Document:

Exhibit 10.50

                                 LOAN AGREEMENT

         THIS LOAN AGREEMENT is made as of the 5th day of November, 2003, by and
between  ISRAEL  DISCOUNT  BANK  OF NEW  YORK  ("Lender"),  a New  York  banking
corporation,  with an office at 511 Fifth Avenue,  New York, New York 10036, and
SYMS CORP.,  a New Jersey  corporation  ("Borrower"),  with its chief  executive
office located at One Syms Way, Secaucus, New Jersey 07094.

                               W I T N E S S E T H

         WHEREAS,  Borrower  has  requested  that  Lender  provide a $20 million
credit facility for the purposes hereinafter set forth; and

         WHEREAS,  Lender  has  agreed  to make the  requested  credit  facility
available on the terms and conditions hereinafter set forth;

         NOW,  THEREFORE,  IN  CONSIDERATION  of the premises and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereto agree as follows:

         Capitalized  terms used in this Agreement have the meanings assigned to
them  in  Appendix  A,  General  Definitions.  Accounting  terms  not  otherwise
specifically  defined  herein  shall  be  construed  in  accordance  with  GAAP,
consistently applied.

SECTION 1: CREDIT  FACILITY

         1.1  LOANS.  Lender  hereby  agrees,  on the terms and  subject  to the
conditions of this Agreement,  and for so long as no Event of Default exists, to
make Revolving  Credit Loans to Borrower during the period (the "Credit Period")
from the date hereof to and including the Business Day immediately preceding the
Commitment Termination Date, as requested by Borrower in the manner set forth in
subsection 3.1.1 hereof,  in an aggregate  principal amount which, when added to
the Lender Letter of Credit Obligations which are to be outstanding  immediately
after giving effect to the borrowing and  application  of such Loans,  shall not
exceed the Maximum Revolving Credit Amount (also hereinafter  referred to as the
"Commitment"). Subject to the terms of this Agreement, during the Credit Period,
Borrower may borrow  Revolving  Credit Loans by means of Floating Rate Loans and
LIBOR Rate Loans. The principal amount of any repayment during the Credit Period
shall be deemed available, subject to the extent of an Available Commitment, for
borrowing  during  the Credit  Period and shall  otherwise  be  governed  in all
respects by the other terms and conditions of this Agreement.  Amounts repaid on
or after the Commitment  Termination  Date may not be reborrowed.  All Revolving
Credit  Loans shall be due and payable in full,  together  with all interest and
fees accrued  hereunder,  on the Commitment  Termination Date,  subject to prior
payment thereof as required pursuant to the terms hereof.

         1.2 USE OF PROCEEDS. The proceeds of the Loans shall be used solely for
Borrower's  general business  purposes not  inconsistent  with the terms of this
Agreement.

<PAGE>

         1.3 LETTERS OF CREDIT.

                  (a)  Subject to the terms and  conditions  hereof,  and for so
long as no Event of Default exists,  Lender shall, upon the request of Borrower,
issue  Letters of Credit  (which term shall be deemed to include the  amendment,
renewal  or  extension  of an  existing  Letter of  Credit)  for the  account of
Borrower  during the period  from the date  hereof  through  and  including  the
Commitment  Termination  Date  having an  aggregate  face amount at any one time
outstanding up to the Available  Letter of Credit  Commitment as then in effect.
Documentary  Letters of Credit  shall not have an expiry date later than 90 days
after issuance and standby Letters of Credit shall not have an expiry date later
than 1 year after  issuance.  In no event,  however,  shall any Letter of Credit
have an expiry date later than the Commitment  Termination Date.  Borrower shall
execute  and  deliver  to  Lender,  all  letter of credit  agreements  and other
documents  required by Lender,  in form and substance  satisfactory to Lender in
its  sole  discretion.   Borrower  agrees  to  unconditionally   and  absolutely
indemnify,  defend, pay and hold harmless Lender for all draws, claims,  losses,
damages, obligations and liabilities suffered or incurred at any time by Lender,
including without  limitation  attorneys' fees and reasonable costs with respect
to any and all Letters of Credit, except to the extent suffered or incurred as a
result of Lender's gross negligence or willful  misconduct.  Lender shall notify
Borrower  in  accordance   with  its  customary   practice  of  any  payment  or
disbursement  made by Lender under any Letter of Credit.  Borrower  shall either
(i) reimburse Lender in immediately  available funds on the same day as Borrower
is  notified  by Lender  that any draw is paid by Lender  under the  Letters  of
Credit  (all such  amounts so paid or  disbursed  until  paid,  are  hereinafter
referred to as "Unpaid Drawings"), or (ii) notify the Lender that it has elected
to convert such amount into a Revolving Credit Loan.

                  (b)  If,   notwithstanding   the  other   provisions  of  this
subsection  1.3, on the Commitment  Termination  Date there are  outstanding any
Letters of Credit which have not expired or been  terminated with the consent of
the Borrower  and the  respective  beneficiaries  thereof,  then this  Agreement
(including, without limitation, this Section 1.3 and Section 2.7 hereof) and the
respective  rights,  obligations  and covenants of the Borrower and Lender under
this Agreement shall remain in full force and effect until the date on which the
last of the Letters of Credit expire or is  terminated  (with the consent of the
Borrower and the  respective  beneficiaries  thereof)  and all payments  made by
Lender under the Letters of Credit are reimbursed in full by the Borrower except
that the Commitment  (including the obligation to issue Letters of Credit) shall
terminate on the Commitment Termination Date and Lender shall have no obligation
after the Commitment  Termination  Date to make Loans or issue or extend Letters
of Credit hereunder.

                  (c) Upon the  execution  and delivery by Borrower to Lender of
its standard form of  application  and  continuing  reimbursement  agreement for
Letters of Credit and Letter of Credit  Security  Agreement  attached  hereto as
Exhibit   1.3   (individually,   an   "Application",   and   collectively,   the
"Applications")  and upon payment by Borrower to Lender of the standard  charges
and  fees  then   customarily   imposed  by  Lender  in  connection   with  such
Applications,  and the Letter of Credit  Fees  described  in Section 2.4 for the
sole account of Lender,  Lender  shall,  subject to the terms and  conditions of
this  Agreement,  in a timely manner in accordance  with its standard  operating
procedures,  issue a Letter of Credit for the  account of the  Borrower.  In the

                                       2
<PAGE>

event of any conflict or inconsistency  between the terms and conditions of this
Agreement  and the terms and  conditions of any  Application,  the terms of this
Agreement shall control.

                  (d) The  obligations of the Borrower under this Section 1.3 to
reimburse Lender with respect to Unpaid Drawings  (including  interest  thereon)
shall,  absent gross negligence or willful misconduct of Lender, be absolute and
unconditional  under any and all  circumstances  and irrespective of any setoff,
counterclaim  or defense to payment which  Borrower may have or have had against
Lender.

SECTION 2: INTEREST, FEES AND CHARGES

         2.1 INTEREST.

             2.1.1 REVOLVING CREDIT LOANS:

                  (a) RATE OPTIONS.  Except as provided  below, all  Loans shall
bear interest at the  applicable  Floating  Rate. At the time of each Loan,  and
thereafter  from time to time,  Borrower  shall have the  right,  subject to the
terms and  conditions  of this  Agreement,  and provided no Event of Default has
occurred  and is  continuing,  to designate to Lender in a writing that all or a
portion of the Loans  shall bear  interest at either the (i) LIBOR Based Rate or
(ii) Floating Rate. Interest on each portion thereof shall accrue and be paid at
the time and rate  applicable to the respective  option  selected by Borrower or
otherwise  governing  under the terms of this  Agreement.  If for any reason the
LIBOR Based Rate option is unavailable,  the Floating Rate shall apply. The rate
of interest on Floating Rate Loans shall increase or decrease by an amount equal
to any  increase or decrease  in the Prime Rate  effective  as of the opening of
business on the day that any such change in the Prime Rate occurs.

                  (b) LIBOR RATE OPTION:

                                (i)  REQUESTS.  Provided no Event of Default has
occurred  and is  continuing,  and  subject to the  provisions  of this  Section
2.1.1(a)(i),  if Borrower desires to have the LIBOR Based Rate apply to all or a
portion of the Loans,  Borrower shall give Lender a written  irrevocable request
no later  than  12:00  Noon  Eastern  time two (2)  Business  Days  prior to the
requested  borrowing  date  specifying  (i) the date the LIBOR  Based Rate shall
apply (which shall be a Business Day), (ii) the LIBOR Interest Period, and (iii)
the amount to be subject to the LIBOR Based Rate provided that such amount shall
be an integral  multiple of $100,000.  In no event may Borrower have outstanding
at any time more than five different tranches of LIBOR Rate Loans.

                                (ii) LIBOR  INTEREST  PERIODS.  LIBOR Rate Loans
shall be selected by Borrower for a LIBOR Interest Period during which the LIBOR
Based Rate is  applicable;  provided,  however,  that (x) if the LIBOR  Interest
Period  would  otherwise  end on a day which shall not be a Business  Day,  such
LIBOR  Interest  Period shall be extended to the next  preceding  or  succeeding
Business  Day as is  customary  in the  market  to which  such  LIBOR  Rate Loan
relates.  All accrued and unpaid  interest on a LIBOR Rate Loan shall be paid at
the end of the  applicable  LIBOR  Interest  Period in  accordance  with Section
3.2.2.  Notwithstanding

                                       3
<PAGE>

anything herein contained to the contrary, no LIBOR Interest Period with respect
to any of the Revolving  Credit Loans may end after the  Commitment  Termination
Date.  Subject  to all of the terms and  conditions  applicable  to a request to
convert all or a portion of the Loans to a LIBOR Rate Loan,  Borrower may extend
a LIBOR Rate Loan as of the last day of the LIBOR Interest Period to a new LIBOR
Rate Loan. If Borrower fails to notify Lender of the LIBOR Interest Period for a
subsequent  LIBOR Rate Loan at least two (2) Business Days prior to the last day
of the then current LIBOR  Interest  Period of an  outstanding  LIBOR Rate Loan,
then such outstanding  LIBOR Rate Loan shall, at the end of the applicable LIBOR
Interest Period, accrue interest at the Floating Rate.

                                (iii)  ADJUSTMENTS.  The Adjusted LIBOR Rate may
be automatically  adjusted by Lender on a prospective basis to take into account
the  increased  costs of the  Lender in making or  maintaining  LIBOR Rate Loans
hereunder due to changes in applicable  law or regulation or the  interpretation
thereof  occurring  subsequent to the  commencement of the then applicable LIBOR
Interest  Period,  including  but not  limited to,  changes in tax laws  (except
changes of general  applicability  in corporate  income tax laws) and changes in
the  reserve  requirements  imposed  by the Board of  Governors  of the  Federal
Reserve System (or any successor or other applicable governing body),  excluding
the Reserve  Percentage and any Reserve which has resulted in a payment pursuant
to Section 2.7 below, that increase the cost to Lender of funding the LIBOR Rate
Loan.  Lender shall promptly give Borrower  notice of such a  determination  and
adjustment, which determination shall be prima facie evidence of the correctness
of the fact and the amount of such adjustment.

                                (iv)  UNAVAILABILITY.  If  Borrower  shall  have
requested  the rate based on the  Adjusted  LIBOR Rate in  accordance  with this
Section 2.1.1(a)(i) and Lender shall have reasonably determined,  in good faith,
that  Eurodollar  deposits equal to the amount of the principal of the requested
LIBOR Rate Loan and for the LIBOR Interest Period specified are unavailable,  or
that the rate based on the Adjusted  LIBOR Rate will not  adequately  and fairly
reflect the cost of the Adjusted  LIBOR Rate  applicable to the specified  LIBOR
Interest Period,  of making or maintaining the principal amount of the requested
LIBOR Rate Loan during the LIBOR Interest Period specified, or that by reason of
circumstances  affecting  Eurodollar  markets,  adequate  means do not exist for
ascertaining  the rate  based  on the  Adjusted  LIBOR  Rate  applicable  to the
specified  LIBOR  Interest  Period,  Lender shall  promptly  give notice of such
determination  to Borrower that the rate based on the Adjusted LIBOR Rate is not
available.  A determination,  in good faith, by Lender  hereunder shall,  absent
manifest  error,  be prima  facie  evidence of the  correctness  of the fact and
amount of such additional  costs or  unavailability.  Upon such a determination,
(i) the  obligation  to  convert  to, or  maintain a LIBOR Rate Loan at the rate
based on the Adjusted  LIBOR Rate shall be suspended  until  Lender,  shall have
notified  Borrower that such conditions shall have ceased to exist, and (ii) the
portion of the Loans subject to the request or requested conversion shall accrue
interest at the Floating Rate.

                                (v) ILLEGALITY.  Notwithstanding anything to the
contrary  herein  contained,  if any change in any law or  regulation  or in the
interpretation  thereof  after  the date  hereof by any  governmental  authority
charged with the administration or interpretation thereof shall make it unlawful
for Lender to make or maintain any LIBOR Rate

                                       4
<PAGE>

Loan,  then, by written  notice to Borrower,  Lender may: (i) declare that LIBOR
Rate Loans will not thereafter be made by Lender hereunder,  whereupon  Borrower
shall be  prohibited  from  requesting  LIBOR Rate Loans from  Lender  hereunder
unless such declaration is subsequently withdrawn; and (ii) if unlawful to be so
maintained,  require  that  all  outstanding  LIBOR  Rate  Loans  made  by it be
converted to Floating  Rate Loans,  in which event (x) all such LIBOR Rate Loans
shall be automatically converted to Floating Rate Loans as of the effective date
of such  notice as  provided  in the  sentence  below and (y) all  payments  and
prepayments  of principal  which would  otherwise have been applied to repay the
converted  LIBOR Rate Loans shall  instead be applied to repay the Floating Rate
Loans  resulting from the  conversion of such LIBOR Rate Loans.  For purposes of
this  Paragraph  (E), a notice to Borrower by Lender  pursuant to this paragraph
shall be  effective,  if  lawful,  on the last  day of the  then  current  LIBOR
Interest Period;  in all other cases,  such notice shall be effective on the day
of receipt by Borrower.

                                (vi) CAPITAL ADEQUACY. If, due to either (i) the
introduction  of or  any  change  in or in  the  interpretation  of  any  law or
regulation  after the date hereof or (ii) the  compliance  with any guideline or
request  from any central  bank or other  governmental  authority  (where or not
having the force of law) issued  after the date hereof (each a "Change of Law"),
there  shall be any  increase  in the cost to  Lender  of  making,  funding,  or
maintaining  Loans or issuing or  maintaining  Letters of Credit,  then Borrower
shall, from time to time, upon Lender's demand, pay to Lender additional amounts
sufficient to compensate Lender for such increased cost. In addition,  if Lender
determines  that  compliance  with any law or  regulation  or any  guideline  or
request from any central bank or other  governmental  authority  (whether or not
having the force of law) issued  after the date hereof  affects or would  affect
the amount of capital  required or expected  to be  maintained  by Lender or any
corporation  controlling Lender and that the amount of such capital is increased
by or based upon the  existence of loans or letters of credit  hereunder,  then,
upon Lender's  demand,  Borrower shall  immediately pay to Lender,  from time to
time as specified by Lender,  additional amounts sufficient to compensate Lender
or such corporation in the light of such circumstances to the extent that Lender
reasonably  determines such increase in capital to be allocable to the existence
of loans  or  letters  of  credit  hereunder.  Notwithstanding  anything  to the
contrary herein contained,  the Borrower shall not be required to compensate the
Lender for any increased  costs or increased  capital  incurred more than ninety
(90) days prior to the date that the Lender  notifies the Borrower of the Change
in Law giving rise to such increased costs or increased  capital and of Lender's
intention to claim compensation therefor.

             2.1.2 DEFAULT RATE OF INTEREST. Upon the occurrence of any Event of
Default under Sections 7.1.1 or 7.1.2, or upon the occurrence of any other Event
of Default and notice from the Lender to the Borrower, during the continuance of
such Event of Default, the outstanding  principal balance of all Loans shall, at
the option of Lender,  bear  interest  at a rate per annum  equal to the Default
Rate.

             2.1.3  CONVERSION OF LOANS.  Subject to the terms hereof,  Borrower
shall  have the right to convert  Floating  Rate Loans into LIBOR Rate Loans and
LIBOR Rate  Loans into  Floating  Rate  Loans from time to time,  provided  that
Borrower  shall give to Lender  notice of

                                       5
<PAGE>

each such  conversion as provided in Section 3.1.1 and provided  further that no
conversion  of LIBOR Rate Loans shall occur  except on the last day of the LIBOR
Interest  Period  applicable  thereto  unless  Borrower has  compensated  Lender
pursuant to Section 2.7(e) hereof.

             2.2  COMPUTATION OF INTEREST AND FEES.  Interest and all fees shall
be computed on the actual number of days elapsed over a year of 360 days.

             2.3 UNUSED LINE FEE.  Borrower shall pay to Lender a non-refundable
unused line fee (the "Line Fee") on the daily  average  amount of the  Available
Commitment  for the period from the date hereof to and  including the earlier of
the date the  Commitment  is  terminated  pursuant  to Section 3.3 hereof or the
Commitment Termination Date, at the rate of .5% per annum. The Line Fee shall be
payable  quarterly  in arrears on the last  Business  Day of each  March,  June,
September  and  December  and on the  earlier  of the  date  the  Commitment  is
terminated pursuant to Section 3.3 hereof or the Commitment Termination Date.

             2.4 LETTER OF CREDIT FEES.  Borrower  shall pay to Lender letter of
credit fees equal to (i) for documentary  letters of credit,  the greater of (1)
one-eighth of one percent (.125%) of the face amount of such documentary letters
of  credit  or (2)  $100.00,  payable  at (A) the time of a draw on a Letter  of
Credit and (B) the time of the  issuance of a Letter of Credit and on each 120th
day thereafter (if such Letter of Credit shall remain outstanding) to the extent
of the undrawn amount of such Letter of Credit,  and (ii) for standby letters of
credit two and one-half percent (2.5%) per annum of the face amount of each such
standby letter of credit, payable quarterly in advance.  Borrower shall also pay
to  Lender  all  of  Lender's  standard  charges  and  fees  (including  without
limitation all cable and wire transfer  charges) for the  amendment,  extension,
cancellation   or  other   administration   of  each   such   Letter  of  Credit
("Administrative Fees"). All such fees are collectively the "L/C Fees". L/C Fees
shall not be subject to refund or pro-ration for any reason.

