      -30-
<PAGE>

         (d) In the event that Buyer fails to obtain the unconditional release
of Seller or any of its Affiliates from all obligations under the Guaranties as
of the Closing Date, Buyer shall either (i) promptly deposit with an escrow
agent reasonably acceptable to Seller an amount in cash equal to the aggregate
principal or stated amount, as may be applicable, of the Guaranties not so
released, which monies shall be held pursuant to an escrow agreement in form and
substance reasonably acceptable to Buyer and Seller, or (ii) provide back-up
letters of credit issued by one or more commercial banks reasonably satisfactory
to Seller, payable to Seller in such aggregate principal or stated amount and
otherwise in form and substance reasonably satisfactory to Seller with respect
to such Guaranties. Seller shall use its commercially reasonable efforts to keep
in place, and Seller will not waive any requirements of or agree to amend any
such Guaranty in any material respect without the prior written consent of Buyer
which consent shall not be unreasonably withheld, for so long as monies are held
in escrow or letters of credit are posted. Any cash deposited in accordance with
clause (i) of this Section 7.6(d) shall be held in a segregated interest-bearing
account and shall be used solely to satisfy Seller's payment obligations in
respect of such Guaranties, and the unused portion of any cash deposit relating
to a Guaranty shall be returned to Buyer promptly following the release of
Seller or its Affiliates with respect to, or any other termination of, the
Guaranties.

         Section 7.7 Intercompany Borrowings. Prior to Closing, (a) Seller and
its Affiliates (other than the Company and the Subsidiary) will pay to the
Company the amount owed by Seller or any such Affiliate in respect of any funds
borrowed by Seller or such Affiliate from the Company or the Subsidiary and (b)
the Company and the Subsidiary will pay to Seller and its Affiliates (other than
the Company and the Subsidiary) the amount owed by the Company and the
Subsidiary in respect of any funds borrowed by the Company and/or the Subsidiary
from the Seller or any of its Affiliates (other than the Company and the
Subsidiary).

         Section 7.8 Public Announcements. Except as otherwise required by law,
regulations or rules of any national stock exchange, the parties hereto shall
each furnish to the other the text of all public notices and communications,
written or oral, proposed to be sent by the furnishing party regarding the
transactions contemplated hereby. Except as otherwise required by law,
regulations or rules of any national stock exchange, the furnishing party shall
not send or transmit such notices or communications or otherwise make them
public unless and until the consent of the other party is received, which
consent shall not be unreasonably withheld or delayed.

         Section 7.9 Schedule Supplements. From the date hereof through the
fifth (5th) day prior to the Closing Date, the Seller may, by written notice to
the Buyer, supplement its Disclosure Schedule (other than Section 7.4(a) of
Seller's Disclosure Schedule) to reflect any change or event that occurs after
the date of this Agreement or to otherwise correct or amend its Disclosure
Schedule; provided, however, that no such supplemental disclosure shall be
deemed to cure any breach of any of the Seller's representations or warranties
for purposes of Section 11.1 or for purposes of Seller Parent's indemnification
obligations under this Agreement.

         Section 7.10 Exclusivity. From the date hereof until the Closing Date,
Seller Parent and the Seller will not (and the Seller will not cause or permit
the Company and the Subsidiary to) solicit, initiate, encourage the submission
of, respond to or agree to any proposal or offer from any Person relating to the
acquisition of all or substantially all of the capital stock or assets of the

                                      -31-
<PAGE>

Company and the Subsidiary (including any acquisition structured as a merger,
consolidation, or share exchange).

         Section 7.11 Corporate Names. The Buyer and the Buyer's Parent
acknowledge that, from and after the Closing Date, the Ultimate Parent, Seller,
Seller's Parent and their Affiliates shall have the absolute and exclusive
proprietary right to all names, marks, trade names and trademarks (collectively,
the "Names") incorporating "Fleet", by itself or in combination with any other
Name, including, without limitation, the corporate design logo associated with
the Ultimate Parent or any of its Affiliates (other than that specifically of
the Company or the Subsidiary to the extent it does not incorporate "Fleet"),
and that none of the rights thereto or goodwill represented thereby or
pertaining thereto are being transferred hereby or in connection herewith. The
Buyer and the Buyer's Parent agree that they will not, nor will they permit any
of their Affiliates (including the Company and the Subsidiary) to, use any Name,
phrase or logo incorporating "Fleet" or the corporate design logo of Ultimate
Parent or any of its Affiliates (other than that specifically of the Company or
the Subsidiary to the extent it does not incorporate "Fleet") in or on any of
their literature, sales materials or products or otherwise in connection with
the sale of any products or services. Notwithstanding the foregoing, for a
transitional period of 180 days following the Closing Date, the Company and the
Subsidiary shall be permitted to use the design logo of Ultimate Party (but not
its name) only to the extent that such logo is incorporated with the Company's
or Subsidiary's name or logo as displayed on existing stationery, business forms
and signage.

         Section 7.12 The Trust. Prior to Closing, Seller Parent shall resign as
trustee of the Trust as of the Closing Date and Buyer shall have secured a
successor trustee and such trustee shall have agreed to commence acting as such
as of the Closing Date.

         Section 7.13 Transition Services. At Closing, Buyer and Seller shall
have entered into a transition services agreement ("TSA") relating to Seller and
its Affiliates providing for the continuation of certain services, including
information technology, human resources, tax, accounting and such other services
as the parties may agree upon, currently provided to the Company and the
Subsidiary, and upon such terms as are mutually acceptable to the Buyer and
Seller.

         Section 7.14 Outsourcing Agreement. At Closing, Seller and/or its
Affiliates and Buyer and/or the Company shall have entered into an outsourcing
agreement (the "Outsourcing Agreement") upon the terms set forth in Exhibit A,
which Outsourcing Agreement shall also contain such other terms that are
mutually acceptable to Buyer and Seller. Also, prior to Closing, the employment
of those employees of the Company's education lending business unit whose names
are set forth on Exhibit B will be transferred from the Company to Seller or an
Affiliate of Seller at Seller's expense.

         Section 7.15 Sublease. Prior to Closing , Seller Parent shall assign
its obligations under the lease for the premises located at 473 Third Street,
Niagara Falls, New York to the Company pursuant to an assignment agreement that
is reasonably acceptable to each of Buyer and Seller. Also prior to Closing,
Seller Parent (or one of its Affiliates) shall enter into a sublease (the
"Sublease") pursuant to which Seller Parent (or its Affiliate) shall sublease
from the Company

                                      -32-
<PAGE>

the space subject to the aforementioned lease that is not occupied by the
Company on the same economic and other terms as are contained in the lease
assigned to the Company; provided, however, that such Sublease will not obligate
the subtenant beyond the end of the current lease term, and which Sublease shall
also contain such other terms as are mutually acceptable to Buyer and Seller
Parent.

         Section 7.16 Trademark Assignment Agreement. At Closing, Ultimate
Parent and Buyer or the Company and/or the Subsidiary shall enter into a
trademark assignment agreement ("Trademark Assignment Agreement") pursuant to
which Ultimate Parent shall assign to the Company and/or the Subsidiary the
trademarks and other items listed in Section 7.16 of Seller's Disclosure
Schedule upon terms that are mutually acceptable to Buyer and Seller.

         Section 7.17 Loan Servicing Agreements. At Closing, Seller and/or its
Affiliates and Buyer and/or the Company shall have entered into agreements (the
"Loan Servicing Agreement Amendments") amending Seller's and/or its Affiliates'
student loan servicing agreements containing the terms set forth on Exhibit D
and such other terms as are mutually acceptable to Buyer and Seller.

         Section 7.18 Closing. Buyer and Seller shall use their respective best
efforts to close the transactions contemplated hereby by June 28, 2002.

                                  ARTICLE VIII

                             POST-CLOSING COVENANTS

         The parties agree as follows with respect to the period following the
Closing:

         Section 8.1 General. Without limiting the provisions of Sections
12.1(b) and (d) and 12.3, following the Closing Date, if any further action is
necessary to carry out the purposes of this Agreement, all of the parties hereto
will take such further action (including the execution and delivery of such
further instruments and documents) as any other party reasonably may request,
all at the sole cost and expense of the requesting party (unless the requesting
party is entitled to indemnification therefor under the provisions of this
Agreement).

         Section 8.2 Litigation Support.

         (a) After the Closing Date, upon Seller's reasonable request and
without necessity of subpoena, Buyer will cause the Company and the Subsidiary
and their representatives and counsel to cooperate fully with Seller and their
representatives and counsel for purposes of permitting Seller to address and
respond to matters involving Seller or its Affiliates that arise as a result of
or otherwise relate to Seller's prior ownership of the Company and the
Subsidiary, whether or not related to this Agreement (other than claims by Buyer
against Seller), including relating to assets, liabilities or other matters
related to the Company or the Subsidiary that are retained by Seller and any
claims made by or against Seller or any of its Affiliates, whether involving any
Governmental Entity or third party.

                                      -33-
<PAGE>

         (b) After the Closing Date, upon Buyer's reasonable request and without
necessity of subpoena, Seller and its Affiliates and their representatives and
counsel will cooperate with the Company and its representatives and counsel for
purposes of permitting Buyer to address and respond to any matters that involve
Buyer or the Company or the Subsidiary that arise as a result of or otherwise
related to Seller's or its Affiliates' prior affiliation with the Company and
the Subsidiary, whether or not related to this Agreement, including any claims
made by or against the Company or the Subsidiary, or Buyer or any of its
Affiliates, whether involving any Governmental Entity or third party.

         (c) Such cooperation under Section 8.2(a) and 8.2(b) shall include (i)
reasonable access during normal business hours and upon reasonable notice to the
appropriate party's and its Affiliates' officers, directors, employees,
auditors, counsel, representatives, properties, books, records and operating
instructions and procedures, (ii) providing reasonable assistance to the other
party in connection with any Actions, including preparation for any Actions such
as discovery, depositions and similar activities, and (iii) the right to make
and retain copies of all pertinent documents and records relating to any such
matters other than (A) tax returns filed by any of such party's Affiliates
(other than the Company and the Subsidiary), (B) any information or materials
subject to confidentiality agreements with third parties or required to be kept
confidential by law or by agreement with borrowers, or (C) any privileged
attorney-client communication or document. Buyer's and Seller's obligations
under this Section 8.2 are in addition to Buyer's and Seller's other obligations
to cooperate with each other contained in this Agreement. Any cooperation
hereunder shall be given at the sole cost and expense of the requesting party
(unless the requesting party is entitled to indemnification therefor under the
provisions of this Agreement).

         Section 8.3 Non-Competition Agreement.

         (a) From the Closing Date through December 31, 2006, the Seller and
Seller Parent shall not, and shall not permit any of its Affiliates to, in any
state in the United States (i) directly or indirectly, either as a principal,
partner, agent, manager, stockholder, director, officer or in any other
capacity, enter into, or expand any existing business into, the business of (A)
servicing student loans or (B) providing management and administrative services
to federal, state and local health and human services government agencies, or
(C) providing workforce development programs to state and local governments
designed to meet the needs of under or unemployed people; provided, however,
that ownership of less than 15% of the voting stock of any corporation engaged
in servicing student loans or providing management and administrative services
to federal, state and local health and human services government agencies or
providing workforce development programs to state and local governments designed
to meet the needs of under or unemployed people shall not constitute a violation
hereof. Nothing contained in this Section 8.3 shall prohibit Seller or its
Affiliates from servicing student loans that are held by Seller or its
Affiliates.

         (b) Nothing contained in Section 8.3(a) shall prohibit activities of
any Person with which the Seller or any of its Affiliates, including but not
limited to Seller Parent, enters into an acquisition, merger or other business
combination, so long as the capabilities acquired with respect to servicing
student loans or providing management and administrative services to

                                      -34-
<PAGE>

federal, state and local health and human services government agencies or
providing workforce development programs to state and local governments designed
to meet the needs of under or unemployed people by the Seller or any of its
Affiliates does not individually account for 20% of the gross revenue of such
Person, following the consummation of any such acquisition, merger or other
business combination with any such Person.

