Document:

CREDIT AGREEMENT

                  THIS CREDIT  AGREEMENT (the  "Agreement") is made and dated as
of the 12th day of  April,  2000,  by and  among the  lenders  signatory  hereto
(collectively,   the  "Lenders");   ROYAL  BANK  OF  CANADA  ("RBC"),   as  lead
administrative agent for the Lenders (in such capacity, the "Lead Administrative
Agent");  ABN AMRO  BANK,  N.V.  ("ABN"),  as  co-administrative  agent (in such
capacity,  the  "Co-Administrative  Agent");  CREDIT  LYONNAIS  NEW YORK  BRANCH
("CL"),  as  syndication  agent (in such  capacity,  the  "Syndication  Agent");
COMMERZBANK  AG,  NEW  YORK  BRANCH  ("CA"),  as  documentation  agent  (in such
capacity,  the "Documentation  Agent"); RBC, as arranger (in such capacity,  the
"Arranger"),   ABN,  CL  and  CA,  as  co-arrangers   (in  such  capacity,   the
"Co-Arrangers");  the Lenders acting as co-agents, as indicated on the signature
pages hereof (in such capacity,  the  "Co-Agents");  and COUNTRYWIDE HOME LOANS,
INC., a New York corporation (the "Company").

                                    RECITALS

                  A. Pursuant to that certain  Revolving  Credit Agreement dated
as of April 15, 1998, by and among the Company,  the Lenders party thereto,  the
Lead  Administrative  Agent and the  Co-Administrative  Agent,  the  Syndication
Agent, the Documentation Agent, the Arranger, the Co-Arrangers and the Co-Agents
named therein (as amended to date, the "Existing Credit Agreement"), the Lenders
party  thereto  agreed to extend  credit to the  Company  in the form of a short
term,  unsecured  revolving  credit  facility  on the terms and  subject  to the
conditions set forth therein.

                  B.  The  Company  has  requested  that  the  Existing   Credit
Agreement be further  amended to, among other  things,  provide a term  facility
pursuant to which loans outstanding under the Existing Credit Agreement may (or,
following the Effective Date (as that term and capitalized terms used herein are
defined in, or the  location of such  definitions  referenced  in, the  Glossary
attached hereto as Annex I), hereunder) under certain circumstances be converted
into a term loan.

                  C. The Lenders and the other parties  hereto have agreed to so
amend the Existing  Credit  Agreement  and, for  convenience  of  reference,  to
restate the Existing Credit Agreement in its entirety as set forth herein and to
replace and  supersede  the  Existing  Credit  Agreement  and the other  "Credit
Documents" (as that term is used and defined in the Existing  Credit  Agreement)
pursuant  to this  Agreement  and the  documents,  instruments,  and  agreements
referred to herein.

                  NOW, THEREFORE, in consideration of the above Recitals and for
other good and  valuable  consideration,  the receipt and  adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:

                                    AGREEMENT

                  1.  Credit Facilities.
                      -----------------

 1(a) Primary Facility.  On the terms and subject to the conditions set forth
herein, each of the Lenders
                                ----------------
severally  agrees  that it  shall,  from time to time to but not  including  the
Revolving Facility Maturity Date (as that term and capitalized terms used herein
are defined in, or the location of the definitions of such terms  referenced in,
the  Glossary  attached  hereto  as Annex I),  advance  its  respective  Primary
Percentage  Share of loans  (the  "Primary  Loans" or a  "Primary  Loan") to the
Company in amounts not to exceed in the  aggregate at any date  outstanding  the
Aggregate  Credit  Limit  minus  the  aggregate  dollar  amount  of Swing  Loans
outstanding  on such date  (including  Swing Loans to be funded on such date but
excluding Swing Loans to be repaid on such date).

                           1(b) Swing Loan Facility.  On the terms and subject
to the conditions set forth herein, each of the Swing

                                -------------------
Line  Lenders  severally  agrees  that it  shall,  from  time to time to but not
including the Revolving  Facility  Maturity Date,  advance its respective  Swing
Line  Percentage  Share of loans (the  "Swing  Loans" or a "Swing  Loan") to the
Company in amounts  such that the  aggregate  amount of Swing Loans  outstanding
does not exceed at any date the lesser of:

                                    (1)     The Aggregate Swing Line Commitment;
                                                and

                                    (2)     The Aggregate Credit Limit minus the
aggregate dollar amount of Primary Loans outstanding on such  date  (including
Primary  Loans to be funded on such date and excluding Primary Loans to be
repaid on such date).

At the request of any Swing Line Lender,  made  through the Lead  Administrative
Agent  at any  time  and  from  time to  time,  including,  without  limitation,
following the occurrence of an Event of Default,  each Lender (including each of
the Swing Line Lenders)  absolutely and  unconditionally  agrees to refund Swing
Loans held by the Swing Line Lenders by advancing its Primary  Percentage  Share
thereof  to the Lead  Administrative  Agent for  disbursement  to the Swing Line
Lenders pro rata,  in accordance  with their  respective  Swing Line  Percentage
Shares.  Such fundings shall be made no later than 12:00 noon (Los Angeles time)
on the date request  therefor is made if such request is made on or before 11:00
a.m. (Los Angeles time) on such date,  and no later than 12:00 noon (Los Angeles
time) on the next  succeeding  Business  Day if request  therefor  is made after
11:00 a.m. (Los Angeles  time).  Advances made by the Lenders  hereunder for the
purpose  of  refunding  Swing  Loans  shall,  for  all  purposes  of the  Credit
Documents:  (i) constitute  Primary Loans to the extent of such Lender's Primary
Percentage Share thereof,  and (ii) be advanced as Alternate Base Rate Loans. In
the event,  for  whatever  reason,  the  Lenders  are not able to advance  their
respective Primary Percentage Shares for the purpose of refunding Swing Loans as
required  hereunder,  then each of the Lenders (including each of the Swing Line
Lenders)  absolutely  and  unconditionally  agrees to purchase and take from the
Swing Line Lenders on demand an undivided  participation interest in Swing Loans
outstanding in an amount equal to their respective  Primary Percentage Shares of
such Swing Loans.  Notwithstanding  anything contained herein, in no event shall
any Lender be required to advance its Primary Percentage Share of any Swing Loan
or to purchase any undivided participation interest in any Swing Loan: a. unless
such Swing Loan was initially made in accordance  with the  requirements of this
Agreement  (as such  requirements  may be amended or waived from time to time as
permitted hereunder) or b. if upon such advance or purchase the aggregate dollar
amount of Primary  Loans and Swing Loans held by such Lender  would  exceed such
Lender's Maximum Commitment.

                           1(c) Term Loan Facility.  In the event the Lead
Administrative Agent shall have notified the Company that
                                ------------------
the Majority Lenders shall have elected not to extend the then current Revolving
Facility  Maturity Date pursuant to Paragraph 5(m) below,  then the Company may,
no later than ten (10) days prior to the then current  Revolving  Maturity Date,
notify the Lenders in writing,  through the Lead  Administrative  Agent, that it
desires to convert the  principal  balance of Primary Loans  outstanding  on the
then current Revolving Facility Maturity Date to a one year, non-amortizing term
loan  (the  "Term  Loan").  Subject  to the  conditions  precedent  set forth in
Paragraph 7(c) below, on the then current Revolving  Facility Maturity Date: (1)
all Swing Loans  outstanding shall be refunded by the Lenders in accordance with
their respective Primary  Percentage  Shares, and (2) thereafter,  the principal
balance  of  Primary  Loans  outstanding  on such  date  shall be  automatically
converted  into the Term  Loan,  which  Term  Loan  shall be held by each of the
Lenders in accordance  with their Primary  Percentage  Shares.  The date of such
conversion shall be referred to herein as the "Conversion  Date".  Following the
Conversion Date no further  borrowings  shall be permitted under this Agreement,
it being agreed and  understood  by the Company that any right of the Company to
draw down undrawn  portions of the Aggregate  Credit Limit shall have terminated
on the Conversion Date.

         2.    Requests for Loans; Funding.
               ---------------------------

                           2(a) Requests for Loans.  Subject to the advance
notice required with respect to Eurodollar Loans pursuant
                                ------------------
to Paragraph 4(a) below,  on any Business Day that the Company desires to borrow
Primary Loans or Swing Loans,  it shall  deliver a Loan  Request,  Interest Rate
Election and Payoff Notice to the Lead  Administrative  Agent no later than: (1)
in the case of Primary  Loans,  10:00 a.m. (Los Angeles time) on such date,  and
(2) in the case of Swing  Loans,  11:00 a.m.  (Los  Angeles  time) on such date;
provided,  however,  that in the event the Lead Administrative  Agent receives a
request for a Swing Loan after 11:00 a.m.  (Los Angeles time) on a Business Day,
the Lead  Administrative  Agent shall work with the Swing Line Lenders on a best
efforts basis with a view toward funding the requested Swing Loans no later than
1:00 p.m. (Los Angeles time) on such date, the Company  expressly  acknowledging
and agreeing  that there is no assurance  that any such funding can be provided.
Only one Loan  Request,  Interest  Rate  Election and Payoff  Notice  requesting
Primary  Loans and only one Loan  Request,  Interest  Rate  Election  and Payoff
Notice  requesting  Swing Loans shall be  submitted  to the Lead  Administrative
Agent on any date.  Any request  for Primary  Loans shall be in such amount that
the  aggregate  dollar amount of Primary Loans which the Lenders are required to
actually newly fund with respect thereto is not less than $5,000,000.00, and any
request for Swing Loans  shall be in an amount not less than  $1,000,000.00.  On
each  Business Day on which a Loan  Request,  Interest  Rate Election and Payoff
Notice is delivered to the Lead  Administrative  Agent, the Lead  Administrative
Agent shall notify the applicable Lenders (which  notification may be telephonic
and, if telephonic,  shall be promptly confirmed in writing) no later than 11:00
a.m. (Los Angeles time) or in the case of a Swing Loan,  11:30 a.m. (Los Angeles
time)) of the aggregate amount of Primary Loans and/or Swing Loans which will be
funded on such date.

                           2(b) Funding of Primary Loans and Swing Loans.
Primary Loans and Swing Loans requested pursuant to any
                                ----------------------------------------
Loan  Request,  Interest  Rate  Election  and Payoff  Notice  shall be funded as
follows:

(1) Each  Lender  shall  make its  Primary  Percentage  Share of  Primary  Loans
available  by wiring  the  amount  thereof  in  immediately  available  same day
(including  Federal) funds, to the Funding Account no later than 12:30 p.m. (Los
Angeles time) on the proposed funding date; and

(2) Each Swing Line Lender  shall make its Swing Line  Percentage  Share of each
Swing Loan available by wiring the amount thereof in immediately  available same
day  (including  Federal)  funds to the Funding  Account no later than 2:00 p.m.
(Los Angeles time) on the proposed funding date.

2(c) Funding  Method.  Each Lender shall be entitled to fund and maintain all or
any portion of its Primary --------------
Percentage Share of Primary Loans and refund and maintain its Primary Percentage
Share of Swing  Loans,  each Swing Lender shall be entitled to fund and maintain
all or any  portion  of its Swing  Line  Percentage  Share of Swing  Loans  and,
following  the  Conversion  Date,  each  Lender  shall be  entitled  to fund and
maintain  its  Primary  Percentage  Share of the Term Loan in any  manner it may
determine in its sole discretion,  including,  without limitation,  in the Grand
Cayman  inter-bank  market,  the eurocurrency  inter-bank  market and within the
United  States,  but  all  calculations  and  transactions  hereunder  shall  be
conducted  as though all Lenders  actually  fund and maintain  Eurodollar  Loans
funded by them  hereunder  through the purchase of offshore  dollar  deposits in
such amounts with maturities corresponding to the applicable Interest Periods.

                  3.  Payment of Principal; Prepayments.
                      ---------------------------------

3(a) Required  Principal  Payments.  Subject to the provisions of Paragraph 3(b)
below, the Company shall pay
                                ---------------------------
to the Lead  Administrative  Agent for the  account  of the  Lenders  the unpaid
principal  balance of each Primary  Loan which is a Eurodollar  Loan on the last
day of the  applicable  Eurodollar  Interest  Period  and the  unpaid  principal
balance of each Primary Loan which is an Alternate Base Rate Loan and each Swing
Loan on the Revolving Facility Maturity Date. Following the Conversion Date, the
Company  shall  pay to the Lead  Administrative  Agent  for the  account  of the
Lenders the unpaid  principal  balance of portions of the Term Loan on the Final
Maturity Date.

                           3(b) Prepayments.  The Company:
                                -----------

(1) May  voluntarily  prepay  Loans in whole or in part at any  time;  provided,
however, that any prepayment shall be accompanied by accrued but unpaid interest
on the Loan or portion thereof being prepaid.

(2) Shall pay in connection with any prepayment  hereunder any amount payable on
account  thereof  pursuant  to  Paragraph  4(e)  below  concurrently  with  such
prepayment.

                  4.  Calculation and Payment of Interest; Related Provisions.
                      -------------------------------------------------------

                           4(a) Interest on Primary Loans and the Term Loan.
                                -------------------------------------------

(1) The  Company  shall pay  interest to each  Lender on such  Lender's  Primary
Percentage  Share of Primary Loans  outstanding  and,  following the  Conversion
Date, on such Lender's Primary Percentage Share of the Term Loan, calculated, at
the election of the Company  made from time to time as permitted  herein and set
forth on a duly executed Loan Request, Interest Rate Election and Payoff Notice,
at either:  (i) the Alternate  Base Rate and/or (ii) the  Applicable  Eurodollar
Rate.  Primary  Loans and  portions  of the Term Loan  bearing  interest  at the
Alternate  Base Rate shall be referred to herein as "Alternate  Base Rate Loans"
and  Primary  Loans  and  portions  of the Term  Loan  bearing  interest  at the
Applicable Eurodollar Rate shall be referred to herein as "Eurodollar Loans".

(2) The  Company  may elect from time to time to have  Primary  Loans  funded as
Alternate Base Rate Loans by giving the Lead  Administrative  Agent  irrevocable
notice of such election as set forth on a duly  executed Loan Request,  Interest
Rate Election and Payoff  Notice  delivered on the proposed  funding  date.  The
Company may elect from time to time to have Primary  Loans funded as  Eurodollar
Loans by giving the Lead Administrative Agent at least three Eurodollar Business
Days' prior  irrevocable  notice of such election by delivery of a duly executed
Loan Request, Interest Rate Election and Payoff Notice.

(3) The  Company  may  elect  from  time to time to  convert  Eurodollar  Loans,
including,  following  the  Conversion  Date,  portions  of the Term Loan  being
maintained as Eurodollar  Loans, to Alternate Base Rate Loans by giving the Lead
Administrative  Agent irrevocable notice of such election as set forth on a duly
executed Loan Request, Interest Rate Election and Payoff Notice delivered on the
proposed conversion date; provided,  however,  that any conversion of Eurodollar
Loans to Alternate  Base Rate may only be made on the last day of the applicable
Eurodollar  Interest Period.  The Company may elect from time to time to convert
Alternate Base Rate Loans, including, following the Conversion Date, portions of
the Term Loan being maintained as Alternate Base Rate Loans, to Eurodollar Loans
by giving the Lead Administrative Agent at least three Eurodollar Business Days'
prior  irrevocable  notice of such  election by delivery of a duly executed Loan
Request, Interest Rate Election and Payoff Notice.

(4) Upon receipt of any Loan Request,  Interest Rate Election and Payoff Notice,
the Lead Administrative Agent shall promptly notify each of the Lenders thereof.
No  Primary  Loan  shall be  funded  as a  Eurodollar  Loan  and no  outstanding
Alternate Base Rate Loan shall be converted  into a Eurodollar  Loan if an Event
of Default or  Potential  Default  has  occurred  and is  continuing  on the day
occurring  two  Business  Days prior to the date of the  funding  or  conversion
requested by the Company or on the proposed funding or conversion date.

(5) Any  Eurodollar  Loan may be  continued as such upon the  expiration  of the
Interest  Period  applicable  thereto  by giving the Lead  Administrative  Agent
(which shall notify the Lenders) at least three Eurodollar  Business Days' prior
irrevocable  notice  of such  election  as set  forth  on a duly  executed  Loan
Request,  Interest Rate Election and Payoff Notice;  provided,  however, that no
Eurodollar  Loan may be continued as such when any Event of Default or Potential
Default has occurred and is continuing,  but shall be automatically converted to
an Alternate Base Rate Loan on the last day of the then current  Interest Period
applicable thereto.  The Lead Administrative  Agent shall notify the Lenders and
the Company  promptly that such automatic  conversion will occur. If the Company
shall fail to give notice as provided above, the Company shall be deemed to have
elected to convert the affected  Eurodollar  Loan to an Alternate Base Rate Loan
on the last day of the Interest Period applicable thereto.

(6) The Lead Administrative Agent shall give prompt written notice (or notice by
telephone  immediately  confirmed  in writing) to the Company and the Lenders of
the applicable interest rate determined by the Lead Administrative Agent.

(7) Under no  circumstances  shall the  Lenders be  required to make or maintain
Eurodollar  Loans under this  Agreement  with more than an  aggregate  number of
eight (8) different Eurodollar Interest Periods.

4(b) Interest on Swing Loans.  The Company shall pay interest to each Swing Line
Lender on such Swing Line
                                -----------------------
Lender's Swing Line Percentage  Share of Swing Loans  outstanding  from the date
advanced to but not including the date of payment  thereof at the Applicable Fed
Funds Rate.

4(c) Payment of Interest.  The Company shall pay interest,  in each case as more
specifically provided in
                                -------------------
Paragraph 5(d) below:

(1) On Alternate Base Rate Loans and Swing Loans,  monthly,  in arrears,  on the
fifth day of each month for the period from and  including  the first day of the
immediately preceding month to and including the last day of such month; and

(2) On Eurodollar  Loans on the last day of the applicable  Eurodollar  Interest
Period relating thereto.

4(d)  Inability to  Determine  Rate.  In the event that the Lead  Administrative
Agent shall have determined
                                ---------------------------
(which  determination  shall be conclusive and binding upon the Company) that by
reason of circumstances  affecting the interbank  eurodollar market adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for any given
Eurodollar Interest Period, the Lead  Administrative  Agent shall forthwith give
notice  (which  may be  telephonic  and  promptly  confirmed  in  writing  or by
facsimile  transmission) of such determination to each Lender and to the Company
at least  two  Eurodollar  Business  Days  prior  to,  as the  case may be,  the
conversion  date of an  Alternate  Base  Rate  Loan to a  Eurodollar  Loan,  the
continuation of a Eurodollar  Loan as such or the proposed  funding of a Primary
Loan as a Eurodollar  Loan. If such notice is given: (1) any Alternate Base Rate
Loan that was to have been  converted to a Eurodollar  Loan and any Primary Loan
that  was to have  been  funded  as a  Eurodollar  Loan  shall,  subject  to the
provisions  hereof,  be continued or funded as an Alternate  Base Rate Loan, and
(2) any outstanding  Eurodollar Loan shall be converted,  on the last day of the
then current  Interest  Period with respect  thereto,  to an Alternate Base Rate
Loan. Until such notice has been withdrawn by the Lead Administrative Agent, the
Company  shall not have the right to  convert an  Alternate  Base Rate Loan to a
Eurodollar Loan, to continue a Eurodollar Loan as such or to fund a Primary Loan
as a Eurodollar Loan.

4(e)  Funding  Indemnification.  In  addition to all other  payment  obligations
hereunder, in the event:
                                -----------------------
(1) any  Eurodollar  Loan is  prepaid  prior to the  last day of the  applicable
Eurodollar Interest Period,  whether following  acceleration upon the occurrence
of an Event of Default or otherwise,  including, without limitation, pursuant to
Paragraphs 14(a), 14(b) and 14(c) below, or (2) the Company shall fail to make a
conversion  into or a borrowing as a Eurodollar Loan after the Company has given
notice thereof as provided in Paragraph  4(a)(2) above, or (3) the Company shall
fail to continue any Eurodollar Loan which it has elected to have continued as a
Eurodollar  Loan, or (4) the Company shall fail to make any payment of principal
or interest on any Loan when due, then the Company shall immediately pay to each
of the affected Lenders,  through the Lead  Administrative  Agent, an additional
amount  compensating such Lender for all losses,  costs and expenses incurred by
such Lender in connection therewith,  including, without limitation, such as may
arise out of the  re-employment  of funds  obtained  by such Lender or from fees
payable to terminate  the  deposits  from which such funds were  obtained,  such
losses, costs and expenses and the method of calculation thereof being set forth
in  reasonable  detail in a statement  delivered  to the Company by such Lender,
such  statement  to be  conclusive  in the absence of manifest  error.  Under no
circumstances  shall  any  Lender  have any  obligation  to remit  monies to the
Company upon prepayment of any Eurodollar Loan, even under  circumstances  which
do not result in the  necessity  for the  payment  by the  Company of any amount
hereunder. The provisions hereof shall survive termination of this Agreement and
payment of the outstanding Loans and all other Obligations.