             2.5  DEFICIENCY  BALANCE  FEES.  Borrower  shall  pay a  deficiency
balance  fee  ("Deficiency  Balance  Fee")  on (a) the  excess,  if any,  of (i)
$250,000  over (ii) the aggregate  average  daily balance of collected  free and
unrestricted funds in Borrower's  non-interest  bearing deposits maintained with
Lender,  after  deducting any and all service  charges  thereon (the  "Collected
Balances")  during each three month period or portion  thereof  (the  "Period");
multiplied  by (b) the average of the Floating Rate in effect during such Period
for the actual number of days in the Period. The Deficiency Balance Fee shall be
payable  quarterly  in arrears on the last  Business  Day of each  March,  June,
September  and  December  and on the  earlier  of the  date  the  Commitment  is
terminated pursuant to Section 3.3.2 hereof or the Commitment Termination Date.

             2.6 REIMBURSEMENT OF EXPENSES.  If, at any time or times regardless
of whether or not an Event of Default  then  exists,  Lender  incurs  reasonable
out-of-pocket legal or accounting expenses or any other reasonable out-of-pocket
costs  or  expenses  in  connection  with  (a)  the  analysis,  negotiation  and
preparation  of this  Agreement  or any of the  other  Loan  Documents,  and any
amendment, modification,  replacement or termination of this Agreement or any of
the other Loan  Documents that has been requested by Borrower and Lender or been
executed by the Loan Parties; (b) the administration of this Agreement or any of
the other Loan Documents and the transactions  contemplated  hereby and thereby;
(c) any litigation, contest, dispute, suit,

                                       6
<PAGE>

proceeding  or action  (whether  instituted  by  Lender,  Borrower  or any other
Person) in any way relating to this Agreement or any of the other Loan Documents
or Borrower's affairs (except to the extent any such cost or expense arises from
Lender's gross negligence or willful misconduct); or (iv) any attempt to enforce
any rights of Lender against Borrower or any other Person which may be obligated
to Lender by virtue of this Agreement or any of the other Loan  Documents,  then
all such costs and expenses shall be charged to Borrower. All amounts chargeable
to Borrower  under this Section  shall be payable  promptly  after demand by the
Lender  therefore,  which demand shall  include a  reasonably  detailed  invoice
therefore,  and shall bear  interest  from the date 10 business  days after such
demand is made until paid in full at the Floating  Rate  applicable to the Loans
from time to time.

             2.7 MAXIMUM REVOLVING CREDIT OBLIGATIONS; PREPAYMENTS.

                  (a) At no time  shall the  aggregate  principal  amount of the
Loans and Lender  Letter of Credit  Obligations  outstanding  exceed the Maximum
Revolving  Credit  Amount.  In the  event  that for any  reason,  the  aggregate
outstanding   principal  amount  of  the  Loans  and  Lender  Letter  of  Credit
Obligations  exceeds  the  Maximum  Revolving  Credit  Amount,   Borrower  shall
immediately, after notice, prepay the Loans or cash collateralize the Letters of
Credit in an amount  sufficient  to reduce  the sum of the  aggregate  principal
amount of the Loans and  Lender  Letter of Credit  Obligations  to an amount not
greater than the Maximum  Revolving Credit Amount.  Any such prepayment shall be
made with  interest  accrued  to the date of  prepayment  and be  subject to the
indemnity agreement set forth in Section 2.7(e) hereof.

                  (b) Subject to the delivery of a Borrowing  Notice pursuant to
Section 3.1.1 and to the indemnity  agreement set forth in Section 2.7(e) hereof
with  respect to LIBOR Rate Loans,  but  otherwise  without  premium or penalty,
Borrower  shall  have the right to prepay  any Loan at any time and from time to
time in whole or in part; PROVIDED, HOWEVER, that (x) any such prepayment (other
than a  prepayment  pursuant to SECTION  2.7(A))  shall be in an amount not less
than such  amounts  as  provided  in  Section  2.7(d)  hereof;  and (y) any such
prepayment of a Loan shall be made with interest accrued on the principal amount
being prepaid to the date of prepayment.

                  (c)  Except  as set  forth in  Sections  2.1.1(b)(iv)  and (v)
hereof,  and except as may be otherwise  expressly directed by Borrower provided
no Event of Default  exists or is continuing,  all payments and repayments  made
pursuant to the terms hereof shall be applied first to Floating Rate Loans,  and
shall be applied to LIBOR Rate Loans only to the extent any such payment exceeds
the  principal  amount of Floating  Rate Loans  outstanding  at the time of such
payment.

                  (d) Except for  borrowings  which  exhaust the full  remaining
amount of the  Commitment  or  prepayments  pursuant to SECTION  2.7(A) or which
result in the prepayment of all Loans of a particular  type,  each borrowing and
prepayment and each conversion of a LIBOR Rate Loan shall be in a minimum amount
of $100,000,  and each borrowing and prepayment of a Floating Rate Loan shall be
in a minimum amount of $50,000.

                                       7
<PAGE>

                  (e) INDEMNITY; YIELD PROTECTION.  [Borrower hereby indemnifies
Lender  against any loss (each a "Loss") or  reasonable  out-of-pocket  expenses
which  Lender  may  sustain  or incur as a  consequence  of (a) the  receipt  or
recovery by Lender whether by voluntary  prepayment,  acceleration or otherwise,
of all or any part of a LIBOR  Rate Loan other than on the last day of any LIBOR
Interest Period applicable to such Loan, (b) the conversion of a LIBOR Rate Loan
prior to the last day of any LIBOR Interest Period applicable to such LIBOR Rate
Loan, (c) the failure to borrow any LIBOR Rate Loan after  agreement  shall have
been reached  with respect to the LIBOR  Interest  Period  therefor,  or (d) any
failure  by  Borrower  to  borrow a LIBOR  Rate  Loan on the date  specified  by
Borrower's  written notice. The Borrower shall pay to Lender a yield maintenance
fee (the  "yield  maintenance  fee") as  payment in full in respect of each such
Loss, if any,  computed as follows:  The current rate for United States Treasury
securities (bills on a discounted basis shall be converted to a bond equivalent)
with a maturity date closest to the maturity date of the term chosen pursuant to
the  LIBOR  Interest  Period  as to  which  the  prepayment  is  made,  shall be
subtracted from the "Cost of Funds" component of the fixed rate in effect at the
time of prepayment.  If the result is zero or a negative number,  there shall be
no yield maintenance fee. If the result is a positive number, then the resulting
percentage  shall be  multiplied  by the amount of the  principal  balance being
prepaid.  The  resulting  amount shall be divided by 360 and  multiplied  by the
number of days  remaining  in the term  chosen  pursuant  to the LIBOR  Interest
Period as to which the  prepayment  is made.  Said  amount  shall be  reduced to
present value calculated by using the number of days remaining in the designated
term and using the above-referenced United States Treasury security rate and the
number of days  remaining  in the term  chosen  pursuant  to the LIBOR  Interest
Period as to which the  prepayment is made.  The  resulting  amount shall be the
yield  maintenance  fee due to Lender  upon  prepayment  of the LIBOR Rate Loan.
"Cost of Funds" as used  herein  means with  respect to any such LIBOR Rate Loan
the Adjusted LIBOR Rate applicable  thereto. If by reason of an Event of Default
hereunder, Lender elects to declare the Loans to be immediately due and payable,
then any yield  maintenance  fee with  respect to the Loans shall become due and
payable in the same manner as though Borrower had been granted and had exercised
a right of prepayment.]

SECTION 3:  LOAN ADMINISTRATION

         3.1 MANNER OF BORROWING  LOANS.  Borrowings  under the Credit  Facility
established pursuant to Section 1 hereof shall be as follows:

             3.1.1 LOAN  REQUESTS.  A request for a Loan shall be made, or shall
be deemed to be made, by an Authorized Officer in the following manner: Borrower
shall give Lender telephonic  notice, to be promptly confirmed in writing on the
form attached hereto as Exhibit 3.1.1.,  of each borrowing (or continuation with
respect to a LIBOR Rate Loan),  each conversion and prepayment of a Loan and, in
the case of the  borrowing or  prepayment  of, or  conversion  of a Loan into, a
LIBOR Rate  Loan,  of the  duration  of each LIBOR  Interest  Period  applicable
thereto (a "Borrowing  Notice").  Each Borrowing Notice shall be irrevocable and
shall be effective  only if received by Lender no later than, in the case of the
borrowing (or  continuation),  prepayment or conversion of a Floating Rate Loan,
12:00  Noon New York City  time,  on the date of  borrowing  (or  continuation),
prepayment  or  conversion  of such  Floating  Rate  Loan or, in the case of the

                                       8
<PAGE>

borrowing  (or  continuation),  prepayment  or  conversion of a LIBOR Rate Loan,
12:00  Noon New York City time,  on the date which is at least two (2)  Business
Days,  prior to the date of such  borrowing  (or  continuation),  prepayment  or
conversion of the Loan designated in the Borrowing  Notice.  Each such Borrowing
Notice  shall  specify  (a) the  amount  and  type of  Loan to be  borrowed  (or
continued),  converted  or  prepaid  and (b) the  date  of  such  borrowing  (or
continuation),  conversion or prepayment  (which shall be a Business Day).  Each
such Borrowing  Notice of the duration of an LIBOR Interest Period shall specify
the LIBOR Rate Loans to which such LIBOR Interest Period is to relate.

             3.1.2 DISBURSEMENT.  Borrower hereby irrevocably  authorizes Lender
to disburse  the  proceeds of each Loan  requested,  or deemed to be  requested,
pursuant  to this  Section 3.1 as  follows:  the  proceeds of each Loan shall be
disbursed  by  Lender  in  lawful  money of the  United  States  of  America  in
immediately  available  funds to Borrower's  operating  account  maintained with
Lender for such purpose.

             3.1.3 AUTHORIZATION. Borrower hereby authorizes Lender, in Lender's
sole discretion,  to debit Borrower's  operating  account(s) in such sums as are
sufficient to pay all interest, when due, all principal when due, and all costs,
fees and  expenses at any time owed by Borrower  to Lender  hereunder.  Promptly
following  any debit to  Borrower's  operating  account  for fees and  expenses,
Lender shall provide Borrower with an invoice as to such fees and expenses.

         3.2 PAYMENTS.  The Obligations shall be payable as follows:

             3.2.1  FUNDS;  MANNER OF PAYMENT.  Each payment and  prepayment  of
principal  and  interest on the Note shall be made in lawful money of the United
States in  Federal  or other  immediately  available  funds  without  set-off or
counterclaim  to Lender.  Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day other than a Business  Day, such payment
shall be made on the next  succeeding  Business Day, and such  extension of time
shall in such case be  included  in the  computation  of payment of  interest or
fees, as the case may be.

             3.2.2  INTEREST.  Except as  provided  in the  following  sentence,
accrued  interest  on each Loan shall be  payable in arrears  (i) in the case of
Floating  Rate  Loans,  quarterly  in arrears on the last  Business  Day of each
March,  June,  September and December,  (ii) in the case of LIBOR Rate Loans, on
the last day of the applicable  LIBOR Interest Period relating  thereto,  and in
each case until the maturity of such Loan or the payment or  prepayment  thereof
in full.  Interest  at the  Default  Rate shall be payable  from time to time on
demand of Lender.

             3.2.3 COSTS,  FEES AND  CHARGES.  Costs,  fees and charges  payable
pursuant to this Agreement  shall be payable by Borrower as and when provided in
Section  2 hereof  to Lender  or to any  other  Person  designated  by Lender in
writing.

             3.2.4 OTHER OBLIGATIONS. The balance of the Obligations (other than
those set forth in this  Section  3.2)  requiring  the payment of money shall be
payable by Borrower to

                                       9
<PAGE>

Lender as and when provided in this  Agreement,  the Revolving  Credit Note, the
Other Agreements, or the other Loan Documents.

         3.3  MANDATORY  AND  OPTIONAL  PREPAYMENTS;   COMMITMENT  REDUCTION  OR
TERMINATION.

             3.3.1  REDUCTION OR TERMINATION OF THE  COMMITMENT.  Borrower shall
have the right, upon at least two (2) Business Days' prior written or telephonic
notice  (promptly  confirmed in writing) to Lender,  at any time to terminate or
from time to time reduce the  Commitment  without  premium or penalty;  PROVIDED
that the  Commitment  may not be  reduced  to the  extent  that  following  such
reduction the sum of the aggregate unpaid principal balance of the Loans and the
Lender Letter of Credit  Obligations would exceed the Commitment.  Any notice of
termination  given by Borrower  shall be  irrevocable  unless  Lender  otherwise
agrees in  writing,  and Lender  shall have no  obligation  to make any Loans or
issue or extend or amend any Letters of Credit on or after the termination  date
stated in such notice.

             3.3.2  EFFECT  OF  TERMINATION.  All of the  Obligations  shall  be
immediately  due and payable upon the  termination  date stated in any notice of
termination of this Agreement given by Borrower  pursuant to Section 3.3.1.  All
undertakings,  agreements, covenants, warranties and representations of Borrower
contained in the Loan Documents  shall survive any such  termination  and Lender
shall  retain  all  of  its  rights  and  remedies   under  the  Loan  Documents
notwithstanding  such  termination  until  Borrower has paid the  Obligations to
Lender,  in  full,  in  immediately  available  funds  and with  respect  to any
outstanding  Letters of Credit  issued for the account of Borrower and any other
outstanding  Obligations of Borrower to Lender,  Lender has obtained  sufficient
cash collateral or an appropriate indemnification by any new lender.

         3.4 APPLICATION OF PAYMENTS AND COLLECTIONS.  Subject to subsection 2.7
of this Agreement,  all items of payment received by Lender by 2:00 P.M. Eastern
time,  on any Business Day shall be deemed  received on that  Business  Day. All
items of payment  received  after 2:00 P.M.  Eastern  time,  on any Business Day
shall be deemed received on the following Business Day. Until payment in full of
all Obligations and termination of this Agreement,  Borrower  irrevocably waives
(except as otherwise  expressly  provided for by Lender) the right to direct the
application  of any  and all  payments  and  collections  at any  time or  times
hereafter  received by Lender from or on behalf of Borrower,  and Borrower  does
hereby  irrevocably agree that Lender shall have the continuing  exclusive right
to apply and reapply any and all such payments and  collections  received at any
time or times hereafter by Lender or its agent against the Obligations,  in such
manner as Lender may reasonably  deem  advisable,  notwithstanding  any entry by
Lender upon any of its books and records.

             3.4.1 RELIANCE BY LENDER. Lender shall be entitled to rely upon any
certification,   notice  or  other  communication   (including  any  thereof  by
telephone)  believed  by it to be genuine and correct and to have been signed or
sent by or on behalf of Borrower or such other  proper  person or persons as may
be  designated  by  Borrower in writing  from time to time,  and upon advice and
statements  of  legal  counsel,   independent   accountants  and  other  experts
reasonably selected by Lender.

                                       10
<PAGE>

SECTION 4: REPRESENTATIONS AND WARRANTIES

         4.1 GENERAL  REPRESENTATIONS AND WARRANTIES.  To induce Lender to enter
into this  Agreement  and to extend credit  hereunder,  each of the Loan Parties
makes the following representations and warranties to Lender:

             4.1.1  ORGANIZATION  AND  QUALIFICATION.  Each  Loan  Party is duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction  of its  incorporation  and has the power to own its  assets and to
transact the business in which it is presently  engaged and in which it proposes
to be  engaged.  Each  Loan  Party is duly  qualified  and is  authorized  to do
business  and is in good  standing  as a foreign  corporation  in each  state or
jurisdiction  listed  on  EXHIBIT  4.1.1  hereto  and in all  other  states  and
jurisdictions  where  the  character  of its  Properties  or the  nature  of its
activities make such qualification  necessary,  other than in such jurisdictions
where the failure to be so qualified would not have a material adverse effect on
the business,  operations or financial  condition of the Loan Parties taken as a
whole (a "Material Adverse Effect").

             4.1.2  CORPORATE  POWER AND  AUTHORITY.  Each  Loan  Party has full
corporate power and authority to enter into,  execute,  deliver and perform this
Agreement  and each of the  other  Loan  Documents  to which it is a party.  The
execution, delivery and performance of this Agreement and each of the other Loan
Documents have been duly authorized by all necessary corporate action and do not
(i) require any consent or approval of the shareholders of the Loan Parties that
has not been obtained;  (ii)  contravene any Loan Party's  charter,  articles or
certificate of incorporation or by-laws;  (iii) violate, or cause any Loan Party
to be in default under, any provision of any law, rule, regulation, order, writ,
judgment,   injunction,   decree,   determination  or  award  in  effect  having
applicability  to such Loan Party,  except to the extent that any such violation
or default would not have a Material Adverse Effect;  (iv) result in a breach of
or constitute a default  under any indenture or loan or credit  agreement or any
other  agreement,  lease or  instrument  to which a Loan  Party is a party or by
which it or its Properties  may be bound or affected,  except to the extent that
any such breach or default would not have a Material  Adverse Effect;  or either
(v) result in, or require,  the creation or  imposition of any Lien upon or with
respect to any of the  Properties  now owned or  hereafter  acquired by any Loan
Party, other than the Liens created hereby in favor of Lender.

             4.1.3 LEGALLY ENFORCEABLE AGREEMENT. This Agreement is, and each of
the other Loan Documents  when  delivered  under this Agreement to which it is a
party,  will be, a legal,  valid and binding  obligation  of such Loan Party and
enforceable  against such Loan Party in accordance  with its  respective  terms,
subject to  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
other similar laws affecting  creditors' rights generally and general principles
of equity.

             4.1.4 TITLE TO PROPERTIES;  PRIORITY OF LIENS. Borrower and each of
its Subsidiaries has good and valid title to, or valid and subsisting  interests
in, all of its real Property,  and all of its other Property, in each case, free
and clear of all Liens except Permitted Liens.  Borrower has paid or discharged,
or reserved for, all lawful claims which, if unpaid, might become a Lien against
any Properties of Borrower that is not a Permitted Lien.