         Section 8.4 Nonsolicitation of the Buyer's Employees. (a) For a period
of four (4) years following the Closing Date, neither the Seller nor any of its
Affiliates shall, directly or indirectly, offer to hire or entice away (whether
as an employee or consultant) or in any other manner persuade or attempt to
persuade any officer or employee with a title of senior vice president or
greater of the Buyer, the Company or the Subsidiary and, in each case, who were
employed by the Company or the Subsidiary at the Effective Time to discontinue
his or her relationship with the Buyer; and (b) for a period of two (2) years
following the Closing Date, neither the Seller nor any of its Affiliates shall,
directly or indirectly, offer to hire or entice away (whether as an employee or
consultant) or in any other manner persuade or attempt to persuade any officer
or employee with a title of vice president of the Buyer, the Company or the
Subsidiary, and, in each case, who were employed by the Company or the
Subsidiary at the Effective Time to discontinue his or her relationship with the
Buyer, the Company or the Subsidiary; provided, however, that this Section 8.4
shall not apply (x) if any such officer or employee has been terminated by the
Buyer, the Company or the Subsidiary for any reason, or (y) if such officer or
employee is hired as a result of a general solicitation for employment not
specifically targeted to employees of the Buyer or any or its Affiliates.

         Section 8.5 Nondisclosure. (a) From the Closing Date through September
30, 2007, except as required by Applicable Law or as otherwise permitted under
this Agreement and upon reasonable advance notice to Buyer, Seller, and its
Affiliates shall not, and Seller shall cause each of Morgan Stanley & Co. and
Edwards & Angell, LLP not to, at any time, make use of, divulge or otherwise
disclose, directly or indirectly, any material information related to the direct
student lending business of the Company that has not been or is not made
generally available to the public by the Company or the Subsidiary prior to the
Closing Date, and (b) for a period of two (2) years following the Closing Date,
except as required by Applicable Law or as otherwise permitted under this
Agreement and upon reasonable advance notice to Buyer, Seller, and its
Affiliates shall not, and Seller shall cause each of Morgan Stanley & Co. and
Edwards & Angell, LLP not to, at any time, make use of, divulge or otherwise
disclose, directly or indirectly, any material information related to the
business of the Company (other than with respect to the direct student lending
business) or the Subsidiary that has not been or is not made generally available
to the public by the Company or the Subsidiary prior to the Closing Date, unless
in either case such information: (u) is or becomes generally available and known
to the public (other than pursuant to disclosure by Seller, its Affiliates and
their respective officers, employees or agents); (v) is rightfully received by
Seller or any of its representatives, agents or Affiliates from any Person after
the Closing Date without restriction on use or disclosure and without breach of
any obligation to Buyer; (w) is independently developed after the Closing Date
by or for Seller or any of its Affiliates; (x) is disclosed by Buyer or its
Affiliates following the Closing Date or (y) is the subject of prior written
approval of Buyer.

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<PAGE>

         Section 8.6 Reformation. The following provisions shall apply to
Section 8.3 and Section 8.4:

         (a) The necessity of protection against competition from Seller and its
Affiliates and the nature and scope of such protection has been carefully
considered by the parties to this Agreement based upon the consultation with and
advice from their respective legal counsel. The parties agree and acknowledge
(i) that the duration, scope and geographic areas applicable to the covenants
contained in Section 8.3 and Section 8.4 are fair, reasonable and necessary, and
do not impose a greater restraint than is necessary to protect the goodwill or
other business interest of the Company and Buyer's investment therein and its
business goodwill, (ii) that adequate compensation has been received by Seller
for such obligations, and (iii) that these obligations do not prevent Seller and
Affiliates from earning a livelihood or conducting its remaining businesses.

         (b) If any provision of Section 8.3 or Section 8.4 is held to be
illegal, invalid or unenforceable under present or future laws effective during
the terms specified in the applicable section, in lieu of such illegal, invalid
or unenforceable provision, there shall be added automatically as a part of the
applicable section a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable,
but no such added provision shall be broader or result in a greater limitation
of the activities of Seller than is provided in Section 8.3 or 8.4, as
applicable, on the date hereof.

         (c) If the automatic reformation provision contained in the preceding
subsection for any reason fails or is held to be illegal, invalid or
unenforceable, the parties request that the Governmental Entity making such
determination interpret, alter, amend and modify the terms of Section 8.3 or
Section 8.4, as applicable, to include as much of the scope, time period and
geographic area specified therein as may be possible without rendering any
provision of Section 8.3 or 8.4, as applicable, illegal, invalid or
unenforceable, but no such modified term shall be broader or result in a greater
limitation of the activities of Seller and its Affiliates than is provided in
Section 8.3 or 8.4, as applicable, on the date hereof.

         (d) If any provision of Section 8.3 or Section 8.4 is held to be
illegal, invalid or unenforceable under present or future laws during the term
of Section 8.3 or Section 8.4, as applicable, the legality, validity and,
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired.

         Section 8.7 Relief.

         (a) Seller acknowledges and agrees that damages at law may be
insufficient for breach by Seller of any of the covenants in Section 8.3,
Section 8.4 or Section 8.5 and Buyer may be entitled to equitable relief in the
form of an injunction to prevent irreparable injury without the necessity to
post any bond therefor.

         (b) Nothing in this section shall be construed as prohibiting the Buyer
or the Company from pursuing any other remedies, including damages, for breach
of Section 8.3,

                                      -36-
<PAGE>

Section 8.4 or Section 8.5. The remedies of Buyer and the Company under this
Agreement are cumulative, not exclusive, and may be exercised alternatively,
successively or concurrently. The existence of any claim or cause of action of
Seller or Seller Parent against Buyer based upon this Agreement shall not
constitute a defense to the enforcement of the obligations of Seller under
Section 8.3, Section 8.4 or Section 8.5.

         Section 8.8 Special Post-Effective Date, Pre-Closing Interim Covenant.
In addition to the provisions contained in Section 7.4 hereof relating to the
operations of the Company between the date hereof and the Closing Date, Seller
and Seller Parent agree that (i) no dividend will be taken from the Company
following the Effective Time, (ii) all intercompany indebtedness between Seller
or Seller Parent and the Company shall be repaid immediately prior to the
Effective Time, and (iii) they will not alter the application of Seller or
Seller Parent's policies relating to intercompany charges which were taken into
consideration in the preparation of the Company's Monthly Plan (the "Monthly
Plan") attached hereto as Exhibit E for each month between the Effective Date
and the Closing Date, which policies will be applied consistently with such
Monthly Plan between the date hereof and the Closing Date. Promptly after the
end of the month in which the Closing Date occurs, if the Company's net income
before income taxes for such month is less than the Company's projected net
income before income taxes for such month as contained in the applicable Monthly
Plan (adjusted for the loss of interest income attributable to the foregoing
debt repayment), the Buyer will cause the Company to reconcile the Company's
actual net income before taxes for such month with such projected net income
before income taxes for such month based on such Monthly Plan (adjusted for the
loss of interest income attributable to the foregoing debt repayment), and to
the extent that any shortfall variances are attributable to violations of the
provisions hereof or any other provision of this Agreement, then Seller Parent
shall pay promptly an amount in cash to the Company equal to such shortfall
variances plus interest as provided in Section 2.6(b) from the end of the month
in question. Any disputes arising out of such reconciliation shall be resolved
in accordance with the same principles applied to determine the Final Closing
Balance Sheet contained in Section 2.4 hereof. As provided in Section 7.7
hereof, prior to the Closing all inter-company indebtedness then outstanding
between Seller or Seller Parent and the Company shall be repaid. In addition,
Seller or Seller Parent and the Company shall settle all intercompany prepaid
and refund items on a pro-rata basis based on the number of days elapsed.

         Section 8.9 Treatment of Certain Accounts Receivable.

         (a) In the event that (i) any of the accounts receivable that were
recorded on the books of the Company and the Subsidiary as of the Effective Time
(the "Effective Time Receivables") are not collected in full within 210 days
after the Effective Time, or (ii) any of the accounts receivable that were, in
accordance with the Company's past practices, reported as "unbilled" accounts
receivable on the books of the Company or the Subsidiary at the Effective Time
and are billed by the Company or the Subsidiary within 30 days after the
Effective Time (the "Post-Effective Time Receivables" and, together with the
Effective Time Receivables, the "Specified Receivables") are not collected in
full after application of all accounts receivable reserves within 210 days after
the Effective Time, then, notwithstanding any other provision of this Agreement
to the contrary, the sole remedy of Buyer shall be to cause Seller to purchase
any such Specified

                                      -37-
<PAGE>

Receivables at the net book amount thereof (after taking into account any
accounts receivable reserves in effect as of the Closing Date and any payments
on such Specified Receivables made after the Effective Time) and no claim may be
made based on inaccuracy of any representation or warranty resulting therefrom.
If any Specified Receivable is not expected to be collectible until more than
210 days after the Effective Time, as applicable, because payment is not
expected to be made under the underlying contract giving rise to such receivable
until after the occurrence of a particular event or circumstance (such as
conclusion of an audit or achievement of a milestone), then such 210 day period
shall not commence until the occurrence of such event; provided that any such
period shall not commence later than the first anniversary of the Effective
Time. The day on which Seller's obligation to purchase any Specified Receivable
is referred to as such Specified Receivable's "Specified Receivable Trigger
Date." If Buyer elects to cause Seller to purchase any such Specified
Receivables, notice of such election must be received by Seller prior to the
30th day after the applicable Specified Receivable Trigger Date or Buyer will be
deemed to have waived any rights with respect to such Specified Receivable. Such
notice shall (i) identify a closing date not less than five days nor more than
thirty days after such notice is received by Seller upon which the closing of
the sale shall occur and (ii) state the purchase price for the Specified
Receivable, together with such supporting detail as may be requested by Seller
(which may be audited by Seller from time to time upon reasonable advance
notice). Seller shall not be obligated to purchase the Specified Receivable
unless the Parties, acting reasonably and in good faith, agree on the amount of
the receivable outstanding. At the closing, Buyer shall deliver to Seller such
instruments of transfer as may be reasonably requested by Seller to evidence the
transfer of the Specified Receivable to Seller, and Seller shall pay the
purchase price by wire transfer in immediately available funds.

         (b) Prior to the purchase of any Specified Receivable by Seller, Buyer
shall cause the Company or the Subsidiary (as applicable) to diligently pursue
collection of such Specified Receivable consistent with the Company's customary
past practices. In circumstances where (x) (i) a single account debtor is
obligated on more than one Specified Receivable and/or accounts receivable that
are not Specified Receivables and (ii) such account debtor makes a single lump
sum payment on such receivables without identifying specifically to which
receivables such payment relates, such payments shall be allocated to satisfy in
full the receivables in order of the dates such receivables were billed or (y)
less than the full amount of a Specified Receivable shall have been paid by the
account debtor, any payment received relating to the Specified Receivable shall
be credited to the Specified Receivable.

         (c) The Effective Time Receivables shall be identified in a schedule
prepared by Seller within five (5) Business Days after the Closing Date and
delivered to Buyer, and the Post-Effective Time Receivables shall be identified
in a schedule prepared by Buyer within 30 days after the Closing Date and
delivered to Seller. Each such schedule will identify the Specified Receivables
in reasonable detail, including identifying the account obligor, the outstanding
account balance and any reserves related thereto, the aging of the Specified
Receivable and the applicable Specified Receivable Trigger Date for each
Specified Receivable.