4(f) Illegality; Impracticality. Notwithstanding any other provisions herein, if
any law, regulation,
                                --------------------------
treaty  or  directive  or  any  change  therein  or  in  the  interpretation  or
application  thereof  shall or may in the opinion of any Lender make it unlawful
or impractical  for such Lender to make or maintain  Eurodollar  Loans:  (1) the
commitment of such Lender hereunder to make, continue or convert into Eurodollar
Loans shall  forthwith be cancelled  and (2) such  Lender's  Primary  Percentage
Share of Loans  outstanding  as  Eurodollar  Loans,  if any,  shall be converted
automatically  to  Alternate  Base  Rate  Loans at the end of  their  respective
Eurodollar Interest Periods or within such earlier period as required by law. In
the  event  of a  conversion  of any  Eurodollar  Loan  prior  to the end of its
applicable  Eurodollar Interest Period the Company hereby agrees promptly to pay
each Lender, upon its written demand, the amounts required pursuant to Paragraph
4(e) above, it being agreed and understood that such conversion shall constitute
a prepayment for all purposes  hereof.  The provisions  hereof shall survive the
termination of this Agreement and payment of the outstanding Loans and all other
Obligations.

4(g) Requirements of Law; Increased Costs. In the event that a change subsequent
to the date hereof in any ------------------------------------
applicable  law,  regulation,  treaty or  directive  or in the  governmental  or
judicial interpretation or application thereof, or compliance by any Lender with
any  request  or  directive  (whether  or not  having  the force of law)  issued
subsequent  to the  date  hereof  by any  central  bank  or  other  governmental
authority, agency or instrumentality:

(1) Does or shall  subject  any  Lender to any tax of any kind  whatsoever  with
respect to this Agreement or any Loans purchased or made  hereunder,  or changes
the basis of taxation of payments to such Lender of principal, fees, interest or
any other  amount  payable  hereunder  (except for changes in the rate of tax on
the overall net income of such Lender);

(2) Does or  shall  impose,  modify  or hold  applicable  any  reserve,  special
deposit,  compulsory  loan or similar  requirement  against  assets  held by, or
deposits or other liabilities in or for the account of, advances or loans by, or
other credit  extended by, or any other  acquisition  of funds by, any office of
such  Lender  which  are not  otherwise  included  in the  determination  of the
Alternate Base Rate or the Applicable Eurodollar Rate; or

(3) Does or shall impose on such Lender any other  condition;  and the result of
any of the  foregoing  is to  increase  the cost to such  Lender of  purchasing,
making,  agreeing  to make,  renewing or  maintaining  or issuing any Loan or to
reduce any amount  receivable in respect  thereof  then,  in any such case,  the
Company  shall  promptly  pay to such  Lender,  upon  its  written  demand,  any
additional  amounts necessary to compensate such Lender for such additional cost
or reduced amounts  receivable as determined by such Lender with respect to this
Agreement or such credit  extensions.  If a Lender becomes entitled to claim any
additional amounts pursuant to this Paragraph 4(g), it shall promptly notify the
Company of the event by reason of which it has become so entitled. A certificate
as to  any  additional  amounts  payable  pursuant  to  the  foregoing  sentence
submitted  by a Lender to the  Company  shall be  conclusive  in the  absence of
manifest  error.  The obligations of the Company under this Paragraph 4(g) shall
survive  the  termination  of  this  Agreement  and  the  payment  of all  other
Obligations.

                           4(h) Taxes.
                                -----

(1) All payments  made by the  Company,  the Lead  Administrative  Agent and the
Lenders  on  account  of the  Obligations  shall be made free and clear of,  and
without  deduction  or  withholding  for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or  withholdings,  now or  hereafter  imposed,  levied,  collected,  withheld or
assessed by any Governmental  Authority,  excluding, in the case of the Lenders,
net income  taxes and  franchise  taxes  (imposed in lieu of net income  taxes),
imposed on the  Lenders,  as the case may be, as a result of a present or former
connection  between  the  jurisdiction  of the  government  or taxing  authority
imposing such tax, or any political  subdivision or taxing authority  thereof or
therein,  and such Lender  (other  than a  connection  arising  solely from such
Lender having  executed,  delivered or performed its  obligations  or received a
payment under, or enforced,  the Credit Documents) (all such non-excluded taxes,
levies,  imposts,  duties,  charges,  fees,  deductions and  withholdings  being
hereinafter  called "Taxes").  If any Taxes are required to be withheld from any
amounts payable to any Lender under the Credit Documents, the amounts so payable
by the Company to the Lead  Administrative  Agent for the benefit of such Lender
shall be  increased  to the  extent  necessary  to yield to such  Lender  (after
payment of all Taxes) interest or any such other amounts  payable  thereunder at
the rates or in the amounts  specified  in the Credit  Documents.  Whenever  any
Taxes are  payable by the  Company or on behalf of the  Company,  as promptly as
possible thereafter the Company shall send to the Lead Administrative  Agent for
its own  account  or for the  account  of such  Lender,  as the  case  may be, a
certified copy of an original  official  receipt received by the Company showing
payment  thereof.  If  the  Company  fails  to pay  any  Taxes  when  due to the
appropriate taxing authority or fails to remit to the Lead Administrative  Agent
the required receipts or other required documentary evidence,  the Company shall
indemnify  the Lead  Administrative  Agent and such  Lender for any  incremental
taxes,  interest or penalties that may become payable by the Lead Administrative
Agent and the Lenders as a result of any such  failure.  The  agreements in this
subsection  shall survive the  termination  of this Agreement and the payment of
all other  Obligations.  Each Lender by executing this Agreement  represents and
warrants to the Company  and the Lead  Administrative  Agent that at the date of
this  Agreement  no Taxes are  imposed  upon such Lender  which would  result in
increased  liability  of the Company to such Lender  pursuant to this  Paragraph
4(h)(1).
(2) Each Lender that is not incorporated  under the laws of the United States of
America or a state thereof (each a "Non-U.S. Lender") agrees that it will, on or
before  the  Effective  Date  or the  effective  date of any  Additional  Lender
Agreement  pursuant  to which it becomes a Lender and on the request of the Lead
Administrative  Agent or the Company, (i) deliver to each of the Company and the
Lead  Administrative  Agent two duly completed  copies of United States Internal
Revenue  Service  Form W-8ECI or W-8BEN or any  successor  form,  certifying  in
either  case that  such  Lender is  entitled  to  receive  payments  under  this
Agreement  without  deduction or withholding of any United States federal income
taxes, and (ii) deliver to each of the Company and the Lead Administrative Agent
a United States  Internal  Revenue  Service Form W-8 or W-9, as the case may be,
and certify  that it is  entitled to an  exemption  from  United  States  backup
withholding tax. Each Non-U.S.  Lender further  undertakes to deliver to each of
the Company and the Lead Administrative  Agent (x) renewals or additional copies
of such  form (or any  successor  form) on or  before  the date  that  such form
expires or becomes obsolete, and (y) after the occurrence of any event requiring
a change in the most recent forms so delivered by it, such  additional  forms or
amendments  thereto as may be  reasonably  requested  by the Company or the Lead
Administrative  Agent.  All  forms  or  amendments  described  in the  preceding
sentence  shall certify that such Lender is entitled to receive  payments  under
this  Agreement  without  deduction or  withholding of any United States federal
income  taxes,  unless an event  (including  without  limitation  any  change in
treaty, law or regulation) has occurred after the relevant date and prior to the
date on which any such delivery  would  otherwise be required  which renders all
such forms  inapplicable or which would prevent such Lender from duly completing
and  delivering  any such form or  amendment  with respect to it and such Lender
advises the Company and the Lead Administrative  Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax.

(3) For any  period  during  which a Non-U.S.  Lender has failed to provide  the
Company with an appropriate form pursuant to subparagraph (2) above (unless such
failure is due to a change after the relevant date in treaty, law or regulation,
or  any  change  in  the   interpretation  or  administration   thereof  by  any
governmental  authority,  occurring  subsequent  to the  date  on  which  a form
originally  was  required to be  provided),  such  Non-U.S.  Lender shall not be
entitled to  indemnification  under this  Paragraph  4(h) with respect to Taxes;
provided  that,  should a Non-U.S.  Lender  which is  otherwise  exempt  from or
subject to a reduced rate of withholding  tax become subject to Taxes because of
its failure to deliver a form required under subparagraph (2) above, the Company
shall take (at the expense of the Non-U.S.  Lender) such steps as such  Non-U.S.
Lender shall reasonably  request to assist such Non-U.S.  Lender to recover such
Taxes.

(4) Any Lender that is entitled to an exemption from or reduction of withholding
tax with respect to payments  under this  Agreement or any Note  pursuant to the
law of any  relevant  jurisdiction  or any treaty  shall  deliver to the Company
(with a copy to the Lead Administrative  Agent), at the time or times prescribed
by applicable law, such properly completed and executed documentation prescribed
by applicable law as will permit such payments to be made without withholding or
at a reduced rate.

(5) If the U.S. Internal Revenue Service or any other governmental  authority of
the United  States or any other  country or any  political  subdivision  thereof
asserts a claim that the Lead Administrative Agent did not properly withhold tax
from amounts paid to or for the account of any Lender  (because the  appropriate
form was not  delivered or properly  completed,  because  such Lender  failed to
notify the Lead Administrative Agent of a change in circumstances which rendered
its exemption  from  withholding  ineffective,  or for any other  reason),  such
Lender shall indemnify the Lead Administrative Agent fully for all amounts paid,
directly or indirectly,  by the Lead  Administrative  Agent as tax,  withholding
therefor,  or otherwise,  including penalties and interest,  and including taxes
imposed by any jurisdiction on amounts payable to the Lead Administrative  Agent
under this  subparagraph,  together with all costs and expenses  related thereto
(including   attorneys   fees  and  time  charges  of  attorneys  for  the  Lead
Administrative   Agent,   which   attorneys   may  be   employees  of  the  Lead
Administrative  Agent). The obligations of the Lenders under this Paragraph 4(h)
shall  survive the  termination  of this  Agreement and the payment of all other
Obligations.

4(i) Buy-Down Provisions.  Notwithstanding anything contained in this Agreement,
the  Company  and any  -------------------  individual  Lender  (as used in this
Paragraph 4(i), a "Buy-Down Lender") may notify the Lead Administrative Agent in
writing that the Company and such  Buy-Down  Lender have entered into a Buy-Down
Agreement  with  respect  to all or a  portion  of the  Loans  from time to time
outstanding held by such Buy-Down Lender (the Loans held by such Buy-Down Lender
which are subject to a Buy-Down  Agreement being referred to herein as "Buy-Down
Rate Loans"),  and that, pursuant to said Buy-Down Agreement,  the interest rate
otherwise  applicable to the Buy-Down Rate Loans during any interest calculation
period shall be reduced to the Buy-Down Rate and the interest  otherwise payable
by the Company to such Buy-Down Lender during such interest  calculation  period
shall be reduced  accordingly.  Interest  payable to such  Buy-Down  Lender with
respect to Buy-Down  Rate Loans shall be billed as  provided in  Paragraph  5(d)
below.  In no event shall the Lead  Administrative  Agent have any obligation or
duty to verify the amount of any  Buy-Down  Deposits  supporting  the pricing of
Buy-Down  Rate Loans held by any  Buy-Down  Lender or the amount of any interest
billing with  respect  thereto.  Any  deficiency  fees payable to such  Buy-Down
Lender by the Company under the applicable Buy-Down Agreement shall be billed by
such Buy-Down Lender to the Company directly.  Any Buy-Down Lender may elect not
to make  demand  for the  payment  of  deficiency  fees  accruing  in respect of
Buy-Down  Deposits from time to time and it is expressly  agreed and  understood
that:  (1) any such  deficiency fee shall not, by reason of such failure of such
Buy-Down  Lender or  otherwise,  be deemed to have been waived by such  Buy-Down
Lender  (except  as such  waiver is  expressly  acknowledged  in writing by such
Buy-Down  Lender from time to time),  and (2) all  deficiency  fees  accrued and
unpaid hereunder and not so expressly waived, whether or not previously declared
due and  owing by any  such  Buy-Down  Lender,  shall  automatically  be due and
payable in full upon the  Revolving  Facility  Maturity  Date or,  following the
Conversion Date, the Final Maturity Date.

4(j)  Obligation  of Lenders to Mitigate;  Replacement  of Lenders.  Each Lender
agrees that: ---------------------------------------------------------
(1) As promptly as practicable after the officer of such Lender  responsible for
administering  the Loans of such Lender  becomes aware of any event or condition
that would entitle such Lender to receive payments under Paragraph 4(g) above or
to cease making  Eurodollar Loans pursuant to Paragraph 4(f) above,  such Lender
will use reasonable  efforts (i) to make,  issue,  fund or maintain the affected
Loans of such Lender through  another lending office of such Lender or (ii) take
such other measures as such Lender may deem  reasonable,  if as a result thereof
the  additional  amounts  which would  otherwise  be required to be paid to such
Lender  pursuant  to  Paragraph  4(g)  above  would  be  materially  reduced  or
eliminated  or  the  conditions   rendering  such  Lender  incapable  of  making
Eurodollar  Loans under Paragraph 4(f) above no longer would be applicable,  and
if, as determined by such Lender in its sole  discretion,  the making,  issuing,
funding or  maintaining  of such Loans through such other  lending  office or in
accordance  with such other  measures,  as the case may be, would not  otherwise
materially adversely affect such Loans or the interests of such Lender.

(2) If the  Company  receives a notice  pursuant  to  Paragraph  4(g) above or a
notice  pursuant  to  Paragraph  4(f) above  stating  that a Lender is unable to
extend  Eurodollar  Loans (for reasons not generally  applicable to the Majority
Lenders),  so long as (i) no  Potential  Default or Event of Default  shall have
occurred and be  continuing,  (ii) the Company has  obtained a  commitment  from
another Lender or another  financial  institution  reasonably  acceptable to the
Lead  Administrative  Agent to  purchase  at par such  Lender's  Loans,  Maximum
Commitment  and accrued  interest and fees and to assume all  obligations of the
Lender to be replaced  under the Credit  Documents,  and (iii) such Lender to be
replaced is  unwilling to withdraw  the notice  delivered  to the Company,  upon
thirty   (30)  days'  prior   written   notice  to  such  Lender  and  the  Lead
Administrative  Agent and payment of any amounts due under Paragraph 4(g) above,
the Company may require,  at the Company's expense and subject to Paragraph 4(e)
above,  the Lender giving such notice to assign,  without  recourse,  all of its
Loans,  Maximum Commitment and accrued interest and fees to such other Lender or
financial  institution  pursuant  to  the  provisions  of  Paragraph  14  below.
Following  such  assignment,  the assigning  Lender shall retain the benefits of
Paragraphs  4(g) and 4(h) above and  Paragraph  9(g) below as the same relate to
the period prior to the effective date of such assignment.

                  5.  Miscellaneous Lending Provisions.
                      --------------------------------

5(a) Use of Proceeds. The proceeds of Loans shall be utilized by the Company for
general corporate
                                ---------------
purposes,  including,  without  limitation,  repayment  of  Indebtedness  of the
Company  to the  Parent  permitted  to be repaid by the  Company  to the  Parent
pursuant to the terms of the Credit Documents, and including CPNs.

5(b)  Assumption of  Funding/Purchase.  The Lead  Administrative  Agent may (but
shall not be obligated to)
                                ------------------------------
assume that each Lender has  advanced  its Primary  Percentage  Share of Primary
Loans and that each Swing Line  Lender has  advanced  its Swing Line  Percentage
Share of Swing  Loans  required  to be funded by such  Lender  hereunder  on the
funding date therefor and may, in reliance upon such assumption,  make available
to the  Company on such date a  corresponding  amount.  If and to the extent any
Lender  shall not have so made  such  amounts  available,  such  Lender  and the
Company  jointly and severally agree to repay to the Lead  Administrative  Agent
forthwith on demand such  corresponding  amount together with interest  thereon,
for each day from the date such amount is made  available  to the Company  until
the date such amount is repaid to the Lead Administrative Agent, at, in the case
of the Company,  the interest  rate  applicable  at the time to the subject Loan
and, in the case of the  Lenders,  the Federal  Funds  Effective  Rate.  If such
Lender shall repay to the Lead Administrative  Agent such corresponding  amount,
such amount so repaid shall constitute such Lender's Primary Percentage Share or
Swing Line Percentage  Share, as applicable,  of the subject Loan, as applicable
for all  purposes  of the  Credit  Documents  as of the date such Loan was made.
Nothing  contained  herein  shall  affect  the  liability  of any Lender for its
failure to make its Primary  Percentage Share of Primary Loans or its Swing Line
Percentage Share of Swing Loans available to the Company as required pursuant to
this Agreement and the other Credit Documents.

5(c)  Evidence of  Indebtedness.  The  obligation  of the Company to repay Loans
shall be evidenced by
                                ------------------------
notations  on the books and  records  of the Lead  Administrative  Agent and the
Lenders. Such accounts shall be conclusive absent manifest error. Any failure to
record the advance of any Loan,  the  interest  rate  applicable  thereto or any
other information regarding the Obligations, or any error in doing so, shall not
limit or otherwise  affect the  obligation of the Company with respect to any of
the  Obligations.  Upon the request of any Lender,  the Company  shall  promptly
execute a promissory note or promissory notes in favor of such Lender evidencing
the Obligations held by such Lender hereunder.

5(d) Interest and Fee Billing and Payment. The Lead Administrative Agent shall:
                                ------------------------------------

(1) On or before the first  Business Day of each month notify the Company (which
notification may be telephonic) of the estimated amount of interest payable with
respect to Alternate  Base Rate Loans and Swing Loans as of the fifth day of the
current month for the period from and including the first day of the immediately
preceding  month to and  including  the last day of such month,  with the actual
amount confirmed by notification by the Lead Administrative Agent to the Company
(which  notification  may be  telephonic  and  which,  if  telephonic,  shall be
promptly  confirmed in writing) given no later than 9:00 a.m. (Los Angeles time)
on the due date of payment thereof;

(2) On the last day of the Interest  Period for each  Eurodollar Loan notify the
Company (which notification may be telephonic and which, if telephonic, shall be
promptly confirmed in writing) of the amount of interest payable on such date on
account thereof;

(3) On or before  the first  Business  Day of the first  month of each  calendar
quarter notify the Company (which  notification may be telephonic) of the amount
of facility fees payable pursuant to Paragraph 5(i)(2) below on the fifth day of
such month for the period from and including the first day of the first month of
the immediately preceding calendar quarter to and including the last day of such
calendar  quarter,  with the actual amount confirmed by notification by the Lead
Administrative  Agent to the Company (which  notification  may be telephonic and
which,  if  telephonic,  shall be promptly  confirmed in writing) given no later
than 9:00 a.m. (Los Angeles time) on the due date of payment thereof; and

(4) From time to time upon the request of any  Lender,  deliver to the Company a
funding  indemnification  billing for amounts payable to such Lender pursuant to
Paragraph 4(e) above or a billing for amounts payable to such Lender pursuant to
Paragraphs 4(g), 4(h) and 4(i) above and Paragraph 5(l) below.
The Company  shall pay the full amount of interest and fees of which it has been
notified  pursuant to  subparagraphs  (1) and (3) above on the fifth day of each
month,  shall pay the full  amount  of  interest  of which it has been  notified
pursuant to  subparagraph  (2) above on the date such  notification is given and
shall  pay  the  full  amount  of  each  billing  delivered  to it  pursuant  to
subparagraph  (4) above within five Business Days  thereafter.  Interest payable
with respect to Buy-Down  Loans prior to the  occurrence  of an Event of Default
and  acceleration of the Obligations  shall be billed to the Company directly by
each Buy-Down Lender in accordance with the timeframes set forth in subparagraph
(1) above, and the Company shall pay the full amount of interest due on Buy-Down
Loans directly to such Buy-Down Lender on the fifth day of each month. Following
the  occurrence  of an Event of Default  and  acceleration  of the  Obligations,
interest  payable on all Loans shall be billed  through the Lead  Administrative
Agent.