                                       11
<PAGE>

             4.1.5 FINANCIAL  STATEMENTS;  FISCAL YEAR. The audited Consolidated
and Consolidating balance sheets of Borrower as of March 1, 2003 and the related
statements of income,  changes in stockholder's equity, and changes in financial
position for the periods  ended on such dates,  have been prepared in accordance
with GAAP and present  fairly the financial  positions of Borrower at such dates
and the results of Borrower's operations for such period. Except as set forth on
Exhibit 4.1.5, since March 1, 2003, there has been no material adverse change in
the financial condition of Borrower.  The fiscal year of Borrower and, as of the
date of this Agreement,  each of its Subsidiaries  ends on or about the last day
of February of each year.

             4.1.6 FULL  DISCLOSURE.  The  financial  statements  referred to in
Section  4.1.5  hereof do not,  nor does  this  Agreement  or any other  written
statement of Borrower to Lender provided pursuant to this Agreement or the other
Loan Documents,  contain any untrue statement of a material fact or, (when taken
as a whole with all other information submitted by Borrower or made available by
Borrower to  Lender),  omit a material  fact  necessary  to make the  statements
contained therein or herein not misleading.

             4.1.7  SOLVENT  FINANCIAL  CONDITION.  Borrower  is now and,  after
giving  effect to the Loans and Letters of Credit to be extended  hereunder,  at
all times will be, Solvent.

             4.1.8 SURETY OBLIGATIONS.  Except pursuant to the Loan Documents or
as set forth on EXHIBIT 4.1.5 hereto,  as of the date of this  Agreement no Loan
Party is obligated as guarantor, surety or indemnitor under any guaranty, surety
or similar bond to assure  payment,  performance or completion of performance of
any Indebtedness for Money Borrowed of any other Person.

             4.1.9 TAXES.  Borrower and each of its  Subsidiaries  has filed all
federal, state and local tax returns and other tax reports it is required by law
or extensions  to file and has paid,  or made  provision for the payment of, all
taxes,  assessments,  fees, levies and other  governmental  charges upon it, its
income and  Properties  as and when such taxes,  assessments,  fees,  levies and
charges  are due and  payable,  unless and to the extent any  thereof  are being
actively  contested  in  good  faith  and by  appropriate  proceedings  and  the
applicable  Borrower or Subsidiary  maintains  reasonable  reserves on its books
therefor.  The provision for taxes on the books of Borrower and each  Subsidiary
of  Borrower  is  reasonably  adequate  for all years not  closed by  applicable
statutes, and for its current fiscal year.

             4.1.10 BROKERS.  There are no claims against Borrower for brokerage
commissions,  finder's  fees or investment  banking fees in connection  with the
transactions contemplated by this Agreement.

             4.1.11 PATENTS,  TRADEMARKS,  COPYRIGHTS AND LICENSES. Borrower and
each Subsidiary of Borrower own or possess all the patents, trademarks,  service
marks,  trade names,  copyrights  and  licenses  used in and  necessary  for the
present  conduct of its business  without any known  conflict with the rights of
others,  except to the  extent  that any such  failure so to do would not have a
Material Adverse Effect.

                                       12
<PAGE>

             4.1.12 GOVERNMENTAL  CONSENTS.  Each Loan Party has, and is in good
standing  with  respect  to, all  governmental  consents,  approvals,  licenses,
authorizations,  permits, certificates,  inspections and franchises necessary to
conduct its business and to own or lease and operate its Properties as now owned
or leased by it, except,  in each such case, where such failure would not have a
Material  Adverse Effect on the business or Properties of the Loan Parties taken
as a whole.

             4.1.13  COMPLIANCE  WITH LAWS.  Each Loan  Party has duly  complied
with, and its Properties,  business  operations and leaseholds are in compliance
in all material  respects with,  the provisions of all federal,  state and local
laws,  rules and regulations  applicable to it, its Properties or the conduct of
its business, domestic or foreign, and there have been no citations,  notices or
orders of  noncompliance  issued to it under any such law,  rule or  regulation,
except,  in each such case, where such  noncompliance  would not have a Material
Adverse Effect on its business, Property or financial condition. Each Loan Party
has  established  and  maintains  a system to monitor  its  compliance  with all
federal,  state and local laws, regulations and rules applicable to it, domestic
or  foreign,  the  failure  with which to comply  would have a Material  Adverse
Effect.

             4.1.14  RESTRICTIONS.  No Loan  Party is a party or  subject to any
contract or agreement  which  prohibits its execution of or compliance with this
Agreement or the other Loan Documents to which it is a party.

             4.1.15  LITIGATION.  Except as set forth on EXHIBIT  4.1.15 hereto,
there are no actions,  suits,  proceedings or investigations  pending, or to the
knowledge  of such  Loan  Party,  threatened,  against  or  affecting  it or the
business, operations,  Properties, profits or condition of such Loan Party which
(a)  directly  relate  to  the  Loan  Documents  or  any  of  the   transactions
contemplated hereby or thereby, or (b) based on its good faith assessment of the
outcome, would reasonably be expected to have a Material Adverse Effect. No Loan
Party is in  default  with  respect to any order,  writ,  injunction,  judgment,
decree or rule of any court,  governmental  authority  or  arbitration  board or
tribunal,  except to the extent that any such default  would not have a Material
Adverse Effect.

             4.1.16 NO DEFAULTS.  No event has occurred and no condition  exists
which  would,  upon or after the  execution  and  delivery of this  Agreement or
Borrower's performance hereunder, constitute an Event of Default.

             4.1.17 LEASES. Borrower is in full compliance with all of the terms
of each of its  respective  capitalized  and operating  leases except where such
noncompliance would not have a Material Adverse Effect.

             4.1.18  EMPLOYEE  PENSION  BENEFIT  PLANS.  Except as  disclosed on
EXHIBIT 4.1.18, neither Borrower nor any Subsidiary of Borrower has established,
maintained  or  contributed  to (or had the  obligation  to  contribute  to) any
Employee  Pension  Benefit Plans.  With respect to its Employee  Pension Benefit
Plans,  Borrower and/or its  Subsidiaries  as appropriate  will have made, on or
prior to the Closing Date, all payments required to be made by it on or prior to
the Closing Date.  Borrower has made available to Lender a true and correct copy
of the most  current  Form 5500 and any  other  form or  filing  required  to be
submitted to any governmental agency

                                       13
<PAGE>

with regard to all Employee  Benefit  Plans  maintained  by Borrower  and/or any
Subsidiary  of  Borrower.  All  Employee  Benefit  Plans  of  Borrower  and  its
Subsidiaries  have been operated in material  compliance  with the provisions of
the  governing  documents  and  with  all  applicable  laws  including,  without
limitation,  ERISA  and the Code and the  regulations  and  rulings  thereunder.
Neither  Borrower nor any  Subsidiary  of Borrower  has incurred any  withdrawal
liability, nor does Borrower or any of its Subsidiaries,  except as disclosed on
EXHIBIT 4.1.18,  have any contingent  withdrawal  liability,  under ERISA to any
Multiemployer  Plan. The present value of all accrued benefits under each Single
Employer Plan maintained by each Borrower and/or any of its Subsidiaries  (based
on those  assumptions  used to fund the  Plans) did not,  as of the last  annual
valuation date prior to the date on which this  representation is made or deemed
made,  exceed the value of the  assets of such Plan  allocable  to such  accrued
benefits.  All liabilities  relating to accrued benefits or individual  accounts
under those  Employee  Benefit Plans which are exempt from Part IV of ERISA have
been funded  (either  through  insurance  or  otherwise)  as of the date of this
representation. There are no pending actions, claims or lawsuits which have been
asserted or instituted  against Borrower or its  Subsidiaries'  Employee Pension
Benefit  Plans,  the assets of any of the  trusts  under  such  plans,  the plan
sponsor, the plan administrator or against any fiduciary of any of such Employee
Pension  Benefit Plans (other than routine  benefit claims) nor does Borrower or
any of its  Subsidiaries  have knowledge of facts which could form the basis for
any such  action,  claim or lawsuit.  There are no  investigations  or audits of
Borrower's or its Subsidiaries' Employee Pension Benefit Plans, any trusts under
such plans,  the plan sponsor,  the plan  administrator  or any fiduciary of any
such Employee Pension Benefit Plans which have been threatened or instituted nor
does  Borrower or any of its  Subsidiaries  have  knowledge of facts which could
form the basis for any such investigation or audit.

             4.1.19  LABOR  RELATIONS.  Except as  described  on EXHIBIT  4.1.19
hereto,  as of the date of this Agreement neither Borrower nor any Subsidiary of
Borrower  is a  party  to any  collective  bargaining  agreement.  There  are no
grievances,  disputes or controversies  with any union or any other organization
of Borrower or any  Subsidiary of Borrower's  employees,  or threats of strikes,
work stoppages or any asserted pending demands for collective  bargaining by any
union or  organization  which  would  reasonably  be expected to have a Material
Adverse Effect.

             4.1.20  FEDERAL  RESERVE  REGULATIONS.   Borrower  is  not  engaged
principally  in,  nor  does  it  have as one of its  important  activities,  the
business of  extending  credit for the  purpose of  purchasing  or carrying  any
"margin  stock" (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System of the United States, as amended to the date hereof).
No part of the  proceeds  of any of the Loans will be used to  purchase or carry
any margin stock or to extend  credit to others for the purpose of purchasing or
carrying  any such margin  stock or for any purpose  which  violates or which is
inconsistent  with the  provisions  of  Regulations  T, U, or X of said Board of
Governors.

             4.1.21 NOT AN INVESTMENT  COMPANY.  Borrower is not an  "investment
company"  within the meaning of the Investment  Company Act of 1940, as amended,
nor is it subject to regulation under any federal or state statute or regulation
which limits its ability to incur Indebtedness for Money Borrowed hereunder.

                                       14
<PAGE>

         4.1.22 ENVIRONMENTAL MATTERS.

                (a)  To the  best  knowledge  of  Borrower,  all  of  Borrower's
operations  and  facilities  are  in  material   compliance  with  all  material
Environmental  Laws,  and  there  is no  Hazardous  Materials  contamination  or
violation of any  Environmental  Law at its operations  and facilities  which is
reasonably likely to have a Material Adverse Effect.

                (b) Borrower has not received any written  complaint,  notice of
violation,   or  of  potential   liability  that  is  currently   pending  under
Environmental Laws which is reasonably likely to have a Material Adverse Effect,
nor is it aware that any governmental  authority is contemplating  delivering to
it any such notice.

                (c)  Borrower  does not  generate,  treat,  store or  dispose of
Hazardous Materials except in a DE MINIMIS amount, in the ordinary course of its
business and in material conformity with all applicable  material  Environmental
Laws.

             4.1.23 INDEBTEDNESS. Except as described on Exhibit 4.1.23 attached
hereto  and  except  for Loans and  Letters  or Credit  contemplated  hereunder,
neither Borrower nor any of its Subsidiaries has outstanding,  as of the Closing
Date,  and after  giving  effect to the  initial  Loans  and  Letters  of Credit
hereunder on the Closing Date, any Indebtedness for Money Borrowed.

         4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties  of each Loan Party  contained in this  Agreement or any of the other
Loan Documents shall survive the execution,  delivery and acceptance  thereof by
Lender and the parties  thereto and the  closing of the  transactions  described
therein or related thereto.

SECTION 5: COVENANTS AND CONTINUING AGREEMENTS

         5.1 AFFIRMATIVE COVENANTS.  During the term of this Agreement,  so long
as the  Commitment  remains  in  effect,  and  for so  long  as  there  are  any
Obligations  outstanding to Lender,  each Loan Party  covenants and agrees that,
unless otherwise consented to by Lender in writing, it shall do the following:

             5.1.1 VISITS AND  INSPECTIONS.  Permit  representatives  of Lender,
from time to time,  during normal  business hours, as often as may be reasonably
requested, to visit and inspect the Properties of Borrower and any Subsidiary of
Borrower,  inspect,  audit and make extracts  from their books and records,  and
discuss with their officers,  their employees and their independent accountants,
Borrower's  and any  Subsidiary of  Borrower's  business,  assets,  liabilities,
financial   condition,   business,   prospects   and   results  of   operations.
Notwithstanding  anything to the contrary  contained herein,  unless an Event of
Default shall have occurred and be continuing,  all costs and expenses  incurred
by Lender under this Section  5.1.1 shall be for the account of the Lender,  and
the Borrower shall have no liability therefore.

             5.1.2 NOTICES.  Promptly notify Lender in writing of the occurrence
of any event or the  existence of any fact which renders any  representation  or
warranty  in this  Agreement  or any of the  other  Loan  Documents  inaccurate,
incomplete or misleading in any material  respect,

                                       15
<PAGE>

including but not limited to promptly  giving  written  notice to Lender of: (i)
the details of any Reportable Events (as defined in ERISA);  (ii) the occurrence
of any event which  constitutes an Event of Default;  (iii) the  commencement of
any proceeding or litigation  which, if adversely  determined,  would materially
and adversely affect its financial condition or ability to conduct its business;
and (iv) the  creation,  establishment  or  acquisition,  in any manner,  of any
Subsidiary not existing on the date hereof.

             5.1.3 FINANCIAL STATEMENTS. Cause to be prepared  and furnished  to
Lender the following (all to be prepared on a consistent basis):

                   (a) not later than  ninety  (90) days after the close of each
fiscal  year of  Borrower,  either  its 10K or  audited  consolidated  financial
statements of Borrower and its  Consolidated  Subsidiaries as of the end of such
year,  prepared  and  certified  by  either  Deloitte  & Touche  LLP or  another
nationally  recognized firm of independent certified public accountants selected
by  Borrower  to have been  prepared in  accordance  with GAAP  without a "going
concern" or like  qualification  or exception and without any  qualification  or
exception as to the scope of such audit;

                   (b) not later than forty-five (45) days after the end of each
fiscal quarter hereafter, other than the fiscal quarter ending on the last month
of  Borrower's  fiscal  year,  either  its 10Q or  unaudited  interim  financial
statements of Borrower and its  Consolidated  Subsidiaries as of the end of such
quarter  and of the  portion  of  Borrower's  fiscal  year  then  elapsed,  on a
Consolidated  and  Consolidating  basis,  certified by the  principal  financial
officers of Borrower to have been prepared in accordance with GAAP and fairly to
present the Consolidated  and  Consolidating  financial  position and results of
operations of Borrower and its Subsidiaries for such quarter and period, subject
only to the absence of footnotes,  changes from audit and normal  year-end audit
adjustments;

                   (c) promptly after the sending or filing thereof, as the case
may be, copies of any proxy statements and 8K's, which any such Loan Party files
with the Securities and Exchange Commission or any governmental  authority which
may be substituted therefor, or any national securities exchange;

                   (d) promptly after the filing  thereof,  copies of any annual
report to be filed under ERISA in connection with each Plan;

                   (e) not later  than  forty-five  (45) days after the close of
each fiscal  quarter  hereafter,  financial  Projections  for  Borrower  for the
balance of the current fiscal year in form reasonably acceptable to Lender;

                   (f) together with each set of financial  statements described
in (i) and (ii) above, or more  frequently if requested by Lender,  a compliance
certificate  signed by the chief financial officer of Borrower  substantially in
the form of EXHIBIT 5.1.3 attached  hereto,  demonstrating  compliance  with the
financial  covenants  contained in Section 5.3 by calculation  thereof as of the
end of such fiscal  period,  and  certifying  that no event has  occurred  which
constitutes an Event of Default under the Loan Documents; and

                                       16
<PAGE>

                   (g) such other data and information (financial and otherwise)
as Lender, from time to time, may reasonably request, bearing upon or related to
Borrower's financial condition or results of operations.

                   (h) Within  forty-five  (45) days after the  delivery  of the
financial  statements  described in clause (i) of Section 5.1.3,  Borrower shall
forward to Lender a copy of the accountants' letter to Borrower's management, if
any, that is prepared in connection with such financial statements.

             5.1.4  SIGNIFICANT  SUBSIDIARIES.   If  the  Borrower  establishes,
creates,  acquires or maintains any  Significant  Subsidiary,  such entity shall
execute  and deliver to the Lender an  unconditional  guaranty of payment of all
the  Obligations,  which  guaranty  shall  be in form and  substance  reasonably
satisfactory to the Lender.

             5.1.5 CONTINUANCE OF BUSINESS.  Do, or cause to be done, all things
reasonably necessary to preserve and keep in full force and effect its corporate
existence  and all  permits,  rights  and  privileges  necessary  for the proper
conduct of its  business and continue to engage in the same or a similar line of
business,  except to the extent  the  failure so to do would not have a Material
Adverse Effect.

             5.1.6 PERFORM OBLIGATIONS. Pay and discharge all of its obligations
and  liabilities,  including,  without  limitation,  all taxes,  assessments and
governmental charges upon its income and properties, when due, unless and to the
extent  only that (a) the  failure  so to do would not have a  Material  Adverse
Effect,  or  (b)  such   obligations,   liabilities,   taxes,   assessments  and
governmental  charges  shall  be  contested  in good  faith  and by  appropriate
proceedings and that, to the extent  required by GAAP,  proper and adequate book
reserves  relating  thereto are  established  by it, and then only to the extent
that a bond is filed in cases where the filing of a bond is  necessary  to avoid
the creation of a Lien against any of its Properties.

             5.1.7  INSURANCE.   Maintain  or  cause  to  be  maintained,   with
responsible  insurance  companies such insurance on such of its  properties,  in
such  amounts and against  such risks as is  customarily  maintained  by similar
businesses;  file with Lender upon its request a detailed  list of the insurance
then in effect,  stating the names of the insurance  companies,  the amounts and
rates of the insurance,  dates of the expiration  thereof and the properties and
risks covered thereby;

             5.1.8 COMPLY WITH ERISA.  Comply with all applicable  provisions of
ERISA now or hereafter in effect,  except to the extent the failure so to comply
would not have a Material Adverse Effect.

             5.1.9 COMPLIANCE WITH LAWS.  Comply in all material  respects with,
the  provisions  of all  federal,  state and local laws,  rules and  regulations
applicable to it, its  Properties  or the conduct of its  business,  domestic or
foreign,  except  where such  noncompliance  would not have a  Material  Adverse
Effect.