         (d) In the event that any Specified Receivable is purchased by Seller,
if requested by Seller, Buyer shall cause the Company or the Subsidiary to act
as collection agent for Seller with

                                      -38-
<PAGE>

respect to such Specified Receivables. In such capacity, Buyer shall cause the
Company or the Subsidiary to (i) diligently pursue collection of such Specified
Receivables as if such receivables were owned by the Company or the Subsidiary,
(ii) remit monies received by the Company or the Subsidiary in such capacity to
Seller within three Business Days of receipt and (iii) upon Seller's request,
commence litigation to collect such Specified Receivables, if commencing
litigation is consistent with the Company's or the Subsidiary's Ordinary Course
of Business, the cost of which litigation shall be borne by Seller and shall be
subject to Seller's direction. As a fee for acting as collection agent
hereunder, the Company may retain 5% of any payments received on such
receivables.

         (e) It is understood that no receivable due from Buyer or any of its
Affiliates is or will be a Specified Receivable.

         (f) Notwithstanding the provisions of Section 8.9(a) it is understood
that the obligation of Seller to purchase Specified Receivables shall not be
subject to the Threshold and the Maximum Indemnification Amount contained in the
Agreement, provided, however, that the Seller shall be entitled to elect to have
the amount of any Specified Receivable put to Seller by Buyer pursuant to
Section 8.9(a) treated as a claim for indemnification under Article XII, and
charged against the Threshold and counted toward the determination of the
Maximum Indemnification Amount at its option in lieu of purchasing such
Specified Receivable.

         (g) It is understood that if the Buyer or any of its Affiliates
(including the Company and the Subsidiary) receive any payment related to an
account receivable that was charged off by the Company or the Subsidiary prior
to Effective Time, the amount recovered shall be added to the accounts
receivable reserve to be utilized to reduce Seller Parent's exposure under
Section 8.9(a).

         (h) It is understood that if the Company or any of its Affiliates
receives any payment in respect of any accounts receivable purchased by Seller
pursuant to this Section 8.9, the Company or such Affiliate shall pay the amount
of such payment to Seller within ten (10) Business Days of the receipt of such
payment by wire transfer of immediately available funds.

                                   ARTICLE IX

                                      TAXES

         Section 9.1 Tax Representations. Except as set forth in Section 9.1 of
Seller's Disclosure Schedule, Seller represents and warrants that:

         (a) All Returns required to be filed for taxable periods ending on or
prior to the Effective Time by, or with respect to any activities of, the
Company or any Subsidiary thereof have been or will be accurately prepared and
timely filed in accordance with all Applicable Law, and all Taxes required to be
paid on or before the Effective Time with respect to the activities of the
Company or any Subsidiary have been or will be paid.

                                      -39-
<PAGE>

         (b) Within the last seven (7) years neither the Company nor any
Subsidiary thereof has ever been a member of a consolidated federal income tax
group of which Ultimate Parent was not the common parent.

         (c) The Seller is not a "foreign person" under Treasury Regulations
Section 1.1445-2(b)(2).

         (d) There are no pending audits, actions, proceedings, investigations,
disputes or claims with respect to any Taxes payable by or asserted against the
Company or the Subsidiary and, there is no basis on which any claim for material
Taxes can be asserted with respect to the Company or the Subsidiary. Neither the
Company nor the Subsidiary has received written notice from any Taxing authority
of its intent to examine or audit any of its Tax Returns.

         (e) Neither the Company nor the Subsidiary is or has been subject to
Tax or conducted business in any country other than the United States.

         (f) No agreements relating to allocation or sharing of, or liability or
indemnification for, Taxes exist between either the Company or the Subsidiary
and any other Person.

         (g) All taxes required to be withheld, collected or deposited by the
Company or the Subsidiary (including, but not limited to, amounts required to be
withheld, collected or deposited with respect to amounts paid or owing to any
employee, creditor, independent contractor or other Person) have been timely
withheld, collected or deposited and, to the extent required, have been timely
paid to the relevant taxing authority. All persons characterized as independent
contractors, and not as employees, were properly so characterized for all
purposes under all Applicable Laws, including, without limitation, their
characterization as independent contractors for income and employment tax
withholdings and payments.

         (h) Neither the Company nor the Subsidiary has made any payments, is
obligated to make any payments, and is a party to any agreement that will
obligate it to make any payments that will not be deductible under Section 280G
of the Code.

         (i) There are no outstanding agreements or waivers that would extend
the statutory period in which a taxing authority may assess or collect a Tax
against the Company or the Subsidiary.

         (j) No closing agreements or settlement agreements pursuant to any
provision of any Tax Law have been entered into with any taxing authority by or
with respect to the Company or the Subsidiary which requires the Company or the
Subsidiary to include any item of income in, or exclude any item of deduction
from, any Tax Return for any taxable period ending after the Effective Time.

         Section 9.2 Section 338 Elections and Forms.

         (a) The Seller and the Buyer shall jointly make all available Section
338(h)(10) Elections in accordance with applicable Tax Laws and as set forth
herein and shall execute Forms 8023 and such other forms as may be necessary to
effect such elections consistent with the

                                      -40-
<PAGE>

periods contained in Section 9.2(c). For federal income tax purposes, the Seller
represents that its sale of the Company Shares is eligible for, and the Buyer
represents that it is qualified to make, such elections.

         (b) The Buyer and the Seller shall be jointly responsible for the
preparation and filing of all Section 338 Forms in accordance with applicable
Tax Laws and the terms of this Agreement. The Seller and the Buyer shall execute
and deliver to one another such documents or forms as are reasonably requested
and are required by any Tax Laws properly to complete the Section 338 Forms.

         (c) In connection with the Section 338 Elections, the Buyer shall
reasonably determine, and Seller shall accept if reasonable, the fair market
values of the assets deemed purchased for purposes of the computation of the
Aggregate Deemed Sale Price (as defined under applicable Treasury Regulations)
of the Company's assets and the allocation of such Aggregate Deemed Sale Price
among such assets (the "Allocation Agreement") in accordance with Section 338 of
the Code. Such Allocation Agreement shall reflect the value assigned to assets
of the Company. The Buyer and the Seller agree that they shall use their
reasonable best efforts to revise the Allocation Agreement to the extent
necessary to reflect the differences, if any, between the Preliminary Closing
Balance Sheet and the Final Closing Balance Sheet no later than sixty (60) days
before the last date on which the Section 338(h)(10) Election may be filed. If,
sixty (60) days before the last date on which the Section 338(h)(10) Election
may be filed, the Buyer and the Seller have not finalized the Allocation
Agreement as described above, any disputed aspects of the Allocation Agreement
or such revision shall be resolved by the Neutral Auditors twenty (20) days
before the last date on which the Section 338(h)(10) Election may be filed. The
costs, expenses and fees of the Neutral Auditors shall be borne equally by the
Buyer and the Seller. The Buyer and the Seller agree to act in accordance with
the allocations contained in the Allocation Agreement in any relevant Returns or
similar filings.

         (d) The Seller and the Buyer agree that, except as required by a final
determination with any tax authority, they will report the transfers under this
Agreement consistent with the Section 338(h)(10) Elections and will not take, or
cause to be taken, any action in connection with the filing of any Return on
behalf of the Seller, the Buyer, or their Affiliates or otherwise that would be
inconsistent with or prejudice the Section 338(h)(10) Elections or the
Allocation Agreement, and they will take all steps necessary to obtain
comparable treatment, where applicable, for state income Tax purposes.

         Section 9.3 Tax Indemnity by Seller Parent. Seller Parent shall be
liable for, and shall indemnify and hold the Buyer, the Company and any
successor corporations thereto or Affiliates thereof harmless from and against
the following:

         (a) Any and all Taxes for any taxable period ending (or deemed,
pursuant to Section 9.5, to end) on or before the Effective Time due or payable
by the Company or the Subsidiary, including without limitation, any Taxes
resulting from the Company or the Subsidiary ceasing to be a member of Seller's
consolidated group and any income Taxes incurred as a result of making the
Section 338(h)(10) Election;

                                      -41-
<PAGE>

         (b) Any and all Taxes that are imposed on the Company or the Subsidiary
pursuant to any obligation to contribute to the payment of a Tax determined on a
consolidated, combined or unitary or other group basis with respect to a group
of corporations that includes or included the Company or the Subsidiary at any
time on or before the Effective Time, including, without limitation, any such
obligation arising under Treasury Regulations Section 1.1502-6 or under any
similar provision of state, local or foreign law;

         (c) Any and all Taxes of Seller or any Affiliate (excluding the Company
and the Subsidiary);

         (d) Any Liability (including Taxes) of the Buyer, the Company, or the
Subsidiary in connection with or arising from any breach of any representation,
agreement, or covenant relating to Taxes made by Seller in this Article IX of
this Agreement; and

         (e) Any lost Tax benefits (based on the present value of such lost
benefits, assuming a 15 year reference period and 7% discount factor) resulting
from an invalid Section 338 Election caused solely by the failure of the Seller
to fulfill its agreements pursuant to Section 9.2 hereof.

         Section 9.4 Tax Indemnity by Buyer. The Buyer shall be liable for, and
shall indemnify and hold Seller and its Affiliates harmless from and against any
and all Taxes for any taxable period beginning (or deemed, pursuant to Section
9.5, to begin) after the Effective Time, due or payable by the Buyer, the
Company or the Subsidiary and for all Other Taxes (as defined in Section 9.11).

         Section 9.5 Allocation of Certain Taxes.

         (a) If the Company is permitted but not required under applicable U.S.
state or local Tax Laws to treat the day on which the Effective Time occurs as
the last day of a taxable period, the Buyer and the Seller shall treat, and
shall cause the Company and the Subsidiary to treat, such day as the last day of
a taxable period.

         (b) Any Taxes for a taxable period beginning before the Effective Time
and ending after the Effective Time (a "Straddle Period") shall be apportioned
between the Seller and the Buyer based on the actual operations of the Company
and the Subsidiary during the portion of such period ending on the day on which
the Effective Time occurs and the portion of such period beginning on the day
following the day on which the Effective Time occurs, and, for purposes of the
provisions of Sections 9.3, 9.4, 9.5 and 9.7, each portion of such period shall
be deemed to be a taxable period (whether or not it is in fact a taxable
period). Notwithstanding the foregoing sentence, (i) any Taxes for any Straddle
Period that are calculated on an annual basis, such as real and personal
property taxes, shall be apportioned between Seller and the Buyer based on (a)
the number of days in the taxable periods ending on the day on which the
Effective Time occurs and (b) the number of days beginning after the day on
which the Effective Time occurs and (ii) any transaction with respect to the
Company or the Subsidiary (other than any deemed sale of assets resulting from
any actual or deemed Section 338 Election) outside the Ordinary Course of
Business occurring and after the Effective Time shall be treated for purposes of
Sections 9.3, 9.4, 9.5 and 9.7 as occurring at the beginning of the day
following the day on which the Effective

                                      -42-
<PAGE>

Time occurs. To the extent (a) estimated Taxes have been paid prior to the
Effective Time with respect to a Straddle Period and are not reflected as an
asset on the Final Closing Balance Sheet or (b) are reflected as an accrued
liability on the Final Closing Balance Sheet, the Seller's liability with
respect thereto shall be reduced by that amount; provided further, that, if such
payment or accrued liability for Taxes exceeds the Seller's liability as
calculated pursuant to this Section 9.5, the Buyer shall pay the Seller the
amount of such excess within ten (10) days after the filing of the Return to
which such Taxes relate. Upon timely notice from the Buyer, the Seller shall pay
to the Buyer, at least ten (10) days prior to the date any payment for Taxes as
described in this Section 9.5 is due, the Seller's share of such Taxes as
described in this Section 9.5.

         Section 9.6 Filing Responsibility.