5(e) Nature and Place of Payments. Except as otherwise expressly provided in the
Credit Documents, all
                                ----------------------------
payments  made  on  account  of the  Obligations  shall  be  made  to  the  Lead
Administrative  Agent at the Contact Office for distribution to the Lenders,  as
the Company shall,  subject to Paragraph 5(h) below,  direct  pursuant to a Loan
Request,   Interest  Rate  Election  and  Payoff  Notice,   without  set-off  or
counterclaim  in lawful  money of the United  States of  America in  immediately
available same day funds, and must be received by the Lead Administrative  Agent
accompanied  by a Loan Request,  Interest Rate Election and Payoff Notice at the
Contact Office by 11:30 a.m. (Los Angeles time) on the day of payment,  it being
expressly  agreed and understood  that if a payment is received after 11:30 a.m.
(Los Angeles time) by the Lead  Administrative  Agent or the Lead Administrative
Agent does not receive a Loan Request,  Interest Rate Election and Payoff Notice
therefor,  such  payment  will be  considered  to  have  been  made on the  next
succeeding  Business  Day or such  later date as the Lead  Administrative  Agent
receives the Loan Request, Interest Rate Election and Payoff Notice therefor and
interest  thereon  shall be payable by the Company at the then  applicable  rate
during  such  extension.  If any  payment  required  to be made  by the  Company
hereunder  becomes due and payable on a day other than a Business  Day,  the due
date thereof shall be extended to the next succeeding  Business Day and interest
thereon shall be payable at the then applicable rate during such extension.  The
Lead Administrative  Agent is hereby authorized to debit accounts of the Company
maintained with the Lead Administrative Agent for amounts payable by the Company
under  this  Agreement  through  the  Lead  Administrative  Agent  and the  Lead
Administrative Agent will promptly notify the Company of any such debit.

5(f) Post-Default Interest.  Following the occurrence of an Event of Default and
until such Event of
                                ---------------------
Default is cured or waived as provided herein,  Obligations  shall bear interest
at a per annum rate equal to the Alternate Base Rate plus three percent (3%).

5(g) Computations. All computations of interest and fees payable hereunder shall
be based upon a year of
                                ------------
360 days for the actual number of days elapsed.  The  determination  by the Lead
Administrative  Agent of any interest rate  hereunder  shall be  conclusive  and
binding on the Company and the Lenders absent manifest error.

                           5(h) Disbursement of Payments Received.
                                ---------------------------------

(1) All  amounts  received  by the Lead  Administrative  Agent on account of the
Obligations shall be disbursed by the Lead  Administrative  Agent to the Lenders
by wire  transfer  prior to the cut-off  deadline of the  Federal  Reserve  Wire
System on the date of  receipt  if  received  by the Lead  Administrative  Agent
before 11:30 a.m. (Los Angeles time) and accompanied by a Loan Request, Interest
Rate  Election and Payoff  Notice (or  disbursed on the day of receipt  although
received later than 11:30 a.m. (Los Angeles time) with the agreement of the Lead
Administrative  Agent  and any  Lender)  or if  received  later  or if the  Lead
Administrative Agent has not received a Loan Request, Interest Rate Election and
Payoff Notice therefor,  on the next succeeding  Business Day or such later date
as the Lead  Administrative  Agent  receives  the Loan  Request,  Interest  Rate
Election and Payoff Notice relating  thereto,  without  interest  payable by the
Lead Administrative Agent.

(2) Prior to the  occurrence  of an Event of  Default  and  acceleration  of the
Obligations, amounts received by the Lead Administrative Agent on account of the
Obligations  shall be disbursed in accordance with the written  direction of the
Company,  subject only to the requirements that amounts disbursed to the Lenders
on account of Primary Loans or the Term Loan be disbursed pro rata in accordance
with  the  Lenders'  respective  Primary  Percentage  Shares  and  that  amounts
disbursed to the Swing Line  Lenders on account of Swing Loans be disbursed  pro
rata in accordance with the Swing Line Lenders' respective Swing Line Percentage
Shares.
(3) Following  the  occurrence  of an Event of Default and  acceleration  of the
Obligations, amounts received by the Lead Administrative Agent on account of the
Obligations shall be disbursed as follows: (i) first among the Lenders, pro rata
in accordance with their respective Primary Percentage Shares, on account of the
Obligations  until the Obligations have been paid in full, and (ii) then, to the
Lead Administrative  Agent with respect to the remaining  Obligations held by it
in its capacity as Lead  Administrative  Agent until such  Obligations have been
paid in full.

                        5(i) Fees.  The Company shall pay:
                                ----

     (1) To the Lead Administrative Agent, such fees as may from time to time be
     agreed upon in writing by the Lead  Administrative  Agent and the  Company;
     and

     (2) To  each  of the  Lenders,  a  facility  fee,  said  fee to be  payable
     quarterly  in arrears on the fifth day of the first month of each  calendar
     quarter for the period from and  including the first day of the first month
     of the immediately preceding calendar quarter to and including the last day
     of such calendar  quarter and on the Revolving  Facility  Maturity Date or,
     following the Conversion  Date, the Final Maturity Date, in an amount equal
     to  such  Lender's  daily  average  Primary  Percentage  Share  during  the
     applicable  calculation  period multiplied by: (i) (y) to and including the
     Revolving  Facility Maturity Date, the average daily Aggregate Credit Limit
     during such  calculation  period and (z) following the Conversion Date, the
     average daily outstanding principal balance of the Term Loan, multiplied by
     (ii) the product of a. 0.08% and b. a fraction  the  numerator  of which is
     the number of days in the applicable calculation period and the denominator
     of which is 360.

5(j) Wire Transfers of Funds.  Notwithstanding anything to the contrary
contained herein and in the other
                                -----------------------
Credit Documents,  funds which the Lead Administrative Agent and the Lenders are
transmitting  by wire  transfer  shall be deemed to have been sent and  received
upon release by the  transmitting  party of such funds into the Federal  Reserve
Wire System.

5(k) Reduction in Aggregate Credit Limit.  From the Effective Date to but not
including the Revolving
                                -----------------------------------
Facility  Maturity  Date,  upon not less than thirty  (30) days'  prior  written
notice to the Lead  Administrative  Agent,  which shall  promptly  transmit such
notice to each of the Lenders,  the Company may permanently reduce the Aggregate
Credit Limit in full or in  increments  of  $5,000,000.00  (with such  reduction
allocated  pro  rata  against  the  Lenders'  respective  Maximum  Commitments);
provided,  however,  that any such  reduction  shall be in a  minimum  amount of
$25,000,000.00; and, provided, further, that upon the effective date of any such
reduction,  the  aggregate  amount of Loans  outstanding  shall not  exceed  the
Aggregate Credit Limit as so reduced.

5(l) Capital Requirements.  The Company shall pay from time to time upon demand
such amounts as any Lender
                                --------------------
may determine to be necessary to compensate such Lender for all reasonable costs
which such Lender  determines are attributable to its making,  agreeing to make,
purchasing or maintaining its Primary  Percentage  Share of any Primary Loan or,
following the  Conversion  Date, of the Term Loan, or its Swing Line  Percentage
Share of any Swing Loan under this  Agreement,  including,  without  limitation,
reserve  requirements  attributed to the unused portion of the Aggregate  Credit
Limit,  in respect of any amount of capital  required to be  maintained  by such
Lender   pursuant  to  any  law  or  regulation  of  any   jurisdiction  or  any
interpretation,   directive  or  request  affecting  banks,   savings  and  loan
institutions  and/or  financial  institutions   generally   notwithstanding  the
creditworthiness  of any particular bank,  savings and loan institution or other
financial  institution  (whether or not having the force of law) of any court or
governmental  or  monetary  authority,  whether  in  effect  on the date of this
Agreement or thereafter. A certificate as to any amounts payable pursuant hereto
submitted  by a Lender to the  Company  shall be  conclusive  in the  absence of
manifest  error.  The obligations of the Company under this Paragraph 5(l) shall
survive the  termination  of this Agreement and the payment of all Loans and all
other Obligations.

                  5(m)   Extension of Revolving Facility Maturity Date.
                         ---------------------------------------------

                           (1) The Company  may,  by written  notice to the Lead
         Administrative Agent (such notice being an "Extension Notice") given no
         earlier  than ninety (90) days and no later than  forty-five  (45) days
         prior to the then current Revolving Facility Maturity Date, request the
         Lenders to consider an extension of the then current Revolving Facility
         Maturity  Date to a date 364 days  after  the  then  current  Revolving
         Facility  Maturity Date. The Lead  Administrative  Agent shall promptly
         transmit any Extension Notice to each Lender.  Each Lender shall notify
         the Lead Administrative Agent in writing whether it agrees to so extend
         the then current Revolving  Facility Maturity Date no later than twenty
         (20) days prior to the then current  Revolving  Facility Maturity Date,
         and any such notice given by a Lender to the Lead Administrative Agent,
         once given,  shall be irrevocable  as to such Lender.  Any Lender which
         does not expressly and timely notify the Lead Administrative Agent that
         it agrees to so extend the then  current  Revolving  Facility  Maturity
         Date  shall be  deemed  to have  rejected  the  Company's  request  for
         extension  thereof.   Lenders  agreeing  to  extend  the  then  current
         Revolving  Facility  Maturity  Date  are  hereinafter  referred  to  as
         "Continuing  Lenders,"  and Lenders  declining to consent to the extend
         thereof  (or  Lenders  deemed  to have  so  declined)  are  hereinafter
         referred to as "Non-Extending  Lenders".  If the Majority Lenders elect
         to so extend the then current  Revolving  Facility  Maturity  Date, the
         Lead Administrative  Agent shall notify the Company of such election no
         later  than  fifteen  (15)  days  prior to the then  current  Revolving
         Facility  Maturity  Date,  and effective on the then current  Revolving
         Facility Maturity Date and subject to the conditions  precedent to such
         extension set forth in Paragraph  7(c) below,  the  Revolving  Facility
         Maturity  Date  shall  be  automatically  deemed  so  extended  and the
         Aggregate  Credit  Limit  shall  be  automatically  deemed  to  be  the
         aggregate Maximum Commitments of the Continuing Lenders (including,  if
         applicable,  any new Lenders who become Continuing  Lenders pursuant to
         subparagraph  (4) below).  Upon the delivery of an Extension Notice the
         Company shall be deemed to have  represented  and warranted that on and
         as of the date of such Extension  Notice no Potential  Default or Event
         of Default has occurred and is continuing. It is expressly acknowledged
         and agreed by the Company that no Lender shall have any  obligation  to
         extend any Revolving  Facility Maturity Date, or, having agreed to such
         an  extension  on any one or more  occasions,  to agree  to any  future
         extension  and that any such  decision by a Lender is in such  Lender's
         sole and absolute discretion.

                           (2) If a Revolving  Facility Maturity Date shall have
         been extended in accordance with  subparagraph (1) above, then upon the
         effectiveness  of  such  extension,   all  references   herein  to  the
         "Revolving  Facility  Maturity  Date"  shall  refer  to  the  Revolving
         Facility Maturity Date as so extended.

                           (3) If any Lender  shall elect not to extend the then
         current Revolving  Facility Maturity Date as requested by any Extension
         Notice given by the Company  pursuant to subparagraph (1) above but the
         Majority  Lenders  have  agreed to do so,  then  concurrently  with the
         effectiveness of such extension,  the Maximum Commitment of such Lender
         shall  terminate  and the  Company  shall on such  date pay to the Lead
         Administrative  Agent,  for the account of such Lender,  the  principal
         amount of, and accrued interest on, such Lender's Loans,  together with
         any amounts payable to such Lender pursuant to Paragraph 4(e) above and
         any fees or other amounts owing to such Lender under this Agreement and
         the  other  Credit   Documents.   Following   such   termination,   the
         Non-Extending  Lender shall retain the benefits of Paragraphs  4(g) and
         4(h) above and  Paragraph  9(g) below as the same  relate to the period
         prior to the effective date of such termination.

                           (4) A Non-Extending Lender shall be obligated, at the
         request of the  Company  and  subject to payment by the  Company to the
         Lead Administrative  Agent for the account of such Non-Extending Lender
         of the  principal  amount of, and accrued  interest  on, such  Lender's
         Loans,  together  with any amounts  payable to such Lender  pursuant to
         Paragraph 4(e) above and any fees or other amounts owing to such Lender
         under this  Agreement and the other Credit  Documents,  to transfer its
         Maximum  Commitment  or  portions  thereof  to an  Applicant  Financial
         Institution  and/or to one or more Continuing  Lenders on the terms and
         subject to the  conditions  set forth in  Paragraphs  14(a),  14(b) and
         14(c) below, any such transfer to be without recourse,  representation,
         warranty  (other  than  good  title to its  Loans) or  expense  to such
         Non-Extending  Lender,  at any time prior to the then current Revolving
         Facility  Maturity  Date.  Each  such  transferee,  if  not  already  a
         Continuing Lender hereunder, shall become a Continuing Lender hereunder
         in replacement of the Non-Extending Lender to the extent of the Maximum
         Commitment  transferred  to it shall  enjoy all  rights  and assume all
         obligations  on the part of the Lenders set forth in this Agreement and
         the  other  Credit   Documents.   Following   such   termination,   the
         Non-Extending  Lender shall retain the benefits of Paragraphs  4(g) and
         4(h) above and  Paragraph  9(g) below as the same  relate to the period
         prior to the effective date of such termination.

                           (5) No  Loan  Request,  Interest  Rate  Election  and
         Payoff Notice  delivered prior to the then current  Revolving  Facility
         Maturity Date and  requesting the funding of a Loan following such then
         current  Revolving  Facility  Maturity  Date shall be  applicable  to a
         Non-Extending Lender; provided,  however, that nothing contained herein
         shall in any manner or to any  extent  relieve a  Non-Extending  Lender
         from its funding obligations  hereunder prior to such current Revolving
         Facility Maturity Date.

                  6.  Guaranty; Subordination; Additional Documents.
                      ---------------------------------------------

 6(a) Guaranty and Subordination Agreement.  As support for the Obligations, the
Company shall execute and
                                ------------------------------------
deliver and shall cause to be executed and delivered to the Lead Administrative
Agent on behalf of the Lenders:  (1) the Guaranty and
(2) the Subordination Agreement.

6(b) Further Documents.  The Company agrees to execute and deliver and to cause
to be executed and
                                -----------------
delivered  to the  Lead  Administrative  Agent  or  such  Persons  as  the  Lead
Administrative  Agent may direct from time to time such  documents,  instruments
and  agreements  as the Lead  Administrative  Agent on behalf of the Lenders may
reasonably  request,  which are in any of the  Lenders'  judgment  necessary  or
desirable to obtain for the Lead  Administrative  Agent,  the  Co-Administrative
Agent,  the  Documentation  Agent,  the  Syndication  Agent,  the Arranger,  the
Co-Arrangers, the Co-Agents and the Lenders the benefit of the Credit Documents.

                  7.  Conditions Precedent.
                      --------------------

7(a) First Loan.  As conditions precedent to the Effective Date and the funding
of the first Loan hereunder:
                                ----------

(1)     There shall have been delivered to the Lead Administrative Agent, in
form and substance and in quantities reasonably satisfactory to the Lenders and
their counsel, the following:

     (i) A duly executed copy of this Agreement;

     (ii) A duly executed copy of each of the Guaranty;

     (iii) A duly executed copy of the Subordination Agreement;

     (iv) Such credit applications,  financial  statements,  pro forma financial
     statements,  authorizations and information  concerning the Company and its
     business,  operations  and condition  (financial and otherwise) as the Lead
     Administrative Agent or any Lender may reasonably request;

     (v)  Certified  copies of  resolutions  of the Boards of  Directors  of the
     Company  and  the  Parent  approving  the  execution  and  delivery  of all
     documents required to be delivered by the Company and the Parent hereunder;

     (vi) Certificates of the Secretary or an Assistant Secretary of each of the
     Company and the Parent certifying the names, incumbency and true signatures
     of the  officers  of the  Company  and the  Parent  authorized  to sign the
     documents  required to be  executed  and  delivered  by the Company and the
     Parent hereunder;

     (vii) An opinion of counsel for the Company and the Parent  (which  counsel
     may be in-house counsel) in form and substance  satisfactory to the Lenders
     and covering such matters as the Lenders may reasonably request;

     (viii) A certificate of an executive officer of each of the Company and the
     Parent in the form of that  attached  hereto  as  Exhibit A dated as of the
     date of this Agreement; and
                                ---------

     (ix) A Covenant Compliance Certificate,  dated as of February 29, 2000, for
     each of the Company and the Parent  demonstrating in detail satisfactory to
     the  Lenders  the  Company's  compliance  with the  covenants  set forth in
     Paragraphs 10(g),  10(i) and 10(j) below, and the Parent's  compliance with
     the  financial  covenants  set forth in  Paragraphs  11(d) and 11(e) of the
     Guaranty.

     (2) All acts and conditions (including,  without limitation,  the obtaining
     of all  necessary  regulatory  approvals  and the  making  of all  required
     filings,  recordings and  registrations)  required to be done and performed
     and to have happened  precedent to the execution,  delivery and performance
     of the Credit Documents and to constitute the same legal, valid and binding
     obligations,  enforceable in accordance with their respective terms,  shall
     have been done and  performed  and shall  have  happened  in due and strict
     compliance with all applicable laws.

     (3) All documentation,  including,  without  limitation,  documentation for
     corporate  and  legal  proceedings  in  connection  with  the  transactions
     contemplated  by the Credit  Documents,  shall be  satisfactory in form and
     substance to the Lenders and their counsel.

     (4) The Company shall have delivered to the Arranger a letter acceptable to
     the Arranger  regarding the payment by the Company to the Arranger of fees,
     and the Company shall have paid all fees required under such letter to have
     been paid prior to the funding of the first Loan hereunder.

     (5) No  material  adverse  change in the  business,  operations,  assets or
     financial  or  other  condition  of the  Company  or the  Company  and  its
     consolidated  Subsidiaries  taken as a whole shall have occurred  since the
     Statement  Date and the Company by  presenting  the initial  Loan  Request,
     Interest  Rate  Election  and  Payoff  Notice  shall be  deemed  to have so
     represented and warranted hereunder.

     (6) There shall be no "Loans" or other "Obligations" outstanding under (and
     as those terms are defined in) the Existing Credit Agreement.

     7(b) All Primary  Loans and Swing  Loans.  As  conditions  precedent to the
     funding of each Primary Loan and
                                ---------------------------------
Swing Loan  hereunder,  including the first such Loan, at and as of the date of,
and after giving effect to, the funding of such Loan:

     (1) The  representations  and  warranties  of the  Company  and the  Parent
     contained  in the Credit  Documents  shall be accurate  and complete in all
     respects as of such date;

     (2) If there has occurred a Potential Default or an Event of Default (other
     than under  Paragraph  11(a) below or under Paragraph 11(e) below resulting
     from a breach or potential  breach of Paragraph 10(i) or 10(j) below),  the
     Majority  Lenders  have not  elected  in  writing  to cease  funding  Loans
     hereunder;

     (3) If there has occurred an Event of Default under  Paragraph 11(a) below,
     one hundred  percent (100%) of the Lenders have elected in writing to waive
     such Event of Default;

     (4) If there has  occurred an Event of Default or Potential  Default  under
     Paragraph  11(e)  below  resulting  from a breach  or  potential  breach of
     Paragraph  10(i) or 10(j)  below,  the  Majority  Lenders  have  elected in
     writing to waive such Event of Default or Potential Default;

     (5) Following the making of such Loan,  the aggregate  principal  amount of
     Primary Loans and Swing Loans  outstanding  shall not exceed the applicable
     limitations  of  Paragraphs  1(a) and 1(b)  above nor  shall the  aggregate
     principal  amount of Primary  Loans held by any Lender  plus such  Lender's
     Percentage Share of Swing Loans outstanding or exceed such Lender's Maximum
     Commitment; and

     (6) The Company  shall have  delivered to the Lead  Administrative  Agent a
     duly  executed  Loan  Request,  Interest  Rate  Election and Payoff  Notice
     requesting such Credit Event.  By delivering a Loan Request,  Interest Rate
     Election and Payoff Notice to the Lead  Administrative  Agent,  the Company
     shall  be  deemed  to have  represented  and  warranted  the  accuracy  and
     completeness  of the statements set forth in  subparagraphs  (b)(1) through
     (b)(6) above and all information  set forth in such Loan Request,  Interest
     Rate Election and Payoff Notice.