             5.1.10 ENVIRONMENTAL LAWS.

                                       17
<PAGE>

                   (a)  Comply  in  all  material  respects  with  all  material
Environmental  Laws and obtain,  comply with and  maintain  any and all material
licenses, approvals, registrations or permits required by material Environmental
Laws; and

                   (b)  Defend,  indemnify  and  hold  harmless  Lender  and its
respective  employees,  agents,  officers  and  directors,  from and against any
claims, demands, penalties, fines, liabilities,  settlements, damages, costs and
expenses of whatever  kind or nature known or unknown,  contingent or otherwise,
arising out of, or  relating  to the  violation  of or  non-compliance  with any
material  Environmental  Laws  applicable  to any  Loan  Party,  or any  orders,
requirements  or  demands  of  any  governmental  authorities  related  thereto,
including,  without limitation,  attorney's and consultant's fees, investigation
and laboratory fees, court costs and litigation  expenses,  except to the extent
that  any  of  the  foregoing  arise  out of the  gross  negligence  or  willful
misconduct of the party seeking indemnification therefor.

         5.2 NEGATIVE COVENANTS.  During the term of this Agreement,  so long as
the Commitment  remains in effect,  and for so long as there are any Obligations
outstanding  to Lender,  Borrower  covenants and agrees that,  unless Lender has
first consented thereto in writing, it will not do the following:

             5.2.1 ACQUISITIONS; MERGERS.

                   (a) Acquire or permit any Subsidiary of a Borrower to acquire
all or  substantially  all of the  stock,  securities  or assets  of any  Person
(whether by purchase,  merger,  consolidation  or otherwise)  other than another
Loan  Party and other  than  acquisitions  of (i)  capital  assets to the extent
governed by Section 5.3.4 and/or (ii)  acquisitions of inventory in the ordinary
course  of  its  business  in  any  transaction  or in  any  series  of  related
transactions (an "Acquisition"), unless such Acquisition constitutes a Permitted
Acquisition.

                   (b) Merge or  consolidate,  or permit any Subsidiary to merge
or consolidate, with any Person unless either Borrower or such Subsidiary is the
surviving corporation,  the Loan Parties remain in compliance with all covenants
and  agreements  contained in this Agreement and the other Loan  Documents,  and
there exists no Event of Default  after giving effect  thereto,  except that any
Subsidiary  may  merge  into  or  consolidate   with  the  Borrower  or  another
Subsidiary.

             5.2.2 LOANS.  Make, or permit any Subsidiary of a Borrower to make,
any loans or other  advances of money (other than (i) any loan,  advance,  store
credit or similar credit  extended to retail or wholesale  customers of any Loan
Party in the ordinary  course of  business,  (ii)  commission,  travel and other
loans,  credits and advances to officers and employees in the ordinary course of
business  consistent  with past practice and (ii)  anticipatory  prepayments  to
vendors in the ordinary  course of  business) to any Person  (other than another
Loan Party) exceeding $2,000,000 in the aggregate outstanding at any time.

             5.2.3 TOTAL INDEBTEDNESS FOR MONEY BORROWED. Create, incur, assume,
or suffer to exist,  or permit any  Subsidiary  of a Borrower to create,  incur,
assume, or suffer to exist, any Indebtedness for Money Borrowed, except:

                                       18
<PAGE>

                   (a)  Indebtedness for Money Borrowed owing to Lender under or
in connection with the Loan Documents;

                   (b) Indebtedness for Borrower Money to another Loan Party;

                   (c) Obligations to pay Capitalized Lease Obligations;

                   (d) Permitted Purchase Money Indebtedness;

                   (e) contingent  liabilities  arising out of  endorsements  of
checks  and other  negotiable  instruments  for  deposit  or  collection  in the
ordinary course of business;

                   (f) Indebtedness set forth on Exhibit 4.1.23 hereto; and

                   (g) guaranties of Capitalized Lease Obligations to the extent
that such lease obligations or similar obligations are not otherwise  prohibited
by this Agreement;

             5.2.4  AFFILIATE  TRANSACTIONS.  Enter  into,  or be a party to, or
permit  any  Subsidiary  of  Borrower  to  enter  into,  or be a party  to,  any
transaction  with any  Affiliate  of Borrower  (other than  another Loan Party),
except in the ordinary course of and pursuant to the reasonable  requirements of
Borrower's or Subsidiary's  business and upon fair and reasonable terms that are
no less  favorable to Borrower or  Subsidiary  than such  Borrower or Subsidiary
would  obtain in a  comparable  arm's  length  transaction  with a Person not an
Affiliate of Borrower or its Subsidiaries.

             5.2.5 LIMITATION ON LIENS. Create or suffer to exist, or permit any
Subsidiary  of Borrower  to create or suffer to exist,  any Lien upon any of its
Property, income or profits, whether now owned or hereafter acquired, except:

                   (a) Liens at any time granted in favor of Lender;

                   (b) Liens for taxes,  assessments  or charges  imposed by any
governmental  authority  (excluding  any  Lien  imposed  pursuant  to any of the
provisions of ERISA) not yet due, or being contested in the manner  described in
Section 4.1.9 hereto;

                   (c)  deposits  under  workers'   compensation,   unemployment
insurance  and  social  security  laws,  or to secure the  performance  of bids,
tenders, contracts (other than for the repayment of borrowed money) or leases or
to secure  statutory  obligations  or surety,  appeal bonds or discharge of lien
bonds,  or to  secure  indemnity,  performance  or  other  similar  bonds in the
ordinary course of business;

                   (d)  statutory  liens of landlords and other liens imposed by
law, such as carriers',  warehousemen's  or mechanic's  liens,  incurred in good
faith in the ordinary course of business and deposits made or bonds filed in the
ordinary course of business to obtain the release of such liens;

                                       19
<PAGE>

                   (e) Liens  existing on the Property of any Person at the time
such Person  becomes a Subsidiary  of the Borrower or is merged or  consolidated
into the Borrower pursuant to a Permitted Acquisition transaction,  and, in each
case,  not  created in  contemplation  of or in  connection  with the  Permitted
Acquisition transaction,  provided however, that such Liens do not extend to any
other Property of the Borrower;

                   (f) such other Liens as appear on EXHIBIT 5.2.5 hereto;

                   (g) Purchase  Money Liens securing  Permitted  Purchase Money
Indebtedness; and

                   (h)  judgment  liens  in  respect  of  judgments  that do not
constitute an Event of Default under Section 7.1.13;

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

                   (j)  Liens in favor of a  financial  institution  encumbering
deposits (including the right of set-off) held by such financial  institution in
the ordinary course of its commercial  business and which are within the general
parameters customary in the banking industry;

                   (k)  Liens on the  assets of any  Subsidiary  in favor of the
Borrower or any other  Subsidiary,  and Liens on assets of the Borrower in favor
of any Subsidiary;

                   (l) Liens on "margin  stock" to the extent that a prohibition
on such Liens would violate Regulation U;

                   (m)  any  extension,  renewal  or  replacement  of  any  Lien
otherwise  permitted by this  Agreement,  PROVIDED  that (i) such Lien shall not
apply to any other  property or asset of the Borrower or any Subsidiary and (ii)
such Lien shall  secure only those  obligations  which it secures on the date of
this Agreement and any extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;

                   (n) one or more other Liens  securing  Indebtedness  or other
obligations,  in the  aggregate,  not in  excess  of  $500,000  at any one  time
outstanding;

                   (o) such  other  Liens as Lender  may  hereafter  approve  in
writing.

             5.2.6 [RESERVED].

             5.2.7  DISPOSITION OF ASSETS.  Sell, lease or otherwise dispose of,
or permit any Subsidiary of Borrower to sell, lease or otherwise  dispose of all
or  substantially  all of its  Assets  other  than  any  sale,  lease  or  other
disposition of any Subsidiary to the Borrower.
                                       20
<PAGE>

             5.2.8 RESTRICTED INVESTMENT.  Make or have, or permit an Subsidiary
of Borrower to make or have, any Restricted Investment.

             5.2.9 CHANGE IN BUSINESS.  With respect to each Loan Party, make or
permit any  Subsidiary to make any material  change in its  business,  or in the
nature of its  operation,  or  liquidate  or  dissolve  itself  (or  suffer  any
liquidation  or  dissolution),  except that (a) a  Subsidiary  of a Borrower may
dissolve  so long as its assets are  transferred  to such  Borrower or any other
subsidiary, and there exists no Event of Default after giving effect thereto.

             5.2.10  ACCOUNTING  POLICIES  AND  PROCEDURES.  Permit any material
change in its or its  Subsidiaries'  accounting  policies and procedures,  other
than as  required  or  permitted  by GAAP,  including  a change in fiscal  year,
without the prior consent of Lender.

             5.2.11 AMENDMENT OF DOCUMENTS.

                   (a)   Modify,   amend,    supplement   its   Certificate   of
Incorporation or by-laws in any way that is adverse to the Lender.

                   (b) Modify,  amend or supplement,  agree to modify,  amend or
supplement,  or consent to the  modification,  amendment  or  supplement  of any
documents  evidencing or relating to any Subordinated  Debt, without the express
prior written consent of Lender.

         5.3 SPECIFIC FINANCIAL COVENANTS. During the term of this Agreement, so
long as the  Commitment  remains  in  effect,  and for so long as there  are any
Obligations  outstanding to Lender,  the Borrower,  covenants and agrees that it
shall:

             5.3.1  WORKING  CAPITAL.  Maintain  as of the  end of  each  fiscal
quarter for Borrower, Working Capital of no less than $50,000,000.

             5.3.2  CONSOLIDATED  LEVERAGE  RATIO.  Not  permit the ratio of its
Consolidated  Unsubordinated Indebtedness to its Consolidated Tangible Net Worth
to be greater than 1.0 to 1.

             5.3.3  CONSOLIDATED  TANGIBLE NET WORTH.  Maintain as of the end of
each  fiscal  quarter  a  Consolidated  Tangible  Net  Worth  of not  less  than
$175,000,000.

             5.3.4  CAPITAL  EXPENDITURES.  Not  permit  the  sum of  Borrower's
Capital Expenditures plus Dividends minus Net Proceeds to exceed $10,000,000 for
any fiscal year of the Borrower, commencing with the fiscal year ending February
28, 2004.

             5.3.5 MAXIMUM NET OPERATING LOSS. Not permit the Net Operating Loss
after Taxes to exceed (a) $10,000,000  for any fiscal  quarter,  or for the four
consecutive  fiscal  quarters,  ending March 1, 2004; or (b)  $8,000,000 for any
fiscal quarter, or any four consecutive fiscal quarters, thereafter.

                                       21
<PAGE>

SECTION 6: CONDITIONS PRECEDENT

         6.1  CONDITIONS  PRECEDENT  TO  EFFECTIVENESS  AND INITIAL  LOAN AND/OR
LETTER OF CREDIT.  Notwithstanding  any other provision of this Agreement or any
of the other Loan Documents,  and without  affecting in any manner the rights of
Lender under the other  sections of this  Agreement,  the  effectiveness  of the
Lender's  commitment  to extend  credit  under  this  Agreement  is  subject  to
satisfaction of each of the following conditions precedent, and Lender shall not
be required to make the initial Loan or any subsequent Loan or issue the initial
or any subsequent Letter of Credit under this Agreement unless and until each of
the following conditions has been satisfied:

             6.1.1  DOCUMENTATION.  Lender  shall  have  received,  in form  and
substance  satisfactory to Lender and its counsel,  a duly executed copy of this
Agreement and the other Loan Documents, together with such additional documents,
instruments  and  certificates  as  Lender  and its  counsel  shall  require  in
connection therewith,  all in form and substance  satisfactory to Lender and its
counsel, including, without limitation, the following:

                   (a)  Certified   copies  of  (i)   resolutions   of  Borrower
authorizing  the execution and delivery of this Agreement and the Loan Documents
and the performance of all transactions  contemplated  hereby and thereby,  (ii)
Borrower's by-laws, and (iii) an incumbency  certificate of Borrower listing the
Authorized Officers;

                   (b) A copy of the articles or certificate of incorporation of
Borrower,  and all  amendments  thereto,  certified by the Secretary of State or
other appropriate official of its jurisdiction of incorporation;

                   (c) Good standing  certificate  for  Borrower,  issued by the
Secretary of State or other appropriate  official of Borrower's  jurisdiction of
incorporation;

                   (d)  A  closing  certificate  signed  by a  senior  executive
officer  of  Borrower  dated  as of  the  date  hereof,  stating  that  (i)  the
representations  and  warranties  set  forth in  Section  4 hereof  are true and
correct  on and as of such date;  and (ii) on such date no Event of Default  has
occurred or is continuing;

                   (e) Borrower  shall have executed and delivered to Lender the
Note;

                   (f) The favorable,  written opinion of counsel to Borrower as
to the  transactions  contemplated  by this  Agreement and any of the other Loan
Documents as required by Lender;

                   (g)  Payment  of  any  fees  and  expenses  owing  to  Lender
hereunder;

                   (h) Payment of reasonable legal fees and expenses of Lender;

                   (i) Such  other  documents,  instruments  and  agreements  as
Lender shall reasonably request in connection with the foregoing matters; and

                                       22
<PAGE>

                   (j) All legal matters  incident to the  effectiveness of this
Agreement shall be satisfactory to counsel to Lender.

             6.1.2 NO DEFAULT. No Event of Default shall exist.

             6.1.3 OTHER LOAN  DOCUMENTS.  Each of the conditions  precedent set
forth in the other Loan Documents shall have been satisfied.

             6.1.4  NO  LITIGATION.   No  action,   proceeding,   investigation,
regulation or  legislation  shall have been  instituted,  threatened or proposed
before  any  court,  governmental  agency  or  legislative  body (i) to  enjoin,
restrain or prohibit, or to obtain damages in respect of, or which is related to
or  arises  out of,  this  Agreement  or the  consummation  of the  transactions
contemplated hereby or (ii) which relates to the assets,  business operations or
obligations of any Loan Party which (in Lender's judgment) could have a material
adverse  effect upon the  creditworthiness,  condition,  operations or prospects
(financial or otherwise) of such Loan Party.

             Upon  the  fulfillment  of  all of the  foregoing  conditions,  the
Borrower  shall  deliver  to the  Lender  a  representation  letter  in the form
attached  hereto as Exhibit 6.1,  stating that all of the  conditions of Section
6.1  have  been  satisfied,   such  representation   letter  to  be  signed  and
acknowledged by Lender.

         6.2  CONDITIONS  TO EACH LOAN AND LETTER OF CREDIT.  The  obligation of
Lender to make each Loan or to issue each  Letter of Credit  hereunder  (in each
case, an "extension of credit") (including the initial extension of credit to be
made  hereunder)  is subject to the  satisfaction  of the  following  conditions
precedent:

             6.2.1  REPRESENTATIONS  AND  WARRANTIES.  The  representations  and
warranties  made by the Loan Parties  herein and in the other Loan Documents and
which  are  contained  in any  certificate  furnished  at any  time  under or in
connection herewith shall be true and correct in all material respects on and as
of the  date of  such  extension  of  credit  as if made on and as of such  date
(except for those which expressly relate to an earlier date);

             6.2.2 NO EVENT OF DEFAULT.  No Event of Default  shall exist on the
date of such  extension  of credit or after  giving  effect to the  extension of
credit to be made on such date;

             6.2.3  RECEIPT OF NOTICE OR REQUEST.  Lender shall have  received a
Borrowing  Notice for  borrowing in  accordance  with Section  3.1.1 hereof or a
request for the  issuance of a Letter of Credit in  accordance  with Section 1.3
hereof; and

             6.2.4 LEGAL MATTERS.  All legal matters  incident to such extension
of credit shall be satisfactory to counsel to Lender.

         Each request for an extension of credit  (including  continuations  and
conversions)  and  each  acceptance  by  Borrower  of  an  extension  of  credit
(including  continuations  and  conversions)  shall be  deemed to  constitute  a
representation  and  warranty by Borrower  as of the date of such  extension  of
credit that the applicable conditions in Sections 6.2 have been satisfied.

                                       23
<PAGE>

SECTION 7: EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

         7.1 EVENTS OF DEFAULT.  The  occurrence of one or more of the following
events shall constitute an "Event of Default":

             7.1.1 PAYMENT OF PRINCIPAL. Borrower shall fail to make any payment
of principal owing hereunder or under the Note, on the due date thereof (whether
due at stated due date, maturity, upon acceleration, or otherwise).

             7.1.2  PAYMENT OF INTEREST,  FEES AND OTHER  OBLIGATIONS.  Borrower
shall fail to make any payment of interest,  fees or expenses owing hereunder or
under the Note, within five (5) Business Days after the date such payment is due
and payable (whether due at stated due date,  maturity,  upon  acceleration,  or
otherwise).

             7.1.3 PAYMENT OF OTHER OBLIGATIONS.  Borrower shall fail to pay any
other of the  Obligations  (excluding  those  set  forth in  Sections  7.1.1 and
7.1.2), on the due date thereof (whether due at stated due date, maturity,  upon
acceleration,  or  otherwise)  and such failure shall  continue  beyond five (5)
Business Days after demand therefor.

             7.1.4  MISREPRESENTATIONS.  Any  representation,  warranty or other
statement  made or  furnished  to Lender by or on  behalf  of  Borrower  in this
Agreement,  any of the other Loan  Documents or any  instrument,  certificate or
financial statement furnished in compliance with or in reference thereto, proves
to have been false or misleading in any material  respect when made or furnished
or when reaffirmed pursuant to Section 6.2 hereof.

             7.1.5  BREACH OF  COVENANTS.  Borrower  shall  fail or  neglect  to
perform, keep or observe any covenant contained in this Agreement and the breach
of such  covenant is not cured within thirty (30) days after the sooner to occur
of notice  of such  breach  from  Lender or the date on which  such  failure  or
neglect first becomes known to any officer of Borrower.

             7.1.6  DEFAULT UNDER OTHER  AGREEMENTS.  Any event of default shall
occur under,  or Borrower shall default in the  performance or observance of any
term,  covenant,  condition or agreement  contained in the Other  Agreements  or
other Loan Documents and such default is not cured within thirty (30) days after
notice from the Bank of such default.