         (a) The Seller shall prepare and file or shall cause the Company to
prepare and file the following Returns with respect to the Company:

                  (i) All income, franchise, gross receipts and similar Tax
Returns for any taxable period ending on or before the Effective Time other than
Returns referred to in Section 9.5;

                  (ii) All other returns with respect to Taxes (other than
income Taxes) required to be filed (taking into account extensions) on or prior
to the Effective Time; and

                  (iii) Notwithstanding Section 9.1(a), the Seller shall cause
the Company to file all Returns and pay out of the Assets of the Company all
Taxes for periods after the Effective Time through the Closing Date.

         (b) The Buyer and the Company shall, subject to the provisions of
Section 9.6(c), make all filings with respect to the Company other than those
described in Section 9.6(a).

         (c) Except as provided in Section 9.6(a)(iii), with respect to any U.S.
state or local Return for taxable periods beginning before the Effective Time
and ending after the Effective Time, the Buyer shall prepare any such Returns in
a manner consistent with past practice unless otherwise required by applicable
law, and the Buyer shall submit Returns to the Seller not later than thirty (30)
days prior to the due date for filing of such Returns (or if such due date is
within forty-five (45) days following the Closing Date, as promptly as
practicable following the Closing Date). The Seller shall have the right to
review such Returns and to review all work papers and procedures used to prepare
any such Return. If the Seller, within ten (10) business days after delivery of
any such Return, notifies the Buyer in writing that it objects to any of the
items in such Return, the Buyer and Seller shall attempt in good faith to
resolve the dispute and, if they are unable to do so, the disputed items shall
be resolved (within a reasonable time, taking into account the deadline for
filing such Return) by the Neutral Auditors. Upon resolution of all such items,
the relevant Return shall be filed on that basis. The costs, fees and expenses
of the Neutral Auditors shall be borne equally by the Buyer and the Seller.

                                      -43-
<PAGE>

         Section 9.7 Refunds.

         (a) The Seller shall be entitled to any refunds or credits of Taxes
attributable to or arising in taxable periods ending (or deemed, pursuant to
Section 9.5, to end) on or before the Effective Time that are not reflected as
assets on the Final Closing Balance Sheet.

         (b) The Buyer or the Company shall be entitled to any refunds or
credits of Taxes attributable to or arising in taxable periods beginning (or
deemed, pursuant to Section 9.5, to begin) after the Effective Time and those
refunds reflected as assets on the Final Closing Balance Sheet.

         (c) The Buyer shall cause the Company promptly to report to and forward
to Seller or to reimburse the Seller for any refunds or credits due the Seller
(pursuant to the terms of this Article IX) after receipt thereof, and the Seller
shall promptly report to and forward to the Buyer or reimburse the Buyer for any
refunds or credits due the Buyer (pursuant to the terms of this Article IX)
after receipt thereof.

         Section 9.8 Cooperation and Exchange of Information.

         (a) As soon as practicable, but in any event within thirty (30) days
after request therefor, from and after the Closing Date, each of Seller and the
Buyer shall (and shall cause their respective Affiliates to) provide the other
with such cooperation and deliver to the other such information and data to
enable each of Seller and the Buyer to complete and file all Returns that it may
be required to file with respect to the operations and business of the Company
or to respond to audits by any Taxing Authorities with respect to such
operations and to otherwise enable each of Seller and the Buyer to satisfy its
internal accounting, tax and other legitimate requirements and to enable the
Buyer to comply with its obligations set forth in Section 9.6 of this Agreement.
Such cooperation and information shall include, without limitation, provision of
powers of attorney for the purpose of signing Returns and defending audits and
promptly forwarding copies of appropriate notices and forms or other
communications received from or sent to any Taxing Authority that relate to the
Company and providing copies of all relevant Returns, together with accompanying
schedules and related work papers, documents relating to rulings or other
determinations by any Taxing Authority and records concerning the ownership and
tax basis of property, which Seller, the Buyer or the Company may possess. The
Seller, the Buyer and the Company shall make their employees and facilities
available on a mutually convenient basis to provide explanation of any documents
or information provided hereunder.

         (b) For a period of six (6) years after the Effective Time, the Buyer
shall, and shall cause the Company to, retain all Returns, books and records
(including computer files) of, or with respect to the activities of, the Company
for all taxable periods ending on or prior to the Effective Time. Thereafter, at
the request of Seller, the Buyer shall not dispose of any such Returns, books or
records, unless it first offers such Returns, books and records to Seller and
Seller fails to accept such offer within sixty (60) days of its being made.
However, the Buyer may dispose of such records prior to that time with the prior
written consent of Seller, which consent shall not be unreasonably withheld.

                                      -44-
<PAGE>

         (c) The Buyer and the Seller and their respective Affiliates shall
cooperate in the preparation of all Returns relating in whole or in part to
taxable periods ending on or before or including the Effective Time that are
required to be filed after such date. Such cooperation shall include, but not be
limited to, furnishing prior years' Returns or return preparation packages
illustrating previous reporting practices or containing historical information
relevant to the preparation of such Returns, and furnishing such other
information within such party's possession requested by the party filing such
Returns as is relevant to their preparation. In the case of any U.S. state or
local or foreign joint, consolidated, combined, unitary or group relief system
Returns, such cooperation shall also relate to any other taxable periods in
which one party could reasonably require the assistance of the other party in
obtaining any necessary information.

         (d) Seller shall have the right, at its own expense, to control any
audit or examination by any Taxing Authority ("Tax Audit"), initiate any claim
for refund (including by filing an amended Return), contest, resolve and defend
against any assessment, notice of deficiency, or other adjustment or proposed
adjustment relating to any and all Taxes for any taxable period ending on or
before the Effective Time with respect to the Company, provided that the Seller
shall not be entitled to settle, either administratively or after the
commencement of litigation, any claim for Taxes which would adversely affect the
liability for Taxes of the Buyer or the Company or any Subsidiary for any period
after the Effective Time to any extent (including, but not limited to, the
imposition of income Tax deficiencies, the reduction of asset basis or cost
adjustments, the lengthening of any amortization or depreciation periods, the
denial of amortization or depreciation deductions, or the reduction of the loss
or credit carry forwards) without the prior written consent of the Buyer, which
consent shall not be unreasonably withheld, and such consent shall not be
necessary to the extent that the Seller has indemnified the Buyer against the
effect of any such settlement. If litigation is required due to the Buyer's
failure to reasonably consent, then the Buyer shall be responsible for one-half
of the litigation costs incurred by the Seller. The Buyer shall have the right,
at its own expense, to control any other Tax Audit, initiate any other claim for
refund, and contest, resolve and defend against any other assessment, notice of
deficiency, or other adjustment or proposed adjustment relating to Taxes with
respect to the Company, provided that, with respect to any U.S. state and local
Taxes for any Straddle Period, the Buyer shall not be entitled to settle, either
administratively or after the commencement of litigation, any claim regarding
such Taxes that would adversely affect the liability for Taxes of the Seller for
any period ending on or prior to the Effective Time without the prior written
consent of the Seller, which consent shall not be unreasonably withheld and
shall not be required to the extent that Buyer has indemnified Seller against
the effects of such settlement. If litigation is required due to the Seller's
failure to reasonably consent, then the Seller shall be responsible for one-half
of the litigation costs incurred by the Buyer. Where consent to a settlement is
withheld by the Seller pursuant to this Section, the Seller may continue or
initiate any further proceedings at its own expense, provided that the liability
of the Buyer, after giving effect to this Agreement, shall not exceed the
liability that would have resulted from the settlement or amended return. Seller
shall furnish the Buyer and the Company with its cooperation in a manner
comparable to that described in Section 9.8(a) to effect the purposes of this
Section 9.8(d).

         (e) If either the Buyer or the Seller (or their respective Affiliates)
fails to provide any information requested by the other in the time specified
herein, or if no time is specified pursuant

                                      -45-
<PAGE>

to this Section 9.8, within a reasonable period, or otherwise fails to do any
act required of it under this Section 9.8, then the failing party shall be
obligated, notwithstanding any other provision of this Agreement, to indemnify
the other and shall hold the other harmless from and against any and all costs,
claims or damages, including, without limitation, all Taxes or deficiencies
thereof, payable as a result of such failure, or in the event of a claim for
refund, the value of such refund.

         Section 9.9 Tax Sharing Agreements. Any Tax allocation or sharing
agreement or arrangement, whether or not written, that may have been entered
into by Seller or any Affiliate of Seller and the Company shall be terminated as
to the Company at or prior to the Closing Date, effective as of the Effective
Time, and no payments which are owed by or to the Company or any Subsidiary
pursuant thereto shall be made thereunder.

         Section 9.10 Payments. Any payment made pursuant to this Article IX,
Article X or Article XII shall be treated by the Seller and the Buyer as an
adjustment to the Purchase Price and Seller and the Buyer agree not to take any
position inconsistent therewith for any purpose.

         Section 9.11 Other Taxes. The Buyer agrees to assume liability for and
to pay all sales, transfer, stamp, real property transfer and similar Taxes
incurred as a result of the sale of the Company Shares ("Other Taxes").

         Section 9.12 Survival Periods. The survival periods with regard to
representations set forth in Section 9.1 hereof shall be to the expiration of
the applicable statutes of limitations.

                                    ARTICLE X

                         EMPLOYEES AND EMPLOYEE MATTERS

         Section 10.1 Employee Benefit Plans.

         (a) Section 10.1(a) of Seller's Disclosure Schedule lists as of the
date hereof (i) each "employee pension benefit plan" as that term is defined in
Section 3(2) of ERISA, (ii) each "employee welfare benefit plan" as that term is
defined in Section 3(1) of ERISA (such plans being hereinafter referred to
collectively as the "ERISA Plans"), and (iii) each material other incentive
compensation, bonus, stock option, stock purchase, severance pay, unemployment
benefit, vacation pay, health, life or other insurance (including Section 125
cafeteria plans or flexible benefit plans), fringe benefit, or other employee
benefit plan, program, agreement or arrangement, maintained or contributed to as
of the date hereof by the Seller Parent or its Affiliates, the Company or the
Subsidiary in respect of or for the benefit of any Company Employee or any
former employee, director, independent contractor or leased employee with
respect to service for the Company or the Subsidiary (and their eligible
dependents and beneficiaries) (collectively, together with the ERISA Plans,
referred to hereinafter as the "Company Benefit Plans").

         (b) With respect to the ERISA Plans:

                                      -46-
<PAGE>

                  (i) Neither the Company or the Subsidiary, any of the ERISA
Plans, any trust created thereunder, or any trustee or administrator thereof,
has engaged in any transaction as a result of which the Company or the
Subsidiary would reasonably be expected to be subject to any material liability
pursuant to Section 409 of ERISA or to either a civil penalty assessed pursuant
to Section 502(i) or (l) of ERISA or a tax imposed pursuant to Section 4975 of
the Code; and

                  (ii) No liability under Title IV of ERISA has been incurred by
the Company or the Subsidiary (other than liability for premiums due to the
Pension Benefit Guaranty Corporation) unless such liability has been, or prior
to the Closing Date will be, satisfied in full and no amendment has occurred
which has required or could require the Company, the Subsidiary or the Buyer to
provide security to any such plan; and

                  (iii) Each of such ERISA Plans has been operated and
administered in substantial compliance with all material provisions of the
governing documents and with all material provisions of Applicable Law; and

                  (iv) Each of such ERISA Plans that is intended to be
"qualified" within the meaning of Section 401(a) of the Code has been determined
by the IRS to be so qualified by issuance and receipt of a favorable
determination letter or reliance upon an opinion letter which states that the
ERISA Plan meets all requirements under the Code and that any trust(s)
associated with such ERISA Plan is tax exempt under Section 501(a) of the Code.
Nothing has occurred since the date of the most recent such determination (other
than the effective date of certain amendments to the Code the remedial amendment
period for which has not yet expired) that would adversely affect the qualified
status of such ERISA Plans; and

                  (v) No actual or threatened disputes, lawsuits, claims (other
than routine claims for benefits), investigations, audits or complaints to, or
by, any person or governmental entity have been filed with respect to the ERISA
Plans or the Company or the Subsidiary in connection with any ERISA Plans or the
fiduciaries responsible for such ERISA Plans, and no facts or conditions exist
which could subject the Buyer, the Company or the Subsidiary to any liability
(other than routine claims for benefits) under the terms of the ERISA Plans or
Applicable Law.