     7(c)  Extension  of  Revolving   Facility  Maturity  Date;  Term  Loan.  As
     conditions precedent to the
                        --------------------------------------------------------
effectiveness of any extension of the Revolving  Facility Maturity Date pursuant
to Paragraph 5(m) above or the conversion of Loans outstanding to the Term Loan,
on and as of the proposed  effective  date of such  extension or the  Conversion
Date, as applicable:

     (1) The  representations  and  warranties  of the  Company  and the  Parent
     contained  in the Credit  Documents  shall be accurate  and complete in all
     respects as of such date;

     (2) There  shall  not have  occurred  a  Potential  Default  or an Event of
     Default; and

     (3)  In the  case  of the  Conversion  Date,  after  giving  effect  to the
     conversion of Loans  outstanding  into the Term Loan,  no Lender's  Primary
     Percentage  Share of the Term  Loan  shall  exceed  such  Lender's  Maximum
     Commitment.

By delivering an Extension Notice or a Loan Request,  Interest Rate Election and
Payoff Notice for the Term Loan to the Lead  Administrative  Agent,  the Company
shall be deemed to have  represented and warranted the accuracy and completeness
of the statements set forth in subparagraphs (c)(1) through (c)(3) above.

                  8.  Representations  and  Warranties  of  the  Company.  As an
inducement to the Lead Administrative  Agent, the  Co-Administrative  Agent, the
Documentation Agent, the Syndication Agent, the Arranger, the Co-Arrangers,  the
Co-Agents and each Lender to enter into this Agreement,  the Company  represents
and warrants to the Lead Administrative Agent, the Co-Administrative  Agent, the
Documentation Agent, the Syndication Agent, the Arranger, the Co-Arrangers,  the
Co-Agents and each Lender that:

     8(a)  Financial  Condition.  The financial  statements  dated the Statement
     Date, copies of which have
                                -------------------
heretofore  been furnished to each Lender,  are complete and correct and present
fairly in accordance  with GAAP the  consolidated  and  consolidating  financial
condition of the Company and its consolidated  Subsidiaries at such date and the
consolidated  and  consolidating  results  of their  operations  and  changes in
financial position for the fiscal period then ended.

     8(b) Corporate Existence;  Compliance with Law. Each of the Company and its
     Subsidiaries: (1) is duly
                                ----------------------------------------
organized, validly existing and in good standing as a corporation under the laws
of the  state  of  its  incorporation,  and is in  good  standing  as a  foreign
corporation in each  jurisdiction  where its ownership of property or conduct of
business  requires such  qualification  and where failure to be in good standing
could have a material adverse effect on the Company, any of its Subsidiaries, or
their  respective  property  and/or business or on the ability of the Company or
the Parent to pay or perform the Credit  Documents;  (2) has the corporate power
and authority and the legal right to own and operate its property and to conduct
business  in the  manner in which it does and  proposes  so to do; and (3) is in
compliance with all  Requirements of Law and Contractual  Obligations  except to
the extent that  failure to comply could not have a material  adverse  effect on
the  Company,  any of its  Subsidiaries,  or their  respective  property  and/or
business  or on the  ability of the  Company or the Parent to pay or perform the
Credit Documents.

     8(c) Corporate Power; Authorization;  Enforceable Obligations.  Each of the
     Company and the Parent has the
                         -------------------------------------------------------
corporate  power and  authority  and the legal  right to  execute,  deliver  and
perform  the Credit  Documents  to which it is a party  and,  in the case of the
Company,  to borrow hereunder,  and has taken all necessary  corporate action to
authorize the execution,  delivery and performance of the Credit Documents.  The
Credit  Documents have been duly executed and delivered on behalf of each of the
Company and the Parent and constitute  legal,  valid and binding  obligations of
such party  enforceable  against such party in accordance with their  respective
terms.

     8(d) No Legal Bar. The  execution,  delivery and  performance of the Credit
     Documents, the borrowings
                                ------------
thereunder and the use of the proceeds thereof, will not violate any Requirement
of Law or any Contractual  Obligation of the Company or the Parent to the extent
that failure to comply  therewith  could have a material  adverse  effect on the
Company or its property  and/or business or on the ability of the Company or the
Parent to pay or perform the Credit Documents.

     8(e) No  Material  Litigation.  Except as  disclosed  on Exhibit B attached
     hereto, no litigation,
                                ----------------------
investigation  or proceeding of or before any court,  arbitrator or Governmental
Authority  is pending or, to the  knowledge  of the  Company,  threatened  by or
against the Company or any of its  Subsidiaries  or against any of such parties'
properties or revenues  involving  amounts,  in the case of any such  individual
litigation,  investigation or proceeding,  in excess of $10,000,000.00 or which,
regardless of the amount in  controversy,  is likely to be adversely  determined
and which, if adversely determined,  could have a material adverse effect on the
business, operations, property or financial or other condition of the Company or
any of its Subsidiaries.

     8(f) Taxes. The Company and each of its  Subsidiaries  have filed or caused
     to be filed all tax returns that
                                -----
are  required to be filed and have paid all taxes (other than  incidental  local
business and other  municipal  taxes which are not material to the  operation of
the Company and its Subsidiaries) shown to be due and payable on said returns or
on any  assessments  made against them or any of their property other than taxes
which are being  contested in good faith by  appropriate  proceedings  and as to
which the Company or the applicable Subsidiary has established adequate reserves
in conformity with GAAP.

     8(g) Investment Company Act. The Company is not an "investment  company" or
     a company "controlled" by an
                                ----------------------
     "investment  company"  within the meaning of the Investment  Company Act of
     1940, as amended.

        8(h)  Subsidiaries.  Exhibit C attached  hereto sets forth an accurate
and complete list of all presently
                                ------------   ---------
existing  Subsidiaries  of  the  Company,  their  respective   jurisdictions  of
incorporation  and the percentage of their capital stock owned by the Company or
other  Subsidiaries of the Company.  All of the issued and outstanding shares of
capital stock of the  Subsidiaries  of the Company have been duly authorized and
issued and are fully paid and non-assessable.

     8(i) Federal Reserve Board Regulations.  Neither the Company nor any of its
     Subsidiaries is engaged or will
                                ---------------------------------
engage,  principally or as one of its important  activities,  in the business of
extending  credit for the  purpose of  "purchasing"  or  "carrying"  any "margin
stock" within the respective  meanings of such terms under Regulation U. No part
of the  proceeds of any Loan made  hereunder  will be used for  "purchasing"  or
"carrying"  "margin stock" as so defined or for any purpose which  violates,  or
which would be inconsistent with, the provisions of the Regulations of the Board
of Governors of the Federal Reserve System.

     8(j) ERISA.  The Company and each of its  Subsidiaries are in compliance in
     all material respects with the
                                -----
requirements  of ERISA  and no  Reportable  Event  has  occurred  under any Plan
maintained by the Parent,  the Company or any of its or their Subsidiaries which
is likely to result in the  termination of such Plan for purposes of Title IV of
ERISA.

     8(k)  Assets.  The  Company  and  each of its  Subsidiaries  have  good and
     marketable title to all property and
                                ------
assets  reflected in the  financial  statements  referred to in  Paragraph  8(a)
above,  except property and assets sold or otherwise disposed of in the ordinary
course of business  subsequent to that date.  Neither the Company nor any of its
Subsidiaries  has  outstanding  Liens on any of its properties or assets nor are
there any security agreements to which the Company or any of its Subsidiaries is
a party,  or title  retention  agreements,  whether  in the  form of  leases  or
otherwise,  of any  personal  property  except as  reflected  in said  financial
statements  referred to in Paragraph 8(a) above or as permitted  under Paragraph
10(a) below.

     9. Affirmative Covenants.  The Company hereby covenants and agrees with the
     Lead Administrative Agent and each
                      ---------------------
     Lender that, as long as any Obligations remain unpaid or any Lender has any
     obligation to make all or any portion of any Loans, the Company shall:

     9(a) Financial Statements. Furnish or cause to be furnished directly to the
     Lead Administrative Agent and
                                --------------------
each Lender:

     (1) Within  ninety  (90) days after the last day of each fiscal year of the
     Parent, consolidated statements of income and statements of changes in cash
     flow of the Parent and its  Subsidiaries  for such year and a balance sheet
     as of the end of such year (including therein as supplemental  information,
     consolidating  statements of income and  statements of changes in cash flow
     and  balance  sheets  as of the end of such  year) in each  case  presented
     fairly  in  accordance  with  GAAP  and,  in the case of the  Company,  the
     requirements of HUD Handbook IG 4000.3 REV and  accompanied,  in all cases,
     by  an  unqualified  report  of a  firm  of  independent  certified  public
     accountants acceptable to the Majority Lenders;

     (2) Within  forty-five (45) days after the last day of each fiscal quarter,
     consolidated  and  consolidating  statements  of income and  statements  of
     changes  in cash flow of the Parent and its  Subsidiaries  for such  fiscal
     quarter and  balance  sheets of the Parent and its  Subsidiaries  as of the
     last day of such fiscal quarter,  presented fairly in accordance with GAAP,
     in each case  certified  in writing as to fairness of  presentation  by the
     chief financial officer or treasurer of the Company and the Parent;

     (3) Within  forty-five (45) days following each  Applicable  Financial Test
     Date, a Covenant Compliance Certificate from the chief financial officer or
     treasurer of each of the Company and the Parent, certifying that there does
     not exist an Event of  Default  or  Potential  Default  and,  in  addition,
     demonstrating in detail  satisfactory to the Majority Lenders the Company's
     compliance  with the  covenants set forth in  Paragraphs  10(g),  10(i) and
     10(j)  below as of and at such  Applicable  Financial  Test  Date,  and the
     Parent's  compliance  with the covenants set forth in Paragraphs  11(d) and
     11(e) of the Guaranty, as of and at such Applicable Financial Test Date;

     (4) As soon as is available any written report pertaining to material items
     in respect of the  internal  control  matters of the Parent or the  Company
     submitted  to  any  of  such  Persons  by  their   respective   independent
     accountants in connection  with each annual or interim special audit of the
     financial  condition  of  such  Persons  made by  such  independent  public
     accountants; and

     (5) Copies of all proxy statements, financial statements, and reports which
     the Parent sends to its stockholders,  and copies of all regular,  periodic
     and special reports,  and all registration  statements under the Securities
     Act of 1933, as amended (the "Act"),  which the Parent or the Company files
     with the Securities and Exchange  Commission or any governmental  authority
     which  may  be  substituted  therefor,  or  with  any  national  securities
     exchange;  provided,  however,  that  there  shall  not be  required  to be
     delivered  hereunder to the Lead  Administrative  Agent such copies for any
     Lender of  prospectuses  relating  to  future  series  of  offerings  under
     registration  statements  filed  under  Rule 415 of the Act or other  items
     which such  Lender has  indicated  in writing to the Parent or the  Company
     from time to time need not be delivered to such Lender.

     9(b)  Certificates;  Reports;  Other  Information.  Furnish  or cause to be
     furnished directly to the Lead
                                ----------------------------------------
Administrative Agent and each Lender:

     (1) Within  forty-five (45) days following each  Applicable  Financial Test
     Date,  prepared as of such Applicable  Financial Test Date and certified by
     an  appropriate  officer of the Company,  a report  covering the  servicing
     portfolio of the Company  covering  such  matters as the Majority  Lenders,
     through the Lead  Administrative  Agent, may reasonably  request (but which
     shall in any event list the aggregate  principal  amount of mortgage  notes
     serviced  and the number and types of loans  evidenced  by such notes,  and
     show all loans in the servicing  portfolio  more than thirty (30) days past
     due the due dates set forth in such notes).

     (2) Promptly,  such additional financial and other information,  including,
     without limitation,  financial statements of the Company, the Parent or any
     Affiliate  of the  Company or the Parent,  as any Lender,  through the Lead
     Administrative Agent, may from time to time reasonably request,  including,
     without  limitation,  such  information  as is necessary  for any Lender to
     participate  out any of its  interests  in  Loans  hereunder  or to  enable
     another financial institution to become a signatory hereto.

     (3)  Promptly  upon  receipt  thereof by the  Company,  copies of all audit
     reports prepared by or on behalf of FNMA, FHLMC and GNMA.

     9(c) Payment of  Indebtedness.  Pay,  discharge or otherwise  satisfy at or
     before maturity or before it
                                -----------------------
becomes  delinquent,  defaulted  or  accelerated,  as the case  may be,  all its
Indebtedness,  except: (1) Indebtedness (other than Indebtedness with respect to
CPNs)  being  contested  in good  faith and for which  provision  is made to the
satisfaction  of the Majority  Lenders for the payment  thereof in the event the
Company is found to be obligated to pay such Indebtedness and which Indebtedness
is thereupon  promptly  paid by the  Company,  and (2)  additional  Indebtedness
(other than  Indebtedness  with respect to CPNs) in the  aggregate not to exceed
$100,000.00.

     9(d)  Maintenance  of  Existence  and  Properties.   Maintain  all  rights,
     privileges, licenses, approvals,
                                ---------------------------------------
franchises,  properties  and  assets  necessary  in the  normal  conduct  of its
business,  and comply with all Contractual  Obligations and Requirements of Law.
The  Company  will at all  times  be a FNMA,  FHLMC  and  GNMA-approved  Seller/
Servicer and a wholly-owned Subsidiary of the Parent.

     9(e) Inspection of Property;  Books and Records;  Discussions.  Keep proper
     books of record and account in
                                ------------------------------------------------
which  full,   true  and  correct  entries  in  conformity  with  GAAP  and  all
Requirements  of Law shall be made of all dealings and  transactions in relation
to its business and activities, and permit representatives of each Lender (at no
cost  or  expense  to the  Company  unless  there  shall  have  occurred  and be
continuing an Event of Default) to visit and inspect those of its properties and
examine and make abstracts from those of its books and records as are reasonably
necessary to enable such Lender to conduct  appropriate  credit due diligence in
connection  with customary  credit approval  practices for credit  facilities of
this type, at any  reasonable  time and as often as may reasonably be desired by
any of the Lenders,  and to discuss the  business,  operations,  properties  and
financial and other  condition of the Company and any of its  Subsidiaries  with
officers and employees of such  parties,  and with their  independent  certified
public accountants.

     9(f) Notices. Promptly give written notice to the Lead Administrative Agent
     (who shall promptly notify
                                -------
each of the Lenders thereof) of:

     (1) The occurrence of any Potential Default or Event of Default;

     (2) Any  litigation  or  proceeding  affecting  the  Company  or any of its
     Subsidiaries  involving  amounts,  in  the  case  of  any  such  individual
     litigation,  investigation or proceeding,  in excess of  $10,000,000.00  or
     which,  regardless of the amount in controversy,  is likely to be adversely
     determined  and  which,  if  adversely  determined,  could  have a material
     adverse effect on the business, operations, property, or financial or other
     condition  of the  Company or the ability of the Company to pay and perform
     the Obligations;

     (3) Receipt by the  Company or the Parent of notice from any rating  agency
     concerning a potential change in any credit rating previously  accorded the
     Company or the Parent by such rating agency; and

     (4) A material  adverse  change in the  business,  operations,  property or
     financial  or other  condition  of the Parent,  the Company or any of their
     Subsidiaries.

     9(g) Expenses.  Pay all reasonable  out-of-pocket  expenses (including fees
     and disbursements of counsel) of
                                --------
the Lead Administrative Agent, the Arranger and the Co-Arrangers incident to the
preparation,  negotiation,  administration and amendment of the Credit Documents
and, following the occurrence of an Event of Default, of the Lead Administrative
Agent and each of the Lenders  incident to the  protection  of the rights of the
Lenders, the Arranger,  the Co-Arrangers and the Lead Administrative Agent under
the  Credit  Documents,  and  incident  to the  enforcement  of  payment  of the
Obligations,  whether by judicial proceedings or otherwise,  including,  without
limitation,   in   connection   with   bankruptcy,   insolvency,    liquidation,
reorganization,  moratorium or other similar proceedings involving the Parent or
the Company or a "workout" of the  Obligations.  The  obligations of the Company
under this Paragraph 9(g) shall be effective and enforceable  whether or not any
Loan is advanced by any Lender  hereunder and shall survive payment of all other
Obligations.

     9(h) Credit Documents.  Comply with and observe all terms and conditions of
     the Credit Documents.
                                ----------------
     9(i) Insurance. Obtain and maintain insurance with responsible companies in
     such amounts and against such
                                ---------
risks as are  usually  carried by  corporations  engaged  in similar  businesses
similarly situated, including, without limitation, errors and omissions coverage
and  fidelity  coverage  in form and  substance  acceptable  under FNMA or FHLMC
guidelines,  and furnish the Lenders on request full  information as to all such
insurance.

     9(j) CPN Program.  Obtain the written  approval of the Majority  Lenders to
     any modification of the
                                -----------
     documentation  relating to the issuance of CPNs of the Company as in effect
     on the date of this Agreement.

     9(k) Hedging  Program.  Maintain at all times a Hedging Program  consistent
     with the Hedging Program in
                                ---------------
effect at and as of the Effective Date.

     10.  Negative  Covenants.  The Company  hereby  agrees that, as long as any
     Obligations remain unpaid or any Lender has
                      ------------------
     any  obligation to make all or any portion of any Loans,  the Company shall
     not, directly or indirectly:

     10(a)Liens.  Create,  incur, assume or suffer to exist any Lien upon any of
     its property and assets
                                -----
(including servicing rights) other than:

     (1) Liens or charges for current taxes,  assessments or other  governmental
     charges which are not delinquent or which remain payable  without  penalty,
     or the  validity  of which  are  contested  in good  faith  by  appropriate
     proceedings upon stay of execution of the enforcement thereof, provided the
     Company  shall  have set aside on its books  and  shall  maintain  adequate
     reserves for the payment of same in conformity with GAAP;

     (2) Liens, deposits or pledges made to secure statutory obligations, surety
     or appeal  bonds,  or bonds for the release of  attachments  or for stay of
     execution, or to secure the performance of bids, tenders,  contracts (other
     than for the payment of borrowed money), leases or margin call requirements
     or for  purposes  of like  general  nature  in the  ordinary  course of the
     Company's business;

     (3) Liens on Mortgage Loans and  Mortgage-Backed  Securities  which are the
     subject of repurchase agreements;

     (4) Liens on real property  (including  fixtures and improvements  thereon)
     securing  Indebtedness  in an amount  not to exceed  $50,000,000.00  in the
     aggregate at any time outstanding;

     (5)  Liens on  property  and  assets of the  Company  securing  short  term
     Indebtedness  of the Company  (Indebtedness  with a maturity of one year or
     less and not automatically  renewable by the Company at its sole option) in
     an amount not to exceed at any date twenty five  percent  (25%) of Mortgage
     Loans and MBS Held for Sale; and

     (6) Liens on servicing  rights of the Company  securing  Indebtedness in an
     amount not to exceed at any date ten percent  (10%) of  Mortgage  Servicing
     Rights.

     10(b)Indebtedness.  Create,  incur, assume or suffer to exist, or otherwise
     become or be liable in respect
                                ------------
of any Indebtedness if upon such creation,  incurrence or assumption there would
exist an Event of Default or the Company would fail to be in compliance with the
requirements  of Paragraphs  10(i) or 10(j) below (assuming such compliance were
tested  at  such  date  immediately  following  such  creation,   incurrence  or
assumption).