             7.1.7  OTHER  DEFAULTS.  There  shall occur any default or event of
default on the part of a Borrower under any agreement, document or instrument to
which such  Borrower is a party or by which a Borrower or any of its Property is
bound,  creating or relating to any  Indebtedness for Money Borrowed (other than
the Obligations) in excess of $1,000,000  ("Material Debt"), and such default or
event of default  results in material  Debt  becoming due prior to its scheduled
maturity or payment date, or that enables or permits (with or without the giving
of notice, the lapse of time or both) the holder or holders of any Material Debt
to cause any  Material  Debt to become due prior to its  scheduled  maturity  or
payment  date,  PROVIDED  that this  Section  7.1.7  shall not apply to  secured
Indebtedness  for Money  Borrowed  that  becomes  due  solely as a result of the
voluntary sale or transfer of the property or assets securing such  Indebtedness
for Money Borrowed.

                                       24

<PAGE>

             7.1.8 INSOLVENCY AND RELATED  PROCEEDINGS.  Borrower shall cease to
be Solvent or shall suffer the appointment of a receiver,  trustee, custodian or
similar fiduciary,  or shall make an assignment for the benefit of creditors, or
any petition for an order for relief shall be filed by or against Borrower under
the Bankruptcy Code (if against a Borrower, the continuation of such proceeding,
unstayed,  for  more  than 60  days),  or  Borrower  shall  make  any  offer  of
settlement, extension or composition to its unsecured creditors generally.

             7.1.9  BUSINESS  DISRUPTION;  CONDEMNATION.  There  shall  occur  a
cessation of a substantial part of the business of a Borrower for a period which
significantly  affects  Borrower's  capacity  to  continue  its  business,  on a
profitable  basis;  or  Borrower  shall be  enjoined,  restrained  or in any way
prevented by court,  governmental or administrative order from conducting all or
substantially all of its business affairs.

             7.1.10 ERISA. A Reportable  Event shall occur which Lender,  in its
sole  discretion,  shall  determine  in good faith  constitutes  grounds for the
Pension Benefit Guaranty  Corporation to institute  proceedings to terminate any
Employee  Pension Benefit Plan or for the appointment by the appropriate  United
States  district  court of a trustee  for any  Employee  Pension  Benefit  Plan,
pursuant  to  Section  4042,  or if  any  shall  be  terminated  in a  "distress
termination"  pursuant to Section 4041(c) or any such trustee shall be requested
or appointed,  or if Borrower is in "default" (as defined in Section  4219(c)(5)
of ERISA) with  respect to  payments  to a  Multiemployer  Plan  resulting  from
Borrower's  complete or partial  withdrawal  from such Employee  Pension Benefit
Plan.

             7.1.11  CHALLENGE  TO  AGREEMENT.  A Loan Party shall  challenge or
contest in any action, suit or proceeding the validity or enforceability of this
Agreement or any of the other Loan Documents,  or the legality or enforceability
of any of the Obligations.

             7.1.12  JUDGMENTS  OR  EXECUTIONS.  One or more  judgments  for the
payment  of money in an  aggregate  amount  in  excess  of  $500,000  above  any
applicable  insurance  coverage therefore shall be rendered against the Borrower
and  the  same  shall  remain  undischarged  or  unbonded  for  a  period  of 30
consecutive days during which execution shall not be effectively  stayed, or any
action shall be legally taken by a judgment  creditor to attach or levy upon any
assets of the Borrower to enforce any such judgment.

         7.2 REMEDIES.  Upon or at any time after the  occurrence and during the
continuance  of an Event of Default,  Lender may, by written  notice to Borrower
(i) terminate the Commitment, and/or (ii) declare the Note or any portion of the
Obligations to be forthwith due and payable,  both as to principal and interest,
without presentment,  demand,  protest or other notice of any kind, all of which
are hereby  expressly  waived,  anything  contained herein or in the Note to the
contrary  notwithstanding,  PROVIDED that if an event specified in Section 7.1.8
hereof shall have occurred,  the Commitment shall  automatically and immediately
terminate,  the Note and all  Obligations  shall  automatically  and immediately
become  due and  payable,  and Lender in each  instance  shall have the right to
exercise its rights  hereunder,  under the other Loan Documents and as otherwise
permitted by law.

                                       25
<PAGE>

         7.3  REMEDIES  CUMULATIVE;   NO  WAIVER.  All  covenants,   conditions,
provisions,  warranties,  guaranties,  indemnities,  and other  undertakings  of
Borrower  contained in this  Agreement and the other Loan  Documents,  or in any
document referred to herein or contained in any agreement  supplementary  hereto
or in any schedule given to Lender or contained in any other  agreement  between
Lender and Borrower, heretofore,  concurrently, or hereafter entered into, shall
be deemed  cumulative  to and not in derogation  or  substitution  of any of the
terms, covenants,  conditions,  or agreements of Borrower herein contained.  The
failure or delay of Lender to require  strict  performance  by  Borrower  of any
provision  of this  Agreement or to exercise or enforce any rights,  powers,  or
remedies  hereunder or under any of the aforesaid  agreements or other documents
or security shall not operate as a waiver of such  performance,  rights,  powers
and remedies,  but all such  requirements,  rights,  powers,  and remedies shall
continue  in full  force and  effect  until all Loans and all other  Obligations
owing or to become owing from Borrower to Lender shall have been fully satisfied
and this Agreement has been terminated.  None of the  undertakings,  agreements,
warranties,   covenants  and  representations  of  Borrower  contained  in  this
Agreement or any of the other Loan Documents and no Event of Default by Borrower
under this  Agreement  or any other Loan  Document  shall be deemed to have been
suspended  or  waived  by  Lender,  unless  such  suspension  or waiver is by an
instrument in writing  specifying  such  suspension or waiver and is signed by a
duly authorized representative of Lender and directed to Borrower.

SECTION 8: MISCELLANEOUS

         8.1  INDEMNITY.  Borrower  hereby  agrees to indemnify  Lender and hold
Lender harmless from and against any liability,  loss,  damage,  suit, action or
proceeding  ever suffered or incurred by Lender  (including  attorneys' fees and
legal  expenses) to the extent  resulting  from  Borrower's  failure to observe,
perform or discharge  Borrower's duties hereunder.  Notwithstanding any contrary
provision in this  Agreement,  (i) the obligation of Borrower under this Section
8.1 shall survive the payment in full of the  Obligations and the termination of
this Agreement, and (ii) the indemnity provided herein shall not be available to
the extent any such liability,  loss,  damage,  suit,  action or proceeding ever
suffered or incurred by Lender arises from Lender's gross  negligence or willful
misconduct.

         8.2 MODIFICATION OF AGREEMENT;  SALE OF INTEREST;  PARTICIPATIONS.  (a)
This Agreement may not be modified,  altered or amended,  except by an agreement
in writing  signed by Borrower  and  Lender.  Borrower  may not sell,  assign or
transfer any interest in this Agreement, any of the other Loan Documents, or any
of the  Obligations,  or any portion  thereof,  including,  without  limitation,
Borrower's rights, title, interests,  remedies,  powers, and duties hereunder or
thereunder.   Borrower   hereby  consents  to  Lender's   participation,   sale,
assignment,  transfer or other disposition,  at any time or times hereafter,  of
this Agreement and any of the other Loan Documents,  or of any portion hereof or
thereof,  including,  without  limitation,  Lender's rights,  title,  interests,
remedies,  powers,  and  duties  hereunder  or  thereunder  to any other bank or
financial  institution.  Provided no Event of Default  exists or is  continuing,
Lender may not sell,  assign,  transfer,  or otherwise dispose of this Agreement
and any of the other Loan  Documents to an entity other than a bank or financial
institution  without  Borrower's prior written  consent,  such consent not to be
unreasonably withheld. In the case of an assignment, the assignee shall have,

                                       26
<PAGE>

to the extent of such assignment,  the same rights,  benefits and obligations as
it would if it were  "Lender"  hereunder  and Lender  shall be  relieved  of all
obligations  so assigned;  provided,  however,  that Lender shall not assign the
Obligations  to nor  divide the  Obligations  among,  more than three  financial
institutions at any one time; provided,  however, that any such assignee must be
a United States lending office of such financial  institution.  Borrower  agrees
that it will use its best  efforts to assist and  cooperate  with  Lender in any
manner reasonably  requested by Lender to effect the sale of participation in or
assignments  of any of the Loan  Documents  or any  portion  thereof or interest
therein,  including,  without  limitation,   assisting  in  the  preparation  of
appropriate disclosure documents.

             8.2.1 In furtherance  and without  limiting the  foregoing,  Lender
shall have the unrestricted right at any time and from time to time, and without
the  consent  of or notice to  Borrower,  to grant to one or more banks or other
financial institutions (each, a "Participation")  participating interests in the
any or all of the liabilities  held by the Lender  hereunder and under the Note.
In the  event of any such  grant by  Lender  of a  participating  interest  to a
Participant,  whether or not upon notice to any  Borrower,  Lender  shall remain
responsible for the performance of its obligations  hereunder and Borrower shall
continue to deal solely and directly  with Lender in  connection  with  Lender's
rights and obligations hereunder.  Lender may furnish any information concerning
any Borrower in its possession  from time to time to  prospective  Participants,
provided that Lender shall require any such prospective  Participant to agree in
writing to maintain the confidentiality of such information.

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

         8.4 SUCCESSORS AND ASSIGNS.  This Agreement,  the other Loan Documents,
the Other  Agreements  shall be  binding  upon and inure to the  benefit  of the
successors and assigns of the Loan Parties thereto and Lender.

         8.5 CUMULATIVE EFFECT;  CONFLICT OF TERMS. Except as otherwise provided
in Section 3.2 hereof and except as otherwise  provided in any of the other Loan
Documents by specific  reference to the applicable  provision of this Agreement,
if any  provision  contained in this  Agreement is in direct  conflict  with, or
inconsistent  with,  any  provision  in any of the  other  Loan  Documents,  the
provision contained in this Agreement shall govern and control.

         8.6 EXECUTION IN  COUNTERPARTS.  This  Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and  delivered  shall be deemed to be an original
and all of which  counterparts  taken together shall  constitute but one and the
same instrument. Signature by facsimile shall bind the parties hereto.

         8.7 NOTICE. Except as otherwise provided herein, all notices,  requests
and demands to or upon a party hereto, to be effective,  shall be in writing and
shall be sent by personal  delivery

                                       27
<PAGE>

against  receipt,  by overnight  courier or by facsimile  and shall be effective
upon receipt, addressed as follows:

              If to Lender:         Israel Discount Bank of New York
                                    511 Fifth Avenue
                                    New York, New York 10036
                                    Attention: Douglas Bottner, Vice President
                                    Facsimile No.: (212) 599-4276

              With a copy to:       (except for Notices  and  communications  of
                                    financial  reports or Notices of borrowings,
                                    conversions, continuations or prepayments)

                                    Zeichner Ellman & Krause LLP
                                    575 Lexington Avenue
                                    New York, New York 10022
                                    Attention: Mark W. Schlussel, Esq.
                                    Facsimile No.: (212) 753-0396

              If to Borrower:       Syms Corp.
                                    One Syms Way
                                    Secaucus, New Jersey 07094
                                    Attention: Antone F. Moreira, Vice President
                                    Facsimile No.: 201-902-9874

              With a copy to:       Bryan Cave LLP
                                    1290 Avenue of the Americas
                                    New York, New York 10104
                                    Attention: Michael Rosen, Esq.

or to such other  address as each party may designate for itself by notice given
in accordance with this Section 8.7.

         8.8 ENTIRE  AGREEMENT.  This  Agreement  and the other Loan  Documents,
together with all other instruments, agreements and certificates executed by the
parties in connection  therewith or with  reference  thereto,  embody the entire
understanding  and agreement between the parties hereto and thereto with respect
to the subject  matter hereof and thereof and  supersede  all prior  agreements,
understandings and inducements, whether express or implied, oral or written.

         8.9 INTERPRETATION.  No provision of this Agreement or any of the other
Loan Documents shall be construed  against or interpreted to the disadvantage of
any party  hereto by any court or other  governmental  or judicial  authority by
reason of such party having or being deemed to have  structured or dictated such
provision.

         8.10  GOVERNING  LAW;  CONSENT  TO  FORUM.   THIS  AGREEMENT  HAS  BEEN
NEGOTIATED, EXECUTED AND DELIVERED IN THE STATE OF NEW

                                       28
<PAGE>

YORK.  THIS AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.  EACH PARTY  EXPRESSLY  SUBMITS  AND  CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY COURT WITHIN
THE STATE OF NEW YORK, AND EACH PARTY HEREBY WAIVES ANY OBJECTION  WHICH PARTIES
MAY HAVE BASED UPON LACK OF PERSONAL  JURISDICTION,  IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED  APPROPRIATE  BY SUCH  COURT.  EACH PARTY  HEREBY  WAIVES  PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED  MAIL TO THE PARTIES AT THE ADDRESS SET FORTH IN
THIS  AGREEMENT AND SHALL BE EFFECTIVE  UPON RECEIPT.  NOTHING IN THIS AGREEMENT
SHALL BE  DEEMED OR  OPERATE  TO  AFFECT  THE RIGHT OF ANY PARTY TO SERVE  LEGAL
PROCESS IN ANY OTHER MANNER  PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY
LENDER OF ANY  JUDGMENT  OR ORDER  OBTAINED  IN SUCH  FORUM OR THE TAKING OF ANY
ACTION UNDER THIS  AGREEMENT TO ENFORCE SAME IN ANY OTHER  APPROPRIATE  FORUM OR
JURISDICTION.

         8.11  WAIVER OF JURY  TRIAL.  THE PARTIES  MUTUALLY  HEREBY  KNOWINGLY,
VOLUNTARILY AND  INTENTIONALLY  WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY  CLAIM  BASED  HEREON,  ARISING  OUT OF,  UNDER OR IN  CONNECTION  WITH THIS
AGREEMENT,  THE NOTES OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
CONNECTION  HEREWITH OR THEREWITH OR ANY COURSE OF CONDUCT,  COURSE OF DEALINGS,
STATEMENTS  (WHETHER  VERBAL OR  WRITTEN)  OR ACTIONS OF ANY PARTY.  THIS WAIVER
CONSTITUTES A MATERIAL  INDUCEMENT FOR EACH PARTY TO ENTER INTO THE  TRANSACTION
CONTEMPLATED HEREBY.

         8.12 RIGHT OF SET-OFF. Each Loan Party hereby grants to Lender, a lien,
security  interest  and right of  setoff as  security  for all  liabilities  and
Obligations  to Lender,  whether now  existing or  hereafter  arising,  upon and
against all deposits, credits, and property, now or hereafter in the possession,
custody,  safekeeping  or control of Lender or any entity  under the  control of
Lender,  or in transit  to any of them.  At any time  after the  occurrence  and
during the continuance of any Event of Default without demand or notice,  Lender
may set off the same or any part thereof and apply the same to any  liability or
Obligation of any Loan Party even though unmatured.

         8.13 USURY. All agreements between any Loan Party and Lender are hereby
expressly  limited so that in no  contingency  or event  whatsoever,  whether by
reason of acceleration of maturity of the indebtedness  evidenced by the

                                       29
<PAGE>

Note or otherwise,  shall the amount paid or agreed to be paid to Lender for the
use, forbearance or detention of the indebtedness  evidenced by the Notes exceed
the maximum  permissible  under applicable law. In this regard,  it is expressly
agreed that it is the intent of the Loan  Parties  and Lender in the  execution,
delivery and acceptance of the Notes to contract in strict  compliance  with the
laws of the  State  of New  York  from  time to time in  effect.  If,  from  any
circumstance  whatsoever,  fulfillment  of  any  provision  hereof  or  of  said
agreements at the time performance of such provision shall be due, shall involve
transcending the limit of validity  prescribed by law, then the obligation to be
fulfilled shall  automatically be reduced to the limit of such validity,  and if
from any  circumstances  Lender  should ever receive as interest an amount which
would  exceed the highest  lawful  rate,  such amount  which would be  excessive
interest shall be applied to the reduction of the principal balance evidenced by
the Notes and not to the payment of interest. This provision shall control every
other provision of all agreements between the Loan Parties and Lender.

         8.14  TREATMENT  OF  CERTAIN  INFORMATION.  The  Lender  agrees  to use
reasonable  precautions to keep  confidential,  in accordance with its customary
procedures  for  handling  confidential  information  of the  same  nature,  all
non-public  information  supplied by the Borrower or any Subsidiary  pursuant to
the Loan  Documents  which (i) is  clearly  identified  by such  Person as being
confidential  at the time  the  same is  delivered  to such  Loan  Party or (ii)
constitutes any financial statement, financial projections or forecasts, budget,
compliance  certificate,   audit  report,   management  letter  or  accountants'
certification delivered hereunder ("information"),  PROVIDED that nothing herein
shall limit the  disclosure  of any  information  (a) to the extent  required by
applicable  laws or regulations or by any subpoena or similar legal process,  or
requested by any bank  regulatory  authority,  (b) to auditors  and  accountants
thereof, (c) to the extent such information (A) becomes publicly available other
than as a result of a breach of this Agreement,  (B) becomes available to Lender
on a non-confidential  basis from a source other than the Borrower or any of its
Affiliates or (C) was available to the Lender on a non-confidential  basis prior
to its disclosure to any of them by the Borrower or any of its  Affiliates;  and
(d) to the extent  the  Borrower  shall have  consented  to such  disclosure  in
writing.  Notwithstanding  anything  herein  to the  contrary,  the  Lender  may
disclose to any and all persons, without limitation of any kind, any information
with respect to the U.S.  federal  income tax treatment and U.S.  federal income
tax structure of the transactions  contemplated  hereby and all materials of any
kind  (including  opinion or other tax analyses) that are provided to the Lender
relating to such tax treatment and tax structure.

                          SIGNATURES ON FOLLOWING PAGE

                                       30
<PAGE>

     IN WITNESS  WHEREOF,  this  Agreement has been duly executed on the day and
year specified at the beginning of this Agreement.

BORROWER:                           SYMS CORP.

                                    By:    /s/ MARCY SYMS
                                           --------------
                                    Name:  Marcy Syms
                                    Title: Chief Executive Officer

LENDER:                             ISRAEL DISCOUNT BANK OF NEW YORK

                                    By:    /s/ LISSA L. BAUM
                                           -----------------
                                           Lissa L. Baum
                                           Executive Vice President

                                    By:    /s/ DOUGLAS BOTTNER
                                           -------------------
                                           Douglas Bottner
                                           Vice President

                                       31
<PAGE>

                                   APPENDIX A

                               GENERAL DEFINITIONS

         When used in the Loan  Agreement  dated as of November [5], 2003 by and
between  Israel  Discount  Bank of New  York,  as  Lender,  and Syms  Corp.,  as
Borrower,  the following terms shall have the following  meanings (terms defined
in the  singular  to have the same  meaning  when  used in the  plural  and vice
versa):

         ACQUISITION - as defined in Section 5.2.1 of this Agreement.