         (c) None of the ERISA Plans is a "multiemployer plan" as that term is
defined in Section 3(37) of ERISA.

         (d) Except as set forth in Section 10.1(d) of Seller's Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
material payment (including without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due from the Company or
the Subsidiary under any Company Benefit Plan; (ii) materially increase any
benefits otherwise payable under any Company Benefit Plan; or (iii) accelerate
the time of payment or vesting, or increase the amount of, any compensation due
to any Company Employee. The only severance agreements or severance policies
applicable to the Company or the Subsidiary in the

                                      -47-
<PAGE>

event of a change in control of the Company are the agreements and policies
specifically referred to in Section 10.1(d) of Seller's Disclosure Schedule.

         (e) No booked or unbooked liability exists which is, or should be,
accounted for by the Company in accordance with Financial Accounting Standards
Number 106. No unbooked liability exists which is, or should be, accounted for
by the Company in accordance with Financial Accounting Standards Number 112
except for such amounts disclosed in Section 10.1(e) of Seller's Disclosure
Schedule.

         (f) There are no agreements which will provide payments to any officer,
employee or highly compensated individual which will be "parachute payments"
under Section 280G or Section 4999 of the Code for which the Buyer or the
Company would have withholding liability or that would result in loss of tax
deductions under Section 280G of the Code.

         (g) All ERISA Plans that are "employee welfare benefit plans" including
health care flexible spending accounts have been operated in substantial
compliance with the group health plan continuation coverage requirements of
Section 4980B of the Code to the extent the requirements are applicable. Except
for liability to provide coverage under the continuation of coverage provisions
of Section 4980B of the Code, Sections 601-608 of ERISA ("COBRA") and applicable
state continuation of coverage statutes, except as set forth in Section 10.1(g)
of the Seller's Disclosure Schedule, neither the Seller Parent or its Affiliates
or the Company or the Subsidiary has made any commitments prior to the Closing
Date relating to present or future retiree medical benefits with respect to any
Transferred Employee or is required to provide retiree medical benefits to any
Transferred Employee. In addition no present or future liability whatsoever
shall exist for the Buyer, the Company or the Subsidiary relating to any program
described in Section 10.1(g) of the Seller's Disclosure Schedule.

         (h) With respect to each Company Benefit Plan, the Seller has furnished
or made available to Buyer true, correct and complete copies of the following
(to the extent applicable); (1) the plan documents and summary plan
descriptions; (2) the most recent determination letter received from the
Internal Revenue Service; (3) the most recent annual report; (4) all related
trust agreements, insurance contracts or other funding agreements that implement
such plans; and (5) all other documents, records or other materials related
thereto reasonably requested by Buyer which would disclose any special plan
features which would adversely affect the Buyer, the Company, the Subsidiary or
Transferred Employees.

         Section 10.2 Establishment of Company Group Health Plans. Not later
than the Closing Date, Seller shall cause the Company to establish, maintain and
sponsor group health plans for Company Employees employed by the Company and
their eligible dependents, which group health plans shall be substantially
similar to the group health plans offered to such Company Employees by the
Ultimate Parent.

         Section 10.3 Employment of Transferred Employees. Buyer shall cause all
Current Company Employees to remain employed by the Company and the Subsidiary
as of the Closing Date (hereinafter collectively referred to as the "Transferred
Employees") in the same or

                                      -48-
<PAGE>

comparable positions, and in the aggregate, at the same or comparable total
compensation (including base pay and bonus but excluding any qualified or
non-qualified defined benefit pension benefit), as are offered by the Buyer to
its current employees in similar positions and in similar geographic locations,
except as otherwise provided in this Agreement. For purposes of this paragraph,
the term "Current Company Employees" shall mean persons who are actively at work
for the Company or the Subsidiary as of the Closing Date and shall include all
full-time and part-time employees, employees on vacation or who have taken a
personal day or occasional absence day as currently defined in the Seller's, the
Company's or the Subsidiary's policies or similar short term leaves for reasons
other than illness or disability. Current Company Employees shall not include
those employees of the Company or the Subsidiary on leave of absence, including
short-term leave for illness, workers' compensation, military leave, maternity
leave, leave under the Family and Medical Leave Act of 1993, short-term
disability, salary continuation, on layoff with recall rights, and employees on
other Company or Subsidiary approved leaves of absence with a legal or
contractual right to reinstatement ("LOA Employees"). If an LOA Employee returns
to active service within six (6) months of the Closing Date, the Buyer, the
Company or the Subsidiary shall offer him or her employment at that time
effective upon return to active service. Until such time as a LOA Employee
returns to active service, such employee shall be the responsibility of the
Seller Parent and its Affiliates and not the Company, the Subsidiary or the
Buyer, for all purposes including but not limited to, benefits and compensation.
LOA Employees who do not return to active employment with the Company or the
Subsidiary within six (6) months after the Closing Date shall not become
Transferred Employees.

         (a) Assumption of Employment and Other Agreements. On and after the
Closing Date, except as otherwise provided in this Agreement, the Company shall
assume all obligations under, and be bound by the provisions, of each employment
agreement or any other agreement by Seller Parent, Seller and their Affiliates
and the Company and the Subsidiary relating to conditions of employment,
employment, separation, or severance that are listed in Section 10.3 of the
Seller's Disclosure Schedule in connection with the Transferred Employees for
the term of each agreement as provided therein. Section 10.3(a) of Seller's
Disclosure Schedule is a list of such agreements (other than Company Benefit
Plans) between the Seller Parent, the Seller or its Affiliates, and the Company
or the Subsidiary and any Transferred Employee that is or could reasonably be
expected to become a liability of the Buyer, the Company or the Subsidiary.

         (b) Recognition of Transferred Employee Service. On and after the
Closing Date, Buyer shall cause the Company and the Subsidiary to recognize the
service of each Transferred Employee for the Company and the Subsidiary, the
Ultimate Parent, the Seller Parent, the Seller and their Affiliates before the
Closing Date for all employment-related purposes (other than benefit accrual
under any qualified or non-qualified defined benefit pension plan) determined in
accordance with the practices and procedures of the Ultimate Parent and its
Affiliates and the Company and the Subsidiary in effect on the date hereof.

         (c) No Accrual under Parent Plans. Transferred Employees shall not
accrue benefits under or remain covered under any employee benefit policies,
plans, arrangements, programs, practices, or agreements of Seller Parent or any
of its Affiliates after the Closing Date. No

                                      -49-
<PAGE>

liability arising from or related to such benefit policies, plans, arrangements,
programs, practices or agreements of Seller Parent or any of its Affiliates
shall be transferred to or remain with Buyer, the Company or the Subsidiary
after the Closing Date.

         (d) No Duplicate Benefits. Nothing in this Agreement shall cause
duplicate benefits to be paid or provided to or with respect to any Transferred
Employees under any employee benefit policies, plans, arrangements, programs,
practices or agreements. References herein to a benefit with respect to a
Transferred Employee shall include, where applicable, benefits with respect to
any eligible dependents and beneficiaries of such Transferred Employee under the
same employee benefit policy, plan, arrangement, program, practice or agreement.

         Section 10.4 401(k) Matching Contribution. Buyer shall provide an
employer matching contribution to each Transferred Employee, who, prior to the
Closing Date, participated in the FleetBoston Financial Corporation Savings Plan
(the "Parent 401(k) Plan") and who is employed by the Buyer or the Company or
the Subsidiary on the Closing Date in an amount equal to the employer matching
contribution that such Transferred Employee would have received under the Parent
401(k) Plan for participation in the Parent 401(k) Plan for the period beginning
January 1, 2002 and ending on the Closing Date had the Transferred Employee been
an active participant in the Parent 401(k) Plan on December 31, 2002.

         Section 10.5 Transferred Employee Benefit Matters.

         (a) Savings Plans. Buyer shall take all action necessary and
appropriate to ensure that, as soon as practicable after the Closing Date, Buyer
or the Company maintains or adopts one or more retirement savings plans
(hereinafter referred to in the aggregate as the "Buyer Savings Plans" and
individually as a "Buyer Savings Plan") effective as of the Closing Date, and
shall cause each Transferred Employee and their eligible dependents to be
eligible to participate in the Buyer Savings Plan as soon as practicable after
the Closing Date. The terms of the Buyer Savings Plan shall provide that the
Transferred Employees employed by the Company shall have the right to make
direct rollovers to such plan of their accounts in qualified defined
contribution plans maintained by the Seller Parent and its Affiliates ("Parent
Savings Plans"), including a direct rollover of any notes evidencing loans made
to such Transferred Employees employed by the Company. Buyer shall take any and
all action necessary and appropriate to ensure that, after the Closing Date, the
Transferred Employees employed by the Subsidiary continue to participate in one
or more retirement savings plans maintained or adopted by the Subsidiary or, at
the election of the Buyer, become eligible to participate in a Buyer Savings
Plan.

         (b) Welfare Benefits.

                  (i) After the Closing Date, the Buyer may elect to have
Transferred Employees employed by the Company continue to participate in the
group health plans established on or before the Closing Date pursuant to Section
10.2 of this Agreement and may elect to have Transferred Employees employed the
Subsidiary continue to participate in the group health and welfare plans
maintained by the Subsidiary. Alternatively, the Buyer may elect to take all
action necessary and appropriate to ensure that, as soon as practicable after
the Closing Date,

                                      -50-
<PAGE>

Buyer or the Company or the Subsidiary maintains or adopts one or more employee
welfare benefit plans, including medical, health, dental, flexible spending
account, accident, life, short-term disability, and long-term disability and
other employee welfare benefit plans effective as of the Closing Date for the
benefit of the Transferred Employees (the "Buyer Welfare Plans"), and shall
cause each Transferred Employee and their eligible dependents to be eligible to
participate in the Buyer Welfare Plans as soon as practicable after the Closing
Date. For purposes of determining eligibility to participate in each Buyer
Welfare Plan, each Transferred Employee shall be credited with service,
determined under the terms of the corresponding welfare plans maintained by
Seller Parent and its Affiliates (hereinafter referred to collectively as the
"Parent Welfare Plans") and the Company or the Subsidiary on the Closing Date. A
service credit will be issued to those Transferred Employees with restrictions
on coverage for pre-existing conditions or requirements for evidence of
insurability under the Buyer Welfare Plans provided, however, that any such
service credit shall not result in greater coverage for a Transferred Employee
than the coverage such Transferred Employee was entitled to under a Parent
Welfare Plan or any other group health and welfare plans in which such
Transferred Employees participated before the Closing Date. Transferred
Employees shall receive credit under the Buyer Welfare Plans for co-payments and
payments under a deductible limit made by them and for out-of-pocket maximums
applicable to them during the plan year of the Parent Welfare Plan in accordance
with the corresponding Parent Welfare Plans. As soon as practicable after the
Closing Date, Seller Parent shall deliver to Buyer a list of the Transferred
Employees who had credited service under a Parent Welfare Plan, together with
each such Transferred Employee's service, co-payment amounts, and deductible and
out-of-pocket limits under such plan. This Agreement does not impose any
requirement on the Company, the Subsidiary or Buyer to provide any benefit to
domestic partners or adult dependents (other than spouses) of Transferred
Employees or to provide post-retirement medical or other post-retirement welfare
plan coverage to any Transferred Employee, except to the extent required under
the continuation of coverage provisions of Section 4980B of the Code and ERISA,
and any applicable state law. The Seller Parent, Seller and its Affiliates
(other than the Company or the Subsidiary) shall provide or continue to provide
retiree health and welfare benefits to retirees, their surviving spouses and
other inactive employees who are receiving or are entitled to elect to receive
retiree health and welfare benefits. The Seller Parent, Seller and its
Affiliates (other than the Company or the Subsidiary) shall indemnify the Buyer,
the Company or the Subsidiary for any claim or action arising from any such
termination of retiree health and welfare benefit program or plan in existence
prior to the Closing Date.