     10(c)Consolidation  and  Merger.  Liquidate  or  dissolve or enter into any
     consolidation, merger, partnership,
                                ------------------------
joint venture,  syndicate or other  combination,  except that the Company may be
consolidated  with or merged with any corporation  provided that (1) in any such
merger  or  consolidation  the  Company  shall  be the  surviving  or  resulting
corporation and (2) at the time of and immediately  after the  effectiveness  of
such merger or consolidation  there shall not have occurred and be continuing an
Event of Default or Potential Default.

     10(d)Acquisitions.  Purchase or acquire or incur liability for the purchase
     or acquisition of any or all of
                                ------------
the  assets or  business  of any Person  other  than in the  normal  course of a
mortgage banking-related business (it being expressly agreed and understood that
the acquisition of servicing is a normal course of business activity); provided,
however, that the Company may acquire all or a portion of the stock or assets of
another  mortgage  company  or  companies  so long as no  Event  of  Default  or
Potential  Default shall exist  immediately  following the  consummation of such
acquisition,  and,  provided,  further,  that the Company shall be in compliance
with the  financial  covenants  set forth in  Paragraphs  10(i) and 10(j) below,
assuming for purposes of this  Paragraph  10(d) that the  "Applicable  Financial
Test Date"  referenced in such  covenants is the day  immediately  following the
consummation of such acquisition.

     10(e)Payment of Dividends.  Declare or pay any dividends upon any shares of
     the Company's stock now or
                                --------------------
hereafter  outstanding,  except  dividends  payable in the capital  stock of the
Company, or make any distribution of assets to its stockholders as such, whether
in cash,  property  or  securities,  if at the date of payment  or  distribution
(either  before or after giving effect  thereto)  there should exist an Event of
Default or Potential Default.

     10(f)Purchase or Retirement of Stock. Acquire,  purchase,  redeem or retire
     any shares of its capital stock
                                -------------------------------
now or hereafter outstanding for value.

     10(g)Investments;  Advances;  Receivables.  Make  or  commit  to  make  any
     advance, loan or extension of credit
                                ----------------------------------
("Advances") to, or hold any receivable  ("Receivable") of, or make or commit to
make  any  capital  contribution  to,  or  purchase  any  stock,  bonds,  notes,
debentures or other securities  ("Investments") of, or make any other investment
in, any Person, except:

     (1) Advances constituting Mortgage Loans made in the ordinary course of the
     Company's
                  business;

     (2) Advances to and  Receivables of any Person which are fully secured on a
     first
                  priority perfected basis by Mortgage Loans;

     (3)  Investments in, Advances to and Receivables of any Affiliate which are
     fully  secured on a first  priority  perfected  basis by Mortgage  Loans or
     Prime Quality Mortgage-Backed Securities;

     (4)  Investment  in,  Advances to and  Receivables  of any Affiliate or any
     Servicing  Pass-Through Venture which is not otherwise an Affiliate,  which
     are unsecured or which are secured on a first priority  perfected  basis by
     collateral  other  than  Mortgage  Loans or Prime  Quality  Mortgage-Backed
     Securities,  in an aggregate  amount not to exceed fifteen percent (15%) of
     the net worth of the Company determined in accordance with GAAP; and

     (5)  Investments  in,  Advances to and  Receivables of Countrywide  Capital
     Markets,  Inc.  or any of its  Subsidiaries,  which are fully  secured on a
     first priority  perfected basis by: (i) debt instruments  issued by FNMA or
     FHLMC or (ii) time deposit  accounts issued by a financial  institution the
     deposits  of which  are  insured  by the  Bank  Insurance  Fund  and  which
     financial  institution  has a deposit rating issued by a recognized  rating
     agency  not less  than the  rating  assigned  to the  Company's  long  term
     indebtedness.

     10(h)Sale of Assets. Sell, lease, assign,  transfer or otherwise dispose of
     any of its assets (other than
                                --------------
obsolete or worn out property),  whether now owned or hereafter acquired,  other
than in the  ordinary  course of business  as  presently  conducted  and at fair
market value (it being  expressly  agreed and understood  that the sale or other
disposition of Mortgage Loans with or without servicing released and the sale or
other  disposition of servicing  rights are in the ordinary course of business);
provided,  however,  that in no event shall the Company  enter into any sale and
leaseback  transaction  involving  any of its assets  without the prior  written
consent of the Majority Lenders;  and,  provided  further,  that the Company may
sell,  lease,  assign,  transfer or otherwise  dispose of any of its assets to a
Subsidiary of the Company (which,  for the purpose of this proviso shall include
any  limited   partnership  the  general  and  limited  partners  of  which  are
Subsidiaries  of the  Company)  so long as:  (1) all  classes  of stock  of,  or
partnership interests in, such Subsidiary are owned, directly or indirectly,  by
the  Company,  (2)  such  Subsidiary  incurs  no  obligations  for  third  party
indebtedness  except such  obligations to employees and vendors as are necessary
or desirable in the normal  conduct of the business of servicing 1-4 unit single
family  mortgage  loans  and in  managing  an  office  building  owned  by  such
Subsidiary,  and (3) any such unpaid  obligations as are described in subsection
(2) above (other than payroll and benefits  obligations to employees)  shall not
exceed at any time $50,000,000.00 in the aggregate.

     10(i)Minimum Net Worth.  Permit its net worth determined in accordance with
     GAAP on and as of each
                                -----------------
Applicable Financial Test Date to be less than $1,200,000,000.00.

     10(j)Maximum  Total Debt.  Permit  Total Debt on and as of each  Applicable
     Financial Test Date to exceed the
                                ------------------
sum of:
     (1) One hundred percent (100%) of Cash, plus

     (2) Ninety percent (90%) of Margins, plus

     (3) Ninety-seven percent (97%) of the amount of Mortgage Loans and MBS Held
     for Sale (including Mortgage Loans and  Mortgage-Backed  Securities subject
     to a Lien under a repurchase  agreement but  excluding  all other  Mortgage
     Loans and  Mortgage-Backed  Securities  which are excluded  from  "Eligible
     Mortgage  Assets"  pursuant  to  subparagraphs  (a),  (b)  and  (c)  of the
     definition of such term), plus

     (4)  Ninety  percent  (90%) of Pool  Loan  Purchases  and  Mortgage  Claims
     Receivable  to the extent such assets  represent VA and FHA Mortgage  Loans
     repurchased  by the  Company  from pools  supporting  GNMA  Mortgage-Backed
     Securities, plus

     (5) Fifty percent (50%) of Deferred Commitment Fees, plus

     (6) Fifty percent (50%) of Property and Equipment, plus

     (7) Seventy-five percent (75%) of Mortgage Servicing Rights, plus

     (8) Fifty percent (50%) of Other Assets,  excluding any unsecured  Advances
     made to Affiliates permitted under Paragraph 10(g)(2) above.

     11. Events of Default.  Upon the occurrence of any of the following  events
     (an "Event of Default"):
                      -----------------

     11(a)The  Company shall fail to make any payment on account of that portion
     of the Obligations consisting of principal or interest on Loans on the date
     when due; or

     11(b)Any  representation  or warranty made or deemed made by the Company or
     the Parent in any Credit Document or in connection with any Credit Document
     shall be materially inaccurate or incomplete in any respect on or as of the
     date made or
    deemed made; or

     11(c)The  Company shall default in the  observance  or  performance  of any
     covenant or  agreement  contained  in  Paragraph 10 above (other than those
     contained in Paragraphs 10(i) and 10(j) above); or
                           11(d)The Parent shall fail to observe or comply with
any term or provision contained in the Guaranty (other
than those contained in Paragraph 11(d) thereof); or

                           11(e)The Company or the Parent shall fail to observe
or perform any other term or provision contained in
the Credit Documents and such failure shall continue for thirty (30) days; or

                           11(f)The Company, any of its Subsidiaries or the
     Parent  shall  default in any payment of any  Indebtedness  (other than the
     Obligations  or as permitted  under  Paragraph  9(c) above) in an aggregate
     amount of more than $10,000,000.00 or any other event shall occur and, as a
     result,  the holder or holders  thereof,  or any  trustee or agent for such
     holders,  either:  (1) cause such  Indebtedness  to become due and  payable
     prior to its stated maturity,  or (2) elect not to cause such  Indebtedness
     to become so due and  payable,  but such  event  continues  for a period of
     thirty (30) days and is not cured or waived; or

                           11(g)(1) The Parent, the Company or any of its
     Subsidiaries shall commence any case,  proceeding or other action (i) under
     any  existing  or future  law of any  jurisdiction,  domestic  or  foreign,
     relating to bankruptcy,  insolvency,  reorganization  or relief of debtors,
     seeking to have an order for relief  entered with respect to it, or seeking
     to  adjudicate  it a bankrupt  or  insolvent,  or  seeking  reorganization,
     arrangement, adjustment, winding-up, liquidation,  dissolution, composition
     or  other  relief  with  respect  to it  or  its  debts,  or  (ii)  seeking
     appointment of a receiver, trustee, custodian or other similar official for
     it or for all or any  substantial  part of its assets,  or the Parent,  the
     Company or any of its Subsidiaries  shall make a general assignment for the
     benefit of its  creditors;  or (2) there  shall be  commenced  against  the
     Parent,  the Company or any of its  Subsidiaries  any case,  proceeding  or
     other action of a nature  referred to in clause (1) above which (i) results
     in  the  entry  of  an  order  for  relief  or  any  such  adjudication  or
     appointment,  or (ii) remains  undismissed,  undischarged or unbonded for a
     period of sixty (60) days;  or (3) there  shall be  commenced  against  the
     Parent,  the Company or any of its  Subsidiaries  any case,  proceeding  or
     other  action  seeking  issuance  of a warrant  of  attachment,  execution,
     distraint or similar  process  against all or any  substantial  part of its
     assets  which  results in the entry of an order for any such  relief  which
     shall not have been vacated, discharged, or stayed or bonded pending appeal
     within  sixty  (60) days from the entry  thereof;  or (4) the  Parent,  the
     Company or any of its Subsidiaries shall take any action in furtherance of,
     or indicating its consent to, approval of, or  acquiescence  in, any of the
     acts set forth in clause  (1),  (2) or (3) above;  or (5) the  Parent,  the
     Company or any of its Subsidiaries  shall generally not, or shall be unable
     to, or shall  admit in  writing  its  inability  to,  pay its debts as they
     become due; or

                           11(h)(1) Any Person shall engage in any "prohibited
     transaction"  (as  defined in Section  406 of ERISA or Section  4975 of the
     Code)  involving any Plan, (2) any  "accumulated  funding  deficiency"  (as
     defined in Section 302 of ERISA),  whether or nor waived,  shall exist with
     respect to any Plan, (3) a Reportable Event shall occur with respect to, or
     proceedings shall commence to have a trustee appointed,  or a trustee shall
     be appointed,  to administer or to  terminate,  any Single  Employer  Plan,
     which  Reportable Event or institution of proceedings is, in the reasonable
     opinion  of  the  Lead  Administrative  Agent,  likely  to  result  in  the
     termination  of such Plan for  purposes  of Title IV of ERISA,  and, in the
     case of a  Reportable  Event,  the  continuance  of such  Reportable  Event
     unremedied for ten days after notice of such  Reportable  Event pursuant to
     Section  4043(a),  (c) or (d) of ERISA is given or the  continuance of such
     proceedings for ten days after  commencement  thereof,  as the case may be,
     (4) any Single  Employer  Plan shall  terminate for purposes of Title IV of
     ERISA,  (5) any  withdrawal  liability  to a  Multiemployer  Plan  shall be
     incurred by the Company or the Parent or any Commonly Controlled Entity, or
     (6) any other event or condition shall occur or exist;  and in each case in
     clauses (1) through (6) above,  such event or condition,  together with all
     other such events or  conditions,  if any,  could  subject the Parent,  the
     Company or any of its Subsidiaries to any tax, penalty or other liabilities
     in the aggregate material in relation to the business, operations, property
     or  financial or other  condition of the Parent,  the Company or any of its
     Subsidiaries; or
                           11(i)One or more judgments or decrees in amounts
     aggregating $1,000,000.00 or more not fully covered by insurance (exclusive
     of self-insurance (not to exceed $5,000,000.00) and deductibles) during any
     consecutive  twelve (12) month period shall be entered  against the Company
     or any of its Subsidiaries and all such judgments or decrees shall not have
     been vacated,  discharged or satisfied, or stayed or bonded pending appeal,
     within sixty (60) days from the entry thereof unless counsel to the Company
     reasonably  acceptable to the Majority Lenders has delivered to the Lenders
     within such sixty (60) day period an opinion that the Company has the legal
     right to have such judgment or decree  vacated  without the  expenditure of
     funds (other than for costs of  proceedings)  and the Company is diligently
     proceeding to accomplish such vacation; or

                           11(j)The Parent shall notify the Lead Administrative
     Agent or any Lender of its  intention  to rescind or revoke the Guaranty or
     the  Subordination  Agreement,  in whole or in part, with respect to future
     transactions or otherwise; or

                           11(k)The Parent shall cease to own one hundred
percent (100%) of the outstanding capital stock of the Company;

                                      THEN:

     (1)  Automatically  upon  the  occurrence  of an  Event  of  Default  under
     Paragraph 11(g) above,

     (2) At the option of any Lender upon the  occurrence of an Event of Default
     under  Paragraph  11(a)  above  unless  such Event of Default is  expressly
     waived in writing by one hundred percent (100%) of the Lenders, and

     (3) In all other cases, at the option of the Majority Lenders,

each Lender's obligation to make Loans shall terminate and the principal balance
of  outstanding  Loans and  interest  accrued  but unpaid  thereon and all other
Obligations  shall become  immediately  due and payable,  without demand upon or
notice or presentment to the Company, all of which are hereby waived.

                  12. Agency Provisions.
                      -----------------

     12(a)Appointment.  Each Lender hereby  irrevocably  designates and appoints
     each Agent as the agent of such
                                -----------
Lender under the Credit Documents and each Lender hereby irrevocably  authorizes
each  Agent,  as the agent for such  Lender,  to take such  action on its behalf
under the  provisions  of the Credit  Documents  and to exercise such powers and
perform such duties as are expressly delegated to such Agent by the terms of the
Credit Documents,  together with such other powers as are reasonably  incidental
thereto.  Notwithstanding  any provision to the contrary elsewhere in the Credit
Documents,  no Agent  shall have any duties or  responsibilities,  except  those
expressly set forth therein, or any fiduciary  relationship with any Lender, and
no  implied  covenants,  functions,  responsibilities,  duties,  obligations  or
liabilities  shall be read into the Credit  Documents or otherwise exist against
any Agent.

     12(b)Delegation of Duties. The Lead Administrative Agent may execute any of
     its duties under the Credit
                                --------------------
Documents  by or through  agents or  attorneys-in-fact  and shall be entitled to
advice of counsel  concerning  all matters  pertaining to such duties.  The Lead
Administrative  Agent shall not be responsible  for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.

     12(c)Exculpatory  Provisions.  No Agent nor any of its respective officers,
     directors, employees, agents,
                                ----------------------
counsel,  attorneys-in-fact or Affiliates shall be (1) liable to any Lender, any
other  Agent,  the  holder of any CPN or the  Company  for any  action  taken or
omitted to be taken by it or such Person under or in connection  with the Credit
Documents  (except  for its or such  Person's  own gross  negligence  or willful
misconduct),  or (2) responsible in any manner to any of the Lenders,  any other
Agent,  the holder of any CPN or the Company for: (i) any recitals,  statements,
representations  or  warranties  made  by the  Company  or any  officer  thereof
contained in the Credit  Documents or in any certificate,  report,  statement or
other  document  referred to or provided for in, or received by such Agent under
or in connection with, the Credit Documents (except such as are prepared by such
Agent and, then, only to the extent such Agent is responsible  for  verification
of the accuracy and  completeness  of the information  contained  therein or the
facts upon which such information is based as expressly  provided herein) or for
the value, validity, effectiveness, genuineness, enforceability,  collectability
or  sufficiency  of the Credit  Documents  or for any  failure of the Company to
perform its  obligations  thereunder or (ii)  assuring  compliance of the Credit
Documents and/or the transactions  contemplated by the Credit Documents with any
law or regulation  binding upon such Person,  it being  expressly  acknowledged,
agreed and  understood  that each such Person has  obtained  independent  advice
satisfactory  to it in all such regards.  No Agent shall be under any obligation
to any Lender to ascertain or to inquire as to the  observance or performance of
any of the  agreements  contained  in, or  conditions  of, the Credit  Documents
(other than agreements required to be complied with by such Agent thereunder and
subject to the  standards of care set forth  herein with respect  thereto) or to
inspect the  properties,  books or records of the  Company.  Each Agent shall be
entitled to refrain from  exercising any  discretionary  powers or actions under
this  Agreement or any other Credit  Document  until it shall have  received the
prior  written  consent of one  hundred  percent  (100%) of the  Lenders to such
action.

     12(d)Reliance by Agent.  Each Agent shall be entitled to rely, and shall be
     fully protected in relying,
                                -----------------
upon any note, writing, resolution, notice, consent,  certification,  affidavit,
letter,  cablegram,  telegram,  telecopy, telex or teletype message,  statement,
order or other document or conversation  reasonably believed by it to be genuine
and  correct  and to have  been  signed,  sent or made by the  proper  Person or
Persons and upon advice and  statements  of legal  counsel  (including,  without
limitation,  counsel to the Company),  independent accountants and other experts
selected by such Agent.  The Lead  Administrative  Agent may deem and treat each
Lender designated on the current  Commitment  Schedule as a Lender hereunder for
all  purposes of the Credit  Documents  unless a written  notice of  assignment,
negotiation or transfer of such Lender's  interests  hereunder and thereunder as
permitted  pursuant  to  Paragraph  14 below shall have been filed with the Lead
Administrative Agent. Each Agent shall be fully justified in failing or refusing
to take any action under the Credit Documents unless it shall first receive such
advice or concurrence of the Majority Lenders (or all Lenders, as required under
the Credit  Documents) or it shall first be indemnified to its  satisfaction  by
the Lenders  against any and all  liability and expense which may be incurred by
it by reason of taking or continuing  to take any action  (other than  liability
and/or  expense  arising  out  of  such  Agent's  gross  negligence  or  willful
misconduct).  Each Agent shall in all cases be fully protected in acting,  or in
refraining from acting,  under the Credit Documents in accordance with a request
of the Majority Lenders (or all Lenders,  if applicable) absent gross negligence
and willful  misconduct on the part of such Agent in the method in which it acts
or refrains from acting in accordance therewith, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders.

     12(e)Notice of Default;  Agreement to Advance.  No Agent shall be deemed to
     have knowledge or notice of the
                                ---------------------------------------
occurrence  of any Event of Default or Potential  Default  unless such Agent has
received notice from a Lender or the Company  referring to the Credit Documents,
describing  such Event of Default or  Potential  Default and  stating  that such
notice is a "notice of  default".  In the event that any Agent  receives  such a
notice,  such Agent  shall give  notice  thereof  to the  Lenders  and the other
Agents.

     12(f)Non-Reliance  on  Agent  and  Other  Lenders.  Each  Lender  expressly
     acknowledges that no Agent nor any of
                                ---------------------------------------
its respective  officers,  directors,  employees,  agents,  attorneys-in-fact or
Affiliates has made any  representations  or warranties to it and that no act by
such Agent hereafter taken,  including any review of the affairs of the Company,
shall be deemed to constitute  any  representation  or warranty by such Agent to
any Lender. Each Lender represents to each Agent that it has,  independently and
without  reliance  upon  such  Agent or any  other  Lender  or their  respective
counsel,  and  based  on  such  documents  and  information  as  it  has  deemed
appropriate,  made its own  appraisal of and  investigation  into the  business,
operations,  property, financial and other condition and creditworthiness of the
Company and made its own decision to extend credit hereunder and enter into this
Agreement.  Each Lender also represents that it will,  independently and without
reliance  upon any Agent or any other Lender or their  respective  counsel,  and
based on such  documents,  information  and  legal  advice  (including,  without
limitation,  advice of regulatory counsel to it) as it shall deem appropriate at
the time, continue to make its own credit analysis,  appraisals and decisions in
entering into the Credit  Documents and taking or not taking action  thereunder,
and to make such  investigation as it deems necessary to inform itself as to the
business,   operations,    property,   financial   and   other   condition   and
creditworthiness of the Company. Except for notices, reports and other documents
expressly  required to be furnished to the Lenders by an Agent  hereunder,  such
Agent shall not have any duty or  responsibility  to provide any Lender with any
legal advice or credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Company which
may come into the  possession of such Agent or any of its  officers,  directors,
employees, agents, attorneys-in-fact or Affiliates.