         ADJUSTED LIBOR RATE - for any LIBOR Interest  Period  applicable to any
LIBOR Rate Loan,  the rate per annum as  determined  on the basis of the British
Bankers'  Association  ("BBA")  "Interest  Settlement Rate" for deposits,  for a
period of time comparable to such LIBOR Interest  Period,  in U.S. Dollars as it
appears on the Dow Jones Telerate  Service page 3750 (or such other pages as may
replace page 3750 on that  service or such other  service as may by nominated by
the BBA for the purpose of displaying BBA Interest Settlement Rates) as of 11:00
a.m. London time on the day that is two (2) Business Days prior to the beginning
of such LIBOR Interest Period;  provided,  however,  if the rate described above
does not so appear on any applicable  interest  determination date, the Adjusted
LIBOR Rate shall be the rate for deposits in dollars for a period  substantially
equal to the interest period on the Reuters Page LIBO (or such other page as may
replace the LIBO Page on that service for the purpose of displaying  such rates)
as of 11:00 a.m. (London time) on the day that is two (2) Business Days prior to
the beginning of such LIBOR Interest Period.

         If both the Telerate and Reuters system are unavailable,  then the rate
for that date will be  determined on the basis of the offered rates for deposits
in U.S.  dollars for a period of time  comparable to such LIBOR Interest  Period
which  are  offered  by four  major  banks in the  London  interbank  market  at
approximately  11:00 a.m.  London time, on the day that is two (2) Business Days
prior to the beginning of such LIBOR Interest Period  preceding the first day of
such LIBOR Rate Loan as selected by Lender.  The principal London office of each
of the four major  London  banks will be requested to provide a quotation of its
U.S.  dollar deposit offered rate. If at least two such quotations are provided,
the rate for that date will be the arithmetic mean of all of the quotations.  If
fewer than two quotations are provided as requested, the rate for that date will
be  determined  on the basis of the rates  quoted  for loans in U.S.  dollars to
leading  European banks for a period of time  comparable to such LIBOR Rate Loan
offered by major  banks in New York City at  approximately  11:00 a.m.  New York
City time, on the day that is two London  Business Days  preceding the first day
of such LIBOR Rate Loan.  In the event that  Lender is unable to obtain any such
quotation  as provided  above,  it will be deemed that the  Adjusted  LIBOR Rate
pursuant to a LIBOR Rate Loan cannot be determined.  In the event that the Board
of Governors  of the Federal  Reserve  system shall impose a Reserve  Percentage
with respect to Libor deposits of Lender,  then for any period during which such
Reserve  Percentage  shall apply,  the Adjusted LIBOR Rate shall be equal to the
amount  determined  above  divided  by an amount  equal to 1 minus  the  Reserve
Percentage.

         AFFILIATE - a Person (other than a  Subsidiary):  (i) which directly or
indirectly through one or more intermediaries  controls, or is controlled by, or
is under common control with, a Person;

<PAGE>

(ii)  which  beneficially  owns or holds 5% or more of any  class of the  Voting
Stock of a Person;  or (iii) 5% or more of the Voting Stock (or in the case of a
Person which is not a corporation,  5% or more of the equity  interest) of which
is beneficially owned or held by a Person or a Subsidiary of a Person.

         AGREEMENT - the Loan  Agreement  referred  to in the first  sentence of
this  Appendix A, all Exhibits  thereto and this  Appendix A as each of the same
may be amended, modified,  renewed, extended,  replaced, restated or substituted
from time to time.

         APPLICABLE MARGIN - means the following  percentage points with respect
to the Floating Rate or Adjusted LIBOR Rate, as applicable.

  ----------------------------------------------------------------------------
    LIBOR RATE LOAN APPLICABLE MARGIN   FLOATING RATE LOAN APPLICABLE MARGIN
  ----------------------------------------------------------------------------
                  2.50%                                  0%
  ----------------------------------------------------------------------------

         AUTHORIZED  OFFICER - any officer of Borrower  authorized by resolution
of the  Board of  Directors  of  Borrower  to  execute  documents,  instruments,
certificates  and agreements on behalf of Borrower in favor of Lender and who is
identified on either the incumbency certificate referenced in Section 6.1 herein
or any updated incumbency certificate of the Borrower delivered to the Lender.

         AVAILABLE  COMMITMENT  - at a particular  time,  an amount equal to the
amount by which  the  Commitment  exceeds  the sum of (i) the  aggregate  unpaid
principal  amount at such time of all Loans made  pursuant to Section  1.1,  and
(ii) the Lender Letter of Credit Obligations.

         AVAILABLE  LETTER OF CREDIT  COMMITMENT  - at any date  shall  mean the
lesser of (a) the  difference  between  the  Letter of Credit  Sublimit  and the
Lender  Letter  of  Credit  Obligations  at such  date  and  (b)  the  Available
Commitment at such date.

         BORROWING  DATE - the  Business  Day  specified  in a Borrowing  Notice
delivered  pursuant to Section  3.1.1 as the date on which  Borrower  requests a
Loan.

         BORROWING NOTICE - as defined in Section 3.1.1 of the Agreement.

         BUSINESS DAY - any day other than a Saturday,  Sunday,  or other day on
which commercial banks in New York, New York are authorized or required to close
and,  if the  applicable  day  relates to a LIBOR Rate Loan or a LIBOR  Interest
Period,  the day on which dealings in dollar deposits are also carried on in the
London interbank market.

         CAPITAL  EXPENDITURES  - cash  expenditures  made  for the  acquisition
(other  than  in  connection  with  an  Acquisition)  of  any  fixed  assets  or
improvements,  replacements,  substitutions  or additions  thereto  which have a
useful life of more than one year, including the total principal

                                       A-2
<PAGE>

portion  of  Capitalized  Lease  Obligations  excluding   expenditures  for  the
replacement  of any  assets  leased  under a  Capitalized  Lease  Obligation  in
connection with a casualty or loss thereof.

         CAPITALIZED   LEASE  OBLIGATION  -  any  Indebtedness   represented  by
obligations  under a lease that is  required  to be  capitalized  for  financial
reporting purposes in accordance with GAAP.

         COMMITMENT - as defined in Section 1.1 hereof.

         COMMITMENT TERMINATION DATE - May 1, 2005

         CONSOLIDATED  - the  consolidation  in  accordance  with  GAAP  of  the
accounts or other items as to which such term applies.

         CONSOLIDATED AND CONSOLIDATING - the consolidation and consolidating in
accordance  with  GAAP of the  accounts  or other  items as to which  such  term
applies.

         CONSOLIDATED  CURRENT ASSETS shall mean, at any time, the  consolidated
current assets of the Borrower and its Subsidiaries, as determined in accordance
with GAAP.

         CONSOLIDATED   CURRENT   LIABILITIES  shall  mean,  at  any  time,  the
consolidated  current  liabilities  of the  Borrower  and its  Subsidiaries,  as
determined in accordance with GAAP.

         CONSOLIDATED  NET INCOME shall mean, for any period,  net income of the
Borrower and its Subsidiaries for such period determined on a Consolidated basis
in accordance with GAAP.

         CONSOLIDATED TANGIBLE NET WORTH as of any date shall mean the excess of
the Consolidated  assets of the Borrower and its Consolidated  Subsidiaries over
their Consolidated  liabilities,  all as determined in accordance with GAAP, but
excluding  from such  Consolidated  assets all items  that  would be  considered
"intangible  assets" under GAAP and excluding from Consolidated  liabilities all
Subordinated Debt.

         CONSOLIDATED  UNSUBORDINATED INDEBTEDNESS as of any date shall mean all
Indebtedness of the Borrower and its Subsidiaries on a consolidated  basis other
than Subordinated Debt.

         CREDIT  FACILITY - the credit  facility  established  by Lender for the
making of Loans and the issuance of Letters of Credit pursuant to the Agreement.

         CREDIT PERIOD - as defined in Section 1.1 hereof.

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

         DEFAULT  RATE - in respect of any Loans not paid when due  (whether  at
stated  maturity,  by acceleration  or otherwise),  a rate of interest per annum
during the period  commencing  on the due date thereof until such Loans are paid
in full equal to (a) in respect of the principal  amount of Floating Rate Loans,
3% in  excess  of the  Prime  Rate as in  effect  from  time to  time  plus  the
Applicable  Margin,  and (b) in  respect of the  principal  amount of LIBOR Rate
Loans, 3% in

                                       A-3
<PAGE>

excess of the Adjusted  LIBOR Rate in effect thereon at the time of such default
plus the  Applicable  Margin  until the end of the then current  LIBOR  Interest
Period  therefor  and,  thereafter,  3% in excess of the Prime Rate as in effect
from time to time plus the  Applicable  Margin;  and in respect of other amounts
payable  by any  Borrower  hereunder  (including  interest)  not  paid  when due
(whether at stated  maturity,  by acceleration  or otherwise),  a rate per annum
during the period  commencing  on the due date until such other amounts are paid
in full equal to 3% in excess of the Prime  Rate as in effect  from time to time
plus the Applicable Margin.

         DEFICIENCY BALANCE FEE - as defined in Section 2.5 of the Agreement.

         DIVIDENDS  shall mean all  dividends  declared or paid by the Borrower,
whether in cash or by the  distribution of property (other than capital stock of
the  Borrower),  and any  money or other  property  paid or  distributed  by the
Borrower in connection with the purchase, redemption, cancellation or retirement
of any capital stock of the Borrower.

         DOLLARS OR $ OR US$ - lawful currency of the United States of America.

         EMPLOYEE  PENSION  BENEFIT  PLAN - means any employee  pension  benefit
plan,  as defined in Section  3(2) of ERISA,  now or  hereafter  maintained  for
employees of Borrower.

         ENVIRONMENTAL  LAWS  -  all  federal,  state  and  local  laws,  rules,
regulations,  ordinances, permits, guidance, orders and consent decrees relating
to protection of the environment.

         ERISA  - the  Employee  Retirement  Income  Security  Act of  1974,  as
amended, and all rules and regulations from time to time promulgated thereunder.

         EVENT OF DEFAULT - as defined in Section 7.1 of the Agreement.

         FLOATING  RATE - a rate of  interest  equal to the Prime  Rate plus the
Applicable Margin.

         FLOATING RATE LOANS - collectively,  all Loans bearing  interest at the
Floating Rate.

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

         HAZARDOUS MATERIALS - any flammable explosives,  radioactive materials,
hazardous materials, hazardous wastes, hazardous or toxic substances, defined in
the Comprehensive  Environmental  Response,  Compensation,  and Liability Act of
1980, as amended (42 U.S.C.  Sections  9601, et seq.),  the Hazardous  Materials
Transportation Act, as amended (49 U.S.C.  Sections 1801, et seq.), the Resource
Conservation  and Recovery Act, as amended (42 U.S.C.  Sections  9601, et seq.),
and in the regulations  adopted pursuant thereto,  or in any other Environmental
Law.

         INDEBTEDNESS - as applied to a Person means, without duplication

SECTION  1: all  items,  which in  accordance  with GAAP  would be  included  in
determining  total liabilities as shown on the liability side of a balance sheet
of such  Person  as at

                                       A-4
<PAGE>

the  date as of  which  Indebtedness  is to be  determined,  including,  without
limitation, Capitalized Lease Obligations,

             (ii) all  obligations  of  other  Persons  which  such  Person  has
guaranteed,

             (iii) all  reimbursement  obligations in connection with letters of
credit or letter of credit guaranties issued for the account of such Person, and

             (iv) in the case of Borrower, the Obligations.

         INDEBTEDNESS FOR MONEY BORROWED - means (i)  Indebtedness  arising from
the lending of money by any Person to the Borrower,  including  Indebtedness (A)
which  is  represented  by  notes  payable  or  drafts  accepted  that  evidence
extensions  of credit,  (B) which  constitutes  obligations  evidenced by bonds,
debentures, notes or similar instruments, or (C) that was issued or assumed on a
deferred basis as full or partial payment for Property (other than  obligations,
if any,  to retail or  wholesale  customers  in respect of  deposits,  lay-a-way
payments or other similar  obligations);  (ii)  Indebtedness  that constitutes a
Capitalized Lease Obligation;  (iii)  reimbursement  obligations with respect to
letters of credit or guaranties of letters of credit and (iv)  Indebtedness of a
Loan Party under any guaranty of obligations that would constitute  Indebtedness
for Money Borrowed under clauses (i) through (iii) hereof, if owed directly by a
Loan Party.

         LETTER OF CREDIT SUBLIMIT - $20,000,000.

         LENDER LETTER OF CREDIT OBLIGATIONS - at any date shall mean the sum of
(a) the  aggregate  undrawn  amount at such date of all  outstanding  Letters of
Credit issued by Lender pursuant to this  Agreement,  plus (b) the amount of all
Unpaid  Drawings  relating  to such  Letters  of  Credit,  less cash  collateral
securing the same.

         LETTER(S)  OF  CREDIT - any  standby  or  documentary  letter of credit
issued under the terms hereof.

         LIBOR  BASED  RATE - a rate  of  interest  on the  Loans  equal  to the
Adjusted LIBOR Rate plus the Applicable Margin.

         LIBOR INTEREST  PERIOD - a period of one, two or three months  duration
during which the LIBOR Based Rate is applicable.

         LIBOR RATE LOANS -  collectively,  all Loans  bearing  interest  at the
LIBOR Based Rate.

         LIEN - any interest in Property  securing an  obligation  owed to, or a
claim by, a Person other than the owner of the  Property,  whether such interest
is based on common law, statute or contract and including,  without  limitation,
the security interest, security title or lien arising from a security agreement,
mortgage, deed of trust, deed to secure debt, encumbrance,  pledge,  conditional
sale or  trust  receipt,  or a  lease,  consignment  or  bailment  for  security
purposes.  For the purpose of the Agreement,  Borrower shall be deemed to be the
owner of any Property  which it has acquired or holds  subject to a  conditional
sale agreement or other arrangement  pursuant to

                                       A-5
<PAGE>

which title to the Property has been  retained by or vested in some other Person
for security purposes.

         LINE FEE - as defined in Section 2.3 of the Agreement.

         LOAN DOCUMENTS - the Agreement, the Notes and the Other Agreements,  as
each of the same may be amended, modified, renewed, extended, replaced, restated
or substituted from time to time.

         LOANS - all loans and  advances of any kind made by Lender  pursuant to
the Agreement.

         LOAN  PARTY  - each  of  Borrower  and any  Significant  Subsidiary  of
Borrower.

         MAXIMUM REVOLVING CREDIT AMOUNT - $20,000,000.

         MULTIEMPLOYER  PLAN -  means  a Plan  which  is  described  in  Section
4001(a)(3) of ERISA.

         NET  OPERATING  LOSS AFTER TAXES means,  for any period,  the operating
loss of the Borrower and its Consolidated  Subsidiaries determined in accordance
with GAAP adjusted for  provision for income taxes and without  giving effect to
any extraordinary  gains or losses or gains or losses from sales of assets other
than inventory sold in the ordinary course of business.

         NET PROCEEDS - for any period,  the net cash  proceeds  received by the
Borrower  and its  Subsidiaries  on a  Consolidated  basis during such period in
connection with the sale, transfer or other disposition of any fixed assets.

         NOTE - the Revolving Credit Note.

         OBLIGATIONS  - all  Loans,  Unpaid  Drawings,  Lender  Letter of Credit
Obligations, and all other advances, debts, liabilities,  obligations, covenants
and duties,  together with all interest,  fees and other charges thereon, owing,
arising, due or payable from Borrower,  or either of them, to Lender of any kind
or nature,  present or future,  arising  under the Agreement or any of the other
Loan  Documents  and whether  direct or indirect  (including  those  acquired by
assignment), absolute or contingent, primary or secondary, due or to become due,
now  existing  or  hereafter  arising and however  acquired.  The term  includes
without limitation, all interest, charges, fees, expenses,  attorneys' fees, and
any other sums chargeable to Borrower under any of the Loan Documents.

         OTHER  AGREEMENTS - any and all agreements and instruments  (other than
the Agreement),  heretofore,  now or hereafter  executed by Borrower,  any other
Loan  Party,  or any  guarantor,  and  delivered  to  Lender in  respect  of the
transactions  contemplated by the Agreement, as each of the same may be amended,
modified,  renewed,  extended,  replaced,  restated or substituted  from time to
time.

         PARTICIPATION - as defined in Section 11.3(b) of the Agreement.

                                      A-6
<PAGE>

         PERMITTED   ACQUISITION  -  an  Acquisition  by  any  Borrower  or  its
Subsidiaries which satisfies all of the following requirements:  (a) no Event of
Default exists hereunder or would exist  immediately after giving effect to such
Acquisition;  (b) the Purchased Business engages in the same, similar or related
lines of business as Borrower's;  (c) in the case of a merger or  consolidation,
and in other cases where appropriate,  the board of directors or other governing
body of the other  Person which is the subject of the  transaction  of merger or
consolidation  shall have approved such Acquisition;  (d) the Loan Parties shall
have  delivered  to Lender a  certificate  from the chief  financial  officer of
Borrower  stating that the Acquisition  constitutes a Permitted  Acquisition (as
defined under the Loan Agreement) and will not result,  immediately after giving
effect thereto, in Event of Default, together with: (i) a compliance certificate
demonstrating  financial  covenant  compliance  under  Section 5.3 before giving
effect  to  such  Acquisition;  and  (ii)  a pro  forma  compliance  certificate
demonstrating  that, upon giving effect to such Acquisition on a PRO FORMA basis
(i.e., calculations being made after giving effect to the Acquisition during the
tested  period  as if such  transaction  had  occurred  on the first day of such
period),  the Loan Parties shall be in compliance  with all of the covenants set
forth in Section 5.3; (e) the  consideration  (including cash  consideration and
any assumption of Indebtedness for Money Borrowed,  but excluding  consideration
consisting of any capital stock of Borrower  issued to the seller or the capital
stock or other Property which is the subject of the Acquisition) paid, shall not
exceed $2,500,000 for any one Acquisition  (whether in one instance or series of
related transactions) or $5,000,000 in the aggregate for all Acquisitions in any
twelve month period  without the consent of Lender;  and (f) Borrower shall have
given Lender ten (10) days  written  notice  prior to the  consummation  of such
Acquisition.