                  (ii) Buyer shall refer to Seller Parent and its Affiliates and
Seller Parent and its Affiliates shall assume responsibility for any claim under
a Parent Welfare Plan made by a Transferred Employee on or after the Closing
Date arising from a disability or loss incurred on or before the Closing Date,
except to the extent that such liability has been accrued on the Final Balance
Sheet and not paid to the Seller Parent or an Affiliate (other than the Company
or the Subsidiary) or an employee benefit plan of the Seller Parent or one of
its Affiliates (other than the Company or the Subsidiary). Nothing in this
Section 10.5(b) shall require the Seller Parent or any Affiliate, or the Parent
Welfare Plans to make any payment or to provide any benefit not otherwise
provided by the terms of the Parent Welfare Plans. For purposes of this
paragraph, a claim is deemed incurred when the services that are the subject of
the claim are performed; in the

                                      -51-
<PAGE>

case of life insurance when the death occurs and in the case of long-term
disability benefits, when the disability occurs.

                  (iii) Seller Parent, Buyer, their respective Affiliates, and
the Parent Welfare Plans and the Buyer Welfare Plans shall assist and cooperate
with each other in the disposition of claims made under the Parent Welfare
Plans, and in providing each other with any records, documents, or other
information within its control or to which it has access that is reasonably
requested by any other as necessary or appropriate to the disposition,
settlement, or defense of such claims.

                  (iv) Except for the flexible spending account (the "FSA")
balances described in Section 10.5(b)(vi), nothing in this Agreement shall
require the Seller Parent or its Affiliates to transfer assets or reserves with
respect to benefits under the Parent Welfare Plans to Buyer or the Buyer Welfare
Plans.

                  (v) Exhibit C is a true and correct copy of the Company's
severance plan ("Company Severance Plan") and Exhibit C-1 is a true and correct
copy of the Subsidiary's severance plan ("Subsidiary Severance Plan"). The Buyer
shall be responsible for any severance benefits payable to any Transferred
Employee following the Closing Date in accordance with the following:

                        (A) During the period commencing on the Closing Date and
         ending on the first year anniversary thereof, the Buyer shall provide
         Transferred Employees of the Company with severance benefits under the
         circumstances provided in, and calculated in accordance with, the
         Company Severance Plan and shall provide Transferred Employees of the
         Subsidiary with severance benefits under the circumstances provided in,
         and calculated in accordance with, the Subsidiary Severance Plan;
         provided however that for purposes of calculating benefits under each
         such plan, the Buyer shall recognize each Transferred Employee's
         combined service with the Company, the Subsidiary, the Ultimate Parent,
         the Seller Parent, the Seller and its Affiliates and their respective
         successors, predecessors and assigns prior to the Effective Time and
         with the Buyer and its Affiliates.

                        (B) During the period beginning on the Closing Date and
         ending on the first year anniversary thereof, neither the Buyer nor any
         of its Affiliates shall amend any provision of the Company Severance
         Plan or the Subsidiary Severance Plan, except as required by Applicable
         Law.

                        (C) For any Transferred Employee who is terminated by
         the Buyer after the first year anniversary of the Closing Date, the
         Buyer shall make severance payments pursuant to the applicable
         severance policy (if any such policy covering such persons is in
         effect) maintained by the Buyer or its Affiliates for the benefit of
         employees of the Buyer in effect on the date of termination.

                  (vi) As of the Closing Date, Seller Parent or its Affiliates
shall cause the portion of the FSA applicable to Transferred Employees to be
segregated into a separate

                                      -52-
<PAGE>

component and all account balances of the Transferred Employees in the FSA shall
be transferred to a flexible spending account that Buyer shall cause to be
maintained for the duration of the calendar year in which the Closing Date
occurs.

                  (vii) Seller Parent and its Affiliates will provide COBRA
coverage after the Closing Date to any eligible employee of the Company and the
Subsidiary (and the employee's eligible dependents) who was covered by a Parent
Welfare Plan prior to the Closing Date who experienced a "qualifying event" as
defined in COBRA prior to the Closing Date and who is not employed by the
Company or the Subsidiary or by Buyer or one of its Affiliates immediately after
the Closing Date, provided such employees and/or dependents make or have made a
proper COBRA election and pay all required premiums. Buyer shall provide or
shall cause the Company or the Subsidiary to provide COBRA coverage after the
Closing Date to any Transferred Employee (and the employee's eligible
dependents) who is employed by the Company or the Subsidiary or by Buyer or one
of its Affiliates immediately after the Closing if the Transferred Employee (or
the Transferred Employee's eligible dependents) experiences a "qualifying
event," as defined in COBRA, on or after the Closing Date, provided such
employees and/or dependents make or have made a proper COBRA election and pay
all required premiums.

         (c) Termination of Participation in Parent and Affiliate Plans. Prior
to Closing Date, Seller Parent and its Affiliates shall take all necessary
actions to remove the Company and the Subsidiary from participation in Company
Benefit Plans sponsored by Seller Parent and its Affiliates (other than the
Company and the Subsidiary).

         Section 10.6 Vacation Benefits. On or after the Closing Date, Buyer
shall cause the Company and the Subsidiary to: (i) assume all liabilities of
Seller Parent or its Affiliates with respect to any accrued but unused vacation
time of Transferred Employees that is an accrued liability on the Company's
Final Balance Sheet; and (ii) allow Transferred Employees to receive paid time
off on or after the Closing Date for any unused vacation time accrued prior to
the Closing Date in accordance with the policies in effect prior to the Closing
Date. Seller Parent and its Affiliates shall have no liability to pay
Transferred Employees for the vacation time described in this Section 10.6. For
a one year period following the Closing Date, each Transferred Employee shall
receive vacation benefits that are equivalent to vacation benefits provided by
the Company or the Subsidiary to such employee as of the Closing Date. After the
one year anniversary of the Closing Date, Transferred Employees shall be
eligible for vacation benefits in accordance with the Buyer's vacation plan or
policy.

         Section 10.7 No Third Party Rights. This Agreement is not intended, and
it shall not be construed, to create third party beneficiary rights in the
Company Employees (including any beneficiaries or dependents thereof) under or
with respect to any plan, program or arrangement described in or contemplated by
this Agreement and shall not confer upon any such employee the right to
continued employment for any period of time following the Closing Date except as
otherwise provided in Section 10.3(a) with respect to employment agreements.

         Section 10.8 Warn Act Requirements. On and after the Closing Date,
Buyer shall be responsible with respect to Transferred Employees and their
beneficiaries for compliance with

                                      -53-
<PAGE>

the Worker Adjustment and Retraining Notification Act of 1988 and any other
similar Applicable Law, including any requirement to provide for and discharge
any and all notifications, benefits, and liabilities to Transferred Employees
and government agencies that might be imposed thereunder as a result of the
consummation of the transactions contemplated by this Agreement.

         Section 10.9 Special Provisions for Certain Employees. Any individual
employed by the Company or the Subsidiary who immediately prior to the Closing
Date either (i) is currently receiving long-term disability benefits under a
long-term disability plan sponsored by Seller Parent or its Affiliates (the
"Parent LTD Plan"), (ii) has been approved for receipt of long-term disability
benefits under the Parent LTD Plan or (iii) becomes disabled prior to the
Closing Date but is within the elimination period as of the Closing Date and
ultimately becomes entitled to long term disability benefits under the Parent
LTD Plan (collectively, an "LTD Recipient") shall be treated as a Transferred
Employee if and when the LTD Recipient recovers from his or her disabling
condition and returns to active service with Buyer or the Company or the
Subsidiary within six (6) months after the Closing Date. If any LTD Recipient
does not recover from his or her disabling condition and return to active
service within six (6) months of the Closing Date, Seller Parent and its
Affiliates shall continue to cover such LTD Recipient under a Parent LTD Plan
and the Buyer, Company and Subsidiary shall have no obligation to offer to
provide employment to such LTD Recipient. Nothing herein shall require Buyer or
the Company or the Subsidiary to reemploy, reinstate or reactivate an LTD
Recipient, except to the extent an LTD Recipient has a right to re-employment,
reinstatement or reactivation.

                                   ARTICLE XI

                              CONDITIONS TO CLOSING

         Section 11.1 Conditions to Obligation of the Buyer. The obligation of
the Buyer to consummate the transactions contemplated by this Agreement is
subject to satisfaction, at or prior to the Closing of each of the following
conditions unless the Buyer in its sole discretion shall have waived such
satisfaction:

         (a) Each of the representations and warranties of the Seller and Seller
Parent set forth in this Agreement shall be true and correct in all respects as
of the date of this Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date; provided,
however, that for the purposes of this paragraph, such representations and
warranties shall be deemed to be true and correct in all respects unless the
failure or failures of such representations and warranties to be so true and
correct, either individually or in the aggregate, will have or are reasonably
likely to have a Material Adverse Effect on the Company.

         (b) On or prior to the Closing Date, the Seller and Seller Parent shall
have performed and complied in all material respects with all of the covenants
to be performed or complied with by it at or prior to the Closing Date.

         (c) The president or any vice president of the Seller shall have
delivered to the Buyer a certificate to the effect that each of the conditions
specified above in Sections 11.1(a) and 11.1(b) is satisfied.

                                      -54-
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         (d) There shall not be any injunction, judgment, order, decree, ruling,
or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement.

         (e) The applicable waiting periods under the Hart-Scott-Rodino Act
shall have expired or been terminated and any Material Governmental Consent
shall have been obtained.

         (f) There shall not have occurred any event that, individually or in
the aggregate, has had a Material Adverse Effect on the Company.

         (g) The Buyer shall have received from the Seller certified copies of
resolutions duly adopted by the Board of Directors of the Seller authorizing the
execution and performance of this Agreement and the other documents contemplated
hereby and the transactions contemplated hereby.

         (h) The Buyer shall have received the opinion of counsel referred to in
Section 3.2(a)(ix).

         (i) The Seller and Seller Parent shall have executed and delivered the
TSA, the Outsourcing Agreement, the Sublease, the Trademark Assignment Agreement
and the Loan Servicing Agreement Amendments.

         Section 11.2 Conditions to Obligations of the Seller and Seller Parent.
The obligations of the Seller and Seller Parent to consummate the transactions
contemplated by this Agreement is subject to satisfaction, at or prior to the
Closing, of each of the following conditions unless the Seller in its sole
discretion shall have waived such satisfaction:

         (a) Each of the representations and warranties of the Buyer set forth
in this Agreement shall be true and correct in all respects as of the date of
this Agreement (except to the extent such representations and warranties speak
of an earlier date) and as of the Closing Date; provided, however, that for the
purposes of this paragraph, such representations and warranties shall be deemed
to be true and correct in all respects unless the failure or failures of such
representations and warranties to be so true and correct, either individually or
in the aggregate, will have or are reasonably likely to have a Material Adverse
Effect on the Buyer.

         (b) On or prior to the Closing Date, the Buyer shall have performed and
complied in all material respects with all of its covenants to be performed or
complied with by it at or prior to the Closing Date.

         (c) The president or any vice president of the Buyer shall have
delivered to the Seller a certificate to the effect that each of the conditions
specified above in Section 11.2(a) through Section 11.2(b) is satisfied.

         (d) There shall not be any injunction, judgment, order, decree, ruling,
or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement.