     12(g)Indemnification.  The  Company  agrees to  indemnify,  defend and hold
     harmless each Agent in its capacity
                                ---------------
as such from and against any and all claims,  obligations,  penalties,  actions,
suits,  judgments,  costs,  disbursements,  losses,  liabilities  and/or damages
(including,  without  limitation,  attorneys' fees) of any kind whatsoever which
may at any time be imposed on, assessed against or incurred by such Agent in any
way (1)  relating to or arising  out of the Credit  Documents  or any  documents
contemplated by or referred to therein or the transactions  contemplated thereby
or any action taken or omitted to be taken by such Agent in connection  with the
foregoing; provided, the Company shall not be liable for any portion of any such
claims, obligations, etc., arising out of or resulting from the gross negligence
or willful  misconduct of such Agent or (2)  resulting  from any action taken or
omitted to be taken by such Agent in accordance with written  instructions given
as provided in the Credit  Documents  or (3)  relating to any one or more of the
matters  covered by Paragraph  12(c) above.  The Lenders  agree to indemnify and
hold  harmless  each Agent in its  capacity as such ratably in  accordance  with
their Primary  Percentage Shares to the extent required by the Company hereunder
if any Agent is not reimbursed by the Company hereunder and without limiting the
obligation of the Company to do so. To the extent indemnification  payments made
by the Lenders  pursuant to this Paragraph 12(g) are  subsequently  recovered by
any Agent from,  or for the account of, the  Company,  such Agent will  promptly
refund  such   previously   paid   indemnity   payments  to  the  Lenders.   The
indemnification  obligations  of the Company and  Lenders  under this  Paragraph
12(g) shall  survive  termination  of this  Agreement and payment in full of the
Obligations.

     12(h)Agent in Its  Individual  Capacity.  Any Agent and its  Affiliates may
     make loans to, accept deposits
                                --------------------------------
from and  generally  engage in any kind of  business  with the Company as though
such  Agent  were not an Agent  hereunder.  With  respect  to such loans made or
renewed by them and any note issued to them hereunder, each Agent shall have the
same rights and powers under the Credit  Documents as any Lender  thereunder and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include Agents in their individual capacities.

     12(i)Successor  Agents.  Any Agent  may  resign  as such  under the  Credit
     Documents upon ninety (90) days'
                                ----------------
prior written notice to the Lenders and the Company and the Lead Administrative
Agent  shall  resign  in the  event its  Maximum  Commitment  shall be less than
$25,000,000.00.  In  addition,  in the  event  any Agent  fails to  perform  its
obligations  under the  Credit  Documents  in any  material  manner and fails to
correct  its  performance  within  thirty  (30) days of  written  notice of such
failure of performance  given by not less than the Majority  Lenders,  then such
Agent may be removed  upon thirty  (30) days  notice  given by not less than the
Majority Lenders. If an Agent shall resign or be so removed,  then, on or before
the effective date of such  resignation or removal,  the Majority  Lenders shall
appoint a  successor  agent  reasonably  acceptable  to the  Company  or, if the
Majority  Lenders are unable to agree on the  appointment of a successor  agent,
such Agent shall  appoint a successor  agent for the  Lenders,  which  successor
agent shall be reasonably  acceptable to the Company,  whereupon  such successor
agent shall succeed to the rights, powers and duties of such Agent, and the term
"Documentation   Agent,"  "Syndication  Agent,"  "Lead  Administrative   Agent,"
"Co-Administrative   Agent,"   "Arranger",   "Co-Arranger"  or  "Co-Agents,"  as
applicable,  shall mean such successor agent effective upon its appointment, and
the former  Agent's  rights,  powers and duties shall be terminated  without any
other  or  further  act or deed on the part of such  former  Agent or any of the
parties to this  Agreement  or any of the other Credit  Documents or  successors
thereto.  After any Agent's resignation or removal hereunder,  the provisions of
this  Paragraph 12 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under the Credit Documents.

     12(j)Sharing  of  Set-Offs.  If  following  the  occurrence  and during the
     continuance of an Event of Default
                                -------------------
any Lender (a "benefitted  Lender") shall at any time receive any payment of all
or part of the  Obligations  held by it or  receive  any  collateral  in respect
thereof  (whether  voluntarily or  involuntarily,  by set-off or otherwise) in a
greater proportion than any such payment to and collateral received by any other
Lender, if any, in respect of such other Lender's portion of the Obligations, or
interest thereon,  such benefitted Lender shall purchase for cash from the other
Lenders such portion of each such other Lender's  Obligations,  or shall provide
such  other  Lenders  with the  benefits  of such  collateral,  or the  proceeds
thereof,  as shall be  necessary  to cause such  benefitted  Lender to share the
excess payment or benefits of such  collateral or proceeds  ratably with each of
the  Lenders;  provided,  however,  that if all or any  portion  of such  excess
payment or benefits is thereafter  recovered from such benefitted  Lender,  such
purchase shall be rescinded,  and the purchase price and benefits  returned,  to
the extent of such recovery but without  interest.  The Company agrees that each
Lender so purchasing a portion of another Lender's  Obligations may exercise all
rights of  payment  (including,  without  limitation,  rights of  set-off)  with
respect to such  portion as fully as if such  Lender  were the direct  holder of
such portion.

                  13. Miscellaneous Provisions.
                      ------------------------

     13(a)No  Assignment.  The Company may not assign its rights or  obligations
     under the Credit Documents
                                -------------
without the prior written  consent of one hundred percent (100%) of the Lenders.
Subject to the  foregoing,  all  provisions  contained in this  Agreement or any
document or agreement  referred to herein or relating  hereto shall inure to the
benefit of each Lender,  its successors  and assigns,  and shall be binding upon
the Company, its successors and assigns.

     13(b)Amendment.  The  Credit  Documents  may not be  amended  or  terms  or
     provisions hereof waived unless such
                                ---------
amendment  or waiver is in writing  and signed by the  Majority  Lenders and the
Company;  provided,  however,  that  without  the prior  written  consent of one
hundred percent (100%) of the Lenders, no amendment or waiver shall:

     (1) Waive or amend any term or provision of  Paragraph  4(e),  4(f) or 4(g)
     above, or this
         Paragraph 13(b);

     (2) Reduce the principal of, or interest on, the  Obligations or any amount
     of fees payable under this Agreement or extend the required payment date of
     principal or interest on the Obligations or any fees;

     (3) Increase the Aggregate Credit Limit above $2,000,000,000.00;

     (4) Modify any Lender's  Primary  Percentage Share or Swing Line Percentage
     Share  except  modifications  resulting  from  an  increase,  permanent  or
     temporary,  in a Lender's Maximum  Commitment or Swing Line Commitment made
     as permitted under this Agreement;

     (5) Modify the definition of "Majority Lenders";

     (6)  Include  any  Person  other  than the  Lenders  signatory  hereto as a
     "Lender"  hereunder  except as  expressly  permitted  pursuant to Paragraph
     14(a) below;

     (7)  Cancel or  terminate  the  Guaranty  or permit the  revocation  of the
     Subordination Agreement;
         or

     (8) Extend the Revolving Facility Maturity Date or the Final Maturity Date;

provided,  however,  that nothing contained herein shall in any manner or to any
extent be deemed to  supersede  any  provision  of the  Credit  Documents  which
expressly  designates  which  Lenders are  empowered  to modify such  provision,
including,  without  limitation,  any  provision of the Credit  Documents  which
expressly  requires the consent of one hundred  percent (100%) of the Lenders to
any  modification  thereof.  No amendment or waiver  shall,  unless agreed to in
writing by the affected  Agent,  modify the rights or duties of such Agent.  The
Lead  Administrative  Agent shall provide notice and a copy of all amendments to
the Credit Documents to all parties to the Credit Documents.

     13(c)Cumulative  Rights; No Waiver. The rights,  powers and remedies of the
     Lenders hereunder are cumulative
                                ----------------------------
and in addition to all rights,  powers and remedies  provided  under any and all
agreements  between  the Company and the  Lenders  relating  hereto,  at law, in
equity or otherwise.  Any delay or failure by the Lenders to exercise any right,
power or remedy  shall not  constitute a waiver  thereof by the Lenders,  and no
single or partial  exercise by the Lenders of any right,  power or remedy  shall
preclude  any other or further  exercise  thereof or any  exercise  of any other
rights, powers or remedies.

     13(d)Entire Agreement;  Severability.  This Agreement and the documents and
     agreements referred to herein
                                ------------------------------
embody the entire  agreement and  understanding  between the parties  hereto and
supersede all prior agreements and understandings relating to the subject matter
hereof and  thereof.  All  waivers  by the  Company  provided  for in the Credit
Documents have been specifically  negotiated by the parties with full cognizance
and  understanding  of their  rights.  If any of the  provisions  of the  Credit
Documents shall be held invalid or unenforceable,  the Credit Documents shall be
construed as if not containing such  provisions,  and the rights and obligations
of the parties hereto shall be construed and enforced accordingly.

     13(e)Survival.  All representations,  warranties,  covenants and agreements
     herein contained on the part of
                                --------
the  Company  shall  survive  the  termination  of this  Agreement  and shall be
effective  until the  Obligations  are paid and  performed  in full or longer as
expressly provided herein.

    13(f)Notices.  All  notices  given by any  party to any of the  others
    shall be in writing (which may be by
                                -------
facsimile transmission),  delivered personally, by commercial courier service or
by  depositing  the same in the United  States  mail,  registered,  with postage
prepaid,  addressed  to such party at the address set forth on Annex II attached
hereto.  Any party may change the  address  to which  notices  are to be sent by
notice of such change to the other party or parties given as provided herein.

          13(g)Governing  Law. This  Agreement  shall be deemed to be a contract
          made under the laws of the State of
                                -------------
California,  and for all purposes shall be construed in accordance with the laws
of said State, without regard to principles of conflicts of law.

          13(h)Counterparts. This Agreement may be executed in counterparts each
          of which when so executed shall be
                                ------------
deemed to be an original and all of which when taken together  shall  constitute
one and the same agreement.

          13(i)Waiver  of Jury  Trial.  EACH OF THE  PARTIES  HERETO  WAIVES ITS
          RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
                                --------------------
ANY CLAIM OR CAUSE OF ACTION  BASED  UPON OR  ARISING  OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES THAT ANY SUCH CLAIM
OR CAUSE OF  ACTION  SHALL BE TRIED BY A COURT  TRIAL  WITHOUT  A JURY.  WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS PARAGRAPH 13(i) AS TO ANY ACTION,
COUNTERCLAIM OR OTHER  PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR
ANY  PROVISION  HEREOF OR  THEREOF.  THIS WAIVER  SHALL APPLY TO ANY  SUBSEQUENT
AMENDMENTS,  RENEWALS,  SUPPLEMENTS OR  MODIFICATIONS  TO THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS.

          14. Additional Lenders;  Assignments and Participations;  Increases in
          Availability.
           --------------------------------------------------------------------

                           14(a)Addition of New Lender.
                                ----------------------

          (1) Subject to the limitation on the Aggregate  Credit Limit set forth
          in the  definition of such term,  the Company or any Lender may at any
          time propose that one or more Eligible  Assignees (each, an "Applicant
          Financial Institution") become an additional Lender hereunder. At such
          time,  the Company or such  Lender,  as  applicable,  shall notify the
          other parties hereto,  including the Lead Administrative Agent, of the
          identity of such Applicant  Financial  Institution  and such Applicant
          Financial   Institution's   proposed   Maximum   Commitment   and,  as
          applicable,  Swing Line  Commitment.  The  addition  of any  Applicant
          Financial Institution shall be subject to:

          (i) If such Applicant Financial  Institution is proposed for inclusion
          as a Lender  hereunder by a Lender,  the prior written  consent of the
          Company  and the  Lead  Administrative  Agent,  and if such  Applicant
          Financial  Institution is proposed for inclusion as a Lender hereunder
          by the Company,  the prior written consent of the Lead  Administrative
          Agent,  none of which  consents  shall be  unreasonably  withheld  and
          which, if given, shall be given in writing to the other parties hereto
          no later  than the tenth day  following  receipt  by the  Company of a
          written  request  for  the  inclusion  of  such  Applicant   Financial
          Institution as a Lender hereunder; and

          (ii)  Delivery of each of the items and the  occurrence of each of the
          events described in subparagraph (2) below.

          (2)  Assuming  delivery  of the  consent of the  Company  and/or  Lead
          Administrative  Agent as  required  pursuant  to  subparagraph  (1)(i)
          above,  the  Lead  Administrative  Agent,  the  Company  and,  if such
          Applicant  Financial  Institution  will be  acquiring  a portion of an
          existing  Lender's  Maximum  Commitment by way of assignment from such
          existing  Lender,  such existing  Lender,  shall mutually agree on the
          Adjustment Date on which such Applicant  Financial  Institution  shall
          become a party hereto and a Lender hereunder. On such Adjustment Date:

          (i) The Lead  Administrative  Agent  shall  deliver to the Company and
          each of the Lenders a  Commitment  Schedule to be effective as of such
          Adjustment Date,  reflecting the inclusion of such Applicant Financial
          Institution as a party hereto and a Lender hereunder.

          (ii) No later than 12:30 p.m.  (Los Angeles  time) on such  Adjustment
          Date,  such  Applicant  Financial  Institution  shall  pay to the Lead
          Administrative  Agent  an  amount  equal to such  Applicant  Financial
          Institution's  Primary  Percentage Share of Primary Loans  outstanding
          and,  as  applicable,  Swing  Line  Percentage  Share of  Swing  Loans
          outstanding.  If such  Applicant  Financial  Institution is becoming a
          Lender  hereunder as a result of an increase in the  Aggregate  Credit
          Limit,  the Lead  Administrative  Agent shall  thereupon  remit to the
          Lenders, as applicable,  their shares of such funds. If such Applicant
          Financial  Institution is acquiring a portion of an existing  Lender's
          outstanding  Primary  Loans,  the  Lead  Administrative   Agent  shall
          thereupon  remit such funds to the assigning  Lender.  Following  such
          Adjustment  Date, fees and interest  accrued on the Obligations to but
          not including such  Adjustment Date shall be payable to the Lenders in
          accordance with their respective  Primary  Percentage Shares and Swing
          Line  Percentage  Shares prior to such  Adjustment  Date before giving
          effect to the readjustment thereof pursuant to the Commitment Schedule
          provided by the Company on such Adjustment Date.

          (iii) If such Applicant  Financial  Institution is acquiring a portion
          of an existing  Lender's Maximum  Commitment by way of assignment from
          such existing Lender, the Lead Administrative  Agent, the Company, the
          assigning Lender and the Applicant Financial Institution shall execute
          and deliver an Assignment  Agreement,  or if such Applicant  Financial
          Institution is becoming a Lender  hereunder as a result of an increase
          in the Aggregate  Credit Limit,  the Lead  Administrative  Agent,  the
          Company and the  Applicant  Financial  Institution  shall  execute and
          deliver an Additional  Lender  Agreement,  either of which  Assignment
          Agreement or Additional Lender Agreement shall constitute an amendment
          to this Agreement to the extent  necessary to reflect the inclusion of
          the Applicant Financial Institution as a Lender hereunder.

          (iv)  The  Applicant  Financial  Institution  shall  pay to  the  Lead
          Administrative Agent a registration fee of $3,500.00.

Subject to the requirements described above, the Applicant Financial Institution
shall become a party hereto and a Lender  hereunder and shall be entitled to all
rights, benefits and privileges accorded a Lender under the Credit Documents and
shall be subject to all obligations of a Lender under the Credit Documents.

          14(b)Assignments  Among Existing  Lenders.  Any Lender may at any time
          agree to assign a portion of such
                                ----------------------------------
Lender's Maximum Commitment to a Transferee Lender. In such event the Lender and
the  Transferee  Lender  shall so notify the Lead  Administrative  Agent and the
Company of the Adjustment Date on which such  assignment is to be effective.  On
such Adjustment Date:

          (1) The Company  shall  deliver to the Lead  Administrative  Agent and
          each of the Lenders a  Commitment  Schedule to be effective as of such
          Adjustment Date reflecting the assignment.

          (2) The Lead Administrative  Agent, the Company,  the assigning Lender
          and the  Transferee  Lender  shall  execute and deliver an  Assignment
          Agreement,  which shall  constitute an amendment to this  Agreement to
          the extent necessary to reflect such transfer.

          (3) No later than 12:30 p.m.  (Los  Angeles  time) on such  Adjustment
          Date, the Transferee Lender shall pay to the Lead Administrative Agent
          an amount equal to, as applicable,  such Transferee  Lender's  Primary
          Percentage  Share of Primary Loans and Swing Line Percentage  Share of
          Swing Loans outstanding in excess of such Transferee Lender's previous
          Primary  Percentage  Share and, as applicable,  Swing Line  Percentage
          Share thereof.  The Lead Administrative Agent shall thereupon remit to
          the transferring Lender the amount thereof.

          14(c)Minimum Loan Commitment. Notwithstanding anything to the contrary
          contained herein, the inclusion of
                                -----------------------
any Applicant Financial  Institution as a Lender hereunder pursuant to Paragraph
14(a) above and the assignment by a Lender of a portion of such Lender's Maximum
Commitment  to a Transferee  Lender  pursuant to Paragraph  14(b) above shall be
subject to the following restrictions:

          (1) If an Applicant Financial Institution is acquiring a portion of an
          existing Lender's Maximum Commitment by way of an assignment from such
          existing Lender,  then: (i) such assignment of Maximum Commitment must
          be in the minimum amount of  $5,000,000.00  (or if in a higher amount,
          in integral  multiples of $5,000,000.00  in excess thereof),  and (ii)
          following the  consummation of the  contemplated  assignment and after
          giving  effect  to any  other  assignments  occurring  on the  related
          Adjustment  Date, such existing Lender must continue to hold a Maximum
          Commitment  of  not  less  than   $25,000,000.00  and  such  Applicant
          Financial  Institution must hold a Maximum Commitment of not less than
          $25,000,000.00;

          (2) If an  existing  Lender  is  assigning  a portion  of its  Maximum
          Commitment  to  a  Transferee  Lender,   such  assignment  of  Maximum
          Commitment  is in the  minimum  amount  of  $5,000,000.00  (or if in a
          higher  amount,  in  integral  multiples  of  $5,000,000.00  in excess
          thereof) and such  existing  Lender  shall  continue to hold a Maximum
          Commitment of not less than $25,000,000.00  following the consummation
          of the contemplated assignment.

There shall be no minimum hold  requirement in the event that an existing Lender
is assigning one hundred percent (100%) of its Maximum Commitment.

          14(d)Sub-Participations  by  Lenders.  Any Lender may at any time sell
          participating interests in any of the
                                -----------------------------
Obligations  held  by  such  Lender  and its  commitments  hereunder;  provided,
however, that:

          (1) No  participation  contemplated  by  this  Paragraph  14(d)  shall
          relieve such Lender from its obligations  hereunder or under any other
          Credit Document;

          (2) Such Lender shall remain solely responsible for the performance of
          such obligations;

          (3) The Company,  the Lead Administrative  Agent and the other Lenders
          shall  continue  to deal  solely  and  directly  with  such  Lender in
          connection with such Lender's rights and obligations  under the Credit
          Documents;

          (4) The  participation  agreement  between  such Lender and the Person
          purchasing such participation interest (a "Participant") shall provide
          that:  (i)  the  participation  interest  of  the  Participant  is  an
          undivided interest in such Lender's Maximum  Commitment,  and (ii) the
          sole voting rights of the  Participant are with respect to those items
          on which  such  Lender is  entitled  to vote  pursuant  to  Paragraphs
          13(b)(2) and 13(b)(7) above; and

          (5) Such Lender  shall not enter into  participation  agreements  with
          more  than  two  Participants  for  each   $25,000,000.00  of  Maximum
          Commitment held by such Lender.
The Company  acknowledges and agrees that each Participant shall be considered a
Lender for purposes of Paragraphs  4(e),  4(f),  4(g) and 5(l) above;  provided,
however,  that in no event  shall any  Participant  be  entitled  to receive any
payment or  compensation in excess of that to which such  Participant's  selling
Lender would be entitled with respect to the participation interest held by such
Participant  if such  Lender  had not sold any  participation  interest  to such
Participant.