         PERMITTED  LIENS - any Lien of a kind specified in Section 5.2.5 of the
Agreement.

         PERMITTED  PURCHASE MONEY INDEBTEDNESS - Purchase Money Indebtedness of
Borrower  incurred  after the date hereof  which is secured by a Purchase  Money
Lien and which,  when aggregated with the principal amount of all other Purchase
Money  Indebtedness of Borrower and Capitalized Lease Obligations of Borrower at
the time outstanding, does not exceed $1,000,000.

         PERSON - an individual,  partnership,  corporation,  limited  liability
company,  joint  stock  company,  land  trust,  business  trust,  unincorporated
organization, or a government or agency or political subdivision thereof, or any
other type of entity.

         PRIME RATE - a fluctuating  per annum rate of interest so designated or
publicly  announced from time to time by Lender as its prime rate for commercial
loans. The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer.

         PROJECTIONS - Borrower's forecasted  Consolidated and Consolidating (a)
balance sheets,  (b) profit and loss  statements,  and (c) cash flow statements,
all  prepared  on  a  consistent  basis  with  Borrower's  historical  financial
statements,  together  with  appropriate  supporting  details and a statement of
underlying assumptions.

         PROPERTY - any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.

                                      A-7
<PAGE>

         PURCHASE  MONEY  INDEBTEDNESS  - means and  includes  (i)  Indebtedness
(other than the  Obligations) for the payment of all or any part of the purchase
price of any fixed assets,  (ii) any Indebtedness for Money Borrowed (other than
the Obligations) incurred at the time of or within 90 days prior to or after the
acquisition or  construction of any fixed assets for the purchase price thereof,
and  (iii)  any  renewals,  extensions  or  refinancings  thereof,  but  not any
increases in the principal  amounts  thereof  outstanding at the time.  Purchase
Money Indebtedness shall not include any Capitalized Lease Obligation.

         PURCHASE  MONEY LIEN - a Lien upon fixed assets which secures  Purchase
Money Indebtedness,  but only if such Lien shall at all times be confined solely
to the fixed assets  (which shall be deemed to include all  accessions  thereto,
proceeds thereof and appurtenances  (whether  tangible or intangible)  thereto),
the purchase price of which was financed  through the incurrence of the Purchase
Money Indebtedness secured by such Lien.

         PURCHASED BUSINESS - the business purchased in an Acquisition.

         REGULATION  D -  Regulation  D of the Board of Governors of the Federal
Reserve System, comprising Part 204 of Title 12, Code of Federal Regulations, as
amended, and any successor thereto.

         RENTALS - means,  as of the date of  determination,  all payments which
the lessee is required to make by the terms of any lease.

         REPORTABLE  EVENT - any of the events  set forth in Section  4043(b) of
ERISA with  respect  to which the PBGC has not  waived  the  notice  requirement
provided for in that Section.

         RESERVE - for any day, that reserve  (expressed as a decimal)  which is
in effect (whether or not actually incurred) with respect to Lender on such day,
as  prescribed by the Board of Governors of the Federal  Reserve  System (or any
successor or any other  banking  authority to which Lender is subject  including
any board or governmental or  administrative  agency of the United States or any
other  jurisdiction  to which Lender is subject),  for  determining  the maximum
reserve  requirement  (including  without  limitation  any basic,  supplemental,
marginal or  emergency  reserves)  for  Eurocurrency  liabilities  as defined in
Regulation D.

         RESERVE PERCENTAGE - for Lender on any day, that percentage  (expressed
as a  decimal)  which is in  effect  on such  day,  prescribed  by the  Board of
Governors of the Federal  Reserve  System (or any successor or any other banking
authority to which Lender is subject,  including  any board or  governmental  or
administrative  agency of the United States or any other  jurisdiction  to which
Lender is subject) for determining the maximum  reserve  requirement  (including
without limitation any basic, supplemental,  marginal or emergency reserves) for
"Eurocurrency liabilities" as defined in Regulation D, in each case used to fund
a LIBOR Rate Loan subject to an Adjusted  LIBOR Rate.  The  Adjusted  LIBOR Rate
shall be adjusted  automatically on and as of the effective day of any change in
the Reserve Percentage.

         RESTRICTED  INVESTMENT - any investment  made in cash or by delivery of
Property to any Person,  whether by acquisition of stock,  Indebtedness or other
obligation  or  Security,  or by  loan,  advance  or  capital  contribution,  or
otherwise, or in any Property except the following:

                                      A-8
<PAGE>

             (i)  investments  in one or more  Subsidiaries  of the Borrower and
investments by one or more  Subsidiaries  of the Borrower in the Borrower or any
other Subsidiary thereof;

             (ii) property  (excluding real property) to be used in the ordinary
course of business;

             (iii) current assets arising from the sale of goods and services in
the ordinary course of business of a Borrower;

             (iv)  investments  in direct  obligations  of the United  States of
America, or any agency thereof or obligations guaranteed by the United States of
America,  provided that such obligations mature within one year from the date of
acquisition thereof;

             (v) investments in certificates of deposit, bankers acceptances and
other  "money  market  instruments"  maturing  within  one year from the date of
acquisition  issued  by  Israel  Discount  Bank  of  New  York  or  any  of  its
subsidiaries  and  Affiliates or by any other  financial  institution  organized
under the laws of the United States,  any state thereof  having capital  surplus
and undivided profits aggregating at least $100,000,000;

             (vi)  investments in commercial paper given the highest rating by a
national  credit rating agency and maturing not more than 270 days from the date
of creation thereof;

             (vii)  repurchase  agreements  maturing not more than 90 days after
the acquisition  thereof,  entered into with any bank or trust company organized
under the laws of the United States of America, any State thereof having capital
and surplus in an  aggregate  amount of not less than  $500,000,000  relating to
United States of America government obligations;

             (viii) mutual funds that invest in any of the foregoing;

             (ix) Permitted Acquisitions; and

             (x) investments permitted by Section 5.2.2;

             (xi) Capital Expenditures permitted by section 5.3.4; and

             (xii) other investments having an aggregate outstanding unrecovered
cost not in excess of $500,000.

         REVOLVING  CREDIT  LOANS -  revolving  credit  loans  made by Lender to
Borrower during the Credit Period pursuant to Section 1.1 of the Agreement.

         REVOLVING CREDIT NOTE - the promissory note in  substantially  the form
of Exhibit A hereto,  to be  executed by Borrower in favor of Lender to evidence
Borrower's obligation to repay the Revolving Credit Loans.

         SECURITY  - shall  have  the same  meaning  as in  Section  2(1) of the
Securities Act of 1933, as amended.

                                      A-9
<PAGE>

         SIGNIFICANT  SUBSIDIARY  - shall have the same  meaning as set forth in
Rule 1-02 of  Regulation  S-X as  promulgated  by the  Securities  and  Exchange
Commission.

         SINGLE  EMPLOYER  PLAN -  means  an  Employee  Benefit  Plan  which  is
described in Section 4001(a)(15) of ERISA.

         SOLVENT - as to any Person,  such Person (i) owns  Property  whose fair
saleable  value is greater than the amount  required to pay all of such Person's
liabilities  (including  contingent  debts),  (ii)  is  able  to pay  all of its
liabilities as such liabilities mature and (iii) has capital sufficient to carry
on its business and  transactions  and all business and transactions in which it
is about to engage.

         SUBORDINATED  DEBT -  unsecured  Indebtedness  for  Money  Borrowed  of
Borrower or any Subsidiary of Borrower that is  subordinated  to the Obligations
in a manner,  under terms and  subject to a written  agreement  satisfactory  to
Lender.

         SUBSIDIARY  - any  corporation  of which a  Person  owns,  directly  or
indirectly through one or more intermediaries, more than 50% of the Voting Stock
at the time of determination.

         UNPAID DRAWINGS - as defined in Section 1.3.

         VOTING STOCK - Securities of any class or classes of a corporation  the
holders of which are ordinarily,  in the absence of  contingencies,  entitled to
elect a majority  of the  corporate  directors  (or Persons  performing  similar
functions).

         WORKING CAPITAL as of any date shall mean  Consolidated  Current Assets
minus Consolidated Current Liabilities.

         CERTAIN  MATTERS OF  CONSTRUCTION.  The terms  "herein",  "hereof"  and
"hereunder"  and other words of similar import refer to the Agreement as a whole
and not to any particular  section,  paragraph or subdivision.  Any pronoun used
shall be deemed to cover all genders.  The section titles, table of contents and
list of exhibits appear as a matter of convenience only and shall not affect the
interpretation  of  the  Agreement.  All  references  to  statutes  and  related
regulations shall include any amendments of same and any successor  statutes and
regulations.  All references to any of the Loan Documents  shall include any and
all modifications thereto and any and all extensions or renewals thereof.

                                      A-10GARTMORE MUTUAL FUNDS
                                        &
                        GARTMORE VARIABLE INSURANCE TRUST

                  CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS
               (AS AMENDED AND RESTATED AS OF SEPTEMBER 18, 2003)

I.     INTRODUCTION

     SECTION  406  OF  THE SARBANES-OXLEY ACT OF 2002.  The Board of Trustees of
each  of  Gartmore  Mutual  Funds  ("GMF") and Gartmore Variable Insurance Trust
("GVIT")  (GMF  and  GVIT hereinafter referred to collectively as the "Company")
has  adopted  this  code  of  ethics (this "Code") to comply with Item 2 of Form
N-CSR,  [1]  which implements Section 406 of the Sarbanes-Oxley Act of 2002 (the
"2002  Act").  Section  406  of  the  2002 Act requires disclosure by management
investment  companies  that  are  registered  with  the  Securities and Exchange
Commission (the "SEC") under the Investment Company Act of 1940, as amended (the
"1940  Act"), concerning a code of ethics for senior financial officers of these
investment  companies.

[1]  Item 2 of Form N-CSR requires a registered management investment company to
     disclose  annually  whether,  as  of  the  end of the period covered by the
     report,  that  company  has  adopted  a  code of ethics that applies to the
     registrant's  principal  executive  officer,  principal  financial officer,
     principal  accounting officer, or controller, or persons performing similar
     functions.  If  the  registrant  has not adopted such a code of ethics, the
     registrant  must  explain why the registrant has not done so. Under Item 2,
     the  registrant  also  must:

COVERED  PERSONS  UNDER THE CODE.  This Code of the Company is applicable to the
Company's chief executive officer (the "CEO") and the Company's senior financial
officers  (e.g., the Company's treasurer and assistant treasurers) (said CEO and
senior  financial  officers hereinafter referred to collectively as the "Covered
Officers").  See  Exhibit  A  to  this  Code.

This  Code  is  intended  to  promote:

     -    honest  and  ethical  conduct,  including  the  ethical  handling  of
          conflicts  of  interest;

     -    full,  fair,  accurate,  timely,  and  understandable  disclosure;

(1)  file  with  the Securities and Exchange Commission a copy of the code as an
     exhibit to the registrant's annual report; (2) post the text of the code on
     the  registrant's Internet website and disclose, in the registrant's annual
     report, the registrant's Internet address, and the fact that the registrant
     has  posted the code on the registrant's Internet website; or (3) undertake
     in the registrant's most recently filed semi-annual report on Form N-CSR to
     provide  to any person without charge, upon request, a copy of the code and
     explain  the  manner  in which this request may be made. Disclosure also is
     required  of amendments to, or waivers (including implicit waivers) from, a
     provision of the code in the registrant's annual report on Form N-CSR or on
     the  registrant's  website.  If  the  registrant  intends  to  satisfy  the
     disclosure  requirement  by  posting  this  information on the registrant's
     website,  the  registrant  will  be  required  to disclose the registrant's
     Internet  address  and  this  intention. Investment companies must make the
     disclosure  discussed in this footnote regardless of whether these officers
     are  employed  by  the  registrant  or  a  third  party.

     -    compliance  with  applicable  laws  and  governmental  rules  and
          regulations;

     -    the  prompt  internal  reporting  to  an appropriate person or persons
          identified  in  the  Code  of  violations  of  the  Code;  and

     -    accountability  for  adherence  to  the  Code.

     DESIGNATED  PERSONS  UNDER THE CODE.  As set forth in greater detail below,
the  Covered  Officers  shall  report to either:  (i) one of the officers of the
Company  set  forth  in  Exhibit  B (each hereinafter referred to as a "Gartmore
Designated Person"); and/or (ii) a member of the Audit Committee of the Board of
Trustees  of  the  Company  (each hereinafter referred to as an "Audit Committee
Designated  Person")  (the "Gartmore Designated Person" and the "Audit Committee
Designated  Person"  hereinafter  referred  to  collectively  as the "Designated
Persons," and singly as the "Designated Person," as appropriate).  See Exhibit B
to  this  Code.

     ROLES  AND  RESPONSIBILITIES  OF THE DESIGNATED PERSONS AND THE INDEPENDENT
TRUSTEES.  As  discussed  in  greater  detail  below, given the seniority of the
Covered  Officers:

i.   the  Gartmore  Designated  Person  shall  be  responsible  for  conducting
     investigations  of  prospective  and  past  conduct  or activity by Covered
     Officers  (other  than  the CEO of the Company) brought to the attention of
     the  Gartmore  Designated  Person,  and:

     a.   with  respect  to  such prospective conduct or activity, also shall be
          responsible  for  making  a  final  determination  whether or not such
          conduct  or  activity  will  violate  this  Code;

     b.   with  respect  to  such  past  conduct  or  activity,  also  shall  be
          responsible for making a preliminary determination whether or not such
          conduct  or  activity  has  violated  this  Code;  and

     c.   with  respect  to  such prospective and past conduct or activity, also
          shall be responsible for making a preliminary determination whether or
          not  to  grant a waiver [2] to the Covered Officer for such conduct or
          activity;

          [2]  Item  2  of  Form  N-CSR defines "waiver" as "the approval by the
               registrant  of  a material departure from a provision of the code
               of ethics" and "implicit waiver," which also must be disclosed in
               the  Form  N-CSR,  as  "the  registrant's  failure to take action
               within a reasonable period of time regarding a material departure
               from  a  provision of the code of ethics that has been made known
               to  an  executive  officer" of the registrant. See also Rule 3b-7
               under  the  Securities Exchange At of 1934, as amended (17 C.F.R.
               240.3b-7).

ii.  the Gartmore Designated Person promptly shall report to the Trustees of the
     Company  who  are  not "interested persons" of the Company, as that term is
     defined  in Section 2(a)(19) of the 1940 Act (hereinafter, the "Independent
     Trustees"):

     a.   his  or  her  preliminary  determination  whether or not any such past
          conduct  or  activity  has  violated  this  Code  and  any recommended
          sanction,  as  appropriate;  and

     b.   his  or  her  preliminary  determination  whether  or  not  any  such
          prospective  or  past  conduct  or activity should be the subject of a
          waiver;

iii. the  Audit  Committee Designated Person shall be responsible for conducting
     investigations  of  prospective  and past conduct by the CEO of the Company
     brought  to  the  attention  of the Audit Committee Designated Person, and:

     a.   with  respect  to  such prospective conduct or activity, also shall be
          responsible  for  making  a  final  determination  whether or not such
          conduct  or  activity  will  violate  this  Code;

     b.   with  respect  to  such  past  conduct  or  activity,  also  shall  be
          responsible for making a preliminary determination whether or not such
          conduct  or  activity  has  violated  this  Code;  and

     c.   with  respect  to  such prospective and past conduct or activity, also
          shall be responsible for making a preliminary determination whether or
          not  to  grant  a  waiver  to  the  CEO  for such conduct or activity;

iv.  the  Audit  Committee  Designated  Person  promptly  shall  report  to  the
     Independent  Trustees:

     a.   his  or  her  preliminary  determination  whether or not any such past
          conduct  or  activity  has  violated  this  Code  and  any recommended
          sanction,  as  appropriate;  and

     b.   his  or  her  preliminary  determination  whether  or  not  any  such
          prospective  or  past  conduct  or activity should be the subject of a
          waiver;

v.   the  Independent  Trustees  shall  be  solely  responsible  for  promptly
     determining  whether  or  not: (a) to accept the preliminary determinations
     made  by  the Designated Person with respect to past conduct or activity of
     the  Covered  Officer  (including the CEO of the Company); and (b) to grant
     waivers  under  this  Code  --  and these determinations of the Independent
     Trustees  shall  be  final;

vi.  the  Independent  Trustees  further  shall  be  solely  responsible  for:

     a.   taking  all  necessary  and  appropriate  disciplinary  or  preventive
          action(s)  (necessary  and  appropriate  disciplinary  or  preventive
          action(s)  may include a letter of censure, suspension, dismissal, or,
          in  the  event  of  criminal  or  other  serious  violations  of  law,
          notification  to  the  SEC  and/or  appropriate  law  enforcement
          authorities) in regard to any existing, actual, or potential violation
          of  this  Code  by  any  Covered  Officer  (including  the  CEO of the
          Company);  and

     b.   assuring  that any changes to or waivers (or implicit waivers) of this
          Code,  to  the  extent  required, shall be disclosed on Form N-CSR, as
          provided  by  SEC  rules;  and

vii. all  determinations,  both  preliminary  and  final, made by the Designated
     Persons  and  Independent  Trustees  shall  be  in  writing.

     NOT  A  1940  ACT RULE 17J-1 CODE OF ETHICS.       This Code is not adopted
under,  nor intended to serve as a basis for complying with the requirements of,
Rule  17j-1  under  the  1940  Act.

II.     COVERED  OFFICERS  SHOULD  ACT  HONESTLY  AND  CANDIDLY

     Each  Covered  Officer  owes  a  duty to the Company to act with integrity.
Integrity  requires,  among  other  things, being honest and candid.  Deceit and
subordination  of  principle  are  inconsistent  with  integrity.

     Each  Covered  Officer  must:

     -    act  with  integrity,  including  being  honest and candid while still
          maintaining  the  confidentiality of information where required by law
          or  the  Company's  policies;

     -    observe the letter of the laws and governmental rules and regulations,
          accounting  standards,  and  Company  policies;

     -    adhere  to  a  high  standard  of  business  ethics;  and

     -    place  the  interests  of the Company before the Covered Officer's own
          personal  interests.