         (e) The applicable waiting periods under the Hart-Scott-Rodino Act
shall have expired or been terminated and any Material Governmental Consent
shall have been obtained.

                                      -55-
<PAGE>

         (f) The Seller shall have received from the Buyer certified copies of
resolutions duly adopted by the Board of Directors of the Buyer authorizing the
execution and performance of this Agreement and the other documents contemplated
hereby and the transactions contemplated hereby and thereby.

         (g) The Seller shall have received the opinion of counsel referred to
in Section 3.2(b)(vi).

         (h) The Buyer and/or the Company shall have executed and delivered the
TSA, the Sublease, the Outsourcing Agreement, the Trademark Assignment Agreement
and the Loan Servicing Agreement Amendments.

                                   ARTICLE XII

                            SURVIVAL, INDEMNIFICATION

         Section 12.1 Survival of Representations and Warranties, Covenants and
Agreements.

         (a) All of the representations and warranties of the Seller and Seller
Parent contained in Articles IV, V, and Section 10.1 of this Agreement shall
survive the Closing hereunder and continue in full force and effect for a period
of eighteen (18) months thereafter, except that (i) the representations and
warranties set forth in Section 4.5, Section 4.6, Section 5.2(b), Section 5.4
and Section 10.1(e) hereof shall survive indefinitely, (ii) the representations
and warranties set forth in Section 5.21 shall survive until barred by the
applicable statutes of limitations, and (iii) the representations and warranties
set forth in Section 9.1 shall survive as provided for in Section 9.12. All
claims for actual fraud shall survive the Closing hereunder until barred by the
applicable statutes of limitations.

         (b) Covenants and agreements of the Seller and Seller Parent contained
in this Agreement that are to be performed prior to the Closing shall survive
the Closing hereunder for a period equal to eighteen (18) months after the
Closing Date or, in the case of any covenants or agreements to be performed
after the Closing, shall survive for one (1) year after the date on which such
post-Closing covenant or agreement was required to have been performed.

         (c) All of the representations and warranties of the Buyer contained in
Article VI of this Agreement shall survive the Closing hereunder and continue in
full force and effect for a period of eighteen (18) months thereafter, except
that the representations and warranties set forth in Section 6.5 shall survive
indefinitely. All claims for actual fraud shall survive the Closing hereunder
until barred by the applicable statute of limitations.

         (d) Covenants and agreements of the Buyer contained in this Agreement
that are to be performed prior to the Closing shall survive the Closing
hereunder for a period equal to eighteen (18) months after the Closing Date or,
in the case of any covenants or agreements to be performed after the Closing,
shall survive for one (1) year after the date on which such post-Closing
covenant or agreement was required to have been performed.

                                      -56-
<PAGE>

         Section 12.2 Indemnification.

         (a) Subject to the provisions of this Agreement, Seller Parent agrees
to indemnify and hold the Buyer and its Affiliates (including the Company and
the Subsidiary), predecessors, successors and assigns (and their respective
officers, directors, employees and agents) harmless from and against and in
respect of all Damages resulting from or relating to:

                  (i) A breach by the Seller or Seller Parent of any
representation or warranty made by the Seller or Seller Parent in this
Agreement;

                  (ii) A breach by the Seller or Seller Parent of any covenant
or agreement made by the Seller or Seller Parent in this Agreement to be
performed (A) prior to Closing or (B) after Closing; and

                  (iii) Any and all Liabilities relating to pre-Effective Time
acts or omissions by the Company or the Subsidiary in connection with the
matters asserted in that certain letter dated April 12, 1997; provided, however,
that any Liabilities for post-Effective Time acts or omissions by the Company or
the Subsidiary shall be the sole responsibility of the Company and the
Subsidiary.

         (b) Subject to the provisions of this Agreement, the Buyer agrees to
indemnify and hold the Seller and its Affiliates, predecessors, successors and
assigns (and their respective officers, directors, employees and agents)
harmless from and against and in respect of all Damages, resulting from or
relating to:

                  (i) A breach by the Buyer of any representation or warranty
made by the Buyer in this Agreement;

                  (ii) A breach by the Buyer of any covenant or agreement made
by the Buyer in this Agreement;

                  (iii) Any and all Liabilities of the Company or the Subsidiary
or any and all Liabilities arising out of or in connection with any of the
business, assets, operations or activities of the Company or the Subsidiary
(including any predecessor of the Company or the Subsidiary and any former
business, asset, operation, activity or subsidiary of the Company or the
Subsidiary), heretofore, currently or hereafter owned or conducted, as the case
may be, including, without limitation, any Liability based on negligence, gross
negligence, strict liability, intentional tort or any other theory of liability,
whether in law (whether common or statutory) or equity; provided, however,
nothing contained in this Section 12.2(b)(iii) shall impair the indemnification
obligations of Seller Parent in Section 12.2(a) hereof or make Buyer responsible
for any litigation asserted against the Seller or Seller Parent for acts or
omissions taken by Seller or Seller Parent directly, as opposed to litigation
asserted against the Seller or Seller Parent solely in its capacity as a
stockholder of the Company; and

                  (iv) Any and all Guaranties.

                                      -57-
<PAGE>

         (c) Seller Parent's and Buyer's respective indemnification obligations
with respect to Taxes are governed exclusively by Article IX; provided, however,
that the procedures outlined in Section 12.3(d) shall be followed with respect
to claims made pursuant to Article IX.

         (d) Anything contained in this Agreement to the contrary
notwithstanding, Buyer shall have no right of indemnification for any loss,
Liabilities or Damages sustained by any Person as a result of the parties'
failure or inability to obtain any or all required consents, waivers,
confirmations, notifications or approvals, with respect to any requirement of
any Governmental Entity (except with respect to any Material Governmental
Consent), or any agreement, contract, lease, license, permit, instrument or
other arrangement or for any termination, amendment, modification or other
change to any of the foregoing after the date hereof. Further, any loss,
Liability or Damage sustained or incurred, as a result of the parties' failure
or inability to obtain any or all required consents, waivers, confirmations,
notifications or approvals, with respect to any requirement of any Governmental
Entity (except with respect to any Material Governmental Consent), or any
agreement, contract, lease, license, permit, instrument or other arrangement or
for any termination, amendment, modification or other change to any of the
foregoing after the date hereof shall not be counted toward determining whether
the Threshold or Maximum Indemnification Amount has been reached.
Notwithstanding the foregoing, nothing contained in this Section 12.2(d) shall
relieve Seller Parent or Seller of its obligation under Sections 7.1 or 7.2 and
any loss, Liabilities or Damages, sustained or incurred by Buyer or any of its
Affiliates solely as a result of Seller Parent's or the Seller's failure to
perform such obligations under Section 7.1 or 7.2 shall be counted toward
determining whether the Threshold or Maximum Indemnification Amount has been
reached.

         (e) Seller Parent's and Buyer's respective indemnification obligations
pursuant to Sections 12.2(a)(i) and 12.2(b)(i) hereof shall be determined
without giving effect to any qualification or exception with respect to
"material", "materially", "material adverse effect", "knowledge of Seller",
"Seller's knowledge" or similar language contained in any representation or
warranty of Seller or Seller's Parent or Buyer or Buyer's Parent, respectively;
provided, however, any such qualification or exception contained in Sections
4.3, 4.4, 5.7, the first two sentences of 5.9 and 5.14 shall still be given
effect. Seller Parent's indemnification obligation pursuant to Section
12.2(a)(i), with respect to only the representation and warranty contained in
Section 5.8, shall be determined without giving effect to the dollar threshold
contained therein; provided, however, that with respect to individual
indemnification claims that are in an amount less than $20,000, Seller Parent
shall have no liability for a breach of Section 5.8 unless and until the total
of all such claims is $1,000,000, at which time all such claims shall be
indemnifiable and shall be considered in determining whether the Threshold and
the Maximum Indemnification Amount has been reached.

         Section 12.3. Limitations.

         (a) Anything contained in this Agreement to the contrary
notwithstanding, (i) the Buyer (on behalf of itself and any of its Affiliates)
shall not make any claim for indemnification pursuant to Section 12.2(a)(i)
and/or Section 12.2(a)(ii)(A) until the aggregate amount of all such claims
exceeds Four Million Dollars ($4,000,000) (the "Threshold") and if the Threshold
is exceeded, Seller Parent shall be required to pay only the amount of the
excess over the

                                      -58-
<PAGE>

Threshold; provided, however, the Seller Parent's obligation and liability for
any and all breaches of the representations and warranties set forth in Section
4.5, Section 4.6, Section 5.2(b), Section 5.4, Section 9.1, Section 10.1(e) or
for claims for actual fraud or for claims made pursuant to Section
12.2(a)(ii)(B) or Section 12.2(a)(iii) hereof shall not be subject to the
Threshold and shall not count toward determining whether the Threshold or the
Maximum Indemnification Amount has been reached and (ii) Seller Parent shall not
be required to make indemnification payments to the extent indemnification
payments would exceed in the aggregate Forty Million Dollars ($40,000,000) (the
"Maximum Indemnification Amount"). In determining the foregoing Threshold and in
otherwise determining the amount to which any indemnified party is entitled to
assert a claim for indemnification pursuant to this Article XII, only actual
Damages, net of all Tax benefits and applicable insurance payments, and no
consequential, incidental or other special damages or losses shall be
indemnifiable. All parties hereto waive any claim to exemplary or punitive
damages. Seller Parent, the Seller and the Buyer acknowledge and agree that any
event, transaction, circumstance, or liability, whether contingent or accrued,
for which an adequate specific reserve has been established on the Final Closing
Balance Sheet, shall not be used at any time as the basis of any claim for
indemnification under Article IX or Article XII, or considered in any way in
determining whether the Threshold or the Maximum Indemnification Amount has been
reached. In addition, in connection with an alleged breach of the Seller
Parent's or Seller's representations, warranties and covenants under this
Agreement, the Buyer's Damages shall be net of all reserves established on the
Final Closing Balance Sheet specifically in connection with the particular item
or contingency in dispute (exclusive of any general corporate reserve). In no
event shall Seller Parent or Buyer be required to make any indemnification
payments to the extent that the total of all indemnification payments made
pursuant to this Agreement would exceed in the aggregate the Purchase Price.

         (b) The obligation of Seller Parent to indemnify the Buyer under
Section 9.1 and Section 12.2(a) above shall expire, with respect to any
representation, warranty, covenant or agreement of the Seller or Seller Parent,
on the date on which the survival of such representation, warranty, covenant or
agreement shall expire in accordance with Section 12.1 above, except with
respect to any written claims for indemnification which the Buyer has delivered
to Seller Parent prior to such date or with respect to any breach of the
representations and warranties in Sections 4.5, Section 4.6, Section 5.2(b),
Section 5.4, Section 10.1(e) and for claims made pursuant to Section
12.2(a)(iii) for which the obligation to indemnify shall be perpetual.

         (c) The obligation of Buyer to indemnify under Section 12.2(b) above
shall expire, with respect to any representation, warranty, covenant or
agreement of the Seller or Seller Parent, on the date on which the survival of
such representation, warranty, covenant or agreement shall expire in accordance
with Section 12.1 above, except with respect to written claims for
indemnification which Seller Parent has delivered to the Buyer prior to such
date or with respect to any breach of the representations and warranties of the
Buyer in Section 6.5, for which the obligation to indemnify shall be perpetual.
In determining the amount to which Seller or Seller Parent is entitled to assert
a claim for indemnification pursuant to this Article XII, only actual Damages,
net of all Tax benefits and applicable insurance payments, and no consequential,
incidental or other special damages or losses shall be indemnifiable.