          14(e)Federal   Reserve  Bank.   Notwithstanding   the   provisions  of
          Paragraphs 14(a) and 14(b) above, any Lender
                                --------------------
may at any time  pledge or assign  all or any  portion of such  Lender's  rights
under this Agreement and the other Credit Documents to a Federal Reserve Bank.

          14(f)Increases in Availability.  From time to time the Company and any
          Lender (an "Increasing Lender") may
                                -------------------------
agree,  with the prior  written  consent of the Lead  Administrative  Agent,  to
permanently or temporarily increase such Lender's Maximum Commitment and Primary
Percentage  Share,  the dollar amount of any such increase to be, subject to the
Aggregate Credit Limit limitation, in the minimum dollar amount of $5,000,000.00
and integral  multiples of $5,000,000.00 in excess thereof.  The Company and the
Increasing  Lender shall agree on the Adjustment  Date for said increase and, if
the increase is a temporary  rather than permanent  increase,  the date on which
said increase shall terminate (the "Temporary  Increase  Termination Date"). The
Lead Administrative Agent shall deliver to the Company and each of the Lenders a
Commitment Schedule to be effective as of such Adjustment Date. On the Temporary
Increase  Termination  Date the  aggregate  amount of such  Increasing  Lender's
Primary  Percentage Share of outstanding  Primary Loans in excess of its Maximum
Commitment after giving effect to the termination of the subject increase shall,
if but only if at such Temporary Increase  Termination Date there does not exist
an  Event  of  Default,  be  payable  in  full.  If at  the  Temporary  Increase
Termination Date there exists an Event of Default, the temporary increase of the
Increasing  Lender shall continue in effect and, unless  otherwise agreed by one
hundred  percent  (100%)  of the  Lenders,  shall  be  treated  thereafter  as a
permanent increase in said Increasing Lender's Maximum Commitment.

          14(g)Provision  of  Information;  Confidentiality.  The Company hereby
          acknowledges and agrees that in
                                -----------------------------------------
connection with the proposed assignment or subparticipation by
a Lender of its  interest  in the  Obligations,  such  Lender  may  disclose  to
prospective  assignees and Participants any and all information provided to such
Lender hereunder; provided, however, that such information shall be furnished to
such prospective assignees and Participants on a confidential basis.

          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
          be executed as of the day and year first above written.

                                             COUNTRYWIDE HOME LOANS, INC.,
                                             a New York corporation

                                             By
                                             Name
                                             Title

                                             ROYAL  BANK  OF  CANADA,   as  Lead
                                             Administrative  Agent,  Arranger, a
                                             Swing Line Lender and a Lender

                                             By
                                             Name
                                             Title

                                             ABN AMRO BANK, N.V., as
                                             Co-Administrative Agent, a
                                             Co-Arranger, a Co-Agent, a Swing
                                             Line Lender and a Lender

                                             By
                                             Name
                                             Title

                                             CREDIT LYONNAIS NEW YORK BRANCH, as
                                             Syndication Agent, a Co-Arranger, a
                                             Co-Agent, a Swing Line Lender and a
                                             Lender

                                             By
                                             Name
                                             Title

                                             COMMERZBANK AG, NEW YORK BRANCH, as
                                             Documentation Agent, a Co-Arranger,
                                             a Co-Agent, a Swing Line Lender and
                                             a Lender

                                             By
                                             Name
                                             Title

                                             [INSERT SIGNATURE BLOCKS FOR OTHER
                                             LENDERS]

ACKNOWLEDGED AND AGREED TO as of the day and year first above written:

COUNTRYWIDE CREDIT INDUSTRIES, INC.

By ___________________________________
Name ________________________________
Title _________________________________

<PAGE>

                    SCHEDULE OF EXHIBITS TO CREDIT AGREEMENT

EXHIBIT        DOCUMENT

     A            Form of Officer's Certificate

     B            Litigation Schedule

     C            Schedule of Existing Subsidiaries

Annex I:          Glossary

____           Attachments to Glossary:
               -----------------------

            Schedule I:      Commitment Schedule as of the Effective Date

            Exhibit A:       Form of Additional Lender Agreement

            Exhibit B:       Form of Assignment Agreement

            Exhibit C-1:     Form of Covenant Compliance Certificate (Company)

            Exhibit C-2:     Form of Covenant Compliance Certificate (Parent)

            Exhibit D:       Form of Parent Guaranty

            Exhibit E:       Form of Parent Subordination Agreement

Annex II:  Schedule of Notice Addresses

<PAGE>

la-364217
                                CREDIT AGREEMENT

                                  By and Among

                                                    COUNTRYWIDE HOME LOANS, INC.

                                       and

                              ROYAL BANK OF CANADA

                    as Lead Administrative Agent and Arranger

                                                     ABN AMRO BANK, N.V. ("ABN")
                           as Co-Administrative Agent

                                          CREDIT LYONNAIS NEW YORK BRANCH ("CL")
                              as Syndication Agent

                                          COMMERZBANK AG, NEW YORK BRANCY ("CA")
                             as Documentation Agent

                                 ABN, CL and CA

                                 as Co-Arrangers

                                       and

                            THE LENDERS PARTY THERETO

                                 April 12, 2000

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

RECITALS.............................. ........................................1
AGREEMENT ........................... .........................................1

1.       Credit Facilities.......... ..........................................1
         1(a)     Primary Facility. ...........................................2
         1(b)     Swing Loan Facility..........................................2
         1(c)     Term Loan Facility...........................................3

   2.             Requests for Loans; Funding..................................3
         2(a)     Requests for Loans...........................................3
         2(b)     Funding of Primary Loans and Swing Loans ....................4
         2(c)     Funding Method...............................................4

   3.             Payment of Principal; Prepayments............................4
         3(a)     Required Principal Payments..................................4
         3(b)     Prepayments..................................................4

   4.             Calculation and Payment of Interest; Related Provisions......5
         4(a)     Interest on Primary Loans and the Term Loan..................5
         4(b)     Interest on Swing Loans......................................6
         4(c)     Payment of Interest..........................................6
         4(d)     Inability to Determine Rate..................................6
         4(e)     Funding Indemnification......................................7
         4(f)     Illegality; Impracticality...................................7
         4(g)     Requirements of Law; Increased Costs.........................8
         4(h)     Taxes........................................................8
         4(i)     Buy-Down Provisions.........................................11
         4(j)     Obligation of Lenders to Mitigate; Replacement of Lenders...11

   5.             Miscellaneous Lending Provisions............................12
         5(a)     Use of Proceeds.............................................12
         5(b)     Assumption of Funding/Purchase..............................12
         5(c)     Evidence of Indebtedness....................................12
         5(d)     Interest and Fee Billing and Payment........................13
         5(e)     Nature and Place of Payments................................14
         5(f)     Post-Default Interest.......................................14
         5(g)     Computations................................................14
         5(h)     Disbursement of Payments Received...........................14
         5(i)     Fees........................................................15
         5(j)     Wire Transfers of Funds.....................................15
         5(k)     Reduction in Aggregate Credit Limit.........................16
         5(l)     Capital Requirements........................................16
         5(m)     Extension of Revolving Facility Maturity Date...............16

   6.             Guaranty; Subordination; Additional Documents...............18
         6(a)     Guaranty and Subordination Agreement........................18
         6(b)     Further Documents...........................................18
  7.             Conditions Precedent.........................................18
         7(a)     First Loan..................................................18
         7(b)     All Primary Loans and Swing Loans...........................20
         7(c)     Extension of Revolving Facility Maturity Date; Term Loan....20

   8.             Representations and Warranties of the Company...............21
         8(a)     Financial Condition.........................................21
         8(b)     Corporate Existence; Compliance with Law....................21
         8(c)     Corporate Power; Authorization; Enforceable.................22
         8(d)     No Legal Bar................................................22
         8(e)     No Material Litigation......................................22
         8(f)     Taxes.......................................................22
         8(g)     Investment Company Act......................................22
         8(h)     Subsidiaries................................................22
         8(i)     Federal Reserve Board Regulations...........................22
         8(j)     ERISA.......................................................23
         8(k)     Assets......................................................23
  9.             Affirmative Covenants........................................23
         9(a)     Financial Statements........................................23
         9(b)     Certificates; Reports; Other Information....................24
         9(c)     Payment of Indebtedness.....................................25
         9(d)     Maintenance of Existence and Properties.....................25
         9(e)     Inspection of Property; Books and Records;..................25
         9(f)     Notices.....................................................25
         9(g)     Expenses....................................................26
         9(h)     Credit Documents............................................26
         9(i)     Insurance...................................................26
         9(j)     CPN Program.................................................26
         9(k)     Hedging Program.............................................26

   10.            Negative Covenants..........................................26
         10(a)    Liens.......................................................26
         10(b)    Indebtedness................................................27
         10(c)    Consolidation and Merger....................................27
         10(d)    Acquisitions................................................27
         10(e)    Payment of Dividends........................................28
         10(f)    Purchase or Retirement of Stock.............................28
         10(g)    Investments; Advances; Receivables..........................28
         10(h)    Sale of Assets..............................................29
         10(i)    Minimum Net Worth...........................................29
         10(j)    Maximum Total Debt..........................................29
11.            Events of Default..............................................30

   12.            Agency Provisions...........................................32
         12(a)    Appointment.................................................32
         12(b)    Delegation of Duties........................................32
         12(c)    Exculpatory Provisions......................................32
         12(d)    Reliance by Agent...........................................33
         12(e)    Notice of Default; Agreement to Advance.....................33
         12(f)    Non-Reliance on Agent and Other Lenders.....................33
         12(g)    Indemnification.............................................34
         12(h)    Agent in Its Individual Capacity............................34
         12(i)    Successor Agents............................................35
         12(j)    Sharing of Set-Offs.........................................35
13.            Miscellaneous Provisions.......................................35
         13(a)    No Assignment...............................................36
         13(b)    Amendment...................................................36
         13(c)    Cumulative Rights; No Waiver................................37
         13(d)    Entire Agreement; Severability..............................37
         13(e)    Survival....................................................37
         13(f)    Notices.....................................................37
         13(g)    Governing Law...............................................37
         13(h)    Counterparts................................................37
         13(i)    Waiver of Jury Trial........................................37

14.            Additional Lenders; Assignments and Participations;
Increases in Availability;....................................................37
         14(a)    Addition of New Lender......................................37
         14(b)    Assignments Among Existing Lenders..........................39
         14(c)    Minimum Loan Commitment.....................................40
         14(d)    Sub-Participations by Lenders...............................40
         14(e)    Federal Reserve Bank........................................41
         14(f)    Increases in Availability...................................42
         14(g)    Provision of Information; Confidentiality...................41Exhibit 10.12

                    MARK IV INDUSTRIES, INC.
                1996 INCENTIVE STOCK OPTION PLAN
                ________________________________

                Second Amendment And Restatement
                Effective as of February 29, 2000
                ________________________________

                            Recitals:

     On April 25, 1996, Mark IV Industries, Inc., a Delaware corporation with
offices at One Towne Centre, 501 John James Audubon Parkway, Amherst, New York
(the "Company") adopted a stock option plan which was intended to enable the
Company to grant incentive stock options (within the meaning of Section 422 of
the Internal Revenue Code) to officers and other key employees of the Company
and its subsidiaries.  This stock option plan, known as "The Mark IV
Industries, Inc. 1996 Incentive Stock Option Plan" (hereinafter the "Plan")
was approved by the stockholders of the Company on July 29, 1996.

     Effective as of July 29, 1996, in connection with the promulgation of a
new rule by the United States Securities and Exchange Commission, the Plan was
amended and restated to permit Executive Officers of the Company to transfer
options they have been granted under the terms of the Plan to the extent that
such options are not "qualified" incentive stock options and to make certain
other technical changes.

     The Company now desires to amend the Plan to eliminate the Plan provision
which allowed Optionees to pay the exercise price payable in connection with
the exercise of their options by authorizing the Company to retain a portion
of the shares of Common Stock which the Optionee would otherwise be entitled
to receive in connection with the exercise of their option as payment of the
exercise price. The Company desires, for administrative reasons, to effect
these amendments through an amendment and restatement of the Plan.

                         Consideration:

       NOW, THEREFORE, in consideration of the foregoing, the Company hereby
adopts the following as the Second Amendment and Restatement of the Plan
effective as of February 29, 2000:

            1.    Purpose of Plan; Current Status of the Plan.     The Mark
Inc., 1996 Incentive Stock Option Plan (hereinafter called the "Plan") is
intended to provide officers and other key employees of Mark IV Industries,
Inc., a Delaware corporation (hereinafter called the "Company") and officers
and other key employees of each Subsidiary of the Company as that term is
defined in Section 3 below (hereinafter individually referred to as a
"Subsidiary" and collectively as "Subsidiaries") with an additional incentive
for them to promote the success of the business, to increase their proprietary
interest in the success of the Company and its Subsidiaries, and to encourage

<PAGE>2

them to remain in the employ of the Company or its Subsidiaries.  The above
aims will be effectuated through the granting of certain stock options, as
herein provided, which are intended to qualify as Incentive Stock Options
(hereinafter called "ISOs") under Section 422 of the Internal Revenue Code of
1986, as the same has been and shall be amended (hereinafter called the
"Code").

         2.    Administration.  The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company (hereinafter
called the "Committee") composed of not less than two (2) directors of the
Company.  The Committee is authorized to adopt such rules and regulations for
the administration of the Plan and the conduct of its business as may seem to
it proper.

       Any action taken or interpretation by the Committee under any provision
of the Plan or any option granted hereunder shall, except to the extent that
any options granted pursuant to the terms of the Plan are not intended to be
considered incentive stock options, be in accordance with the provisions of
the Code, and the regulations and rulings issued thereunder as such may be
amended, promulgated, issued, renumbered or continued from time to time
hereafter in order that the options granted hereunder shall, to the fullest
extent possible, constitute "incentive stock options" within the meaning of
the Code.  All action taken pursuant to this Plan shall be lawful and with a
view to obtaining for the Company and the option holder the maximum
advantages under the law as then obtaining, and in the event that any dispute
shall arise as to any action taken or interpretation by the Committee under
any provision of the Plan, then all doubts shall be resolved in favor of such
having been done in accordance with the said Code and such revenue laws,
amendments, regulations, rulings and provisions as may then be applicable.
Any action taken or interpretation by the Committee under any provision of the
Plan shall be final.  No member of the Committee shall be liable for any
action, determination or interpretation under any provision of the Plan or
otherwise if done in good faith.

       3.    Participation.  The Committee shall determine which of the
employees of the Company and its Subsidiaries will receive options under the
terms of this Plan from among officers and other key employees of the Company
and its Subsidiaries (including, subject to the provisions of Section
422(c)(5) of the Code, officers or other key employees possessing more than
ten percent (10%) of the total combined voting power of all classes of stock
of the Company).  Those individuals to whom options are granted under the
terms of this Plan are sometimes hereinafter referred to as "Optionees".  The
Committee shall determine the terms and provisions of the options granted
hereunder (which need not be identical), the time or times at which options
shall be granted and the number of shares of common stock of the Company
(sometimes hereinafter referred to as "Common Stock") (or such number of
shares of stock in which the Common Stock may at any time hereafter be
constituted), for which options are granted.  Notwithstanding the foregoing,
in no event shall the Committee grant any options to the Company's Chief
Executive Officer, any of the four (4) most highly compensated officers, or
any other employee of the Company if the aggregate number of shares of Common

<PAGE>3

Stock which can be purchased by any such individual through the exercise of
all options granted to him or her under the Plan exceeds 300,000 shares of
Common Stock, adjusted as provided for in Section 5 hereof.  For purposes of
this Plan, the term "Subsidiary" shall mean any corporation which satisfies
the definition of a "subsidiary corporation" as contained in Section 424(f) of
the Code and the term "Subsidiaries" shall mean all corporations which satisfy
the definition of a "subsidiary corporation" as contained in Section 424(f) of
the Code when, in each case, for purposes of applying such definition, the
"employer corporation" is deemed to mean the Company.

               In selecting Optionees and in determining the number of shares
for which options are granted, the Committee may weigh and consider the
following factors:  the office or position of the Optionee and his/her degree
of responsibility for the growth and success of the Company, length of
service, remuneration, promotions and potential.  The foregoing factors shall
not be considered to be exclusive or obligatory upon the Committee, and the
Committee may properly consider any other factors which to it seems
appropriate.

             An Optionee who has been granted an option under the Plan may be
granted additional options under the Plan if the Committee shall so determine.

             In no event shall any options be granted under this Plan at any
time after the termination date set forth at the end of this Plan.

       4.    Shares Subject to the Plan.  Subject to adjustment as provided in
Section 5 of this Plan, the aggregate number of reserved shares of Common
Stock for which options may be granted hereunder shall not exceed three
million (3,000,000) shares, determined as of April 24, 1996, (the effective
date of this Plan); provided, however, that as to shares subject to options
which expire or terminate pursuant to the provisions of this Plan without
having been exercised in full, such shares shall be considered to be available
again for placement under options granted thereafter under the Plan.  Shares
issued pursuant to the exercise of incentive stock options granted under the
Plan shall be fully paid  and non-assessable.

       5.    Anti-Dilution Provisions.  The aggregate number of shares and the
class of shares as to which options may be granted under the Plan, the number
and class of shares subject to each outstanding option, the price per share
thereof (but not the total price), and the number of shares as to which an
option may be exercised at any one time, shall all be adjusted proportionately
in the event of any change, increase or decrease in the outstanding shares of
Common Stock or any change in classification of the Company's Common Stock
without receipt of consideration by the Company which results either from a
split-up, reverse split or consolidation of shares, payment of a stock
dividend, recapitalization, reclassification or other like capital adjustment
so that upon exercise of the option, the Optionee shall receive the number and
class  of shares that he would have received had he been the holder of the
number of shares of Common Stock for which the option is being exercised

 <PAGE>4

immediately preceding such change, increase or decrease in the outstanding
shares of Common Stock of the Company.  Any such adjustment made by the
Committee shall be final and binding upon all Optionees, the Company, and all
other interested persons.  Any adjustment of an incentive stock option under
this paragraph shall be made in such manner as not to constitute a
"modification" within the meaning of Section 424(h)(3) of the Code.

             Anything in this Section 5 to the contrary notwithstanding, no
fractional shares or scrip representative of fractional shares shall be issued
upon the exercise of any option.  Any fractional share interest resulting from
any change, increase or decrease in the outstanding shares of Common Stock of
the Company or resulting from any reorganization, merger, or consolidation for
which adjustment is provided in this Section 5 shall disappear and be absorbed
into the next lowest number of whole shares, and the Company shall not be
liable for any payment for such fractional share interest to the Optionee upon
his exercise of the option.

        6.    Option Price.  The purchase price for each share of Common Stock
which may be acquired upon the exercise of each option issued under the Plan
shall be determined by the Committee at the time the option is granted, but in
no event shall such purchase price be less than one hundred percent (100%) of
the fair market value of the Company's Common Stock on the date of grant.  If
the Common Stock of the Company is listed upon an established stock exchange
or exchanges on the day the option is granted, such fair market value shall be
deemed to be the highest closing price of the Common Stock of the Company on
such stock exchange or exchanges on the day the option is granted, or if no
sale of the Company's Common Stock shall have been made on any stock exchange
on that day, on the next preceding day on which there was a sale of such
stock.