     All  activities of Covered Officers should be guided by and adhere to these
standards.

III.     COVERED  OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS
         OF  INTEREST

     GENERAL  PRINCIPLE.  The 1940 Act is designed, in part, to address inherent
conflicts  of  interest  that exist in the management of an investment company's
assets  by  a  third  party (i.e., the investment company's investment adviser).
Similarly, the Investment Advisers Act of 1940, as amended (the "Advisers Act"),
addresses conflicts of interest faced by an investment adviser in the management
of  client  assets.  The  principles  set  forth  in  this  section  relating to
conflicts  of interest reflect the fact that investment companies and investment
advisers  thereof  already  are  subject  to prohibitions on certain activities,
including  self-dealing,  and  substantial  limitations  regarding  conflicts of
interest  by  the  1940  Act  and the Advisers Act and the SEC rules promulgated
thereunder.  In  light  of  the  existing  structural, statutory, and regulatory
environment  for  registered investment companies, a code of ethics broader than
necessary  to  meet  the  new  2002  Act  code  of  ethics  requirement  may  be
unnecessary.  This Code, however, is intended to require the Covered Officers to
adhere  to  the  general  principle of the Company's advisers that those persons
responsible  for  managing  other  people's  money should be held to the highest
standards  of  integrity.

     GUIDING  PRINCIPLES.     A  "conflict  of  interest"  occurs  when  an
individual's  private  interest interferes with the interests of the Company and
the  shareholders  of  the  Company.  A  conflict  of  interest can arise when a
Covered Officer has interests that may make it difficult to perform that Covered
Officer's  Company  work objectively.  For example, a conflict of interest would
arise  if  a  Covered  Officer,  or  a  member  of the Covered Officer's family,
receives  improper  personal  benefits  as  a  result  of  the Covered Officer's
position  in  the  Company.  In  addition,  investment  companies also should be
sensitive to situations that create apparent, not actual, conflicts of interest.
Service  to  the  Company  should  never  be  subordinated  to personal gain and
advantage.

     Certain  conflicts  of  interest  covered  by  this  Code  arise out of the
relationships  between Covered Officers and the Company that already are subject
to  conflict  of  interest  provisions in the 1940 Act and the Advisers Act. For
example,  Covered  Officers  may not individually engage in certain transactions
(such  as the purchase or sale of securities or other property) with the Company
because  of  the  status  of  Covered  Officers  as  "affiliated persons" of the
Company,  as  that  term  is  defined  at  Section  2(a)(3)  of  the  1940  Act.
Accordingly,  as  to  the  existing  statutory  and  regulatory  prohibitions on
individual  behavior,  these  prohibitions shall be deemed to be incorporated in
this  Code  and,  therefore,  any  violation of these prohibitions also shall be
deemed  to  be  a  violation  of  the Code. Covered Officers, in all cases, must
comply  with  applicable  statutes  and  regulations.

     As  to  conflicts  arising  from,  or  as  a  result  of  the  contractual
relationship  between,  the  Company  and the investment adviser(s) of which the
Covered  Officers  also are officers or employees, it is recognized by the Board
of  Trustees of the Company that, subject to each investment adviser's fiduciary
duties  to  the  Company,  the  Covered  Officers, in the normal course of their
duties (whether formally for the Company or for the adviser, or for both), shall
be  involved in establishing policies and implementing decisions which will have
different  effects  on  the  investment  adviser  and  the Company. The Board of
Trustees  of  the  Company  recognizes  that  the  participation  of the Covered
Officers in these activities is inherent in the contractual relationship between
the Company and the investment adviser and is consistent with the expectation of
the  Board of Trustees of the Company of the performance by the Covered Officers
of their duties as officers of the Company. In addition, it is recognized by the
Board  of Trustees of the Company that the Covered Officers also may be officers
or  employees  of  other  investment  companies advised by the same adviser and,
accordingly, the principles of this paragraph shall further apply to the Covered
Officers  acting  in  these  capacities  as  well.

     RESPONSIBILITIES OF COVERED OFFICERS:  In accordance with these principles,
each  Covered  Officer  must:

     -    avoid  conflicts  of  interest  wherever  possible;

     -    handle  any  actual  or  apparent  conflict  of  interest  ethically;

     -    not  use  the  Covered  Officer's  personal  influence  or  personal
          relationships to influence investment decisions or financial reporting
          by  an  investment  company  whereby the Covered Officer would benefit
          personally  to  the  detriment  of  the  investment  company;

     -    not  cause  an  investment  company  to  take  action, or fail to take
          action,  for  the  personal benefit of the Covered Officer rather than
          for  the  benefit  of  said  company;

     -    not  use  knowledge of portfolio transactions made or contemplated for
          an  investment  company  to  profit  or cause others to profit, by the
          market  effect  of  these  transactions;

     -    as  described in more detail below, discuss with a Gartmore Designated
          Person  any material transaction or relationship that could reasonably
          be expected to give rise to a conflict of interest; provided, however,
          that  the  CEO  of  the  Company  must discuss with an Audit Committee
          Designated  Person any material transaction or relationship that could
          reasonably  be  expected  to  give rise to a conflict of interest; and

     -    report  at  least annually to the Company on the Company's "Trustees &
          Officers  Questionnaire"  any  and  all  material  transactions,
          affiliations,  or  relationships  that could reasonably be expected to
          give  rise  to,  or  be  related  to,  a  conflict  of  interest.

     CONFLICT  OF  INTEREST SITUATIONS:  Certain conflict of interest situations
that  always  should  be  discussed  by  a  Covered Officer with the appropriate
Designated  Person  include  the  following:

     -    any  outside  business  activity  that  detracts  from an individual's
          ability  to  devote  appropriate  time  and  attention  to  his or her
          responsibilities  with  the  Company;

     -    service  as  a director on the board of any public or private company;

     -    the receipt of any non-nominal or non de minimis gifts (i.e., gifts in
          excess of $500.00) from any company with which the Company has current
          or  prospective  business  dealings;

     -    the  receipt  of  any  entertainment  from  any company with which the
          Company  has  current  or  prospective  business dealings, unless said
          entertainment  is business related, reasonable in cost, appropriate as
          to  time  and  place,  and not so frequent as to raise any question of
          impropriety;

     -    being  in  the  position  of  supervising,  reviewing,  or  having any
          influence  on  the  job  evaluation,  pay, or benefit of any immediate
          family  member;

     -    any  ownership  interest  in,  or  any  consulting  or  employment
          relationship  with, any of the Company's service providers, other than
          the  Company's  investment  adviser  or  any  of  the  Company's other
          affiliates;  and

     -    a  direct  or  indirect financial interest in commissions, transaction
          charges,  or  spreads  paid  by  the  Company  for effecting portfolio
          transactions or for selling or redeeming shares other than an interest
          arising from the Covered Officer's employment, such as compensation or
          equity  ownership.

     In  addition, any activity or relationship that would present a conflict of
interest  for  a  Covered  Officer  also likely would present a conflict for the
Covered  Officer  if a member of the Covered Officer's family engages in such an
activity  or  has  such  a  relationship.

IV.     DISCLOSURE

     Each  Covered  Officer  is required to be familiar, and to comply, with the
Company's  disclosure controls and procedures in connection with the 2002 Act so
that  the  Company's  subject reports and documents filed with the SEC comply in
all material respects with the applicable federal securities laws and SEC rules.
In  addition,  each  Covered  Officer  that  has direct or supervisory authority
regarding  these  SEC filings or the Company's other public communications, also
should  consult,  to the extent appropriate within the Covered Officer's area of
responsibility,  with  other  Company  officers  and  employees  and  take other
appropriate  steps  regarding  these  disclosures  with the goal of making full,
fair,  accurate,  timely,  and  understandable  disclosure.

     Accordingly,  each  Covered  Officer  must:

     -    familiarize  himself  or  herself  with  the  disclosure  requirements
          applicable  to  the Company as well as with the business and financial
          operations  of  the  Company;  and

     -    not  knowingly  misrepresent,  or  cause others to misrepresent, facts
          about  the  Company  to others, whether within or outside the Company,
          including,  among others, the Company's internal auditors, independent
          directors,  independent  auditors,  and  governmental  regulators  and
          self-regulatory  organizations.

V.     COMPLIANCE

     It  is  the  Company's  policy  to  comply  with  all  applicable  laws and
governmental  rules  and regulations.  It is the personal responsibility of each
Covered  Officer  to  adhere  to the standards and restrictions imposed by these
laws,  rules,  and  regulations, including, among others, those laws, rules, and
regulations  relating  to  affiliated  transactions,  accounting,  and  auditing
matters.

VI.     ACCOUNTABILITY,  REPORTING,  AND  ENFORCEMENT RESPONSIBILITIES UNDER THE
        CODE

     RESPONSIBILITIES  OF  THE  COVERED  OFFICERS:   Each  Covered Officer must:

     -    upon  receipt  of  the  Code,  sign  and  submit  to  the  appropriate
          Designated  Person  an acknowledgment stating that the Covered Officer
          has  received,  has  read,  and understands the Code (see Exhibit C to
          this  Code);

     -    annually  thereafter,  submit  a  form  to  the appropriate Designated
          Person confirming that the Covered Officer has received, has read, and
          understands  the  Code  and  has complied with the requirements of the
          Code  (see  Exhibit  D  to  this  Code);

     -    not  retaliate  against  any  employee,  Designated Person, or Covered
          Officer  for  reports  of  potential  violations that are made in good
          faith;  and

     -    notify  the  appropriate  Designated  Person  promptly  if the Covered
          Officer  becomes  aware of any existing or potential violation of this
          Code  (failure to notify the appropriate Designated Person under these
          circumstances  is  itself  a  violation  of  this  Code).

     GENERAL  RESPONSIBILITIES  OF  THE DESIGNATED PERSONS:  Except as otherwise
described  herein, the Designated Person:  (i) shall be responsible for applying
this  Code  to  specific  situations  in  which  questions  are presented to the
Designated  Person;  and  (ii)  has  the authority to interpret this Code in any
particular  situation.  The  Designated  Person  shall take all actions that the
Designated  Person  considers  necessary  and  appropriate  to  investigate  any
existing,  actual,  or  potential  violations reported to the Designated Person.

     SPECIFIC  ACCOUNTABILITY  &  REPORTING  RESPONSIBILITIES:  The  Gartmore
Designated  Person  and  the  Audit Committee Designated Person shall report, in
writing,  quarterly  to  the  Independent  Trustees  all  determinations,  both
preliminary  and  final,  if  any,  made  during  the  previous  quarter.

     The  Independent  Trustees  shall report, in writing, quarterly to the full
Board of Trustees all actions taken under this Code with respect to the previous
quarter:

     a.   by  the Gartmore Designated Person with respect to prospective conduct
          or activity of the Covered Officer (other than the CEO of the Company)
          and  by  the  Audit  Committee  Designated  Person  with  respect  to
          prospective  conduct  or  activity  of  the  CEO;  and

     b.   by  the  Independent  Trustees with respect to all other matters under
          this  Code.

     AUTHORIZED  CONSULTING  PERSONS:  In  addition,  the  Designated Person, as
appropriate,  also  is  authorized  to  consult with the following other persons
(hereinafter  referred to collectively, with the Audit Committee of the Board of
Trustees  of  the  Company,  as  the  "Authorized  Consulting  Persons"), and is
encouraged  to  do  so:  (i)  any  Audit  Committee  Designated Person; (ii) the
chairperson  of  the  Nominating  and Board Governance Committee of the Board of
Trustees of the Company; (iii) the Independent Trustees of the Company; (iv) the
"Lead"  Independent  Trustee  of  the  Company; (v) the Board of Trustees of the
Company;  (vi)  counsel  to the Company; and/or (vii) counsel to the Independent
Trustees.

VII.     OTHER  POLICIES  AND  PROCEDURES

     As  noted above, this Code is not adopted under, nor intended to serve as a
basis  for complying with the requirements of, Rule 17j-1 under the 1940 Act (in
regard  to  the  reporting,  disclosure, and preclearance of personal securities
transactions  and  personal  securities  holdings,  and to other related matters
covered  by  Rule  17j-1  under  the  1940  Act).

     The  code  of ethics of the Company and the code of ethics of the Company's
investment advisers, each pursuant to Rule 17j-1 under the 1940 Act, and each as
amended and reapproved from time to time, each sets forth more detailed policies
and  procedures  that  are  separate  requirements  which  apply  to the Covered
Officers  and  other  persons,  and  are  not  part  of  this  Code.

VIII.     AMENDMENTS

     This  Code may not be amended except in written form, which amendments must
be  specifically approved by a majority vote of the Company's Board of Trustees,
including  a  majority  of  the  Independent  Trustees of the Company's Board of
Trustees.

IX.     CONFIDENTIALITY

     All  reports and records prepared or maintained pursuant to this Code shall
be  considered  confidential  and shall be maintained and protected accordingly.
Except  as  otherwise  required  by law or this Code, these matters shall not be
disclosed  to  anyone  other  than  Designated Persons and Authorized Consulting
Persons.

X.     INTERNAL  USE

     This  Code  is intended solely for the internal use by the Company and does
not  constitute  an  admission,  by or on behalf of the Company, as to any fact,
circumstance,  or  legal  conclusion.

XI.     APPROVAL  HISTORY

     This Code implements Section 406 of the Sarbanes-Oxley Act of 2002, and has
been:

NOMINATING  AND  BOARD  GOVERNANCE  COMMITTEES:

     Initially  approved  and  adopted  by  the  Nominating and Board Governance
     Committees  of  the  Boards  of  Trustees  of the Gartmore Mutual Funds and
     Gartmore  Variable  Insurance  Trust:

     June  4,  2003

     Subsequently  amended  and  restated by the Nominating and Board Governance
     Committees  of  the  Boards  of  Trustees  of the Gartmore Mutual Funds and
     Gartmore  Variable  Insurance  Trust:

     August  19,  2003

AUDIT  COMMITTEES:

     Initially  approved,  ratified,  and adopted by the Audit Committees of the
     Boards  of  Trustees  of  the  Gartmore  Mutual Funds and Gartmore Variable
     Insurance  Trust:

     September  17,  2003

BOARDS  OF  TRUSTEES:

     Initially  approved  and  adopted by the Boards of Trustees of the Gartmore
     Mutual  Funds  and  Gartmore  Variable  Insurance  Trust:

     June  5,  2003

     Subsequently amended and restated by the Boards of Trustees of the Gartmore
     Mutual  Funds  and  Gartmore  Variable  Insurance  Trust:

     September  18,  2003

<PAGE>
                                   EXHIBIT  A:

                  "COVERED OFFICERS" UNDER THIS CODE OF ETHICS
                              (as  of June 5, 2003)

Paul J. Hondros    President & Chief Executive Officer, GMF and GVIT
Gerald J. Holland  Treasurer & Chief Financial Officer, GMF and GVIT
William Baltrus    Assistant Treasurer, GMF and GVIT
Joseph Finelli     Assistant Treasurer, GMF and GVIT
Bryan C. Haft      Assistant Treasurer, GMF and GVIT
Michael Leonard    Assistant Treasurer, GMF and GVIT
Brian J. O'Neill   Assistant Treasurer, GMF and GVIT
Mary Lou Vitale    Assistant Treasurer, GMF and GVIT

<PAGE>
                                   EXHIBIT  B:

               "DESIGNATED PERSONS" UNDER THIS CODE OF ETHICS [1]
                              (as  of June 5, 2003)

                          "GARTMORE DESIGNATED PERSON"

                                    Each of:

Eric  E.  Miller                    Secretary,  GMF  and  GVIT

     (Mr.  Miller currently also serves as a Senior Vice President and the Chief
Counsel  for  Gartmore  Global  Investments)

Michael  Krulikowski               Assistant  Secretary,  GMF  and  GVIT

     (Mr.  Krulikowski  currently  also serves as a Vice President and the Chief
Compliance  Officer  for  Gartmore  Global  Investments)

                       "AUDIT COMMITTEE DESIGNATED PERSON"

                       Each member of the Audit Committee
                    of the Board of Trustees of GMF and GVIT
                            shall be deemed to be an
                      "Audit Committee Designated Person."

[1]  The  Securities  and  Exchange Commission has indicated that any Designated
     Person  of the Company "should have sufficient status within the company to
     engender respect for the code and the authority to adequately deal with the
     persons  subject  to  the code regardless of their stature in the company."

<PAGE>
                                   EXHIBIT  C:

                              INITIAL CERTIFICATION

                            GARTMORE MUTUAL FUNDS AND
                        GARTMORE VARIABLE INSURANCE TRUST
                  CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS

To:     Eric  E.  Miller,  Secretary,  GMF  and  GVIT
        Michael  Krulikowski,  Assistant  Secretary,  GMF  and  GVIT

1.   I  hereby  acknowledge  receipt  of  the  Gartmore Mutual Fund and Gartmore
     Variable  Insurance Trust Code of Ethics for Senior Financial Officers (the
     "Code").

2.   I  have  read  and  understand  the Code, and I recognize that I am subject
     thereto  in  the  capacity  of  a  "Covered  Officer."

3.   I shall comply with the requirements of the Code, and shall disclose/report
     all  violations or potential violations of the Code as required thereunder.

4.   As  of  the  date  indicated  below,  I  am  not aware of any violations or
     potential  violations  of  the  Code.

Signature:                   _________________
Name:                        _________________
Title:                       _________________
Date  Report  Submitted:     _________________

<PAGE>
                                   EXHIBIT  D:

                              ANNUAL CERTIFICATION

                            GARTMORE MUTUAL FUNDS AND
                        GARTMORE VARIABLE INSURANCE TRUST
                  CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS

To:     Eric  E.  Miller,  Secretary,  GMF  and  GVIT
        Michael  Krulikowski,  Assistant  Secretary,  GMF  and  GVIT

1.   I  have  read and understand the Gartmore Mutual Fund and Gartmore Variable
     Insurance  Trust Code of Ethics for Senior Financial Officers (the "Code"),
     and  I  recognize  that  I am subject thereto in the capacity of a "Covered
     Officer".

2.   I  hereby  certify  that,  during  the year ended December 31, 200_, I have
     complied with the requirements of the Code and have reported all violations
     or  potential  violations  required  to  be  reported pursuant to the Code.

Signature:                   _________________
Name:                        _________________
Title:                       _________________
Date  Report  Submitted:     _________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}]]