                                      -59-
<PAGE>

         (d) Promptly after receipt by an indemnified party under this Article
XII of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Article XII, notify the indemnifying party in
writing of the claim or the commencement of that action stating in reasonable
detail the nature and basis of such claim and a good faith estimate of the
amount thereof, provided that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have to the indemnified party
unless and only to the extent such failure materially and adversely prejudices
the ability of the indemnifying party to defend against or mitigate damages
arising out of such claim. If any claim shall be brought against an indemnified
party, it shall notify the indemnifying party thereof and the indemnifying party
shall be entitled to participate therein, and to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party, and to settle and
compromise any such claim or action; provided, however, that the indemnifying
party shall not agree or consent to the application of any equitable relief upon
the indemnified party without its written consent. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable for
other expenses subsequently incurred by the indemnified party in connection with
the defense thereof; provided, however, that if the indemnifying party elects
not to assume such defense, the indemnified party may retain counsel
satisfactory to it and to defend, compromise or settle such claim on behalf of
and for the account and risk of the indemnifying party, and the indemnifying
party shall pay all reasonable fees and expenses of such counsel for the
indemnified party promptly as statements therefore are received; and, provided,
further, that the indemnified party shall not consent to entry of any judgment
or enter into any settlement or compromise without the written consent of the
indemnifying party which consent shall not be unreasonably withheld. The Buyer,
the Seller and Seller Parent each agree to render to each other such assistance
as may reasonably be requested in order to insure the proper and adequate
defense of any such claim or proceeding. The indemnified party shall also have
the right to select its own counsel, at its own expense, to represent the
indemnified party and to participate in the defense of such claim, as
applicable.

         Section 12.4 Remedies Exclusive. Except as otherwise specifically
provided in Section 2.4, Section 8.6, Section 8.7 and Article IX, the remedies
provided in this Article XII shall be the exclusive remedies of the parties
hereto (except with respect to claims for actual fraud) from and after the
Closing in connection with any breach of a representation or warranty, or
non-performance, partial or total, of any covenant or agreement contained
herein. The provisions of this Article XII shall apply to claims for
indemnification asserted as between the parties hereto as well as to third-party
claims.

         Section 12.5 Mitigation. The parties shall cooperate with each other
with respect to resolving any indemnifiable claim, including by making
commercially reasonable efforts to mitigate or resolve any such claim or
liability. Each party shall use commercially reasonable efforts to address any
claims or liabilities that may provide a basis for an indemnifiable claim such
that each party shall respond to any claims or liabilities in the same manner it
would respond to such claims or liabilities in the absence of the
indemnification provisions of this Agreement. In the event that any party shall
willfully fail to make such commercially reasonable efforts to mitigate or
resolve any claim or liability, then notwithstanding anything else to the
contrary contained herein, the other party shall not be required to indemnify
any Person for any

                                      -60-
<PAGE>

indemnifiable loss that could reasonably be expected to have been avoided if
such party, as the case may be, had made such efforts.

         Section 12.6 Treatment of Payments. All payments made pursuant to this
Article XII (but not pursuant of Article IX) shall be treated as an adjustment
to the Purchase Price.

                                  ARTICLE XIII

                                   TERMINATION

         Section 13.1 Termination of Agreement. This Agreement may be terminated
as follows:

         (a) By the mutual written consent of the Seller and the Buyer;

         (b) Either the Seller or the Buyer if the closing contemplated by
Section 2.1 hereof has not occurred by the close of business on September 30,
2002 and if the failure to consummate the transactions contemplated hereby on or
before such date pursuant to the terms of this Agreement did not result from the
failure by the party seeking termination of this Agreement to fulfill any
undertaking or commitment provided for herein that is required to be fulfilled
prior to such closing; and

         (c) Either the Seller or the Buyer if the other party has, in any
material respect, breached any representation, warranty, covenant or agreement
contained herein and such breach has not been or cannot be cured by the earlier
of (i) thirty (30) days after the date on which written notice of such breach is
given to the party committing such breach or (ii) the Closing Date.

         (d) By Seller or the Buyer if any event or condition exists which would
render impossible the satisfaction of the conditions to Closing set forth in
Sections 11.1(e) and 11.2(e).

         Section 13.2 Effect of Termination.

         (a) If any party terminates this Agreement pursuant to Section 13.1
above, all rights and obligations of the parties hereunder shall terminate
without any liability of any party to any other party; provided, however, that
the provisions contained in (a) Section 7.3 hereof and (b) the Confidentiality
Agreement, shall survive any termination of this Agreement indefinitely
(notwithstanding any provision herein or therein to the contrary); and provided;
further that the provisions contained in Section 7.14 shall survive any
termination of this Agreement pursuant to Sections 13.1(b) and 13.1(d).

         (b) A termination under Section 13.1 shall not relieve any party of any
liability for a breach of any covenant or agreement under this Agreement, or be
deemed to constitute a waiver of any available remedy (including specific
performance if available) for any such breach.

                                      -61-
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                                   ARTICLE XIV

                                  MISCELLANEOUS

         Section 14.1 No Third-party Beneficiaries. Except as specifically set
forth herein with respect to Company Employees, this Agreement shall not confer
any rights or remedies upon any Person other than the parties and their
respective successors and permitted assigns.

         Section 14.2 Entire Agreement. This Agreement (including the documents
referred to herein) and the Disclosure Schedules and Exhibits hereto and the
Confidentiality Agreement constitutes the entire agreement among the parties
with respect to the subject matter hereof and there are no other understandings,
agreements, or representations by or among the parties, written or oral, related
in any way to the subject matter hereof.

         Section 14.3 Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party may assign either this Agreement or
any of its rights, interests or obligations hereunder without the prior written
approval of the other parties hereto.

         Section 14.4 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party.

         Section 14.5 Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

         Section 14.6 Notices. All notices hereunder shall be sufficiently given
for all purposes hereunder if in writing and delivered personally, sent by
documented overnight delivery service or, to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to the appropriate
address or number as set forth below. Notices to the Seller or Seller Parent
shall be addressed to:

                           Fleet National Bank
                           100 Federal Street
                           Boston, MA  02110
                           Attn:  Terrence P. Laughlin
                           Fax:  617-434-2729

                           with  copies to:

                           V. Duncan Johnson
                           Edwards & Angell, LLP
                           2800 Financial Plaza
                           Providence, RI  02903-2499
                           Fax:  401-276-6611

                                      -62-
<PAGE>

or at such other address and to the attention of such other Person as the Seller
may designate by written notice to the Buyer. Notices to the Buyer shall be
addressed to:

                           Affiliated Computer Services, Inc.
                           2828 North Haskell
                           Dallas, TX  75204
                           Attn: Chief Executive Officer
                                 General Counsel
                           Fax:  214-823-5746

                           with a copy to:

                           Baker Botts LLP
                           2001 Ross Avenue
                           Suite 700
                           Dallas, TX  75201
                           Attn:  Neel Lemon
                           Fax:  214-661-4954

or at such other address and to the attention of such other Person as the Buyer
may designate by written notice to the Seller.

         Section 14.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.

         SECTION 14.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO, TO THE EXTENT IT
MAY LAWFULLY DO SO, HEREBY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF DELAWARE AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
DELAWARE, AS WELL AS TO THE JURISDICTION OF ALL COURTS FROM WHICH AN APPEAL MAY
BE TAKEN OR OTHER REVIEW SOUGHT FROM THE AFORESAID COURTS, FOR THE PURPOSE OF
ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF SUCH PARTY'S OBLIGATIONS
UNDER OR WITH RESPECT TO THIS AGREEMENT OR ANY OF THE AGREEMENTS, INSTRUMENTS OR
DOCUMENTS CONTEMPLATED HEREBY (OTHER THAN THE CONFIDENTIALITY AGREEMENT), AND
EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE IN ANY OF SUCH
COURTS.

         EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONCERNED WITH THIS AGREEMENT OR
ANY OF THE AGREEMENTS, INSTRUMENTS OR DOCUMENTS CONTEMPLATED HEREBY. NO PARTY
HERETO, NOR ANY ASSIGNEE OR SUCCESSOR OF A PARTY HERETO SHALL

                                      -63-
<PAGE>

SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER
LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY OF THE
AGREEMENTS, INSTRUMENTS OR DOCUMENTS CONTEMPLATED HEREBY. NO PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE
PROVISIONS OF THIS HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANYWAY AGREED WITH
OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT
BE FULLY ENFORCED IN ALL INSTANCES.

         Section 14.9 Amendments and Waivers. This Agreement may not be modified
or amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Either
party hereto may, only by an instrument in writing, waive compliance by the
other party hereto with any term or provision of this Agreement on the part of
such other party hereto to be performed or complied with. The waiver by any
party hereto of a breach of any term or provision of this Agreement shall not be
construed as a waiver of any subsequent breach.

         Section 14.10 Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.

         Section 14.11 Expenses. Except as otherwise provided herein, whether or
not the transaction contemplated hereby are consummated, each of the parties
hereto will bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby. The Buyer shall pay all filing or other fees payable to Governmental
Entities, including but not limited to filing fees due in connection with any
pre-merger notification pursuant to the Hart-Scott-Rodino Act.

         Section 14.12 Construction. The parties 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 and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.

         Section 14.13 Incorporation of Exhibits and Disclosure Schedules and
Confidentiality Agreement. The Exhibits, and Disclosure Schedules and
Confidentiality Agreement identified in this Agreement are incorporated herein
by reference and made a part hereof.

                                      -64-
<PAGE>

         Section 14.14 Disclaimer of Warranties.

         (a) Except as to those matters expressly covered by the representations
and warranties in this Agreement, the Seller is selling its ownership interest
in the Company on an "as is, where is, with all faults" basis and it is the
explicit intent of each party hereto that neither the Seller nor any of its
Affiliates is making any representation or warranty whatsoever, express or
implied, beyond those expressly given in this Agreement. The Buyer acknowledges
that neither the Seller nor any of its representatives or any other Person has
made any representation or warranty, express or implied, as to the accuracy or
completeness of any memoranda, charts or summaries heretofore made available by
the Seller or their representatives to the Buyer or any other information which
is not included in this Agreement or Seller's Disclosure Schedules or Exhibits
hereto, and neither the Seller nor any of its representatives or any other
Person will have or be subject to any liability to the Buyer, any Affiliate of
the Buyer or any other Person resulting from the distribution of any such
information to, or use of any such information by, the Buyer, any Affiliate of
the Buyer or any of their agents, consultants, accountants, counsel or other
representatives. The Seller makes no representations or warranties with respect
to any estimates, projections, forecasts or forward-looking information provided
to the Buyer. There is no assurance that any estimated, projected or forecasted
results will be achieved. Neither the Seller nor any other Person shall have any
liability or indemnification obligation to Buyer or any other Person resulting
from Buyer's use of any information, projections, demands or materials made
available to Buyer in certain "data rooms", "management presentations",
"break-out" sessions, responses to questions submitted on behalf of Buyer,
whether orally or in writing, or in any other form in expectation of the
furtherance of the transactions contemplated in this Agreement.

         (b) Anything contained in this Agreement to the contrary
notwithstanding, Seller makes no representations or warranties with respect to
the United States Government Contract No. PM94017001, as amended, modified or
extended, by and between the United States Department of Education and ACS
Government Services, Inc. (as successor to Computer Data Systems, Inc.), and
including to the extent any such contract, agreement, instrument or other
arrangement has been incorporated into any other contract, agreement, instrument
or other arrangement to which the Company or the Subsidiary is a party. This
provision shall not limit any other disclaimer contained in the Agreement.

                                      -65-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.

                                    FLEET NATIONAL BANK

                                    By:
                                       -------------------------------------

                                    Title:
                                          ----------------------------------

                                    FLEET HOLDING CORP.

                                    By:
                                       -------------------------------------

                                    Title:
                                          ----------------------------------

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.

                                    AFFILIATED COMPUTER SERVICES, INC.

                                    By:
                                       -------------------------------------

                                    Title:
                                          ----------------------------------

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