       7.    Option Exercise Periods.  (a)   The time within which any option
granted hereunder may be exercised shall be, by its terms, not earlier than
one (1) year from the date such option is granted and not later than ten (10)
years from the date such option is granted.  Except as otherwise provided for
herein, the Optionee must remain in the continuous employment of the Company
or any of its Subsidiaries from the date of the grant of the option to and
including the date of exercise of option in order to be entitled to exercise
his option.  Options granted hereunder shall be exercisable in such
installments and at such dates as the Committee may specify.  Unless the
Committee shall specify otherwise, the right of each Optionee to exercise his
option to purchase the number of shares to which his option initially related
shall accrue on a cumulative basis as follows:

                  (i).  the Optionee shall have the right to purchase one-
fourth (1/4) of the total number of shares of Common Stock which can be
purchased pursuant to the option (subject to adjustment as provided in Section
5 hereof) at the end of the one (1) year period following the date the option
is granted;

 <PAGE>5

                  (ii). the Optionee shall have the right to purchase an
additional one-fourth (1/4) of the total number of shares of Common Stock
which can be purchased pursuant to the option (subject to adjustment as
provided in Section 5 hereof) at the end of the two (2) year period following
the date the option is granted;

                  (iii). the Optionee shall have the right to purchase an
additional one-fourth (1/4) of the total number of shares of Common Stock
which can be purchased pursuant to the option (subject to adjustment as
provided in Section 5 hereof) at the end of the three (3) year period
following the date the option is granted;

                  (iv). the Optionee shall have the right to purchase the
remaining one-fourth (1/4) of the total number of shares of Common Stock which
can be purchased pursuant to the option (subject to adjustment as provided in
Section 5 hereof) at the end of the four (4) year period following the date
the option is granted.

               Continuous employment shall not be deemed to be interrupted by
transfers between the Subsidiaries or between the Company and any Subsidiary,
whether or not elected by termination from any Subsidiary and re-employment by
any other Subsidiary or the Company.  Time of employment with the Company
shall be considered to be one employment for the purposes of this Plan,
provided there is no intervening employment by a third party or no interval
between employments which, in the opinion of the Committee, is deemed to break
continuity of service.  The Committee shall, at its discretion, determine the
effect of approved leaves of absence and all other matters having to do with
"continuous employment".  Where an Optionee dies while employed by the Company
or any of its Subsidiaries, his options may be exercised following his death
in accordance with the provisions of Section 10 below.

             (b)   Notwithstanding the foregoing provisions of Section 7(a),
in the event the Company or the shareholders of the Company enter into an
agreement to dispose of all or substantially all of the assets or stock of the
Company by means of a sale, merger, consolidation, reorganization,
liquidation, or otherwise, or in the event a Change of Control (as hereinafter
defined) of the Company shall occur, all unexercised options granted hereunder
shall become immediately exercisable with respect to the full number of shares
subject to that option during the period commencing as of the date of
execution of such agreement and ending as of the earlier of (i) ten (10) years
from the date such option was granted, or (ii) ninety (90) days following the
date on which a Change in Control occurs or the disposition of assets or stock
contemplated by this sentence is consummated.  In addition, in the event that
substantially all the stock of any Subsidiary by whom an Optionee is employed
is sold or otherwise disposed of by merger, consolidation, reorganization,
liquidation or otherwise, or in the event that substantially all the assets of
any division of the Company or any division of any Subsidiary by whom the
Optionee is employed are sold or disposed of by means of a sale, merger,
consolidation, reorganization, liquidation or otherwise and, in connection
with any such asset sale, the Optionee's employment with the Company or the
Subsidiary (as the case may be) is terminated, the options of an Optionee

<PAGE>6

employed by such a division or Subsidiary shall, unless the Optionee remains
in the employ of the Company or any Subsidiary of the Company immediately
following any such sale or other disposition of stock or assets, become
immediately exercisable with respect to the full number of shares subject to
that option during the period commencing as of the date of execution of the
agreement providing for such sale or other disposition and ending as of the
earlier of (x) ten (10) years from the date such option was granted and (y)
ninety (90) days following the date on which the disposition of the assets or
stock contemplated by this sentence is consummated.  Ninety (90) days
following the consummation of any disposition of assets or stock referred to
in the preceding sentence, any unexercised options issued hereunder which have
become exercisable pursuant to this paragraph (or any unexercised portion
thereof) shall terminate and cease to be effective.  In addition, if any
disposition of assets or stock referred to in this paragraph occurs with
respect to substantially all the assets or stock of the Company or if a Change
in Control occurs, ninety (90) days following such disposition of assets or
stock or Change in Control, this Plan and any unexercised options issued
hereunder which have become exercisable pursuant to this paragraph (or any
unexercised portion thereof) shall terminate and cease to be effective, unless
provision is made in connection with such transaction for assumption of
options previously granted or the substitution for such options of new options
covering the securities of a successor corporation or an affiliate thereof,
with appropriate adjustments as to the number and kind of securities and
prices.

             (c)   For purposes of this Plan, a "Change in Control" shall be
deemed to have occurred if:

                 (i).  any "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Act")) becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Act) of more than thirty percent (30%) of the then outstanding voting stock of
the Company, otherwise than through a transaction arranged by, or consummated
with the prior approval of its Board of Directors; or

                 (ii). during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors of the
Company (and any new director whose election to the Board of Directors or
whose nomination for election by the Company's shareholders was approved by a
vote of at least two thirds of the directors then still in office who either
were directors at the beginning of such period or whose election or nomination
for election was previously so approved) (hereinafter referred to as the
"Continuing Directors") cease for any reason to constitute a majority thereof;
or

<PAGE>7

                  (iii). the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Company
immediately prior thereto continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity)
at least 80% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation (provided, however, that if prior to the merger or
consolidation, the Board of Directors of the Company adopts a resolution that
is approved by a majority of the Continuing Directors providing that such
merger or consolidation shall not constitute a "change in control" for
purposes of the Plan, then such a merger or consolidation shall not constitute
a "change in control"); or

                 (iv). the shareholders of the Company approve an agreement
for the sale or disposition by the Company of all or substantially all the
assets of the Company.

              (d)   Any change or adjustment made pursuant to the terms of
this Section 7 shall be made in such a manner so as not to constitute a
"modification" as defined in Section 424 of the Code, and so as not to cause
any incentive stock option issued under this Plan to fail to continue to
qualify as an incentive stock option as defined in Section 422(b) of the Code.
Notwithstanding the foregoing, in the event that any such agreement shall be
terminated without consummating the disposition of said stock or assets, any
unexercised unaccrued portion of any option that had become exercisable solely
by reason of the provisions of this paragraph shall again become unaccrued and
unexercisable as of said termination of such agreement; subject, however, to
such portion of such option accruing pursuant to the normal accrual schedule
provided in the terms under which such option was granted.  Any exercise of
any portion of any option prior to said termination of said agreement shall
remain effective despite the fact that such portion became exercisable solely
by reason of the Company or its shareholders entering into said agreement to
dispose of the stock or assets of the Company or the stock or assets of any
Subsidiary of the Company, any division of the Company or any division of any
Subsidiary of the Company.

       8.    Exercise of Option.  Options shall be exercised as follows:a)
Notice and Payment.  Each option, or any installment thereof, shall be
exercised, whether in whole or in part, by giving written notice to the
Company at its principal office, (the "Exercise Notice") that the Optionee
intends to exercise all or part of any option he has been granted and by
paying to the Company the purchase price for the number of shares of Common
Stock of the Company which the Optionee desires to purchase at the price per
share (as adjusted) set forth in the option which the Optionee desires to
exercise.

<PAGE>8

             (b)   The Exercise Notice: (i) shall state the identity of the
options being exercised (by reference to the date of the grant of the option);
(ii) shall state the number of shares to be purchased and the purchase price
to be paid; and (iii) shall contain representations on behalf of the Optionee
that he acknowledges that the Company is selling the shares being acquired by
him under a claim of exemption from registration under the Securities Act of
1933 as amended (hereinafter referred to as the "Act"), as a transaction not
involving any public offering; that he represents and warrants that he is
acquiring such shares with a view to "investment" and not with a view to
distribution or resale; and that he agrees not to transfer, encumber or
dispose of the shares unless:  (A) a registration statement with respect to
the shares shall be effective under the Act, together with proof satisfactory
to the Company that there has been compliance with applicable state law; or
(B) the Company shall have received an opinion of counsel in form and content
satisfactory to the Company to the effect that the transfer qualifies under
Rule 144 or some other disclosure exemption from registration and that no
violation of the Act or applicable state laws will be involved in such
transfer, and/or such other documentation in connection therewith as the
Company's counsel may in its sole discretion require.

              (c)   Payment of the purchase price for shares of Common Stock
to be acquired in connection with the exercise of any options granted under
this Plan shall be made: (i) by delivery to the Company of cash or a certified
or bank check payable to the order of the Company in an amount equal to the
portion of the purchase price which is payable in connection with the exercise
of such option; or (ii) by delivery to the Company of previously acquired
shares of the Company's Common Stock having an aggregate fair market value
equal to the portion of the purchase price which is payable in connection with
the exercise of such option, provided that such previously acquired shares of
Common Stock have been held by the Optionee for at least six (6) months or
such other period of time as may be required by the Committee at the time such
shares are delivered to the Company in connection with the Optionee's exercise
of his/her option hereunder. If shares of the Company's  Common Stock are
delivered as payment of the purchase price for shares of Common Stock to be
acquired in connection with the exercise of options granted hereunder, the
shares of Common Stock which are delivered in payment of such purchase price
shall be equal to the fair market value (determined in accordance with the
principles set forth in Section 6 hereof) of the Common Stock on the day
immediately preceding the day on which such Common Stock is delivered in
payment of the purchase price for shares of Common Stock to be acquired in
connection with the exercise of options granted hereunder.

             (d)   Issuance of Certificates.  Certificates representing the
shares purchased by the Optionee shall be issued as soon as practicable after
the Optionee has complied with the provisions of Section 8(a) hereof.

             (e)   Rights as a Shareholder.  The Optionee shall have no rights
as a shareholder with respect to the shares purchased until the date of the
issuance to him of a Certificate representing such shares.

<PAGE>9

       9.    Assignment of Option.  (a)   Subject to the provisions of
Sections 9(b) and 10 hereof, options granted under this Plan may not be
assigned voluntarily or involuntarily or by operation of law.  Any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of, or to subject
to execution, attachment or similar process, any incentive stock option, or
any right thereunder, contrary to the provisions hereof shall be void and
ineffective, shall give no right to the purported transferee, and shall, at
the sole discretion of the Committee, result in forfeiture of the option with
respect to the shares involved in such attempt.

               (b)   Notwithstanding anything to the contrary contained in the
terms of the Plan as in effect at any time prior to the date hereof and
notwithstanding anything to the contrary contained in the terms of any
statement, letter or other document or agreement setting forth the terms and
conditions of any options previously issued pursuant to the terms of this
Plan, any and all Non-Qualified Options (as defined in Section 13 hereof)
previously issued to any officer of the Company (as defined in Rule 16a-l(f)
issued under the Securities and Exchange Act of 1934 (hereinafter an
"Executive Officer")) pursuant to the terms of the Plan and, subject to the
approval of the Committee, any Non-Qualified Options which may be granted or
issued to any Executive Officer of the Company at any time in the future
pursuant to the terms of the Plan shall be transferable by the Executive
Officer to whom such Non-Qualified Options have been or are granted to: (a)
the spouse, children or grandchildren of the Executive Officer (hereinafter
"Immediate Family Members"); (b) a trust or trusts for the exclusive benefit
of such Immediate Family Members: (c) a partnership or limited liability
company in which such Immediate Family Members are the only partners or
members; or (d) a private foundation established by the Executive Officer;
provided that (x) there may be no consideration for any such transfer; (y) in
the case of Non-Qualified Options which may be granted in the future, the
statement, letter or other document or agreement setting forth the terms and
conditions of any such Non-Qualified Options must be approved by the Committee
and must expressly provide for and limit the transferability of such Non-
Qualified Options to transfers which are permitted by the foregoing provisions
of this Section 9(b); and (z) any subsequent transfer of transferred Non-
Qualified Options shall, except for transfers occurring as a result of the
death of the transferee as contemplated by Section 10(e), be prohibited.
Following the transfer of any Non-Qualified Options as permitted by the
foregoing provisions of this Section 9(b), any such transferred Non-Qualified
Options shall continue to be subject to the same terms and conditions
applicable to such Non-Qualified Options immediately prior to the transfer;
provided that, for purposes of this Plan, the term "Optionee" shall be deemed
to refer to the transferee.  Notwithstanding the foregoing, the events of
termination of employment of Section 10 hereof shall continue to be applied
with respect to the original Optionee for the purpose of determining whether
or not the Non-Qualified Options shall be exercisable by the transferee and,
upon termination of the original Optionee's employment, the Non-Qualified
Options shall be exercisable by the transferee only to the extent and for the
periods specified in Section 10 below.

<PAGE>10

       10.   Effect of Termination of Employment, Death or Disability.  (a)
In the event of the termination of employment of an Optionee during the two
(2) year period after the date of issuance of an option to him either by
reason of (i) a discharge for cause, or (ii) voluntary separation on the part
of the Optionee and without consent of the Company or the Subsidiary for whom
the Optionee was employed, any option or options theretofore granted to him
under this Plan, to the extent not theretofore exercised by him, shall
forthwith terminate.

              (b)   In the event of the termination of employment of an
Optionee (otherwise than by reason of death or retirement of the Optionee at
his Retirement Date) by the Company or by any of the Subsidiaries employing
the Optionee at such time, any option or options granted to him under the Plan
to the extent not theretofore exercised shall be deemed canceled and
terminated forthwith, except that, subject to the provisions of subparagraph
(a) of this Section, such Optionee may exercise any options theretofore
granted to him, which have not then expired and which are otherwise
exercisable within the provisions of Section 7 hereof, within three (3) months
after such termination.  If the employment of an Optionee shall be terminated
by reason of the Optionee's retirement at his Retirement Date from the Company
or from any of the Subsidiaries employing the Optionee at such time, the
Optionee shall have the right to exercise such option or options held by him
to the extent that such options have not expired, at any time within three (3)
months after such retirement.  The provisions of Section 7 to the contrary
notwithstanding, upon retirement, all options held by an Optionee shall be
immediately exercisable in full.  The transfer of an Optionee from the employ
of the Company to a Subsidiary of the Company or vice versa, or from one
Subsidiary of the Company to another, shall not be deemed to constitute a
termination of employment for purposes of this Plan.

            (c)   In the event that an Optionee shall die while employed by
the Company or by any of the Subsidiaries or shall die within three (3) months
after retirement on his Retirement Date (from the Company or any Subsidiary),
any option or options granted to him under this Plan and not theretofore
exercised by him or expired shall be exercisable by the estate of the Optionee
or by any person who acquired such option by bequest or inheritance from the
Optionee in full, notwithstanding Section 7, at any time within one (1) year
after the death of the Optionee.  References hereinabove to the Optionee shall
be deemed to include any person entitled to exercise the option after the
death of the Optionee under the terms of this Section.

             (d)   In the event of the termination of employment of an
Optionee by reason of the Optionees' disability, the Optionee shall have the
right, notwithstanding the provisions of Section 7 hereof, to exercise all
options held by him, to the extent that options have not previously expired or
been exercised, at any time within one (1) year after such termination.  The
term "disability" shall, for the purposes of this Plan, be defined in the same
manner as such term is defined in Section 105(d)(4) of the Internal Revenue
Code of 1986.

<PAGE>11

             (e)   For the purposes of this Plan, "Retirement Date" shall mean
with respect to an Optionee, the date the Optionee actually retires from his
employment with the company or, if applicable, the Subsidiary by whom he is
employed; provided that such date occurs on or after the date the Optionee is
otherwise entitled to retire under the terms of the company's retirement plan
or, if applicable, the retirement plan of the Subsidiary by whom the Optionee
is employed.

        11.   Amendment and Termination of the Plan.  The Board of Directors
of the Company may at any time suspend, amend or terminate the Plan; provided,
however, that except as permitted in Section 12 hereof, no amendment or
modification of the Plan which would:

             (a)   increase the maximum aggregate number of shares as to which
options may be granted hereunder (except as contemplated in Section 5); or

             (b)   reduce the option price or change the method of determining
the option price; or

             (c)   increase the time for exercise of options to be granted or
those which are outstanding beyond the terms of ten (10) years; or

             (d)   change the designation of the employees or class of
employees eligible to receive options under this Plan, may be adopted unless
with the approval of the holders of a majority of the outstanding shares of
Common Stock represented at a shareholders Company, or with the written
consent of the holders of a majority of the outstanding shares of Common
Stock.  No amendment, suspension or termination of the Plan may, without the
consent of the holder of the option, terminate his option or adversely affect
his rights in any material respect.

       12.   Incentive Stock Options Power to Establish Other Provisions.  It
is intended that the Plan shall conform to and (except as otherwise expressly
set forth herein) each option shall qualify and be subject to exercise only to
the extent that it does qualify as an "incentive stock option" as defined in
Section 422 of the Code and as such section may be amended from time to time
or be accorded similar tax treatment to that accorded to an incentive stock
option by virtue of any new Revenue Laws of the United States.  The Board of
Directors may make any amendment to the Plan which shall be required so to
conform the Plan.  Subject to the provisions of the Code, the Committee shall
have the power to include such other terms and provisions in options granted
under this Plan as the Committee shall deem advisable.

<PAGE>12

       The grant of any options pursuant to the terms of this Plan which do
not qualify as "incentive stock options" (as defined in Section 422 of the
Code) as a result of the application of the $100,000 annual limitation
contained in Section 13 hereof is hereby approved provided that the maximum
number of shares of common Stock of the Company which can be issued pursuant
to the terms of this Plan (as provided for in Section 4 hereof) is not
exceeded by the grant of any such options and, to the extent that any options
previously granted pursuant to the terms of this Plan were not "incentive
stock options" within the meaning of Section 422 of the Code, the grant of
such options is hereby ratified, approved and confirmed.

         13.   Maximum Annual Value of Options Exercisable.  Notwithstanding
any provisions of this Plan to the contrary if:  (a) the sum of: (i) the fair
market value (determine of the grant) of all options granted to an Optionee
under the terms of this Plan which become exercisable for the first time in
any one calendar year; and (ii) the fair market value (determined as of the
date of the grant) of all options previously granted to such Optionee under
the terms of this Plan or any other incentive stock option plan of the Company
or its subsidiaries which also become exercisable for the first time in such
calendar year; exceeds (b) $100,000; then, (c) those options shall continue to
be binding upon the Company in accordance with their terms but, to the extent
that the aggregate fair market of all such options which become exercisable
for the first time in any one calendar year (determined as of the date of the
grant) exceeds  $100,000, such options (referred to, for purposes of this
Plan, as "Non- Qualified Options") shall not be deemed to be incentive stock
options as defined in Section 422 (b) of the Code.  For purposes of the
foregoing, the determination of which options shall be recharacterized as not
being incentive stock options issued under the terms of this Plan shall be
made in inverse order of their grant dates and, accordingly, the last options
received by the Optionee shall be the first options to be recharacterized as
not being incentive stock options granted pursuant to the terms of the Plan.

        14.   General Provisions.  (a)   No incentive stock option shall be
construed as limiting any right which the Company or any parent or subsidiary
of the Company may have to terminate at any time, with or without cause, the
employment of an Optionee.

             (b)   The Section headings used in this Plan are intended solely
for convenience of reference and shall not in any manner amplify, limit,
modify or otherwise be used in the construction or interpretation of any of
the provisions hereof.

             (c)   The masculine, feminine or neuter gender and the singular
or plural number shall be deemed to include the other whenever the content so
indicates or requires.

            (d)   No options shall be granted under the Plan after ten (10)
years from the date the Plan is adopted by the Board of Directors of the
Company or approved by the stockholders of the Company, whichever is earlier.

<PAGE>13

       15.   Effective Date and Duration of the Plan.  The Plan is effective
as of April 24, 1996, and will terminate on April 23, 2006 provided however,
that the termination of the Plan shall not be deemed to modify, amend or
otherwise affect the term of any options outstanding on the date the Plan
terminates.

      IN WITNESS WHEREOF, the undersigned has executed this Second Amendment
and Restatement of the Mark IV Industries, Inc. 1996 Incentive Stock Option
Plan for and on behalf of Mark IV Industries, Inc. this 10th day of April,
2000

                                     MARK IV INDUSTRIES, INC.

                                   BY: /s/ Richard L. Grenolds
                                       -----------------------
                                        Richard L. Grenolds
                                        Vice President and
                                        Chief Accounting Officer

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